Nearly 20 years ago, Diahann W. Lassus and Clare E. Wherley were on the fast track to corporate success when they decided to take the risk of setting out on their own as small business consultants. The aggressive but personable duo were moving up the fast track of the corporate ladder at AT&T by the time they met while installing the communications for the 1984 Olympics in Los Angeles.
When that 20-hour-a-day-seven-day-week, all-consuming but exhilarating, ordeal was over, both decided they wanted something new and different. They fell almost by accident into financial planning and wealth management, and quickly discovered that women were in a distinct minority in the financial services business.
Lassus and Wherley also were among the few financial advisors at that time who realized that women could make up a large percentage of their client base. They set up shop with a couple of part-time helpers in suburban Madison, N.J., and jumped feet first into the new era of fee-only financial planning.
"We were from the corporate world where you billed people by the hour, and we did not know any other way to do it," says Lassus, who usually takes on the task of communicating the firm's goals to the public, appearing on television and radio shows and talking with reporters. Because fee-only financial planning was new, the pair had to sell the idea first, before they could sell themselves to prospective clients. The marketing part of the business took up a good deal of time in the beginning and Lassus became an expert at it, speaking at seminars and accepting a spot on CNBC and later CNN to talk about financial planning and in particular women and their money.
Long before they became successful, independent businesswomen, Lassus and Wherley had worked for others. Lassus had been moving quickly through the ranks at AT&T through a series of promotions when she was assigned to oversee the Olympics communications and coordinate the 700 volunteers who made the games possible. Her boss for that assignment was Clare Wherley.
"That was an intense nine months. When it was over, I went back to New Orleans, where I had been assigned before," Lassus said during a recent interview in the firm's New Providence, N.J., office, to which it moved in 1990. "Clare and I had talked about what we wanted to do after the Olympics. The Olympics were so intense, it would have been difficult to return to the corporate world."
Wherley explains it a little differently, but agrees the Olympic experience gave them a sense that they had unfulfilled potential. "Corporate America is so hierarchical, and the Olympics project was totally undefined. We just had a huge 'to do' list with 100 people to get everything done, and there was no possibility of a postponement. It had to be done on time," she recalls. "I could not have gone back to the corporate world after that."
In fact, the two women look at most things differently, which is what they say makes them mesh so well. One client describes Wherley as the more "motherly" of the two, although both speak of clients as friends rather than customers. Dressed in conservative business suits with pearls or a touch of pink to soften the look, both women exude an air more of casual friendship than of hard-driven professionals.
Instead of heading back to AT&T, Lassus took early retirement and created her own company, and Wherley soon joined her. The two are still co-owners, with Lassus serving as president and handling investments, marketing and sales and Wherley serving as CEO and running the financial planning and tax practice side of the business. Because of their corporate backgrounds and the fact that both had M.B.A.s, the pair had originally planned to be consultants to small businesses. But that plan changed; each is now a certified financial planner and a certified public accountant.
"We fell into financial planning and accounting in the early stages," Lassus said. "I read about the CFP designation and we decided that it really made sense, so I signed up for the course. During my first CFP class, one of Clare's long-time friends died of cancer and his spouse was in desperate need of assistance, so I did my first financial plan for her. Working with Client Number One, as we call her, was the most stressful plan I was ever going to do, but it was also very satisfying. It is what made me decide this is what I wanted to do. There are very few things you can do in life where you can really see that you make a difference and you can still make a nice living for yourself. Many people have enough money if it is managed correctly, but a few bad decisions and they will not have enough. That is where we make a difference."
For the first client, Lassus prepared an inch-thick bound document. "Now I do cheap three-ring binders with a lot of valuable information inside. We want this to be a living, breathing document that they can write on, tear apart and remove or add pages," she says.
Despite the change, the original approach also worked. Client Number One is still with them. "I have more money now than when my husband died and I have never worked," says Laurette Connelly. "I can ask them about anything, including advice on buying a car or moving into a retirement community. I don't think I would feel free to do that with someone else. I sent other people to them who had more money than I would ever think of having, and I sent them some who did not have much. But each has to protect what they have and they were treated exactly the same."
Many of the first clients recommended to Lassus Wherley were women, either single women or women who were married and making the higher salary in the family. In other families that came to the firm, the husband was the major wage earner and handled the investments but questioned whether he was making the right decisions. In fact, a large portion of their clients fall into the category of financially savvy, some with Wall Street backgrounds, but they either want a second opinion on their investments or they no longer want to deal with the details of their family investments.
Lassus Wherley now has 24 full- and part-time employees, and the firm has $200 million in assets under management. It provides financial planning, investment management and family office services. Getting in the door doesn't come cheap. The minimum fee for a comprehensive financial plan is $8,000, and the minimum annual financial planning retainer is $1,500 per year or 20% of the plan fee. The minimum annual fee for wealth management or discretionary accounts is $6,300, with a percentage fee starting at 0.9% for $700,000 in assets and declining as the assets increase.
The firm also offers a wealth-builder service for young couples with under $500,000, but the client places the trades themselves. Family office services include tax preparation and trust management. The firm uses mutual funds and exchange-traded funds, but the specific services provided are, in some ways, the least of what the firm offers.
"We probably spend ten minutes of any hour talking with a client about specific assets or investments and 50 minutes talking about how they are, what their goals are and where they want to be in the future," Lassus says. "When we started, I wanted to build a relationship with each client, one client at a time, as they say. Early on, I did a speech about client relationships and I was embarrassed to talk about it because it seemed so obvious to me. I got more compliments from people on how insightful the speech was."
The two broke ground in other ways also. As two women in a male-dominated industry, they brought in women clients and tried to recruit more women into financial planning. Even though it is a relatively small firm the office operates in teams, with everyone serving on at least two teams. Full-blown annual staff meetings are held at which everyone is expected to participate. Clients who are brought into the firm belong to the firm not to the individual.
"In that way, I can act as a rainmaker. People I bring in are the firm's, not mine. We assign people to whomever it makes sense for them to work with," Lassus adds.As the public speaker for the firm, Lassus appears on panels and prestigious committees and was appointed to the Retirement Savings Summit by President Clinton and the New Sources of Capital Board by former New Jersey Governor Christine Todd Whitman, and she was a delegate to the White House Conference on Small Business. In addition, she was named one of Worth magazine's top financial advisors an unprecedented five times. She served as president of the National Association of Women Business Owners. Each appointment or office was used, in part, as a way to make new contacts and build business.
In its expansion, the firm has added a full-time investment advisor, a strategic advisor brought in on a consulting basis, an office manager and a lawyer, Suzanne C. Lowe, who is also a financial planner and runs the Naples, Fla., office. Lassus works there one week a month, and also takes time to indulge in her passion for golf. "Sometimes it makes sense to assign someone I recruit to Suzanne, because of her legal background," Lassus says.
Lowe met Lassus through business contacts while practicing law and had already been thinking of how to get out of the cold. The opportunity to switch careers came at a perfect time. "I can use my analytical skills and have the client contact, and I like to give advice," Lowe says. "I work here alone three weeks out of the month, but we work as a team and I am always in contact with people in New Jersey. The atmosphere at Lassus Wherley is a little more relaxed and comfortable than at most financial planning firms. There is never the feeling that there is only one way to do something, and we decide as a team what we think is important."
Everyone on the team buys into the belief that the client comes first and that providing peace of mind for the client is the goal. The firm's "reason for being" is so important that it is posted on the office walls as a reminder.
Included in that is a respect for the client's perceptions of their needs. "It is not our job to tell a client he or she is rich," Wherley says, "because that is very relative. Our job is to tell them what their options are."
Lassus comes at that job from a more intuitive standpoint, while Wherley works through the details one step at a time. "We have had some differences over the years because if I see clouds, Diahann sees sunshine. But we agree on the things that are important-integrity, helping the client realize his or her options. Our goal is to help a client build enough assets to retire and enjoy the other half of their lives. This is not about how much money you have-although most financial planners would not agree with that-it is about lifestyle."
In the initial interview and during all subsequent contact, the planners try to determine what the person or family wants to do. "A brokerage firm does a risk analysis to determine how much risk a person is willing to take and they base their decisions on that," Lassus says. "I don't think you can do that. Everyone is willing to take large risks in a good market and no risks in a bad market. You have to determine what people's goals are."
In keeping with that philosophy the firm members often become friends with clients, tacking pictures of weddings, graduations and vacations to the bulletin board, getting presents of singing monkeys at Christmas or going to family reunions. Children are welcome in the office and often look forward to the visits.
The office itself is a rambling old frame building from the 1860s that has been converted for office use, but the atmosphere remains warm and informal. The first encounter for a prospective client is likely to be with Manda or Sammie, the two nonmatching Bichon Frise dogs that have the run of the office.
"One is too tall and one is too small, by pedigree standards, but we don't care," Wherley says. Clients come in who are nervous or formal and they soon relax in the presence of the two white, fluffy dogs. "Of course, if someone doesn't like animals, they generally would not hire us," Lassus concedes. Those who want to make swift changes in investments or alter investments based on short-term stock market swings also would not be inclined to hire Lassus Wherley.
"We are in this for the long term," Lassus says. "I don't know anyone who was not invested to some extent in technologies. I do not ever want to see another year like 2002. But we did well, and one client even called to thank us because she had only lost a little when others she knew lost a lot."
William H.C. St. John of Short Hills, N.J., has been with the firm over that long haul. St. John, who is retired from education, has seen market ups and downs and life changes for himself during those years. "Sometimes I investigate someone else, but then they make empty promises," St. John says. 'I have total confidence in Diahann. I don't have to worry about their impeccable honesty. Diahann is great with the mutual funds and Clare is great with taxes."
But size is relative and not everyone considers the firm small. Lisa and John, who asked that their last name not be used, started looking for a financial planner early last year. As a stay-at-home husband married to an advertising executive, John wanted reassurance that he was investing the couple's funds wisely. They interviewed several firms and came down to two, Lassus Wherley and another, much smaller firm. They went with the small firm, thinking they would get more attention.
"Then we got a letter addressed to the wrong names, and he did not consider the cost of health care in our retirement until we mentioned it. We wanted to think about spending a little more, maybe $10,000, and one of his scenarios was for us to spend $50,000 a year more. He was not listening," Lisa says.
The couple had told Clare Wherley they were selecting someone else, and then went back to the firm when the first arrangement did not seem to be working out. "They were very cordial," John explains. "We wanted to know if we could increase our discretionary income and buy a summer house. Clare said she would not tell us we couldn't do it, but it would be tough. I was dumbfounded at the contrast between the conclusions of the two firms."
"We did this for some peace of mind and we wound up worrying about the first financial planner instead of about our money," Lisa adds.
Others would view Lassus Wherley as a small firm. "The advantage of our being small is that it gives people access," Wherley says. "Some places, if you do not have $10 million in assets you cannot get the time of day. Here a real person answers the telephone and someone can always help you."