These days, it almost seems like victory lap-time at The Enrichment Group in Miami. With 240 clients, eight planners and a staff of 13, founder Kathleen Day is running a financial-advisory firm that by most accounts is not only larger than most of its peers, but also successful in more ways than one.
Go there as a client and the focus-at least initially-isn't going to be on maximizing your returns or leveraging your earning power by working more efficiently. It's more likely to be on helping you define how much is enough and how to harness financial resources to enrich the rest of your life.
Instead of focusing on trendy investments, a team of planners takes clients through a hands-on, or some would even say touchy-feely, process designed to elicit their core, human values. If you died tomorrow, fundamental Enrichment Group planners ask, "What would your greatest achievement and biggest regret be?" And, how can your assets be used to maximize your enjoyment and your legacy?
"We do comprehensive financial planning and asset management," says Day. "But we also spend a lot of time talking about the values that are important to a client, what they want to achieve, what they want for their children and what they want to be remembered for. Our financial planning is geared toward looking at resources that range from income and assets to skills and helping people use those things in a way that makes their lives fuller."
It's probably a more rigorous process than most investors look for, but Kathie Day wouldn't have it any other way. After all, her own trial by fire has sharpened her priorities. Four years ago, to many observers, Day was a brilliantly successful planner and entrepreneur who had built a 15-person-plus advisory shop that was gaining respect in both Miami and the nation. But minute by minute, day by day, Day was finding life more of a travail than she wanted to admit. She'd find herself barely wrangling a ski trip with her family, only to be sidetracked on the slopes by a client's emergency tax question. Finally, it hit her. Life had to get more enjoyable and less stressful or she might throw in the towel. "I knew I was going to burn out if I didn't do something, and that wasn't good for my clients or me," Day says.
That change came in the form of a personal coaching program that helped Day discover what today seems obvious: She was running a sizable company like it was a one-person shop, with the most crucial client data stored in her somewhat overcontrolling head.
Since then, she's become a devotee of the Toronto-based Strategic Coaches program, which she credits with helping her transform her hands-on, value-oriented approach to planning into a team-oriented firm in which systems and tools are designed so that everyone can pull his or her own weight. "The program helps you articulate who you are and what you're trying to do," says Day.
Articulating those values helped Day lay the foundation for The Enrichment Group, the new name for Kathleen Day & Associates, the firm she founded in a one-room office 14 years ago. The name change reflects not only the fact that the firm's planning is designed to enrich clients' lives, but it also recognizes the team of eight planners and 13 staff that makes it all happen.
To transcend her sole-proprietor mentality, two years ago, Day created a new corporate structure. "We all became part of the corporation, and that meant we each took on a corporate role. And planners have a piece of the corporation," Day says. Up to that point, planners had been operating as independent contractors, but that's been changed to a revenue-and-expense-sharing arrangement.
As part of the new corporation, Day also put the finishing touches on what other planners say is an unusual investment committee. Each of her planners has responsibility for a sector of the market, for which they act as both portfolio manager and investment analyst, write in-depth analyses for clients and make buy and sell recommendations.
"What you get instead of having one investment person, as many firms have, is a mechanism that allows for individualization and collective wisdom," says Norm Boone, a founder of the exclusive planners' think tank, the Capstone Group. This study group of top advisors meets regularly to share its best planning and investment practices. Day, a new member of the group, was recommended because of her unique planning and corporate practices, and the investment committee at her firm is one of those practices, Boone says.
Day's husband, Bryan "Pat" Day, who joined the firm as a new advisor in 1992, is responsible for tracking large-cap value stock funds. "We tell clients the things about their fund managers they won't find elsewhere," says Pat Day, who left his job as a midlevel manager with Florida Power and Light to pursue a career as a financial advisor. "Once a month, the investment committee meets to vouch for the managers we still support, and jointly we come up with the funds we'll continue to use. We typically stay with the same managers for years, but that doesn't mean that we won't make changes. We examine each portfolio individually. We don't push changes across all portfolios."
The Enrichment Group tracks about 60 funds closely, and the typical client portfolio ranges from seven to 15 funds, depending on the client's needs. The firm also does active tax harvesting each quarter, to offset gains with losses where applicable.
The bedrock for that kind of service and the team approach Kathie Day has fostered at The Enrichment Group is automation. Day's been a relentless taskmaster about buying and customizing a desktop system that allows her planners and staff to create a paperless office.
"We worked hard to develop a comprehensive system that allows us to access whatever piece of paper or data we need," says Day. The result is a paperless, desktop system so effective that her son and daughter-in-law, who helped create the system, have launched a successful Phoenix-based consulting firm, Trumpet, that markets and installs the system for financial-planning firms.
Day credits the system, which requires that all staff scan crucial documents and keep timely client notes, with giving her a life back and allowing her and Pat to pursue activities and travel both professionally and personally. "When someone calls me now, it feels great to be able to say, 'How are you feeling? I know you were sick. How was your trip? How are your grandkids?' I can't remember these things with 240 clients, but now anyone here at any desktop can see when the last client contact was made and access all important documents."
As for the paperless office, it's in keeping with the decision of the firm's planners that they wanted their work to be measured in value, not in paper or pounds.
It frees practitioners to engage in what advisor Ellen Siegel calls the soft approach to planning, which can often start where more traditional financial planning leaves off. Siegel, who spent 20 years as an insurance agent before joining the firm in 1997, says that some of the most pertinent planning data can come from these discussions. For instance, she says, in recent discussions with a young doctor, she discovered that his greatest dream was running his practice more effectively so he'd have more time to spend with family. Siegel and the rest of The Enrichment Group planning team helped the doctor realize that an office coordinator would be a cost-effective addition to his practice. They also helped him hire his mother, a proud bookkeeper who refuses gifts, and pay her a bit over the market rate, as well as fund a retirement plan and long-term care insurance, another primary goal elicited during his planning session.
"What our planning does is put things in context," Siegel says. "It doesn't take away the need for investing; it gives them a reason for doing it all." Office automation has also freed up planners to offer more practical sessions with clients-especially in the area of estate planning and something the firm calls the responsible money course for kids.
On the estate-planning front, even with middle-income people, Day and her planners will call a meeting with families and act as the mediator. Sometimes, that means letting adult children know that they're not getting the inheritance they might have hoped for, if the head of a family feels the wealth might be better earmarked for grandkids and charity.
Other times, it means asking hard questions. "I have a female client who is ill and dying. When I met with her and her husband, I asked her: 'Are you worried he'll remarry and your money will go to someone else?' She said, 'Thank God you said that.' We ended up gifting some assets to her family at death and setting up a bypass trust. She didn't know there was a way to handle this," Day explains.
The Enrichment Group does the family sessions "because it's far less charged for us than for a family members to say these things," Day maintains. "But it can also work, when heirs understand that they must give assets away or pay them out in taxes, to find charities as a family. We'll facilitate that as well."
The firm also offers counseling sessions for parents and their teen-agers when the latter are preparing to depart for college. Planners will help students determine their spending needs (parents fund the student spending accounts quarterly) and even set the kids up with software that allows them to track their bank accounts and bills online. "We've done about 20 sessions. They work," says Day, who developed the educational program for her children when they went off to school.
How does the firm charge for two- and three-session family and budgeting counseling? Even The Enrichment Group is struggling to find the appropriate way to be compensated for these value-added services. Right now, they're part of the $4,000 to $5,000 annual fee clients pay for asset management and financial planning, though some clients are charged an additional hourly fee. Day says the firm has had numerous discussions and is trying to come up with a formula that allows it to bill families that need additional services.
But that's an easy challenge now that the hard work of creating a team-oriented firm has been put into place. Day and her husband are finding the time they need to grow personally and professionally. And to preach what they practice, they give all their staff four weeks of vacation after just six months on the job.
Now Day is finding hers is not a bad life after all. When asked what her next goal is, Day says frankly: "I'm living it."