Here's how Capital Analysts caters to nearly 500 financial advisors.
Bob Cogan probably isn't the world's best dancer.
In fact, a few of the advisors who work with Capital Analysts Inc., the broker-dealer Cogan runs, saw him dance to a golden oldies rock band at a recent sales conference. They say the veteran brokerage executive should stick to running the company and leave the dance floor to the more fleet of foot. They're only half joking, but that's OK with Cogan, since running a broker-dealer is something he does pretty well.
With 29 years under his belt at Capital Analysts, based in Radnor, Pa., he's got the chops to prove it.
From the dark days of 1992-when the then-corporate parent of Capital Analysts, Fidelity Mutual Life, issued a "find-a-buyer-or-close-the-firm" ultimatum-until today, Cogan and the team of top managers he's hand-picked have built a mid-sized broker-dealer with an impressive array of products, timely proprietary investment research and the kind of hands-on customer service that most companies would envy. (Cogan really does answer his own phone, as do all the senior managers at Capital Analysts. In fact, the phone lines in the company's call-center desk roll over to them when the customer service reps get busy. The company policy is: No waiting allowed).
Insiders at the firm say that Cogan spent months soliciting and analyzing offers for the firm back in 1992. They also report that he decisively rejected several that would have been very lucrative for senior managers, because they would have undermined the home office, before deciding on Western and Southern Financial Group. Many advisors who left the firm because of the uncertainty (the total number of advisors dropped from about 500 to just over 200) have decided to come back. "I think that says a lot," Cogan says today. "I can also say that I'm probably the only president of a company that was bought ten years ago who can say it is better today than it was the first day." For the record, advisors say there is no pressure or incentives to sell the parent's annuities products.
Despite the long-running bear market that has taken a nasty bite out of larger broker-dealers' profits, Capital Analysts has managed to make money in each of the last three years, even with one of the richest staff-to-advisor ratios in the business. (They have one home office staffer for every ten advisors).
The reason for continued success? Cogan says it's because the company has consciously decided to work with advisors, and advisors alone, for more than two decades. The decision, he says, allows the firm to direct its services, products and platforms exclusively to those who practice planning. And the size of the firm allows staff to know each advisor by name, along with the type of practice he or she has built.
The decision is paying off. "For people positioned as advisors, it's a great time in the marketplace," Cogan says. "Investors who have been with transactional-type firms or were do-it-yourselfers really want and need advice now, and they're turning to advisors."
Just how serious is the firm about finding advisors? "There are no wirehouse people here," Cogan says. "Culturally, we're not the right fit for them. If in the first five minutes someone asks about payouts, we know we're not the firm for them."
The upshot to this determination to attract and support advisors is simple: More than one-third of the firm's top producers were profitable last year. "We have been increasing assets under management over the past three years, which is good news," says planner Robert J. Richards, president of EPA Financial Services Corp. of Toms River, N.J. "I really do think a downturn brings business to those who practice financial planning," adds Richards, who has had a ten-year working relationship with Capital Analysts.