"We're really strategic in nature, versus tactical," says Mayhew. "We have an eclectic advisor base ranging from one-person shops to firms with more than 20 advisors. The value they find in us is as a trusted resource to objectively decode all this information and create sense and direction for them."
On the fixed-income side, the company offers a wide host of products, including direct notes and internotes, which are direct initial corporate offerings that allow investors to buy low denominations that were previously only available to institutional investors. A recent offering includes GMAC's internote, which pays 4%. "That's attractive for investment grade," says Mayhew.
To help advisors compete further, the company has competitively priced its wrap fee programs at just 80 basis points, compared with the going rate of 125 basis points. This allows advisors to add on 50 to 100 basis points and still remain very competitive. "With all the fee compression going on, we knew that 3% programs were going to become 2% programs, so we changed our all-in costs accordingly," Mayhew adds.
Advisors like Capital Analysts' investment research, product creation and pricing. "They're pioneers in this kind of mutual fund and stock research, and it's very helpful to have these rankings and analysis," says John Clarke, president of Denver-based Grayhill LLC, which has worked with Capital Analysts for 35 years.
Clarke, whose firm uses wrap fee programs almost exclusively, says he also finds the company's prompt due diligence helpful. "If we're considering a private deal, say a mezzanine offering for a closely-held stock, they'll look at it and approve it as quickly as possible. They're sensitive to the marketplace. Also, they sometimes don't approve products, which in my view is good, too."
While Cogan says he's proud of the proprietary programs and research the company creates, he also is quick to point out that products and services can quickly become a commodity. What really sets a broker-dealer apart, Cogan contends, is its people and the relationships they have with the field.
The fact that Cogan started his career in 1974 as an investment advisor during that now-far-off bear market, and spent 13 years as a successful planner before joining the home office, doesn't hurt when it comes to creating a culture that values empathy and responsiveness to advisors the way Capital Analysts' seems to.
"They're coming through with everything they promised," says Minoti H. Rajput, president of Secure Planning Strategies of Southfield, Mich., which joined Capital Analysts 15 months ago after an extensive search for the right broker-dealer. Rajput, who specializes in doing planning for families with disabilities, was named one of Worth magazine's 250 Best Financial Advisors six years in a row. "I want to be heard, and I want answers right away, and that's what I'm getting here," she says.