A former General Motors employee, Tim Herbert now is helping his former colleagues as a financial advisor.

    Tim Herbert was a General Motors human resource manager who heard in the mid-1980s that the American automobile industry was facing a temporary decline, but he did not believe what he and the other GM employees were being told. He saw the writing on the wall and thought that the decline was going to become a way of life for those living and working in his hometown of Detroit.

At the time, Herbert already had been doing some financial planning on a part-time basis, helping his fellow auto industry employees, and he knew he wanted to go into the financial field full time. But, even then it took him several years before he finally made the jump.
"I was ready to leave GM several times, but they kept giving me promotions, so I kept putting it off," Herbert remembers. But after three years of thinking about it, he finally made the commitment to quit the automobile industry, where members of his family had worked for three generations. He started his own financial planning business, the Timothy Herbert Financial Group in Troy, Mich., which offers securities through Centaurus Financial Inc. Now he and a four-person support staff handle more than 700 clients with $140 million in assets under management. He also has two partners and works with four other independent registered representatives who work with their own clients.

The firm, which relies on word-of-mouth referrals to grow, serves automobile industry employees, and particularly those from General Motors, because Herbert knows the industry and GM in particular from the ground up. Starting as a per diem security person to get his foot in the door, Herbert took his interest in business, which he developed in college, and began his first career in the GM human resources department. During his GM career, he worked at several headquarters, offices and plants in the Midwest and held various supervisory positions in budgeting, business and human resources planning, health and safety and labor relations.

"A friend, Stephen Kremer, started an investment business right out of college, and while I was at GM, he told me to invest. That was in the early '80s, when most working people did not invest much," Herbert says. "Then he suggested I start handling my own investments. Those were mutual funds with an 8.5% load, but it sparked my interest."

His interest grew so much that Herbert returned to school to get his master's degree with the help of GM tuition assistance. He then started acquiring various financial licenses and certifications and began helping his fellow GM employees with their investments and financial questions. Herbert uses his knowledge of the benefits that GM offers to help auto industry employees parlay those benefits into a more secure financial future. Building on the friendship that started in a seventh-grade art class, he is now partners with Kremer.

"I always felt there was a good synergy for us," says Kremer, branch manager of Centaurus' Troy office, where Herbert is an independent rep. "I have the investment background and Tim knows the auto industry. He started as a client of mine but then we pulled him into the financial business part time, until he was making more part time here than he was full time at GM. Even though he could be his own boss here, it still took him years to make the full transition. Now he brands himself and our firm as an auto industry specialist."

Herbert is never shy about calling on his auto industry background. His Web site, www.timothyherbert.com, tells potential clients he is "Steering GM employees to financial freedom," and he touts his services as "Built to perform. Built to last," words accompanied by a picture of a bright red sports car and the Detroit skyline. He says he brings the same commitment to excellence to his financial planning clients as the automakers bring to their cars.
Herbert's second career in finance developed in part because of a study of business trends he did in graduate school. That research showed him that the assurances of American auto industry management, who said the initial decline was a one-time, temporary situation, were off the mark. Instead, he saw a continuing trend that was going to affect his future and that of many others.

"In Michigan, approximately 30% of families have one or more members working in the auto industry, and two-thirds of families depend on the auto industry in some way," Kremer says. "Because of the uncertainty in the industry, people need financial advice, and Tim is more knowledgeable about the industry than anyone I know."

The firm also offers its services to those with much smaller amounts to invest than is typical at many financial planning firms. Most clients are management level, but some are hourly employees and assembly-line workers.

"Two decades ago, management said they were going to make one set of cuts, and it would be over, but I thought I saw that the decline was not going to go away. You could be the hardest-working person in the world, but if the industry is cutting back and you are let go, where are you going to go? I also saw a large group of baby boomers getting ready to retire, and I knew the financial planning field was going to grow. Put on top of that I am knowledgeable about auto industry, and especially GM benefits, and it became a 'eureka' moment for me," Herbert remembers. "Now I love my job. My partners think I am crazy for working so many hours, but people need help and who else knows all this stuff as well as I do? Who else went through this same transition and can empathize with the automotive employees and their transition?"

Herbert's wife of 19 years, Evy, helped him make the leap to create his own business. She is from a long line of self-employed individuals, so she encouraged her husband to break out on his own. The couple has two daughters, 13 and 10, and they spend much of their time when Herbert is not working on the road traveling to their children's volleyball and soccer games. Being Michigan natives, they also snowboard and ski. All of those contacts also help Herbert build his business.

"I want to continue to grow the business. The fact that the industry is still declining is actually good for our firm because people need to know if they can take buyout offers. Do they have enough money when they reach retirement, or can they retire early? For those newer employees, who are still working, the defined pension benefit plan is not offered anymore or has been reduced, and there have been drastic changes to the 401(k) plans-Roth 401(k)s became available in 2006," Herbert says, outlining some of the many questions being raised.

For the Sweeneys, in Farmington Hills, Mich., the financial questions revolved around retirement. John Sweeney was retiring as a GM supervisor and his wife, Joann, was an hourly worker at the plant.

"We interviewed several financial planners because I did not think I was doing very well investing on my own. We both feel comfortable with Tim. Several people I worked with were his clients and they were very complimentary of his work," Sweeney says. "He knows what is coming down the pike at GM before we do, and Tim is very good about making sure we know what is going on. If we have questions, they get us the answers. We are both retired now, and as long as GM stays afloat I guess we are OK, but Tim seems to think we will be fine."

The fact that the firm has many automotive and GM employees or retirees as clients is a big selling point for most people.

"Tim has a lot of similar customers, so he can apply what he knows to a lot of people," says Jim Machak of Bruce Township, Mich. "That's smart business. He can't watch a lot of different clients, but he has enough similar clients that he can watch situations at a higher level and then roll down the advice to the individual portfolio."
Machak and Herbert worked together years ago at GM, and Machak sought out Herbert when he was doing financial planning on the side. Then they lost touch.

"My wife, Kathy, and I went through three advisors. They all seemed to have part of the answers, but then we went to a financial seminar that Tim was part of, which is how we reconnected with him," says Machak, who was a senior manager in the GM program management area. "I wanted someone familiar with GM benefits so that if something happens to me, my wife will have someone knowledgeable to turn to. He will be able to deal with issues she may have with GM. With other advisors, if I did not call them, nothing would happen. Tim is watching that auto industry and will take action even if I do not nudge him."

For other clients, the immediate future of the auto industry is of prime importance. Curt Shinabarker is an engineering manager in the GM new technology area, and his wife was an engineer with the company until their son was seriously injured and she quit work to take care of him. Retirement is not in the immediate future for the Brighton, Mich., resident, who has three teenagers and an 8 year old.

"I have always contributed the maximum amount towards GM retirement and have taken advantage of every GM investment opportunity," says Shinabarker. "Tim understands that. Before we went to him, we had investments scattered all over. He was able to pull everything together for us and show me visually what we have; it is more understandable for me. He took some of our accounts and made them international and he staggered the risk. We still have mutual funds as part of the mix, and he left some accounts liquid so we can do things like renovate the house to make it accessible for our son.

"We meet at least annually and more if I need to," adds Shinabarker, who did not have a financial advisor before his son Alex was injured. "Most advisors wanted $500 or $600 every year to update the financial plan, which was a deterrent for me. Tim helps me review all of my holdings at work and outside of work and makes recommendations right on the spot, and then we make the adjustments if necessary."
Although each client may have distinct family situations or unique goals, Herbert's typical client is from the suburbs of Motor City and has a background he is familiar with. He helps them mostly with retirement and college planning and insurance needs and also works with a team of CPAs and attorneys to help with taxes and estate planning.

"Auto industry employees are facing a lot of anxiety and stress," Herbert explains. "Many fear they may be losing a great-paying job. Some will get a big windfall, but if they take a buyout, what does that do to the pension? People in their fifties are being downsized-some voluntarily who get a big payout, and some nonvoluntary who are told, 'Here's the door.' They are facing an uncertain future and they need information to make better decisions. I help them transition through those changes.

"Most of my clients are doing fairly well, but they are not millionaires," he adds. "Our whole focus is on the automotive industry and particularly with GM and how it affects employees and their financial planning."

Herbert's firm is part of Centaurus Financial, a national independent broker-dealer, which provides clients with access to registered financial representatives who do not sell proprietary products. Herbert uses many financial vehicles, such as mutual funds, ETFs, no-load and fee-based accounts, as well as some variable annuities with living benefits for a portion of the retirement assets to provide some stability to meet mandatory income needs. He also recommends Curian Capital, a registered investment advisor based in Denver that provides fee-based separately managed accounts.

"This offers clients some tax advantages on their nonqualified assets and does not tie up their money," Herbert explains. "We have some control over the taxation of assets, and the smaller investor can take advantage of it. You do not need to invest millions to be able to have separately managed accounts. This is fairly new. I do some practice management training for other registered representatives and many do not know of the availability of separately managed accounts for smaller investors."

For Herbert, there is a lot of personal satisfaction in helping former colleagues over the hurdles being placed in front of them by the troubled automobile industry.

"We take on clients who do not have enormous amounts of money," Herbert says. "I know these people, their culture and their work. We can provide a lot of value-added service because we focus on the auto industry and especially GM employees. We give better advice because we have one type of client coming down our 'assembly line.' There is a huge satisfaction in working with many grateful people in these troubling times in the auto industry and in helping them through this challenging transition in their lives. It is like lifting what amounts to a big load of bricks off their shoulders."