Susan Kaplan said she’s never given a marketing seminar. She doesn’t hand out business cards unless she’s asked for them. She doesn’t even really have to sell what she does in group settings. She’s never had to market herself because other people are usually doing it for her. She’s got so many referrals, she’s now reached that particular form of advisor Valhalla in which she has to turn them away—referring six to eight clients a week to other firms, she says.

And yet she’s engendered such trust that sometimes her clients tell her they want divorces from their spouses before they tell the spouses themselves. She recalls that one client’s child even came out of the closet to her before telling the rest of the family. Recently, while eating at a Left Bank restaurant in Paris, she recalls running outside repeatedly to tell a client how not to muck up a real estate deal.

“She was asked to bid over ask and drop all contingencies,” says Kaplan. “I’ve been involved in eight real estate investments, and every single time somebody has said it’s priced to sell and someone said to offer over [the asking price] it was wrong, wrong, wrong.”

Hard to imagine now, but Kaplan used to be an ICU nurse monitoring the vitals of unconscious patients. But since the late ’80s she’s been a financial advisor, and her 20-plus-year-old firm, Kaplan Advisors, has now gathered $1.5 billion in assets and landed her on Barron’s list of the top financial advisors in the country in both 2012 and 2013. Her expertise earned her a radio show she co-hosted in Boston for more than a decade (The Money Show on WTKK) and won her a role in the top advisor class in a very competitive Beantown.

She says her growth has been steady. She started with $50 million in assets in 1993 and now has $1.5 billion—all without hiccups or layoffs and without hitting the asset ceiling so many others do.

How did she do it? A mix of personality traits, she says. She’s conservative and doesn’t like to blow money on overhead until she has to. She’s paranoid and doesn’t like other managers handling her clients’ money (she invokes the ghost of Bernie Madoff) or back office broker-dealers sending them mail behind her back.

She’s also got a “bring the family” attitude toward her clients, and gives advice to the kids and spouses (and sometimes even girlfriends) for free. She doesn’t sell products like annuities even though she could. For her virtue, spending time on analyses for people who are not yet clients, she has on occasion been told she’s doing it wrong—giving advice away for free. For staff, she likes to pick the apple right off the tree—getting analysts right out of school and teaching them herself rather than trying to retrain someone who’s been in the polluted waters of the sales business.

She says she never even intended to start her own business. She began in the nurturing bosom of an insurance company. Her financial planning business took off within and then organically split off from it.

It sounds like impossible kismet. So many advisors have trouble breaking through the asset ceiling—say, $200 million—she knows, and yet Kaplan has persevered with shrewdness and by letting other people be her best voice and in such manner joined the $1 billon club without suffering the degradations of two bear markets.
 

 

ICU Nurse
It’s a long way from her beginnings. In her early 20s, Kaplan was an intensive care unit nurse at New York Hospital.

“I loved it,” she says. “To be a cardiac surgery intensive care unit nurse was the most demanding, the most exciting. But it was definitely for a young, single woman. Because everyone there was young. There’s some physical elements to it, but it’s also strenuous. Mentally strenuous. You had to work nights and weekends; you get one holiday off.”

“People were really living and dying on a daily basis. It was just always urgent.”

The ICU was an environment largely driven by numbers rather than nurturing and bedside manner, she says. The field is similar to her current one, she says, in that it requires you to prioritize and remove distractions from your mind.

“It’s an ICU, not an emergency room. The client or patient is pretty much unconscious. And it’s numbers driven. You’re reading monitors, you’re reading vital signs, you’re reading flows of fluids into the patient. It’s a numbers game. Yes, they do wake up, they do stabilize, but then they leave you and go out into a regular room. So the ICU is a very intense, numbers driven place. … In an ICU you have a relationship with all the machines.”

“It was when they were doing heart transplants,” she says. “It was exciting and challenging every single day or night. The downside is that in the nursing that I was doing, you would have to master, let’s say, 150 steps for a certain kind of patient. That took you time to do that. Once you mastered that, that was that. You weren’t using any ingenuity. You weren’t allowed to do anything creative because it was an urgent ICU setting and you had to do all those steps. Whereas in the financial advisory world, it’s very creative. In many ways you’re taking custody of your clients similar to nursing.”

She said the nursing was great for her when she was single and in her 20s, but motherhood made the demanding hours impossible. She transitioned to an industrial nursing job at PaineWebber. Next thing she knew, she was making pals on Wall Street.

“I became friends with a lot of the trading people and it sort of opened a new world. I was friends with a lot of the government security guys, so I was learning a lot about bonds. I just realized how vast the world of investing was. Prior to that, you have some mutual funds and that’s it.” She says it was her mother, an executive secretary, who originally introduced her to investing through a love of Louis Rukeyser. “I just realized the importance of it,” she says. “That money dictates your standard of living for the rest of your life. I realized it was important to understand the market. And the more involved you get in anything, the more interesting it becomes.”

Kaplan took about 10 years between the ages of 25 and 35 to raise her two children, though the phrase “time off” is misleading, since she was actually realigning the chess pieces for her next big move. Though she served her time with Play-Doh, she also took time to get her MBA, which took a bit longer than the average degree program because she wanted to hold out for the best professors.

“Having 10 years off was my intellectual stimulation,” she says. “I had a wonderful time making Play-Doh and doing everything, but intellectually it was perfect because I got my MBA half-time.”

She got her MBA at the Boston University School of Management.

“Sometimes I went days and sometimes I did nights, depending on my husband’s schedule because he would be home with the kids. So a typical day would be either I would go to school all morning or go to school in the evening, and then when the kids were at a playgroup, at nursery school or whatever, I would be studying and doing the preparation for classes, research, things like that, and then I would usually do that at night as well,” she says. Typically [with] the playgroups, you’d have five parents, five kids. And two of you would take care of the kids and the other three would have a couple of days a week off.”

She emerged from the house and landed at Conway & Davis in Needham, Mass., a high-level insurance firm where she worked for eight years. The firm offered financial planning as a “perk” to big executive clients, and the planning biz became Kaplan’s bailiwick. Getting her CFP license and high-level planning experience within the walls of an insurance firm allowed her to meet other people in the field and make the inroads into the industry that would eventually land her a role as president and chairman of the board at the Boston Institute of Certified Financial Planners.

“I really fleshed out my financial planning background,” she says, “as in any professional organization, you learn about the other practices by meeting more people in the field. You see the different things everyone is doing. It helped me define what I wanted my firm to be.”

She eventually realized she was an island at her own firm—handling her own financial planning clients but paying somebody else half her money for the privilege.

“If they had been willing to keep increasing what they were paying me, I would have still been there,” she says. “I think it was a case of wanting to keep what I earned and wanting to do things my own way. They really were more insurance people, so the elaborate steps of my financial planning I think they became annoyed with.”

“When I actually started my own firm, I just went from keeping half of what I was earning to keeping all of what I was earning. So it was really no risk at all.”
 

 

She launched in 1993. At first, she shared an office suite with two other people, but her company was just her and a phone, and she set up shop with LPL—a firm she’s still with because she still trusts it more than others not to try spiriting clients away behind her back. She played with hourly fees, but despaired at seeing her advice not implemented, and she wanted more control over the assets.

“Almost from the beginning I’ve never cold called, I’ve never given seminars, I’ve never done anything like that. It’s always been clients referring other clients,” she says.

One client is Jon Veznedaroglu, a former exec at a national bank who decided to retire when he was 45 in 2006. He had spent most of his professional life saving while working in M&A, credit cards and technology at his company (which he declines to name). He’d saved enough that he wanted to get out of the business, and he interviewed with some 12 financial advisors. Most of what he found was people with canned investment models and patronizing attitudes who assumed he was going to go back to work in six months and was just going through a phase. He’d also become leery of the private banking products at companies like his own.

“I was working at the bank,” he says. “The whole thing is you never want to go into the kitchen of the restaurant you’re eating at and see how they’re making the sausage. Places like banking, private banks they are factories. I understand the commission schedule. If they try to go outside the lines, forget about it. They spend tens of millions of dollars developing these models. Unless you are a mega-wealthy billionaire, you’re not going getting that sort of plan that’s sculpted for your needs.”

Kaplan, he said, “got it.” She knew that with his frugal ways and with the saving he’d already done, he could indeed stop working at 45 and behold the joy of a long retirement, even without tens of millions. She offered him a sense of comfort that he somewhat hesitatingly calls “motherly.”

A few months after Veznedaroglu retired, the market crashed, and he confronted a moment of terror that he’d made a bad decision—unstitching himself from his income and a banking industry at a time when it would be impossible to re-enter, and watching his portfolio tank for his trouble. He says Kaplan, acting not just as an advisor but a therapist, “talked him off the ledge.”

Since then his portfolio has regained its footing, and after letting it sit for seven years he’s even ready to take disbursements of principal in the middle of 2014.

Veznedaroglu had known of Kaplan from her radio show when he met her through a friend of a friend. But in many cases she’s found her clients from referrals through professional organizations such as the Women’s Business Network (a multi-disciplinary group) and the ICFP.

Kaplan has found herself on a number of “best of” lists, including the best advisors for doctors, and engineers also call her for trade meetings. Such people are often referred to as “clients from hell,” people who have a do-it-yourself attitude, who like to know the nuts and bolts of things and perhaps even micromanage what the advisor is doing. But Kaplan says bring ’em on. She likes working with involved people and there are lots of things they need help with.

“Often, people don’t understand what they own,” she says. “They hold accounts in three different places or five different places. They never marry them all together. They never look at their whole portfolio as a unit. We tend to find certain investments more appealing than others and we just keep buying them. Someone can come in with three different accounts and they’re all large-cap value.

“I think that having a few doctors and really seeing what they were going through with the advent of managed care, where they were really being crippled by what the third-party payers were willing to pay them, I think then when other physicians would come and interview me, they found that I was unique in terms of my understanding of what was being done to their whole field.”

She says a lot of the impression she makes has to do with simple candor and not using numbers as some legerdemain to stun her clients into muteness.
“I’m not trying to dazzle them with Sharpe ratios,” she adds. “I’m being much more candid, much more down-to-Earth.”

For several years she had the three-hour call-in radio show. There she held forth on many of her pet issues—like the risk in portfolios and how it harms cash flow. A conservative investor, she likes balanced funds—“a delightful investment class,” she gushes. “They are considered little old lady funds because they do have the cash and bonds. But in a year like last year that was fabulous that the S&P was up 29%, the balanced funds were up like 22% … 18%. You’re not laying on the side of the road in bonds. And so they really are a delightful investment class, especially if people are trying to bring down the risk of the portfolio as they are retiring and for the first time in their lives are not adding to it anymore. And they generate income.”

Her candor, though it may be anodyne to her clients, might anger the Gods elsewhere. She hates annuities, and has used her radio soapbox to say that even though she’s authorized to sell them, she won’t. Student loan debt is another pet peeve, and she goads clients to find good state schools. She got in hot water with the long-term care insurance industry for bad-mouthing their products in a Wall Street Journal blog, opining that the product premiums had become so high they were no longer worth the trouble for clients who likely wouldn’t pay in long enough to use them anyway.

She also recently unceremoniously dumped an Asian mutual fund, yanking $35 million and moving it to small-cap positions. (She won’t name the fund, lest bad publicity make a “not nice” move even less so.) It was simple, she says: Asian securities weren’t doing well, and her clients needed small-company exposure.

“Universally on the radio show,” she says, “callers would say this is the only place I can go to find out what’s really happening. So I would unmask commissions and all sorts of things to have people make the decision.” She would tell people there’s nothing wrong with commissions, but that you need to know if an advisor is making more money from one recommendation than they would from another.

She’s got a million-dollar minimum and it’s moving up, she says. Many of her clients are those anticipating retirement or a small number of people who have accumulated a lot of assets beforehand. She has 150 families.

“I say families because once I take on a client, I tend to take on everybody associated with them,” she says. “First of all, I see and help children of clients as a courtesy to them. So they’ll call me with their first job; where should they invest their first 401(k) contribution. Should they buy a house?” It’s gotten to the point that she cannot take on new clients regularly; before she stopped taking them, her asset growth was 10% to 20% a year, even during the recession.

“Even if you have a year like 2000, 2001, 2002, 2008, many people who are self-investors become terrified in a really bad market and want funds professionally managed. So one would think that a bad market would really be crippling, because certainly assets drop in value, but usually there’s more of a demand than ever from the client to take them on.”

“I’ve always been incredibly conservative. I found in the beginning that many advisors’ downfall was taking on too much overhead, more than they could really afford. I’m sort of a squirrel when it comes to overhead, although my offices are gorgeous. Each move I make is five years later than I could have made it, including starting my practice. So that conservative approach has been enormously powerful.”