Right from the start, Jeff Thomasson was sure of his vision. It didn't matter that the profession he envisioned barely existed at the time. He probably never imagined he was creating what arguably would become America's largest, most successful independent advisory firm, one that now has 500 family and 100 institutional clients with more than $13 billion in assets under advisement. After all, he started the Indianapolis-based Oxford Financial Group in 1981 at the grand old age of 22.
It was the worst of times, characterized by crippling inflation, 20% interest rates, intermittent gas lines and an unemployment rate well on its way to double digits (it reached 10.8% in late 1982). The fragmented independent advisory business at that time was a tiny cottage industry populated with career changers.
Thomasson had just completed his MBA at Indiana University, where he was named outstanding student. Even that hadn't come easy. The average student in Indiana's MBA program was in his or her early 30s, and Thomasson had to make several trips to the admissions office in Bloomington to convince them to admit him. He had graduated from Ball State at age 20 after three years of study.
Oxford was launched the same month Thomasson got married. He had asked for his wife's hand from his future father-in-law, a homebuilder who hadn't built a house for a year, and the older man offered him words of worry and concern. He worried Thomasson didn't have a job, much less a business. Nor experience or clients. Nor did he know any affluent people. The idea looked like a pipedream. It seemed like a lousy time to start any business, much less one in wealth management. His future mother-in-law had doubts, too, but she knew the two were in love and gave it her blessing.
Indeed, Thomasson hadn't rubbed shoulders with many wealthy folks growing up in the Hoosier state. But he had learned about hard work. His father was disabled and his mother was a bank teller.
Given his age, Thomasson could also afford to fail, though that was never an option for him. "We had a negative net worth [with student loans,] so our goal was to get back to even," he recalls.
The nascent entrepreneur had first given serious thought to his own firm during his second year as an MBA student. In the fall of 1980, he worked with a professor developing a business plan. "Back in 1981, you were either a trust officer, a money manager, a life insurance agent or a stockbroker. I really wanted to do something different," he says. "I knew I wanted to go into finance and I knew I wanted to make a difference."
So he went out and did something few RIAs today would deign to do. "A friend said all you have to do is cold call nonstop for two or three years and you'll never have to do it again, so I did," he explains. "Thank goodness it was before voice mail."
Although he looked closer to 16 than 22, the young advisor had been an ace finance student, specializing in investments and taxation, and he exuded enthusiasm and confidence. "I didn't know what I didn't know," he jokes. "I was incredibly confident about what I did know."
The Early Years
Oxford was established as a fee and commission firm. That first year, Thomasson earned about $60,000, split almost equally between two revenue sources. By 1984, the firm was thriving, with six employees generating about $600,000.
From the outset, Oxford cultivated relationships with allied professionals, particularly CPAs. Some became good friends.
In 1984, several people suggested that Oxford convert to a fee-only business. Thomasson and his colleagues liked the suggestion so they dropped their securities licenses that year. Even after the change, they pulled in another $600,000 in 1985, a "huge victory," he says. Still, it took another decade before folks in the greater Indianapolis region, particularly competitors, believed the firm was truly fee-only.