Not only did the move eliminate conflicts of interest and differentiate the firm; it also sprinkled some marketing sizzle on it. Allied professionals started taking Thomasson to client meetings and urging people to hire the firm. "I almost got a discount because I wasn't in the product distribution business," he says. To this day, allied professionals remain the "lifeblood" of the firm's growth strategy and it tries to reciprocate when appropriate.
In the mid-1980s, it seemed as if Oxford was adding a new client almost every week. Many of the early clients were physicians; others were business owners and people who had inherited money. The firm also started advising some retirement plans.
But even though the top line was surging, Oxford was already experiencing growing pains. When Jeff Stroman, a former Robert W. Baird branch manager, joined Oxford in 1987, the firm still had fewer than ten employees and it had been a successful fee-only concern for a few years. But it faced many operational challenges, and it was frequently forced to invent the wheel. "Before Schwab revolutionized how mutual funds could be bought and sold, all trading was done direct with each fund company one trade at a time," Stroman remembers.
When it came to performance reporting, there were no "off the shelf" vendor systems. "We had to create our own proprietary system," Stroman says.
Ditto for data aggregation software, which didn't exist. All the client portfolio information was entered manually from hard copy custodial statements.
A CPA from a regional brokerage firm, Stroman was brought in to build out Oxford's investment platform. The firm's investment offerings in the late 1980s were limited largely to a small group of no-load mutual fund companies and money managers. Stroman believes the firm had about $25 million under advisement at that time. But Oxford needed to expand its head count to deal with the client growth and the additional workload.
By the time the fee-only RIA business surfaced on the financial services industry's radar screens in the early 1990s, Oxford was going gangbusters. Lots of small business owners who had sold all or part of their businesses were searching for an advisor who was not selling products. So were executives from public companies. Many businesses in the Indianapolis area that were sold at prices ranging from $10 million to $100 million played right into Oxford's hands, so it moved to expand into family office types of services. Very successful small business owners tend to run in the same circles, and soon Oxford had a new referral stream. "They were incredibly attractive clients with sophisticated planning needs that had not been addressed previously because their net worth was largely tied up in the business," Stroman says.
As its client network was growing increasingly affluent, Oxford expanded its portfolio of services and investments and started to compete in the family office world. In the mid-1990s, it started offering clients alternative investments, particularly hedge funds. Oxford was an "early adopter of hedge funds and, by and large, clients have been well-served" as a result, says chief investment officer Mark Green.
By 1997, the firm had persuaded many clients to establish trusts at several banks. It quickly grew tired of banks trying to cram proprietary products into these trusts. In typical fashion, Oxford simply established its own trust company and told clients it would charge no additional fiduciary fees. That unit now has more than $3 billion in assets.
'Vision, Smarts'
The late 1990s was a magical time for the U.S. economy. With the exception of the technology business, few other industries were participating in the boom to the degree that the independent financial advisory business was. Around the nation, many RIA firms were experiencing the same growth trajectory that had propelled Oxford virtually since its inception.