While Katie Wilson was completing her MBA at Thomas College in Waterville, Maine, she worked as an intern at a financial planning firm. Wilson liked the work so well that she decided to become a financial advisor. But, like most new MBA graduates, she didn't just land in the perfect job after she graduated in 2007. Now, though, she believes she's found it at a small financial planning firm where she is well on her way to her career goals. "I like my job so much," Wilson says. "I just get excited to go home and tell my husband about my day."
Because I've heard so many financial advisors complain about how difficult it is to recruit young people into the business, I was interested in the details of Wilson's search and what she learned from it. As it turned out, I learned a lot myself by getting to know Wilson and her co-workers.
Those who read my September column on getting started as a life planner may remember Jeffrey A. Scales as the planner I went to for advice in late summer. I'd chosen him because he was an independent planner here in Rhinebeck, N.Y., and most especially because I was impressed by the quality of his staff when I looked at his Web site. I was even more impressed when I met them. I was intrigued, too, by Scales' nonchalance about the press. He was happy to do me a favor and make time for lunch, but eager to get back to clients, too.
When I decided to write a profile on his advisory business, particularly on the way he recruits and trains staffers, he said he didn't have time to talk with me until mid-September. When I got in touch with him in mid-September, he was still too busy to talk. I don't remember another financial planner who couldn't make time for the press. Naturally, that is most attractive to a reporter. (If he doesn't have time to talk to me, he must know something I need to learn, right? It's exclusive!)
But let me finish Wilson's story. After she got her MBA, she lived in Boothbay Harbor on the coast of Maine, got married to a man who was finishing his stint in the Coast Guard and enjoyed the coast while he finished. Then the couple moved to the Hudson Valley, where the husband had grown up. "In fall 2009, I started marketing myself," she says.
Wilson did some research on financial advisors in the area and found Scales the same way I did. She sent him an e-mail, telling him that she was moving to the area and was interested in a job in financial services. He responded cordially but had nothing to offer at the moment. Although she wanted to work with a small, independent planner, the numbers of those are limited in small towns.
So Wilson began applying for wirehouse jobs. "I figured you had to start at a wirehouse," she says. But the salary-$12,000 a year-was not encouraging. Also "they said they couldn't afford me if I only made $100,000 a year in revenues," Wilson says. "I had to make $250,000 plus."
The wirehouse recruiters did not like the fact that "I had no influence in the community," she says. "I had no book of business." Wilson grew up in Vermont. Early in 2010, Scales sent Wilson an e-mail asking: "What ever happened to you?" She began working in the office two days a week filing and answering the phone.
Her story piqued my interest. It seems wirehouses are always claiming that their reps are financial advisors. But do they hire a trained financial advisor who knows how to bring the best advice to clients? Or are they hiring a salesman who will bring in a substantial amount of money from day one? And this just after the Department of Labor has backed off-at the urging of many politicians-the requirement that all advisors must be fiduciaries. Why? Because it would limit the customer's choice in advisors: Only those who put the client's interest first would qualify, a mere handful under that proposed rule.
When Scales didn't have time to do a follow-up with me, I decided to spend an afternoon with his staff. JSA Financial works out of a large and beautiful home on one of Rhinebeck's quaint streets. Scales bought the house and had it totally renovated before the firm moved in December 2010. The result is stunning. The house now has five big offices on two floors, a kitchen and a parking lot. (Parking is dicey here.) Rhinebeck, founded in 1688, overlooks the Hudson River and is a popular tourist spot for the craft and antiques shows and the Dutchess County Fair, as well as leaf peeping in the fall.
When I arrived at JSA, I talked first with Gail Decker, a part-time receptionist who works Monday, Wednesday and Friday to schedule client appointments and take care of Scales' personal business. Decker worked for the telephone company where Scales managed the 401(k) plan; she's known him for 15 years. When she retired from the phone company in 2004, Scales asked her to come to work in his office and she did, "because I thought he would be nice to work for." After eight years at the company, she has no plans to leave.
Debbie Stanton, the office manager and jack-of-all-trades, has worked for JSA for 12 years. After she earned her B.S. in business administration from Marist College, she worked for IBM; when IBM laid off thousands of people in the Hudson Valley in 1992, she worked in real estate foreclosures until her dad, a former IBM employee, decided to make a second career out of financial planning. Stanton became his assistant. When her father retired, several financial planners tried to recruit her. Scales was one of them. She worked part time for three planners until she quit to raise a family. After her daughter Jamie was born, Scales tried to lure her back into the office. She began to bring her daughter into work on Thursdays when no clients were scheduled, and over the years increased her work time. Now Jamie is 15 and Stanton's son Brandon is 12. Stanton works 35 hours a week as manager/bookkeeper/recruiter/tech expert/compliance department/advertising, marketing and human resources department.
Because she's performed all the tasks in the office at various times, she can fill in for any other staffers to prepare meeting notes and follow-ups. When talking with Stanton, I believed I could trust her with anything; Scales certainly has a knack for recruiting dependable staffers, I thought. "I could never leave," Stanton says. "I could never find another job this flexible." Scales trusts her with setting her own agenda because "he knows I would never leave anything unfinished," she says.
In 2005, Scales left Ameriprise and signed on with Commonwealth, where he operates a fee-offset business. When he was with Ameriprise, Scales might find what he considered just the right product for a particular client and Ameriprise would nix it because Ameriprise didn't sell it. He is much happier at Commonwealth.
But can all the people Scales hires be ideal for their jobs? It seems so. In 2008, JSA put an ad in the Poughkeepsie Journal for a new staffer. Stanton received 20 to 30 resumes a day for two months. She read them all, interviewed many applicants, trimmed the list to six and then three before hiring Woodley Humphreys, someone new to the Hudson Valley who had the ideal training and experience to work for an advisor. Humphreys grew up in Scottsdale, Ariz., and graduated from Arizona State University with a degree in economics and sociology.
Just out of college, she began working for the Vanguard Group in Scottsdale. Like all new Vanguard hires, she spent one year taking phone calls, learning the lingo and answering questions like: "What is a mutual fund? How do I open a 401(k) account?" Then she was allowed to look around the firm and choose a career direction. Humphreys thought she'd learned quite a bit about funds; she decided to go into brokerage in 2000. First she took trades herself, then moved to trade management where her job was to correct trading mistakes. "I would investigate what had happened," she says. "Time was of the essence because we had to unwind the position and manage risks."
Then she moved to the institutional side of the business, where she worked with ERISA experts to deal with company 401(k) plans. Here she coordinated with the human resources department of the client company to get plan details ironed out. "I learned ERISA on the job," she says.
She also completed all the modules for the CFP certificate while she worked at Vanguard. She left Vanguard and went with her fiancé to travel around the world for nine months. When they resettled in the Hudson Valley where her husband grew up, she got a real estate license and completed yoga teacher training. An all-around person in my book!
In November 2008, she went to work at JSA where she began by answering the phone and preparing for Scales' meetings with clients. Then she began learning about life insurance and long-term care insurance, got her insurance license, and now works with clients to do research and find the best policy to fulfill their needs. She also does research on funds by working with Morningstar and talking to fund companies. The difference between working for a large corporation and a small independent planning practice is "night and day," she says. Amen.
Surely some readers must be thinking: Yes. But all these people are novices. None are at the top of their expertise like those who consult with large financial planning firms. True. And I think that's the beauty of it. Each of these women feels blessed to work in such a comfortable learning environment with so much responsibility. Scales is expert at delegating. He hires the best people he can find and then waits to see what attracts a new hire and where that person's talents lie.
And he encourages them to learn about that field and gives them a lot of independence to work with it. "Jeff is very good at encouraging us to be independent and go after our goals," Katie Wilson says. "He encourages feedback. He is also into career development." I'd also like to mention the kudos he deserves for keeping not just harmony but really joy in an all-woman office. Anyone who has ever worked in an all-woman company knows how difficult that can be.
All of the employees except Gail Decker have their Series 7 and Series 63 licenses. Wilson is sitting for the CFP exam in November. Scales encourages all kinds of training, as well as mental and physical health, paying for gym memberships for his staff, for example. He keeps a pretty brisk schedule out of the office himself. Every other day before work he kayaks on the Hudson for an hour to an hour and a half. He meditates every day, practices yoga in the morning and attends a yoga class on Sundays. The son of a member of Doctors Against the Vietnam War, he is a socially conscious advisor. Indeed, one of his specialties is social investing for clients.
Is Scales the perfect boss?
Nothing's ever perfect, of course.
But he comes close.
Mary Rowland's October column mistakenly referred to the Heritage Institute as the Heritage Foundation. Advisor Charlie Haines, who was profiled in the column, works with the Heritage Institute in Portland, Ore., which works with families on multigenerational planning.
Mary Rowland can be reached at firstname.lastname@example.org. She has been a business and personal finance journalist for 30 years and has written two books for financial advisors: Best Practices and In Search of the Perfect Model.