Steven L. Sanders learned his first lessons about managing money as a middle school student with a paper route. He learned how to count his earnings, and-not being on salary-he learned how to provide good service by making sure the papers never got wet. The results were that he tripled the number of customers he had and began developing the principles and concepts that have led him to a successful career in investment and wealth management.

Sanders used his beginnings as a child entrepreneur and, subsequently, his nearly 25 years of experience in the financial services industry, to create First Genesis Financial Group in Newtown Square, Pa., a suburb of Philadelphia, where both he and his partner, Roman C. McDonald, grew up. Sanders, chairman and CEO of First Genesis, and McDonald, president and co-founder, are African-American, and target the African-American community, which they feel is one of the largest blocs of underserved investment and estate planning clients in the nation.

First Genesis was created in 2005 and is now approaching $100 million in assets under management, with an annual 70% growth rate. But even more important, according to clients and associates, is the reputation the firm is building for community service and promoting financial education, especially among African-Americans and small business entrepreneurs who are approaching retirement.

"We feel we are filling a void in the marketplace," Sanders says. "We are bringing institutional-style portfolio management techniques to individuals and business owners and serving people with as little as $25,000 to invest."

First Genesis has quickly become one of the largest firms in the country serving the African-American community, and it has accomplished this partially through education efforts. Sanders does a local financial radio program, has written a regular financial newspaper column and is often called on for financial commentary by national television networks, and members of the firm conduct regular seminars for corporations and the public. Contacts are developed from all areas of life, including Sanders' and McDonald's strong ties to the church and the African-American community.   

"We have developed a niche," says Sanders. "This is the first generation of African-Americans with wealth approaching retirement and they need our message. You do not want to just spend your assets; you want to leave a legacy for your children and grandchildren. Plus, young people are beginning to save more, and financial planning is becoming important to them. A couple of generations ago, the stock market was considered the enemy by young people. Now they are interested in how it works and what they need to do to take advantage of it."

Sanders, who has worked as an institutional investment manager and was employed by a large bank to help educate young people about finances, has written a book, Money Matters for Young Adults. More than two decades ago he founded Sanders Financial, which focused on high-net-worth individuals and small pension plan sponsors. That led to the creation of Advent Capital Management Partners, which serviced large retirement plan sponsors.

The two companies merged into a successful institutional money management firm before Sanders branched out to create his own wealth management firm of First Genesis. Now, Sanders, who was educated at Howard University, and McDonald, a graduate of Lehigh University, divide duties, with Sanders, as chief investment strategist, concentrating on the investment side, and McDonald, as chief estate planning officer, specializing in estate management.

Both men are involved in numerous community organizations, academic groups and African-American groups. "We are passionate about our community and especially about the urban community," McDonald says.

First Genesis is associated with Creative Financial Group, a boutique wealth management organization for high-end estate and business succession planning, which is part of the New England Life Insurance Co. The firm is also a representative of Curian Capital, a subsidiary of Jackson National Life         Insurance Co. First Genesis offers Security and investment advisory services through New England Securities (NES) of Boston.
First Genesis offers a range of services for both individuals and privately held corporations, including asset management; business succession; executive and employee benefits; retirement and estate planning; financial planning; and tax reduction strategies.

The young firm added 100 clients to its base in the past two years and will grow from nine to 14 staff members this year. Although it services clients with small portfolios, the typical client has $200,000 to $20 million in investable assets. In addition to nearly $100 million in assets under management, First Genesis is responsible for $340 million in protection products, such as insurance, for clients.

"We want to acquire new clients and add relationships with advisors who share our philosophy of serving the community, but we want people to become clients for life," says Sanders. "We want to under-promise and over-deliver. I loved the financial services industry in the past, but it is even better now, in part because of changes in technology that make it more efficient and easier to provide services. We can reach the global investment marketplace at the same time that we have been able to carve out a local niche of clients, and there is something magical about seeing our clients reach their goals."

In order to help clients reach those goals, First Genesis concentrates on a wide mix of asset allocation, including global investments. "We make sure the portfolio is global and that our client also understands where bonds and stocks fit in and where they need alternative assets," Sanders explains. "You need a good mix of traditional and nontraditional asset classes, not just 60% stocks and 40% bonds. You also need international equities and bonds, and some of that needs to be in emerging markets and some in established."

Sanders feels strongly that a diverse portfolio can include growth opportunities in countries such as China and India, and at the same time markets such as Ghana in Africa, which has a strong stock exchange and where First Genesis "has friends on the ground."  The firm's emerging market plays include investments in growing infrastructure, but First Genesis also likes commodities such as gold, corn used for ethanol production, and the wheat and soy needed for growing populations.

"With some people, we start with education: How do stocks and bonds react in a bull or bear market, and how do you take advantage of this? What does the Federal Reserve Board really mean to the individual? If there is a recession, should you move or reallocate resources?" Sanders asks. "If you are a client of ours, we began to anticipate the recession in the market a year ago, and we began to move more into commodities."

Fees at First Genesis vary by services provided. Asset management costs range from 70 basis points to 185 basis points. The client mix is about 40% small and medium-size business owners, 40% retirees or near-retirees and 20% institutions and individuals. If a client desires it, the firm will screen investments for a variety of social concerns, taking into account religious beliefs, concern for the environment, a client's union involvement or their desire to avoid "sin" products.

Even though part of First Genesis' target audience is near-retirees, the firm has recruited young people, such as Christopher Glover, 30, who is now senior investment analyst. "I was on a trading desk of a municipal bonds firm with 50 traders and 2,000 agents. I and one colleague made up the entire minority membership of the firm. I needed a mentor, and Steve was that person," remembers Glover. "He gave me guidance and then we talked about First Genesis. Steve said he did not want me to work 'for' him, he wanted me to work 'with' him. Everything at First Genesis is about individual success and personal growth and responsibility."

Sanders adds, "One of the challenges for a young person is working with a client twice his age. We have advisors dealing with people their grandmother's age. I have spent a lot of time training young people so they are willing to listen. We say clients who know us will like us and will trust us because of our depth of knowledge."

Two types of clients tend to show up on First Genesis' doorstep: those new to wealth management who are frustrated by the prospect of investing and those who are dissatisfied with their current investment returns. "But sometimes it is not a dissatisfaction with the returns, but a lack of communication on the part of the advisors," Sanders says. "For those who are overwhelmed by the prospect, we revert to an old African proverb. 'How do you eat an elephant? One bite at a time.' We prioritize, and then we chip away a little at a time."

One First Genesis client also relies on an old saying to explain his involvement with, and enthusiasm for, the firm. "My father used to say there were preachers who were so busy doing the Lord's work, they never had time to pray," explains Dr. Bernard E. Anderson, a nationally known economist and author who was the first African-American to earn tenure at the University of Pennsylvania Wharton School. "I am an economist and have served in academia and the public sector and private sector, but I never paid enough attention to managing my own money."

Anderson first contacted a financial planning firm in Washington, D.C., while serving in the Clinton Administration but felt the firm's planners did not take into consideration what he already knew and provided little follow-up, so the effort fell by the wayside. Then he returned to Philadelphia and made the acquaintance of Sanders, who had once belonged to the same college fraternity as the economist.

"I was impressed with the way he explained my options to me. We were not looking for the fast buck, but Steve convinced me I could take a little more risk. He put me in international markets in Western Europe, which is not something I would have done. But he made me feel comfortable with it, and I am not stuck with anything-we can always make adjustments," says Anderson, who also appreciates the educational side of First Genesis.             Anderson focused much of his academic research on the racial inequalities in American economic life.
"There is a major difference in the way African-Americans save and invest compared to whites, and part of what Steve does is explain to people the importance of saving and investing to improve their quality of life."

It was a shared church affiliation, rather than fraternity, that brought Kimlar Satterthwaite to First Genesis, but it is his long employment with the Philadelphia Water Department, the fifth-largest public utility in the nation, that may prove to be the best resource for First Genesis.
"I have worked in customer service for 33 years, and I get a feel about people. I was impressed by Steve. I told him I was nearing retirement and he should keep me in mind," Satterthwaite says. "A few days later he called me and every question I asked he gave me a sensible answer that I could understand. We are in the preliminary stages of planning, but he knows I want to take a vacation, pay off some debts and redo our kitchen, so he gave me a projection on how I can use some money and then save the rest for the long term."

Satterthwaite is confident enough in First Genesis that he has arranged for a brown-bag seminar, at which the firm will talk with some of the 3,000 water department employees, nearly half of whom will be retiring in the next few years.

"For a lot of people, especially in the African-American community, the wealth they have accumulated is being negated," warns McDonald. "There is a lot of first-generation wealth out there, and as the baby boomers are retiring, they need investment advice. First Genesis brings a holistic approach to the table to plan how to use and preserve wealth, as well as how to leave a legacy."