Here's a fitting question for this decade: Can an extremely nice guy be a very successful and hard-nosed businessperson? By just about any measure, Bill Carter has managed to pull it off.
With the help of a dedicated staff, the 55-year-old Carter has built a $400 million fee and commission shop on what even he admits have been part-time hours for much of the past three decades. Today, Carter Financial Management of Dallas has 190 clients, and the average one has $2.5 million in assets. To service them, Carter and the three partners he's brought on have grown the firm to 15 advisors and 22 professional staff members working from seven offices.
So what did Carter do with the workday hours he wasn't in the office? He was giving his time to a select, but large, group of academic, civic and professional organizations that are richer in more ways than one as a result of his efforts and vision. Some people do extreme sports. Bill Carter does extreme volunteerism.
The graduate of Texas A&M admits that he probably would have had a much bigger firm and more income sooner if he'd spent all his time in the office. But that, to Carter, would have been missing the point. "When I got out of the Army and wound up setting my sights on financial planning, I made a commitment that I'd be involved in three things," Carter says. "I wanted to help financial planning grow as a profession. I had a great time at Texas A&M and wanted to give something back. And I felt that everyone has an obligation to give to their community, as corny as that sounds."
To some people, that might have meant joining a couple of boards, doing a little fund raising, maybe leading a Boy Scout troop or two. For Carter, it's meant more than 30 years of nonstop service.
In the planning arena, he's been chairman of the CFP Board of Standards, president of the International Association for Financial Planning (IAFP) and held numerous leadership roles with the Institute of Certified Financial Planners (ICFP). In the early 1980s, when there were way too many
questionable sales practices, professional organizations were looking for a young face with wisdom and integrity to present to the public as an example. Carter, a clean-cut boy wonder, was an obvious choice.
He also was a long and vocal proponent of the merger between the IAFP and ICFP. The resulting organization, the Financial Planning Association (FPA), was formed in 1999. Today, Carter is a trustee of the Foundation for Financial Planning, which has donated funds to support FPA members' pro bono planning work for families of victims of the September 11 terrorist attacks on New York City and Washington.
"It's been important to me to work with someone who cares so deeply about the industry he's in," says Joanne Galbraith, a partner at the company who has run its investment-advisory arm for nine years. "Bill evolves with the changing times and keeps pace with the leaders in the industry and is among them. No one here is resting on their laurels, least of all Bill."
His work as a dedicated Aggie has been just as impressive. Since graduating in 1969, Carter has been a tireless fund-raiser and a leader of just about every committee at Texas A&M University. He's been a member of its President's Council executive committee since 1992. And he's been a member of the 12th Man Foundation Board of Directors, the school's leading source of fund raising for its athletic programs, for 15 years. He received the college's Distinguished Alumni Award in May 2000.
On the community front, Carter has been involved with too many organizations and charities to name them all. His activities include sitting on the boards of several groups, including the Cotton Bowl Athletic Association, the Children's Medical Center of Dallas and its Planned Giving Council, and the Baylor University Medical Center.
Those who know Carter say he is a good-hearted person who wants the best for everyone around him, including staff and clients. Some people turn that kind of charm on and off, but Carter is sincere, according to competitors, staff and clients.
How can he be so nice and so driven?
Raymond James CEO Tom James says his father had some of the same qualities as Carter, whose firm has done business at the brokerage giant since the early 1990s. "I think you can be a driven person and have good values and good personality traits," James says. "It's true of many of the leaders on the political and corporate horizon who leave their mark. My father was one of the early progenitors of financial planning, in the 1950s. He founded this firm, but he was soft-spoken, too. I think that, like Carter, those who demonstrate knowledge of planning and concern for their clients do well over time."
Today, in many arenas, Carter's reputation precedes him. That's been a calling card for advisors looking for the right firm to call home. When Robert Berg decided to put his expertise as a Fortune 500 corporate finance officer to work as a planner, he spent a year searching for a place he'd want to be. "I looked around a long time and kept hearing good things about Carter Financial," Berg says. After interviewing, he signed on "with a handshake in 1988."
What's kept him at the firm is the fact that "Bill has lived up to the commitments he made to me," says Berg, now a partner. "He's continued to build the business around the full-service financial planning concept so that every client gets a comprehensive plan. He's a diplomat who encourages people to be the best they can be."
But Carter Financial Management wasn't always a rip-roaring success. Carter's volunteer activities often deprived the firm of his time and energy. Anthony Greene, chairman and CEO of Raymond James Financial Services, believes Carter Financial took off after Carter left the CFP Board of Standards in 1994. Since then, the firm has tripled revenue to $2.9 million, and the number of practitioners have increased 50% to 15.
During Berg's early years at the firm, the United States was in a recession, and Texas was in even worse shape, teetering on the brink of a banking and real estate depression. Carter honored the financial arrangements he made to Berg and others; he had set aside reserves in the mid-1980s for an inevitable downturn in the business cycle. But it wasn't easy. He recalls there were some months in which he didn't know whether he would be able to pay the bills.
The current downturn that started in 2000 is going a whole lot better. Carter set aside bigger reserves, which he hasn't had to tap yet because his firm has remained quite profitable. One reason: Today, the fee-and-commission firm derives more than 80% of its revenues from fees.
Carter credits his success to financial planning, too, but it wasn't his first career choice. In fact, in his early twenties, he bought a specialty-advertising franchise that turned out to be unworkable. That was a jarring comeuppance after his glowing time at Texas A&M, his Army service, a summer abroad in Greece and several successful years in retailing. What made it more disturbing was the fact that he borrowed the $15,000 to buy the franchise from a hometown banker who was his Dad's banker, too. And that meant he had to own up to the failure in very real terms-he had to pay the money back.
To do that, he began casting around for a career that would fulfill his sense of duty-ingrained in him during his college and military years-and a desire to control his destiny. A friend who was starting a planning career urged him to consider the choice, too. "I went in his office and saw all these files and numbers and said, 'This is not for me,'" says Carter. "But the more I told him what I was looking for, the more he convinced me that planning would fill the bill."
Carter signed on in 1973 with Financial Services Corp., where he worked for several years until economic downturns led to the firm's temporary demise. That experience drove him into business for himself. Luckily for him, the same hometown banker knew Carter was a man of his word and was willing to lend him money again-this time to set up his own advisory office. "I planned to be a sole proprietor, but that didn't last long," he says.
Planning mentors with whom Carter had worked encouraged him to get involved with the IAFP, and he was elected president of the Dallas chapter within just a few years, which qualified him to be a member of the group's national board. The experience and exposure, along with obtaining his CFP certification in 1976, taught him about making a business into a going concern.
In the meantime, another planner in Lubbock, Texas, watched Carter's growth with interest. Lee Pennington, a partner in Pennington, Bass and Associates, had talked to Carter about the planning profession before Carter embarked on his career. "I'd been in the industry since 1968, and he called me and asked me if planning was something worthwhile," Pennington says. "When I think of him, I think of his dedication to his clients, friends and profession. He's loyal and tenacious and can be very politic. He could have been a great politician, still could be. He's just had one problem all of his adult life. He went to Texas A&M instead of Texas Tech, and we usually beat him at football." Pennington doesn't say what era to which he is referring.
Carter, who started Carter Financial Management in 1976, wanted to provide his clients, many of whom came with him from Financial Services Corp., with a high level of service, and that desire resulted in his building a team instead of going it alone. A few years later, in 1980, Carter instituted a comprehensive annual financial planning review that showed clients where they were in meeting their goals. Their response? "They told us this is what they wanted to see and asked what took us so long," he says.
Not long after, product salespeople, especially those selling tax shelters like limited partnerships, discovered the mantle of financial planning. "I saw my job as helping people to accumulate wealth, but everyone in the world got into the business as planners, but almost none of them were planners," Carter says. By the late 1980s, when many advisors were grousing about planner bashing in the media, Carter wasn't. He was far more disturbed with the way many salespeople had used the title of financial planning to deceive and abuse the public trust. Recognizing the profession's Achilles' heel-a lack of minimum entry standards-he became involved with the CFP Board of Standards and eventually was named its chairman.
His firm sold some tax shelters, but Carter kept the emphasis on planning. The same was true as the industry evolved into asset management in the 1990s. "I saw financial planning being pushed to the side. I had a meeting with our company, and I said, 'Look, I got into this business to be a financial planner, and we're going to continue to do that. We'll be asset managers, but only as part of planning.'"
That stance has continued to win Carter and his firm admirers. One is Dr. Tom L. Potts, a former chairman of the CFP Board of Standards and professor of finance at Baylor University. Potts met Carter when the latter was president of the IAFP and Potts began getting excited about financial planning. He subsequently went on to take the reins of the CFP Board and to encourage the creation of practice standards. Potts also created Baylor University's major in financial services and planning. "I've known Bill for 16 or 17 years now," Potts says. "He really encouraged me as I developed the financial services and planning degree here."
In fact, Potts trusted Carter enough to refer an affluent couple to him for planning. They've been Carter's clients ever since. "What impressed me was he spent the first year getting their needs and goals in order. He didn't sell them anything that first year. He helped them build a proper foundation first. Every time I run into them at a social function, they tell me how glad they are to be working with Bill Carter."
Another admirer is Raymond James' Greene, who has watched Carter's firm become one of its top 10 offices. "When it comes to financial planning, a lot of people talk the talk and go through the process," Greene says. "Not many go as far as Bill does to really walk the walk."
And Bill Carter is glad to be spending more time with his clients these days, too. In the last five years or so, he's scaled back a number of his professional and civic commitments. "My objective as many of these activities came to an end was to come back and build my company. I was ready for that, and it's made a huge difference."
The result? Revenue at Carter Financial Management has tripled since 1994, and Carter's own planning income has doubled. (His overall income has tripled, counting his profits from two real estate franchises he owns.)
Kathy Muldoon, a partner at Carter Financial who's worked at the firm since 1979, says Carter's passion and focus are givens that are refreshing even today. Even during the dark days of the economic recession that hit Texas particularly hard a decade ago, when both she and Carter worried how they would pay the bills, Muldoon says her trust in Carter never wavered. "There was a stretch when my assistant made more than I did," Muldoon says. "But the difficult times were never difficult because I wasn't worried about Bill's character or his capacity to work hard or be smart."
Muldoon leaned on that character seven years ago when her husband was killed in an accident. "Bill was a steady hand. I've told people he was my left lung for a year, and in hindsight, that's accurate," she says.
Muldoon has married again-to one of Carter's longtime clients. And Carter, whose personal life, like his firm, often took a backseat to his volunteer activities, seems to be reordering his priorities. He married for the first time last year to a woman he says is the love of his life. They dated for eight or nine years before tying the knot. The most impressive thing, he says, is that he loves his wife, Fran, more now than he did the day they were married.
The hard work at the firm is really paying off now, as evidenced by the way business has held up throughout 2001. "This is a great firm to work at. We've done the long-range planning," Muldoon says. "We've put in the time and energy. We're in a good place now."
For Carter, the challenge at hand is doing everything better than the firm does it now. That means converting to a paperless office, adding more planners and hiring a full-time marketing person. But the future will be nothing if not interesting. "There will be more competition. I'm not particularly worried about that. The business today is in the best shape it's been in. There appears to be a return to financial planning," Carter says. "And when the public is better served, we all win."
Side Bar:
The Success Of Common Sense
Long-term success, says Dallas-based planner Bill Carter, is a matter of implementing planning and service fundamentals in ways that matter to clients. Here's a look at some of the essentials Carter has used to build his $400 million firm:
Put financial planning first. During the early 1980s, many advisors gave lip service to planning while selling limited partnerships. Later that decade, the buzzword was asset management. At both times, planning fell by the wayside, but not at Carter's firm. "What makes Bill successful is he's always been dedicated to comprehensive planning," says Thomas James, CEO of Raymond James, where Carter has kept client accounts since the early 1990s. "He is knowledgeable and puts client interests first. That's why he doesn't lose clients."
Educate, educate. Carter makes education a reality for both clients and the 37 planners and professional staff members who work at the firm's seven offices. More than 150 clients came in November to the firm's 22nd all-day educational seminar, which featured mutual fund managers from PIMCO and SunAmerica. Classes for staff and planners take place every Tuesday morning. Topics range from client service to planning and insurance.
Make client service a reality. Carter teaches classes on service himself. The results have been far-reaching at the firm, which even has implemented a scheduling system designed to ensure that no client waits more than five minutes to see a planner. "We like that Bill takes the time to see that we're taken care of," says Cozette Hawthorne, who along with her husband, Ray, is a longtime client. "We're retired and have lots of questions, but he always answers all of them. We're treated with the utmost courtesy."