Raising The Bar

One year ago almost to the day, I remember meeting David Goad of FPtransitions in New York City and having a long conversation about the state of the profession. At one point, David raised a criticism of our magazine and virtually all of our competitors. He pointed out correctly that we devoted a lot of editorial space to the most successful firms in the profession and gave short shrift to the typical small advisory shops.

As I was writing this month‚s cover story about Charlie Haines‚ firm, I recalled my conversation with David. I certainly can‚t argue with the accuracy of his observation. However, there is a valid reason why editors like myself tend to focus on professionals like Charlie Haines, who are exceptional and think outside the box.

It‚s not simply that they make more interesting material for articles. The overarching reason is that a practitioner is likely to gain a lot more insights into the business from reading about an extraordinary firm than from an ordinary one.

I don‚t expect readers to learn about Charlie‚s unique vision for a multi-client family office and go out and hire a clinical psychologist and a corporate governance expert or create a center for philanthropy, like he has. But I do believe they should know that some folks are raising the bar in ways few of us could have imagined. At a time when falling equity prices are compressing profit margins at many firms, the fact that revenues at Charles D. Haines & Co. climbed 19% between the first and second quarters of 2002, despite the headwind of the stock market, should raise some eyebrows.

It‚s no secret that the worst bear market since the Great Depression has challenged almost every industry and profession in America. In the 1990s, it was assumed that once-volatile industries like technology, financial services and travel had figured out how to smooth out the business cycle. Instead, it‚s turning out that supposedly non-cyclical industries like supermarkets, pharmaceuticals and telecommunications are hitting the same air pockets as auto makers and semiconductor manufacturers.

Advisors are caught in an interesting paradox. Just as the market is depressing revenues, it‚s also prompting more do-it-yourself investors than ever to throw in the towel and seek advice. Demand for your services has never been higher. But if a firm is running at full capacity, the only way to add clients is to add capacity, or people. Consolidation is one way out; so is better management. But the advisory profession finds itself in a far stronger position than industries like technology and telecommunications that are afflicted by plummeting demand.

Evan Simonoff, Editor-in-Chief

[email protected]

P.S. This month we are introducing a new experimental service called InkLinkMobile that we hope will help you access articles when you don‚t have the magazine in front of you. In this issue, we put Smart Codes at the end of each article we think you might want to archive or share with colleagues.

Check it out at www.inklinkmobile.com or www.financialadvisormagazine.com and enter a Smart Code in the window with two red arrows. Let us know what you think.

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