How do you turn a prospect five years away from retirement into a client? That's where Hanson McClain's customer service procedures and relationship management technology come into play. There are continuing soft touches and invites for the prospects to come to seminars and meetings to discuss everything from plan and tax-law changes to investment and retirement trends. Once people show interest in working with Hanson McClain, the firm goes all out to win their business. Those who sign on get a level of service that many other firms only provide to very wealthy clients.
The phone is answered and clients are greeted at the firm's main Sacramento office by Katherine Hall, who is the director of first impressions. When clients arrive, Hall has their coffee and cookie order ready (the firm bakes fresh Otis Spunkmeyer cookies daily) evermore. There is no automated voice mail system at the company. Hall has the ability to direct anyone who calls in to the most appropriate person. Everyone works with the same contact management system, and a client's information is input within 15 minutes of a call, so that any advisor at the firm can answer just about any client question. And Hall, who has access to all employee calendars, can schedule meetings as needed. "Without these standardized practices and checklists, I don't think we'd have been able to get to where we are now," says Julia Miller, who manages client services at the firm. "We constantly take a look at the way we do things and see what needs to be tweaked. There are no sacred cows here. We constantly look for ways to improve client experience."
On the investment management side of the company, Hanson McClain has developed about 20 mutual fund and ETF portfolios designed to generate 7% to 8% long-term returns. "Obviously in years like this, that's hard to do, so I think the key is making sure the asset allocation you use allows the individual client to ride out the turbulent times so that they benefit from the subsequent recovery," says David Schauer, chairman of the firm's investment committee.
One of the hallmarks of the firm's investment management style is that it includes eight to ten funds per portfolio; it also holds 50% to 60% stock allocations and experiences low turnover. "In some years, we don't replace any holdings, and in other years, we might replace two funds," Schauer says. The company favors names such as Selected American, Loomis Sayles, Dodge & Cox and even Vanguard. About 20% of the firm's portfolios comprise global assets.
The investment horizon ahead? Schauer says that with both fiscal and monetary policy working to stimulate the economy, "we think we'll see the economy moving in the right direction in the second half of the year. We think we'll have a stronger second half than we've seen to this point," Schauer adds.
Equally important for clients is the advice they receive from Hanson McClain's advisors. All of them have CFP certificates, and the firm is highly selective in its hiring process, which, because of its aggressive growth, never ends. Steve Burnett is the president of the financial advisor division at the firm and oversees both practices and hiring. "Recently in Houston, we went through 300 applications to get 60 interviews to get five candidates to fly to Sacramento to find one advisor," says Burnett, who is still an active advisor at the firm. "The group of advisors clicks well here. I attribute that to smart hiring. The culture mesh is critical."
The practices and final planning product delivered to Hanson McClain's clients are every bit as critical. "We really focus on our niche. They rely on us. They don't have the background to do their own research," Burnett says. "So we take it to heart to give them the best plan possible to meet their needs."
It's a rough environment for retirees these days, the advisor admits. "Our job is to tell the client what they need to hear, not always what they want to hear. Some of our advisors have to tell their clients, 'You shouldn't retire now.' Clients are looking to sustain their lifestyle for the rest of their lives. We're honest with them, and we hope they don't walk down the street at age 51 and buy into the notion that they can live forever on a $350,000 portfolio taking 9% distributions."
As for the future of the company, Burnett, who has been with Hanson McClain since 1996, says he likes the way his bosses do business. "They like to hear: 'Have you ever thought about doing it this way?' They're smart about business. They know what success looks like."
Hanson himself concurs. "I have no desire to work for someone else and no desire to retire, so clearly I don't have plans to sell the company, at least not in the next five years. I try to look at my life in five-year increments."