Turbulent times test mettle of financial advisers

In the wake of a global financial crisis, many financial advisers in the Capital Region have found t

In the wake of a global financial crisis, many financial advisers in the Capital Region have found themselves in a sink or thrive environment.

Rodney Brewer, a managing associate at MassMutual Financial Group in Albany, said he has acted as a recruiter of other financial advisers for several years. He said the business environment is more diffi cult today than in the past, which may be good for established advisers like himself.

“In the past, if I hired five financial advisers I’d have one of them left after two or three years. The staggering difference is now I’ll probably have just half of that one . . . after two or three years,” Brewer said. “I have 30 percent to 40 percent fewer competitors in the market because a lot of people have failed in the Capital Region and throughout the whole landscape of the county because of the financial collapse. It is tough, but those that can prevail have a huge opportunity ahead of them. I just took over 825 accounts from a guy who left the business in December.”

Financial advisers are usually individuals with securities licenses who can sell various financial products like stocks or bonds but more often mutual funds and life insurance annuities.

Brewer said he’s been a financial adviser since 2004. He said he’s never been a “stock picker”; he outsources the money management of his clients to several companies that offer managed portfolio accounts that make investments based on a client’s risk tolerance. He said the strategy is more tactical than mutual funds that invest more broadly across economic sectors. He said he thinks the wild fluctuations of the stock market since the collapse in 2008 are now leading more people to seek out financial advisers.

“I think people are more apt to talk to an adviser today because before the calamity people could kind of manage things themselves and do well because the market was going up. When the market goes down people start to doubt themselves,” he said.


Joseph Ventura, president and manager of William Tell Financial Services with Invest Financial in Latham, said most financial advisers in 2009 probably had 10 to 15 percent declines in business from 2008 and many have gone out of business. He said many of the surviving financial advisers have spent most of their time over the last year helping their existing clients weather the financial storm and haven’t spent nearly enough time seeking out new clients. This year he expects that to change.

“We’ve been more proactive for the last three months. We’ve had more time to follow up on referrals, we’ve had more time to get involved in workshops and more soliciting and prospecting than ever before,” Ventura said.

Ventura said in 2009 he noticed more and more of his clients being reluctant to invest in mutual funds that had front-loaded sales charges for the purchase of every share in the fund. He said he thinks that trend has abated.

“People say, ‘I’m already bruised, I don’t want to do this because it costs me money,’ ” he said. “People now are more apt to take advice when given. In some cases they are calling us. I had a church recently that got a $100,000 gift and if it was 12 months ago the board of trustees and the church members probably would have said, ‘Let’s just put it in the bank for now.’ But the first thing they did was call me and say they think they should put it in the market. When a discerning, conservative group like folks from a church feel like they’re good with that, it’s good writing on the wall.”

Dawn Shannon, a financial adviser for NPA Financial in Clifton Park and the president of the Capital Region chapter of the National Association of Insurance and Financial Advisers, said the market for financial advisers is more stable here than in many parts of the country because of the high number of state employees and because the local real estate market never crashed as hard as it did elsewhere. She said local property taxes are too high and continue to drive many elderly citizens to sell their homes and leave the area, but financial advisers affiliated with national firms often don’t lose those people as customers.

Shannon said her firm offers a range of financial products including life insurance annuities, which she thinks has helped the company do better than some local advisers who concentrate more on being stockbrokers. “Our outlook is still growth. We had double digit growth last year and I would expect

the same this year,” she said.

Another issue that has emerged from the financial crisis is the bad image some financial advisers have gotten because of the exploits of people like Bernard Madoff, who has pleaded guilty to securities fraud for running a multibilliondollar Ponzi scheme. Also, U.S. Sen. Kirsten Gillibrand, D-N.Y, has been highlighting the need for increased legal protections for senior citizens who hire “senior advisers” — a designation Gillibrand says is too easy to earn in New York state and misleads the elderly into hiring unqualifi ed financial advisers.

Shannon said the Madoff scandal and the criticisms of senior advisers can harm legitimate financial advisers, but not irrevocably.

“Obviously there are bad connotations out there because a small percentage of the population does bad things and that definitely does paint a bad air on the industry as a whole, but I think it’s pretty easy to overcome when you’re talking to someone,” she said.

Categories: Business

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