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MAKING CENTS OUT OF THE NEWS
Blog #33
(October 13th, 2011)
The Mission and the Challenge
By Tom McAllister, CFP®
Forgive me, but I couldn’t resist. When prominent financial planner and Financial Planning Magazine columnist Deena Katz challenged each of us to articulate in writing what is unique about what we offer our clients, I realized that even regular readers of my “Making Sense Out of the News” blog may not be aware of the details of my own forty-nine year career in the financial world.
My mission statement is; “To inform, educate, help and motivate my clients, prospects, listeners, and readers by sharing the knowledge, experience, wisdom, and judgment I have gained over these many years.”
These weekly blogs are one vehicle I use to fulfill this mission, as are my quarterly newsletters. So too, are my cruise lectures and individual meetings with clients and other people with whom I meet one-on-one.
As I reminisce about my career, I realize that my story reveals the larger story of the changing ways in which financial services have been delivered to the public.
The stockbroker era:
Back in August 1962 when I joined Merrill Lynch, Pierce, Fenner and Smith as a trainee in Indianapolis, we “account executives” built our business by cold calling, on the phone and in person, to anyone who would talk to us. Occasionally, we’d be treated to some “walk-ins.” In my own case, since I had spent two years while in college as a radio announcer and disc jockey, I was put to work giving daily market reports on both radio and Channel 4 TV, and for many years here in Indianapolis, I was on the air while developing into a successful young stockbroker.
After seven years I was in line for branch management training. Since becoming a manager would have meant moving my family at least two or three times in the coming few years, branch management would simply not fit my family obligations. I left Merrill and opened a branch office as Indiana branch manager for a second investment banker and New York Stock Exchange firm, Robert W. Baird and Co. of Milwaukee. I enjoyed considerable success in this venture also, building the office from a startup to the largest branch office in the Baird system in just six years.
By 1975 I had tired of what I had come to realize is toughest job in the stockbrokerage business, local branch manager. While I had many responsibilities, I was allowed little influence on how the firm was being run. By now a single parent to my six children. I decided it simply was not worth it, and left Baird in 1975 to start my own investment broker dealer and financial planning firm.
The tax-advantaged investment era:
I had met, through a mutual client, one of the founders of the financial planning movement, Herman W. Yurman, “Hy” to all who knew him. He was my mentor for the next six years and I became quite successful in my new venture. I specialized in tax incentive investments, for which there was a big demand at the time, with the rate of federal income tax on unearned income a whopping 70%. Meanwhile, in Indiana, the 3% corporate gross income tax was causing most private businesses to adopt S corporation status. All business profits became taxable to the owners at that 70% federal rate. Tax incentive investments could, and did, defer these taxes more or less indefinitely. When taxes were finally paid, investors in these plans had had, for a number of years, the use of money which otherwise would have gone to taxes at a time when bank interest rates were in double digits. I did well.
The Financial Planning era
In the early 80’s, interest rates came down, Congress changed the rules on tax incentive investing, and my business had to change. I had become central Indiana’ first Certified Financial Planner through the College for Financial Planning, which at that time granted the designation. I switched most of my business activity to financial planning, offering a few alternative investments and mutual funds to fit special needs. In the mid-80s I added individually managed accounts to my client options and over the years this has become the predominant part of my practice.
Industry and community service
Early in this period I volunteered to serve with our self-regulatory body, the National Association of Securities Dealers (now the Financial Industry Regulatory Authority). I have served continuously for 34 years with several different committees, including the District 8 Business Conduct Committee, which actually hears and decides on disciplinary cases involving member firms and representatives. So far as they have been able to determine, this 34 years is the longest continuous service in the history of the financial planning industry.
For the past 25 years I have also been an arbitrator, helping members of the public find redress from harm by firms and individuals in our business. I am proud of my industry service, which continues to this day.
World traveler
In 1994, through pure chance, I began giving lectures on cruise ships, mostly on Princess Lines.
This has been an absolute joy for me, as I have always loved to travel. I have lectures on more than sixty cruises, visiting 143 countries. Along the way, through my lectures, I have, I hope, educated, informed, helped, and motivated thousands of listeners. The cruises have slowed down in recent years to one or two a year. I am grateful for this opportunity to serve people in such a delightful way. I am blessed!
The mission continues…
My 49 years of knowledge and experience is currently available for new financial planning and investment management clients. I have affiliates who handle the day to day management of the investment accounts. They are experienced professionals whom I have known and whose performance I’ve observed for more than thirty years. I handle the marketing, communication, and financial planning. Together we can offer a great deal of depth, perspective and judgment in our work with clients.
So, Ms. Katz, I have answered your challenge. I believe I am unique among my peers in the financial planning independent broker-dealer network, in at least two ways:
 My transition from New York Stock Exchange firm branch manager to financial
planning, including my early CFP designation.
My long service to the investment business in my volunteer regulatory work and
as an arbitrator
In keeping with Deena Katz’ encouragement to each of her CFP colleagues to put to paper and then spread the word about our unique qualifications and the unique talents each of us offers, I invite my readers to take advantage of this unusual set of qualifications, either personally or by referring me to friends or family members.
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