The Opening Days Of A Wealth Management Company

We were just a bunch of stockbrokers trying to grab the gold ring in the financial service business. All pretty good salesman but none of us had much knowledge in running a company. We, sort of, knew generally what to do but no specifics. Confidence was our largest asset but probably our biggest liability.

A group of 10 were we. Renegades that left a brokerage firm in New York to start our own wealth management company; feeling it would bring us a minimum of fame and maximum fortune.

I say minimum of fame because achieving fame in the financial service business is reserved for the television pundits and the people who flamed out in a colossally infamous fashion. Sometimes getting a stretch in an orange jump suit.

The only positive about that little holiday is that it was usually a vacation in a minimum security establishment. There you can lift weights and get in the shape you've always wanted to.

That is, if you don't go to heavy on the carbs which is something people do who have little to look forward to other than dinner.

No, no--none of that nonsense. We aspired to be low profile managers of of the moneyed North Jersey landed gentry. Enough wealth in Jersey to manage forever. We actually wanted to keep out of the glare of Wall Street and focus on Main Street.

The financing our little ambitious project came from a $500,000 line of credit from a bank in Pittsburg. The bank had a connection with the father of the guy who thought of creating our own firm in the first place.

Quite a sum, we thought back in the early 80s.

After moving our famlies to Northern Jersey, set up shop in an office building in Irvington. Not exactly Far Hills but we were planning on soliciting clients from that wealthy community. We'd contact them from our lesser expensive coorpoate digs in Irvington. We all aspired to live in Far Hills or Saddle River sooner rather than later.

Our office was not particulary impressive but it was large. We planned on expanding our work force but seeing our clients in their homes--no need for fancy.

Our business was financial planneing , mainly for transferring speculative stocks into more stable mutual funds for retirees

We were full service and ready to go probably before we should have been.

No sooner than we had our broshures complete with our pictures under which we had imposing titles; we had our inpressive stationary printed; monogrammed confirmation slips printed; we were cold calling prospective clients from lists of individuals we purchased from companies that sold such things long before the Russians thought of it.

Because we all had friends, family and prior clients we had delt with in the past, we were understandably in a mild competition to see who would score the first new client of our new firm.

Our fearless leader (the guy who thought of breaking off from our old company; whose father had the Pittsburg bank connection) thought he'd add to the fun by offering $100 to the broker who was able to land the first "new" client.

What he didn't mention was that he arranged for the president of the bank who extended our $500,000 line to be in attendance when our first customer (we call then clients for dignity sake) received the comformation of his trade.

The first in an expected long line of celebrations leading our wealthy senior citizens down the paths of comfortable retirements.

My friend Jack was the broker with the inital client. He "financially planned" the idea of selling inherited Crystler stock and transferring the proceeds into the Putnam Growth Mutual Fund. A good bit of it too.

We all tipped our hats to Jack, conceeding that he won the $100 and looked forward to meeting our benifactor bank's president in our confirmation ceremony with Jack's new client.

The celebration was set when the trade settled a couple of days hence.

Bank president introduced, client introduced, monogramed confirmation introduced to client.

Our firm's first client's eyes seemed to swell!

A closer inspection of the comfirmation.

He then burst out laughing!

He turned to Jack and exclaimed, "You guys are going to be really, really successful!"

NOW WHY WOULD HE SAY THAT?

He held out the confirmation for all of the assembled to see, including our benefactor bank president.

Seems our hastily formed back office had issued a confirmation that had the proceeds of the sale; some $500,000 was listed in the box that was intended for commission and the commission, $2500 was listed where the proceeds should be.

The client jokingly feigned wishfulness, "I hope that damn mutual fund you put me in is a top performer!"

The only one in the room who didn't seem to get the joke was the bank president.

He scratched his head.