Building BAM Advisor Services: Why I’m a Wealth Advisor

As I mentioned in my previous article, I spent 28 years with a company that, at one time, was the largest one-office accounting firm outside of New York City. The firm is now known as RubinBrown, but originally was called Rubin, Brown Gornstein & Co. In 1966, I was the 11th person to come into that organization. When I retired from the firm in 1994, we had grown from just those 11 associates into a company of 200, all through internal growth.

And I felt I had held all the most fulfilling roles within the firm. I was responsible for starting the firm’s tax department and doctor’s division, as well as its small business, governmental and nonprofit offerings. Oh, and I was in charge of the firm’s practice development and personal financial consulting groups, too.

So, in 1994 when I announced that I was retiring at age 50 to join some friends in starting Buckingham Asset Management, most people were bewildered. They thought I was a little bit nuts to give up my place within the firm. There were, however, three things that I didn’t very much like about public accounting.

Tax Season

As with so many accountants at CPA firms, I served a number of clients and coordinated their year-end accounting and tax returns. The heavy workload from January through April required at least 55-hour weeks, including weekends and some evenings. Not much fun, and it left very little time for family life.

Time Sheets

I kept track of my time, for billing and other purposes, in tenths of an hour. I recorded all the time I spent in the office and out in the community. If I had a six minute phone call with a client, it was duly recorded. Let’s just say I didn’t like keeping such an extensive account of my days.

Accounts Receivable

I analyzed these time records and billed monthly, quarterly or annually for each client. As I recall, we averaged about 91 percent of our standard billing rates, so $10,000 worth of time spent on a client’s audit at our normal billing rate might result in a $9,100 bill for that client. But it didn’t stop there. It was my duty as a partner to collect the money too. That meant the occasional call asking if a client could pay, or at least make a partial payment, on the bill. As a last resort, it meant meeting with a client to tell them we couldn’t do the current year’s work until they had at least paid the previous year’s outstanding balance.

Stuart_BAS

 

 

 

 

 

 

 

 

Stuart speaks at a Rubin, Brown Gornstein & Co. (now RubinBrown) seminar about 30 years ago. Mahlon Rubin, one of the firm’s founders, and Jim Castellano, the firm’s current chair, listen intently.

Guess what three things we don’t have in the asset management business at BAM Advisor Services? You guessed it: tax season, time sheets and accounts receivable.

As wealth advisors, our work output is more evenly spread throughout the year, regularly and consistently helping clients with their financial planning needs. With some exceptions, there is no real time pressure for much of what we do, especially with our evidence-based, long-term approach to investing. No hectic tax season!

We can meet with clients, leisurely and as they require it, to thoroughly consider each individual family situation before offering our tailored, solid and thoughtful financial advice. No minutely prepared time sheets!

As stated in our investment advisory agreement with our clients, our agreed-upon (and often scaled) fee will generally be deducted from their investment accounts quarterly in advance. No messy accounts receivable!

Changing just those three aspects of the business resulted in a huge improvement throughout my life. Starting an RIA and launching BAM Advisor Services was the best move I ever made. And witnessing the collective experience of all the independent CPA firms we’ve worked with throughout the country and over the years has only reinforced my original, personal decision to found a firm that offers its clients the promise of true wealth management.

Many of our member firms also agree that the shift from accounting and tax work to full-time wealth management and financial planning has greatly improved their own lives and that of their clients. Perhaps the proof of that is in the pudding. Today, The BAM ALLIANCE is a community of more than 140 like-minded wealth management firms that serve more than 18,000 clients and their families.

In the RIA industry, I’m known for saying, “Watch out, the CPAs are coming!” Why I believe this to be true will become quite clear in future articles. But for now, you know at least three of the many reasons.

 

The opinions expressed by featured authors are their own and may not accurately reflect those of the BAM ALLIANCE. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice.

© 2014, The BAM ALLIANCE

BAM Advisor Services

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