Former pro-wrestler and current film student Stephen Wilson is admittedly sore following a weekend stunt class when he arrives at Raymond James's corporate headquarters in St. Petersburg, Florida, on a balmy mid-July morning.
But what Wilson is in for today will be a workout of a different kind. Wilson will meet directly with executives from all sides of Raymond James's business, including wealth management, asset management and equity research. And his investment portfolio will be put through the paces to see how the planning for all of his investments-income tax, estate and retirement, as well as risk management-can be pushed forward even more. He will even get a tour of the firm's extensive art collection.
Accompanying Wilson is his long-time advisor, Charles Nemes, senior vice president of investments at Raymond James, who has flown in from Novi, Mich., where his practice, Nemes Rush Private Wealth Management, is based.
The visit is part of Raymond James's exclusive "By Invitation Only" program that allows its financial advisor force to invite select clients with at least $1.5 million in investable assets to a visit to the firm's home office. It is here that clients get to meet directly with the executives behind Raymond James's various departments.
The experience is aimed at strengthening client's ties to their advisor and trust in the firm, which is the purpose of Wilson's visit today. Other visits are centered around an inflection point in a client's life-such as retirement, divorce or sale of a business-that will change their financial situation. Advisors may also invite certified public accountants or attorneys they may partner with on a BIO visit.
The visits also are aimed at instilling the confidence that leads to new clients moving to the firm with new advisor hires, existing clients transferring more assets to the firm and both clients and professionals making more referrals to the firm's advisors.
And the program, which began in 1988, shows no signs of slowing down. In the past five months, Raymond James has redesigned the space devoted to the BIO program to enable more visits on the same day. The visits are organized by BIO Visit Coordinator Debbie Hunting, who works with a team of six wealth management consultants. The firm has also recently opened its BIO program to its newly acquired advisory force at Raymond James-Morgan Keegan.
The result has been a surge in participation in the program. The total BIO visits for the fiscal year ending Sept. 30 are expected to reach 220, with the last two quarters seeing a 30% jump in visits from the same period one year ago. On average, the firm sees more than 200 visits on a year over year basis, according to Raymond James.
"Our philosophy is we see the advisor as our client," says Patrick O'Connor, senior vice president of Wealth Management Solutions at Raymond James, which includes the BIO program. "If it's worth the advisor's time as our client, and their client agrees to come, it's worth everyone's time in the home office to support that relationship."
Where the Tour Begins
The advisor-client relationship between Nemes and Wilson traces back to even before Nemes began his career as a financial advisor. Prior to starting his advisory career at Merrill Lynch in 1987, Nemes was a CPA. Wilson's father, Bruce O. Wilson, a well-known attorney in Michigan, hired Nemes for expert testimony in a case.
So when Nemes began his career as a financial advisor , he called Bruce Wilson to let him know what he was doing and asked him to pass his name along if he knew anyone who needed his services. "'Clients nothing. I'll be over tomorrow,'" Nemes remembers Bruce Wilson saying in response. The family became one of Nemes's first clients, and stayed with him when he moved to Raymond James at the height of the financial crisis in 2008 following 20 years at Merrill Lynch.
Both Nemes and Stephen Wilson remember Bruce as a man who was "bigger than life." After Bruce Wilson passed away 10 years ago, his son received several calls from people who his father had provided pro bono legal services to in times of need.
Bruce Wilson also didn't differentiate between anyone because of class, Nemes recalls. "They had a hunting place up North, and he would invite the guy who ran the gas station, who would be right next to a Supreme Court judge, and all three would be hunting together," Nemes says. "He was friends with all and to all."
Today, Nemes also works with Bruce Wilson's widowed wife and daughter. Stephen was in college when his father first started working with Nemes, and since then his career has made several transitions. After graduating with degrees in criminal justice and teaching, Wilson became a football coach. But at the age of 29, Wilson realized he had never fully realized his wrestling dream.
It was then that Wilson tried out in Atlanta, trained for a few years and traveled the pro wrestling circuit in the southeast, mostly in Georgia and Tennessee. Wilson eventually signed with World Championship Wrestling, which at the time employed wrestling stars Hulk Hogan and Randy Savage. The experience inspired Wilson's interest in television production behind the scenes. He started learning more about camera angles, editing and putting shows together. From there, he has studied film, most recently at the Burt Reynolds Institute for Film & Theatre in Jupiter, Fla. It was at that school over the weekend that Wilson took a stunt class with Hollywood stunt professional Glenn Wilder.
"I don't know who your hero was growing up, but this was my favorite actor," Wilson says of Reynolds. "That movie 'Hooper' I remember seeing as a kid when he was a stunt man, and that's all I wanted to do." Today, Wilson's dreams include documentary film making and possibly creating a wrestling show of his own.
Hearing From the Experts
The first session in this morning's BIO visit at Raymond James is with Susan Hartman, wealth management consultant with expertise in tax and estate planning, who will talk about the firm's Wealth Management Solutions business.
"We want to have you be very participatory in the visit. Ask questions as they come to you," Hartman tells Wilson. "It's your visit, and when you ask a question, you are going to see these people come alive, because they know what they're doing and they love to share it with you."
Raymond James was established in 1962 by current chairman Tom James's father, Hartman explains, and the goal was to tie wealth planning together so that all aspects of a plan complemented each other. That helps the firm's strategy of saving clients more on their taxes, she says, rather than earning those gains by taking aggressive investment risks. From there, Hartman homes in on how well Wilson, who is a resident of Florida and South Carolina with strong family ties in Michigan, has positioned himself to establish residency in Florida. Wilson's attorney is currently drafting his will and power-of-attorney documents.
Do those new documents, Hartman asks, indicate Wilson is a Michigan resident? Does Wilson have a Florida voter identification? Where did he open up his banking accounts? Where does he keep his most valuable items?
All of these areas will be considered when establishing residency, Hartman says, and from many of his affirmative answers for Florida, he is already on his way to solidifying residency in that state. Still, Hartman requests a copy of all of the drafted documents to make sure there are no holes. "Michigan is pretty aggressive about going after estate taxes," Hartman says. "When someone who has resided and lived and paid tax in Michigan moves out, they lose a lot of revenue from people retiring to other states, so they seek individuals' estates and they will go after you. So we need to make sure everything's in place."
Other documents Hartman requests include the power of attorney, health care servicing and living will. Because Wilson is both an organ donor and has a living will, he must plan for coordination of the two. If at some point he is treated for cancer, for example, treatments like radiation and chemotherapy may damage organ tissues, while other drugs may preserve them. He must decide what he would prefer.
Next up is a session with George Raffa, senior vice president at Raymond James's Asset Management Group, with about $85 billion in assets. That business has expertise in two areas, Raffa says: drilling down on asset allocation decisions, including timing and risk, and the search for and selection of money managers.
The Asset Management Group has the analytical capabilities to gauge when an investment is at its top, when investors should sell, or at its bottom, when investors should buy. It also means closely following money managers to check for any red flags, Raffa says, like a sale or acquisition of their firm or when investment portfolios are drifting from their original investment thesis.
Their guidance is useful when an advisor like Nemes is looking at possibly investing with two investment managers who invest in the same area, say small companies in Europe, and are earning the same return. The Asset Management Group will analyze both managers to come up with their adjusted rate of return based on risk to find out which is the clear winner.
"We don't know you. He does," Raffa says to Wilson of his relationship with Nemes. "But he needs a third party, non-biased resource to turn to ask tough questions and understand straight answers with no agenda behind the scenes. That's the information we provide."
And it is exactly that statement that prompts Wilson later to say, "That made me feel good, because I know he does know me."
It is also in this meeting that Wilson brings up the question on everyone's lips that will draw a mixed response in the meetings from Raymond James's experts throughout the visit. "I hear people saying they watch what happens in Spain and Greece, and they say, 'Well, if things go bad there, then we're in trouble here,'" Wilson says. "How much of what happens there does influence or affect us?"
It is a tough subject, Raffa says, and one that must be considered in context. A small country like Spain or Greece may feel like it is controlling world economics, he says, but investors must ask themselves if that is the truth or is that what news coverage would have viewers believe. "No question the headline risk is there, the financial risk is there, but the reward is also there," Raffa says. If Wilson wants to capitalize on that risk, there are investment vehicles that Nemes can show him to invest in that area, Raffa says. If he wants to stay away from that risk, Nemes can show him a portfolio of 100% U.S.-based companies.
Other fixed income managers, who tend to be negative, Raffa says, such as Joseph Jackson, a portfolio co-manager and senior credit analyst at Eagle Asset Management, will likely have a much darker view of the situation in Europe. And Raffa's prediction turns out to be correct in the next meeting with Jackson regarding Eagle Asset Management, a wholly-owned subsidiary and in house asset management company at Raymond James. Jackson serves as head of corporate bond credit research, and that involves taking the Securities and Exchange Commission filings of the various companies' bonds they own and issuing their own ratings. When those ratings vary from what Standard & Poor's or Moody's are placing on the same securities, that prompts Eagle to take a deeper look to find out what is going on.
That saved Eagle in 2007 and 2008 when the names of certain financial firms started to deteriorate in their credit models, prompting Eagle to sell its holdings in those firms before the crisis hit. Today, Eagle's concern with Europe is the possible insolvency its governments face, Jackson says. That comes as European banks have been forced to buy the debt of countries including Italy and Spain, and many of the counterparties to those financial institutions are U.S. money centers. As a result, Eagle has stayed away from investing in the U.S. financial institutions involved, instead favoring regional banks, Jackson says.
"I think the Eurozone is eventually going to fall apart," Jackson says. "The difficulty is really coming up with the timing. When is it? Is it next week, in six months? Can the politicians extend it for another five years, ten years?" Whatever the timing, Europe is approaching recession, while China's growth is slowing down, he says. Both will inevitably affect the U.S. market and make for a volatile investment market going forward as perception of Europe swings from risk on to risk off. One bright spot Jackson sees for the foreseeable future: equity markets should continue to do well.
That bullishness on equities is on display in the next meeting with Jeffrey Saut, chief investment strategist at Raymond James and frequent CNBC commentator. In the session on equity research, Saut talks about why he sees the U.S. as poised for growth, even in spite of Europe's woes. A key to the U.S. gaining strength will be this year's election, Saut says, particularly whether the Republicans can take a majority in both the Senate and House of Representatives. History shows that their majority in Congress results in a 15% rise in the markets per year, regardless of which party the president represents. And because Saut sees clues the Republicans will triumph in this year's congressional elections, the U.S., in turn, will prosper.
"There's a widespread perception that the U.S. is in secular decline, and the reality may be if we change the constituency of Congress, the best may be yet to come," Saut says. "We're rapidly developing very cheap domestic sources of energy, and at the same time our relative cost of labor is declining."
Fears of a possible catastrophe in Europe, or what Saut calls "Euroquake," will not likely hamper U.S. growth, he says. Currently, 67% of the sales in the S&P 500 are in the U.S., and just 15% in Europe. That comes as Saut sees European politicians continuing to work on resolving their issues in order to preserve their power. And if countries like Greece or Portugal opt out, it could ultimately make for a stronger union, he says.
"I'm not one of these people who think Euroquake is going to pull us back into a recession, I just don't," Saut says.
Drawing Inspiration From Living Artists
Up next for Wilson and Nemes is the one session common to all BIO visits: a tour of Raymond James's extensive art collection. The collection holds more than 2,000 art works and spans the nearly one million square feet of the firm's headquarters.
The tour today is given by Raymond James art curator Emily Kapes. Her role includes training 15 other Raymond James employees to give tours, which are given to about 3,000 people each year.
The extensive collection is evidence of the devotion Tom James and his wife Mary, who own most of the works, have to art. Tom James is president of the board of trustees for the Salvador Dali Museum in downtown St. Petersburg. While there are no Dali works at Raymond James's headquarters, some of the works are inspired by the famous Spanish artist.
That includes an oil painting by Ben Steele entitled "Salvador's School" created in 2011, where the melting pocket watches from Dali's famous work "The Persistence of Memory" are replaced with school supplies including crayons, glue, a ruler and pencil. "It's a pretty whimsical work and a good example of Steele's work," Kapes says.
Moving into the atrium of the headquarters, where a steel and glass fish sculpture titled "Lucky" by Paul Eppling is displayed. Eppling is a well-known local artist in St. Petersburg, with works displayed in public areas throughout the city.
Also on the tour is a painting by James Michaels titled "The Bold and the Beautiful," a collage combining western historical images like Annie Oakley with childhood images including the character Jessie from Toy Story. The painting, made from oil and acrylic paints and wood, is one of more than 90 works by Michaels in Raymond James's collection.
Moving up the elevator to the executive conference room is where the first Western painting that Tom James purchased is displayed. Today, more than half of Raymond James's collection consists of western and southwestern art, many of which depict Native Americans and cowboys. This painting, by Earl Biss, a Crow Indian, was purchased at a show in 1985 when the painting was still wet. The work, entitled "Winter Sunrise Circle of the Big Sky People," shows several Native Americans traveling by horseback in a mostly blue landscape.
It is also in this conference room where a framed copy of Raymond James's tombstone from when the firm went public in 1983 hangs next to a piece of ticker tape from that opening trading day. On that same wall hangs a prospectus from 1969, from an earlier attempt by the firm to go public, and a plaque from the Certified Financial Planners Association honoring firm founder Robert A. James. The conference room window provides a view of the lawn below where more sculptures are displayed.
"Tom and Mary James are active buyers and they really like to support living artists," Kapes says. "They are starting to look at older works and some deceased artists and thinking about a possible museum in the future, to create more depth to the collection."
The art tour marks the conclusion of the seventh BIO visit Nemes has attended. Throughout the visit, Nemes has piped in with explanations and context so that Wilson can better understand how the presentations relate to his portfolio. Each BIO visit has surprised his clients, Nemes says. Most expect a group tour, where they will walk around with 10 to 20 guests, and not the one-on-one attention they get with the BIO visit.
That individual focus, which included a brief meet-and-greet with Chairman Tom James during the tour today, is also what attracted Nemes to the firm. The same kind of tour would also have more difficult to schedule at his previous firm Merrill Lynch, where there was no headquarters.
"If you're at Merrill, they view that client as their client, not yours," Nemes says. "Here, they view the client as my client, and 'What can I do for you to make your client's experience the very best?'" (A Bank of America Merrill Lynch spokesman says that the firm does allow clients to tour its offices at the World Financial Center in New York and in Hopewell, N.J., which include the Global Wealth and Retirement Solutions and Merrill Lynch Wealth Management businesses.)
The tour has made an impression on Wilson, who calls the day "fantastic." The sessions helped him better understand how what happens in Europe may affect the U.S., he says, but did not change the way he feels about his investments. "I've always had tons of confidence in Charlie," Wilson says, "but to come and meet all these other people, I feel even more confident."
Like Nemes, many Raymond James advisors are repeat visitors. Through the thousands of BIO visits that have happened over the years, two key themes emerge: clients in transition who get to see the extent of the firm's advice and resources, and new revelations about clients that crop up with the help of Raymond James's experts.
David Kolpien is an example of one Raymond James advisor who has used the program to help his clients through a major transition. Kolpien's visit with one potential client on the same day as Nemes and Wilson brings his total BIO visits with clients to more than 12 during his 11 years at the firm.
Today, Kolpien has traveled from his Fort Wayne, Ind., practice. He is joined by the potential client, who has asked to remain anonymous as he transitions from his current executive role at a commercial bank to creating a fund focused on distressed debt investments in commercial real estate.
The banking executive was connected to Kolpien through a mutual client, who is partnering with the banking executive to raise the fund, and has previously been on a BIO visit himself.
Their meetings today have included Raymond James's wealth, equity research, bond, fixed income, bank and alternative investments businesses. They plan to follow that with an additional session on alternative investments to get more specific feedback on the new business plan. The sessions have been helpful, the banking executive says, as he navigates the transition from one professional role and another.
"When I become a client of Raymond James, I don't feel that I will be a number," the banking executive says. "I feel like I will be a known customer to this company. That's my key takeaway from today."
Taking clients who are on the precipice of a major financial event to a BIO visit worked well for Carl Mahler, a Raymond James Financial Services advisor at the Pinnacle Group in Midlothian, Va.
Husband and wife, Coleman and Janet Goodman, were already Mahler's clients for about six years when they made the trip down to Raymond James's Florida headquarters from Midlothian in 2006. At that time, Janet's father was getting ready to sell the family farm in northern Virginia to developers, and the transaction would result in a significant sum for the couple.
Mahler thought it was the ideal time to bring the couple on the BIO visit. Both the Goodmans and Mahler agree that the visit added a new level of trust to the relationship, which has significantly grown since that time. "It gave me the comfort of seeing somebody eye-to-eye that was going to be directly dealing with managing the money," Coleman Goodman says.
The family property was ultimately sold, and Mahler says that since the BIO visit, the skepticism he used to receive from them regarding some of his advice has gone. "Ever since that time, they have become some of our best clients," Mahler says. "They trust us and are comfortable with our recommendations."
Raymond James & Associates advisor Dustin Wilder, who serves as principal of CoastalStates Wealth Management in Bluffton, S.C., says the BIO program has transformed his practice. Wilder's team developed a close relationship with a local bank in South Carolina, CoastalStates Bank, that did not have its own wealth management division. Wilder and his team invited the bank's executives-including their president and heads of their legal counsel and branches-to a BIO visit.
"So often the perception is that we are stock jockeys, because we are a brokerage firm," Wilder says. "We had to prove that our capabilities go beyond just trading stock."
The tour helped them instill the confidence in the practice to create a fee-sharing relationship, where the bank will refer clients to Wilder's team. The relationship has resulted in about $27 million in rollovers through the bank, and Wilder's team has renamed their practice to reflect those bank ties.
But sometimes the biggest takeaways for advisors from the BIO visits are not the assets, but instead the new information uncovered about their clients. Anne Bedinger, a Raymond James & Associates advisor based in Boca Raton, Fla., says she has had that experience with clients, particularly when they meet with tax an estate planning expert Susan Hartman.
"[Hartman] has an ability to say things sometimes to clients and bring things out of them that maybe I wasn't able to do," Bedinger says.
In one meeting, a client who was selling her business revealed to Hartman that she was providing a home for her daughter in Washington, D.C., and another home for other children in another location. "'Well, I'd like to be adopted,'" Bedinger recalls Hartman saying, half in jest, in response. The message: it may be time to shift priorities to emphasize other financial goals instead.
It is exactly that kind of direct input that helps make the BIO program so successful, says O'Connor, the executive of the firm's wealth management solutions. By carefully preparing for each meeting with the advisors, the firm's staff is armed with information about the clients. The meetings can take that knowledge to another level by uncovering what the advisor does not know, has not asked or was too uncomfortable to bring up, O'Connor says.
The emphasis on the BIO program comes as the firm has seen an increase in its top client segments-those with $2.5 million and more-soar in the past two years, O'Connor says. The BIO visits have helped to attract those clients and give confidence to advisors from other major firms to join Raymond James. "Probably the biggest differentiator, if you ask the advisors who have come here recently from other firms," O'Connor says, "is culture."