No. 3 ERIC PAYNE, 37
Merrill Lynch, Carmel, Ind.
Eric Payne's first client didn't come to him seeking investment advice. Fresh out of college, Payne was working as a CPA with Ernst and Young. The CFO of a large corporate client came in to meet with Payne, peppering him with a barrage of tax questions.
But as the meeting unfolded, Payne began to imagine himself moving beyond the accounting world. "I found myself enjoying our conversations about his family's finances more than auditing his books," he says. Drawn to a more personalized level of service, Payne made the jump to advising, starting out as a sole practitioner, with that CFO coming on board as his first account.
Eventually he would team with Ron Mencias, an old CPA colleague [and a fellow Top 40 Advisor this year], and form what has become a thriving practice catering to high net worth investors in the Indianapolis area, a client base comprised largely of well-heeled business owners and physicians.
Payne believes that his deep understanding of the tax issues that affect his clients, many of whom are retired or are nearing retirement, is a key differentiator that sets his practice apart from other advisors. Clients often come to him seeking advice on how to handle a liquidity event, such as selling a business, in the most tax-advantageous way possible.
"The tax background is key with high income, high net worth people," Payne says. For that clientele, he adds, "it's not what you earn, it's what you get to keep."
Looking back on the past year, Payne's tax expertise was particularly valuable as nervous clients absorbed the headlines coming out of Washington about looming tax changes stemming from the negotiations over the fiscal cliff. And, just as Payne had anticipated, the ultimate deal that Congress and the White House reached raised tax rates for capital gains and dividend income for the top-earning individuals and households, who were also hit with a surcharge on investment income under President Obama's health care law.
Now a 14-year veteran of Merrill, Payne jointly leads a staff that boasts more than 140 years of combined experience with the firm. He believes that a team approach with a deep bench is essential to meeting the needs of affluent clients who are expecting an ever-higher level of service from their advisors.
"We never want to over-promise and under-deliver, so we over-invest in administrative people, over-invest in advisors," he says. "I think it's a continuing trend," Payne adds, "toward larger and more sophisticated advisory teams."