No. 2 STEPHEN BARRETT, 37
J.P. Morgan Securities, New York
AUM: $126.96m (custodied at JPMS)
For most people, the bull market would represent unadulterated good news. For Stephen Barrett, it brings big challenges. With stock prices climbing for a fifth year in a row, "trying to keep investors in the equity market" is a tough job, he says.
Barrett says once equity-heavy clients saw their balances rebound to pre-2008 levels, it's been tough talking them out of fleeing the market. "It's as if they were glad to have gotten away from 2008 whole and now wanted to take their preserved money and run," he says. Those considerations meant Barrett had to "learn how to manage relationships" and help clients' thinking "not be clouded" by the short-term macros, such as the federal government shutdown.
Barrett generated more than 50% of his $5.74 million in revenues from transactions. And unlike most of the advisors on this list, he is generating production off of investment ideas and trade execution for clients-some of which are hedge funds-whose assets are custodied outside the firm (which explains his high production/AUM ratio). His total AUM including those assets is $610 million.
Meeting clients' constant needs for attention and ideas energizes Barrett, a confirmed workaholic. Before becoming a financial advisor, Barrett spent five years on the buy-side of the investment banking business. Then, after getting an itch to try retail, he joined Bear Stearns, where he saw the work-style of legendary CEO Alan "Ace" Greenberg. Watching how Greenberg operated, Barrett knew he had found his professional home.
He and his colleagues started work at 5 a.m. Greenberg occupied center stage, a phone attached to each ear, and Barrett, in order to keep pace, clocked only four or five hours a night of sleep. "It was an intense awakening. I loved the action and energy that came each day."
Since those days, Barrett has fine-tuned his investing approach. He once picked stocks using a bottoms-up strategy that focused on a company's fundamentals. But now he starts with the macros and analyzes which sectors will outperform.
Within that framework, he conducts his stock picking. Each member of his team, with five professionals, focuses on a particular sectortechnology, finance, industry and gaming. He has one person on his team assigned as the options specialist and another keeping tabs on the macro-economic picture.
Barrett creates a list each morning at 6 a.m. (when his team starts work) of what he needs to get done. He doesn't stop until each item gets checked off that listand that may mean speaking with foreign clients at 2 am. "My wife may not like that," he says. But Barrett does it because "building trust takes a very long time and you can lose it very quickly."
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