Participants:
Steve Wershing
Julie Littlechild
Chuck Bean
Steve Wershing:
Welcome to Becoming Referable, the podcast that shows you how to become the kind of advisor people can’t stop talking about. I’m Steve Wershing. On this episode we talk with Chuck Bean, Founder and CEO of Heritage Financial Services in Boston.
Heritage has been recognized several times for its growth and for its client service, including being the 2017 winner of the Charles Schwab Best in Business Impact Award. We take a close look at the firm’s processes and its philosophy. We talk about how they’ve centralized financial planning and investment management so that its wealth managers and wealth advisors can concentrate on the client relationships. Some firms struggle with getting clients to round up paperwork for a plan, so you might be surprised at how much Heritage demands of its clients even before committing to a relationship. We talk about what Heritage has learned from its client advisory board and how they’ve put that feedback into action. And stay through to the end where Chuck tells us a story from his past about personal service and how high he sets the bar for commitment to clients. It’s a memorable story you’ll want to hear.
And now here’s our conversation with Chuck Bean.
Chuck Bean, welcome to the Becoming Referable podcast. We’re so happy to have you today.
Chuck Bean:
Thank you very much for having me.
Julie Littlechild:
Yeah, great to have you here today.
Steve Wershing:
So, Chuck, you started Heritage Financial Services in Boston and the firm has been recognized a few times for the outstanding job that you do. I’ve worked with you for a bunch of years on your advisory board. I’ve had the chance to both see what a good job you do and hear directly from your clients, including the most recent Schwab Impact Award. So give us a little insight as to how you built a firm like that. What have you focused on that you think has helped given you that kind of reputation with clients and with the industry?
Chuck Bean:
Thank you, yes. We’ve had remarkable growth over the years, Steve and Julie. And a lot of that is based on a wonderful team effort that we have. We have an executive management team comprised of five outstanding individuals that are all focused on continued successful organic growth. We have a number of different centralized departments with investment management, all the client facing wealth management advisors, we have a financial planning team, also a client service and ops team amongst our administrative staff. And it’s really been a collective effort from all of the 30 staff members in the firm that helped achieve growth rates in the mid-teens annually. Almost as far back as the eye can see. So we’ve essentially doubled our assets under management over the last, I’d say, six or seven years. We’re now north of 1.4 billion of AUM. And I’m very proud to say all that has been through organic growth.
I think another reason for some of the successes and recognitions that we’ve received has been through our high client retention rate. We’ve been very honored to maintain roughly a 99% client retention rate. Fortunately, very few clients leave the firm and I think that’s a testament to the exceptional service and fiduciary responsibility that we have for each and every client. We also have-
Steve Wershing:
Yeah-
Chuck Bean:
Go ahead, sorry.
Steve Wershing:
Go ahead, I’m sorry. No, go ahead.
Chuck Bean:
I think we have a very good innovative use of technology. We have some mobile friendly tools for our clients so they can log on to a client portal and check out their accounts on a daily basis or as often as they’d like. It is a secure vault where they can store things like tax returns, or estate planning documents, and look at their financial plans, and performance reports. And I think what truly separates us is the comprehensive wealth management offerings that we afford. We span across investment management, cash flow and financial planning, all different types of income tax planning, helping people secure retirement, assist with their philanthropy, estate planning, et cetera. So it’s really a whole list of comprehensive wealth management practice.
Steve Wershing:
And do you think that’s what separates Heritage is that you will look at all of that different stuff or are there other special things going on that you think have contributed to that growth and that reputation?
Chuck Bean:
Steve, I think our team approach sets us apart and differentiates us amongst many of our competitors. Each client is assigned two client facing advisors. A more senior person, we’ll call a wealth manager. Then an associate, more of a supporting cast. We call that person a wealth advisor. And our clients come in to meet with us on a very regular, frequent basis. Anywhere from three to four times per year. We actually never let a client leave without scheduling the next meeting. So it’s a constant revolving door of communication. Each of those wealth management teams, there are actually six in the firm, are supported by experts in the field of investments, financial planning, client service and ops. So it’s very much a team approach. Very hands-on. Every client that comes in, we have an agenda prepared well in advance. The client assists and gets involved with preparing our customized agenda. It’s a very comprehensive approach.
Steve Wershing:
And one of the things … I want to highlight that because there are a lot of places that talk about having a team approach. But you really operate as an ensemble model. I mean you’ve centralized financial planning and you’ve centralized investment management. And so they … I believe it sounds like no matter who people are working … No matter who clients are working with, they really get a consistent experience and the advice is coming from the same place. Is that true?
Chuck Bean:
Yes, we want a consistent deliverable across the board. We’ve taken great efforts to ensure that there’s continuity and consistency across the way we communicate investment performance, the level and detail of the comprehensive financial planning work that we do, the quality of introductions to other outside professional advisors in the field of estate planning, tax planning, philanthropy, and income tax planning, et cetera. So each client that comes in has a very consistent and unique service model that regardless which of the six different wealth management teams are faced with, they’re being delivered the same high level quality advice.
Steve Wershing:
Okay.
Julie Littlechild:
I’m interested to ask for advisors who are listening to this who are just growing the business. Who are lower in terms of assets, but aspire to have the kind of model that you have. Was there a certain critical mass at which point this structure, this team approach became possible, or did you really build it from the start with that in mind?
Chuck Bean:
So great question, Julie. Probably about 10 years ago I recognized that I wasn’t an expert in every field and facet of wealth management. My strengths were geared around relationships and building long-term clients with the firm, and networking with COI’s, centers of influence. I was also doing all the financial planning work, and engaged in investment management selection, and composition of portfolios. And I eventually got to a crossroads where I recognized there are people who are more focused, educated and smarter than I am in certain facets of the business. So the first area that … Where I was able to delegate some responsibilities was investment management. We hired a gentleman by the name of Bob Weisse, he’s now our Chief Investment Officer. He has a four person team that heads up the investment committee. They’re minding the till. They’re overseeing the portfolios, they’re doing all the rebalancing that’s necessary, year-end tax law selling, deploying new capital as it comes in, freeing up moneys for distributions for those who are retired. And so the investment team has really donned the responsibility of maintaining the integrity of our portfolios. We then later on added a financial planning group. Ed Jastrem is my current director of financial planning. He has a four-person team and they get very intricately involved with all advanced facets of tax planning, estate planning, financial planning, et cetera.
So we will call in these experts from these different teams to help and assist the client facing wealth managers, wealth advisors with getting the job done. And these clients recognize that, wow, I have this … As you mentioned, ensemble practice, with all the different areas of discipline that I can call on and assist in getting the work done. We also have a client service and ops team as well that handles opening up all the accounts, transferring assets, change a beneficiary, fund a trust, bill payment services. So each client gets to know probably five people pretty intimately within the firm that are working on their behalf.
Julie Littlechild:
Yeah, it’s interesting. Having that model and that depth of expertise behind the team, does that change the qualities that you look for in a wealth manager or advisor because they can draw on that expertise? They don’t need to do it all?
Chuck Bean:
We do. We actually look for wealth managers that have very strong relationship building skills, strong networking skills, very confident individuals that can help develop new business. Because they don’t need to be experts in the field of investment or asset management. Although they need a core baseline and foundational level of education on the financial planning side, we do require everybody have a Certified financial planner’s designation or a Chartered Financial Consultant’s designation. But they are able to call on these other experts to come in when the bar is raised, and more sophistication, more meat on the bone is required.
Steve Wershing:
And Chuck, would you say that there is a philosophy that heritage has as the way it approaches clients or the way it executes on financial planning?
Chuck Bean:
Yes, our philosophy is very much geared around that team approach I just described. And a very high commitment to client service. We try to provide white glove, red carpet treatment to each and every client. We have very lengthy internal checklists for each and every client in all different facets of their financial livelihood. We’re engaged very closely with all the other trusted advisors outside of the firm that they may choose to work with in the field of accounting, or estate planning, insurance, et cetera. So very much team oriented, very much client service oriented. We act as a true fiduciary. The client’s interests always come first. As an RIA we aspire to the highest levels of standards of fiduciary care for our clients. So all that wraps into our philosophy.
Julie Littlechild:
Can you … The white glove service and the checklist. I’d love it if you could give us some specific insight into what that looks like. We use terms which are very high level, but what does that look like in action?
Chuck Bean:
So our financial planning team actually modeled and internal checklist that’s built within our CRM. We use Tamarac as our client relationship manager. And we have a whole section within the CRM, Julie, that details probably 100 point checklist broken down by main categories of income tax planning, estate planning, philanthropy, debt service, retirement, et cetera. And for instance, under the income tax section, we want to make sure that we’re capturing our client’s tax returns each and every year.
We’re looking through the schedules. We’re looking at schedule A, the itemized deductions, we’re looking at schedule B, the interest in dividends, the schedule D, schedule E for those that have passive real estate investments, schedule C for those that have consulting practices. What can we do to add value to mitigate or reduce the tax liability in this instance. Are there opportunities to set up an individual 401(k) with the income that’s being generated? Are there low-income years, they just retired and before they turned age 70 and a half and hit mandatory required distributions, are there gap years as far as income where income tax rates drop off and we can convert IRA to Roth IRA during those years. Are there opportunities to become more tax efficient with the portfolio based on their present length of income tax rate and projecting going forward. And on and on. Are there carry forward losses on the tax return that can be used to incur gains and rebalance without worrying about additional tax liability.
All of this information under each of those main categories is captured in our CRM and we can run reports off of that. Who’s missing their 2017 tax returns? And the financial planning team can reach out to the wealth managers and wealth advisors and make sure they proactively gather that information. We review estate planning document. When was the last time they were updated? Has it not been reviewed in 10 years. And since then, a state tax laws have changed, or the client’s family dynamics are changed, or the people who they want serving his fiduciaries and they’re no longer here, or too old, or disabled, or unable. So we’re dotting i’s, we’re crossing t’s, we’re looking through their documents, we’re ensuring that we’re doing everything a sound professional financial advisory firm should be doing for all them.
Steve Wershing:
And I want to build on that a little bit because there are a lot of firms that say good service, but I’m really intrigued by how you interpret that. And so it sounds like you’ve really taken the comprehensive aspect of it and systematized it with checklists, and processes, and those kinds of things. And also you’ve coupled that with sort of a diligence about how frequently you’ll see clients. So you put the two of those together and it sounds like that’s how you’re defining service and that’s kind of what you see as separate … It sets you apart. Is that a fair summary of that?
Chuck Bean:
Oh, 100%. Most clients are enamored and wowed with the early process of coming on board with us. And if I could just take a moment to describe what that looks like. So we’re referral based, 100% of the business that comes to this firm is through an introduction. We do do small marketing events for existing clients and they may bring a friend but majority of the clients are referred by an existing client who is extremely satisfied or one of the many centers of influence relationships that we have. So early on, someone would call the wealth manager that they got referred to and there’ll be a triage call. That triage call may last 30 minutes. We’re trying to ascertain what are their goals, objectives, why are they reaching out to us, what do they want to accomplish. And then we dig into their family dynamics a little bit, their professional careers, what levels of income they’re generating, what type of assets or resources they’ve been able to save away, and what are the pain points, what are the challenges, or once again why are they thinking about making a switch or hiring our firm.
So we walk away from that call and truly understanding if they’re a qualified candidate to potentially work with us. And if so, we move on to what we call our three meeting onboarding or new client process. We send out a new client kit. There’s a data gathering form, an investment questionnaire, and a checklist of items. We want them to complete all that and bring them with … Bring that with them on their person to that first meeting. That first meeting is called a discovery meeting. It’s a 90 minute meeting. We want the tax returns, the investment statements, the retirement account statements, and the bank account statements in addition to the completed data gathering form and investment questionnaire. That’s just getting the ball rolling. That’s enough information for us to put some chips on the table and have some talking points to determine what their financial livelihood looks like, what are the challenges, what are the goals, what are the objectives with the wealth that they’ve created. So that first meeting is a discovery meeting. Once again, it lasts about 90 minutes and they’re only meeting with two members of our team, the wealth manager or the wealth advisor. The client facing folks.
Between meeting one and meeting two, we’ll provide them with some more homework. And we talk about that the first meeting. We ask for estate planning documents, insurance policies, a listing of the executive benefits they may have if they’re working, a listing of whatever benefits they may have through their employer. And a host of other things. Typically budget worksheets, we understand what the spending plan looks like. We want all of that prior to the second meeting which is another 90 minute meeting typically a week to two weeks out.
And we want them to send out to us in advance so our planning team can wrap their arms around it and start to put together some preliminary planning documents. And those planning documents are as follows. We put together a net worth statement or a personal listing of all their financial assets and liabilities broken down by ownership, title, category. We put a lot of details in there, we put the beneficiaries, the secondary beneficiaries, and the retirement accounts. The accounts are owned by trusts. We list the name of the trustees and the successor fiduciaries. It’s a very comprehensive working document.
We also put together an initial draft of a financial plan. We happen to use eMoney and the financial plan projects out their future. All the income, and cash flow, and expenditures, and resources. We have some idea. Look out there in the horizon and get some semblance of what the future looks like.
And the last thing we do for that second meeting … And this is all called the state of the union meeting by the way, is an executive summary from our investment team with regards to how their present portfolio is positioned. How it’s asset allocated, the fees that they’re paying, the level of risk that they’re tolerating, historical performance. So we have some talking points around investments. That’s the second meeting.
Steve Wershing:
Before we go to the third meeting, Chuck, I want to ask you something about that.
Chuck Bean:
Sure.
Steve Wershing:
You said that people bring a certain amount of stuff to the discovery meeting and then they have some homework to send you stuff between the first and second meeting. And that first you collect a lot of information it sounds like between the first and second meeting that your planning team has to go through. But you also said that it happens the second … The state of the union meeting happens a week after the discovery meeting. That’s not a lot of time. Go ahead, I’m sorry. There’s something I want to ask you about it, but go ahead and talk about that.
Chuck Bean:
It typically happens anywhere from a week on the early side to upwards of three weeks later after that first meeting. Some people are very well organized and very diligent with regards to their financial records. They can get it back to us in no time. We really work at the client’s pace on this one and determining when the next meeting is structured. But we do need all that information at least four business days prior to that next meeting so that my planning team can wrap their arms around all the data and get the work done.
Steve Wershing:
Right.
Chuck Bean:
And we are very efficient, we are very productive in our firm. We have wonderful resources. Other firms may not have those resources, so the team effort gets the job done.
Steve Wershing:
And one of the other things I wanted to ask you about is that I speak with a lot of advisory firms that they really struggle with compliance. That they can’t get the clients to send them information but one thing I can see that’s a difference between you and other firms is that you said they never leave until they’ve got something scheduled again. So they know when the next meeting’s going to be and they know that they have to have the stuff in to you. But how else do you address that issue of people’s reluctance to do the work digging through their files to get all the stuff that you need?
Chuck Bean:
We clearly have the most … The highest success rate for those that are truly engaged and respectful of our time, and are following up in a timely manner with our requests. Not everybody in the world is like that. I would say that 90% of our prospective clients that get through this process to the third and final meeting become clients. But there are some that drop off along the way because they’re not serious, they’re not focused, not engaged, they may not be willing to divulge all that information. So I’d say close to 60% of those that stock the first meeting get to the third and final meeting. And once again, 90% of those end up becoming clients.
Steve Wershing:
Okay. What was I going to say about that? I was going to ask you about-
Chuck Bean:
The third meeting.
Steve Wershing:
Yeah. And then the third meeting. But just getting the people on board with that to getting them engaged with it. So you said as much as 40% of those people don’t get it all the way to the end after the discovery meeting, is that right?
Chuck Bean:
Yeah, if I had to guess, close to a third of clients … Of prospective clients don’t get through that full process. But once again, we’re looking for a certain breed of clientele that is engaged, that is involved, that is very respectful of professional guidance and advice, that’s going to provide us the information that we need to get the job done, and comes and follows through with their review meetings. And we don’t want people who are canceling, or bowing out, or wasting time so to speak.
Steve Wershing:
Yeah, that’s really interesting. And then when somebody on your team is following up on that, to try to sort of give them that little nudge to get that stuff in or to call it quits, what does a conversation like that sound like between somebody at Heritage and the client. If you’re following up to say, “Hey, we need that stuff from you”?
Chuck Bean:
So we have paraplanners that support those client facing advisors. Once again, the wealth manager and wealth advisor. So the paraplanner is engaged in that early onboarding process. And they’re communicating directly with the potential client. So they’re reminding them by emails that we’re still missing this information or could you please kindly send this statement or direct us in the right area to capture it ourselves, whether it’s reaching out to the CPA to get tax returns, or the insurance advisor to get current summary statements. So it’s very much a back and forth and there’s a lot of communication early on with the prospective client to get all the chips on the table and complete the puzzle.
So fortunately, we’ve got the staff to engage with our clients and remind them in a friendly manner. Do meetings get pushed off or rescheduled because they don’t have it all? Sure, of course, that happens all the time. But I think our process works. And once clients are walking down that path and are on the track to become a potential client of the firm, they’re enamored with all the information we’re looking at and analyzing. And they say to themselves, “Ah-ha, I’ve never had a firm interested in turning over all these stones and dotting all these i’s. And this is refreshing, this is new.” Also, we’re not charging for this early phase…
Steve Wershing:
Oh okay. That would be another question. Sure.
Chuck Bean:
So there’s no obligation or fee for the first few meetings, but we’re doing a lot of work. We’re engaging a lot of our staff, and our expertise, and time to get to a level where we can both mutually make a decision to work together or not.
Steve Wershing:
Let’s get to that in a minute because that’s another really interesting thing to explore. So let’s get to the third … So then you have the third meeting and tell us what the third meeting’s about.
Chuck Bean:
So the first meeting is the discovery meeting, the second is state of the union, really sharing with the client where they stand today financially without any recommendations. But we do stop to pinpoint areas that can be improved upon and share our observations. Third meeting is all about wealth management recommendations. That’s when we bring a member of our investment management team in to talk about our investment philosophy, our approach to asset management, we have a full blown proposal, comparing their current portfolio to what we’re recommending. And this all delves very well with the financial planning work that we’ve already done to date. Keep in mind we now have a financial plan completed, we have a personal financial statement. We know what the client’s goals and objectives are, we know what they want to accomplish. So we’re now capable of being able to provide them with a prudent list of recommendations as to how their money should be managed.
So that third meeting is about investment management. We also itemize and prioritize all the financial planning projects that we can assist them with. And that’s prioritized in conjunction with the client. Maybe their state plan’s out of date, maybe they’re underinsured. Maybe they want to help their grandson or granddaughter go to college and they’re funding a 529 plan. One of a million different things. And we put that list of financial planning topics together and we then discuss the next steps of potentially moving forward if you’d like to engage our services. If so, we schedule yet a fourth meeting, sign paperwork, and then start to tackle the financial planning list.
Julie Littlechild:
So there’s so much activity that goes on. It’s quite amazing. I’m interested. I know that client feedback is a part of your business and that you’ve got an advisory board in place. Are these … Do you test and assess client feedback on the kind of information that they receive, how they want to receive it, and whatnot?
Chuck Bean:
We do, Julie. In fact, our client advisory board has been a wonderful forum to solicit direct feedback from some our top ideal clients in the firm. We meet twice a year, there’s 12 hand-picked ideal clients that rotate every three years on and off that board. And we’ve solicited just some tremendous guidance and advice from these folks. They really our client board of directors. And for example, some of the things that have come out of that is how often we should be meeting with our clients.
Once they come on board through that early phase, then we get into regular rotation of review meetings, that most clients are coming in every three to four months for a 90-minute review. And a lot of my peers and competitors will say, “Whoa, that’s way too much. You just need to do an annual review.” It is truly what differentiates us, Heritage Financial Services, and sets us apart. And when clients come in for those reviews, there’s always topics to cover. There’s new tax laws that affect them, and there’s some family dynamics that change, their estate plan needs to be updated, there’s something going on in the markets or the economy that they want to discuss, there’s re-balancing to do, there’s expenses to be paid, there’s trips to go on. You name it.
So, each review meeting is 90 minutes going forward and our advisory board says, “Please don’t stop that. We value that time with you immensely.” We had actually threatened to pull back and maybe do twice a year. Those seeing four times a year, three times a year. And they’re saying, “Time out. No. Please don’t do that. We truly value the frequency and how often we meet with you.”
Steve Wershing:
Have there been any other big ah-ha’s you’ve gotten from your board? I know that we’ve covered a lot in it, but are there any things that stand out that really caused you to follow an initiative or change something besides the frequency of meeting? I think that’s a significant ah-ha. Any other big ah-has that you can remember getting?
Chuck Bean:
Yeah, Steve, the board has been tremendous. We’ve received a ton of great feedback. I’ll share a few things off the top of my mind. One is our client portal. So we have a client portal that was designed specifically to the requests and needs and demands of our advisory board with regards to what type of charts, and performance reports, and mountain charts, and asset allocation pie charts that they want to see when they log on and look at their accounts. So we showed samples of those reports and what can be changed, what can’t be changed, how that should be displayed on their dashboard when they log on. So they were very instrumental in helping us design the client portal.
Beyond that we recently learned when we’re putting on client prospecting events. We bring existing clients to a wine and dinner pairing. We ask them to bring a friend, what type of venue should that be? Should there be education involved? Should it be just pleasure. And they said the biggest bang for our buck would be to pair the two together. Have a speaker on a specific educational topic and have it at a venue that they’re excited to attend. Maybe a museum or something of the such. And include food and drink. They said free food and drink will bring some of the folks out.
Julie Littlechild:
That doesn’t change with money, does it? We all like that.
Chuck Bean:
No, no. Some things are tried and true. Also concierge services. Some of the things we’ve been asking our advisory board are what other ancillary services should we embark on or what should be considered to enhance the service offerings that we’re presently affording our clients? And some concierge services came out of this. They said, “What if you could help us out ensuring that when we want to travel, when we retire, are there certain travel agencies that you’d highly recommend that specialize in trips to Europe, or educational trips, or safaris, or what have you. So now we have relationships with a handful of travel agencies in and around the Greater Boston area that will work directly with our clients, put an itinerary together, and see them through.
We’ve also engaged with certain banking relationships where folks need home equity lines, or credit, or mortgages, or banking services above and beyond what they’re able to get with their local bank. So we have that listed amongst our concierge services. We have a relationship with an auto dealership that owns 30 different dealerships of all makes and models of automobiles. And there’s a white glove service department there that takes care of our clients, charges a fair profit margin, without any haggling or negotiating over the vehicle. So things like that. We’re offering more concierge services as a result.
Also when we transition a client from one advisory team to another, as advisory teams get to full capacity but want to continue to move up stream to work with larger clients, they need to transition some of the smaller clients to another team. And they helped us design a plan of attack to how to effectively do that without disheartening the client relationship. And many, many others. A lot of our website, our collateral, our unique value proposition, all that has been designed and developed with the assistance of our advisory board.
Steve Wershing:
The show is about referrals and so one of the things we wanted to get around to after talking with you about the service and the feedback is what do your clients say about Heritage and you’ve said that you’ve grown Heritage entirely organically, what do you think are some of the things that have contributed to your ability to attract referrals?
Chuck Bean:
I think some of the things that immediately come to mind when someone’s asked what they think of Heritage is they take care of everything. At least on the financial side. Every detail matters. They have exceptional professional expertise with a vast team of individuals that are caring for us. It’s personalized, it’s customized, they’re very friendly, they’re very warm, they’re honest, they have a lot of integrity, we trust them immensely, the breadth of service, the level of comprehensive detail they go through. They go above and beyond. So I think those are some of things that might come to mind when asked of our clients. And those are the things our advisory boards tells us when we ask them as well.
Steve Wershing:
Hmm. Now you had said before that you’d made a big point about offering the fiduciary service and being free of conflict of interest. Heritage before had been a hybrid firm and I think for a lot of the listeners who are a different structure, either a hybrid or something like that, we’d be interested in hearing a little bit about how did you gradually come to the conclusion that you needed to switch from being a hybrid firm over to being an RIA only?
Chuck Bean:
Sure. So I’m in my 28th year of being in the industry. I graduated from Boston College with a finance degree back in 1990. I immediately took a job with John Hancock financial services on the managerial side of the house. I was a full-time captive agent at John Hancock offering their proprietary insurance, tax deferred investments, and mutual funds to clients that I was literally cold calling back in those days. So after five years of building an initial clientele with John Hancock, probably a couple hundred clients back in those days, I recognized that John Hancock was very good in certain areas, but they weren’t excellent in all areas. And I wanted to be able to offer more freedom of choice. Less proprietary investments, more offerings across the universe of potential financial instruments that are available.
So, I branched away and went with an independent broker dealer, Commonwealth Financial Network. I have very dear friends that I maintain very strong relations with to this day. I became one of their top advisors over the 14 years that I was working with Commonwealth. And Commonwealth helped me leverage and build a business. I was able to act more as a fiduciary and provide unbiased independent objective advice. There were no proprietary investments. I had all kinds of different folks at Commonwealth that I could leverage in the field of financial planning, and asset management, and wealth management, estate planning. They had experts in insurance, and tax, and wonderful, excellent firm that I was very proud to be a member of for all those years. And we actually set up the registered investment advisor practice in parallel with Commonwealth.
So back in 1999 after being with Commonwealth for about five years or so, I was allowed to create this Heritage Financial Services RIA in parallel working with Commonwealth. It was really the first steps into becoming purely independent. So eventually in 2008 we decided to branch off of Commonwealth. I think we got to a level where we were outgrowing some of what the broker deal was able to afford us … You folks there?
Steve Wershing:
Yeah. We’re here.
Julie Littlechild:
Yeah.
Chuck Bean:
Oh, sorry. And so fully became independent on the RIA side back in 2000 … Early 2009. So we haven’t looked back. We’ve tripled in size since then. We’ve grown from 500 million under management to now just shy of 1.5 billion. And a lot of the departments, and services, and back office folks that were doing that work for us at Commonwealth, we now have in house here at the firm.
Julie Littlechild:
So looking forward, is it more of the same in order to grow or what does the future look like for you?
Chuck Bean:
So, Julie, I actually had an off-site partners retreat with our five person executive management team a few months ago to sketch out the future of the firm where we’re looking out literally five years and building the template, the blueprint for the future. And we’re a 30 person firm now. And we’re just under 1.5 billion. We expect to be close to 3 billion five years out if we continue on the same trajectory of our growth rate. We would have 55 plus employees at that time. We have presently nine equity owners in the firm. I would suspect that to hopefully double at least over the course of the next five years. We’re offering more concierge services. We’re enhancing our service offerings. We’re taking more advantage of financial technology so that we can communicate in a more dynamic virtual world with especially some of the younger clients who are Gen Xers and millennials.
Things are evolving. They’re changing. They keep continuing to develop.
Steve Wershing:
Now, we’re almost up on time, Chuck. But I cannot let you go without getting a story from you. A lot of advisors really believe that they’re service oriented. But there’s a story from your past that takes that to a whole new level. And it involves, I believe, pruning a tree for a client? Can you tell us that story?
Chuck Bean:
It’s a great story, but I’ll take it one step behind that. I grew up on a small vegetable farm in Westwood, Massachusetts. We had about 20 acres. I was the oldest of four boys. My mom and dad just had a tremendous set of values, and principles, and ethics that they bestowed upon each of us. Dad would have us up at five in the morning at sunrise every day working in the fields in the summer time. It was literally sun up to sun down. And just a tremendous work ethic. And mom would ring the bell when the sun was setting and dinner was set at the table. The family unit was very tight. To this day, my brothers are some of my best friends, and my mom lives across the street from me. I lost my dad several years ago, but I carry him with me every day.
And when I first started in the financial services industry with John Hancock, my literally very first client was in Framingham, her name was Rita. I won’t share her last name. But she allowed me to come over and talk about the financial solutions and expertise that I had. And she was complaining at the time that she had this cherry tree with the branches that were leaning on the telephone wires. And she couldn’t get any subcontractor to come over and cut the limb down.
Now, growing up on the farm and having some skill with the chainsaw and many other pieces of equipment. I literally had a three piece suit with a tie on, it was a hot summer day in August, probably 85 degrees. I asked Rita, “Do you have a chain saw in the garage? I’ll be happy to take care of it.” She’s like, “Oh, no, no, no, I didn’t expect you to do that.” I’m like, “No, no, no. I’m happy to help you.” So off I went and took my sport coat off, went into the garage, fired up the chainsaw, climbed up the cherry tree, sawing the branch off, saw dust all over me, I’m sweating my butt off, and down the limb came, cut it up, put it aside. And she was just enamored with the fact that I would go to those lengths to help her. And I walked … In my briefcase, I have a $10,000 check for an investment where I made $300 and I thought I hit the lottery.
Steve Wershing:
So there it is. So that throws down the gauntlet. I defy any advisor to tell me a service story that beats that one.
Julie Littlechild:
That’s white glove, that is.
Steve Wershing:
That’s … Yeah. That’s actually it’s leather glove.
Julie Littlechild:
Leather glove, whole different thing
Steve Wershing:
Well, I think … I love hearing about Heritage and all the stuff that you do. We do have to wrap it up, but Chuck, thanks very much for joining us today. Like I said before, Heritage has been recognized rightly for all the great services you provide. And a lot of advisors could learn a lot from all the stuff you’ve put together. And I appreciate your willingness to share some of that expertise on the show today.
Chuck Bean:
Oh, it’s my true pleasure. Thank you very much for having me. I really appreciate it.
Julie Littlechild:
Take care.
Chuck Bean:
Thank you, Julie. Thank you, Steve.
Julie Littlechild:
Hi, it’s Julie again. It was great to have you with us on Becoming Referable. If you like what you’ve been hearing, please do us a favor and rate us on iTunes. It really does help. You can get all the links, show notes, and other tidbits from these episodes at becomingreferable.com. You can also get our free report, Three Referral Myths That Limit Your Growth, and connect with our blogs and other resources. Thanks so much for joining us.