Seek out advice from others who have gone out on their own
New York is an expensive place for a financial adviser to hang out a shingle. Kathy Boyle, however, wouldn't have it any other way.
After working for Merrill Lynch & Co. Inc. in the 1980s, Wheat First Butcher Singer Inc. and then First Union Corp., which acquired the investment bank in the 1990s, Ms. Boyle started Chapin Hill Advisors Inc. in 2000 out of her apartment on the Upper West Side in Manhattan before moving to a modest Midtown office.
“Everything is expensive here. The rent is high, the overhead is high, and my employee costs are huge compared to the rest of the country,” she said. “But there's also more money here, and I love the challenge of trying to stand out from the competition.”
Launching her firm shortly after a market peak in 2000 was a major challenge, particularly given First Union's aggressive fight to keep her clients. “If you're not bringing in new clients when the markets are falling, it gets very hard,” she said. “Your costs are always going up.”
In hindsight, she would have solicited more advice from business peers about vendors and tips for starting up the business. Getting a good information technology firm and the basic equipment and furniture she needed for the business was difficult.
It helped to sign on with LPL Investment Holdings Inc. to handle much of the back-office functions with clients, she said.
“In the post-Madoff world, it's been particularly good to be part of LPL. My clients understand that that lack of accountability can't happen when they get their statements directly from LPL and not me.”
It has also given her more time to drum up new business. Chapin Hill, which doesn't disclose assets, has just under 110 clients. Ms. Boyle's latest initiative was the launch of a division for not-for-profit organizations last March. Though yet to land any large clients in the space, she is arranging a series of round tables to discuss issues important to the community.
Ms. Boyle said her biggest mistakes were with people. “I'm horrible at managing people. I'm not a branch manager — I'm an adviser, and I don't want to work with 10 reps.”
In retrospect, it would have been far easier to have a partner with some complementary skill sets, she said. She remains the sole owner and only adviser, though she has seven support staff.
She credits a testing template an LPL adviser shared with her for improving hiring practices. She now gives prospects four short tests to assess their basic skills in math, English and business judgment. “It's been a godsend. If people fail the tests, I don't meet with them.”
E-mail Andrew Osterland at aosterland@investmentnews.com.
BEST ADVICE:
“Be conservative with your income projections and aggressive with your costs. There's always something you don't expect.” Kathy Boyle
