Combining firms reduces costs and spurs collaboration

Sandy Johnson’s best business decision was to participate in an Ameriprise Financial Inc. experiment 20 years ago that brought individual advisers together to operate as a group practice. Today, her Proviant Group boasts operational efficiencies that would turn both smaller and larger firms green with envy.

Proviant began with Ms. Johnson and two other solo advisers combining in St. Cloud, Minn., as part of an Ameriprise pilot program in 1994. From the beginning, they shared technology and staff, and benefited from being able to collaborate on issues and bounce ideas off each other, Ms. Johnson explained.

As the firm grew, it built out its infrastructure and even bought a building to house the firm. But it was when the firm could afford to bring on specialized talent in areas such as operations, investment analysis and financial plan creation that the business really took off.

“Bringing someone on just to do the front desk and then other individuals to specialize — that really worked out well for everyone,” Ms. Johnson said.

Each of Proviant Group’s 11 advisers, including the four partners, handles an average of 350 clients. A 14-person support staff takes care of about 150 clients each. Both the firm’s client-to-staff and client-to-adviser ratios are among the highest of any adviser who participated in last year’s InvestmentNews adviser survey.

These exceptionally high ratios, combined with the firm’s high operating margin, led InvestmentNews to name the firm a top performer for its personnel management in its practice management awards given out last September.

If you’ve never heard of Proviant Group, it may be because the 20-year-old firm adopted that name just last year. Most recently, it was called Johnson Carriar Kruchten Anderson & Associates after its four partners: Ms. Johnson, Barclay Carriar, Patrick Kruchten and John Anderson.

The group’s name has changed along with its partners over the past two decades. But a couple of years ago, the group decided it didn’t like that the name excluded some advisers, and felt that the firm needed an identity bigger than just the names of the partners.

The partners were surprised at the difficulties in choosing a new name. After many meetings, they chose one two years ago, but in the process of trying to trademark it, they discovered that a Texas financial company had a similar name. So they started over, only this time using a consultant.

“It’s challenging to find a unique name, and one that doesn’t say weird things in a different language,” Ms. Johnson said.

While about half of the support staff at Proviant Group works in a common capacity, the firm also is separated into teams of advisers and client service managers, who hold a state insurance license and Series 7 and Series 66 licenses. Most teams have three or four people, but Ms. Johnson’s team has four advisers and two client service managers.

PEACE OF MIND

Ms. Johnson, 66, likes that structure because it allows her to take more time off and still ensure that client needs are met. She still handles some clients exclusively, typically those with larger accounts who pay higher fees, she said.

“I’m not sure I’m doing them a favor, but they feel like I am,” Ms. Johnson said.

She prefers to have clients work with all the advisers on her team so there is backup if one adviser isn’t available.

“It’s easier when clients are co-advised,” Ms. Johnson said. “It makes it easier to take off and do other things, and not feel like I’m neglecting my clients.”

Ms. Johnson has no plans to retire. “I will probably continue working until such time as I’m not bringing value to the table,” she said. “Or if it’s not fun anymore.”

Related Topics: Best Practices, Financial Planning