A POSSIBLE STAKE IN CONTROVERSIAL ADVISER: AMEX DEFECTOR IN DETROIT IS GOING DUTCH WITH ING

John Hantz didn’t become the $1.3-million-a-year head of American Express Financial Advisors’ biggest market by thinking small.

Now the head of his own firm, staffed with more than 100 former Amex advisers, Mr. Hantz has forged a strategic alliance with the giant Dutch insurer ING Group, which is interested in taking an equity stake in Hantz Financial Services in the future, says Larry Roth, who heads ING’s brokerage operations. Vestax Securities Corp., an ING-affiliated broker-dealer based in Hudson, Ohio, is providing technology, clearing and back-office services to the Hantz firm.

Mr. Hantz made national headlines – and was slapped with a fat lawsuit – when he left Amex’s Detroit unit in October taking more than 100 advisers with him.

He continues to break the rules as head of his own shop. Hantz’s reps will be employees, notindependent contractors, the norm in the industry. As a result, they will be salaried, with incentive commissions if they produce beyond set minimums. Financial plans, mandatory for all clients and sold for between $300 and $2,000, will be a major source of revenue. The home office will cover all their office expenses. Of course, wooing former clients will be on hold initially since when Amex sued Hantz and his top executives, it won an arbitration order barring him from actively soliciting former Amex clients for a year.

Amex also alleges he had romantic flings with subordinates and has two Social Security numbers, charges he flatly denies.

Mr. Hantz’s aspirations go well beyond the Michigan and Ohio markets he will initially serve as he seeks to build a national firm with a new model of financial planning. He’s targeting more upscale customers than Amex and is instituting what may be the industry’s most rigorous training regimen. He hopes to access business owners through referrals from certified public accountants and form teams of experts to aid reps in estate planning.

“I think he has a firm, frankly, that’s going to be a model for the future,” says Mr.
Roth.

For now, Mr. Hantz and his partners are the sole owners and say they want to keep it that way. But their business plan includes strategic acquisitions to break into new markets, and deep-pocketed ING is the obvious source of capital for such pursuits. Will ING make that investment without the equity? “There’s enough opportunity for them (within the alliance) that they’ll still want to do it,” predicts Orison “Kip” Chaffee, chief operating officer for Hantz.

Another question is where Mr. Hantz and his cohorts will find new reps, given the stiff competition for talent in the industry. New advisers must agree to three years of training ending with the attainment of at least three designations: certified financial planner, chartered financial consultant and chartered life underwriter. “We’re looking at the hat trick,” Mr. Hantz says.

That may irk top producers who don’t like to be told what to do.”People will be willing to jump through hoops for you if they need a job,” says Chet Helck, senior vice president at Investment Management and Research Inc., a brokerage in Atlanta.

“Most of the people who are successful reps are very well educated, experienced and knowledgeable. “But they’ve attained that because they wanted to. They’ve been motivated to do that themselves.”