The Mutual Fund Store brings advice business to the mass affluent

Despite its decidedly mass-market focus, The Mutual Fund Store maintains that client relationships are priority No. 1. “We're not in the mutual fund sales business; we're in the advice business,” said founder and chief executive Adam Bold. The Mutual Fund Store had $5.1 billion in discretionary assets as of March 31, ranking it fifth on the InvestmentNews RIA Giants list. It is a fee-only firm with 70 offices across the country, working primarily with the mass affluent and concentrating solely on mutual funds. “Our clients are regular people,” Mr. Bold said. “If you had $10 million, you could go to [The Goldman Sachs Group Inc.], and they would manage you for a fee. If you had $100,000, you either did it on your own or went to a full-commission brokerage. We've brought services to the mass affluent.” The firm serves 28,591 investment advisory clients and oversees 61,843 discretionary accounts — more than any other firm on the RIA Giants list. But the huge numbers don't mean that clients get lost in the crowd. During the 2008 downturn, for example, clients received e-mails with market updates and the firm's economic outlook as often as twice a week, Mr. Bold said. The firm also phoned clients once a month instead of every four to six months, which had been typical.

HOLDING ONTO CLIENTS

The regular contact seems to have worked, as The Mutual Fund Store retained between 96% and 98% of its clients last year, Mr. Bold said. “Regular contact can be a client retention strategy when something out of the ordinary happens,” said Maureen Wilke, co-founder of The Connected Advisor, a practice-management firm. “If there are clients you don't want to lose, call them. Don't wait for them to call you,” she said. The firm reached out to clients with a reassuring e-mail May 6, following the nearly 1,000-point decline in the Dow Jones Industrial Average. “We didn't see the drop as a market-changing event; it was an anomaly. People were still scared, but we talked them off the ledge,” Mr. Bold said. E-mail Darla Mercado at [email protected].