For Armond Dinverno, co-chief executive of Balasa Dinverno Foltz LLC, becoming the firm's primary number cruncher was just a matter of playing to his strengths — a credo he's stuck to as he manages the firm's day-to-day business.
“It's my passion to build a great business, and not everyone has that passion,” he said. “It's not so much about the money but about running a good business. Not every manager is built to pay attention to the numbers.”
The firm grew from the 2001 merger of Mr. Dinverno's practice with that of co-CEO Mark E. Balasa. The men split their duties, making Mr. Balasa the chief investment officer and Mr. Dinverno head of the firm. The latter, in charge of increasing profitability, took a lighter client load, spending the majority of his time monitoring profit-and-loss statements, deciding where to reinvest, and managing the adviser team.
At the time the two firms merged, they had combined assets of $450 million. Today, Balasa Dinverno Foltz, which is based in Itasca, Ill., manages $2 billion in assets.
Mr. Dinverno and Mr. Balasa have had to contend with tumultuous markets. Big firms, Mr. Dinverno said, are particularly sensitive to market swings.
HIRES AMID TURMOIL
While last month's stock market swoon didn't require any drastic measures to keep the firm's P&L statement in check, 2008-09 was a different story altogether. During those years, the firm resisted the temptation to lay off staff members and, in fact, made the decision to hire more employees to help deal with anxious clients.
The benefits were twofold: Staff members were reassured that the firm was committed to keeping them, and investors received extra attention during a stormy period, Mr. Dinverno said.
“All that time spent servicing clients kept them loyal, and the profitability came back quickly when the markets bounced,” he said.
Bolstering the employee ranks in a down market may seem counterintuitive, but it makes sense from a long-term perspective, Mr. Dinverno said.
“Managing the profitability is about reinvesting regularly — not boom-and-bust cycles where you make a lot of money but your equipment breaks down,” he said.
Today, the firm is spending money to update its customer relationship management software. It's also investing in additional computer screens so that each of its advisers can work on two screens.
The firm's budget has some “wiggle room,” Mr. Dinverno said.
“The dual screens weren't in the budget, but it's about the efficiency of not having all your programs on one screen,” he added.
In addition, Balasa Dinverno Foltz has brought on eight new hires this year, with the intention of making its advisers potential owners of the firm. Today, the firm has 35 employees, which includes 13 client service teams. One of those teams specializes in catering to women in the midst of a major life transition.
Developing advisers' skills and matching them with well-suited clients have gone a long way toward smooth operations.
“We're all different and have different skill sets,” Mr. Dinverno said. “We want [you] to work on what you're the best at already.”
Clients initially are paired up with advisers who are compatible, but nothing is set in stone. In one case, a client switched wealth managers because he didn't agree with the adviser's approach, Mr. Dinverno said.
“We're a work in progress, and every stage is an evolution,” he said.
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