PM Team Structure Portfolio Management Institute Atlanta April

PM Team Structure Portfolio Management Institute Atlanta April 2009 Jeffrey S. Gerson, Guarino & Meisel Group Family Wealth Director Senior Portfolio Management Director New York City, NY

Team Definition “A Team is an assembly of individuals who work together towards a common goal”

Individual Definition “A single human considered apart from a society or community “ “a single human being, as distinguished from a group”

Question Do you believe your client’s want to view you as an island?

Team Formation n When do you consider forming a team? “Successful teams are built by filling weaknesses, not by just adding strengths”

Types of Teams n n Vertical Team Horizontal Team

Types of Teams n Vertical Team n n n One main decision maker Looks much like a single practitioner with an army Very often, the team leader receives the gross and the rest of team receives salaries

Types of Teams n Horizontal Team n n Team Macro Decision Making Generally a sharing of the gross pool Team members in charge of excelling at their specialty Looks like advisory firm within the firm

Why Should you Consider a Team? n n Depth Continuity Service Reduce Risk

Why Should you Consider a Team? n Depth n n Fact: HNW individuals gravitate towards the team approach Fact: Nobody is so smart that they can be everything to everyone

Why Should you Consider a Team? n Continuity n n HNW Clients want to feel that their financial future doesn’t end when your financial career ends HNW Clients want to know that someone is available at all times to watch their assets

Why Should you Consider a Team? n Service n n Team members can focus on specific aspects of service/advice in a collaborative effort. Diversity in product / service offerings is very sticky for Clients

Why Should you Consider a Team? n Reduce Risk n n Sharing in the ups and downs of the cycles makes it easier to focus on doing business Providing a diverse offering of specialties amongst a team mitigates the risk of a client finding answers elsewhere

What Makes Teams Last? Compatibility n Respect n Success n

Define Roles and Expertise “Successful teams are built by filling weaknesses, not by just adding strengths” Products and Services n Portfolio Management n n n Equity Fixed Income Trust Services Liability Management Estate Planning Alternative Investments Cash Management Executive Benefits Philanthropic Services Insurance Long Term Care Asset Protection Process n n n n n Rainmaker Family Office Advisor Portfolio Manager / Chief Investment Officer Financial Planner Relationship Manager Administrative / Operations Team Management Technology Coordinator Presentation & Proposals

Top 5 Mistakes 1. 2. 3. 4. 5. Duplication: Hiring someone just like yourself Dumping Ground: Hiring A Junior Partner Upon Which To Dump The C-D-X-Y-Z Book Forcing the Roles Issue: Putting People In Roles That Don’t Play To Their Strengths I vs. We: Policy stems from the top and everyone needs to buy into the team approach Dislocated Comp Structure: This business is a meritocracy. The comp needs to reflect that.

Getting There 3 Stages 1. 2. 3. Observation and Due Diligence Dating Marriage

Preparation n Compatibility n n n Social Business Personality Analysis n Paragon Resources

Compensation “Be Fair or Beware”

Compensation Structures Support Staff “Nobody Works For you, they work with you”

What does Staff Want? • Respect • Praise • Protection • Money

Compensation Structures Financial Advisors

“Dating” Model Team 50% Team Candidate 50% Pool Acct. Joint Production Number

Marriage “Model” Step 1: Inventory Your Current Business – Focus Report Analysis Step 2: Establish definitive roles and expectations Step 3: Create method of measurement and evaluation Step 4: Establish a production number for legacy business Step 5: Establish a production number for new business

Marriage Compensation Subjective - not good on it’s own Objective - not good on it’s own Question: Whats the solution? Answer: Progressive Objective Subjective

Progressive Objective Subjective The establishment of a system that incentivises all team members to service the entire book and creates a method for less senior FAs to increase their equity over time by being rewarded by the success of the team and being rewarded for their level of contribution.

Case Study Gerson Guarino & Meisel Group New York, NY

Gerson, Guarino & Meisel Group Official Firm Titles Investment and Wealth Management Jeffrey S. Gerson Family Wealth Director Senior Portfolio Management Director Gregory M. Meisel Portfolio Management Director Richard F. Di. Venuto Family Wealth Director Shawn P. Landau, CFP® Vice President – Wealth Management Michael A. Gammarati, CRPC® Portfolio Management Associate Christopher D. Guarino Research, Service, and Administration Lisa Guzman Laura Micelli Registered Client Service Associate Sr. Client Service Associate Andrea Amaya Registered Associate Joseph Gammarati Registered Client Service Associate Ishrat Mirza Client Service Associate

Gerson, Guarino & Meisel Group Actual Roles Investment and Wealth Management Jeffrey S. Gerson Christopher D. Guarino Rainmaker / PWM Advisory / Sales / PR CIO / Portfolio Manager Gregory M. Meisel Relationship Mgr / Sales / Team Conduit Richard F. Di. Venuto Asset Protection / Investment Banking / Sales Michael A. Gammarati, CRPC® Shawn P. Landau, CFP® CFP / Comprehensive Plans / Sales Follow up Cash Inv. / Model Portfolio Execution / Sales Fullfillment / Insurance / CPM Research, Service, and Administration Laura Micelli Lisa Guzman EFS, New Accounts Complicated Projects Joseph Gammarati Managed Accounts / 529 s Insurance and Annuities Fixed Income Trading Assistant Presentation Prep. / CFA Candidate Andrea Amaya Ishrat Mirza Travel and Ent. Scheduling / Operations Administration Wires, Journals etc…

“Progressive Objective Subjective” Model Legacy FA number New Business Number Total Production FA #1 35% FA #2 24% FA #3 17% FA #4 13% Joint Production Number FA #4 11%

PM Team Structure Portfolio Management Institute Atlanta April 2009 Jeffrey S. Gerson, Guarino & Meisel Group Family Wealth Director Senior Portfolio Management Director New York City, NY