Life Is Complicated. This Wealth Manager Wants to Help Clients With ‘Everything They Do.’

view original post

MAI Capital Management Managing Partner Rick Buoncore, left, and Chief Innovation and Growth Officer Joe McLean.

Photograph by Daniel Lozada/ Photograph by Katie Thompson

MAI Capital Management’s advisors help their clients with financial planning and investing, but also advise them on big purchases and often help with nonfinancial matters. “When clients have had medical issues with family members, we’ve even gotten them to the appropriate doctors through our network of contacts,” says Rick Buoncore, managing partner of the $14.4 billion-asset firm. Most clients have between $1 million and $10 million in assets with the firm.

Buoncore and Joe McLean, MAI’s chief innovation and growth officer, tell Barron’s that their Cleveland-based business talks to some clients weekly or even daily, a far cry from the historical norm.

Barron’s: How did MAI start?

Rick Buoncore: We were founded almost 50 years ago. Mark McCormack was a sports agent, and his client was the golfer Arnold Palmer. Arnold was going to play the Masters, and he said, “Geez, Mark, I forgot to file my tax return.” Mark said, “Don’t worry about that. Win the Masters; I’ll take care of your taxes.” When Arnold needed money managed, Mark created an asset management operation, and then financial planning and the whole infrastructure of a wealth management firm. I bought the firm in 2007, and I really loved that the only thing they ever thought about was taking care of the client.

Read More Top Independent Advisors

Over the years, MAI has grown, in part, by folding in other advisory practices, which plug into your operations, technology, and investment research. What’s the appeal of that for those advisors?

Buoncore: They no longer have to wear six hats in the field; they wear one hat, and that’s taking care of the client. We have two mandates. One is to grow the firm to get all the economies of scale and benefits of growth. The other is to never lose that boutique feel at the client level.

Who are your typical clients, and what services do you provide?

Key Data

  • Assets under management
    $14.4 Bil
  • Number of clients
  • Number of advisors

Buoncore: We have about 6,000 clients. I’d say 4,000 of them have accounts with between $1 million and $2.5 million. And then we have about 100 who have $50 million and above. The basic services are cash-flow analysis, an insurance review, an estate-plan review, and an investment analysis. We do 4,500 to 5,000 tax returns a year. We obviously do lots of financial planning.

Once a client is established with you, how often do they meet with their advisor?

Buoncore: Our goal is to meet every client at least four times a year, but we are open to much more often than that. We seek to go beyond just advising clients on their wealth, and be involved with them in everything they do.

Joe McLean: Historically, advisors met with clients quarterly, and the reason was basically because fees are charged quarterly. So advisors had to justify their fee, which meant that the relationship was purely around investment performance. Clients are seeking something completely different now. They want to know that they have someone in their corner who’s independent, who’s thinking not just about their investments, but also about how they can spend smarter.

What is your investment approach? Do you use alternative investments?

Buoncore: We talk about investments last with new clients. We first have to get to know the client and understand their goals and their needs. Then we’re much more prepared to build a portfolio to meet those needs. Every client has their own needs and risk tolerance; every advisor has a set of ideas to build a solution. There are income-producing ideas, growth-oriented ideas, and aggressive-growth-oriented ideas.

We took what Arnold and Mark built and have added things to make it much more robust, including alternatives. People hear “alternatives” and many times they think “too risky.” We view alternatives as a way to generate return with less risk.

What’s your fee model?

Buoncore: Certain clients prefer an asset-based fee. Some clients ask to pay a retainer for certain services. Sometimes it’s a mix of both. We do it based on what the clients desire.

Joe, you recently joined MAI. What are you focusing on?

McLean: I’m spending a lot of time seeking the next generation of advisors to come on to our platform, and the next generation of clients. One way we’re doing that is by teaching what we call a master class in life. We recently did this through the University of Arizona’s business school. The class was for student athletes and others and covered managing their personal and financial lives. We plan to take that to different universities.

Thanks, Rick and Joe.


Related Posts