Become a Client Service Advisor!

We recently engaged in a tête-à-tête with James Zimbardi, co-founder of Allgen Financial Services, and discussed how they conquered challenges faced when starting their firm. With over 10 years experience as an entrepreneur and business executive, and holding an MBA from MIT, Zimbardi’s endeavors have impacted several multi-national corporations such as American Express, Smith Barney, Merrill Lynch and Morgan Stanley. By focusing on retirement and estate assets, and strategically joining forces with financial firms that offer other financial related products, Zimbardi and the team at Allgen make a positive difference for the middle market. He also offers tidbits of advice for those thinking of setting up their own firm.

How did you get into the financial services industry? The reason why I entered the financial services industry was to make a difference in the lives of others from a financial perspective. Most people living in the United States are facing an enormous challenge. There is a -1% savings rate in the US, and we are on track to experience an even greater decrease moving forward. Consumerism has plagued our society, and we need to do something immediately to protect the financial wellbeing of individuals and their families. Allgen Financial Services wants to make a difference by tackling this epidemic. If we do nothing else, we want to encourage and equip our clients to have a retirement free from financial bondage by helping them make wise financial decisions sooner rather than later.

What were some of your early obstacles with the firm? One of the early obstacles we faced when starting the firm was defining who we are and whom we serve. In the beginning, we tried to provide all the services and products having to do with financial planning and the implementation of the plans we created for clients. This was overwhelming and impossible for us to manage due to our size. We were never able to serve our clients with excellence. Also, our circles of influence were never able to articulate exactly what we did. It was too broad and general for anyone to say, “That is what I need.” This challenge led us to become strictly focused on retirement and estate asset management.

Another obstacle we faced was overcoming the breadth and depth of large institutions. Even though there is room for a new company to enter the market, most prospects are interested in the prestige of being a client of a large institution. There seems to be a preserved safety net signaling an account is better managed and protected. Large institutions are able to provide a unique client experience since they have an abundance of resources and economies of scale at their disposal. However, making changes to overcome challenges can be difficult at times for the larger institutions. You don’t turn the Titanic on a dime. Unlike the large institutions, Allgen is able to have a pulse on the market and act quickly to satisfy the needs of its clients and marketplace. We are able to offer investment advisors more autonomy to help us grow the organization.

Who do you serve? Allgen Financial Services is focused on serving the middle market. A good client for us is someone with $250,000 to $1 million in assets. We only help to manage retirement and estate related assets. For all other financial related products and services, we refer to our strategic partners. In many cases, we serve other firms with asset minimums of $1 million. They typically don’t want to deal with clients with less then $1 million and/or have a hard time serving this market. We provide an outlet for them to provide individuals they are not interested in serving. We are able to financially reward them for their efforts.

What is your strategy for growth? At Allgen, we have developed a three-part strategy revolving around building relationships. We develop relationships with other financial firms to develop strategic alliances, succession plans, and achieve global expansion.

Partnering With Other Financial Firms Allgen wants to partner with other financial firms that also serve a specific niche market. We find great value in joining forces with firms that are serving the same market as us, but providing a different type of service; or even firms that are servicing a different market all together. The key is to find the synergistic qualities. For example, companies with an asset minimum of $10 million+ per client are great candidates for us to develop a relationship with.

Also, a company that is specifically focused on providing products or services such as life insurance or financial planning, but does not manage retirement or estate assets, is a great potential partner. We are able to get creative and structure win/win business arrangements with other financial firms in order to complement each other’s service offerings and create additional streams of revenue. We feel it is critical to combine efforts in order to stay focused and create economies of scale in order for both parties to reach their full potential.

Help With Succession Planning We want to help financial service professionals create and implement an exit strategy. In many cases, we find owners have not thought about how to make a smooth transition from their business. We help create a succession plan together in order to provide a way to ensure clients continue to be serviced with excellence; that it is financially rewarding for the owner; and that the business continues its legacy. We are looking to acquire other fee-based firms and broker dealers with over $20 million in assets under management.

Expanding Globally In today’s global economy, there is no doubt that firms need to be thinking globally. Up until now our firm has only served mature markets.

However, these markets seem to be saturated and over-served at times. It is almost an issue of cannibalization. All the firms keep bumping into each other, going after the same client. We feel there is a better way. One of the solutions is to implement a global strategy to reach less mature markets. We are not yet prepared to take this venture up on our own. But, with the right alliances, we are very interested in expanding our reach on a global scale.

What advice would you give someone who wants to start their own financial services firm? Make sure you define your market extremely well. If you don’t have critical mass to capture a significant amount of the market share within your geographic and/or demographic profile, you probably have not defined your market well enough. Also, make sure you are serving a significant purpose. Don’t fall into the trap of getting into the financial services industry for yourself because it has great potential to improve your lifestyle. This reason for being in business as an entrepreneur will get old after a while.

If starting a financial firm on your own is attractive, you may want to consider getting started by working with an RIA like Allgen Financial Services, Inc. There are many benefits to working with an established firm, but still having the capability to run your own firm.