| Cambridge Investment Research: Bank On It |
| Financial | |||
| Written by Eric Slack | |||
| Sunday, 01 June 2008 | |||
 Jim Guy tells us how this financial advisory service provider is beating competitors through technology, planning, and integrity.
“As companies grow they get large enough to have cultural shifts, but they don’t have to abandon their culture; they choose to because they can,” said Jim Guy, executive vice president and chief marketing officer. “We think that is a mistake, as our cultural values have intrinsic value to our advisors, their clients, and everyone we work with.”  Jim Guy, executrive vice president One of the biggest issues facing Cambridge since the turn of the century has been a steady increase in the regulatory burden placed on the industry by authorities. When American Executive caught up with Schwartz in 2006, he talked of the worries facing financial advisers in regards to regulatory compliance and said the company created a separate division to provide regulatory support for its representatives with their own RIAs. Two years later, according to Guy, regulations are still something Cambridge is dealing with, but it just goes with the territory. “The privacy act passed early in the decade required additional precautions with clients’ personal information. Additional steps were taken due to the Patriot Act to protect our system from being used to launder money for American born crime or terrorism,” Guy said. “We applaud the purpose of these actions, but there have been some unintended consequences in terms of complexity.” Recognizing that government regulators have been trying to step up industry accountability, Cambridge employees strive to understand the purpose of various regulations and honor the spirit of the regulations by helping advisors intelligently apply techniques to guarantee compliance. Guy said that involves a two-step process. The first step involves a due diligence process when recruiting prospective advisors to join the team. Cambridge expects its people to meet high standards in terms of business practice and integrity. The second piece involves thorough surveillance through IT solutions, which mostly catches inadvertent mistakes. “There are occasional errors by honorable people, but occasionally you do find bad apples,” said Guy. “We have one of the cleanest regulatory records among the large independent space, better than the 50 largest companies. That is a testament to the fact that we do those things well.” Invest in your strengths Cambridge not only understands the complexities involved in the investment market, but it also knows the importance of internal investments in its own processes. Schwartz talked with us two years ago about the creation of an imaging system to handle documents, not only at the Cambridge headquarters, but also available to offsite reps. Guy said that while Cambridge continues to invest in improvements for the system, other companies are still far behind, and Cambridge remains the only fully integrated, straight through workflow system in the industry. In addition to the imaging system, there is now CIRStatements, Cambridge’s account consolidation and reporting service. It also has overlay software called CLIC, which takes care of client information and transaction data from the revenue standpoint. “One Cambridge advisor really can serve clients from anywhere in the world through the Internet,” Guy said. “We’re always refining and improving our systems, but we have a world-class virtual office offering that is second to none in our space.” Workforce development is also a continuing investment for Cambridge, especially when considering its rapid growth. Thirteen years ago, it was a small company with 45 advisors. Today, Cambridge’s nearly 270 employees support more than 1,200 advisors nationwide. The growth in advisors is a key driver for Cambridge’s focus on enhancing its practice management efforts. The firm brought in industry veteran Brian Propes as vice president of practice management as more and more advisors were looking to Cambridge to help with their own growing practices. The office will provide coaching, mentoring, and training programs designed to support advisors as they meet the needs of their clients and the future needs of their individual practices. This will be critically important during an era where the average age of a financial advisor is in the mid-50s. Like society at large, the investment industry is preparing for the baby boomer tsunami, and advisors and investors alike are concerned what will happen to a practice in the event of an advisor’s death or disability. Succession and acquisition planning was an area in need of attention, as Guy said it wasn’t uncommon to see a miniscule percentage of advisors with a written succession plan in place. To meet the need, Cambridge hired an associate director of succession and acquisition to reach out to all affiliated advisors and offer help with succession protection plans. This way, clients feel protected and advisors have an answer to the morbid question, “What happens if you die?” “It’s a win-win for everybody. The future needs of clients are provided for, and the advisors know their family will get a fair price under circumstances that may require a sudden sale,” Guy said. “And the acquirer wins because they grow through the acquisition.” This brings us back to the company’s cultural dedication. Cambridge not only strives to become the leading independent broker dealer specializing in fee-based advisory solutions, it does so through key values—integrity, commitment, flexibility, and kindness. “We need to adhere to those values when we make a decision. It must be made with integrity and with commitment to the client and the community,” said Guy. “It must be done with the flexibility we pride ourselves on and always with kindness, a human value that should never be forgotten in any enterprise.” |
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American Executive is a RedCoat Publishing publication.
American Executive is a RedCoat Publishing publication.
