This being my first time in Atlanta, I'm at the mercy of my host as far as lunch is concerned. Fortunately, Joby Gruber is a born and bred Atlantan. Plus, he has a good rule: When visiting his reps around the country, a dinner must be at a regular restaurant, not a chain.
Dailey's clearly meets this requirement. Atlanta is a fairly new city — it was burned down by the Yankees, after all — but Dailey's is located in an old building downtown. Its remodeled d?cor is elegant and unpretentious, and the staff is brimming with goodwill. The Southerners sure know how to treat you like family.
Which seems to fit in with Gruber's principle of running his business. He doesn't neglect the fact that FSC is part of American International Group. But he seems less interested in technology, products and advisory service platforms, and more in the personal aspect of helping the company's financial advisors.
On the way to the restaurant from the Marriott Marquis, the venue of the FSC National Education and Business Conference, we run into some attendees — a top producer who runs his practice with his wife and daughter.
"We just saw Ted Turner," they joke. "He's giving us all his money to manage."
"Good for you," responds Gruber. "How come nobody ever asks me whether I have a financial advisor?"
He has used this line before, he admits. It is true. In all the years he has worked with financial advisors, none has asked him that question. "But it occurs to me to ask them whether their business is as successful as they want it be," he says.
Gruber likes to frame his relationship with his producers not so much as a broker/dealer vs. its reps but one business owner to another. People sometimes don't realize how fiercely independent and entrepreneurial independent advisors really are.
"They may call themselves financial planners, advisors, whatever," he says, "but what they are is small business owners."
The firm's 1,600 reps come from wirehouses, insurance, accounting, but their practices, consisting typically of two to three producers and up to seven support staff, are small businesses. Being in control is what they want, and Gruber sees the role of the broker/dealer as catering to this mindset. For example, the firm pays commissions on a weekly basis, giving producers control over cash flow.
Financial advisors coming to FSC are typically seasoned professionals in their field — the broker/dealer is not set up to train newcomers — but they are often neophytes as far as managing their own business is concerned.
The firm does a lot of hand-holding for those who are just starting up, but even experienced independents may encounter difficulties. The business environment is getting progressively more complex, the cost of medical insurance and other employee benefits is rising and back-office functions are becoming more onerous.
To say nothing of the cost and time involved in meeting regulatory requirements. Gruber says it is not unusual for a producer to spend about 25 percent of his or her time providing financial advice and 75 percent running the business, handling compliance issues, etc. The regulatory climate is unlikely to get easier. FSC has a pilot program in place, in which the broker/dealer takes on a substantial portion of the reporting burden — free of charge. In return, the producer pledges to increase production by a set percentage. It's a division of labor right out of classic economic theory — market players concentrating on what they do best.
Or, to use Gruber's football analogy, the broker/dealer is like an offensive linebacker, plowing the field for the running back. In this business, the ball carrier is the financial advisor, of course.
Gruber is a sports fan, but the analogy he uses even more often is derived from medicine.
"We pattern our firm on the television show E.R.," he says. "It is set in a teaching hospital. We like to think of ourselves as a learning broker/dealer."
