How an Advisor Who Hates Sales Built a Billion-Dollar Practice

Baum, 62, not only has a proven talent for forming relationships, she carefully continues to nurture them over the years, as she tells ThinkAdvisor in an interview.

"I know it sounds silly," she says, "but [my clients] are like my village, my identity."

The advisor vigilantly watches over the accounts and phones clients proactively when markets turn dicey, putting in a generous amount of time for hand-holding to assuage unfounded worries.

The Baum Jackson Investment Management Group — Baum's partner since 2000 is certified financial planner Margie Jackson — is based in Annapolis and manages a total $1.5 billion in client assets.

A long-time Chairman's Council member who holds the Certified Private Wealth Advisor designation (CPWA), Baum has a $1 million account minimum but is somewhat flexible about that with referrals from significant clients.

With her unassuming demeanor, she has a mellow way that surely makes it easy for folks to open up and bond. About 80% of her book is individual clients. The rest are mid-market endowments and foundations.

Starting at Alex. Brown, she remained with the firm through acquisitions by Bankers Trust and Deutsche Bank, then moved to Tucker Anthony, which the Royal Bank of Canada acquired in 2001 and merged with its Dain Rauscher Wessels BD.

Fresh out of Duke University in 1978, Baum, a summa cum laude graduate born and bred in tiny Salisbury, Maryland, opted to join her father's retail jewelry business rather than pursue employment in investment management, an area she was attracted to and minored in at Duke.

Seven years later, as a divorced single mom, she tackled a career reappraisal and made the big switch to financial services.

The FA has landed on The Financial Times' Top 400 Advisors list every year since its 2013 launch, one of only 19 advisors to do so and the only woman in that group.

Baum devotes a sizeable portion of her off-hours to philanthropic endeavors, notably the Baltimore Community Foundation, whose investment committee she chairs.

Here are highlights from our interview with the senior vice president, who felt confident that building relationships was her certain route to flourishing in the business:

THINKADVISOR: What's the secret to your success?

PATTI BAUM: The most important thing is I really love my clients. They're like my village, my identity.

When there's a big market decline, like last December, do you phone your clients proactively?

I get out my list and start calling everybody. That's what they hire me for. They hire me to be proactive. Clients want to know that you're watching their stuff and paying attention. They want to know you're minding the shop and not out sailing.

What do you do to help clients handle their emotions as investors?

Our job is to try to make sure the clients are allocated such that, in a December like we went through last year, they don't panic.

When you call them, what do you say?

I say, "Remember that we talked about this? It's part of being invested in stocks and the price you pay for the part of your portfolio that's getting better returns in this kind of volatility." I've had several clients say to me, "Thank you for holding my hand. I needed to hear that."

When you're preparing clients for inevitable market declines, what's their reaction?

Sometimes they'll say, "I'm not worried. I know you'll get me out before the market goes down." I always tell them, "No, no. I'm not that good. We don't know [that far in advance]." Often those big downdrafts happen in a day or two. So I say, "What's more important is that you're allocated such that you can stomach [the big drops] and that you sleep at night."

You have 58% of clients' assets in stocks and bonds and 15% in mutual funds. Why that allocation?

I end up having a lot of individual stocks that people have owned for a really long time. So there are big capital gains and [other] reasons why they shouldn't be sold. I also have separate accounts with individual stocks that managers are running. We use mutual funds more often in retirement plans.

I understand that you're a major fan of impact investing.

I'm very big on impact and ESG investing [environmental, social justice, governance]. I think it's the way of the future. I've developed a really good stable of funds that are screened for ESG. Why would you want to own stocks of companies that don't care about sustainability, governance and diversity?

But FAs, in general, haven't been too enthusiastic about impact investing, have they?

That was true in the past because for years the funds weren't strong, and performance lagged. But over the last four years, there's been a proliferation of funds and families; and because most of them exclude fossil fuels, they've outperformed. It's been amazing. Actually, there's been a confluence of things: more funds available, better performance and the next generation is demanding [to invest in ESG] because they really care about it. That's a great tailwind.

What are clients nervous about these days, and to what extent would those issues impact their portfolios?

The current political environment is what I hear most. Geopolitical issues, like China. People talk about the [2020 presidential] election. But who sits in the White House doesn't really affect the market. The market is basically responding to corporate earnings growth and the health of the economy. I try to remind clients of that. At a conference once, I heard Bob Doll of Nuveen say: "What happens in the White House is what happens if the Orioles win the World Series. It has the same effect across the market."