Mal Makin’s Underrated—and Understated—Ways to Gain Clients

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This is Greg Bartalus for Barron's The Way Forward. My guest is Malcolm Makin, the president of Professional Planning Group, and our topic today is growth. Malcolm, welcome.

Thank you.

So admittedly, growth is a giant sweeping topic, but it's directional, and I would like you to just briefly tell me a little bit about yourself and your firm and what are the best ways for advisory firms to find growth.

Well, Professional Planning Group is an independent RIA that I started from literally scratch back in 1975. And we still have our very first client. Before COVID we had about $1.5 billion under management. We're not— I guess you would say we're a family firm. I have 4 sons that work with me, 3 of whom are advisors. We have 19 people in all. It's a great place to be. Good firm.

Okay. That's amazing, by the way, that you have that first client. That's pretty remarkable.

She's very happy about it.

Yeah, that's great. That's great. So tell me about growth. There was a study done not long ago. I think it pointed out that something like in the past 5 years, there's really been precious little organic growth.

So when my kids were little, I used to read them Dr. Seuss, who is a one of my heroes. And Dr. Seuss wrote a book called The Lorax. And it was a story about how greed and lack of understanding and just plain greed could end the civilization as we knew it. And the Lorax was the person, if you will, who spoke for the trees and the trees were in danger. And the Lorax was trying to stop the Once-ler who was out chopping the trees down and destroying the landscape and so on. And the Once-ler's response to being talked down to was, "Business is business. And business must grow bigger and bigger and bigger." You know. As I think about growth, most of us in our profession, most of us in all professions, really talk about growth as something which is organic, something which has to come from inside ourselves or inside the firm, whether it's bringing in new clients, whether it's adding monies to accounts that we have. I think we often overlook what what growth is and the stages that it goes through. So for example, during my first 10, 12 years of being in this profession, my biggest fear was being found out. That someone would finally understand that I really wasn't at all as smart as I pretended to be.

Well, the old imposter syndrome, right?

Oh, it was awful. I mean, it wasn't awful, but it was a reality. My typical day was getting up about 5 o'clock in the morning and I would read everything I could get my hands on. I would work all day long, and a day was typically until 10 o'clock at night. And you just work and work. You just go at it. That's your job.

But that's, in a way, it was good though. That insecurity fueled your ambition. And/or you could even frame it the opposite way. Once someone thinks that they know it all, well, they certainly don't, and then they become complacent. They get fat and happy.

And that's what we see typically happening in our profession, and I suspect not not just in financial planning. The first 10 years, you just put everything you've got into it. You put your heart, your soul, your everything into it. And then things aren't so bad. You know, you're making a decent living. You have a good group of clients. Your relationships are good. You feel confident in what you're doing. And you sort of, emotionally begin to take a little bit of time off. And maybe you come in at 9 instead of 8. Maybe you leave at 4:30 instead of 5:30. That kind of thing.

So you get less hungry.

Less hungry, but maybe just more complacent. I used to keep a— in my first office, I had a little cartoon in the back. And it was Dennis the Menace walking down the street. And I had this in my closet. And Dennis the Menace is walking down, he's got his bat on his shoulder and he's got his glove at the end of the bat. And Ruff is on one side, his pal Joey is on the other side. Dennis has an eye that is just throbbing so hard that in the cartoon it hurts. And Dennis says, "You know, Joey, it's okay to pretend you're tough." Just don't start believing it. And there's a real moral there.

So tell me about growth and the business today and what you're seeing and where there might be self-delusion.

I started out really selling tax-sheltered annuities. I was financial advisor for the National Education Association in the state of Rhode Island, which meant that I had a responsibility to provide a variety of seminars to the teachers. I talked about teachers being professionals in the business of education. Because they were teachers in the— because they were professionals in the business of education, they had opportunity to use 403(b) tax-sheltered annuities. And it was a wonderful business. It was good for them. And I did that probably for 6, 7, 8 years. And I reached a point though where I had so many clients in that sector that I really couldn't do the things that I wanted to do, that I was really interested in doing, which was wealth management and real financial planning. I was on a couple of national boards at the time. I was on the National Board of Ethics for Certified Financial Planners. And I ended up literally giving away my entire book of annuity business so that I could transition over and do the things that I thought, at least for me, made more sense. And we're still in the position of having to do that. So Westerly is a modest, beautiful, historic New England town. There is a fair amount of concentrated wealth, but most of our clients are people who are working class folks, they're middle income people. When they retire, they may retire from a place like Pfizer or a place like General Dynamics or some other companies and come away with pretty good pensions that they need help with. But it's not the kind of business that you would have if we were in a very large metropolitan area. I was talking with someone today who said that their firm had about $1.3 or $1.4 billion under management and he had 87 clients. We have many more than that.

Yeah, I mean, it's interesting, the growth imperative, and it's not just in this business. I mean, it manifests itself And really for that sake, the whole economy, I mean capitalism, and it's arguably somewhat arbitrary, like what is that growth? So for example, in the newspaper industry, many decades ago, it used to be very low growth. A lot of media companies would own them because there was an element of prestige. It was like you owned this media organ, this is a very respectable thing. Yeah, it's not a moneymaker, but it was a certain pride in having this. And my understanding is that later, you know, investors said, you know what, you could squeeze more profits out of this. We can do that. But then arguably when that happens, the news gathering process becomes something a little less, a little different, a little less pure, if you will. It's not necessarily just driven by trying to speak, reflect the truth. There are other imperatives at work. And now, for example, with everything being tracked in terms of ratings, you can to a T figure out what you can. The ratings, for example, in the media industry increasingly are a tail wagging a dog. So you have all these commercial dynamics that are nudging you in there. And it's— I understand the idea is like it doesn't have to be bigger. It could be better. It's the quality. And at a certain point, no one's really benefiting. You might get a higher number, but this client's not being served and you're not feeling happy about what you're doing.

It really is about the quality. And that was part of the concern I had in talking about growth. You think about growth in terms of client numbers, in terms of revenue, in terms of accounts, in terms of national rankings, those kinds of things. But it's a changing landscape. And you discover that the person who came in as someone who really wanted to work with people and either sell things or do things or create things has to be a business owner, has to be a caretaker, has to know an awful lot, has to know at least a little bit about an awful lot of things. And that gets difficult. I think a number of professionals, not just in our business but in all business, you just reach a level where you can't go any further. You just, you're there in the middle. I've been very fortunate to be able to build a remarkable firm. The penalty, the payoff for that is to be able to do more things with more people. The difficulty with that is when it was me and one other staff person who sat behind a desk with a Smith-Corona typewriter. Today there are 19 of us, and there's no way that I can know what's going on in that office all the time. And I have to have people that I trust with my life Because this is my life. This is my child. And I need people there that can make the decisions, who know what they're doing, and who understand what the mission is. I read someplace not too long ago that the way many organizations fail is because as the team grows, people come in and they don't become committed to a mission. They're in it for themselves. They want to make more money. They want to use it as a stepping stone. They want things other than what the philosophical, emotional, spiritual mission is of that firm. So I think as a firm grows, it becomes critical that everyone on board actually be on board and be able to articulate who are we, why are we here, what's our job, how are we going to do it?

[Speaker] Yes, and I'd imagine that the older a firm is, the more challenging that is simply by dint of time. Like if you were established, there's the arc of time and those values, Well, let me frame it differently. If you're a company that started 3 years ago, you only have a 3-year track record and you hire people in the first past year, well, that's 1/3 of the company's existence. So it's still a little bit more malleable and arguably a work in progress. But when you have some really bedrock principles, foundation, you probably have to be vigilant about just really articulating clearly what this is. And hopefully it's self-explanatory though, that you don't have to tell, but you can show and that it's manifested in your day-to-day exchanges with people.

You're exactly right. You have to be able to articulate not only what you are doing, but more importantly, why you're doing it. You have to be able to articulate that to your clients, to your staff, to yourself. Yeah, you have to understand that, right?

And if you can't be clear, then they're not gonna— they will— can— in the best case, they can only follow what you prescribe clearly.

Yeah, it can get muddy really fast.

Yeah, yeah.

So How do we gain more clients? How do we get our names out there? How do we advertise? I've always thought that it was rude to say to someone who is your professional client at the end of a meeting, well, gosh, Greg, you think I'm doing a good job for you? Well, what are you going to say? No? Yeah. So if you think I'm doing a good job, "Would you give me the names of 3 or 4 of your best friends, and I'm going to give them a call and see if I can help them too." That's awful. So what we've never done that. But one of the most successful things that I did back in the early, late '80s, early '90s, Pfizer was having their first very large turnover. There were about 150 people, I think, at the time that were being let go. And that meant that 401(k)s were being stopped. There were lump sum distributions. There were incentives. There were stock options. And there was a very large group of people that were having difficulty. Prior to that, I had had a gentleman come into my office who worked with Pfizer. He was retiring on a normal basis. And I used it as an opportunity to let the folks at Pfizer know that, not that I was alive and well, that I just existed. So I called the human resources department and I said, my name is Mal Makin, I'm a financial advisor in Westerly, and I'm working with I told them the gentleman's name. And I said, I want to make sure that I give him the very best advice I can. Can you help me understand what you offer, what your benefits are, and maybe spend an hour or so with me, or connect me with someone that I can talk with? They were gracious, allowed me to do that. I went over of a morning and sat with the head of the department. And for some reason that I'm deeply grateful for, we really hit it off. He really liked me. I think he thought that I was an interesting young fellow and seemed to have my heart in the right place. And so we literally spent the entire morning together and he went through all the benefits that they had, their 401(k) plan, how it functioned and how employees could use it, their pension plan, their health insurance, the whole business. So go ahead 6 months now and we're having this big layoff. I was asked to come in with their pension fellow who worked for the company. I came in as the outside wealth manager, the outside financial planner. And was asked to explain to people who were there in English what these benefits could mean if they were properly used. And I was also asked to meet individually with clients either at the plant or in my office if anyone wanted to meet with me. Well, everyone wanted to meet with me. I had, for 3 weeks, I was having people coming in at 10 o'clock at night. And needless to say, I was buried really fast. I became efficient really fast. And it was the beginning of some really good relationships and really good client events.

[Speaker] And what I really like about that story is you weren't selling. There was nothing crass. There was nothing. It was just you being of service And that was helpful and disarming and I guess an element of reciprocity. You're like, okay, you're not selling, but they're seeing you in action and you're winning their trust.

And it really was that. I can think of any number of examples where someone came in, they already had a relationship with someone. It wasn't my place to interrupt that relationship. It was my place to be the very best I could be. And the results of that was that I literally became the financial advisor. I was the Pfizer guy. You know, we still have the phone ring and someone will say, "Can I speak with Mal Macon? My friend Jill told me that he's the advisor guy. He's the Pfizer guy." I'll tell you a quick anecdote which still makes me smile. I was working with a couple who had— he was a scientist. He had led a team that had discovered a very important drug for Pfizer. She also worked at Pfizer and they both retired. We did a lot of work together and it was great. They spent several years sailing their boat in the Caribbean and having a great time. Well, they came back. They had been clients for about 10 years. So we had a really nice relationship. And they're sitting there in the office one day and they just weren't paying attention. There was just something going— there's a dynamic going on that I couldn't get my hands on. And I finally said, What's going on here? You two keep looking at each other and you look at your watch. Tell me what's happening. And he said, well, Mal, when we leave here, we're going to the Maserati dealer in Fairfield. And we're going to look at new Maseratis. And I'm so excited. And I laughed. And I said, well, "It just so happens that I bought a brand new Porsche just about a month ago, and it's in the parking lot. Come on out and take a look at it." So we all went out and they sat in the car and they started it up and they went, "Vroom, vroom, vroom." You know, they did all the things. And liked the car so much that I made arrangements for them to go meet with the person that I had dealt with at the Porsche dealer. And that was the last I heard of it. They took off. Well, 3, 4 months later, they came back in for another review. And the same thing happened all over again. I've got all my notes, my things, performance, everything. And they're looking at each other like 2 little kids. I said, "Okay, what's going on?" And they both laughed and said, "Mal, come on, come outside." And so I go outside and my car is parked there. Over next to my Porsche is a brand new, black, beautiful Carrera S. And it's stunning. And just as I was saying, "Oh, you got it, that's awesome," there's a Connecticut designer license plate that says THX M-A-L. Thanks, Mal.

That's amazing.

It's unbelievable.

Yeah, that's great. Great.

And we still get calls coming into the office after all this time saying, I met Dr. So-and-so in a parking lot in front of the grocery store, in front of Stop and Shop. And I asked him about his car and his plate. And he tells me you're a 'You're an awfully good financial advisor. Can I talk with you?' So you never know.

That's amazing. I mean, just how that goodwill— and he's always selling, just driving, and he's getting the word out. That's fantastic.

One of the other things that I've done that has sort of— I don't want to say it's been successful, because I didn't do it to be successful. Really to try to be transparent. Many of us send our Christmas letters and we say something like, "Martha and I and the boys and our two puppies went to Bromley Mountain for vacation and we had a wonderful time. Martha skied and fell and I skied and almost broke my neck," that kind of And, you know, they're fun letters. But I wanted to send something from the office, which was a Christmas letter that would be not telling about accomplishments, but would be talking about what's going on in the world. So my first couple of Christmas letters were just about that. They would talk about people I had met, clients that I had worked with or had special situations, or people who had recovered from illnesses and that kind of thing. And the response I got back to me was just— it was unbelievable. People really related to it and they really liked it. One year I thought I was really busy and I didn't write it. And I had a client call me up and chew me out royally. She said, "You made me like that letter. You write it." I said, "Yes, ma'am." And I never missed another year.

Wow.

And it's universally known as Mal's Christmas Letter. So we have it on our website now, and back in those days you didn't have websites.

That's fantastic. How many years have you done it for now, would you say?

Probably about 35. Wow.

You know, you could like self-publish a book, put them all together to like paperback size and give them out to clients.

That's an interesting idea. One of the nicest things that happened, I had my 75th birthday a while back. And I walked in my office and the office is balloons, confetti, stuff all over the place. And one of the things that my staff did for me was to collect and reprint all of those letters. And it was really cool.

That's really nice. That's sweet.

It was really cool.

Yeah.

We have One of the ways that I tried to grow— by that I mean have clients come to me rather than me chasing them down— we always try to have a really tasteful, artful office. So my first office was something— my wife is an interior designer. She's artful, tasteful, and all kinds of good things. And she designed that We went to— we bought an office when we just ran out of room. We bought a building and then we ran out of room with that. So back about 22 years ago, year 2000, a building came up for sale and it was an apartment building. It was a 3-bedroom— not a 3-bedroom— a 3-room 3-story brick Georgian colonial. I knew it had 3-something in there. It was 3 stories. Brick Georgian colonial. The outside of the building was just phenomenal. It had been built by one of the early business leaders in Westerly. Faced the park. Walked in and the place was just a mess. And I remember standing there underneath the chandelier and looking at these ceilings that had been artificially lowered to so they didn't have to heat it quite so much. Saw where the tenants could not go up the stairs because there was plywood covering the stairwell. And just sort of holding my head thinking, "Oh my gosh, this is awful." In the meantime, Martha, my wife, is standing about 6 feet away, social distance. And she's thinking, Oh my gosh, this is unbelievable what I could do with this. And so we literally spent the next year and a half— I say she spent the next year and a half with local craftsmen in the building, and we restored all of it. Received a citation from the Rhode Island Historic Preservation Association. And people would come in, clients would come in, or friends of clients would call and say, "We'd really like to see your building." The local newspaper, the Westerly Sun, ran a front page and then some pictures, the senator cutting the ribbon. It was awesome. And I really think that the building itself captured in prospective clients' eyes. A sense of stability, a sense of authenticity, a sense that these folks really know what they're doing. We actually had a client who, after he became a client, brought his lawyer from Providence to the office and just drove through when we were closed. But he wanted his other professional advisor to see the smart decision he'd made.

Yeah, and in addition to all that, I think another word that comes to mind is sacrifice for a vision. You know, you didn't take the easy path with that. It would've been simpler, less time-consuming to just go, oh, let's buy that new place. I think it, yeah, it reflects and it says something to actually do that. And in addition to all the points you made.

Yeah, I think everything, that we do, the way we dress, how we look when we're out in public, how we conduct ourselves, how we speak with people is a reflection of— it's what people see. So, you know, what's the old saying? It's not what you say, it's what they hear. It's not what you are trying to project, it's what they see. I think that's really important. If in fact you're trying to become someone who is recognized or thought to be a quality person. One of the other things I should mention too, I love to play golf. It's sort of a disease, I think.

But one you don't need to be cured of, thankfully.

No, thank you. I don't need a shot for that. And what I found when I really started playing seriously, I discovered that there were several local charities that sponsored golf tournaments, charity golf tournaments. And so I sponsored one, I sponsored a couple, and we probably sponsor as a firm now 15, maybe more of charitable golf tournaments all around our area. And every year it gets to be a little bit more because people will say, you're having a tournament? You should call Mal Magan. He likes that stuff. But they'll display our banner. They will market for the firm in a way that is, it's just tasteful. It's nice.

I think that's the common theme that These are creative soft-sell ways of getting your name and brand out without at all being tacky or direct or crass or commercial, in an understated and classy way. Yeah, it's definitely, yeah, it seems to be what you're doing, yeah.

One of the great things that Barron's does for me and for advisors like me is the pieces in the Wall Street Journal, the pieces that are in Barron's. And I had a phone call last week saying, "Mal, I saw your piece in the Wall Street Journal. It was awesome. It was so good. I'm so proud to be your client." And I had to go get my Wall Street Journal and go digging in there. It was the quarterly piece. So I guess I would say I'm really grateful to what Barron's has done for my profession and for me and for where we are.

Well, that's kind of you to say, but without people like you, there wouldn't be— we wouldn't have this caliber of guest. People at our conferences, so thank you.

It goes both ways.

All right, well, before we wrap up, do you have any actionable ideas for advisors listening and above and beyond what we've talked about maybe in terms of growth?

The only idea I would have would be for those folks who are listening to this right now and who are just scared to death because of what's going on in the world. Politics, Europe, money. On any given day, you could convince yourself that the world is coming to an end. And my belief is that the world is not coming to an end. And If you were a student of history, a student of the markets, you know that this is not the first time this has happened. This is not unusual. And one of the things that we all do, everyone in my office, advisors and staff and me included, is to remind people that investing, growing wealth, is not a hit or miss. It's not a scratch card. It's serious business. And the way you do it is to intelligently, thoughtfully have a diversified portfolio and get ready for what's going on right now long before we got to right now. So our clients are, they're not thrilled with where the markets are, but they know that they will ultimately be okay because we did the things beforehand. Because once markets go down, panic selling is awful. So my advice is hang in there.

Well, that was excellent advice and a really edifying conversation. I enjoyed all your stories and anecdotes. They were really colorful and great to hear. So thank you again.

You're welcome. Nice to talk with you. Thank you.

Thank you. My guest was Malcolm Makin. For more advisor-specific podcasts, please check out barons.com/podcast. For The Way Forward, I'm Greg Bartalus.

This podcast was brought to you by Wells Fargo Advisors. Looking for a firm your clients can't outgrow? Wells Fargo Advisors offers financial advisors full balance sheet solutions with wealth planning, investment products, banking, and lending that meet the needs of affluent to ultra-high net worth clients. Build your practice your way and on your schedule with independent and employee model options designed to meet your needs today and tomorrow. Learn more at joinwfadvisors.com.