Unpretentious, striking in his success, former professional tennis player Dan Goldie manages client assets in the amount of $ 845 million in his unusual RIA firm. It does so with no employees, no marketing, no financial planning or trading software and using only passive vehicles largely from a single fund family, FA told ThinkAdvisor in an interview.
As a tennis star, he beat Jimmy Connors; and in his 5 1/2 years as a professional – ranked 27th – won four titles and reached the Wimbledon quarter-finals. But stress fractures to his tibia forced him into early retirement at age 27.
Fortunately, this far-sighted athlete, raised in McLean, Virginia, always had a backup plan: a career in financial services. And he implemented it as soon as he left the courts in 1991. With a degree in economics from Stanford University – which he studied on a tennis scholarship – he reinvented himself as an independent Loring Ward affiliate at the RIA.
Twenty-seven years later and boasting a diversified book, Dan Goldie Financial Services, in Palo Alto, Calif., has a $1 million account minimum and charges a 1 percent drawdown on its assets.
After two decades of solo practice, Goldie has hired two FA partners in recent years, both independent contractors. He now plans to add more advisors under his banner in the not too distant future.
In 2015, Goldie returned to the tennis court and won over 50 singles titles. The RIA hadn’t touched a racket in 24 years.
Here’s how the discipline and work ethic of a remarkable athlete helped Goldie, 54, succeed on and off the field:
THINKADVISOR: You have a most unusual practice!
A large portfolio with $845 million in assets under management, 333 clients, 1,194 accounts, but you have no employees. Not even an assistant?
No, I don’t have anyone.
How does outsourcing all back office and administrative functions to Loring Ward benefit you?
This frees me up a lot to focus on my clients. I don’t have any staff to supervise. I don’t hire or fire anyone. It’s very effective and makes life much easier.
To what extent do you rely on cutting-edge technology?
I have cell phones and an internet connection. I do not use any trading or financial planning software. I use an Excel spreadsheet, a calculator, and my head: financial planning software is neither necessary nor helpful.
With no employees and just you and your partner Dirk Gilliard working in the office (David Magnuson, your other partner is based in Burlingame, California), the space you have must be small.
No, this is not the case. The condo I own has a suite large enough to accommodate half a dozen people. There are five offices. So if I have more advisors in the future, the space is available.
Is this a plan?
I think it is. Over the next decade, I may add one or two more advisors. This is good for succession planning.
Does being a former tennis star help attract clients?
This sets me apart from other advisors. I stand out a little. So it’s an interesting topic for discussion. When a financial advisor is unique in some way, it’s memorable.
What are you doing in terms of marketing?
Nothing. It’s mostly word of mouth. I have written a few books which have attracted a number of clients. With “The answer to investment» (Business Plus 2011; co-written by Gordon Murray), I received so many requests that I asked Dirk to help me.
Why did you stop playing tennis?
I was exhausted from tennis and frustrated with my (shin) injuries.
Does having played professional tennis help you in your work as a counselor?
It definitely helps me a lot in terms of the discipline and work ethic lessons I’ve learned. All the things that go into becoming a successful athlete translate into other areas.
What is your approach to investing?
Passive investment in diversified global portfolios. We mainly only use dimensional funds (mutual funds), which I have been using since I started. These are the best vehicles for my approach: investing across asset classes. It has limited disadvantages compared to more aggressive and concentrated approaches.
Why did you decide to become a counselor?
I have always been fascinated by how financial markets work and their competitive nature. I studied economics at university and thought that one day I would go into trading, financial management or consulting. Additionally, because I grew up in part (very modest means), I place a lot of importance on financial security. I particularly enjoy helping people become financially secure.
You have been a solo advisor for 20 years. How did you decide to join forces?
This allows me to have a succession plan. It’s easier when people take over your practice. When “The Investment Answer” became a New York Times (Advice) bestseller, I couldn’t respond to all the requests myself. Dirk (joined me) and I passed along a lot of potential new clients to him.
Do the three partners work together?
No. Dirk and David manage their own clientele. We keep income separate. But since they use my company name and I coach them a little, we have a revenue sharing agreement. We all have our own clients, even though we use the same back office team.
Do you ever help each other?
If necessary, we work as a team: when I need legal advice for a client, David, who is a lawyer, helps me. I have more experience in financial planning, so I help him that way.
Why do you plan to add partners?
It’s good to have more people to grow the business. It’s more fun. I make a little extra money through revenue sharing. And I really enjoy helping other advisors start their businesses.
What is the biggest challenge of getting financial advice?
The hardest part is attracting new customers. With me, they come slowly and I’ve grown the business over time. I have retained my customers at a very high rate.
What is the biggest secret to your success?
My main focus is on serving people well, providing good advice and ensuring customer satisfaction. This is perhaps the most important thing. Customers stay and recommend their friends.
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