BY MOREY STETTNER, FOR INVESTOR'S BUSINESS DAILY
A client's passing remark over 25 years ago has stayed with Judith McGee. "People with money have real art," the client told McGee, a certified financial planner (CFP) in Portland, Ore.
As CEO of McGee Wealth Management, she took the comment to heart. Given her goal of designing an office that reflects the sensibilities of her clients, and she started buying impressive artwork to adorn the walls.
McGee, 74, entered the financial planning business in 1975. In 1979, she became one of the first women in the western United States to earn the CFP designation.
With nearly $500 million in assets under management, her firm has three advisors and 14 employees. In 2015, she was inducted into Research magazine's Advisor Hall of Fame, and she has written personal finance books such as J.K. Lasser's Personal Investment Planner and The Random House Personal Investment Management Guide.
IBD: What lessons can you share about building a successful practice?
McGee: You have to love the industry and have a core belief that you're making a difference in people's lives. And you have to learn from experience to be really good at this. It takes five years to know what you're doing.
IBD: How did you make it through your first five years?
McGee: I became an advisor at 32 after working at engineering and manufacturing firms. I had a business background. I'd been an assistant to the comptroller of a big aerospace company. I got lucky: In 1975, I joined a small office of six financial planners as their only support person. I could type 100 words a minute. I told them, "If you pay me $500 a month plus 2% of the gross, I can make a difference in your firm." They agreed, and I was able to learn financial planning. Within a year, the six split up and I was offered a partnership with one of the senior advisors.
IBD: How did you attract clients?
McGee: During those first few years, I helped create money management seminars held at Oregon State University and other venues. It was a free consumer course. That helped, and I started doing a lot of writing and speaking.
IBD: What's the most important business decision you've made?
McGee: In 1986 and 1987, I had what I call my brick-wall story. Both of my parents died at 65 within two months of each other. And I was diagnosed with breast cancer. On March 7, 1988, I had a double mastectomy. I decided to close a good practice I had in Spokane, Wash., with my daughter, Linette Dobbins. We moved our practice to Portland, where I was born and raised. We opened in Portland in 1990.
IBD: Did you have clients lined up in Portland?
McGee: I was starting over, although I kept some clients from Spokane. We still take care of them today.
IBD: What was your growth plan?
McGee: I set three goals: to give one to two speeches a month, have lunch twice a week with a center of influence in the community, and bring in two new clients every week. The speeches were for investment clubs, service groups and anyone else who'd have me. The title of my talk was, "Love, Men and Money," about gender differences and how that influences attitudes about money and the different languages we use to talk about money.
IBD: How did you convert attendees into clients?
McGee: I didn't try to sell during my speech. But I'd always stay afterward when people would come up to me and talk. I'd hear what frustrated them and their pain point. It's all about listening to someone one-on-one. Counseling skills are tremendously important; when people are in pain, you have to understand the cycle of grief, show patience and give them time. I'd give someone my card and say, "Come on in. Let's chat."
IBD: Can anyone learn counseling skills? Or do you think you're born with those skills?
McGee: You need empathy. Certain people have a higher ability to recognize others' needs and emotions. A friend who knows me well teases me and says, "You're really a social worker pretending to be a financial advisor." Along with empathy, you need innate curiosity — the ability to ask the question behind the question.
IBD: You mentioned having two networking lunches a week. How did you define a center of influence?
McGee: A trust officer, a real estate agent, an auctioneer for estates, tax preparers — any professional service person who shared my demographic. My daughter Linette, who has worked with me for 29 years, set up those lunches.
IBD: What's the best advice you'd give a new financial planner?
McGee: You want to solve a client's problem. To do that, your assumptions have to be valid. A married couple in their early 60s just met with us for the first time. In reviewing their financial plan, we saw that their CPA's assumptions were faulty.
IBD: What assumptions were wrong?
McGee: The CPA assumed 8% annual total returns, life expectancy to 82 and had the wrong Social Security assumptions. The bottom line is their spending level was way too high. So we reran their financial plan and pointed out they needed to make changes in some of the numbers.
IBD: How did they react?
McGee: They seemed receptive. You have to have tact to be able to tell the truth to a client. It helps to create the right environment. You can't be stingy in what you reinvest into the practice. Every few years, we do a remodel so that our office has a fresh look.
IBD: How would you describe your office?
McGee: It looks like someone with quiet money lives here. We've got nice art. When people walk in the door, it's clean and welcoming and it shows we've put it all together.
Opinions expressed are those of Judith McGee and are not necessarily those of Raymond James. It is not known whether the clients mentioned approved or disapproved of the services provided.
The 2015 Research Magazine Advisor Hall of Fame: Candidates must pass Research Magazine's rigorous screens, have served a minimum of 20 years in the industry, have acquired substantial assets under management, have demonstrated superior client service and have earned recognition from their peers and the broader community for the honor they reflect on their profession. Preliminary judging in the contest was by Research Magazine Editor in Chief Janet Levaux and Executive Editor Kenneth Siber. Final judging was performed by a panel of distinguished experts: Mark Elzweig, principal, Mark Elzweig Company, ltd; Michael Fink, professor, Texas Tech University; and Jon Henschen, president, Henschen & Associate. Four individuals were bestowed with this recognition for 2015. Neither Raymond James nor any of its financial advisors have paid a fee in exchange for this recognition. This recognition is not indicative of future performance, is not an endorsement, and may not be representative of individual clients' experiences. Raymond James is not affiliated with Research Magazine, the named judges or the organizations they represent.