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COVER
STORY - June
2001 by Lisa Summers Sidebar-
Stockbrokers have had to assuage their client’s concerns. “I call it the sleep test,” said Earl Winebrenner III, president of Winebrenner Capital Partners LLC in Louisville. “If you’re not sleeping, then you’ve got to make changes.” Although the stock market has seen a decline, Kentucky brokers urge their clients to take a long-term view. Of course, it doesn’t hurt if you have invested responsibly in the beginning. Responsible investing is what creates and maintains wealth. It is the goal of all noteworthy stockbrokers.
After graduating from the University of Louisville with a degree in finance, he worked for Prudential Securities and later, J.C. Bradford, recently purchased by Paine Webber. Winebrenner said he could tell the company was going to be purchased and he thought it was a good opportunity to start his own firm. He now has a fully licensed brokerage business with more than 30 employees, more than half of whom are independent contractors who work in Kentucky banks or accountant offices. Winebrenner’s goal is to build the largest Kentucky-based firm in the region within the next five years. Winebrenner’s firm does approximately half of its business in the traditional manner of advising individual clients, and half in investment banking or raising capital for businesses. The ambitious broker enjoys driving race cars as a hobby, so clearly he is comfortable with a degree of risk that may make some feel queasy. But for his clients, he takes a structured, careful approach to investing, recommending mostly mutual funds, where the risk is spread out among many different companies. But first come the basics. “Whether young or old, the first question I ask people is things about basics like whether they have a will,” said Winebrenner. Then they discuss what type of debt the potential client owes. Is the debt in high-interest credit card balances? Do they have insurance, including disability insurance? Do they have a retirement plan? “Sometimes I feel that we’re as much of a counselor as a financial adviser,” said Winebrenner. Once those basics are covered, then the client is ready to consider investing. They talk about their plans and goals. And they insure that they have at least three to six months’ living expenses tucked safely away. “Now we’re ready to invest anything above that, any discretionary income,” said Winebrenner. He eases clients into mutual funds first, before they start investing in individual stocks. Winebrenner said he wants his clients to be long-term investors in the stock market. He considers mutual funds a great way to build a good platform. Some of his clients invest as little as $50 to $100 a month. “We don’t have any minimums,” he said. “As little as $100 a month will accumulate wealth over time.” Call it the wonder of compounding.
“Long term in today’s world is what happened this morning on the market,” said a grinning Thomas B. Current III, branch manager of Raymond James Financial Services Inc. in Frankfort. Raymond James Financial Services is one of the largest financial services firms in the nation, with more than 1,900 locations throughout the country. Unfortunately, Current said, that short-term perspective is what many Americans take in today’s fast-paced environment. He encourages his clients to take the emotion out of investing by developing a systematic method. “You have to think long-term because of the short-term fluctuations,” said Current, who has been in business in Frankfort for four years. He cites the proliferation of information as one reason people get bogged down before beginning an investment program. That’s where Current steps in. Like Winebrenner, he guides his clients through a maze of questions before accepting the first penny for investment. “My position is to help people understand what they value,” said Current, and whether they can handle the degree of risk versus the rate of return. “In the past year, people have started to realize that they can’t take the volatility,” said Current. The majority of Current’s business is in mutual funds. He also does a great deal of what he calls heritage planning, or protecting assets for his older clients who wish to leave money to their children or grandchildren. “That’s really my goal, to help people reach that point,” said Current. Current does business with many friends who attend his church. So he offers his clients the opportunity to invest their money according to their conscience. He runs what he calls a moral filter, a software program that allows clients to evaluate where their money is actually going and for what purposes. Sometimes, especially in mutual funds that encompass many different companies, that can be hard for clients to determine on their own. “I don’t make a decision for them,” said Current. “I just provide them the information.”
She graduated from Briar Cliff College with a degree in urban sociology. Barron was going to be a social worker, a thought that now brings a smile to her face. “From social worker to mogul,” Barron said with a laugh. “If I had to do it all over again, I’d do exactly the same thing that I’m doing now.” Barron is still a bit of an oddity in the brokerage field. Although there are many women stockbrokers today, few own their own businesses. Barron’s firm, Nancy Barron and Associates, is located off Old Vine Street on Grand Boulevard. She employs four people, three of whom are stockbrokers. All are women except one. “I think, overall, it’s been my experience that women listen,” Barron explained. “They work harder and listen more. In the long run, a person gets better service.” Barron moved to Kentucky in 1974 with the W.E. Hutton brokerage business. From there, she went to Thompson McKinon, then First Security Brokerage, and then had what she calls “a brief and disastrous” partnership in another firm. “So, you see that I’m an overnight success,” Barron said, laughing. “Every place I ever worked seemed to go under for some reason.” Luckily for her clients, that has not been the case with her latest venture. Nancy Barron & Associates has been in business since 1992. The firm follows what she calls the oldest rule in history. “We buy quality and we hold it.” That, plus the old adage, ‘don’t put all your eggs in one basket,’ pretty much sums up Barron’s approach. “We think our job is to point people in the right direction and keep them on track,” she said. Like Winebrenner and Current, Barron asks her clients “mortifyingly personal questions” in order to determine what they can afford to invest and where it should be placed. “With most young people, growth is where it’s at,” said Barron. “You need growth. If you buy quality and you hold it, you should probably look to double your money every five to six years.” All three stockbrokers insist that you can never start investing too soon. Taking the long-term view will accumulate wealth over time and ease worries around retirement age, they say. All three have been in the brokerage business long enough to see and understand the market’s fluctuations. While it may rile investors, who see their portfolios declining in value, the stockbrokers insist that long-term, responsible investing will definitely pay off. “In this
business, the only thing you can do is make a plan that
you’re going to hunt with the hounds and run with
the hares,” said Barron. “It’s exciting.
I’ve never been bored.” Lisa Summers is a
staff writer for The Lane Report.
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Copyright 1996-2001, by Kentucky Business Online. All rights reserved. Editorial
content is copyright 2001, Lane Communications Group The Lane Report is a trademark of Lane Communications Group. All other trademarks are the property of their respective owners. |
During the
past year, Americans have discovered valuable lessons
about their capacity for taking risks. The lessons have
sometimes hit directly in the pocketbook, as stock
markets have faltered and consumers have seen the value
of their portfolios decline. The market began its slide a
little over a year ago, resulting in declining stock
prices and shrinking returns on investments.
Take Winebrenner, for
example. Winebrenner is a man clearly comfortable with a
degree of risk, at least in his own life. The Louisville
native started his own securities business in 1999 on
Greene Way off Hurstbourne Lane.
Few things
say as much about people as how they spend their money.
The act of spending hard-earned cash speaks of priorities
and wishes. And it reveals whether or not they thing
long-term enough to save for the future.
Thirty miles away in
Lexington, Stockbroker Nancy Barron is in the
wealth-building business. The Norfolk, Va. native has
been in the brokerage business for almost 30 years.