When Chris DiMattio, front man for "Brass and Ivory," a big band in Dunmore, Pa., belts Frank Sinatra's "My Way" during a performance at the annual Scranton Italian Festival, he owns it.
DiMattio, an advisor at the FCNB bank branch in Dunmore, has had a successful career in this once booming mining area that largely played out years ago. (Invest Financial is the third-party-marketer for FCNB.)
Over the course of 23 years in the financial services industry, DiMattio has built a successful practice with over 1,000 clients and $265 million in assets under management.
He has had numerous offers to move to more lucrative territory, or to a higher position at the bank or with Invest Financial.
But he has chosen to stay put in his hometown. "I like it here," he explains. "I always wanted to be a local guy. My parents are nearby, I've got my wife and my two kids living 10 minutes from my office, and I like my clients. I'd be happy to be able to work five days a week instead of seven, and eight hours a day instead of 12, but I like being my own boss, and I have no desire to move."
If being happy staying put is unusual in the turbulent and high-turnover advisory business, so is DiMattio's business model. Almost from day one in 1997 at FCNB, which wanted him to set up an investment program in the Scranton area, DiMattio has focused on reeling in local employers' 401(k) business. He was previously a sales manager for NatWest Financial Markets Group and before that, a broker at Dean Witter.
"I had a small book about $25 million in assets that I brought with me to FCNB," he recalls. "But what I did was, in the main office there were four executive offices: the president's, the chief retail officer's, the chief commercial officer's, and the boardroom. So I left my door open and if someone of influence was coming up the stairs, I'd introduce myself or go to their office and ask if they had any customers who needed my services."
As it turns out, they often did. "A commercial borrower would often need to pledge collateral and would have funds with some brokerage where they were paying a 1% fee," he said. "We'd transfer the money to FCNB, set up a collateral account, and I'd manage the money for 25 basis points. The bank would get the interest on the loan, and the client would get cheaper and better service on their collateral account investment." When the loan gets repaid, the account usually stays with DiMattio. That system has continued to grow, he says.
Meanwhile, he had been running a small 401(k) plan for a friend since before he came to FCNB. He realized he could be doing that work for other employers so he started educating the commercial lenders at the bank about the benefits of identifying potential retirement fund prospects. "So when they'd meet with some business about a loan, they'd ask whether the employees had a retirement plan. If not, I'd come in with three proposals for them to look at," he recalls.
DiMattio says he'd always go with multiple options, "because I always thought that for fiduciary reasons it would be better to show them three different plans. I'd show an MFS, Putnam and Fidelity plan, or a Fidelity, Aetna and Hancock plan. I'd also bring in an administrative team from some third party and we'd select one plan together."
He says his experience was that employers who opted to offer retirement plans to their employees "needed someone to hold their hand. They wouldn't be getting participation, weren't able to answer employees' questions, and so we'd do all that for them."
All that hand-holding paid off when markets crashed in 2000. It required a lot of work to keep clients in those hectic days, he said, but he was successful with retention, losing just three plans.
By that point, three years into his advisory position at FCNB and after weathering the 2000 meltdown, DiMattio says he realized that the 401(k) business was "a good steady source of fee income at a time when no one was putting money into anything else no 529 plan contributions, no buying of annuities, nothing. Yet even at about 20 basis points per plan, there was this steady flow of income so much so that in 2008 I was Invest's top producer."
His production was about $1.5 million that year, he says, and it was "largely thanks to my 401(k) plans, some retirees, estate planning and insurance transactions."
Today, he says retirement plans account for 25% of his gross business. "You'd think it would be 75% considering the time I spend on it," he quips.
He says the average fee is just 20 basis points per plan. "Some clients need more of my time, some need me once or twice a year," he says. "I charge them all the same."
He doesn't try to also snag the investment business of a 401(k) sponsor's owners. "There is a bit of a difference between managing a 401(k) plan and an owner's assets, and many don't even want to put all the eggs in one advisor basket," he says.
He feels it should be one or the other. "Sometimes I'll make it a choice," he says, "and I usually choose the 401(k) plan, because I enjoy it more. I like working with the people."
Because he's been selling 401(k) plans for so long, he says he is getting increasing business from retirees and from people who refer other employees or friends to him. "There are a lot of cross-selling opportunities," he says.
Not all of the work DiMattio does, however, is fee-generating.
One of his favorites is helping to organize the Scranton area's annual Italian Festival each Labor Day. He also just finished a stint as president of Unico National, the largest Italian-American service organization in the country.
While his role in the community certainly makes him well-known, he doesn't like to use those activities to generate business.
Even some of his on-the-job tasks don't bring in revenue.
A lot of it involves counseling bank customers and his own clients on how to withdraw assets from their IRAs without paying an IRS penalty.
"Because of the area's economic difficulties," he says, "there are lots of people who come in saying that they need to pull money out of their IRA. Sometimes it's to live on. Sometimes it's because they want to pay for their kids' college." They're allowed to do that, of course, but he tries to talk them out of it. He cautions that they'll never get that money back and they may well need it one day.
He also not a fan of reverse mortgages "They don't realize what type of contract they are getting into," he says.
He does a lot of counseling on how people can maximize their Social Security benefits. "A lot of people around here, sadly, just take it at 62."
Of all the free advice he dispenses, he says, "It's a lot like a lawyer doing pro bono legal work. You simply have to do it."
On the other hand, he says sometimes good deeds come back to you. "I recently had someone come in saying, 'Fifteen years ago, you gave me a tip on educational planning, and I told you I'd come to you if I ever came into money.' Well, it turned out he finally did. He came into possession of some property and sold it, and so I got his business."
How much more can he grow, with 1,000 clients to serve and all those 401(k) plans to keep track of and education seminars to conduct? "It's not easy," he admits, "but I am looking for a true partner I can share the business with. It has to be someone who has my values. and my work ethic."
Would the partner also have to be able to play in his Brass and Ivory band? "It could be a sideman or soundman or woman," he jokes.
Name: Chris DiMattio
Bank: First National Community Bank
Location: Scranton, Pa.
TPM: Invest Financial
2013 production (YTD): $868,000
2012 production: $1,087,313
2011 production: $1,005,759
2013 (present): $265 million
2012 AUM: $245 million
2011 AUM: $240 million