When people in New Albany, Mississippi, a town of 8,500 on the Tallahatchie River, say "I'm going to the bank," they don't need to specify which bank. "In New Albany when you say 'the bank,' that's us," explains Mike Alef. He might have added that when you say "BNA's investment program," you're really saying Mike Alef. As senior vice president of BNA, Alef is also the bank's only financial advisor.

"I run it, and I am it," he says.

Founded in 1896 as the Bank of New Albany-which is how most people in Union County still refer to it-its name was changed in 2007 to the more corporate-sounding BNA Bank. It now has roughly 12,000 depositors and claims a 75% market share of the county's population.

That makes his job both easier and more difficult. "Everybody knows me," he says. "I have two kids in college and one still in high school so I'm out in the community a lot. People see me at the school, at church and at the ball field. They know that if they have a problem, I'm here. They know I have to be able to look all of them in the eye too."

Such familiarity, he says, breeds confidence in clients. But it also means he has to take care of everyone, from the big employer who needs a 401(k) plan for his workers to someone who wants to open up a small IRA just before the April 15 tax deadline. "I've got 500 clients and it doesn't matter whether it's a half-million-dollar account or a $2,000 IRA-folks expect the same amount of service from us," says Alef.

Alef hails from New Albany, which he proudly notes is the birthplace of author William Faulkner. He tried to get away, working first as a broker for an office of Edward Jones, and then taking a job with the Bank of Mississippi, a larger regional institution. But in 2001, he and his family moved back to New Albany. "At the beginning it was a difficult decision to leave a big regional bank and come back to a small community bank," he says. "We really did it for the family-New Albany is a good place for the kids, and my wife's family lives here."

That said, he's had his challenges. "The bank is very conservative," he explains, "and change here comes slowly. We're really concerned about losing depositors at the bank." That has meant that he has not been able to rely much on referrals from bank personnel to build a book. He says there are "a few folks" he can count on to help with cross-selling. "With others, they just do their job and go home."

Given that situation, Alef says he started out offering seminars, explaining what the idea of an investment program was. Since then the business has grown largely through client referrals. But Alef also goes after local business clients, too, as a way to add to both his AUM and his client base. "I'd say it's unusual for a community bank to get a lot of business clients. There's not a lot of return on setting up retirement plans for a company. But I could see there is a need, so I've done that," Alef says. In fact, the idea has paid off, as participants and employers, over time, have brought him their personal accounts as well.

"We've probably got $4 million in retirement plan assets," he says. "That's a lot in a little town like ours." (The third-party marketer for the bank is Sorrento Pacific Financial.)

As an example of his efforts in the retirement area, he cites a local construction firm that typically has 40 employees. Alef set up a 401(k) plan designed for an industry where people are in and out all the time, according to the ebb and flow of projects. The plan currently has $800,000 in invested assets, which, at a 1% fee, means Alef is making $8,000. "That's a good deal for them, and a good deal for us," he says. He also picked up the owner's personal investment account.

Alef has his eye on a local Ford dealership, but he says it is a harder sell. "The owner lives in Memphis," he explains, which is 50 miles away. There's also a Korean auto plant in town that he's working on. "The owners don't live here. They're in Memphis too, and they don't speak English. But I love dealing with them."

That said, Alef says that his most rewarding clients remain the people who run local businesses.

There are the professional offices, where he can set up Savings Incentive Match Plans for Employees (or SIMPLE plans.) "I just did a Simple IRA plan for a local physicians office," he reports. "That was $700,000 of assets."

Then there's a local guy — a heavy equipment operator who "moves dirt" — who Alef won over by helping with a personal financial problem. The owner, he recalls, had worked for a large construction company, and when he left, his retirement assets were frozen. "He had no idea what was happening to it. We spent a good bit of time getting hold of it. Now it's in an IRA that we helped him to set up," Alef says. "That's not something most wire- house brokers would have done for him, but I'm not paid on commission, so I just did it. We want to set ourselves up as a service. Folks outside looking in might say that's no way to run a business, but we say, 'okay, maybe, but that's how we want to work — taking care of our customers.'"

Now Alef handles the company's employee retirement plan. He adds, "I handle investments for him outside of his retirement plan too. We've really helped him with investments and loans and he really appreciates us."

Alef says he doesn't have one basic approach to investing clients' assets. "It comes down to each individual's needs," he says. With smaller clients, he usually goes with mutual funds, which he says are the most cost efficient. He steers away from variable annuities. "If you looked at most broker-dealers, you'd probably find that their top investment category was variable annuities. I see that product as too narrow for my clients. Don't get me wrong, they can be good investments, but the negative is that most of them cost 3%, so you have to do better than 8% to grow. Plus they're illiquid. If you need more than the guarantee provides, you're in trouble," Alef notes.

Alef says in general he focuses on "trying to manage the downside risk." That may have something to do with his own early experience in the 2001-2002 dot-com market downturn: While the market dropped 45%, his biggest decline was 21%, and that , he says, was his own account.

Alef allows that it can be a challenge having a conservative approach to investing "because people often come in with high expectations" of rapidly growing their assets. "Part of it is that most people's expectations are based on what their friends tell them, and friends usually don't brag about their bad decisions, only their good ones," he says. "So we have to try and provide more consistent investment returns." He tries to do this by making use of money managers and alternative investments.

Meanwhile Alef can probably expect his advisory business to grow. The bank recently opened a branch in Tupelo, a much larger city located about 30 miles to the southeast of New Albany. So far, he spends most of his time on visits there doing loans, but of course, that means he's got a chance to cross-sell down the road.

In anticipation of a growing investment program, he is training his assistant to handle financial advising. She currently helps in his office with trust work and commercial lending.

Vitals

Name: Michael Alef
Bank: BNA Bank
Location: New Albany, Miss.
TPM: Sorrento Pacific Financial
2012 production: $140,900
2011 production: $133,600
2012 AUM: $32,154,000
2011 AUM: $24,452,000