Vacherie, located midway between New Orleans and Baton Rouge in Louisiana is a rural town (pop. 3,500) surrounded by antebellum plantation homes, sprawling moss-covered live oak trees, and "lots of sugar cane fields," says Frank Smith, who serves as a Sorrento Pacific Financial advisor at First America Bank & Trust, the town's local bank.
It's also a place, Smith says, "where sports is a religion." Smith, who played basketball at Loyola University in New Orleans in 1992-96, knows that religion well. In fact, you might say he is part of its priesthood, serving as a coach to teams of young athletes in and around Vacherie in baseball, basketball, "and a little football."
It's not just that he loves coaching kids (he clearly does). Smith has two children aged 15 and 5, who are both active in sports, so coaching just makes sense for the 6'7" former guard.
As it turns out, it is also a great way to get yourself known in the community as a financial advisor.
"It's not that I got into coaching in order to meet people for business reasons," explains Smith. "And I don't actually use coaching as a recruiting system. But if you do things to help kids with sports here, folks really appreciate it, and that goes a long way."
Smith says, too, that because he's so involved with his children's sports activities, it has been hard for the young father to also get as involved in the local Lions, Rotary and other organizations which many financial advisors use as venues to market themselves as he otherwise might. "So the sports activities are where I get to know people and they get to know me," he adds.
But in a town like Vacherie, an advisor could do a lot worse than sports events as a place to see and be seen. "This is a very small town, and the ball parks are the social center of the place. You get three generations of people at every game. Often there are more grandparents than there are parents, because the grandparents have the time to go with the kids."
But he avoids doing business on the field. Nor does he even actively pursue the parents of his players. "I don't go down my team list making cold calls," he says. "But even so, you do get known. People tend to find out who you are, and then they'll call you."
As an example of how being a coach has helped him build his business, he recalls a locally owned company that had about 40 employees. "Over the past 10 years, whenever their retirement plan came up for renewal, I'd get in touch with them, but they were never ready to move. Then, recently, I coached the owner's grandson. I didn't think much about it, but as usual, I sent them another notice asking if they would be interested in looking at our 401(k) plan. And this time, the owner called me and said, "Listen Frank, you've coached my grandson, and you've been coming to us for some time. You have roots here, and our plan advisor has moved out of town. We'd like to give you our 401(k) business."
He says, "With 40 employees, that was a good bit of business for me right away, and a big referral network, too."
More often, though, it's just a matter of people knowing who he is. "Our bank is the biggest building in town," he says, "so people know it. It's just a matter of them getting to know I'm associated with the bank. Then when they need investment advice, they trust me and come to me."
Where the coaching comes into play, he says, is often after he has talked with a potential new client on the phone. "They'll come in to meet me in person, and I'll recognize it's a parent or grandparent of one of my kids. And they'll recognize me. Then it's, 'Hey, Coach Frank, good to see you!'"
Smith says many of his clients are long-time employees of the petrochemical industry, which has people working all over the region. "We have sugarcane farmers too," he says, "but it's mostly petrochemical retirees."
The typical client, he says, is someone who has 80% to 90% of their assets in a 401(k), which they need to invest when they retire. "We try to talk to them three to four years in advance of retirement, if not sooner," he says. "Typically, they'll have maybe $500,000 to $1 million saved and we'll do a roll over when they retire. This is their one investment decision-What to do with that money."
Smith says he tries to show the benefits of generating income from several different sources with some money in growth mode, and some producing income. "I like to use a three-column strategy," he says. "One-third in short-term investments for liquidity, one-third invested in long-term and inflation-protected income, and one-third in growth investments for later on." He typically recommends a mix of mutual funds, annuities and a "fair bit" of bonds.
The trust that Smith has built up with his clients, both on and off the playing field, paid off when the financial crisis hit in 2008, he says. "People had a lot of concerns, of course, but we stayed in touch with everybody, and with our three-column approach, most people were happy that the only real problem was in the growth column, and that money was for later on. Most people stayed put. There were very few maneuvers made."
He adds, "I'll tell you this. For us, because we used more bonds and annuities, the crisis was actually a business opportunity. People who just had mutual funds came in and wanted to get into annuities."
Word-of-mouth and client referrals are the main sources of growth in Smith's client base, though the bank also has a quarterly referral program, which includes a $25 bonus for any referrals made by bank staff.
First America Bank & Trust has 24 branches to serving the 21,000 people of the parish, which is what counties are called in Louisiana. Smith, who has been working at First America for eight years, splits these branches evenly with another advisor, Dave Cortez. The 12 branches Smith handles are located on both sides of the Mississippi River, and Smith says he puts 40,000 of miles a year on his pick-up truck, most of that work-related. "I'm a real road warrior," he says, "and my truck is my office." The pickup was his choice of vehicle because of the ample leg-room. "I'm not a guy who could drive all those miles in a Prius," he laughs.
Smith used to have a regular schedule of rotating visits to the branches, he says, but now he mostly works out of the home office and visits people in the branches by appointment only. "I let the course of business dictate my travel," he says. "For the most part, when I got to another branch, it's to meet with someone."
Smith started out working as an advisor with New England Financial, an affiliate of Met Life. "During that time, I was calling the bank's management about having me sell securities for them, but they were very conservative, and reluctant to do that." After a couple of years of his calling them, he says they decided to "dip their toes into the water," though, and they asked him to select a broker-dealer. He went with ICBA, which was later acquired by Sorrento Pacific Financial.
If Smith's sideline of coaching has turned out to be a successful, if unusual, way of gathering clients, it's one he will probably be continuing to engage in for some time.
Last year, the Smith family added a new member, now just 1, and too young to be wielding a bat or dribbling a basketball, but who is no doubt destined to hit the playing fields of Vacherie.