Some two decades ago, Annette Martin was working as an administrative assistant at a retirement home in Lancaster County, Penn. Recalling those days, she says, “I met so many people there who were simply not financially prepared for retirement.” She explains, “It was a really nice place, with independent living facilities, and places where you would go later if you needed more care but it was pretty pricey. People would have to prove they had the assets, and many would come up short.”

Some of those who came up short, however, could have had enough with proper planning. It was sad to see, she said, but it also inspired her to seek out a new chapter in her career. Although she had to wait until her children were grown (she has six, and eight grandchildren). But then she began to look for a new career that would allow her to help such people. Her choice: financial advisor.

She started out working in insurance sales for Mutual of New York, spending four years there. Then she moved to Fulton Financial, a community bank based in her hometown of Lancaster. She’s been at the bank now for 15 years. “You see the same kinds of problems today as I saw at the retirement community,” she says, “only now there are many more people facing the problem of lack of financial preparedness.”

Martin’s approach as an advisor has been fairly consistent over the years, she says. “I spend a tremendous amount of time profiling my clients to see what their needs are. Then we look at three buckets of money—short, medium and long-term—and figure out what we need to do to fill them.”

She adds, “I try to keep it all as basic as possible, whether I’m dealing with younger people just beginning to think about saving for retirement, people nearing retirement, or those who are already retired.” Basically, she said, it comes down to discovering what people’s goals are, and what it will take to achieve them. “I stay within a client’s risk parameters. If someone is a balanced investor, I’ll put them into growth mutual funds and fixed income, but there’s no set ratio of equity and fixed-income that I use. We could be 70-80% growth and 20-30% fixed-income at one point, but then more heavily in fixed income if the market changes,” she explains.

Lately, however, there has been a major change in her practice, and as a result a change in her relationships with clients: a shift to much more fee-based business.

Martin explains that five years ago, her bank changed broker-dealers, leaving PrimeVest (now Cetera) for Raymond James. Just before the switch, PrimeVest had been talking to its advisors about doing more fee-based business and Martin took that to heart with the move over to Raymond James.

She says she knew at the time that it would mean taking a financial hit initially to move away from a fully transaction-based practice, “so I decided to give myself three to five years to make the shift.”

Her bank, where she is responsible for four branches, was supportive of the change, she says, but not in any financial way. “There was no financial support offered,” she says. “It was more a case of them telling me that they thought it would work better for me if I had more fee-based clients.”

The first year, she admits, was difficult. “My production went down about 50%,” she says, “and so I gave myself three years to try it and then see where I was.”

As it turned out, she was in a good place by then. “Every year since that first one production has grown,” she says. “In 2010, it was $521,000. By 2012 it was $900,000, and last year it was $1.2 million.”

“By this point, I think I’ve got my answer,” she says, noting that by the end of 2013, her fee-based business accounted for close to half her production. “It was a good idea to shift over to a more fee-based practice.”

 

Check back tomorrow to read more about how Martin’s shift to fee business has benefitted her and her clients (and when fee-business doesn’t make sense).

 

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