How an Olympic hurdler and Smith Barney broker made the leap to his own RIA
Goal oriented: Tom McGuirk put his breakaway date on the wall in the place where his running time used to be
5 min read- Olympian McGuirk transitioned from Smith Barney broker to RIA owner in 2008.
- Volatility and client relationship value drove McGuirk's decision to launch his RIA.
- Partnership with a CPA and strategic tech choices aided the firm's smooth launch.
- Client trust and control over experience fueled a high 95% retention rate.
You’d think nothing could match the pressure of competing in the Olympics.
Tom McGuirk will tell you otherwise.
The man who ran the 400 meter hurdles for Ireland in the 1996 and 2000 Olympics says it’s a tough call to say which was more gut wrenching; walking into the Olympic stadium or opening the doors to MartinThomas Wealth Management, his own Palo Alto, Calif.-based RIA practice in November 2008.
“Sport really does mirror life,” explains McGuirk, who holds a CFP, and who has partnered with Martin Bicker, a CPA. “With both, you have worked very hard and set a clear goal, which you then attain.”
McGuirk found success as a runner while a high school student in San Francisco and at Cal Berkeley. While he was training to run for his parent’s homeland in the Olympics, he tacked a time on his wall at home. Each day he would look at “ 4:59.” Breaking the five-minute barrier was the benchmark for being a world-class hurdler.
What Nov. 8 meant
Years later, after making the jump (pardon the pun) from competitive running to finance, he put the date “November 8” in that slot. A Smith Barney broker who’d put in a previous, three-year stint at Merrill Lynch, he had been considering going independent since Bear Stearns toppled in the spring 2008.
“I found myself explaining to my clients how the FDIC worked and all those bits of alphabet soup. This caused me to really work on my practice, and see the value of relationships, not so much the brand of the firm that was behind me.”
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“When Lehman began teetering, I knew it was time. And when I began working with Schwab as my custodian, we worked on a timeline which culminated in the November 8th opening.”
A different attitude toward the wirehouse
Regarding his former firm (he worked out of the Smith Barney Palo Alto location), McGuirk has nothing but positive things to say.
“It was a Friday, and I was told to resign at 2 p.m. It was rough, since I obviously couldn’t tell my clients, but I couldn’t even inform my assistant. So here I am putting stuff in boxes and taking them down to my car.”
He drove over to his new office at 2:45. “It was this intense feeling of euphoria and also a moment of whoa! I am really a business owner now.”
Story Timeline
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For more on McGuirk’s breakaway, see: The number one obstacle to completing a clean breakaway from a wirehouse
While many newly minted RIAs engage in a battle with their former wirehouse, McGuirk did not. “ These are good friends, guys who I play hoops with every Friday. Also, I think if I had left Smith Barney for another wirehouse then the situation would have been different. I think they had respect for being ballsy enough to make the jump.”
He had laid the groundwork for the move from July to September by doing everything from ordering a color copier to choosing a top-shelf technological platform. The company is using Black Diamond for reports, RedTail for CRM, and MoneyGuidePro for planning.
Independent-within-Smith Barney breaks away after hitting wall
“We made sure our website was going to be up and running when we opened, we had chosen our colors and found a great physical location. The costs were considerable, but not out of control. Remember, this was a time when real estate prices were very low.”
In 2008, he had approached Martin Bicker, a tax expert with whom he’d worked for years. McGuirk suggested the two of them might join together in their own shop. Ultimately, the idea worked out, with the initial client base coming to the firm via McGuirk.
“Look, clients want to work with someone they trust, especially during a time of crazy volatility. (We) decided we wanted to have more control over our clients’ experience. We have had a 95% client retention rate, even with those who were a bit miffed when we made the jump without informing them ahead of time, which legally we couldn’t.”
How McGuirk found advisors
With so many layoffs throughout the financial services industry, the fledgling firm was able to make a case to lure experienced advisors over to the independent side.
“It turns out this was a great time to launch a firm. We were able to hire folks from Merrill Lynch (Michael De Nevi) and (Kent Smith) Bank of America.”
The bulk of McGuirk’s clients are in their 30s and 50s, and, reflecting the firm’s Silicon Valley location, many are linked to the technology sector. This means McGuirk’s team has learned to specialize in stock options and other complexities that arise when a firm is acquired.
“Our M.O. is to protect first and then grow,” he says.
“The firm is new, but our investment philosophy is not. We have doubled in assets up to a current level of $130 million. We have been aggressive in terms of investing in very good technology and in ourselves through marketing.”
Sign of success
Even with the best planning and the clearest goals, McGuirk notes, you still have to pay attention to the details. The firm’s new sign turned out to be too big under the city’s regulations. The partners fixed it.
“We dealt with the city, made the changes, and all is fine. The sign looks great.”
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