The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
Tuesday, June 06, 2000|
Invest Early, Invest Often
Al Gore and George W. Bush may be slugging it out, but financial advisor David Speck recently won re-election and is happily ensconced on the Alexandria City Council. The advisory business is going pretty well too.
Although Speck is currently a managing director of First Union Securities in Alexandria, VA, he is an educator by training. He taught in the George Washington University graduate school of education for many years. He left academia in 1976 for a position in the US Department of Labor.
He didn't stay for long, but it was the first step in a life-long involvement in politics. After Labor, he was elected to the Virginia General Assembly and then a number of terms on the the Alexandria City Council.
Before the last election, he vowed that this would be his last term. "I don't think politics is something you should do forever. You should leave before the voters tell you to get out," he said.
In 1982, without formal business education, he entered the financial world. Since that time he's built a significant advisory practice. He currently has 1500 clients and $350 million assets under management.
While his practice has been steady, the firms he's been associated with have undergone a number of changes. "This is my fourth firm in 10 years, and I haven't changed my office or my desk," he said.
The firm has changed from a long-established local firm to a national giant, but those changes have had a minimal effect on his practice. The relationships between himself and his clients are the bedrock of his business, he says, and the name on the letterhead doesn't affect those relationships.
His clients are largely older, a fact which drives his investing style. "You have to be committed to a long and methodical cycle of business. My philosophy is to buy good stuff and leave it alone. Successful investing is boring."
The relationship is what counts, not necessarily soaring performance. "If we try to compete with hot deals and cheap prices, it only works until somebody's got a hotter deal or a cheaper price," he said.
His client look to him for consistency, and he expects the same from a fund company. "Predictable, steady, solid returns" is what he wants, and one of the primary places he looks for them is at American Funds. "There's no surprises with American," he said. "I don't go to sleep at night worried that when I wake up, all the managers will have bolted."
"At least once a year, I try visit all the families where I do extensive business. I want to see them, I want to look them in the eye. It's nice to see the same people year after year. That's very important to me."
When it comes to new funds, Speck is a tough sell. "You need to be aware of new developments and new ideas, but there aren't that many," he says. Cold calls and mass mailings tend to fall on deaf ears. "You have to focus on a limited number of choices, and I'm pretty selective about who I talk to. Successful wholesalers know that I work very slowly, and that I need time to get comfortable with a new product."
One new idea that Speck can live without is the profusion of new share classes. "It's confusing to everyone," he said "It creates the illusion that there are free funds, and that if you make an investment through an advisor, you're getting ripped off. I don't think it serves the public or the investment community very well."
Teaching, politics and finance seem to require very different skills, but Speck sees common ground. "Everything I've done is about problem solving. In politics and investing, you're always solving somebody's problems. You're always trying to address someone's needs and concerns."
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