Global gurus

Good thing Global Financial Private Capital Human Resource Director Dale Thompson minored in psychology.

That's because Thompson, from his downtown Sarasota office, recently defused a sticky situation between employees who work for a Global Financial client in Washington state. The work involved a series of sometimes-tense phone calls over a dispute the employees had in money management tactics.

It's a bit different from traditional wealth management and stock picking, an area where Sarasota-based Global Financial, founded in 1994, really makes its money. Clients range from other wealth managers, for whom it provides back office support and products, to individual investors and retirees, for whom it manages money.

But Thompson's effort, says Global Financial CEO Michael Dixon, illustrates the firm's ability to one-up Wall Street while it maintains a nimble, counterintuitive mission. “We are not just financially servicing the clients,” says Dixon, a native of Britain and a former professional rugby player in his homeland. “We don't just bang out financial products. A lot of people view us as just another investment firm and want to pigeonhole us.”

Whatever the label, Global Financial's strategy clearly works. It's on a growth spurt rarely seen lately in the Sarasota-Bradenton market for any business, much less one in topsy-turvy financial services, which is still finding its way after the 2008 crash.

Assets under management, for one, are up 150% from 2011, from $1.24 billion to nearly $3.11 billion in 2013. Even more telling in an industry that's bled jobs for years: Global Financial's payroll rose from 25 in 2010 to 106 by the end of 2013 — a 324% increase in employees. The firm, which declines to release specific annual sales figures, also says its client base is up eightfold in the last three years.

The investment and money management industry has noticed Global Financials' rapid rise.

One accolade was it made Forbes magazine's 2013 list of the fastest-growing registered investment advisers in the country. The list is based on growth in total assets under management from March 31, 2011 through March 31, 2013. With growth of $951 million during that time, Global Financial was 28th on the list, which includes powerhouses like Irvine, Calif.-based Sageview Advisory Group, a $20 billion firm. Another honor: Trade publication REP magazine named Global Financial the 46th largest registered investment adviser in the country in its most recent industry analysis.

More recognition came from the New York Stock Exchange, which invited Global Financial and some business partners to ring the opening bell on the trading floor Feb. 25. The firm sent a contingent of 15 employees, including several top executives, from Sarasota to New York City for the ceremony. “By reaching this milestone,” says Dixon in a press release to mark the occasion, “we have taken another important step forward on behalf of our employees, investors and advisers.”

'Make money'
One example of Global Financial's agile and contrarian strategy is an exchange-traded fund it introduced March 13. An ETF is a security that tracks an index or commodity and is bought and sold daily like a stock.

The ETF at Global Financial, traded under the symbol MINC, is a salvo in what executives call the Federal Reserve's “war on seniors and saviors.” Global Financial President Geoffrey Frazier says that war stems from quantitative easing, a monetary policy many believe has ushered in a zero interest policy — which is where seniors and savers get zapped.

But Global Financial's ETF, says Frazier, is designed to “help clients do better than zero.” With a yield around 3% MINC isn't sexy by some Wall Street big-money standards, but it's done well in the market. It surpassed $100 million in sales in less than a year.

Chris Bertelsen, chief investment officer at Global Financial, says the ETF has been successful because it places a modicum of control back with clients. Global Financial's wealth management clients, he says, are mostly retirees with an age range of 50-90 who come to the firm with this request: Don't lose my money, don't lose my money, don't lose my money, and, if you can, make me a little money.

“We try to find a way for clients to reasonably make money with as little volatility as possible,” says Bertelsen. “We are always looking for an edge. If we don't have an edge, there's no reason to play.”

Global Financial recently added a series of products, beyond the ETF, geared toward the niche segment of its business where it does work for other financial advisers. Both products help financial advisers formulate succession plans, a complicated process.

One product is Advisor to Advisor Continuity, where Global Financial will find a successor for a client. He or she can either be someone within the firm's network or an outside money manager with whom the the firm works. Global Financial basically plays matchmaker, finding a successor who is in line with the mission, clients and investment strategy. The second product is Legacy Lock, what the firm calls an exclusive program within the financial services sector that protects a business in lieu of a formalized succession.

No high fives
The ETF and other client innovations formed the basis of the NYSE bell-ringing invitation.

While the trip was a sweet reward, it's in large part outside Global Financial's comfort zone because the firm places humility high above boasting in its corporate culture. Dixon regularly talks with employees about the practice and repetitive process of success being more important than actual winning — sacrilege on Wall Street.

“When we go around the table we talk about what could go wrong,” says Frazier, “not high-five each other.”

That approach streams down from Dixon, an engineer by trade who sold a multimillion-dollar software company in England before he moved to Sarasota in the late 1990s. He joined Global Financial in 2001. Says Dixon: “A key thing we do is to remember that risk is always around the corner.”

That risk-averse philosophy didn't stop the firm's top four executives from investing significant personal funds into Global Financial over the past five years. The foursome consists of Dixon, Frazier, Bertelsen and Chief Compliance Officer Edward Bertelsen, Chris Bertelsen's son. The capital has gone mostly to buy and upgrade top-line software and data systems.

Executives decline to say how much of their own money is at stake in the business or how much they've invested in total. Quips Frazier: “Is gobs a word?”

A more pressing challenge the firm faces is one that could resonate with many Gulf Coast executives and business owners: Finding good employees.

The firm recently added a second downtown Sarasota office, on the fifth floor of the PNC Bank building on Ringling Boulevard. About 50 employees work there, to go with the 55 or so in the company's headquarters, which is between the Sarasota Police Department and the Sarasota County Sheriff's Office jail.

Dixon says the crux of the challenge is the type of people Global Financial seeks end up going to bigger firms in New York and Chicago. The firm currently has 10 open positions, mostly in financial analyst roles, and will likely need more to sustain the growth. Recruitment, both internally and with outside firms, has become one of Global Financial's biggest expenses.

“It's not easy to find people who can do this work,” says Dixon. “It's very expensive and time-consuming to find talented people and be able to get them to come to Sarasota.”

Even with that backdrop Dixon and his team are planning now for what the company will look like when, not if, it hits $10 billion in assets under management. Dixon doesn't want to get caught unprepared if the growth rate continues to rise.
“We don't plan for the ego thing,” says Dixon. “We plan to do the right thing.”

Giant among us
A list of the 50 largest registered investment advisory firms in the country, published by Forbes magazine last April, included one Gulf Coast company: Tampa-based Independent Financial Partners.

With $3.36 billion in assets under management through March 31, the firm ranked 39th on the magazine's list of registered investment advisory “Giants.” Only one other Florida firm, Jupiter-based Genspring Family Offices, which was third with $15.14 billion in assets under management, made Forbes' top 50 Giants list. Sarasota-based Global Financial Private Capital ranked 28th on the magazine's nationwide list of the fastest-growing registered investment advisers. That list was based on growth in total assets under management from March 31, 2011 through March 31, 2013.

For more on Independent Financial Partners visit Size Matters.

At a glance
Exchange Traded Fund/MINC
Sarasota-based Global Financial Private Capital introduced an exchange-traded fund last year. The fund, a security that tracks an index or commodity and is bought and sold daily like a stock, helped boost the firm's assets under management total to more than $3 billion. Here are some specifics on Global Financial's ETF:
Exchange: NYSE
Symbol: MINC
Inception date: March 19, 2013
Outstanding shares: 2,050,000 (through Feb. 25)
Assets under management: $102.12 million (through Feb. 25)
Net asset value: $49.81 (through Feb. 25)
52-week range: $48.59-$51.01
Management fees: 0.65%
Total annual fund operating expenses: 1.13%
Yield to maturity: 2.99%
Partners: Bethesda, Md.-based investment firm AdvisorShares and Newfleet Asset Management, an investment subsidiary of Hartford, Conn.-based Virtus Investment Partners.
Prospectus: The ETF, according to AdvisorShares, “seeks to provide current income consistent with preservation of capital, while limiting fluctuations in net asset value due to changes in interest rates.”