In Profile: John O’Brien

Advisory Evolution

by Carolyn Ellis

John O’Brien is president of OneSource Retirement Advisors in Malvern, PA. With $250MM in assets under management, he and his partners, Frank Ortner Jr. and Frank Ortner III, have advanced the notion that classic marketing techniques paired with a team-based, collaborative approach can bring success. And so OneSource offers clients in the emerging affluent market a multi-disciplinary, consultative approach to retirement planning. We talked with O’Brien about the strategy that distinguishes his firm within the advisory channel, and how his approach appeals to clients in today’s evolving marketplace.

L&HA: OneSource might just say it all, but tell us about your agency.
JO: We started this agency 15 years ago in Malvern, Pennsylvania. We modeled it on a very successful practice we had seen in Boston that offered seminars and hosted a radio show. The basic concept was marketing to retirees attracted to the idea of having everything in one place. My partners are Frank Ortner Jr., an attorney with home office experience, and his son, Frank Ortner III, a CPA, who was 30 years old when we joined forces. When we started we weren’t really great at sales, but when we went to an advisory, fee-based business, clients just poured in. They really liked one-stop shopping and having an objective way to pay us. Research data show that only 8 percent of advisors provide a total wealth management solution and are truly asset-based, fee-only firms.

L&HA: How would you describe your client base?
JO: Most of our clients are local (we’re 30 minutes outside Philadelphia), but some have moved out of state or are out-of-state referrals.

L&HA: And how does your conversation often begin?
JO: Retirees face a dilemma: I have my money now but how do I get it to work for me and last the rest of my life? Often people have been procrastinating, and then like seeing the doctor, they finally walk in the door. We have clients who belong to the greatest generation and those that are in their 70s. For people who are starting to retire earlier in their late 50s, it’s a different paradigm because fewer have pensions. Our clients know they can get online with Charles Schwab and talk to somebody on the phone, but they’re looking for more. They want a relationship.

L&HA: Are your clients showing signs of money anxiety?
JO: Most of our clients were managing their money themselves. When you’re accumulating money and you’re working your nest egg is piling up, but it’s easy to think, “I’m not there yet; I’ll deal with this later.” When these clients come to us they’re looking for somebody to help them deal with, “Do I have enough saved?” and “How do I turn my savings into a retirement plan?” It’s different now, having done this through two bad markets. We had not seen stock market losses like 2008 in our lifetimes so we didn’t know how things were going to work. In 2010 the market had come back a little bit but no one was really sure if that was all right. Now most people feel the economy and stock market are better. But people still have anxiety about whether they have enough money to last the rest of their lives.

L&HA: What’s the impact of sustained low interest rates?
JO: I can remember fixed certificates for 7 percent, and not that many years ago, 5 percent. Now we’re looking at 2 percent or less. I often allude to two neighborhoods, one currently at 2-3 percent. Across the street is the equity market where you can earn higher returns, but if you change your mind you can really get hurt trying to cut back across the street and bring your money with you.

It’s easy to illustrate balancing the portfolio by showing three buckets, short-term, medium-term and long-term. In the short-term bucket you would have money making 1-2 percent. In the income bucket we might have something more balanced that might make 4 percent, and in the long-term bucket we have our growth investments, our stock funds making an expected 8 percent or greater return. For each person there’s a balance in how much money they have in each bucket. The real risk is living too long.

SO, The advisor’s job is to spend some time with clients understanding their priorities, goals, and dreams, and then doing a needs analysis. We identify the gap between what clients think they need and what their investments can do. We always hope investments can fill the gap.

L&HA: Will this method work for everybody?
JO: It’s important to be honest with prospects who are going to be short of funds, to manage their expectations. Most of our emerging affluent clients, with assets north of $1 million, are in a different spot because they did things pretty well. They saved money and lived within their means, and they probably will continue to do so into retirement. It’s our job to show them how to fill the gap and help keep them on track. Most people who come to me fit that profile.

L&HA: Do you find many retirees in their later years have taken on monthly debt helping children or grandchildren with cell phone bills, rent, or college tuition?
JO: Clients like that don’t fit the profile we can serve. However, I have sat in many meetings over the years where people are on that track; they have overspent. We also see considerable wealth that will be passed down. Sometimes children are expecting to inherit money and haven’t done any planning.

L&HA: So, your practice isn’t based on product, it’s about process. Is that a fair assessment?
JO: We have learned that the emerging affluent client is interested in a collaborative and consultative process. Let’s use New England football fans as an analogy. Clients want to know their lifestyle is going to be secure. New England fans want Bob Kraft and Bill Belichick to put together the best team. They want the right players and they want to win. Clients also want their advisor to assemble the best. It’s not necessary that you actually play quarterback. We have core people here – attorney, CPA, CFP, but to be multi-disciplinary we need to go to outside experts. We use an insurance agent for agents, a broker’s broker, and we outsource the portfolio management with some very high quality mutual funds.

L&HA: Within the framework of today’s advisory firms, what do you see on the horizon?
JO: In the middle market today I see more technology-based delivery of services. We hear the term robo-advisor for the big firms’ software suites that store client data and then reach conclusions about how to invest, how much insurance to buy, all the things we used to do in the office. So what’s left for us? The same as always: to build a relationship based on what each client needs and then assemble the best strategies and players to help them. Then there’s communication. In our family we always said good manners will never go out of style. It’s the same in our business with service and personal advice.