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Staying Out of the Silos

A Midwestern planning firm finds success with an atypical management structure.

David Harrell, 06/17/2008

Budros, Ruhlin & Roe, Inc. eschews the typical "silo" approach to organizing its large financial planning practice. Instead, the Columbus, Ohio-based fee-only firm takes an alternative path to managing its clients and their more than $1 billion of assets.

"We're a little different in our structure in that each partner doesn't have his or her own set of clients," chief investment officer Dan Roe says. "All four partners work with all of our clients." That doesn't mean the firm lacks a specific structure, as it's organized around seven distinct planning teams. Each team is headed by an experienced planner who is supported by an assistant planner and additional staff. And each of these seven teams serves and administers 40 to 45 clients.

But throughout the financial planning process, from initial client meetings to ongoing investment management decisions, one, two, or more of the four partners will, as needed, attend client meetings to advise, based on their respective expertise. When it comes time for any major client decisions--such as a shift in asset allocation or the dropping of an insurance policy--the final call is made based on the input of all four partners.

Top of Their Game
Roe likes that the system provides "checks and balances" for all such decisions. "There's always another partner there who's going to challenge a conclusion and the underlying assumptions used," Roe says. "So we owe to each other to be on top of our game, and the end result is much better for the client." Roe strongly believes that clients benefit from the collective knowledge of the four partners.

The other major benefit of the firm's silo-free organization is that it allows for even greater specialization by the practice's four partners, perhaps leading to a practice-level knowledge base that exceeds what it would be if each partner operated separately. For example, before joining the firm in 1996, Roe worked as a sole practitioner in Cincinnati. This meant, of course, that he was required to stay on top of all areas relevant to a financial planning practice, including tax issues and estate planning.

Now, he can rely on partner John Schuman, a CPA and an attorney with expertise in estate planning and business and succession planning. "John is so good that I don't have to be reading revenue rulings and understanding what's coming down the line from Congress in terms of estate planning," Roe says. While the firm doesn't draft the final estate documents for clients, it will closely work with a client's attorney to prepare an estate plan that works most advantageously with a portfolio. Peggy Ruhlin, who is second in seniority at the firm, takes a special interest in initial meetings with clients, handling much of the "investor education" work, in terms of directing a client toward the most appropriate asset allocation. As a CPA, she also plays a key role in more-complex income tax issues and planning.

Jim Budros, who founded the firm in 1979, has long been involved in estate planning issues and takes a strong interest in investment policy statements and developing spending policies for drawing income from portfolios. He also takes the lead in business development efforts for the firm.

And as research director and chief investment officer, Roe oversees the firm's 10 model portfolios, devising the asset allocations and the investments used to fill each allocation. The firm uses a holistic approach to investment planning, and its preference is to advise and manage all of a client's assets, including those within retirement plans.

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