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Ageless Excellence

Achieving freedom in a wirehouse environment is no small feat, but Joseph Chu has pulled it off.

David J. Drucker, 10/18/2007

If you read my columns regularly, you know I'm a frequent detractor of the wirehouses as beacons of financial planning progressiveness. In fact, call me crazy, but I believe that it's virtually impossible to perform a truly advisory service from a primarily product-pushing platform.

Yet every so often, individuals or teams within these organizations manage to create little fiefdoms that do more than convince unsuspecting consumers to buy inappropriate or extortionate products as means to financial salvation. And Joseph Chu, CFM, CIMA, and senior financial advisor with Merrill Lynch in Greenwich, Conn., is one of them. At the tender age of 27, Chu has collected 125 clients nationwide and manages for those clients approximately $200 million. How he's done that, given his Merrill Lynch status, might hold lessons for other "captive" advisors.

In answer to my first question, Chu said, "No, I didn't grow up in an entrepreneurial environment, just the traditional Asian culture that emphasizes the importance of working hard and finding a good job." Yet, he still took a divergent path from his other family members who he characterizes as stuck in middle income positions as engineers, professors, and computer science professionals. "I wanted to escape from the trap of living in middle America," he said.

That escape began with earning a bachelor of science degree in finance, management, and economics from the University at Albany, SUNY, in 2001. After this, he spent less than a year in Manhattan as a public accounting risk consultant with Arthur Andersen, fortuitously leaving just before the Enron scandal surfaced. Chu learned quickly that accounting takes a certain personality type. "It also takes longer to get to the top [in the accounting profession], and there's less of an entrepreneurial spirit in accounting firms. I wanted to go into something within sales that would draw on my finance background," Chu said.

Now, Chu has not just a sales position, but a small business within Merrill Lynch. "I was 22 when I started, and it was very difficult persuading prospective clients to take my advice on managing their money," he said. But Chu had persistence on his side. "I came into the business not knowing anyone, and I didn't come from wealth. So I would lock myself in a conference room every day and make 200 cold calls." If nothing else, Chu said he had a consistent marketing process.

The cold-call drill eventually led to a revelation: "The reality is that if you're pushing products, you're not going to grow in this business. If you want to grow in this business, you must go after wealthier and wealthier clients. And these people are sophisticated; they don't need people telling them what stocks to buy, but they do want someone to look at the big picture and give them advice."

At the same time, Chu didn't think becoming a wirehouse-style money manager was the answer, either. "How can people who just came from sales tell people how to manage money?" he said. "Who on earth are these retail brokers posing as money managers? Besides, research shows most professional money managers don't beat their indexes, anyway."

So Chu changed his focus to his own brand of wealth management. "I've followed the concepts of the Millionaire Next Door. As a twenty-something, I've worked hard, invested wisely, and I have a mortgage and a family-- all of which has helped align me with my clients," he said. "I've grown up fast, but I've also gained my clients' trust. They know they're not working with some young guy just out to make a quick buck."

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