Why did they merge their firm with another? They found kindred spirits in their new partners.
This monthly series of articles describe the many steps and occasional missteps we have taken in building our financial advisory business, Garnet Group LLC. Garnet has more than 90 clients, $300 million in client net worth under advisement, offices in Bethesda, Md., and Boston, and eight staff members. Veena Kutler, CFA, and Annette Simon, CFP, are the principals managing the Garnet office in Bethesda.
Since the official announcement of our merger in last month's column, we've received a good deal of feedback from our readers--and a lot of questions. Many of our fellow advisors have wondered why we would choose to sacrifice any of our independence and share our business with another firm in another city. In our previous article, we discussed several of the issues that led to the decision, but in truth, we would never have considered merging as viable growth strategy if we had not found partners as compatible, smart, and experienced as Lisette Smith and Tanya Rapacz of Smith Rapacz, LLC.
Shared Approach and Values
We began discussing the possibility of a business alliance with Tanya and Lisette more than two years back; but just over a year ago, we launched a more serious process of decision-making, negotiations, and paperwork leading to the formation our new entity, Garnet Group LLC. From the start, all four of us have agreed that the structural and philosophical similarities between Mosaic and SmithRapacz helped the merger take shape and coalesce.
Some those similarities were uncanny. Both firms opened their doors in the fall of 2000-- meaning both started out in the difficult bear market that lasted until 2003. Both firms are fee-only and comprehensive in their approaches, with an emphasis on proactive client service and ongoing relationships. Like Mosaic, SmithRapacz adhered to a diversified investment strategy based on asset allocation, DFA funds, no-load mutual funds, and exchange-traded funds. All of the principals wear multiple hats, and we place a high value on achieving excellence in our professional lives without sacrificing the quality of our family lives. All of us are moms who, on a daily basis, integrate our roles as advisors and entrepreneurs with meeting the demands of our seven children ranging in age from 2 to 21.
While Veena came to the financial advisory business from the institutional investment world and Annette made a career change from management consulting, Lisette has spent her entire 20-year professional career in this business. A Boston University MBA, she teaches at local CFP programs and works with the CFP Board on developing test questions for the CFP exam. Lisette co-chaired the 2005 NAPFA NE regional conference in Boston and served on the board of ICFP, the predecessor organization to the FPA. She has served as an arbitrator for the NASD Office of Dispute Resolution, helping to resolve matters arising between investors and securities firms. She is a member of the board of directors, serving on the strategic planning committee, of Volunteers of America® of Massachusetts, a non-profit human services organization. Lisette is an avid cyclist and enjoys spending outdoor time with her husband, son, and family dog.
Tanya has a strong interest in history, language, and literacy. She is a Wellesley College alumna and has worked as a volunteer in literacy programs for more than 10 years. After college, armed with a degree in Russian studies, Tanya followed the path of other liberal arts graduates and entered the business world, where she found that her abilities in organization, writing, and communication were welcome. Tanya was a securities litigation consultant, providing investment analysis to attorneys and government agencies with cases involving investors and brokers. As part of that role, she testified as an expert witness before NYSE and NASD panels. She also worked at Standard & Poor's, where she created educational newsletters and Web sites for banks and mutual funds. She then joined the financial advisory firm where Lisette worked, found that they worked well together and decided to join her in partnership. Tanya is the youngest of the four Garnet principals and the only one with a preschool child. She enjoys hiking in her spare time, as well as spending time with her growing family.
Different Starting Points
While it took the two of us, Annette and Veena, only a handful of lunches and NAPFA study group meetings to get to know each other before diving into our partnership, Tanya and Lisette had worked together for a year before deciding to open their own firm. Both had worked in Boston at a long-established high-net-worth financial planning and family office firm, whose average client net worth was north of $5 million.
Lisette was at this firm for 12 years where she developed extensive experience working with wealthy families and counseling them on a full spectrum of issues--ranging from help in leasing a car to high-level philanthropic strategies. At the time of her departure, Lisette was the director of financial planning, responsible for all planning. Tanya was a planner at the firm, working closely with Lisette. Seeking independence and better work-life balance, they decided to branch out on their own in 2000. Both of them loved the hands-on, multidimensional, family-office service they had provided at their old firm and wanted to keep that work structure intact at their new firm.