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A Model Practice

Amid the downturn, Nick Giacoumakis has established a viable and growing business by sticking with key disciplines.

Karen Dolan, 10/21/2010

The temperature in the Boston area was 104 degrees when the power clunked out. In the darkened offices of New England Investment & Retirement Group, the stuffy air and rising heat couldn't dim Nick Giacoumakis' passion for his profession and the firm he founded in the suburb of North Andover. He has good reasons to be fired up.

As many financial advisors were facing tumbling asset levels and disappointed clients in 2008 and 2009, Giacoumakis was adding new relationships throughout the downturn, enough to nearly overcome the impact to assets from the steep market decline. His revenues dipped just 3% in the aftermath of the financial crisis.

Giacoumakis emerged from that period stronger than ever. His firm manages $500 million for 1,100 clients. In 2009, he made Barron's 1,000 top advisors list. He remained on the list in 2010 and is gunning for the top 100 list next year, now that he's crossed the $500 million threshold. He has achieved that success with a savvy business sense and an eye toward building an enterprise that can handle scale without compromising quality.

The Business Model
Giacoumakis brings a sensible business mind-set to financial planning. He points to a common error made by financial advisors when building their practices.

"Take Harry, for example," Giacoumakis says, describing a typical scenario. "He builds a book of 300 clients and hasn't grown his service staff quickly enough. Balls start dropping. Monitoring slips. Harry is overwhelmed and crumbling by the weight of his success because there's a lack of scalability and repeatability to his practice."

Giacoumakis has taken great pains to not underestimate the resources required to service his client relationships and monitor their accounts. He's avoided that trap by growing staff in advance of clientele. His firm employs 13 people, including five planners, three in-house researchers, and several client-service representatives. The team has grown steadily along with assets under management since the firm's founding in 1995. Several members have played key roles for 10 years or longer. There's family involvement as well. Giacoumakis' wife, Laura, contributes to the firm's marketing and communication efforts; his teenage daughter spent this past summer scanning documents to support the firm's paperless commitment.

The Investment Model
Giacoumakis has spent his investment career building and evolving an investment model that feeds into eight model portfolios. Clients are ushered into the appropriate portfolio based on their individual needs and risk tolerance, allowing Giacoumakis and his research analysts to focus their time and efforts on staying on top of the markets, managers, and securities that make up the portfolios. The model portfolios allow the team to spread its highest-conviction thinking across all client portfolios and to move money around quickly and in a way appropriate for each risk level. Making decisions on eight portfolios, not 1,100, adds tremendous scalability to the practice.

Giacoumakis and his investment team research and debate the holdings in the model portfolios with supplementary research support coming from the firm's longtime broker/ dealer partner, Commonwealth Financial. The team holds weekly informal investment meetings and more-formal, documented monthly meetings. Debate among staff is welcome. "If everyone agrees, we're not thinking," he says.

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