Many advisers are in flux these days, and Brian Surovik at Lone Star Bank and Trust in College Station, Texas, knows how that feels.
Despite mergers, conversions and a bank collapse, his production has grown 300% in the past two years — triple the industry average.
He prefers to keep his exact production numbers to himself, but Surovik says he is currently the fifth-ranked consultant for Investment Professionals Inc.
At Lone Star, a subsidiary of Thomasville Bancshares Inc. in Georgia, he works mostly with 300 to 500 high-net-worth households.
Surovik, 33, signed on with Edward D. Jones & Co. LP in late 2000 and built an office from scratch. In 2004 he and his partner, Doug Hicks, moved to State Bank, which was much closer to where they lived.
The move from brokerage to bank was not much of a culture shock, Surovik said, because he and Hicks had already been focused on financial planning and diversification at a time when the trend was to sell hot stocks to eager buyers. After the tech bubble burst, 80% of their clients followed them to State Bank.
Despite adverse markets, State Bank did so well it caught the eye of a Prosperity Bancshares Inc. in Houston, which bought State Bank's parent in 2007. One problem: State Bank owned its own broker-dealer, while Prosperity worked with Investment Professionals Inc.
In May 2007, Surovik and Hicks were recruited by IPI to join a Franklin Bank branch across the street from Prosperity's. But even though Franklin signed on with IPI, it also bought First National Bank of Bryan, a client of ING Group NV's Primevest Financial Securities, in June 2007.
He spent those months calling clients to calm them and persuade them to transfer their accounts. He also spent time talking to Primevest to make sure clients who wanted to stay with Franklin could do so easily.
As if taking on a new job and a conversion from one third-party marketer to another — a nightmare of client hand-holding and administration — were not enough, Surovik and Hicks were in the market for a sales assistant. That job involves "a lot of long hours and hard work," Surovik said.
When the conversion was completed, he felt he could get going — he liked IPI, was happy with its management and had persuaded almost all his clients to make the leap to Franklin. Franklin Bank Corp.'s operations covered spanned several states, and when it bought First National Bank of Bryan, the stock price was a respectable $20 a share. But its exposure to real estate markets, particularly in Florida and California, was already beginning to undermine Franklin's balance sheet. Client panic spread with news of the mortgage crisis, and Surovik began reassuring clients all over again.
The calls increased in August 2008, when Franklin said it was looking for capital. "All banks suddenly seemed to need capital," Surovik said. "We just hoped it wasn't as bad as we were reading," but on Nov. 7 the Federal Deposit Insurance Corp. shut the bank.
"Management gets notified by phone, and then they walk in at 4 p.m. and tell everyone that they're now employees of the FDIC, which is taking over," he said. "You don't know till the last minute. It was a horrible feeling." He spent the night calling clients to let them know what happened.
When Franklin reopened its employees had a new boss: Prosperity Bank. Since he had already worked at Prosperity, the shaken bankers grilled him. He reassured them "Prosperity has said it wants to keep everybody, and it did a good job last time," when it took on State Bank's employees. Still, "everything was up in the air."
Prosperity and IPI fought over who owned Surovik's accounts. When the dust settled, Prosperity lost out, but that made him a rep without a bank.
After a month IPI found the reps a new home at Thomasville Bancshares, which wanted to open a branch in Texas and established Lone Star Bank and Trust.
Though referrals are hard to come by, with Lone Star's parent based four states to the east, Surovik is drumming up business by asking clients for referrals, conducting educational seminars, hosting client appreciation dinners and "conducting a lot of financial planning reviews."
Many advisers fail to conduct those reviews in a down market, he said, "but we show clients how to correct their allocations to see them through this market."