CEG Worldwide Success Story–Jeff Carbone

Advisor Jeff Carbone describes him­self as a “team player.” By focusing on a team concept that includes working in close consultation with each client, Carbone puts into place a key concept of wealth management—aligning wealth with life values.

It’s an approach that has served him well. Carbone, co-founder of North Carolina-based Cornerstone Financial Partners, has built a successful firm with three other partners: Brian Needleman, Andrew Smith and Craig Rubrecht. Today, the company has nearly 600 clients and $300 million in assets under management. All the partners have significant experience in the industry (see the sidebar on page 15) at such firms as the national broker-dealer Raymond James.

The concept of a team supporting an individual client—and the concept of the client as participating in a team effort—is part of what drives the suc­cess of Cornerstone. Carbone’s experi­ence with team dynamics goes back to high school and college, where he par­ticipated in baseball and enjoyed the camaraderie (even though he admits he was not Major League material). “I was good enough to play,” he recalls, “and more than that, I was good enough to enjoy the learning experi­ence and to appreciate that the team concept benefited individual players.”

He has applied the lessons learned from team sports to his professional and personal life, first at American Express, then at Prudential Securities, and finally at Cornerstone, which he co-founded in 2001. What’s more, he sees that team approach now spread­ing across the industry.

Carbone and his partners put the client first; they try only to recom­mend what is in the client’s interest, given his or her risk profile and goals. Investment plans are implemented using both passive and active manage­ment strategies. The active investing is done with an asset-allocation framework so that the equity and fixed-income approach is strongly moored to the client’s tolerance for volatility over time.

By bundling together the client’s appetite for risk with a portfolio that recognizes it (but still leaves room for active management as necessary), Carbone and his partners believe they are offering the best of both worlds. Indeed, famous investor Warren Buffett is a special hero of Carbone, who admires the Oracle of Omaha’s “common man” style. Like Buffett, Carbone and his partners spend long hours evaluating potential invest­ments, though they neither consider themselves to be high-flying fund managers nor seek the fame of certain hedge fund stars. “Our whole approach is about the client,” he notes.

Carbone has married his invest­ment approach to various best prac­tices, including the wealth manage­ment business model—which provides a launching pad for Cornerstone’s investment focus. The idea of wealth management is espe­cially compelling to Carbone, who sees it as “state of the art” when it comes to team play within the financial arena. “Every part of wealth management provides an interaction between skilled individuals and the client, which in turn provides a gamut of options to choose from.”

The wealth management process, which Carbone says has taken Cornerstone “to the next level,” involves the preferences and needs of the individual client from the outset. Interviews that seek to tie a client’s or prospect’s wealth to an underpinning of organized investing discipline— including regular reviews and evalua­tions—are a mainstay of this approach. There are a great many adjustments that can take place to ensure specific cash flows based on individual situations. Investments can readily be made more or less aggres­sive, depending on the individual’s vision for the future. If immediate income is needed, for instance, stocks that pay dividends and fixed-income investments may be recommended.

The above paradigm is certainly a change from the way that finances used to be approached. Before the advent of advanced technology and risk management best practices, finan­cial advisors simply did not have the ability to create portfolios that were tailored to the client’s life goals. But now, advisors like Carbone can bring significant resources to bear on issues of import. Cornerstone provides investment, financial planning and insurance expertise, and it can draw on numerous outside experts for other kinds of services, including legal counsel.

Carbone and his partners came to understand the wealth management concept after being introduced to it by California-based CEG Worldwide in late 2006. “The concepts that we were exposed to by CEG Worldwide have proven invaluable,” Carbone points out. “They have merged seamlessly with our other approaches to client service and have allowed us to build an even more client-centric whole.”

Going forward, Carbone says that a $1 billion firm is certainly possible— but that Cornerstone won’t sacrifice its tenets simply for growth. Instead, he pledges to continue combining care­fully considered investment approaches with wealth management, to ensure that clients’ wealth is aligned with their values and fully supports their life goals. “This is the cutting edge of finance,” he concludes, “and we’re most pleased that our participation has put us there. I think our clients are too.”

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