Greg Fenton

Gregory Fenton's mother sold life insurance, and he was always impressed with the level of care she showed her clients. Fenton has adopted that same attitude with his clients at his successful financial planning and wealth management firm, Cambridge Cape Cod Advisors. It's an approach that has served him well. "We focus on serving a limited number of individuals and families," he explains. "Our most successful relationships involve clients with $1 million to $10 million in assets." Fenton looks for clients who share his family-oriented values and want to preserve wealth for their loved ones. For Fenton, as with others who practice true wealth management, the process is all about discerning each client's value system and then creating an investment and planning strategy that aligns resources and wealth.

Just as Fenton arrived at a sophisticated approach to cutting-edge, consultative wealth management in a somewhat unorthodox way, he has been somewhat idiosyncratic in the way he has built his business. Unlike many wealth managers, Fenton uses an annual retainer fee model that assesses one fee for clients using financial planning services and another, higher fee for wealth management clients. By charging an annual retainer based on income, net worth and the complexity of a client's situation, Fenton can diversify his business and expand his universe of potential clients—taking in individuals who will someday need a full spectrum of wealth management services but do not need it now. For Fenton, a high-tech computer engineer with a steady high-figure salary is a great client for potential wealth management services—even if the individual is fairly young and doesn't actually have the asset base set up yet. He elaborates: "Say, you have a young guy with a good salary and great prospects, but he has two or three children, a big mortgage and college to look forward to. Why not start your relationship now rather than wait 20 years? Think of the opportunity costs you are foregoing. Plus, in reality, you will never see the guy again. He's not going to get back to you in 20 years, and you're not going to keep him on your Christmas list for that long."

In the meantime, he can calibrate the amount of wealth management services he needs to provide, and can always raise his wealth management fees for those who need more services.

He also feels that the more common percentage-based model puts too much emphasis on investment results, noting that this model experienced a 30 percent drop in revenue last year. Fenton, whose firm saw revenues rise 20 percent in 2008, is succeeding where he believes others are not in this challenging climate. For example, he's gaining two to three new clients a month using his annual retainer model. "People need wealth management and financial planning more than ever now," he points out. "But maybe we need to experiment with the compensation model a little more than we have in the past. New challenges call for new solutions."

Thinking outside the box has always been something of a specialty for Fenton. After graduating with a degree in accounting from Bowling Green University, he headed to Texas in the early 1980s to become an energy trader. He did well until deregulation changed the industry in the mid-1980s. Still a young man, Fenton headed in a new direction. "I moved to Vail, Colorado, and spent the next three years skiing," he recalls. "I wasn't quite sure what I wanted to do with my life, but being single in Vail wasn't a bad way to figure it out."

Eventually, Fenton made his way to Boston and began to work in his mother's profession, life insurance. In 1996, he founded Cambridge Cape Cod Advisors, a fee-only registered investment firm. By then, he'd discovered modern portfolio theory and a passive asset-class investing approach. He combined that approach with laddered bond portfolios for many of his clients, a strategy that is reaping huge dividends now. He estimates that many of his clients, especially retirees, currently have only about a 30 percent exposure to the stock market.

Fenton has worked on building up the wealth management side of his business with the help of coaching firm CEG Worldwide. He explains he actually met a CEG Worldwide principal while skiing and then stayed in touch until he was ready to utilize the firm's services. "I can't say enough about the CEG Worldwide process," he says. "I learned a lot about how to expand the wealth management side of the business, and the learning curve has been great. They short-circuited what would have been about a decade of experimentation for me."

With the help of CEG Worldwide, Fenton has built an entire wealth management business in two years' time—converting numerous financial planning clients and attracting dozens of new clients as well. "I'm confident that this environment provides us with a great opportunity to continue to expand aggressively. By combining what I learned from CEG Worldwide with a fee-based approach to wealth management, I think I have a formula that works well for the business and, more important, provides clients with the flexibility they need as their wealth grows."

Return to the advisor success story archive.

Return to this month's advisor success stories.