Excerpt from "Pay It Forward", Financial Advisor - JAN 2008

At its core, Parsec provides value-priced, fee-only comprehensive planning and investment management at prices that start at 0.9% up to $1 million. The aggregate family and business discount reduces client fees to as little as 50 basis points for accounts of $8 million or more. The firm will generate $550 million in gross revenues in 2007, a heady number that fuels Parsec’s profit sharing, growth and charitable goals.

Using the investment model Boyer himself began developing more than 30 years ago, his investment team, led by William S. Hansen, builds client portfolios using carefully selected individual equities for mid- and large-cap positions. “Our logic is it doesn’t make sense on the larger-cap side to pay a mutual fund manager to go buy Microsoft or General Electric,” says Hansen. The typical portfolio has 40 to 50 positions and low turnover, adds Hansen, who steers clear of heavily leveraged companies in favor of those with earnings that outpace their cost of capital.

Boyer’s love of stocks began back when he was a kid, living with his grandparents and his mom, a very smart but very underpaid college professor. “Everyone in my family was intelligent and worked hard, but they were all kind of broke,” says Boyer, who decided that wasn’t going to be him. As he sought to learn about investing, a savvy uncle suggested he should buy two shares of an oil company (the precursor of Amoco). “It doubled to $100 a share in 18 months. I was amazed by that,” says Boyer.
More than 40 years later, Boyer’s lifelong pursuit of stock investing wisdom informs all of his clients’ portfolios. “I can safely say our stock portfolios allow customization and save clients 1% to 1.5% they’d pay elsewhere for mutual funds,” says Greg James, a partner in Parsec’s Charlotte office who moved over from Charles Schwab & Co. in 2001. “We get growth and the upside of the market, but we’re very much about limiting downside, too. Why should we own the automakers and steel companies in an index fund when they make no money?” asks James. “This allows us to outperform the market and add value for clients as their CFOs.”

With some firms, you can attribute success to sheer and undeniable demographics. The boomers are aging. There are 78 million of them. They need assistance. The reasons for Boyer’s success, however, are deeper than that. It’s not just about being in the right business at the right time. “It’s about realizing that the better clients do, the better we all do. It’s about how we share success that propels us all forward,” the 60-year-old Boyer says. Sharing success and wealth is something Boyer takes seriously, as evidenced by his stock purchase plan for employees, the firm’s generous profit-sharing and its 2% annual charitable contributions—a whopping $110,000 in combined donations for 2007. Wal-Mart only gave at 0.08%. “I think if every company gave at 2%, we’d solve the world’s problems,” Boyer says.

Spreading the wealth is something he benefits from, too, he says. In fact, he just got back from a trip he made to Italy with six other couples, five of them clients. “Some business people don’t like to work with friends, but Bart will look you dead in the eye and tell you he only wants to work with people he likes. And he means it,” says one of his newer recruits, Michael J. Bruder, a longtime trust and commercial lending officer in Asheville who worked with Boyer for years on mutual trust accounts before joining Parsec just last fall. “As I approached age 55, I asked myself: ‘Is this really what I want to do with the rest of my life?’” Bruder remembers. “I had my CFP and wanted to do wealth management, but not just any place. So, I called Bart and said: ‘I want to go into wealth management and yours is the only firm I’d work with in Asheville.’ A week later, we shook hands.” Today, he sits in Boyer’s office and will take over many of the president’s clients in the years ahead as Boyer begins to take a little more time off to pursue his wanderlust, work on his tennis prowess and shore up his fledgling golf game.

By all reports, Boyer’s reputation and the culture he’s created are key components of his growing firm, which today has offices in both Asheville and Charlotte, N.C. Boyer says he can see opening four to five more offices in the next five years. While advisory firms’ worst challenge these days is a shortage of quality staff, the best and brightest advisors seem to find their way to Parsec’s doors. Many of the firm’s 13 advisors have come on board in the past five years, some in the past two months, from leading financial services institutions including Charles Schwab & Co. and Wachovia. This creates deep bench strength for Parsec’s clients, many of whom, like Christianson, have evolving business and family needs. It also ensures the firm’s growth and profitability as senior employees begin to depend on their Parsec stock values and dividends for retirement. “It’s a win-win situation for everyone,” says Boyer. “Employee ownership is better for clients, it’s better for the founder [meaning himself], and it’s dramatically better for employees.”

Parsec partner and advisor Barbara Gray agrees: “We have two managing partners, both in their late 30s, and they’ll be here for 20 years at least as owners. When I retire, I can be assured I’ll get dividends,” says Gray, a neighbor of Boyer’s whom he recruited as a client service specialist in 1999. Today, Gray, who is lead advisor for 100 clients and oversees Parsec’s compliance efforts, owns 2% of the firm.

Everyone gets to buy stock at Parsec, from the receptionist to the CEO. Their reward? A 100% employer match, average annual returns of 15% and dividends of 10%. Employees can pay for their shares over the course of the year through paycheck deduction, but they immediately begin to earn dividends. For a $150,000 investment over 30 years ($5,000 annually), rank-and-file employees can walk away with $4.5 million at retirement, according to the firm’s stock buying opportunity handout. Dividends alone are projected to pay more than $381,000 in year 30. “Beyond creating passionate ownership, this is a way for everyone to create tremendous wealth,” says Gray. Couple stock ownership with the Parsec profit-sharing plan, which is funded exclusively by the firm at 20% of employee pay up to $42,000 annually, and it’s easy to see how Boyer attracts and retains top talent.

More advisors in the industry are beginning to hear Boyer talk about the benefits of employee stock ownership firsthand as an integral part of succession planning. He presented his vision at two NAPFA conferences this year, including the organization’s Advanced Planners Conference. “When you think about ownership transition in our industry, typically advisors sell to [a] financial entity or one of those roll-up firms,” Boyer says. “For our clients, it would mean an increase in fees at the very least. I’d have to pay taxes on all that money. And it would take away our ability to build and earn together.”

Undoubtedly, stock ownership has been a great recruiting tool for the firm. “I worked with one of the trust officers who joined Parsec recently from Wachovia,” says estate attorney Andy Strauss. “New folks have no doubt been very attracted to the fact that they could become owners of Parsec and have a piece of the action. Bart’s model for sharing in revenues and growth is a successful one.”