FREE 10.1 Q&A – Ann Kavanaugh

FREE 10.1 Q&A – Ann Kavanaugh

On the right track.

AP affiliated colleague Ann Kavanaugh is a long-standing financial services professional whose unassuming nature and soft-spoken demeanor belie the depth of her experience in helping the clients she shares with iValue colleagues John Schroll and Stacy Pfizenmayer.

There’s more to this seasoned business woman of 34 years than meets the eye. In this Q&A, Kavanaugh talks about the evolution of her career, as well as her personal commitment to the community at large. Her life has deep roots in Berwyn, Pa., one of a string of towns along the “unofficial” historical Main Line of the Pennsylvania Railroad, a getaway spot for 19thcentury Philadelphia aristocrats.

FREE: How did you get started in the financial services industry?
ANN KAVANAUGH: I actually started my career in the banking industry in 1982. It was a year of deregulation. My role at that time was in the marketing side of the business.

FREE: Did you study finance in school?
AK: I have a business degree from Villanova University, which included finance, marketing, management—the whole thing.

FREE: Tell us how your transition from banking to financial services came about.
AK: The ’80s was a time when the FDIC promulgated the rules to allow banks to be discount brokers. I was with Philadelphia Savings Fund Society, the largest bank in Philadelphia at the time, and my project was to bring discount brokerage to the bank. Probably five years later, the decision was made to bring licensed Series 6 people into the branches to sell mutual funds. I would say that was the beginning. As it turns out, the reason I decided to get my Certified Financial Professional (CFP) designation when I did was because, over the course of 11 years, my jobs had been eliminated six times due to mergers and other corporate shenanigans.

FREE: Not exactly a direct pipeline from banking to brokerage. What tipped the scales for you?
AK: I thought long and hard about the kind of career I could pursue where my rapidly graying hair would be an advantage rather than a disadvantage. I honestly thought what I would do is become a trust officer at a bank because banking was really my orientation. I just happened upon Vanguard, which is naturally a large mutual fund company, located just a couple of miles from where I live. Through personal contacts, I was able to learn that they had an advice business. In 2003 at Vanguard is when and where I really started giving individual advice to highnet- worth clients.

FREE: How did you learn about AP?
AK: I was a senior financial planner at Vanguard for many years working with high-net-worth clients. I came to know Stacy Pfizenmayer, who was a colleague of mine at the time … also a senior financial planner. Today, I work with Stacy and John Schroll. John has been with AP since 2004. Everything I learned about AP, I learned through Stacy and John.

FREE: Tell us about your transition to AP in January 2015.
AK: Overall, the transition went fairly smoothly. The biggest challenge of the transition effort was related to creating a joint rep code for John, Stacy and me, and then moving all of the existing clients to the new rep code. If there was one person that stood out as being extremely helpful to me during the process, as well as after, it would be Internal Business Consultant Kaitlyn Stanley. Whenever I needed anything or had questions, Kaitlyn was—and still is—my “go-to” for the answers.

FREE: Do you feel that AP is on the right track?
AK: I know that AP has made some new hires of late and they seem to be pretty together people; people like Vice President of Sales and New Business Development Keith J. Kelly. What AP is working to accomplish is very different than the vast majority of other broker/dealers.

FREE: Schroll Advisory won the simulated SharkTank competition at Connections 2015, the firm’s national conference. How has the win impacted your business?
AK: It’s been great! We jumped right in and began utilizing the marketing support dollars very effectively. Prior to SharkTank, the business name had been “John R. Schroll.” For the purposes of the competition, the decision was made to submit our business plan as Schroll Advisory. It wasn’t so much a branding plan as it was making the business plan stand out. So the first thing we addressed after the win was a full rebranding of the business to iValue Financial Planning. One of the primary goals for the best use of the marketing support was to establish a digital presence. FMG Suite was engaged after the conference and is in the process of developing an iValue Financial Planning Web site.

FREE: What are your thoughts on next steps to enhance iValue Financial Planning’s digital presence in AP’s social media program?
AK: Actually, we are working on establishing iValue’s presence on LinkedIn right now. It is the next logical step for us as financial professionals for networking and communicating with our clients.

FREE: What are your goals in terms of succession planning?
AK: John wants to have more time and flexibility. I don’t actually see him completely exiting the business, so Stacy and I are essentially taking over the primary role in having contact with the clients. We plan to add a partner in June who is not only a CFP, but has a background as a CPA, as well. This will allow us to add to the tax practice.

FREE: What is iValue’s product mix?
AK: The base portfolio was almost exclusively commission-based. The strategy is to convert that portfolio to managed accounts—anything fee-based. Our focus is to try to be very transparent with our clients about fees.

FREE: What are the challenges you face with regard to transitioning clients from commission-based to fee-based?
AK: With a $100 million portfolio, there are a lot of trails. We’re working with each client individually, one by one, to determine suitability in moving them from the type of investments they currently have to the low-cost, diversified portfolios that we are looking to move them into. We are constantly looking for low costs. It is really gratifying to see that as we move clients from the investments they currently hold—which, in many instances, are C shares—the practice is earning more money. Revenue is going up; clients are paying less in expenses. Low costs matter to our clients and impact their ability to meet their goals. From a business perspective, it’s a classic win-win.

FREE: How did you prepare for the Department of Labor’s (DOL’s) changes to the fiduciary rule?
AK: Our perspective is, and always has been, in doing the right thing for the client. Both Stacy and I have our CFP designation. When you are a CFP, you agree to be a fiduciary. With so many years as a CFP, it gets into your DNA.

FREE: What motivates you to be successful?
AK: My motivation for success stems from my ability to impact clients’ lives. It is truly a breathtaking experience.

FREE: What was the best piece of advice that you’ve ever received?
AK: My father always said to me, “Hope is not a strategy. You have to have a plan. You can’t just want something. You have to be organized and make a path toward it.”

FREE: Tell me about the town in which you live.
AK: I live in Berwyn, Pa. It is one of a string of towns referred to as the “Main Line” of Philadelphia. Back in the day, wealthy Philadelphia residents built summer mansions in the suburbs. One such resident felt it was inconvenient to take carriages or ride horses to get to their summer homes, so he built a train line. It was called the Main Line and it travelled from the center of the city of Philadelphia 12 miles west. That’s kind of the reputation the town has, but really, Berwyn is just a regular little town that boasts the best school system in the state.

FREE: Tell us how you came to be involved with the Court Appointed Special Advocates for Children Program (CASA).
AK: I was getting my hair cut and I read an intriguing article written by Dr. Phil, who is the national spokesperson for the organization. I had a friend who was severely disabled and, subsequently, he passed away. Over the course of his lifetime, I learned a great deal about navigating the social services system. I felt like those were dormant skills that I had and it just seemed like a good fit with CASA. Even with those skills, the application process was very selective; once selected, the rigorous training spanned many weeks.

FREE: How do you spend your time as a social services advocate?
AK: There are approximately 1,000 foster children under the auspices of Children and Youth Services (CYS) in Delaware County, Pa., where I live. Two part-time lawyers serve as their guardians and protectors. This agency exists to support the courts to look after cases—all deserving and, in many cases, the worst of the worst. In our office, we represent the interests of about 100 of those 1,000 children. As an appointee of the court, you have absolute and full access to their teachers, doctors … anyone and everyone who can make a difference in their lives. The mission of CYS is to reunite children with their families. The only perspective we have is the best interest of the child. Sometimes, that means they should be brought back together with their families; sometimes, that is not the case. Ultimately, ensuring that the children have the services they need is the goal.

FREE: Between all of the things you do, how do you spend your leisure time?
AK: I’ve never been one to have hobbies and I don’t play sports. Yoga is my indulgence. One day my neighbor said, “I’m going to yoga. Will you come with me?” I didn’t think I’d be able to do yoga, but I gave it a try. I used to have back problems, as well as other physical issues that I don’t have any more, and I feel great.

FREE: What are your plans for the future?
AK: iValue is the future. There is so much to do in bringing our clients around to understand how we can optimally serve them. John has laid a strong client-focused foundation to the practice. With access to more select financial tools that can better help our clients, we can ensure their best chances for success. That’s what it’s all about.

FREE: Ann, thank you so much for your time. I wish you continued success in all that you do.
AK: You’re welcome. Thank you.

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