Greg Carlson believes coming to work each day knowing that you and your colleagues are helping clients achieve successful financial outcomes is affirmation enough of a job well done.
But sometimes, he says it’s nice to hear it from those on the outside looking in.
Carlson and the other 34 people employed at Carlson Capital Management in Northfield, Hastings, Bloomington and Rochester received some pretty lofty praise recently when CNBC ranked the integrated wealth management firm No. 2 in its annual list of Top 100 Fee-Only Management Firms.
The only other Minnesota firm to make the list was Cahill Financial Advisors, Inc. out of Edina, which finished 69th.
“It was a very pleasant surprise,” said Carlson, who is a principal in the company that has been around for 30 years. He noted that the firm was ranked 17th on CNBC’s inaugural list in 2014. “We know a lot of great firms and to be recognized as No. 2 in the country is very affirming that what we are doing, we are doing well.”
But Carlson said the real accolade should be about the company’s retention rate. While Carlson Capital Management has seen steady growth, more importantly, it has retained more than 99 percent of its clients and has seen the assets it manages double in the past six years.
“That says to me that what we offer is what the client needs,” said Carslon, whose firm manages assets totaling $1.3 billion. “You can’t manage that without the right systems in place.”
Carlson says one of the keys to the great relationships with the firm’s clients is the decision to not work on commission, but use a fiduciary model. That, he says, has been from the company’s beginning.
According to the Carlson Capital Management website, a fiduciary relationship represents the highest standard of care imposed by either equity or law. A fiduciary owes a duty of loyalty to whomever services are provided and is expected to be above reproach in carrying out their duties. They must not put their personal interests before that of their clients, and they may not profit from their position as a fiduciary without the consent of the person to whom they have pledged their fiduciary duties.
“You always have to act with the best outcome of the client in mind,” Carlson said. “You are always putting their interests first.”
According to Kelly Irvine, director of marketing and communications, Carlson Capital Management uses the fiduciary status because it answers the question about “how we are different.”
“We are an RIA (Registered Investment Advisory) firm and so we are independent,” she said. “That differentiates us from larger organizations like Edward Jones, Ameriprise, etc. Not that we don’t respect what they do, [because] we sure do, but we are held to a fiduciary standard and we celebrate that. It means we aren’t beholden to certain products or offerings and we commit to always doing what is in the best interest of a client. To help ensure that we have the best practices in place in that regard, we are CEFEX certified.”
While Carlson is honored that Carlson Capital Management was recognized by CNBC in the first two years of its listing, he’d rather the spotlight shine on his employees, who he says share the vision of the principals who first took a chance in opening the firm.
“This doesn’t come without a strong team,” he said. “When you get to the level we are now, it takes incredible colleagues who care about the mission of the company, and more than anything, the outcomes of the clients.
“When you are told you are doing a good job, you only want to get better. The next day, you wake up and want to earn [that recognition] today.”
With that in mind, Carlson said he and the others have built up a list of more than 700 clients. He firmly believes that the 99 percent retention rate Carlson Capital Management has been able to sustain is because of the dedicated people who work every day for their clients.
With the right systems in place, Carlson said it is easy to bring in the right people − those who care about the firm’s mission and its clients.
“You can’t just say what you do, you have to show it,” he said. “Our colleagues add value. Over 30 years, you add the experience. Yes, we have the right offerings for our clients to have successful financial outcomes, but in the end, you have to care about the client. When you care, it turns into a lifelong relationship. Our colleagues are making these relationships a reality every day.”
Adam Hoffmann buys into that philosophy each and every day. As Director of Investments & Research at Carlson Capital management, it is his role to lead the firm’s investment team in the area of trading, investment research, portfolio design and technology support investment applications. He oversees analysis and execution of investment strategies for new and existing client portfolios.
Hoffmann said the jump from No. 17 to No. 2 on CNBC’s Top 100 Wealth Manager list surprised some, but was an affirmation to many others.
“We know the strength of the firm and the offering,” said Hoffmann, who has been with Carlson Capital Management since 2005. “A huge part of it is we are working together for our clients. We are really one large team. The founders and principals have instilled that community feel.”
Hoffmann said his firm’s growth isn’t really surprising given the mission. But he admitted it is amazing.
“It’s wonderful to see us grow at such a great rate but keeping the same feel as in 2005,” he said. “We just keep hiring good people, people with a cultural fit. It has served us well.”
Carlson agrees and looks forward to the future, not with the goal of making CNBC’s Top 100 list or even its Top 10 list. He and the other founders and principals have been intentional in the people the firm hires and the products offered. But at the end of the day, it comes down to the relationship with the client.
“The driving force of this company and its people is to help one client at a time,” said Carlson, who noted that Carlson Capital Management currently serves clients in 38 states. “We just focus on doing that well. Ten years from now if we get another honor like this, it will be even more gratifying because we know we have gone forward and that we are still helping our clients be successful.”