A most unusual financial team

Three generations of Lippmans – Ariel, Howard, and Bill. Photos by Jerry Szubin

When a female financial planner in Morris County opened shop 20 years ago, she named her company after her very young son. Reason: She wanted a man’s name for her firm. Otherwise, she worried, many men would never consult her, preferring to deal with a male financial adviser.

Howard Lippman and Ariel Jacobs, two financial advisers in Fort Lee, do not have that problem. They work together, for Merrill Lynch Wealth Management. And not only are they a male-female team; they are that even more unusual pairing, a father and daughter.

Ariel joined the partnership in 2007, and Howard says the result has been been “phenomenal.” She brought to the business not just different and desirable skills – for example, she knows a lot about computers, whereas he does not – but she has brought in plenty of new clients. Many came from the new website she put up: http://fa.ml.com/lippman_group.

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Although it is certainly not all her doing, this year her father made Barron’s magazine’s list of The Top 1000 Financial Advisors, clocking in at No. 40 of 40 in New Jersey. “The listing,” writes Barron’s, “is based on assets under management, revenue the advisors generate for the firm, and the quality of their practices. Investment performance isn’t explicitly a criterion…, but most of the advisors have been attracting lots of new business through referrals, a clear sign of customer satisfaction.”

In other words, the more new clients, presumably the better the investment results.

Father and daughter’s offices are not huge, although Howard has been with Merrill Lynch since 1977 and is now senior vice president of investments. On his wall hangs a framed article about him that appeared in 1990 in another Bergen County newspaper, the author of which happens to be this writer. Commenting on his photograph, Howard says with a laugh, “That’s when I had hair.”

Affable, straight-forward

He is an affable fellow, making you feel instantly comfortable and putting you at ease. He also has a quick mind: Q. Aren’t there storage charges if you buy gold? A. Not if you buy an exchange traded fund.

His partnership manages $603 million, mostly the money of individuals, not groups, with an average account size of $2.5 million. Clients have an average net worth of $5 million. The partnership has 300-400 clients.

So, what are the benefits of a father-daughter team?

Male clients can deal with a man, female clients with a woman – if they so choose.

Younger clients have an adviser to relate to, and so do older clients. Ariel is 30, Howard is 61. And sometimes Ariel’s young clients refer their parents to Howard, while Howard’s clients refer their offspring to Ariel.

Clients who worry what might happen to them if their financial adviser was no longer available can stop worrying. If Howard was on vacation or somewhere else, Ariel would be around. “When clients call,” boasts Howard, “one of us is always available to answer the phone. Not only that, but when I’m 90, she’ll be only 59.”

In fact, this continuity has deep roots: Howard’s father, Ariel’s grandfather, is Bill Lippman, a legendary investor who has worked for years for the Franklin Funds in Fort Lee. It was he who warned area Jewish organizations against investing money with Bernard Madoff, telling them that if you do not know exactly how someone is supposedly making his money, keep away.

Communally active

Lippman the elder is active in Jewish affairs, on the board of the Jewish Home in Rockleigh, and the Kaplen JCC on the Palisades in Tenafly, as well as the Arnold P. Gold Foundation in Englewood Cliffs, which fosters humanism in medicine. His daughter, Debbie, is married to Stuart Himmelfarb, who started a foundation, B3/The Jewish Boomer Platform, focusing on Jewish baby boomers’ involvement with Judaism. Howard is also on the board of the Jewish Home. His wife, Sherri, is a former president of the Tenafly board of education and now a docent at the Metropolitan Museum of Art. His sister, Debbie, is the daytime program director of the 92nd Street Y-Tribeca Division.

The Jewish connections have a side-benefit: possible referrals. Of course, referrals come from their other social encounters, too – from people Howard meets on the tennis courts he frequents, for example, and Ariel meets at University of Michigan reunions. The fact that their clients seem to have done okay financially no doubt carries a little weight, too.

So, how come Howard did not join his father at the Franklin Funds? Actually, his father urged him to join Merrill Lynch – because he believed that Merrill Lynch had the best program for new financial advisers.

Not that things haven’t changed a whole lot in the financial field in the past 40 or so years. Financial advisers used to be “stock jockeys,” involved almost exclusively in buying and selling stocks. Today, says Howard, he can refinance mortgages, get credit cards, obtain loans, determine someone’s asset allocation, provide muni and corporate bonds, and help with estate planning. “I can do it all,” he says proudly. “There’s nothing I can’t do for you.”

Something else that has changed: Investors have gotten more realistic. They have not forgotten the Tech Wreck, and today they are content with getting five percent from their portfolios, not 50 percent. Ironically, tech stocks have never looked more atttractive. Nowadays, some of them are even paying healthy dividends.

How they do it

So, how do Howard and Ariel invest money? Two ways.

First, via a dividend-managed account, based on the Franklin Rising Dividend Fund, which looks for sound stocks of sound companies that have regularly raised their dividends – a sign not just of prosperity, but of concern for shareholders. (Bill Lippman gets credit for creating the first rising-dividend fund.)

Next, a portfolio based on the recommendations of The RIC Report, a Merrill Lynch Research Investment Committee publication with input from Merrill Lynch’s foremost analysts. The publication regularly recommends a particular asset allocation portfolio.

Howard is big on high dividend-paying stocks. “We’re in a low-growth environment, where you get low returns on almost everything,” he says. An exception is blue-chip companies still paying generous dividends – and that is what sophisticated investors are looking for these days.

“If you have a portfolio of 60 percent stocks, 30 percent bonds, 5 percent cash, and 5 percent gold,” he points out, “and there’s a 20 percent correction, you may lose only 10 percent, not 20 percent. Whereas many investors may have a portfolio more heavily weighted to stocks – and lose more.”

Well-suited for the task

Of Howard’s three children, Ariel seemed especially right for the financial field. She studied psychology and statistics in college, where she graduated With High Distinction and Phi Beta Kappa; she is also good with people. Whereas Howard’s strength is in investment strategy. Howard’s son, Jordan, 33, has a doctorate in cognitive sciences and is doing a post-doc at the University of Pittsburgh; his daughter, Blair, 25, is a marketing manager of a women’s TV network, WeTV.

So, what – if anything- does Ariel dislike about being a financial adviser? She had a ready reply: “2008.” That is when the market lost 30 percent of its value.

Stress in general, she adds, is unwelcome. Of course, she goes on, downmarkets like the one in 2008 also offer opportunity – to buy good stocks relatively cheaply.

What she enjoys about her work is interacting with people – all sorts of different people, with all sorts of challenges. “Every day is different.” And trying to help clients reach their goals – a prosperous retirement or sending their kids through college, whatever. Her husband, Andrew, by the way, works with his own father – in a paper business.

Any surprises she has found working with her father? “I was surprised how well we work together, how smoothly it went. Even though I’m a more cautious investor than he is – he’s more of a risk-taker. I started working for him in 2007, just before the crash, and he has a longer-term perspective.”

She herself is a Certified Financial Planner. Would she recommend that other would-be financial workers get a CFP certification? “Definitely. It was really difficult – it took me two years to complete – but it was worth it. ” Being a financial adviser these days is much more comprehensive, she explains, and you must consider things besides investments – like insurance, taxes, and estate planning.

Any other advice for young people entering the field? “Being on a team is important. A family team is great, but any team is good. People are there to give you backup. Coverage is important.” And if the team consists of family members – father and child, perhaps – clients feel a sense of continuity. Clients, she adds, also appreciate seeing a family working happily and well together.

One other thing. When she joined her father’s office five years ago, she was the only female financial adviser. The whole field remains male-dominated. And she gives her father credit for the fact that, when she was thinking what career to enter, he boldly suggested the financial field.