Custer Financial Services: Relationship building is business building

Feature Custer Financial Services Dcsba Panel

Betty Harris Custer is the first to acknowledge that 2020 was a particularly difficult year for her “little entity.” Custer, founding managing partner and owner of Dane County Small Business Award winner Custer Financial Services, was not speaking in terms of finances because while March was a rocky time as the economy was shut down to stop the spread of COVID-19, the stock market recovered and so did her firm.

Nor was she necessarily referring to her succession plans, which “blew up” when the pandemic caused a potential buyer to back out, sending the 73-year-old executive and J. Corkey Custer, her husband and the firm’s managing partner, back to square one.

What Custer was talking about is the emotional toll of losing 40 valued customers who happened to be in the age group that was most vulnerable to COVID-19. In her 50 years in the financial planning industry, it was the single worst year she’s ever had in terms of client deaths. In a line of business where establishing close relationships is the real coin of the realm, these weren’t distant tragedies.

“Only a couple of them were directly COVID-19, but I think a lot of them were indirectly COVID, people who were isolated, depressed over not seeing family, and just so many circumstances,” she explains. “So, it was a horrific time to go through.”

This from a woman who has seen her clients recover from multiple market meltdowns, especially the crash of 1987 and the Great Recession of 2008. “This was worse because it just impacted everybody,” she notes. “You didn’t really know when the end was going to come with those market collapses. I’ve been through enough of them, but I could with some confidence — although I could never guarantee anything — tell clients that we’d be OK, that we would be coming out of it, but there was just so much uncertainty with this particular [pandemic] event.”

With Harris Custer’s retirement still just over the horizon — more potential buyers have emerged — she’s pleased with her organization’s financial position. Given potential threats like inflation and her historic knowledge of what that did to savers and investors in the 1970s, the firm is still in a position to be of service to both nervous and nervy investors.

Having served on other business boards that saw their organization’s revenues plummet due to the pandemic, Custer is thankful to have stable revenues for Custer Financial Services, which has grown to $1.6 million in annual revenue. “We had a horrific March 2020 when COVID first hit. Everyone was shuttering their businesses and things were closing down and unemployment was skyrocketing, and nobody knew what was really going to be the long-term economic impact on the market,” she explains. “So, the market had three horrific weeks, but after that it was a strong year in the market, and because we’re paid based on assets under management for the most part, financially it was not a difficult year for us.

“It was all about the emotional and personal interactions and hearing so many people going through difficult times.”

The last taboo

Custer pinpoints such relationship building as the key to success in her industry — relationship building with clients and employees. Custer has built a large client portfolio, but she also has recruited most of the broker-dealers in the organization. As she recruited people, she told them that communications skills, which lead to strong relationships, and being a good listener are the keys to success in financial planning.

The reason for that is that money is one of the last taboos. Custer finds it remarkable that people will go on television shows and reveal their darkest personal secrets to a studio filled with hundreds of strangers, not to mention a vastly broader viewing audience, but they absolutely clam up when it comes to money. However, a trusted financial adviser can get them to open up about their money, and such empathy has led hundreds of existing clients to refer Custer Financial Services to other people. It also has helped the firm serve three or more generations of families.

“We even have to have people tell us if there is a family rupture, and if there is one child or one sibling that they would never think about leaving any money to,” she explains. “Those are very personal things, very difficult things to discuss, and yet if we’re going to be successful in working with them as financial advisors, we have to have that skill.”

Small Business Award judges were impressed by Custer Financial Services’ overall solid package of employee benefits, but Harris Custer is particularly proud of the bonuses it provides. Years ago, when her own compensation and that of her husband and others in financial planning roles went higher because of changes made the parent company, she set up a bonus system for the staff to share in the firm’s success. On a quarterly basis, when the firm derives the largest amount of its revenue, financial planners get a significant bonus.

“So, they can feel, during all the other months and days and weeks of the year when that bonus isn’t in their pocketbook, that it’s coming and that they are also benefiting from the hard work they are doing to help us, as a firm, grow that structure.”

Return on charitable investment

The 40-year-old firm devotes at least 10% of its profits, and some years closer to 25%, to charitable organizations. In 2020, which will forever be known as the “COVID year,” its contributions were closer to 25% because the need was so great. The areas it has emphasized most have been social concerns, the arts, and special programs that were deemed vitally critical at any point in time, and while it has given to national organizations, most of its charitable endeavors have had a “Buy Local” theme. In the past year, with racial equity and public health rising to the top of the critical list, beneficiaries have included the Boys & Girls Club of Dane County and the Progress Center for Black Women.

Over the past 40 years, the firm’s financial gifts to charities number in the multimillions. Harris Custer helped chair the campaign to build the Lussier Community Education Center and has served as an advisor or led capital campaigns for Literacy Network, Operation Fresh Start, and the Wisconsin Youth Symphony Orchestra. “It’s always with the idea that this is a profession that pays well if you work hard and do the right things and if you build the trust that is critical for the clients,” she explains, “and so it seemed it was critical for us to give back to areas of the community that matter to us.”

In addition to the aforementioned beneficiaries, all financial planners at Custer Financial Services are leaders on area boards for organizations such as Overture Center for the Arts, Madison Ballet, and United Cerebral Palsy. “Community impact is a big factor here,” stated one judge.

With any luck, that community impact will continue with the eventual buyer. Employees are gradually moving back into their offices after 14 months in which Custer’s office was her dining room table. Harris Custer and her husband, who worked upstairs in an open area of their home, wore headsets for a good portion of the day so they would not hear one another’s conversations. Betty, a person of faith, moved back to the office on Easter weekend. “That was my own professional resurrection,” she states.

With vaccines now generally available, Custer Financial Services is leaving office masking up to clients. More business — think Zoom calls — is done electronically, more files are becoming electronic, and the task of finding a buyer for the business continues. Harris Custer hinted that her staff doesn’t completely believe that her retirement is just beyond the horizon. “I kidded when the succession fell apart that the staff had a secret office pool around whether I would really retire,” she jokes. “I am 73 and obviously that’s past the normal age of retirement for a lot of people, but I love my work. I care deeply about my clients.

“I would also like to spend more time traveling with my husband and spend more time with my grandchildren. I’m more concerned about trying to find the right fit than I am with a calendar deadline.”

The Dane County Small Business Awards are presented by Bank of Sun PrairieM3 Elevate, and Madison Gas and Electric.

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