How Investing Is Just Like Working at Jiffy Lube
CNBC.com Senior Writer
HOLLYWOOD, Fla. - For many investors, the idea of who their manager is can be amorphous - a blend of numbers guru and life planner with unclear methods and strategies.
For Ric Edelman, though, his job is simple: Just think of him as the guy who changes the oil in your car.
"I'm Jiffy Lube, that's what I am," he told a group of his fellow investment pros here. "I'm not going to give you better investments than you can get on your own. I simply save you the time and trouble of having to do it."
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When Edelman looks under the hood of his clients' investments he prefers not to see a twisted mash of tubes and belts and pistons and gears but instead multiple elements blended for a singular purpose.
While many of his peers preach diversity and complexity, Edelman instead holds to four criteria that he sees as the key to proper client service.
First, clients "must be homogeneous"; advice must be "strategic" and "consistent," and whatever he does must be "scalable" in that it should be applicable for all his clients.
"I am not at all interested in doing something for a client. I am interested in doing something for 1,000 clients," he said. "If I can't do it a thousand times I'm not going to do it at all."
Put all those requirements and philosophies together and it adds up to a firm that is 17,000 clients strong and manages $8 billion for clients, some of whom start with as little as $5,000 as an initial investment.
Edelman Financial Services was ranked first among advisory firms in Virginia by Barron's.
The firm's leader, then, carried some cachet with attendees at the first day of the Inside ETFs Conference presented by Index Universe. 2013 marks the 20th anniversary of the exchange-traded fund, which now occupies a huge footprint in the market with $1.4 trillion in assets under management and average daily trading volume in excess of $54 billion.
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"Can you tell me who your clients are? I can tell you who my clients are in a single word. Can you do that?" he asked. "The single word I would use to describe my clients is they're 'delegators.'"
They're people who want someone to do their investment thinking for them. Edelman sees the best way to do that as by having all 85 of his advisors being single-minded in their approach.
"Merrill Lynch has 15,000 brokers and they're doing 15,000 different things," he said. "As long as whatever they're doing is ethical, legal and profitable Merrill doesn't care what they do or how they do it."
Edeleman prefers a different track.
The Jiffy Lube metaphor again? No, actually he sees his firm also as akin to a certain coffee chain.
"We are Starbuck's," he said. "You can go into any Starbuck's in the world and know exactly what you're going to get."
-By CNBC.com's Jeff Cox. Follow him on Twitter at @JeffCoxCNBCcom