Business Profile

Michael Graham: MSTC, John Graham & Associates

John Graham & Associates, Inc., is now a familiar name in central Illinois. The 10-year-old firm was started by John Graham and his son, Michael. About his father, Michael said he had spent the previous 25 years working for different financial planning firms and had dreamed about opening his own high-level financial planning firm that would offer state-of-the-art services and, most importantly, highly personalized service. “By opening his own firm, John was able to attain his desired independence from the bureaucratic and captive atmosphere he felt with his previous employers,” according to Michael, who’s first vice president of John Graham & Associates (JGA).

The firm doesn’t have any proprietary products, nor do they underwrite securities, he said. “Our clients appreciate our objective, advice-driven approach. This is proven by the fact that the referrals we’ve received are a huge part of our growth over the last 10 years. Our clients also appreciate the fact that we’re committed to them and to our community. They see this isn’t just a job for us. We have a deep commitment to our clients, as our time, personal assets, and families’ reputations are on the line each day. That’s a major difference between us and our competitors.”

In 2000, another company was added: Midwestern Securities Trading Company, LLC (MSTC), a broker/dealer and a registered investment advisor. “We’re one of the only locally owned broker/dealers in the central and southern Illinois area,” said Michael, the company president. “MSTC provides ‘back office’ type support and compliance support for independent registered representatives and investment advisors. MSTC was formed after we came to the realization that there weren’t any broker/dealers we felt satisfied working with. Our clients and our registered reps deserved better service, and by forming our own broker/dealer with no compromises or shortcuts, we could have complete control over that.”

As a financial planning firm, he said the company offers a number of services. “Some of these include college planning and retirement planning for both individuals (employees) and businesses (employers) such as 401(k)s, pensions, and IRAs. We specialize in stocks, bonds, mutual funds, CDs, 529s, and custodian accounts. We also offer insurance products such as life, long-term care, and disability insurance. We do research tailored to each client to provide the best portfolio.”

Since JGA’s founding, Michael said its vision has matured and been affirmed by the shakeups in the securities industry during the last five years. “While our competitors have downsized or are in the process of doing so, we’re increasing staff and spending more money on research, technology, and support staff. We’re always looking for more ways to improve our clients’ experiences. We’re the largest brokerage presence in East Peoria and one of the largest independent firms in the Peoria area.”

An evolving and more heavily regulated securities industry affects MSTC as well. “It’s more important than ever to have a highly educated, ethical, and professional team to navigate the ever-changing regulatory landscape. We continue to focus on doing the right things for the right reasons. We believe business is about people—not volume. We’ve always taken that perspective and know that’s how our clients’ interests are best served.”

Michael said technology is a great equalizer, allowing smaller firms to compete with the big ones. “Technology makes it easier to communicate and provide higher levels of service, and it’s less expensive than it used to be. Clients don’t all have the same needs, so advisors must provide individualized information to each client. Technology aids in providing this important information. Staying focused on the people (clients)—not short-term profits—has kept us strong.”

His companies’ structure offers both employees and clients the best of both worlds, he said. “By affiliating with a small, independent broker/dealer, a rep will be an individual and have a name—not just a number, as the case can be in a large broker/ dealer. Being a small broker/dealer allows us to give more personalized attention to our representatives, copying the same service we strive to provide for our individual clients. Our company’s owners are also producers and are able to provide practical industry experience when addressing concerns and helping our representatives grow. In a small, growing business, this is a major advantage to working with us.”

There’s often a misperception among registered reps who think they need to work with a large firm to grow their business, Michael said. “In actuality, clients need to invest with a rep because they believe he has their best interests in mind and is competent and ethical—not necessarily because of what company he works for. Some other misperceptions are that small firms can’t provide technology or research. As technology and research costs have become more accessible over the last several years, it’s much easier for small firms to provide top-of-the-line technology, as well as research.”

In the next decade, Michael said he predicts more registered reps will turn to smaller companies like MSTC. “We expect they’ll tire of their companies’ changing philosophy or signs on the doors. We expect more people will tire of a lack of personal and/or customized service. Reps will demand more consistent service and accountability. With the frequent changes in regulations, reps will want a partner that’s compliant with these changes and able to bring experience to the table when implementing these changes to their business and their bottom line.”

He also foresees continuing ramifications from changes in government- and employer-sponsored programs. “Many individuals are realizing they can’t rely on Social Security alone to provide for them during retirement. This, along with many employers freezing or eliminating traditional pension plans, has led to an increased demand for financial planning services and educational seminars.”

Michael said both businesses will keep building infrastructure as they continue to expand. “We’re always looking to bring on more clients. We’re also looking to add more registered reps to our firm, as well as the possibility of offering our services within local banks. We’re interested in strategic alliances with complementary businesses, as well as working with retiring reps on a succession plan. During our growth, we’ve stuck with our principals and will continue to. Again, business is about people—not volume.”

And it’s this client-centered approach that he believes will win in the end. “The financial services industry is always changing—whether it’s the stock market, new regulations, or the changing needs of our clients. We have to make sure always to be one step ahead so we can handle any problems that may arise. We appreciate the opportunity to serve our clients and thank them for the trust they place in us.” IBI

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