Russ Hill has led his firm through a lot of transitions. During his time at Long Beach, Calif.-based Halbert Hargrove Global Advisors, he’s helped morph the company from a simple brokerage to a tax shelter shop to a commission-based firm, and ultimately to a fee-only planning business with roughly $4 billion in AUM.

Each time the CEO and chairman pushed his company in a new direction, it was to stay ahead of a shifting market that impacted what his clients would need, he says.

Now, some 40 years into his career, Hill is still rolling with the changes, orchestrating another set of transitions. The goal: to keep up with the two biggest trends facing the financial planning industry — the advance of so-called robo advisors that provide investment management for the young and not-so-affluent, and an aging baby boomer generation, forced to cope with unfamiliar terrain such as chronic health conditions and cognitive decline.

Over the next few years, Halbert Hargrove will develop two new businesses — one aimed at young savers, the other to help counsel clients on the practical side of aging. “I’m going to do this regardless of cost,” says Hill. “I think this will be a great differentiator.”

At the same time, the firm is continuing with a long-established succession plan aimed at training and developing a new generation of managers able to run the business when Hill is long gone.

TAKING CHANCES

Hill has a long history of taking chances to grow and negotiate unfamiliar terrain. On numerous occasions during his tenure at Halbert Hargrove, he’s had to borrow to pay the bills or take in investors to finance the addition of offices, technology or the managers needed to keep the operation running, he says.

“You have to build the capacity before you can grow,” says Hill. “I’m conservative with my clients’ finances. With mine, I’d like to think that I’m taking sensible risks.”

Hill started in the financial advisory business back in the 1970s. A fresh-faced Stanford MBA, he was working for his dad at Halbert Hargrove — then a traditional brokerage — peddling stocks for a $500 draw against commissions. Though he says he had neither interest in nor aptitude for picking stocks, he quickly became one of the firm’s top producers and ended up buying out his dad’s partners within a matter of a few years.

“I got to change what the firm did,” he says.

Back in the 1970s, financial planning was all about sales, he explains. “You would figure out the kinds of things your clients needed and then sell them something. It was a terrible conflict of interest but there weren’t a lot of options. If you tried to do pure planning, no one would pay you and you wouldn’t survive.”
What his clients needed in the 1970s and early ‘80s, he says, were tax shelters in commodity-oriented businesses that could soar in times of high inflation. At the time, top marginal tax rates were at 70% and inflation was so rampant that the government imposed price controls to tamp down escalating consumer costs. Meanwhile, the tax code was rife with loopholes that paid handsome returns to those investing in the right products.

Hill launched several investment partnerships that raised cattle, drilled for oil and even made wine, co-founding the William Hill Estate Winery (now part of Gallo). But when the government started closing tax loopholes and made strides taming inflation, Hill morphed the firm again into a traditional RIA selling mutual funds.

FEE-ONLY SHIFT

Then, not satisfied with the commission-based funds that provided the bulk of the firm’s income, he sold the brokerage and launched Halbert Hargrove Russell in 1989 as a fee-only advisor.

At the start, Hill says the company was almost a franchise, representing Russell Investments’ institutional clients from Los Angeles to the Mexican border. As time went on, he broadened the client and investment mix and started adding staff. But as the firm got larger and began to add offices in such places as Houston and Scottsdale, Ariz., Hill realized that trying to juggle the day-to-day operations of a business with the demands of clients was an impossible job.

To grow, he needed managers unfettered by client service. Even though adding executive-level staff seemed like a costly and risky undertaking, Hill took another chance. “We hired a number of people before we could afford it,” he says. “You’ve got to invest in skilled people and train them.”

So far, the investment has paid off handsomely. The firm has 30 professionals managing nearly $2 billion in discretionary assets and it advises institutional clients on how to invest another $2 billion.



Buoyed by gains in its private equity and financial advisory units, Blackstone Group (NYSE:BX) performed better than Wall Street expected in the fourth quarter, despite annual drops in earnings and revenue.

The New York-based alternate asset management and financial services company earned $1.25 a share, off 7.4% from a year earlier, but beating by 33 cents estimates of analysts polled by Thomson Reuters. Revenue fell 20.6% from Q4 2013 to $2.1 billion, beating views of $1.8 billion.

Economic income in Blackstones private equity unit more than doubled to $1.82 billion in 2014 from $715.4 million during the previous year. The companys financial advisory segment, which soon will be spun off, posted a 52.3% yearly gain to $115.3 million for the year.

Meanwhile, economic income in Blackstones real estate unit dropped 9.1% from its 2013 results to $1.8 billion last year. Its credit units economic income sagged 7.7% to $330.7 million in 2014.

Blackstones fund activity generated $2.7 billion in performance fees last year, up 91% from 2013.

Assets under management reached $290.4 billion on Dec. 31, a 9% increase from a year earlier. Fee-earning assets under management rose 9% to $216.7 billion.

Performance fees slid 22% from the fourth quarter of 2013 to $1.32 billion.

The company announced that it will pay a record dividend of 78 cents for Q4, up from 58 cents a year earlier.

Shares fell 1.1% in morning trade but mostly had recovered by early afternoon to 36.67, off 0.2%, in the stock market today. It currently has an IBD Composite Rating of 90, which means that Blackstone shares perform better than 90% of other publicly traded businesses. Blackstone shares closed Wednesday at 36.74, a record high for the company. The companys stock gained 8.2% last year.

Follow Ciaran McEvoy on Twitter: @CiaranJMcEvoy.



City lawmakers have approved a resolution calling for the creation of a financial advisory board in Niagara Falls.

As part of the proposal, introduced by Council Chairman Andrew Touma, the city will convene a panel consisting of local citizens who will offer their insight and expertise as part of the annual municipal budget process.



The syndicated facility has a tenor of 72 months and is the first of its kind for Universal Hospital, a multi-specialty hospital in Abu Dhabi. The deal will be used to bring together all of the hospitals current banking facilities under one common structure as well as fund an expansion into a new building adjacent to its current property.

NBF was the lead arranger for the transaction and led a group of participants that included United Arab Bank, Al Hilal Bank and Commercial Bank of Dubai.

Mr. P.B Das, Senior Executive officer of NBF Capital said that this transaction further demonstrates NBF Capitals capacity to support the increasingly sophisticated financial requirements of companies as they expand across the UAE and the Middle East. Since opening in May 2013, the firm, which offers bespoke financial advisory from loan syndication to corporate restructuring to companies in sectors as diverse as precious metals to manufacturing, has secured AED 2.1 billion worth of deals that are either closed or in the pipeline.

We are extremely pleased to be given the opportunity to spearhead Universal Hospitals maiden syndication within one year of the organisation commencing its operations. That we were able to attract such strong showing for the deal underscores not only the bright prospects for the UAE healthcare sector, but our confidence in Universal Hospitals potential to becoming a leader in its field, and I thank all the participating banks for their partnership and support.

This latest transaction further reaffirms our growing reputation as a bespoke financial advisory partner of choice in the UAE and we look forward to playing a greater role in the ambitions of businesses in the country and across the region.

Dr. Shabeer Nellikode, Founder of Universal Hospital, said: The successful conclusion of Universal Hospitals maiden syndication is the first step of our long-term plans to become a premier healthcare provider in the UAE. We now look forward to our expansion into Dubai and the Northern Emirates and hope to continue serving our customers and our stakeholders with larger and better projects in the future.