Home Grown: Father inspires Medford man to follow in his footsteps

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Stephen Gerritz put down the guitar to pursue his wealth-management business, but he still keeps a few near by in his home office.Bob Pennell

Editor's note: This is one in a weekly series of profiles on locally owned and operated businesses in Southern Oregon.

What do you do and how long have you been doing it? I started what is now Gerritz Wealth Management in 1993. I was licensed in 1982 as registered representative, commonly known as a broker, in Gresham. I earned my designation as a financial planner in 1997 and became a registered investment adviser in 1993 when I became fee-based instead of commission-based. I now have offices in Medford, Portland and Clatskanie.

How long have you lived in the Rogue Valley? My wife, Sandy, and I moved here from Bend in 1997.

What inspired you to go into this line of work? My father was an early pioneer in the financial-planning movement. He wanted to groom me to take over his business some day. He convinced me I could make a living and help others with their futures. He sent me to the competition, Anchor National Financial Services, to get my training. He passed away in 1983.

What decision or action would you change if you could do it again? I probably would seek a career as a chartered financial analyst. They are more focused on the investment part of the business. A financial planner is a general practitioner who does everything from insurance to retirement needs. I have gravitated to the money management side and have had the most impact on my clients through the management of their money. Through the downturn, I've been able to protect my clients using risk-management techniques.

What's the toughest business decision you've made? Changing from commission compensation to fee-base compensation, that was scary. I had to raise five times the amount of money to generate the same income for myself. Both my clients and I are glad that I made that decision and my advice is not riddled with conflicts of interest. I was able to convert virtually all my clientele to the new method. It took me about two years to reach that level of investment money. The frightening thing is you don't know if it's going to work right away.

Who are your competitors? Anybody who calls themselves a financial adviser or planner. You go into a bank and they have someone selling funds; insurance companies have financial planners selling securities. I wonder though, what does a guy do who works off commissions in this past bear market?

What are your goals? I'm getting more of an Internet presence. I literally have not met face to face with a lot of clients. I use "Go to Meeting," a software teleconferencing package to meet with a lot of clients. I have a monthly newsletter for clients and a blog called Gerritz Insights with market comments. I'm a member of the National Association of Active Investment Managers. Money management is a process, not an event. Typically, people are sold a portfolio and expected to hold on to it through good times and bad. An active portfolio manager will make use of various technical analysis tools and make judgment whether you should get out of the way or invest. As an example, our group president asked 150 of us at a convention how many people beat the market last year and all of us raised our hand. It was not a hard feat; it's something you have to be active to do. The buy and hold philosophy, which is based on the modern portfolio theory, was developed in the 1950s. While it worked well in the bull market of the '80s and '90s, it has failed miserably the last 10 years. Markets now are much too volatile.

What training or education did you need? All the experts say they take years to forget what college taught them. You learn by affiliating yourself with trade organizations and taking specialized classes. I had a mentor from Florida, Michael Price, who manages six hedge funds worth more than $200 million. In order to be a certified financial planner, you have to have a college degree or have been in the business for five years.

What's your advice for budding entrepreneurs? A person should strive to be the best at what they do and communicate clearly with the target audience and let them know why they are different from the crowd. I want to distinguish myself as different and should be able to tell people what I do in the time it takes for an elevator ride. So many people make it complicated when it doesn't need to be complicated.

To suggest ideas for this column, about businesses that are at least five years old, contact reporter Greg Stiles at 776-4463 or e-mail business@mailtribune.com

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