Don G. Burman had spent six years as a registered representative in the Topeka office of Offerman & Co., a Minneapolis, Minn.-based financial services company, when he found himself persuaded to come to Lawrence last year.
With his son, Don M. Burman, and Doug Bennett, who also are licensed to sell securities, the elder Burman opened a new division office for Offerman in Lawrence. The push to open the office in Lawrence came from the younger Burman and Bennett, who already lived here.
They believed the Lawrence economy offered a ripe market for the investment products Offerman sells, which include stocks, bonds, mutual funds, annuities and corporate debt issues.
"I feel like there's a lot of people who have executive-type positions in Topeka and Kansas City and choose to live in Lawrence. And then there's the university," the younger Burman said.
Still, they knew they'd have to work at bringing another investment business into the community. They found that breaking into the local market was a little like buying stock: Patience and timing were everything.
RATHER THAN horn in on relationships that local investors already had established with other stockbrokers, the three set out to find the untapped market they believed was here.
And it's working, Don M. Burman said. "A lot of our clients are people who have never invested before."
The three are reluctant to reveal too many details about their approach, but basically it has worked like this: They developed a prospect list and phoned the people on it to ask permission to put them on a mailing list.
In their office, high-pressure cold calling is taboo. "It's kind of a low-key contact," the younger Burman said.
The prospects then began to receive periodic newsletters from the office. The objective was to educate prospective and often inexperienced investors about the products and services the company sells.
"We just slowly nurtured those relationships," the younger Burman said, noting that people who are now clients may have received half a dozen contacts before any business was conducted.
IF THEIR strategy had a drawback, it was in the length of time it took for the strategy to pay off.
"Short-term, it was painful for the first five or six months because we didn't do any phone sales," he said. "It's a slower way to go, but we think it builds longer-term relationships."
His father, who serves as division manager, said the approach has worked well in Lawrence. "The response to our direct mail has been 10 times what it's been in other cities," he said.
As a result, he said, the office has built "a niche business" with clientele from sectors of the local market that other firms may have ignored.
"We've been very much pleased with the response from the surrounding communities Baldwin, Ottawa, Leavenworth, Tonganoxie," he said.
Last year, his son and Bennett were Offerman's top new sales reps. The elder Burman, with 30 years experience in the investment industry, consistently places among the top 10 of all Offerman reps.
TIMING also has played a role in the early growth of the office's business.
"I think it also has to do with interest rates falling," Bennett said.
With rates on deposits tumbling toward the lowest levels in nearly 20 years, people who had accumulated savings have been more receptive to alternatives.
The office has advertised aggressively, promoting products such as tax-deferred municipal bond funds, which have particular appeal in the current financial and tax climate.
And the local market has its share of baby boomers, people now in their 40s, who are just coming out of their peak spending years and beginning to think about saving more seriously for retirement. The elder Burman said that suits him just fine, since much of the business in the office is about retirment planning.
"We think that's more important than ever before with the uncertainty about (the financial strength of) pension plans," he said.
THE OFFICE'S business also quickly gathered momentum from referrals, his son said.
Many of them have come through Offerman, which has 250 registered representatives in its 140 offices, he said. However, he said that many also have come from clients.
"Lawrence is such a close-knit community," he said, explaining that word-of-mouth referrals probably are more important here than in a larger city.
Despite the many factors that have worked to their advantage during the past year, a number of prospective clients remain leery of the stock market.
The Burmans and Bennett maintain that those fears are unfounded, that the next few years hold many investment opportunities.
"When you think about the guy who's 60 years old, when he was born, the Dow was at 40. It's gone up his whole life and yet he's scared of equities," the younger Burman said.
HE SAID carefully chosen equities or stock mutual funds are a necessary part of planning for retirement because most traditional investments, such as certificates of deposit, don't pay returns that are sufficient to outpace inflation and taxes.
"If you don't beat taxes and inflation, it doesn't matter what the yield is," he said.
His father agreed and said he didn't think the recent surge in the stock market would burn itself out any time soon. He noted the poor showing in corporate earnings last year and recent moves by many companies to downsize, but said he expected see many publically traded companies to rebound.
"When this thing turns the corner, this is going to be a tremendous climate for earnings in corporate America," the elder Burman said.
"Most of the financial gurus think the Dow could be at 6,000 by '95 or the year 2000," he said.