Top executive shares success story

Jose Rivera, senior vice president of RMD Wealth Management Group at UBS, shared his experiences about his rise to top wealth manager from a non-finance background and his thoughts on what students can do to get an edge over their peers in the financial services industry in an interview with The Ticker.

Rivera, whose name represents the ‘R' in RMD, came from humble beginnings and never imagined himself as a wealth manager. He went to City College to study architectural drafting, but flunked out after a semester. "I was more interested in dancing than I was in studies," said Rivera.

Despite never finishing college, Rivera went on to become one of the top financial advisers in the nation. Rivera made the list of the top 100 financial advisers in the United States in 2008.

After "loading trucks for about a year," Rivera began his career at Thomson Mckinnon as a dividend clerk in the dividend department. After about a year, he got an offer from Fiduciary Trusts, where he worked his way up the dividend department to become a custody officer.

"As a custody officer I had client accounts to take care of, but I did not have contact with them ... I had to perform the administrative duties and service the accounts in the background," said Rivera.

A few years later, another friend of his who moved to a firm called IDS Financial Services (an American Express affiliate) said, "Listen, we're hiring. If you want to be a broker, they will help you get your license." Rivera realized the opportunities he had in front of him, took the job, and was paid on commission.

After Rivera passed the test to become a licensed broker, IDS sent him to Chaska, Minnesota for training, but decided the lifestyle of cold winters in Minnesota was not what he wanted.

Rivera returned home and sent his resume to the Dean Witter firm, where he was hired and worked on draw. Rivera explained that ‘draw' is when, "they give you money but you owe it to them, so it's not a salary." For example, the firm might give an employee $1,000 a month, but the employee has to cover that amount each month.

Rivera worked long, hard hours, starting at 7:30 a.m. and ending at 10 p.m. or 11 p.m. "That was building a business. Cold calling prospects, in the hopes of eventually turning them into clients," Rivera said.  Within three years, Rivera became the number one broker in his Brooklyn office at Dean Witter.

When the Brooklyn office closed, Rivera was relocated to the World Trade Center, where he became assistant branch manager. Rivera still had his clients to manage, and was starting to build a good business, but he felt he needed to attain more success. He saw even more potential in his business.

Dean Witter sent Rivera to manage a 60-person office in Wayne, New Jersey and he soon learned that managing was not his passion. "I enjoyed managing money and managing relationships with clients. But managing people? It just wasn't my thing."

When Morgan Stanley acquired Dean Witter, Rivera was asked to manage five to six top producing brokers in the Morgan Stanley headquarter office, while keeping his business and managing his clients' funds.  After that, Rivera became a full-time broker, and stopped managing. When Rivera left Morgan Stanley in 2009 to go to UBS, he was ranked the 15th broker at Morgan Stanley.

As a wealth management group at UBS, RMD's investment thesis is built around the foundation of preserving capital and investments focusing on low volatility. The group developed five portfolios that follow what they refer to as "Low Volatility."  "What we did was look for investment styles that would complement your traditional IRA investment or your traditional asset classes," said Rivera.  "What we found was that the last three or four years, various families of mutual funds have come up with some new investment styles that were only available at one time to the higher net worth investor through hedge funds."

Market neutral funds, Long-Short Funds, and Opportunistic Funds were some of the funds mentioned by Rivera. "When you take those type of investments and you put them in an investment portfolio of traditional asset classes, it's amazing what it does to volatility. You're actually reducing the volatility of the portfolio," said Rivera. This means longer and greater returns in the market for Rivera's clients.

When asked how the group retained its clients throughout the financial crisis, Rivera replied, "get on the phone every day." Prior to March 9, Rivera had to reassure his clients. Although the media made it seem like the world was coming to an end, people were still purchasing cars, "clothes, food, and homes," commented Rivera.

The RMD Wealth Management Group uses numbers instead of percentages while exploring a client's risk tolerance. "You hear 10 percent, and you probably think ‘oh that doesn't sound too bad.' But if you have $1 million and it goes down to $900,000, you lost $100,000. It's still 10 percent, but is that going to bother you?" said Rivera. He explained he uses "sticker shock" to find out a client's risk aversion. "If you give me $100,000 and your next statement shows it's 80,000, are you going to throw up or are you going to be okay with it?"

Being one of the top professionals in the financial services industry requires various elements. Personality, work ethic, building a good business, and staying connected to investors are the principles that Rivera said led him to make the list of top 100 financial advisors by Barron's The Winner's Circle. Rivera, who spoke on Jan. 8 about the benefits of Roth IRAs (Individual retirement account) on NBC's NY Nightly News, stressed that you will need to have a similar personality as your clients to be successful in wealth management.