St. Cloud financial planner shares secret to his success

March 09--Of more than 2,500 representatives nationally under the ING Financial Partners umbrella, Tom St. Hilaire ranked among the top three last year for advised assets under management.

He's president and CEO of Mahowald Financial Planners and a certified financial planner and charter financial analyst. When he got the latter designation several years ago, there were only eight people in the five-state area who could boast both CFP and CFA status.

St. Hilaire, who grew up in Monticello, graduated from Yale University in 1996. He worked in Boston as a business consultant and later was vice president of operations and strategy at John Hancock Financial Services. After meeting his wife, Lexy, St. Hilaire moved back to Minnesota and joined his father's Minneapolis financial planning firm, buying it in 2007 and moving it to St. Cloud in 2009.

Although St. Hilaire won't turn 40 until the end of March, some of his clients are baby boomers.The last boomers to turn 65 will do so in 2029, by which time there are expected to be more than 70 million people that age and older in the U.S.

Planning for their futures, and those trailing the boomers, is paramount, and St. Hilaire works with 80 companies to

provide retirement benefits and financial advice.

What prepared you to work in the financial services industry?

"I did management and strategy consulting for a number of Fortune 500 companies. I was a 23-year-old telling them what I thought they should do. That was silly. I worked 70-85 hours a week and I was traveling all the time. Every airline loved me. It was exciting ... I got a lot of experience working in different corporate environments on different problems at an age when I shouldn't have been exposed to that at all. I'd work for a client for two to six months and then go on to another one. At a certain point, that became boring. You wanted to see some things through. On one of my projects, I helped John Hancock develop a distribution company and a manufacturing company. They brought in a field guy to run the distribution side as the CEO and he leased me for six months to be the COO and set up the organization. I hit it off with him and had fun with that. He offered me the permanent job. That was also heady. I was 26 and asked to manage a bunch of people in their 50s who were managers of other departments. It was a great opportunity to find out if I wanted to work in a large corporate environment. After about three years, I knew I did not."

What made you feel that way and is that why you came back to Minnesota?

"Hancock went through an IPO ...We had to do a lot of cost cutting and a lot of revenue generation. We doubled revenues and reduced costs by about a third in a short period of time. It wasn't a lot of fun and there was a lot of stress ... We had an internal battle and, for whatever reason, my CEO's side won. The other division lost and my counterpart there had her career set back about five years. She was exiled to a customer service organization far away from the corporate headquarters because her team lost. I realized I wouldn't be at the control of my own destiny while I was there. I would be at the whim of whoever I reported to. I figured if I wanted to run one of those corporations someday -- which is what my ambition was at the time -- I would probably change companies six to 10 times to have a shot at it. I think the average tenure of a CEO at a Fortune 500 company at that time was about 18 months. I didn't see changing jobs eight times for a year-and-a-half of work. I came back to Minnesota because a friend of mine was working here with his father in a business and I decided to join them. His father was planning to retire but, after a year-and-a-half changed his mind and said he was never going to retire. So, what they were training me for was never going to happen and they wanted to put me in sales to leave Minnesota on Sunday night every week and come back on Thursday night. I'd just had a son and I wasn't looking forward to seeing him three days a week, so I cast my line out for other jobs. My father, at that point, said, 'Why don't we go fishing and talk about my firm?' That was about nine years ago."

What kind of lifestyle change did that bring?

"I was trying to figure out what I wanted to do and what I wanted to be as I grew older," St. Hilaire said. "I didn't know the downsides of other jobs and didn't properly appreciate the advantages of owning your own firm. As I went along and found the sacrifices I would have to make on my family side to do the corporate route, that became much less attractive. I've always had a foot in the financial services industry but I came at it much different than most people. Most start in sales and end up in a corporate capacity. I started consulting with the corporate side and what I observed was there weren't very many people in the advisory business doing it the way that I thought it should be done. When I met with my father, it was a good time to reassess what was important to me ... My friend's company dealt with the transport of auto parts. The job was to get spark plugs from one location to another for half a cent less than you were paying. If you did that, it was a great day. There wasn't a lot of satisfaction for me. It was the same in those other corporate environments. We got earnings per share up another 2 cents. That's good, but it didn't make me feel like I'd left the world in a better spot."

So dealing with individual clients and planning for their futures held more interest?

"We work with a lot of small-business owners and a lot of people in the medical community. We've had business owners who have passed away unexpectedly. To be able to go in and help their families and their partners financially move on from that and recover -- that's really cool and gives me a feeling I never got from any other position. And, the ability to be home for dinner never hurt, either."

How did you come to move your business to St. Cloud?

"My father had always worked with the Mahowald agency here in town. That was about 30 years ago. He would come up on Thursday and partner with them on their medical and business owner clients to do individual planning. The insurance agency would do the business liability coverage and we would handle the personal liability and opportunity -- or investment -- side of the relationship. It was a nice partnership. What I looked at after I made the decision to buy the firm from my father, I looked at where I wanted to be and what kind of life I wanted to have. ... St. Cloud is far enough away from the Cities that we have a strong community but we're close enough so, if I want to go see a Twins game -- though not last year when they weren't winning -- it's pretty convenient to go down there."

You worked for your father and now your father still works with the business. What is that relationship like?

"Our deal was that I would work with him for the first year or year and a half before I bought the company and do everything his way. After that, I would start to adjust the firm -- particularly some of the products and technologies we use ... He's still very active but as an employee. He's adjusted to that very well, although he tells me what he's going to do. He was in San Francisco one day. He climbed Mount Kilimanjaro a couple of weeks before that, and then he's going to Jamaica. He's 67 and he doesn't like Minnesota winters."

How is your organization structured and what's your reach?

"We remain partners with the Mahowald agency for a lot of our clients in town. That's why we operate both as Mahowald Financial Partners and Midwest Financial Partners. That's because nobody outside St. Cloud can spell or pronounce Mahowald. We're in St. Cloud probably 3 1/2 days a week but we're still in the Cities and we have clients in Waterloo, Iowa. So we're down there a day or two per month. And we've got clients in Connecticut, Massachusetts and New York. Believe it or not, they just like dealing with somebody from the Midwest. They figure we're honest and a lot of my friend base is still out east. I make trips out there two to three times a year."

You've tripled your assets under management since buying the firm. What was the key to that?

"Part of it is time and working with clients. We just don't lose them. We've probably parted ways with two or three clients since I've joined -- and those were mutual decisions where we didn't fit anymore. There are a number of people who do a quality job of investment management or estate planning or buy-sell planning. There's not many who can put all three together with a high level of expertise. That's what we do."

You developed some software that has been picked up by other members of the ING Financial Partners group, to which you belong. What does it do and how did that happen?

"The reason we wanted to develop our own program is because most of the things that are off the shelf in the financial services industry are either 'black box,' which means you don't know how they get to their calculations, or they'll spit out 110 pages to tell you two things. I find that not very helpful. ... In the end, we decided we could probably build this tool better than anyone else. It goes back to Excel training from my consulting days. I figured a way to get it done and I took a week and a half off from seeing clients and basically went from coffeehouse to coffeehouse in St. Cloud about three years ago. When I need to do design work or really get into something, I have to get out of the office."

What are the challenges investors will face as the baby boom generation continues to retire?

"We work with clients in their 30s, 40s and 50s because, if the setup is right, retirement is simple. But a lot of times it takes 15, 20, 30 years to get your assets, insurances and legal documents structured right. A lot of people don't do that in advance ... A lot of the problems people have in retirement is they get far too conservative too early and neglect to think about inflation or what happens to assets over 30-40 years. Or they leave everything on autopilot and never check their investments so they can be exposed when the market drops 20 percent 18 months before you're planning to retire and now you can't. ... There have been general rules of thumb when you look at investments in the past, but those aren't sophisticated enough for the couple today that retires at 65 and there's a 50-50 chance that one of them is going to make it to 95. When you talk about living off the same pool of assets for 30 years, there's a lot different approach than if you're going to live off them for five to seven years."

How has recent history affected the way people look at investing?

"We haven't had a normal recession in this country for 20 years. We had the tech bubble where everything dropped 47-48 percent and then we had the financial services bubble, where everything dropped 47-48 percent. That's not how market declines usually happen. I think people are more apt to overreact when we have a 10-15 percent market correction and say, 'Omigosh, we're heading for something like what we did the last two times.' That's not historically what happens."

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