Many Happy Returns

Whether helping a wage earner plot a savvy investment strategy or a wealthy entrepreneur preserve his riches, these local financial pros earn high marks by giving smart advice and putting their clients first

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Independent Advisers

1 BRENT BRODESKI
Savant Capital Management, Geneva
bbrodeski@savantcapital.com | 815-227-0300
Minimum account: $1 million
Typical account: $1-$10 million-plus

Doctors, lawyers, and other affluent people typically go to Brodeski—who tops our list of registered investment advisers—in financial disarray, with little coordination between their tax, insurance, estate planning, and investing strategies. "There's a gap between where they're heading and where they want to be," says Brodeski, 40, whose 21-adviser firm is headquartered in Rockford (with offices in Geneva, Hoffman Estates, Freeport, and Madison, Wisconsin). "We help identify those gaps, then build strategies and processes to realign their path with their plan."

Once an integrated financial plan is in place, the firm's investment team can tailor a diversified global portfolio. Brodeski thinks it's nearly impossible for mutual fund managers to beat the stock market consistently over time. That's why he believes in passive investments such as index funds (which mimic the performance of stock market indexes such as the S&P 500 and the Russell 2000) and exchange traded funds (baskets of investments organized around specific themes, such as domestic small-cap stocks, real-estate investment trusts, or municipal bonds). It's also why he doesn't believe in "tactical" investing—making short-term bets in the hope of rapid appreciation. Such "market timing," he says, is "a watered-down way of saying, 'I can be smarter than everyone else.' It sounds sexy. The problem is, it doesn't work. And that shifting [money] around creates taxes and transaction costs" that hurt returns and add risk.

A better approach, he says, is to systematically rebalance portfolios, shifting some money out of outperforming investments and plowing it into underperforming categories, thus keeping the portfolio balanced. Recently, for example, he shifted client money out of Treasury bonds, which investors have flocked to during the credit market meltdown, and into small-cap value stocks, which have taken a beating. Such moves are "emotionally hard" for most investors, he says, but they improve long-term performance while keeping risk in check. The best part: "I don't have to spend a lot of energy stock-picking, market-timing, and manager-picking," says Brodeski. "Now I can spend that time on the client, helping him understand his long-range vision, sorting out complex multigenerational issues, coaching his children on financial matters—things that add value.

2 FREDERICK PAULMAN
RMB Capital Management, Chicago
fpaulman@rmbcap.com | 312-993-5820
Minimum account: $1 million
Typical account: $3-$10 million

IN BRIEF: Offers in-depth financial planning and investment management services to high-net-worth clients, including large numbers of partners at law firms. Besides using outside advisers to manage client money, in areas such as international stocks, the firm also invests in funds managed in-house, including two domestic stock portfolios and a domestic long-short hedge fund. One advantage for clients, says Paulman, 35 (whose partner, Richard Burridge, 46, is third on our list): "We don't have an extra layer of fees associated with farming everything out.

3 RICHARD BURRIDGE
RMB Capital Management, Chicago
rburridge@rmbcap.com | 312-993-5810
Minimum account: $1 million
Typical account: $3-$10 million

See Frederick Paulman, above

4 DAVID HUBER
Huber Financial, Buffalo Grove
dhuber@huberfinancial.com | 847-541-6888
Minimum account: $500,000
Typical account: $1-$3 million-plus

IN BRIEF: Offers financial planning and asset management, with preference for value investing in passively managed funds. "If your goal is to retire at 60 and you need X per month to live on, you'd rather find out now there's a shortfall than at age 59," says Huber, 51. "We can tell you what you need to do to get you there." At presstime Huber's firm was preparing to roll out "next generation" planning software, allowing clients to track, via computer, daily progress toward their financial plan

BULLISH CALL: For long-term investors, Huber likes small-cap value funds

5 AARON IZENSTARK
Iron Financial Companies, Northfield
aaron1@ironfinancial.com | 847-386-1000
Minimum account: $250,000
Typical account: $1-$2 million

IN BRIEF: A former trader at the Chicago Board of Trade, Izenstark, 43, aims to deliver consistent investment profits in good markets and bad by using hedging strategies he learned on the exchange floor. No buy-and-hold money manager, he focuses on fixed-income vehicles (such as high-yield bond funds) and alternative investments for a clientele of individuals and other financial advisers looking for a defensive hedge for their clients. "It's ingrained in my DNA how to manage risk," Izenstark says. "We're strictly focused on protecting [clients'] assets.

6 MARK BALASA
Balasa Dinverno & Foltz, Itasca
mbalasa@bdfllc.com | 630-875-4900
Minimum account: $1 million
Typical account: $3.5 million

IN BRIEF: The firm's 700 clients include heavy doses of small-business owners and doctors. Range of services goes well beyond managing investment portfolios, says Balasa, 49. It involves bringing order to the client's balance sheet, including "income projections going into retirement, tax returns and estate planning documents, projections for kids' education, stock options, insurance," he says. "It's common for busy people to have all those pieces going in different directions. Our goal is to bring it all together.

7 ARMOND DINVERNO
Balasa Dinverno & Foltz, Itasca
adinverno@bdfllc.com | 630-875-4906
Minimum account: $1 million
Typical account: $2 million

See Mark Balasa, above

8 STEVE WEINSTEIN
Altair Advisers, Chicago
sweinstein@altairadvisers.com | 312-429-3013
Minimum account: $5 million
Typical account: $5-$10 million-plus

IN BRIEF: From the ashes of Arthur Andersen, where Weinstein, 55, and partners formed an investing consulting practice, the firm has grown from $500 million in client assets in 2002 to $2.7 billion today. Provides high-net-worth clients with overall investment policy and asset allocation strategy. "We're constantly searching for the best and brightest managers in all the different asset categories," he says

9 MICHAEL LEONETTI
Leonetti & Associates, Buffalo Grove
mleonetti@leonettiassoc.com | 847-520-0999
Minimum account: $2 million
Typical account: $6 million

IN BRIEF: Physician specialists make up the largest segment among 450 clients. Leonetti, 52, prefers the phrase "financial independence analysis" to "retirement planning." "People want to know that their money and expenses are structured so they're fine financially and independent of anyone or anything they can't control," he says. Allocating assets to achieve a customized plan for each client "gives peace of mind versus going in blind.

10 ROBERT HUFFMAN III
Relative Value Partners, Northbrook
bhuffman@rvpllc.com | 847-513-6300
Minimum account: $1 million
Typical account: $3 million

IN BRIEF: Because portfolio allocation determines performance, says Huffman, 48, "being in the right segments of the market is extremely important"—and the best way to do that is through exchange traded funds, he says. For the Wall Street pros who form a large chunk of its clientele, the firm also offers expertise in the neglected niche of closed-end funds, which trade on stock exchanges often at a 10- or 15-percent discount to their fair market value.

This article appears in the April 2008 issue of Chicago Magazine.

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