Where do you draw the line between work and family? That's a common refrain among workaholic financial advisers feeling guilty about yet another missed Little League game or dance recital.

Now that many financial planners have established successful practices and are earning incomes commensurate with their clients, time is threatening to replace money as the currency of the late '90s. Some planners, having questioned how much is enough, are taking matters into their own hands by redefining the traditional money management practice. They're placing as much emphasis on quality time away from the office as they are on quantity time at the office and are finding that business is better than ever.

Take the case of Rhoads Grunden Lucca, an investment management firm in Dallas. The firm’s principals, John Rhoads, Dave Lucca and Ricky Grunden, have spent the better part of 10 years building a formidable $70 million practice, with clients in 17 states and two foreign countries. Yet only five years ago, the partners weren't sure where the practice was headed and whether each was happy going to work in the morning. "There were a lot of bridges for us to cross as business partners and as individuals," explains Rhoads, the firm's managing partner and a 35-year veteran of financial planning. "We were trying to be all things to all people, and that's a huge pitfall in the money management business."

All three partners yearned for more time away from the practice. Both Rhoads and his wife wanted to spend more time with their grandchildren and delve deeper into their ministry work in the Dallas area, where the pair taught Sunday school classes and worked at a nearby youth ministry teaching handicapped children to ride horses.

Grunden wanted more days on his working ranch just north of Dallas, where he and his wife could spend even more time raising their eight children, six of whom were being homeschooled. "I wanted to set priorities that would work for my family" Grunden says. "And more time with Dad was necessary to create the kind of family my wife and I value."

Lucca sought to push the geographical boundaries of the partnership, lobbying the others to allow him his longtime dream of moving his family to the pastoral farm country of Lancaster, Pa. There he could return to his rural roots and build a new client base 1,800 miles away. "I simply wanted more nature and less concrete," Lucca says.

To create the type of business structure that met both the needs of the partners and the needs of their clients, Rhoads, Grunden and Lucca began meeting in 1994 to lay the groundwork for what Lucca began calling a "lifestyle" business.

The cornerstone of the new structure would be a new compensation structure that emphasized fees and de-emphasized commissions. "We had to transition from commissions to fee-only, otherwise the lifestyle business would never have worked," Rhoads recalls. "Ten years ago, I was strictly a commission-based planner, and it took me five years to cross the bridge from commissions to fee-only. It's not something that happens overnight."

Of the three partners, only Lucca had started his professional career as a planner, earning his Certified Financial Planner license right after attending college at Penn State. Both Rhoads and Grunden entered the financial services business through the life insurance industry and, like so many converted insurance veterans, started to view clients' financial lives from a much broader perspective than simply life insurance. "Both Ricky and Dave were students at Brookhaven College in Dallas in the early '80s when I taught part of the CFP course," Rhoads says. "That was our first contact together." Grunden joined the firm shortly after studying under Rhoads, and Lucca came on board in 1986 at a time when fee-only financial planning was a novel concept.

As the practice evolved, the partners realized that remaining a commission-based practice would have precluded the change to a lifestyle practice, if only because the compensation structure restricted a planning firm's flexibility, Lucca says. "A lot of people in our business are held captive to their income stream," he explains. "It may not seem so today, but walking away from what was a lucrative commission structure five years ago to a relatively weaker fee-based structure wasn’t easy. But we agreed as a team that fee-only was the best course of action for the firm.

Once the compensation issue was worked out, Rhoads, Grunden and Lucca began growing their assets with an eye on officially revamping their business to a lifestyle practice in 1995. But the newly created firm’s liftoff encountered some turbulent weather. "It's hard to go from three individuals to a team," says Lucca. "We had to get on the same page on where the practice was and where it was headed. And in the beginning, that was easier said than done."

The partners first tried managing money together, but with three strong entrepreneurs, the group clashed.

The solution? A new way of managing money in a multi-partner firm that played to each partner’s individual strengths and also cut out specialty services, such as estate planning, that the team didn't want to offer. The firm began focusing on using proprietary portfolios of no-load funds that produced strong, reliable income and growth at controlled risk levels. "One day it hit us out of the blue," Lucca says. "Why couldn't we each take one of three portfolios as lead manager; either low-risk, mid-risk or aggressive risk portfolios? That way, each of us could remain on his own turf and deal in the investment areas that he felt most comfortable in." Immediately after installing the new portfolio program, called the RGL Safety Net, each of the advisers began to see the on-site possibilities of a lifestyle practice.

As the firm started to specialize in managing clients' retirement assets, a defined profile of the typical client began to emerge. Most were married retirees in their sixties receiving a lump sum that gave them responsibility for managing their pension or retirement funds for the first time in their lives. Rhoads describes them as "salt of the earth" people with an average asset base of $383,000. "Most would not consider themselves affluent, but they are well-off," he says.

Just one issue remained before the team could tackle the off-site lifestyle problem: narrowing the view of the practice. "Unfortunately, no practice is great in all financial planning categories," Rhoads explains. "I personally don't go for the jack-of-all-trades practice. If you don't specialize in insurance or estate planning, it's probably best to stay away from it and refer the business out to the experts. And our area of expertise was asset management, so that's what we decided to do – and nothing else. We're living proof that less is more."

The firm does offer what Rhoads calls "wisdom advice," helping clients buy a new car or home, but it doesn't market its services that way. "We give our clients advice on these matters and do not charge for these services," he says. "We already charge our clients for managing their assets, so we don't charge extra."

Now, Rhoads, Grunden and Lucca offer fewer services than they did five years ago, but they have a much stronger firm. "I remember a few years ago, when I was a broker-oriented planner, I had over 2,000 customer accounts," Rhoads recalls. "The phones never stopped ringing. Today, we are four times more successful with only 200 clients."

The firm took off financially, with 60% of Rhoads' take-home pay soon coming from new fee-based clients. The practice grew even faster after the partners gave complete control over the computers and back-office systems to what Lucca jokingly calls "a full-time office manager/treasurer/system administrator" who had already been with the firm since 1990. "That kept us off the computers doing trades and gave us more time with clients," Lucca says. "It was a huge time-saver."

The team continued to fine-tune the compensation system. New clients were added to the fold as "corporate clients," whose income is credited to the firm as a whole. Each partner pays an equal share of overhead costs, rather than trying to calculate who paid what for postage stamps. Both Grunden and Rhoads have their own personal strategic assistants, paid for out of their individual salaries. A buy-sell agreement was also put in place in the event that one partner dies or simply wants to get out of the practice. "We estimate that firms like ours are currently selling for six times revenues," Rhoads offers. "We've become better businessmen, better marketers and can now even bring on junior partners. We've come a long way."

Lucca has been working out of Lancaster for almost a year now, e-mailing and faxing his colleagues in Dallas and attending on-site meetings four times a year. Both Rhoads and Grunden are finding more time for their outside interests, with Rhoads spending more time with his grandchildren and Grunden more time on his ranch. Each couldn't be happier. "The new firm [structure] enables us to spend more time focusing on the things we love, like our families," says Lucca. "We have a lot more time to spend with them. That’s the joy of it."

Clients don't seem to mind, either. "Heck, I'm all for it," says Carey Rector, a client in Fort Worth. "I'm doing a lot more email communicating with John [Rhoads]. It's funny. I'm more dependent on them than ever, and I'm communicating with them as much as ever. It's just done differently: in a smarter way. I think they ought to be congratulated for combining work and family as they have. It's a lesson we all could use."

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