Breakaway UBS broker works long hours, couldn’t be happier

Living up to his name, Ralph Courage last August ditched 27 years of working under the umbrella of big retail-brokerage firms to set up shop as a registered independent adviser.

“One can argue that it was the worst time in history to move a practice,” said the 57-year-old Norfolk, Va., adviser, who specializes in constructing portfolios for physicians, charitable trusts and family offices. “It’s been quite a challenge, but there is nothing we did when we were working for the world’s largest wealth management bank that we cannot do now.”

When he went out on his own, Mr. Courage was a $1 million producer at UBS AG, the Zurich, Switzerland-based bank that got into the U.S. brokerage business by buying New York-based Paine Webber Group Inc. in 2000. He said he was offered “eye-popping opportunities” to join other wirehouses but opted for a more psychically satisfying alternative that also has financial rewards.

“When you compare what I did to taking a check from someone else, you’d have to say this doesn’t make sense,” said Mr. Courage, who explained his motives during a webcast that The Charles Schwab Corp. of San Francisco conducted last week for brokers who are considering independence. “But when you think about the fee revenue that compounds over time, the math is compelling.”

And then there are those psychic satisfactions.

“Brokerage firms have agendas that can sometimes be costly to clients,” Mr. Courage said, referring to the corporate drive to build assets, which sometimes dictates price points and builds in costs for services that many clients don’t use. “We charge less, we have our freedom, and our staff doesn’t have to worry about capricious decisions that can affect branch support.”

NOTHING PERSONAL

Mr. Courage, who joined Paine-Webber Inc. in 1990 after stints at Prudential Securities Inc. and Merrill Lynch & Co. Inc., both of New York, said that he has nothing personal against UBS, and he doesn’t downplay the difficulties and anxieties of starting from scratch. (However, at Schwab’s September conference for RIAs, he spent considerable time at the UBS booth and was impressed with a range of alternative-investment products of which he was unaware when he was at the firm, he said.)

“Setting up a business is complicated, and people love being protected under the umbrella of a big company,” Mr. Courage said.

But the recent firestorm of problems at financial firms was distracting and raised questions about client service.

“The trend wasn’t our friend,” Mr. Courage said. “Having to constantly defend the industry over a host of issues using scripted talking points had become unacceptable.”

The turning point was discovering the technology, product diversity and practice-management support that custodians such as Schwab, Fidelity Investments and TD Ameritrade Holding Corp. are offering.

“If the platforms are as good or better and the menu of choice is radically better and you can more easily put your client first, then it’s an easier decision,” Mr. Courage said.

Schwab, which is his primary custodian, also referred him to a law firm that he said has been a great help in setting up Courage Partners LLC.

Mr. Courage said that he came close to keeping his brokerage license as an independent affiliated with Wachovia Securities Financial Network LLC, a firm that he admires and that he thinks will continue to provide strong support even though the St. Louis-based broker and its bank parent, Wachovia Corp. of Charlotte, N.C., are being absorbed into San Francisco-based Wells Fargo & Co.

His five-person firm, which includes two sales assistants from UBS, his 21-year-old daughter and his 31-year-old business partner, Jeff Miller, isn’t soliciting clients but is focusing on ensuring a “safe landing” for those who followed them to independence. That includes all his medical clients, Mr. Courage said, and most of his “institutional” accounts.

His core portfolio is based on “sensibly allocated index positions” and exchange traded funds, with some alternative index products in satellite portfolios. Allocations are understandably heavier today in cash and fixed income than normally, and returns are consequently down but “in line with benchmark indexes,” Mr. Courage said.

He expects assets under management to return soon to the $200-million-plus level that he had at UBS, and he said that he is confident that he can hit the $500 million level that he had at UBS — with the help of some experienced hires he is considering, the addition of new assets that clients are transferring to him and some large accounts that they are referring to him.

Despite putting in 80-hour work weeks as a self-employed adviser, Mr. Courage — who counts sports cars, photography and investment philosophy as his major hobbies — said that his energy level has never been higher. “The question about all this is what took us so long,” he said.

E-mail Jed Horowitz at [email protected].