07/15/2014

Island Hopping

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Continuing our 30th anniversary series, Aquila Regional Sales Manager Sherri Foster recalls the beginnings of Aquila, reveals what fund salespeople do, and explains why working in Hawaii isn’t what you think.

Your career with Aquila started with a chance meeting. What happened?

It was the summer of 1984 and I was a realtor in Lahaina, Maui. Lacy Herrmann (Aquila founder) and his wife Betsey wandered into my office. They were on a cruise and were walking through town. I showed them a condo, we talked, and they returned to their ship.

That winter I followed up with a phone call.  Lacy ended up buying the condo.  He now owned real estate on Maui and had a relationship with Hawaiian Trust Company (acquired in 1985 by current Fund Advisor, Bank of Hawaii).  And he noticed that Hawaii didn’t have a state-specific municipal bond fund.

That was the beginning of the Aquila municipal bond funds. Lacy had Hawaiian Tax-Free Trust up and running that February and asked me to be his local sales liaison. I had a lot to learn about mutual funds and bonds.

Lacy knew I had strong sales skills and was confident that I could succeed in a sales role with Aquila. And here I am, 30 years later. If I’m not the oldest fund wholesaler in the industry, I must be the longest-tenured wholesaler.

What exactly does a fund wholesaler do?

We’re the connection between the fund company and the financial advisors who recommend our funds to their clients.

Every week I meet with advisors from firms such as Morgan Stanley, Merrill Lynch, UBS, Wells Fargo; independent advisors with LPL, Raymond James, Edward Jones; and dozens of banks, credit unions, and smaller advisory firms throughout Hawaii. About 1,200 to 1,500 of my “clients” or advisors are actively investing in Hawaiian Tax-Free Trust.

I meet with them, train them, update them on our performance and characteristics. And together, we meet with their clients—fund shareholders or potential shareholders—who want to talk with someone from Aquila who is local rather than in New York or California.

I’m largely independent, which is appealing. But the requirements of the role also mean I’m sometimes working on weekends, preparing for the next week’s presentations.

Monday is my office day. The rest of the week I’m meeting with advisors on the islands of Oahu, Hawaii, Maui and occasionally Lanai.

That sounds nice.

The travel is overrated. I’m in nice places but I live out of a suitcase. People who meet me will say, “you’re really lucky to live in Hawaii – do you drink Mai Tais and live on the beach?” I don’t remember the last time I was on the beach. We may be more relaxed in Hawaii but we’re just as focused and serious about our businesses as anyone on the mainland. Hawaii has its challenges. We have a five or six-hour time difference with our New York headquarters. When they’re sitting down to dinner I’m still here in the hot seat.

Are there any other fund wholesalers based in Hawaii?

I used to be the only one. Now, to my knowledge, it’s me and one other wholesaler with an annuity firm.

Does being local help?

Absolutely. I’m available in person for advisors and their clients every week, versus every three to four months for wholesalers who live on the mainland. If they need to talk to an Aquila portfolio manager in Honolulu or the Three Peaks managers in Colorado, we can get them on the phone.

Advisors and shareholders also love the local focus of our state-specific municipal bond funds – not just in Hawaii but also our six other state-specific funds. We’re invested in their infrastructure. In Hawaii, that’s over 200 different bonds, financing projects all over the state. Their money stays in their state, helping to build infrastructure they can see. I’m an investor myself and I love that part of it.

With hundreds of fund companies out there, what does Aquila offer investors that you think is unique?

When you’re small like us, you go the extra mile. Our local presence is a big part of that. That local access and transparency was Lacy’s vision and it’s still the Aquila way.

One example:  I often conduct educational seminars for financial advisors. In addition to the advisors’ clients and their friends, we often open our seminars to the public by advertising them in the local media.

At one of these Saturday seminars a woman with slippers and pedal pushers came in the door. She didn’t look penniless, but she also didn’t look like someone who would pull her checkbook out and write a $1 million check for an investment in the Trust, which she did.

She saw the ad, showed up, liked the potential dividends and tax savings (Hawaii is one of the highest-taxed states in the U.S.), and warmed to our conservative strategy. And the only reason we connected is because at Aquila we make ourselves accessible at a very local level.

Advisors and shareholders also like knowing that as an employee, working at Aquila is great. We’re a small, family-owned firm with great working relationships and enormous loyalty. I always feel better about doing business with companies whose employees are happy to be there.