Broker Check

Making a Significant Difference in Lives for More than 30 Years: Cutter & Company

| October 03, 2018
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Experience is one of life’s best teachers, provided one is willing to learn. The founders of Cutter & Company are prime examples of that approach, as the firm celebrates 30 years in business. They absorbed valuable lessons from work experiences early in their careers and decided to build their own business, based on a fundamental vision to make a significant difference in the lives of their clients and their employees. That principle remains the foundation of the firm going forward.

Controlling Their Own Destiny

Co-founders Debbie Castiglioni (CEO) and Bill Meyer (President) started working together in 1983, focused at the time on group medical and life insurance for businesses. Bill attained his securities license that same year, believing that adding investments was needed to make a difference in client’s lives in a significant way. After adding investments to their insurance practice, Bill and Debbie worked with a few different broker-dealers. The first firm went out of business due to a lack of capital or business acumen. The second was, at the time, one of the largest independent broker-dealer firms in the country. However, the owner of that firm encountered legal issues, so once again a change was necessary. They then started working with another, locally owned firm, where several important lessons started crystalizing.

“We worked in close proximity, saw how they operated and thought it was a good education for us,” Castiglioni said. “The owner was a great salesman but lacked business acumen. We tried to help him with a business plan. But he didn’t listen to Bill or to his CFO.”

“We saw the hand-writing on the wall in mid-1987 and started the process of filing paperwork with what is now FINRA to become our own broker-dealer. In 1988 Debbie and I started our own firm,” Bill said. “We just wanted to control our own destiny. I knew darn well we could control our expenses and not go out of business.”

Initially it was just Meyer and Castiglioni and a receptionist to start Cutter & Company. But soon other like-minded financial advisors joined them. What evolved over time was a model that allowed independent advisors to run their businesses as they see fit for the benefit of their clients, utilizing the full-range of investment products available, with a structure to provide top-of-the line back-office and compliance support.

Positioned to Weather Change

Cutter & Company started out primarily as an execution business. The typical broker at the time was not conducting advisory work for fees; they were offering products to clients in exchange for commissions. But the dynamic has changed. Brokers still must utilize a broker-dealer to execute transactions, but fee-based advisory practices are more prominent. Those changes created margin compression on both commissions and fees. The firm also weathered the serious market downturns of 2001-02 and 2008-09 without any lay-offs, a unique testament to the firm’s philosophy and approach.

“To deal with industry dynamics, we must provide exceptional service to our independent advisors and help them in any way we can,” Castiglioni said. “That includes moving into holistic planning for clients.”

“Not only have Debbie and I been able to make a significant difference in the lives of personal clients, but we have the opportunity for many other advisors to do the same for their clients,” Bill said. “We treat people extremely well. As a result, both on the advisor side and the staff side we have almost no turnover. I think that speaks volumes.”

Doing It the Right Way

Castiglioni said the company grew by accident, and perhaps necessity, due to increasing industry regulations. The firm needed to grow to provide an economic base to support the increasing costs of compliance with regulations. As the firm added independent advisors, Castiglioni became deeply immersed in the intricacies of industry regulations. She became involved with the industry organizations, including NASD, FINRA and SIFMA (formerly the Securities Industry Association “SIA”, where she became the chair representing small-sized firms around the country and served on the Board).

Bill points to the company’s extraordinarily clean record when it comes to regulatory compliance. He says that focus on ethical behavior permeates the firm and credits Castiglioni’s leadership by example.

“She is not only the CEO but is effectively our Chief Compliance Officer.  She has truly helped us stay in business because of her compliance prowess, willingness to roll up her sleeves, and get involved in the industry.  It is pretty rare to see that clean of a history.  Also, we have a wonderful tenured staff, human capital—after all businesses don’t run themselves it’s people who run companies, Bill said.”

Foundation for the Future

Cutter & Company is putting a succession plan in place for both the broker-dealer side of the business as well as the RIA practice to ensure the firm continues in the same direction the founders put in place 30 years ago. The firm operates without any debt and is well positioned to handle the next major move in financial markets. At all times, the focus is on honesty, integrity, and providing real value to our clients.

“It’s been a privilege to serve our advisors and their clients over 30 years. We are really focused on making a real difference in people’s lives. At the end of the day, that’s what it’s all about,” Bill said.

Financial advisors who have a similar mindset are invited to reach out to Debbie or Bill for a personal conversation about how that can become reality through their own independent business, partnering with Cutter & Company.

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