Father-son team caters to wealthy clientele: Goelzer a local fixture in portfolio management

January 8, 2007

Reeling in 45-inch northern pike during annual fishing excursions to the upper regions of Canada is one type of bonding experience Don and Greg Goelzer cherish.

But the camaraderie the father and son share really is rooted in the 25 years they have spent working side by side at Goelzer Investment Management Inc., the downtown advisory firm Don founded in 1969.

In the quarter-century since son Greg arrived fresh from college, the two have helped grow the firm's client base to one that boasts $1.5 billion in assets. Neither claims to have any regrets about the decision to tackle the daily grind together.

"We've enjoyed every minute of it," Don said. "It's been very rewarding for both of us."

At 78, the elder Goelzer serves in an advisory role as company chairman while Greg, 48, oversees daily operations as CEO. Yet, the silver-haired leader looks as though he could still outlast executives half his age.

Born in Wisconsin, Don moved to Indianapolis as a youngster in the 1930s. His father had an ownership stake in a vegetable packing company that merged with Stokely-Van Camp, which brought him here as a sales manager.

Don later earned a bachelor's degree from the Indiana University School of Business in 1950 and began his investment career at City Securities Corp., Indianapolis' oldest locally based brokerage firm.

For 19 years, he remained perfectly content there until he approached management about becoming an equity shareholder. There were only two shareholders at the time and they made it clear the structure wouldn't be changing anytime soon, he said.

With his mind set on an ownership opportunity, he left the firm, took three of his colleagues with him, and set up shop on the top floor of the Midwest Building on East Market Street.

Even so, he and John Peterson, the City Securities chairman who became company president about the time of Don's departure, remain good friends. They're both alumni of the Sigma Chi fraternity at IU.

"Everyone that starts at City Securities is very successful," Peterson said. "He's one of many who have gone out in another direction, and City Securities is proud to be their birthplace."

The Goelzer office since has moved from its original location and has overlooked downtown's Monument Circle for the past 13 years. Several other changes have transpired since its inception as well.

Perhaps the most notable is its transition from a brokerage selling stocks, bonds and a handful of mutual funds to a fee-based investment adviser that provides portfolio-management services to individuals and institutional investors. Its wealthy clientele, numbering 375 in 32 states, each has assets of at least $1 million. Goelzer solicits only clients in Indiana, but credits its sweeping range to clients who have migrated or retired to other parts of the country.

The change in direction occurred in 1981, when the firm became a registered investment adviser. Sensing the industry trend toward fee-based counsel, Don wanted to enter the fray without starting from scratch. So, in 1983, he acquired Kiser Cohn & Shumacker, which enabled the firm to add a retail slant to augment its brokerage business.

Greg came aboard in 1981, after earning a telecommunications degree from IU. He had no grand vision of following in his father's footsteps. Rather, he planned to pursue a career in radio or television.

But when Don's business partner, Richard Medaris, became ill from cancer, Greg helped fill the void by answering phones and greeting clients. His responsibilities ultimately evolved into sitting next to his father and learning the intricacies of the industry.

Greg credits Don's hands-off approach with helping him, as well as the firm's 12 employees, to thrive.

"The reason we have been so successful is because he allows us to make a difference; he doesn't micro-manage," Greg said. "We're a tight-knit family."

A second acquisition really solidified Goelzer as a top-notch advisory firm and enabled it to ditch securities altogether. In 1989, it purchased the prestigious Collett & Co., an advisory firm founded in 1934 and led by John Collett.

Collett & Co. achieved notoriety by underwriting the initial public offerings for Eli Lilly and Co., Ball Corp., Hook Drugs, and L.S. Ayres and Co. As shares of those family-owned companies went public, many family members, as well as key corporate officials, turned to Collett to provide investment counsel.

By the time of the sale, it had accumulated $24 million in assets, which lifted Goelzer's assets under management to $80 million.

A decade of prosperity for market investors during the 1990s helped Goelzer's clientele achieve current assets of $1.5 billion. To be successful in the investment industry, however, it takes more than a bullish climate, said L.H. Bailey, chairman of Chicago-based David A. Noyes & Co., which has an Indianapolis presence.

"Trust, integrity and knowledge are the three key things to developing a clientele in my business, and the Goelzers have all of those," he said. "That's true whether you're at David A. Noyes, Merrill Lynch or wherever."

Still, they've encountered a few hardships along the way. For starters, it took Don a good five to seven years to accumulate enough revenue to sustain a comfortable living.

In 1969, when he parted ways with City Securities, he had three young children at home. Greg, the eldest, was 11 at the time and recalls asking his father, "Why are you pacing at night?"

Several years later, in 1981, when Goelzer began to make the switch from a brokerage to an adviser, there were days when Don wondered whether the firm would manage a single stock trade. Now, the goal within seven to 10 years is to double current assets to $3 billion.

Goelzer's growth so far could not have been realized without its employees, many of whom have been with the firm several years, Don said. Most important, though, everyone at Goelzer has the opportunity to become a company shareholder.
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