In 1962, Joseph Romano, a hardworking fruit vendor and entrepreneur who emigrated from Sicily to Chicago, had recently retired and moved with his wife, Mary, to a house they had just bought on a lake in southern Wisconsin. They had a modest nest-egg of about $50,000 and Joseph asked his two sons, Bob and Dick, to help him invest it. With that simple request, Romano Brothers and Company, which this year is celebrating 50 years of business in Evanston, was born.
In many ways, the story of Romano Brothers is a classic American story: Sons of an immigrant overcome inexperience and little money with hard work and a personal touch to make themselves and their firm into a shining success. But unlike their larger and more well-known counterparts in the financial industry – many of which, in this economic climate, have been vilified for their rapacious greed – the Romano brothers seem to measure success not just by their bottom line and that of their clients, but also by the firm’s contribution to the vibrancy of the larger community in which it works. In this way, with its residents’ long tradition of civic engagement, the story of Romano Brothers and Company is perhaps also a classic Evanston story.
The Lean Years
When their father approached them with his retirement fund, Bob and Dick had both dabbled in the stock market but they were amateurs. Bob had owned the Northwestern Watch Repair at 919 Davis St. and was just completing his degree from John Marshall Law School. His younger brother Dick had earned his Ph.D. in chemical engineering from the University of Delaware and had recently moved his wife and two children to St. Louis, where his employer at the time, Monsanto, had just built a large research facility.
As the two brothers set about looking for places to invest their father’s retirement income, they discovered that most firms catered to wealthier clientele. One Sunday at a family gathering, Dick remembers having a conversation with his brother Bob in which they discussed a business idea.
“You know, maybe other people could use this kind of a service, for the modest investor who doesn’t probably fit in a bank investor environment, who may need something a little more independent than a brokerage firm which kind of pushes products and is more aggressive in terms of transactional income,” Dick recalls. “So we thought maybe this is something for us to do.”
Bob filed a form with the Securities Exchange Commission, they deposited somewhere in the range of $10,000 into a bank account and then waited for a telegram that gave them the go-ahead. Bob had a wife and six kids; Dick, a wife and two kids. With 12 mouths to feed and little experience to work with, the brothers put all of their net worth into a single stock: themselves.
“It was extremely naïve, it was a totally stupid business plan,” says Dick Romano, quickly adding, “It wasn’t a business plan, let’s put it that way.”
Bob set up their new business in the downtown Evanston building that housed the First National Bank and Trust Company of Evanston.
“The most important thing to me was that we settled [in Evanston] and were part of the community, because we were small chickens in a big pot downtown,” says Bob Romano. “Out here we were something.”
But that “something” was still a dream that had yet to reveal itself. A year after Bob filed the SEC paperwork, Dick left Monsanto and moved the family to Evanston, where the two brothers had an office but not much else. They had no idea how to keep books, how to execute orders, or how to clear transactions.
“Everything was a challenge because we had absolutely no experience in the business,” says Dick, who forty years later had accumulated enough expertise to be elected to the board of the NASDAQ stock exchange.
March 1964 was the nadir, when the fledgling firm’s total revenue was $252.
“That’s not profit, that’s income. That was absolutely a low point,” says Dick.
Around 1970, Romano Brothers and Company joined the Midwest Stock Exchange, which lent the firm some credibility. But if their clients’ testimonials are to be believed, the firm’s credibility was mostly built not with certificates and memberships but with the Romano brothers’ personal – some might even say old-school – approach to doing business.
“We deal in relationships,” says Dick. “We’re like the old grocery, where you went to the store and you talked to the grocer … He knew your family, ‘Hey how are the kids?’ Our relationship is much more of that nature as opposed to a more institutional, impersonal nature.”
Over and over, clients of the Romano Brothers have referred to the firm’s familial approach as the reason they invest their life savings with them.
“I think they treated their customers so well,” says Pete Venema, a Romano Brothers client since the 1960s who was also employed there for a time. “They were willing to work with anybody.”
For their 50th anniversary party, which was held on Aug. 16, the firm commissioned Evanston filmmaker Susan Hope Engel to make a half-hour documentary about the company (the film, entitled “The Romano Brothers Story: 50 Years,” can be viewed on YouTube). In the film, one client after the next shares stories about how the staff at Romano Brothers took a personal interest in their lives. Ms. Engel says this sense of family kept emerging as she interviewed people associated with the Romanos, which is why she opted not to identify them until the closing credits.
“I didn’t put their names in the film [because] everyone who came in was telling a story I could’ve heard from dozens of other people, and so it wasn’t so much who was saying it but what was being said,” says Ms. Engel, later adding, “I think there’s this level of trust that is pretty amazing. I didn’t have to twist anybody’s arm to tell those stories.”
This personal approach set Romano Brothers apart from the Merrill Lynches and the Dean Witters downtown.
“We’re looking at their situation as if it were our own. What would we do? And I think that’s a big difference than a lot of other firms,” says Dick’s son, Joe Romano, who is now the firm’s president.
In addition to its broader family of clients, the firm itself has truly been a Romano family affair. Joe started in 1995, just a couple of years after his uncle, Bob, retired. For the first year and a half, he shared an office with his father, mostly learning the business through osmosis. Today, their offices are adjacent to one another and a cubby-hole is cut into the adjoining wall so they can easily exchange market commentary, advice and observations. Joe met his wife, Natalie, at the firm when she worked as Dick’s assistant. Joe’s sister, Kathy Mayer, and his cousin, Donna Romano, worked at the firm as well in the mid-1980s, and Bob’s son Bill was involved for 27 years until his retirement in 2007.
While the Romanos themselves have sunk two generations into the family business, some of their clients have even deeper roots.
“When we get somebody on board, they’re here for three, four generations,” says Joe Romano. “It’s very rare that we lose a client. Very rare.”
One needs only to read about Frances Willard and attend a City Council meeting to get a sense of Evanstonians’ well-worn tradition of civic engagement and community involvement. In this way, the story of Romano Brothers is perhaps a uniquely Evanston one.
“The health and vibrancy of this community is really important to them and it shows up in their work with non-profits,” says Karen Singer, president and CEO of the YWCA Evanston/North Shore. She says the YWCA is a relatively new customer, but they chose the firm to handle their endowment because of its strong reputation in serving the community.
“When we interviewed with Joe, it was almost instantaneous in terms of comfort,” says Ms. Singer. “They just really understood how important this little pot of money was for our mission … and really took the stewardship of this endowment at a personal level.”
Among the many Evanston organizations that the Romanos have been involved with are Connections for the Homeless and the Woman’s Club of Evanston. Joe Romano is currently a member of the Youth Job Center board of directors and the Evanston Firefighter Pension review board. For its 40th anniversary, the firm donated $40,000 to Evanston non-profits in $5,000 and $10,000 allocations. They received more than 80 proposals. The firm even sponsored the Evanston Symphony Orchestra’s Christmas concert for the first seven years.
Dick Romano has also been intimately involved with the McGaw YMCA for decades, serving as chairman of the board in the early ‘90s and as chair of two capital campaigns.
“[Dick] was and is a civic role model for commitment to the community,” says Bill Geiger, CEO of the McGaw YMCA. “It’s easy to sit back and see the impact that he and Joe have had not only on the McGaw YMCA but the whole community.”
Vickie Burke worked with Romano Brothers on the Woman’s Club of Evanston’s capital campaign in 2006-2007. “They get what the Woman’s Club has given back to the community. That’s so important because I think that they get that for a lot of the not-for-profits in Evanston,” she says.
Ms. Burke says she sits on numerous boards for Evanston non-profits and often sees the Romano name. “There are certain people, organizations and companies in Evanston that you will see on almost all of these annual reports for not-for-profits in Evanston and the Romanos are one of them,” she says.
“I have nothing but good things to say about them,” echoes former longtime Evanston mayor Lorraine Morton. “I’ve known about their work through organizations I have represented. They’ve always made money for them.”
Dick Romano says his firm’s philosophy on giving is simple: “We just want to give back.”
Dick and Bob Romano started with their father’s $50,000 retirement fund and no business plan. Fifty years later, the firm, which recently changed its name to Romano Wealth Management, manages nearly $1 billion in client assets. Amid this tumultuous economic climate, in which seemingly every major American investment firm has come under scrutiny for financial misdeeds, one could assume that the Romano Brothers have made a few mistakes along the way. Compared to the losses racked up by the likes of Goldman Sachs and JP Morgan Chase, the Romanos might even be excused for one or two as merely the cost of doing business. Such an assumption, however, would reveal a lack of familiarity with the Evanston firm.
“One of the things we’re very, very proud of is that we’ve been in this business 50 years and we have not had one formal disciplinary complaint in 50 years. …And I will tell you that I don’t know if there’s another firm that has been in business 50 years that has a completely clean disciplinary record,” says Dick Romano.
Another source of pride, says Joe Romano, is that the firm’s business model, which seemingly emerged organically when they saw results from treating people well, is the same as when his father started the company. And as the firm looks toward its next milestone, the plan is to maintain this personal approach to doing business.
“The reality is, it’s pretty labor-intensive and it’s hard to replicate, but I think we’ll be doing it bigger, I think we’ll be doing it better, but I don’t think we’re going to be the next Merrill Lynch. Nor do we want to be the next Merrill Lynch,” says Joe Romano.
As for Dick Romano, he passed along the reins to his son ten years ago and now spends about seven months out of the year in Florida. But he cannot completely let go of the firm he and his brother Bob started 50 years ago and still manages a nearly $300 million book of business. “I’m 80 years old and I have absolutely no plans to retire. I’m in perfect health and I have at least most of my marbles,” he says. “I intend to be here for a good part of the next 50 years.”