Her Own Private Wall Street: Patricia Winans, Chairwoman and CEO of Magna Securities Corp.
What does it take to own a part of Wall Street? Ask the highly esteemed Patricia Winans, Chairwoman and CEO of Magna Securities Corp., a New York City brokerage firm that is making a name in Wall Street history. Her career is unparalleled, and her business is bottom line focused, but this strong-willed financial magnate also manages her life and her firm with a softer side–one that is insightful, edifying, and generous to the core. Winans is a forerunner in a field where mostly men dominate, and admittedly she’s had to conform to certain industry conventions. Never losing sight of her identity, or letting opposition strike her down, she continues to focus on her goals, in addition to being a positive leader at work and at home.
Winans first conceived Magna Securities in 1991, and in 1992 opened her own trading desk. She recalls, “It all happened very quickly. Owning my own business was not something that I had always envisioned.” Her entrepreneurial inspiration came from Muriel Siebert, the first woman to own a seat on the New York Stock Exchange, and the first to head one of its member firms–Muriel Siebert & Co., Inc. Winans wholly admired Seibert’s philanthropic efforts. She says, “I wanted to do what Seibert was doing, and I knew the only way I could do it was to start my own firm.” Seibert’s charitable tactics were simple. She would go to an issuer of bonds and ask to participate in a deal; in return for the opportunity she promised to give 50 percent of her commission to charity. Winans had the same goal, but she says, “I knew I couldn’t just start my firm by approaching municipalities, and corporations with the same idea because I didn’t have the money to back it up. Eventually, I was able to set up a type of business that did not require a lot of money to launch.” With $5,000 dollars of start-up capital, a degree in Corporate Finance and Economics, and extensive banking experience, Winans set out as an entrepreneur with a vision.
In over ten years of operation, it is Magna’s willingness to commit to clients that has built and buttressed its good name. When Magna didn’t have the infrastructure, or the funding to provide even half of what their competitors could offer, they compensated with “operational excellence.” Winans says, “If I made a promise to my client, and told them I could deliver, then I was bound and determined that that was what my company would do. Anything less than that was not acceptable.”
Now, Magna Securities can provide institutional investors with a full-service trading desk, and they specialize in commission-recapture, transition management and soft dollars. A few of their clients include Dow 30 companies and big-name corporations like Boeing, Disney, Lockheed Martin, Sempra Energy, and Sprint. Magna also handles the largest pension plan in the world, Cal PERS (California Public Employee Retirement System). Magna prides itself on offering customers a wide range of efficient trade-execution possibilities, anonymity and confidentiality. Their diversified client list includes public and corporate pension funds, foundations, investment advisors, hedge funds, Canadian broker-dealers and universal banks.
The big payoff for Winans didn’t take place until almost six years into the venture. Most entrepreneurial endeavors take approximately five years to spearhead and a tremendous amount of sacrifice. Winans recalls, “It was hard work to set up my own company, and instead of reaping immediate benefits and taking home a huge salary, the money had to be reinvested into the company.” Her determination to build a reputable company overrode any temporary desire of personal wealth. She says, “I sacrificed practically everything you can imagine to keep capital in my firm, and to make sure the company had everything it needed to survive.” For Winans, this meant putting her personal relationships, friendships, and the thought of marriage and children, completely on hold, until her dream was accomplished.
Personal sacrifice and gritty devotion are only part of the success combination. She says, “If I could pinpoint the culture in my firm, and the character trait it takes to make it on Wall Street, I would say most everyone here has a very determined personality.” As the company’s visionary, Winans understands that to make her visions a reality she must be calculating, organized, and methodical. Before this financial magnate owned her own company, she learned to set goals, and every day she repeated the mantra–”what will it take today, to do something towards my goal.”
At the helm of her brokerage firm she learned to manage with micro-perspective exactness. She admits, “I’m constantly looking at our commission goals because I want to know how much money we’ve made, and how close we are to making our weekly goals, or our monthly goals. As long as there is more time in the week, there is more time to push a little harder to try and achieve your goal.” Winans is not of the attitude that whatever happens, will happen. She firmly adheres to making good outcomes arise from hard work. She says, “If you put forth more effort, you can make things happen. This is something I learned in sales prior to starting my firm–you have to be determined to make your goals, and to make your numbers. At the end of the week if you know that you’ve done everything in your power to make things happen, but they don’t, then it will be easier for you to accept the outcome.”
A competitive mentality is the final component of success for Winans. “We’ve always said we’re not afraid to compete, and we know we’re good at what we do,” she proudly asserts. “We’re going to win some, and lose some, but we can win our fair share, and sometimes more, if we remain goal-oriented and very competitive.” In addition, Winans believes it is necessary to be a creative risk-taker. She says, “having a creative side, and utilizing that creativity is an important objective-it will help to distinguish you from the rest.” For example, Winans is looking to expand her business and purchase a larger office space–one of the risks she believes will help her business grow. She says, “It seems like an odd time to grow a business, but when Magna gets hired by a pension fund we generally have a contract associated with that hiring, and the contract gives us a little stability, and the assuredness to know that business will be coming through the door.”
Year after year Magna Securities has continued to thrive. Even when the market was plummeting, Winans remarks, “The result was that a lot of our clients began re-balancing their portfolio–selling stocks they didn’t want and buying stocks they thought would go up next. They were re-positioning themselves in stocks that would be poised for further growth.” With more activity generated, it ultimately translated into more business for the firm. Soon this massive amount of selling would end.
Individuals who were selling, or who got out of the market completely, placed a lot of downward pressure on the market. Now that the market is more at an even keel, business at Magna is decelerating. During the 2002 fiscal year, revenue was down by 20 percent, and Magna experienced its first semi-slump. This monetary slowdown wasn’t the result of losing any clients, but as Winans explains, “The amount of portfolio turnover was down because the market was trading in a very narrow range, as opposed to going straight up, it has been staying in the same range. This year trading stayed in the 7000 to 8500 range, without ever quite going beyond 9000 for any sustained amount of time.” In other words, in past years Magna turned a portfolio over 10 to 15 times, but due to the narrow range of trading, the same portfolio may now only turn over 3 to 5 times.
Philanthropy outside of the firm makes Winans noble, but philanthropy within the firm is what makes Magna Securities a great success. On generosity, Winans says, “I have always been generous with my employees because I am smart enough to realize, if you’re running a business you can’t do it by yourself-you need people who are willing to go beyond the call of duty.” Some critics of this philosophy might suggest that it is impossible to be bottom line focused and very generous at the same time. Winans reassures business owners, the formula that works best is “to be generous on one hand and very firm on the other. It’s a good combination because your employees instinctively know you’re not going to take advantage of them, and they won’t take advantage of you.”
With all of Magna’s success, Winans has devoted philanthropic efforts to her own family. In the same tradition of Muriel Siebert’s benevolence, Winans has given every member of her immediate and extended family a new future. Taking them out of the inner cities of Chicago and Houston, and relocating them to a small community in Arizona, Winans’ goal is to provide them with leadership, and to place them in an environment where they can prosper.
Winans drive to be the principal motivator in her family is owed to her experience as a business leader. She says, “My business made me realize that any type of life, whether it is an organization or a family–must have leadership to survive.”
At the age of 12, Winans mother passed away, turning the family upside down. She recalls, “not that my father wasn’t a leader-he was a decorated U.S. Army Major-but his style of leadership was one of strict discipline, and he didn’t know how to get in touch with his kids, so the family structure broke down.” All of Winans sisters and brothers fell into a destructive spiral of crime and substance abuse. Conversely, Patricia felt compelled to get out of that environment and eventually worked to put herself through DePaul University. Winans’ drive to excel was an extension of what her mother wanted for their family. She says, “I always thought someday, if I was able, I would take my family out of that negative environment and correct the situation.” Of all that Winans has accomplished, she prides herself most on being able to put her family back on track. Triumphantly she imparts, “I have seven nephews, and two nieces, and now all of them are working. It took a lot of money to get them out, but no one was left behind.”
Winans attributes her “hard-core” business savvy to her father’s military style, but she says when it comes to her leadership style, “I don’t rule with fear–instead I prefer a loving, but firm hand.” She believes you can get the best out of people when you show them why something is to their advantage, and stands firmly by the conviction– ”everyone doesn’t have to love you, but they have to respect you.”
The Rise to Wall Street
Out of 438 graduating high school seniors, Winans placed 38th in her class, but humbly considered herself an average student. Her biggest lesson in school was learning to develop a rapport with teachers so she could ask questions without feeling intimidated. She says, “Admitting to myself that I didn’t understand something, put me over the top. Instead of saying, ‘I don’t get it,’ and thinking I wasn’t smart enough, I learned to ask questions, and find answers.”
What eventually led Winans into corporate finance was her ability to think in quantitative terms, and analyze various probabilities. Despite earning a “C” in high school algebra, she queried her teachers constantly and furthered her skills in mathematics. In 1979, while in college, Winans went to work for the first National Bank of Chicago, and started her career in finance as a bank teller. When Winans learned that the bond department paid the most money, she applied for a position and was hired because she had “really good diction.” She explains, “Since a lot of what goes on is done by phone, and people need to understand what you’re saying when you pronounce a number, the position required that you speak clearly, otherwise a client could misunderstand, and there would be a huge monetary problem on your hands.”
Winans credits her time in the bond department as the place that taught her corporate lingo and the know-how needed to excel in corporate America. At the time, the bank earnestly wanted to promote minorities, but Winans explains, “they needed people who ultimately fit into the position whether they were a minority or not. And that’s the way it is, you can’t just capitalize on being a minority unless you have the entire package to go with it.” She admits that even with good diction, she was still corrected often, but her willingness to learn prompted her bank superiors to promote her.
Winans believes that “a lot of young adults don’t want to accept that they have to conform to some extent in order to get ahead. If you conform, you get ahead sooner, and the money comes sooner.” Does she feel a betrayal of identity in conformity? She answers, “I may find myself speaking Ebonics when I’m with family, so I’m comfortable with the language, but I choose not to use it in a corporate environment.”
Winans recounts a conversation with her father about moving ahead in her career. Using an analogy, he explained that the banking industry is similar to the Army–it’s a place where one can move up in the ranks. “I may have started as a bank teller, but I definitely wanted to move up.” True to her goals, by the time Winans left banking to start her own successful business, she had attained the prominent position of Vice President.