Finding a brokerage firm that hasnt struggled in the past two years would be like finding a grain of pepper in a pile of rocks.


D.A. Davidson & Co., a Great Falls, Mont.-based investment firm with a Spokane branch, has had its taste of the countrys sour economy, but continues to grow and refine its services, says Spokane branch manager Bob Cummings. Its branch here, which includes three offices with one in Colville, has been open for 10 years, has more than $1 billion in assets under management, and 10,000 clients, he says.


The Spokane branch started with about 1,000 clients in 1992. The client base has grown steadily since then and assets grew for eight years, Cummings says. By the end of the 1990s, revenue was 14 times what it was when the branch opened. When the economy took a nosedive in 2000, revenue dropped 20 percent.


Clients have become less aggressive about investing during the economys recent downturn, Cummings says. The branch hasnt had to lay off employees, but a few support-staff positions went unfilled when some workers left the company, he says.


Cummings compares the countrys recent slump with the declines the U.S. market suffered in the 1920s and 1930s, when mass production of automobiles caused the economy to surge ahead, and then put it into a tailspin, just as the dot-coms inflated the market during the 1990s, only to dot-bomb two years ago. He says hes optimistic that the stock market, as well as D.A. Davidson, will prosper once the economy stabilizes.


I look for the same kind of benefits we saw from the 40s through the 60s, in terms of using Internet technology and investors benefiting from it, Cummings says. We, as a firm, are very enthusiastic about what the future holds for a company that can maintain a personal level of service for people.


D.A. Davidson has withstood the recently turbulent economy in part because its not involved in a lot of public offerings, Cummings said. At the same time, it has attracted stockbrokers from other Spokane firms to its flexible work atmosphere, and is adding a new service for clientslegal advice on estate and trust planning.


Were trying to put together a platform that allows brokers to do financial planning, as well as estate planning, Cummings says.


Founded in 1935, D.A. Davidson claims to be the largest full-service investment firm based in the Pacific Northwest. It has 34 retail offices in seven states. Its part of Davidson Cos., which also includes Davidson Trust Co., a wealth-management and trust operation, Davidson Investment Advisors, a professional money-management firm, and Davidson Travel, a travel agency. Davidson Cos. has $76 million in total capital and 750 employees.


The assets managed by the Spokane branch account for 11 percent of the Davidson Companies entire brokerage businessthe largest amount aside from its headquartersof Davidson Cos. 34 branch offices, Cummings says. The branch here includes offices in Old City Hall, 221 N. Wall; on the South Hill, at 2204 E. 29th; and in Colville. The company also has a Coeur dAlene office, although it isnt a part of the Spokane branch.


D.A. Davidson opened here 10 years ago with one office and only Cummings, an assistant, and two brokers staffing it. The branch now employs 22 brokers, 20 support-staff members, and six other employees in its trust division, and is looking to hire more, Cummings says. The branch recently hired Lee Greene, a Spokane attorney with 25 years of experience in estate and trust planning, to fill an educational role for clients, determining their needs and referring them to specific advisers at the office for financial planning.


Cummings says that at first, the branchs brokers raised concerns that Greenes role would encroach on their territory, but a similar service was successful at D.A. Davidsons branch in Bozeman, Mont., and staff members here now embrace it.


The fact that this company would bring on this kind of service is unique, Greene says. It shows a desire to really provide overall financial planning for clients.


Davidson Cos. provides more than $1 million to the graduate business programs of 21 regional colleges and universities to invest. Students in those programs create portfolios and decide how to invest the money. Any return on a schools portfolio above six percent is donated to that institution, Cummings says.


Its a way of giving back to various communities, Cummings says. Its a way of reaching out to some young investors who hopefully will remember what we did for them.


Cummings says D.A. Davidson has grown because its employee owned and employee friendly.


Were not a highly structured company in terms of work and lifestyle, he says.


As one example of that low-key corporate structure, Cummings cited David Milbrath, one of the offices highest-producing brokers, who spends about 75 percent of his time away from Spokane. For three months out of the year, Milbrath works from the mountains of Montana, where he skis. He spends November and April in Arizona, where he rides his Harley-Davidson motorcycle, and he works out of his lake house in Sandpoint, Idaho, much of the rest of the time.


I cant believe that Im so lucky, Milbrath says. I thank the Lord every day.


Technology, plus Milbraths brokering style, allows him this luxury, Milbrath says. He invests clients money solely in mutual funds and for management by investment managers. Rather than identifying specific stocks and bonds for clients and then contacting those clients frequently about buying or selling investments, and altering their portfolios, as a conventional broker would, Milbrath relies on the expertise of professional money managers, he says.


Those are companies such as Seattle-based Rigel Capital Management and McKinley Capital Management Inc., of Anchorage, Alaska, that manage money invested in specific market segments.


Clients get better service because theres a professional monitoring the account daily, Milbrath says. Its all done on a flat fee so that theres no commissions.


Instead of calling clients every three weeks, Milbrath contacts them once every three months.


We might talk about the grandkids, or the market, or anything, Milbrath says, but they know Im not calling to sell them something.


Most D.A. Davidson brokers here use money managers to some extent, but Milbrath is one of only three that base most or all of their clients investments on them, he says.


Many of D.A. Davidsons clients choose to have their assets managed on a fee basis, rather than on conventional transaction-based plan, Cummings says. Its up to brokers and clients to determine the appropriate options.


We dont dictate how a broker runs their business, Cummings says, as long as its ethical.


The company has had to adjust its investment practices over the past two years, he says. Investors and brokers have gone full circle, Cummings says. At cocktail parties they were giving investment advice to friends (before the downturn in the economy). Now, theyre going to parties and dont want to talk about it. Its been a trying time.


Brokers at D.A. Davidson focus on planning and organizing clients investments, rather than pursuing speculative strategies, Cummings says.


Its less about which stock to buy, he says. Its more about, How do we diversify ourselves to not be exposed to extreme risk, yet capture good risk return?


Cummings has faith in the stock markets recovery and in D.A. Davidsons ability to adjust to client needs as it rides the economys sometimes turbulent wave.


The long term tells you the market will return 7 or 8 percent, he says. The kind of performance weve had in the last two years has just made a lot of people adjust their plans.