BANKING / FINANCE : Breakaway Brokerage Seeks a Turnaround of Atrocious Timing

Two Newport Beach stockbrokers, facing an industry with fewer customers and smaller commissions, figured that they could come up with a better idea.

Gerald H. Klein and Charles G. Salisbury left their jobs at Prudential-Bache Securities to start Holford Securities Inc., a discount, full-service brokerage in Irvine, on Aug. 1.

The next day, Saddam Hussein’s Iraqi troops invaded Kuwait, sending the stock market in a tailspin and nearly destroying Holford.

Many of Klein’s and Salisbury’s former Prudential-Bache customers were nervous over the invasion and decided that they did not want to switch to the new firm. And, of course, some customers even left the market.

Salisbury acknowledged this week that Holford Securities was hit harder than he and Klein anticipated, “and the market has not cooperated with us at all.”

Fortunately, he said, the company has enough capital to weather the storm and expects to break even by the end of the year, which is about twice as long as the two had anticipated it would take to reach the break-even point.

Klein, Salisbury and three other sales people are promoting Holford in Leisure World, the gated retirement community in Laguna Hills, and elsewhere in South Orange County. By offering discounts of 40% to 70% on commissions, they hope to attract customers to their offices in the Irvine Spectrum.