The good news, according to Alexandra Lebenthal, is that nearly everyone in the tri-state area has heard of her firm. The bad news is that the family never totally capitalized on that potent brand recognition.

However, it’s never over until it’s over, and the capable Ms. Lebenthal, president of the eponymous firm, is far from calling it quits.

If you own a radio, you’ve heard Alexandra Lebenthal offering to educate you about municipal bonds. It’s an appealing pitch, suggesting personalized service in this age of computer generated communication. And, she means it.

If a Lebenthal client calls in with a problem, they are likely to hear back from none other than the CEO herself, who recognizes the power of such individualized attention.

Would that building the firm were quite that easy. In an era in which large Wall Street firms routinely gobble up their smaller brethren, it was perhaps inevitable that Lebenthal & Company would sell.

And sell they did, to Advest, part of the MONY group, in 2001. And, of course, that was not the end of it. The Axa Group, a large French financial conglomerate, bought the MONY group just last year.

Really, it’s impressive that there’s much left of Lebenthal & Company at all. So many small firms have completely disappeared from sight over the years. The power of branding, though, is huge. This firm represents to many thousands of individual investors all they want to know about municipal bonds, and in many cases, investments in general.

Who are these clients? They are, according to Ms. Lebenthal, “the millionaire next door.” They are doctors and realtors and professionals of all kinds who have been able to put some money away, but are not especially sophisticated about how to invest it. They want yield, and security, and they want to be treated well.

And, as self-made business people, they are not particularly fond of turning over to Uncle Sam any more of their money than necessary.

In other words, they don’t want hedge funds or other snazzy new investment concepts, and they surely don’t want to deal with an anonymous computer-generated voice on the other end of the line.

That being said, a review of one’s municipal bond portfolio today could cure even the worst attack of insomnia. Yields are low, and likely to remain fairly low. Going longer term doesn’t boost returns much. Nor does dipping down in quality.

For instance, the yield on “AAA” five-year munis today is 2.83%. On 10-year maturities, the yield is 3.56% – almost no premium. The yield on 10-year corporate “BBB” bonds (a sizeable step down in quality) is around 5%. Wow. In other words, there’s not much you can do to boost your returns.

In other words, things are slow in the bond business, and especially in munis. But, there is a case to be made for these wholesome and stodgy instruments, and no one is better able to make it than the folks at Lebenthal.

The case rests, of course, on the tax-exempt status of municipal bonds. And, the numbers are compelling.

For instance, if you are in the highest tax bracket and live in New York, your combined tax rate is nearly 42% (unless you have a really clever tax attorney – in which case please send us his name).

To equal the current after-tax yield on a 10-year muni, you would have to earn 6% on a competing investment. Wait a minute! Not all the hedge funds did that well last year. So much for stodgy.

So how is Alexandra Lebenthal going to rev up her company? She is starting with that which she knows best – sales. Ms. Lebenthal joined the firm a few years out of Princeton, after a brief stint at Kidder Peabody. She began as a salesperson, after a certain amount of requisite training, and was ultimately assigned to work for her grandmother.

Grandmother? Yes, Sayra and Louis Lebenthal jointly founded the firm in 1925, originally focusing on trading bond odd-lots. In 1988, Sayra Lebenthal, age 91, was still going strong. She had a great number of devoted clients, and it was her granddaughter’s task to keep them on.

However, for a young woman in her late 20s, working for the feisty older lady was not quite what she had in mind, though she admits she learned a great deal from her forebear. As soon as she could, Ms. Lebenthal gratefully returned to the sales department, her first love.

In 1993 she took over management of the firm’s nascent mutual fund business and at about the same time had her first of three children. The follow ing year was a misery. The bond business was in the doldrums, and the firm, trying to diversify away from its traditional niche, lost its way.

A number of big firms, such as Donaldson, Lufkin and Jeanrette and First Boston were struggling to exit the municipal bond business. Spreads had narrowed by about two-thirds in the preceding decade, wringing most of the profitability out of the industry.

Ms. Lebenthal took over as president in 1995, and started taking the company back to its roots. In her view, that meant serving individual investors with personal attention and a focus on municipal bonds.

Her ambition today is to continue to build the sales force, and to open strategic new offices in key markets. In the past two years, in line with this goal, she has almost doubled the number of salespeople working at Lebenthal. How does she do it? By treating employees like family. Just like clients.

Testament to her abilities, Ms. Lebenthal’s job has gotten broader since the company was sold. Today she runs not only the Lebenthal muni bond business, but also has responsibility for Advest’s muni operations, which are substantially larger and directed at institutional investors.

While there are about 70 salespeople at Lebenthal, there are another 430 at Advest. Together, the firms generate about $60 million in combined revenues in her area.

In the past two years, Lebenthal has opened five new offices, focusing on key retail markets such as Florida, New Jersey, and New York.

What’s next? Continued expansion, more salespeople (she’s aiming at 100), new offices. Lebenthal recently opened an office on Long Island which brought not only increased business but a huge gain in productivity. It seems that the time spent commuting by employees in the area could be better spent calling clients. Surprise, surprise.

Also, Ms. Lebenthal hopes to hang new products onto the firm’s existing client relationships. Though this is not a particularly original quest, the firm’s close ties with clients might give it a leg up in selling insurance, estate planning, and other higher-margin offerings. Also, the ties to the many firms that make up Axa and Advest will undoubtedly offer up some opportunities for cross-selling.

One area that will not pop up on her screen is hedge funds. There is no way to sell munis short, or even to hedge them. That’s OK with Ms. Lebenthal. As she tells us on the radio, it’s not just making money that counts; it’s holding onto it.