Media Articles

11 Oct

Posted at 23:39h in Media Articles by

By Gregg Greenberg

The widespread devastation caused by hurricanes Helene and Milton has wealth managers updating their emergency plans.

First hurricane Helene smashed the Southeast, destroying homes and businesses. Not long after, hurricane Milton retraced some of her catastrophic path, adding to both the human toll and billions of dollars of devastation.

Taken together, the lethal storms made business owners nationwide, including wealth managers, rethink their business continuity plans.

Marc Fischer, director of business services at Procyon Partners, for example, says he keeps an emergency response plan in place that is shared with all his staff members and is implemented in the event of an emergency or natural disaster. It summarizes Procyon’s system backup procedures, how to access systems remotely, and what to do in the event of emergencies.

“We’ve found one of the most important considerations is to maintain lines of communication. For that reason, we have email distribution lists, of course, but we also have an intranet where we post critical information,” said Fischer.

Fischer says his intranet app is also accessible via mobile phone and the landing page has a scrolling bar for crucial alerts. Perhaps most importantly, when he posts critical information, the system can override any communications filter a user may have configured. In other words, the post will not be on the intranet, but hit every email inbox, and notify users on their smartphones as well.

With regard to advising the firm’s clients about emergency planning, Fischer says it boils down to the individual client and their own comfort level.

“One of our founding partners is a proponent of the ‘Red Folder.’ This is a simple red manilla folder, kept in a strong box, and includes all the most important information which would be absolutely vital to have at one’s fingertips if the head of the household died or became severely incapacitated,” said Fischer, adding that all family members should know how to access the Red Folder and “need to practice retrieving it from time to time.”

Elsewhere, Brent Weiss, head of financial wellness at Facet, says it’s the duty of a financial planner to make sure clients and staff are prepared for hurricanes, wildfires, or other catastrophic emergencies.

“Helping our members grow their money and build wealth is important, and it’s just as important to help them protect it and, maybe more importantly, the people they care about most,” said Weiss. “If you aren’t having these conversations with your clients or members, take the time to do it. Not only will you help them with an essential piece of their overall plan, but you’ll position yourself as their trusted partner for years to come.”

In other words, disaster planning is good business too.

And as a Floridian who lives only 50 miles from where hurricane Milton made landfall, Weiss has firsthand experience in dealing with natural disasters.

“We often think they will never happen to us, but they do. And they test our emotions and our relationships. Losing everything or even just something small can have a profound impact on the way we look at the world. In those moments, having a plan can be the thing that gives you hope. Homes can be rebuilt and things can be rebought if you plan properly, but knowing you have a plan for you, your family, and everything you work so hard for can be priceless,” said Weiss.

Knowing the specific risks is an important step as well, he said. In Florida, for example, hurricane risk is high, while in California, the risk of earthquakes would be a primary concern. In areas with known risks, one can generally get insurance for protection against a natural disaster.

“Talk to a property and casualty insurance agent to determine what type of coverage is offered, what you need, and the cost of the protection. In some areas, you may need special coverage. As an example, a flood is not covered under a regular homeowners insurance policy, and you will need to get a separate policy to cover any losses,” Weiss said.

Another tip from Weiss is for business owners and homeowners to take and store videos of their properties. It will help expedite the claims process since you’ll have a more accurate accounting of things for your insurance company.

“This might sound silly, but one of the best and easiest ways to prepare for an insurance claim is to take a video of your home. Turn on the camera and walk around your house both inside and out to document what you own and the state of your home before any event occurs,” said Weiss.

Meanwhile, Scott Victoria, COO at TradePMR, says his firm is markedly attentive to emergency preparedness considering its Florida location. He says the firm has a response team that has representation from all facets of the business to ensure that all aspects are covered including clients, employees, compliance, legal, operations, and technology.

“We have a robust Business Continuity Plan (BCP) that is regularly reviewed and tested so that our staff are well-versed in emergency procedures. This plan includes clear communication protocols and ensuring that our employees have access to the necessary resources in the event of an evacuation,” said Victoria.

He adds that the company also invested in cloud-based systems and redundant infrastructure, allowing their employees to securely access our platforms from anywhere, whether that’s for evacuation support or for setting up remote work environments in advance of any storms.

Mason Salit, chief talent officer at Dynasty Financial Partners, says the company has a business continuity team that meets regularly and updates their emergency plan when necessary. The team includes senior leaders from technology, operations, finance, marketing, HR, and compliance. For Helene and Milton, Salit said the emergency team got ahead of the storms, tracking their paths in order to ensure they had plans in place.

“For Milton, we started having meetings and communicating with the Dynasty Team on Saturday, Oct. 5.  By Sunday, Oct. 6, we had already told the team that we wanted everyone to work from a safe place,” said Salit. “We were giving them the opportunity to take hotel rooms, rent cars, evacuate to wherever they needed.”

Salit says Dynasty’s employees formulate their own personal emergency plans during the year. When faced with storms like Helene and Milton, however, the firm tracks where its employees have relocated. Dynasty also uses an emergency notification system to communicate with employees before, during and after the storms.

Casey Sabnis, senior vice president of operational risk at LPL Financial, said many advisors may have found themselves unable to maintain critical operations due to power outages, evacuation orders, or infrastructure damage in the wake of Helene and Milton. According to Sabnis, the past few days have been an uncomfortable but necessary reminder of the importance of comprehensive emergency and business continuity planning for advisors.

“Having a plan on paper is just the first step – you’ve got to put it into action and ensure it’s effective,” said Sabnis. “For instance, having a list of client cell phone numbers is a great start, but it’s not much help if it’s stuck on a computer in a powerless office. Instead, ensure that hard copies are available in multiple locations and that key executives have the means to communicate, such as phone power banks or generators, even when the power’s out.”

When advising clients, Sabnis encourages them to have emergency cash on hand, as ATMs and credit cards may not work during power outages.

“As for document storage, it’s more crucial than ever. Important files should be backed up and accessible remotely or stored in secure, off-site or cloud-based locations to ensure they’re protected and available when needed most,” said Sabnis.

Finally, Janet Fox, LPL financial advisor and president of ACH Investment Group, agrees that power outages can create havoc during natural disasters. That’s why it is important to have back up plans and a little cash on hand in the event of interruptions.

“A withdrawal from your bank ATM in advance might be beneficial. It does not have to be huge amounts of cash, but enough to get by for a couple of days or so for supplies. This would include pet food and supplies for any of your pets,” said Fox.

09 Oct

Posted at 18:51h in Media Articles by

Is it finally time to wave goodbye to the industry standard one-percent AUM fee?

Let’s talk about the one percent, shall we? It’s been a while since anyone brought it up.

Sorry, not that one percent. Not the one politicians rail against for holding almost a quarter of the nation’s wealth. Those folks are doing quite well, thank you very much, enjoying the bounty that comes with record-high stock prices and a Federal Reserve that won’t let them go lower.

No, we’re talking about the one percent that that one percent is paying their wealth managers to oversee their increasingly bountiful portfolios. Because even with break points above and below that 100 basis-point fee for assets under management (AUM), it still remains the industry benchmark – the index finger in the wind, if you will, indicating when wealth managers start that vital discussion regarding the value of their services.

Well, that metaphorical finger has been up in that very same place for a long, long time now, despite the fact that advisors are now being asked to do a whole lot more for their clients. Even the not-so filthy rich ones.

Sure, the AUM model seems fair when compared to the now-ridiculous commissions that dominated the financial world only a few decades ago. But estate planning takes time. So does researching, managing, and monitoring alternative assets.

And time, as has often and rightly been said, equals money. Time is the very thing financial advisors are being paid for. It’s not like your wealth manager is charging clients for raw materials or delivery. It’s all about the time they devote to clients and the literal finger clicks it takes to get them to retirement, or wherever it is they want to go.

So, with that in mind, is it finally time to give the finger – and not the index one – to the one-percent fee?

 

THE SQUEEZE IS ON

 

Robert Pearl, co-founder and wealth advisor at G&P Financial, offers clients a standard, tiered fee structure of 1.25 percent for assets under $1 million, one percent for assets between $1 million and $5 million, and 0.80 percent for assets over $5 million. Currently he does not foresee any changes to his pricing model. Nevertheless, he does anticipate offering more services at the same cost simply because the industry keeps trending that way.

“Many firms are already incorporating services like tax planning and preparation, estate planning, and, for higher-net-worth clients, even services such as bill payments. I believe the next phase in our industry will likely include life coaching services as part of the overall offering,” said Pearl.

Right now Pearl says he does not feel much pressure to reduce fees. In fact, as his client base nears capacity, he’s been contemplating raising fees for new clients. And for those seeking financial planning advice, but who don’t meet the asset minimums required to work with him directly, he is offering a subscription-based model for ongoing planning and guidance.

Jonathan Foster, president & CEO at Angeles Wealth Management, also lists a typical tiered billing schedule, starting at that fabled one percent for the first $2 million in advised assets and scaling down to as low as 50 basis points for assets over $25 million. And he agrees that the “headline” fee rate has dropped only modestly, but the services provided, and the cost thereof, have increased dramatically.

“Twenty-plus years ago, private client advisors could charge one percent per year to basically pick a basket of full-priced mutual funds. Now, advisors are expected to provide comprehensive wealth services for the same price – financial planning, after-tax management, asset allocation, manager research, philanthropy planning, estate and planning,”

Added Foster, “Looking into the future, I think traditional asset-management fees will continue to compress, with index funds charging near zero, customized indexing and tax loss harvesting indexing under 10 basis points, and active at 25 basis points or less. I cannot imagine anyone paying one percent per year for this in five years.”

The key to maintaining prices, according to Foster, is to provide clients with value.

“Are we providing great value to the family for what we charge? If not, it’s not sustainable,” said Foster.

That said, Zoltan Pongracz, private wealth advisor at Procyon Partners, is not sold on the idea that prices are being compressed, nor is he feeling much pressure to lower fees. He points to an AdvisorHub study showing that fees for clients with significant assets ticked up between 2020 and 2021 primarily because clients came to understand the value of the services they were receiving beyond portfolio management.

“Advisors focused solely on portfolios are commoditized and face fee pressure, but when you help clients live better lives through robust financial planning, fees become secondary. Many claim to offer financial planning, but executing it well is an entirely different game – it’s like comparing me to Michael Jordan because we both play basketball,” said Pongracz.

 

A LITTLE MORE FOR A LITTLE MORE

 

Pongracz adds that through Procyon Trust, their trust and estate vertical, they offer corporate trustee services for an additional fee. This ensures trust assets are managed impartially and in accordance with the trust document’s terms, offering continuity and expertise for beneficiaries.

“We feel we’re fairly compensated for these extra services,” said Pongracz. “Could we charge more, and would people pay it? Sure. But our aim is to remain middle-of-the-road on cost while delivering top-tier results and value.”

Taking a similar approach is John Mosher, partner at Unique Wealth, who says some of his firm’s clients compensate them with a consulting agreement for advice surrounding other issues like business succession planning, estate planning concepts, informal business valuations and many others. However, he adds that “most clients receive services like these as part of the value we deliver in their comprehensive planning experience.”

On the topic of charging for ancillary services, Jason Gordo, co-founder and president at Modern Wealth Management, says private placements can either be billed on a one-time basis or included in the advisory fee, depending on how much liquidity and control they retain.

“If there’s a high level of control and influence, it might be integrated into the overall advisory fee. Otherwise, a one-time billing structure could be more appropriate,” said Gordo.

Furthermore, he offers estate and tax planning as additional services and bills them separately from the core financial planning and portfolio management services.

“This allows clients to tailor their planning needs based on their unique estate planning requirements,” said Gordo.

Finally, Anders Jones, CEO & Co-Founder at Facet, takes things to a new level by offering, well, levels. The firm charges an annual membership fee separated into three tiers – $2,000, $3,000 and $6,000 – based on level of service and the extent to which they implement the advice they offer. Across all tiers they include investment management as part of the annual fee.

“We strongly believe that the commission- and AUM-based fee approaches create an inherent conflict of interest and do not put a client’s best interests first,” said Jones. “We believe that over time, the industry will shift to more transparent, flat, and hourly pricing, where clients understand exactly what they are paying for and exactly what they are getting.”

20 Sep

Posted at 20:20h in Media Articles by

In the dynamic landscape of finance and accounting, the relationship between private equity and CPA firms has transformed unlocking opportunities for wealth creation for partners of CPA firms. This article explores why private equity is attracted to CPA advisory firms and how strategic investment can greatly benefit the firms and their partners.

By way of background, we are private wealth advisors at a fully independent registered investment advisor. Previously, we were partners of a Top 10 public accounting firm and co-led their wholly owned RIA. We’ve completed hundreds of financial plans for partners across tax, assurance, and consulting.

Our takeaway: The whole industry is ripe for change.

At the heart of many CPA firms lie the pervasive challenges of talent acquisition, deferred compensation, and slowing organic growth.

Talent acquisition

It’s no secret that the ability to attract talented young people to the profession is struggling. On July 31, 2024, the National Pipeline Advisory Group, an independent advisory group convened by the AICPA’s Governing Council, released its final report of its recommendations to address the profession’s talent shortage. Their six recommendations were as follows:

1. Address the cost and time of education;
2. Make the academic experience more engaging;
3. Enhance the employee experience, particularly in the first five years of employment;
4. Prioritize strategies to expand access to the profession for the underrepresented at every stage;
5. Provide better support to CPA Exam candidates; and lastly,
6. Tell a better story to young adults thinking about which career to pursue on the impact accounting has on businesses, communities and economies.

It’s clear the intense, demanding nature of “busy season” that can occur several times throughout the year depending on where you sit within the organization, combined with staff turnover and increased pressure from management teams to drive organic growth, are dissuading many from pursuing careers in the field.

This comes at a time when tax and audit compliance are getting more complex. The once idolized image of becoming a partner at a CPA firm has lost its luster among the younger generation after considering the time it takes to earn partner status following graduation (approximately 10-15 years). Instead, they are considering other career opportunities that utilize the same skill sets.

Deferred compensation

The path of partnership is more palatable for people who’ve been in the profession for some time already. They’ve seen how deferred compensation plays out in the end from watching others retire and receive benefits. They know they will work till (or almost till) mandated retirement age to accumulate length of service and other compensation awards that will be deferred till after retirement.
Each firm will use a different formula, but generally, it is one that pays a multiple of the partners’ average last few years salary distributed over a fixed number of years. For example, let’s say a partner earns an average salary over their last five years of service of $500,000. This can get a multiple of two, which equals $1,000,000 in deferred compensation paid out over 10 years, so $100,000 per year in retirement.

In practice, this structure has worked well. Senior partners retired and transitioned their book of business to younger partners. The younger partners then grew that book of business until they retired and so on, with each new class of partners’ success contributing to pay the firm’s deferred compensation liabilities. The cycle continues.

Fast forward to today, and the profession has evolved. Deferred compensation liabilities have become larger as more and more partners retire. Demographically, a significant number of firm partners are eligible for retirement now, and one can’t help but wonder how many members retired earlier than planned due to the pandemic. This model begins to falter if you are not regularly ushering in a new generation of rain makers.

Whether you are investing in new technology or looking to fuel growth through M&A, these initiatives all come at a cost. Decreasing business investment due to capital being allocated to deferred compensation liabilities can lead to a business losing its edge over time.

 

09 Sep

Posted at 19:34h in Media Articles by

Dynasty Affiliates Share Retirement Strategies For Adjusting To Current Conditions, Trends And Tax Planning In The Final Months Of 2024

With less than four months to go before we ring in 2025, the approaching year end serves as a reminder for advisors and clients to check on portfolio performance, consider adjustments in response to developing trends, review strategic options for tax planning and adapt for current conditions.

Especially for clients who are nearing or in retirement, portfolio adjustments can make a significant difference in their quality of life in both the near and long term. Three executives at affiliates of Dynasty Financial Partners walk us through key year-end retirement planning considerations.

Key Changes And Trends For Retirement Planning

As we near the end of the year, Matt Liebman, Founding Partner and CEO of Amplius Wealth Advisors, says that we must monitor legislative and regulatory actions after the election that may impact financial planning.

Matt Liebman, Founding Partner & CEO, Amplius Wealth Advisors Also looking to legislative issues, Ryan Kemp, Account Vice President at Cyndeo Wealth Partners, points out the current higher levels of the federal estate tax exemption are set to expire in 2025. “It can take months for a complicated estate plan to be restructured and executed and assets to be moved. The closer we get to the end of next year without it looking like Congress will act, the harder it will be to get an estate plan change implemented in time.”

Robert S. Alimena, Vice President, Private Wealth Advisor at Procyon Partners, notes that increasing expenses due to inflation have impacted clients’ financial plans. He explains that client costs continue to increase, although at a slower rate than the past few years, which pushes up withdrawal needs. “As withdrawal needs increase, individuals need to ensure their asset allocation continues to match up with their personal benchmark objectives to achieve their goals.”

Alimena points to clients’ cash allocations. “Right now money market rates are attractive, but in a falling rate environment that attractive rate could change quickly and in order to ensure their portfolio is achieving the desired return profile, re-allocating cash to asset classes with better long-term growth prospects is prudent in avoiding opportunity costs.”

Adjusting Retirement Strategies For Current Conditions

Kemp says that cash is important when adjusting client portfolios to current conditions. He recommends holding funds for several years of retirement needs in cash and cash alternatives. “It appears that we are continuing to move toward an eventual Federal Reserve rate cut and investors should prepare their safer money and fixed income holdings for a normalization of the yield curve.”

Due to the rate hiking cycle, Alimena says the fixed income part of a portfolio is “now at a point where it can now do more of the heavy lifting in helping clients achieve their target portfolio returns.” He points out that falling bond prices and strong equity returns may have pushed portfolios “out of range with regards to their risk tolerance and expected withdrawal rate.

He recommends reviewing clients’ portfolio allocations as well as their spending needs. “This might include adding non-correlated assets through the use of alternatives to ensure their investment assets are properly diversified and minimize volatility relative to their personal target returns.”

Liebman states that short-term economic conditions shouldn’t “have a major impact on solid long-term financial plans that balance both short-term and long-term goals.”

Tax Moves Before Year-End

Approaching the end of 2024, Liebman says that tax considerations are best discussed with clients one-on-one, and he cautions advisors and clients to ensure their required minimum distributions are complete.

Kemp notes that Roth conversions and tax loss harvesting should always be considered at the end of the year. “Another often overlooked opportunity is to max out a Health Savings Account, if eligible, and invest those funds for later.”

Alimena proposes that advisors and clients consider adding after-tax contributions to their 401(k) plans. While the current limit for individual contributions is $23,000 (or $30,500 if over 50), Alimena explains that the overall contribution limit is $69,000, which could allow up to $46,000 additional after-tax dollars. “The employee can then roll these after-tax contributions into a Roth IRA when they retire achieving the mega backdoor Roth.”

Alimena also suggests another strategy for clients with 1099-NEC income or who are self-employed: the Solo 401(k). “Even if the individual is maxing their employee contributions through their W2 job, they could still make a profit sharing contribution into their Solo 401(k), deferring taxes on up to an additional $69,000 depending on their self-employed income. For people in a higher tax bracket, this strategy can allow them to defer more funds for retirement, reducing their taxable income and increasing their nest egg.

 

 

20 Aug

Posted at 14:57h in Media Articles, Uncategorized by

Procyon Partners is proud to announce that Jerry Sneed, CFA®, CAIA® and Frank McKiernan have been recognized by Forbes and Shook Research as top Next-Gen Wealth Advisors Best-In-State for 2024. This prestigious honor highlights their exceptional expertise and dedication to their clients, solidifying their positions as leaders in the wealth management industry.

The Forbes/SHOOK Top Next-Gen Advisors Best-In-State list, which includes 1,621 top professionals who collectively manage nearly $2.8 trillion in assets, identifies the industry’s rising stars—advisors born in 1985 or later with at least four years of experience. With the average age of a financial advisor now at 56, and fewer than one-third of advisors under 40, the recognition of Sneed and McKiernan underscores the critical importance of fresh talent in financial advice.

“We are honored to be recognized by Forbes and Shook Research,” said Jerry Sneed. “This acknowledgment is a testament to the hard work we put in every day to ensure our clients are well-positioned for the future.”
Frank McKiernan added, “This recognition motivates us to continue pushing boundaries and delivering the highest level of service to our clients.”

Phil, CEO of Procyon Partners, praised the duo’s achievements: “Jerry and Frank embody the next generation of wealth advisors, and their recognition by Forbes is well-deserved. At Procyon Partners, we understand the importance of supporting and growing talent like Jerry and Frank—not only for the success of our firm but also to provide our clients with the innovative and forward-thinking advice they need in a rapidly changing world.”

 

Data provided by SHOOK® Research, LLC. Data as of 3/31/24. SHOOK considered advisors born in 1985 or later with a minimum 4 years as an advisor. Advisors have: built their own practices and lead their teams; joined teams and are viewed as future leadership; or a combination of both. Ranking algorithm is based on qualitative measures: telephone and in-person interviews to measure best practices. Also reviewed: client retention, industry experience, credentials, review of compliance records, firm nominations; and quantitative criteria, such as: assets under management and revenue generated for their firms. Investment performance is not a criterion because client objectives and risk tolerances vary, and audited performance reports are rare. SHOOK’s research and rankings provide opinions intended to help investors choose the right financial advisor and are not indicative of future performance or representative of any one client’s experience. Past performance is not an indication of future results. Neither Forbes nor SHOOK Research receive compensation in exchange for placement on the ranking. For more information, please see
www.SHOOKresearch.com. SHOOK is a registered trademark of SHOOK Research, LLC.

09 Aug

Posted at 14:01h in Media Articles by

Dynasty Affiliates Predict Equities Markets And Discuss Economic Factors, Opportunities And Risks

As we look towards the second half of 2024, uncertainty remains around the markets, partially driven by the Federal Reserve, which may cut rates in September for the first time since March 2020 if economic data stays on course. The upcoming election also clouds the road ahead, as well as Monday’s market turbulence.

Advisors, wealth managers and – most importantly – their clients, need to examine the factors, trends, opportunities and risks in the equities markets for the second half. To hear seasoned views on how economic indicators will move, predictions for stocks, and potential opportunities and pitfalls, we reached out to three senior executives from affiliates of Dynasty Financial Partners.

Stock Market Predictions

Examining how the stock markets will fare for the second half of 2024, Matt Liebman, Founding Partner and CEO of Amplius Wealth Advisors, caveats that short-term forecasts present challenges, and states that “we expect volatility to remain fairly elevated at least until this unusual election is completed.”

Eric Branson, Director of Investments at Cyndeo Wealth Partners, also sees “choppiness as we approach the election, as the political winds shift back and forth between the candidates.”

According to Branson, the more significant factor is how the Federal Reserve handles interest rates. “The current data has increased the markets’ anticipation of a rate cut in September and again later this year. Once these are known then it is our opinion that the markets will grind slightly higher by year end from current levels.”

“Stock market performance in the second half of this year, we believe, will present more opportunities for active management than the first half of the year,” says Mark Rich, Director of Investments at Procyon Partners. “The names that have led the market will need to start showing proof that AI is worth the massive investment that is needed to become a leader in the space.”

Rich says that the best opportunities will be in stocks outside of those that led the first half of the year. “We are allocating more towards small and mid-cap stocks along with a focus on more balance between growth and value going forward. These names present better entry points from a valuation standpoint. However, quality fundamentals are more difficult to find within these asset classes, and strong active managers will have a leg up on the passive index exposure.”

Key Economic Indicators

These predictions of how equity markets will fare in the second half of the year are partially based on the performance of economic indicators such as GDP, unemployment and inflation.

Rich expects the Fed to progress against its inflation target of 2%, but not to reach that target by year end.

In a similar vein, Liebman says that “inflation will decrease slightly as the impact of the Federal Reserve’s tight policy impacts the economy.”

Branson says that higher interest rates will at some point start to bring inflation under control. “The question of when we will start to see the data reflect that might have been answered with the recent employment data.”

He says that markets will look to see if the Fed can “land the plane” of the economy smoothly, and, in the meantime, investors can expect turbulence. “Even though no one likes turbulence, it is a normal part of the journey to get us to our destination.”

Rich points out that recently the employment “numbers have started to roll over. The overall employment environment remains strong historically, but has a tendency to loosen quickly when these numbers start to trend in the wrong direction.”

“Barring a material economic slowdown, we expect interest rates to be the driving factor for stock market performance in the near term,” says Rich. “With the market expecting cuts starting in September of this year, a lower interest rate environment should be most positive for small cap stocks that are more reliant on debt. Additionally, growth should benefit from lower interest rates as they can finance their growth at a more reasonable cost.”

Risks And Opportunities

While viewing it as unlikely, Rich says that the largest threat to the market is a reacceleration of inflation, which would force the Fed to shift towards restriction again.

Branson states that the largest risk – but also the largest opportunity – is market turbulence. “If the investor can see past the momentary turbulence and look for discounted entry points to good businesses, then when the turbulence settles down they will be glad they did.” He cautions against a fearful run for the exits during turbulent markets.

Rich states that the largest opportunities today, which he views as AI and the upcoming elections, are also the largest risks.

“AI is a transformational investment opportunity and should see continued growth,” he says. “However, companies involved in the AI trade have already experienced significant price increases and many are trading at lofty valuations relative to history.”

While stating that the elections should not have any long-term impact on equities markets, in the near term, Rich says, “Attractive entry points may present themselves as a result of rhetoric or the results of the upcoming election.”

Liebman views concentration as a central risk and diversification as an opportunity. “Large capitalization U.S. technology stocks have been the best performers over multiple recent time periods. Investors are at risk from becoming too concentrated in those few large stocks. We think that there is a real opportunity to diversify to other areas of the market.”

Also finding benefits in diversification, Branson sees opportunity in investors broadening out from the currently popular AI trade and the “Magnificent Seven” stocks, which are Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA and Tesla.

24 Jul

Posted at 21:24h in Media Articles by

By   Rob Burgess

They were military members, teachers, civil engineers, broadcasters, human resources directors and every profession in between.

And now they’re financial advisors.

While these career changers may not have much in common on the surface, one attribute they share is the desire to find a profession that truly fulfills them — and the determination to take the often arduous path of reinvention.

Several financial advisors who pivoted into the industry reflected on their journeys for Financial Planning and offered hard-won words of advice to those thinking of walking in their footsteps.

A slow turning

Carla Adams, founder and financial advisor at Ametrine Wealth in Lake Orion, Michigan, was a little over a year into her work in the chemistry doctoral program at Northwestern University when she “realized how miserable” she was.

“I loved chemistry, and I still do, but I was working long hours in the lab, six to seven days a week,” she said. “That’s very different from four to eight hours a week in the lab in college. It’s fairly isolating and not very social, and I’m an extroverted person.”

After writing a master’s thesis, Adams went job hunting, but to no avail.

“There didn’t seem to be many job openings at the time, and my mother suggested I also apply to jobs in finance, as companies might be interested in my strong analytical background,” she said. “I honestly ended up taking the first job offer I got, which just so happened to be in wealth management at an RIA. It was serendipitous.”

Adams soon fell in love with the job, both working with clients and at the computer running analyses.

“More than 16 years later, I’m running my own firm and couldn’t be happier with where my career has taken me,” she said. “While chemistry of course has pretty much nothing to do with personal finance, I feel that studying chemistry at the graduate level developed my analytical thinking and problem-solving skills.”

Ross Dugas, founder and financial advisor at Scientific Financial in Pearland, Texas, holds a doctorate in chemical engineering from the University of Texas and worked in research for Dow Chemical for 12 years. He said he enjoyed helping “colleagues invest tax-efficiently and make the most of their company benefits.”

But COVID-19 and the resulting on-site staff limitations completely disrupted his plans to better integrate himself within Dow’s production units.

“I started to consider new possibilities and realized I would enjoy running a solo, advice-only financial planning business,” he said.

Family ties lead to new career paths

Family situations often served as a catalyst behind many career changes into  financial planning.

Ann M. Covington, a CFP with CovingtonAlsina in Annapolis, Maryland, spent 17 years in the auto industry and was working as a consultant when she became engaged.

“I insisted we have a financial plan done,” she said. “When we met with our advisor, he kept saying, ‘You know a lot about this. Why aren’t you doing this?’ After several years of working with him as a client, I was going to be a stay-at-home mom, and he finally recruited me.”

Ross J. Natoli, a CFP with Joel Isaacson and Co. in New York, served as a legislative advisor in the U.S. Senate and later worked in brand management, most recently in financial technology. He said that growing up, his family’s finances were a constant stressor.

“Budgeting and stretching our dollars were ingrained in me from a young age,” he said. “As I grew up and started making my own money, I became fascinated with financial wellness, my 401(k) and investing. It became a passion and an obsession, so much so that I decided in my mid-30s to leave my marketing career behind and pursue financial advice full-time.”

Marianne M. Nolte, a financial planner with Imagine Financial Services in Lake Havasu City, Arizona, previously owned and operated a sports video production company that served the international equestrian show-jumping community for over 30 years. When she was 25 years old, her parents’ health began to decline and they reached out to her, their only child, for help. Together they met with their CPA, estate attorney, insurance agent and financial advisor to ensure all was in order. While working with her parents and their professional circle, Nolte “learned quite a bit about financial planning.”

“I’m blessed that my parents led me to financial planning,” she said. “I became hooked, and I knew this was the profession of my future.”

Not long after her parents died, Nolte started her journey to becoming a CFP and opening her own firm — decisions she said she doesn’t regret.

“If you have the guts, and sufficient funding to get you through the first couple of lean years, step off the ledge,” she said. “There is no need to look back.”

A military edge can help a planning career

Long before he founded Ironclad Financial in 2022 in Radnor, Pennsylvania, Nick Rygiel was a surface warfare officer in the U.S. Navy, serving four years onboard the U.S.S. Porter.

He later worked for Deloitte Consulting in Arlington, Virginia. Rygiel said his previous careers taught him the importance of strategic planning and resilience.

“I wanted to apply those skills in a way that helped people achieve their financial goals,” he said. “I chose to become a financial advisor because it allows me to blend my analytical skills, strategic thinking and desire to help others into a fulfilling career. Financial advising offers a dynamic environment where I can continuously learn and grow while making a tangible difference in clients’ lives.”

A previous career in the military can prove to be pivotal in a future career in financial planning.

Jeff H. Farrar, co-founder of Procyon Partners in Lenoir City, was an officer in the U.S. Coast Guard before becoming a financial advisor in 1999. He said he was always interested in personal finance, but a year working on the trading floor of UBS proved “too transactional.”

What attracted him to his current career was “the finance, puzzle solving, helping people, building long-term relationships, the control of your work-life balance and the constant stimulation of an ever-changing investment, tax and regulatory landscape.”

“Grit, determination, planning, intelligence and curiosity all made me successful,” he said.

John R. Power, a CFP with Power Plans in Walpole, Massachusetts, was a U.S. Army officer who was ready to retire as a colonel in the early 1980s. He took a course in personal computing and built a Microsoft Excel spreadsheet evaluating mutual funds, which helped spark his interest.

“The military plans everything, so I understood the value of analysis and planning better than most,” he said.

Communication and technical skills transfer well

Those with communication skills have also often found a home in financial planning.

Brad Wright, managing partner at Launch Financial Planning in Andover, was a radio and television host based mostly in Los Angeles. He decided to make the switch because “broadcast media had changed and was less fulfilling than it once was.”

“It had become much less creative,” he said.

After studying in the personal financial planning program at UCLA while still working in media, he began the slow transition.

“My former boss still talks about the time he found me in a production studio studying for the CFP exam,” he said.

Wright said his communication skills and hands-on nature were assets in his new career.

“While building my own firm I’ve discovered that, much like in radio, ‘live and local’ works,” he said. “Getting out and becoming involved in helping your community helps growth.”

A technical background has also proved useful to some.

Andy Cole, a financial advisor with Fiduciary Financial Advisors in Dallas, was a civil engineer who designed water and wastewater infrastructure for local municipalities. He said this experience fed directly into his current career.

“Some of my favorite projects as an engineer involved building water models for water distribution systems,” he said. “The design of financial planning models are very similar. The pump inflows, customer demand, reservoir storage and pipe frictions of a water model are like the cash inflows, spending, savings and taxes of a financial planning model.”

Karen Ogden, a partner at Envest Asset Management in Ridgefield, Connecticut, said her previous roles at the Chicago Board of Trade, Federal Reserve Bank of Chicago and as head of human resources for a small broker-dealer were invaluable experience in her current profession.

“I believe I am a well-rounded and capable advisor because I had prior career experience,” she said. “This role now draws on all of it and having the confidence to address the myriad situations that arise is key to allowing me to help clients navigate an important aspect of their lives.”

From the classroom to the planning industry

Susan Plisch, founder of Resilient Divorce Solutions in Urbana, Illinois, taught high school and college math for nearly a decade. She first learned about financial planning when she was helping her widowed mother find an advisor.

“I thought …, ‘There is a profession where I can use my superpower, mathematics, to help people without compromising my values,'” she said. “The ability to see where someone is at and explain something in a way that connects and brings about that lightbulb moment is a skill I learned while teaching that transfers to financial planning.”

David W. Demming, founder and president of Demming Financial Services in Aurora, Ohio, said he wanted to be a college professor as an economic, or Marxist, historian.

“Ergo money dictates what people and politics do,” he said.

Because he “needed a paycheck as well as an exemption,” he started teaching high school social studies. Meanwhile, his doctorate program was transferred to Kent State University. While he was a student there, the 1970 shootings occurred. After eight years, he quit the program in frustration with only a master’s degree. It was from there he turned to financial planning in 1978.

“I wanted to help people and as a historian had the perspective,” he said.

Dugas said he brings “an engineer’s skeptical perspective to the financial industry.”

“Working as a researcher requires that one always challenge the status quo and look for better, more efficient ways to solve problems,” he said. “That same mindset of maximizing efficiency translates perfectly to financial planning,”

Advice to others thinking of making the leap

Rygiel said the hardest part of making the transition to becoming an advisor was learning a new skill set and knowledge base. He advised others looking to make a change to seek a mentor.

“If I could do it over again, I would have sought out an ex-military, veteran, mentor in the financial industry earlier in my transition,” he said. “Having guidance from someone with experience in financial advising and an understanding of the military transition would have accelerated my learning curve and provided valuable insights.”

Stephen Maggard, a financial advisor with Abacus Planning Group in Columbia, South Carolina, was an Army officer who transitioned to financial planning in 2019 after taking some CFP classes. He said networking as much as possible was key to success for those new to the profession.

“There are so many advisors doing great things in this industry, and doing it in their own unique way,” he said. “Learning who those people are and why they do what they do will only clarify in your mind the path you want to take.”

Finances are also a concern for those about to enter a new field. Fortunately, Dugas said he managed his finances adequately to have the opportunity to make a dramatic career change and forgo a substantial salary.

“I’m blessed that I can now completely control my schedule and lead a slower-paced life with my wife and three young kids,” he said.

Neil Krishnaswamy, president of Krishna Wealth Planning in McKinney, Texas, worked as an electronics engineer before transitioning into financial planning in 2011. He said the most significant hurdle he had to face when moving careers was “giving up a highly lucrative position with a good salary and benefits, and essentially starting over.”

“I would advise anyone making a similar transition to ensure they have full support from their spouse, if married, and enough liquid cash or investments to cover their expenses for at least one to two years,” he said. “If you are new to financial planning, consider working with an established firm first before venturing out on your own.”

Li Tian, a CFP with LPL Financial in San Marcos, California, said having a spouse who brought in a stable income, health insurance and savings helped to bridge the gap into a new career from her previous work in biotech.

“For those aspiring career changers who might not want to start from zero, perhaps joining an established firm is a great way to make the switch,” she said.

Cole said those looking to make the change should check in with themselves to ensure they are “running to something and not just running from something.”

“If you are just switching careers because you don’t like your current career, it’s very possible you won’t like being a financial advisor either,” he said. “You will just be swapping a job for a job. If you are going to go through all the effort to make the change, I would encourage you to make sure you are swapping a job for a passion.”

Edward Hadad, a financial planner with Financial Asset Management in Chappaqua, New York, was previously an auditor and later accountant for Wall Street firms before becoming a fundraiser for nonprofits. He said while career changers may not necessarily have to pass the CFP exam before transitioning, he would encourage them to take courses, join industry groups, network and set up meetings with peers in the profession.

“This is a great profession that needs hardworking people of integrity, and there are spots open for people like you,” he said.

Dugas said he took special care to design his practice to provide himself “maximum flexibility” and “attract those skeptical-, curious-, analytical-minded types” he enjoys working with.

“If I could do it again, I’d do it all the same,” he said.

Adams said she cherishes her relationships with clients and loves “getting into the nitty-gritty details of investing and financial planning.”

“I honestly don’t think I’d change a thing if I could do it all over again, because that path I took somehow led me right to where I am,” she said.

22 Jul

Posted at 22:00h in Media Articles by

Diana Britton | Jul 22, 2024

While many in the financial advice business have for years focused on retail clients, some firms are finding that institutional clients, such as pensions and foundations, can pay off in a major way.

When advisor Phil Fiore started his career at Prudential Securities in the 1990s, the most common way to build a book of business was to “dial for dollars,” cold-calling complete strangers hoping to convince them to hand over their assets and invest in the latest preferred stock.

“How many times am I going to do that? How many times you get punched in the face?” he said.

He had a better idea—if he could land a client with a larger pool of assets, say, a retirement plan, he could access the people within that pool. A $20 million retirement plan client, for instance, could provide 200 participants as warm leads for his private wealth business.

Fiore has followed that thesis for three decades and now leads Procyon Partners, a Dynasty Financial Partners-backed registered investment advisor with $7 billion in total assets, about $4.5 billion of which are institutional.

To be sure, the wirehouses

have been building their institutional consulting businesses for many years. In fact, Fiore built one of the biggest institutional consulting groups at Merrill Lynch and then UBS before going independent. Morgan Stanley’s Graystone Consulting has roots dating back to 1973 and is still going strong.

There have been some early adopters in the RIA space, such as Captrust, which oversees more than $800 billion in assets, and SageView Advisory Group, which advises on over 1,900 defined contribution, defined benefit and deferred compensation plans.

However, many in the RIA business are only now beginning to discover Fiore’s premis for themselves and making concerted efforts to serve the institutional market.

One of the biggest RIAs in the country, Mariner Wealth Advisors, acquired two institutional consulting firms, AndCo Consulting and Fourth Street Performance Partners, in early February, adding $104 billion in assets and 100 employees. The two firms will combine to form the foundation for Mariner Institutional. Mariner’s existing retirement plan services team, which manages about $5 billion in defined contribution assets, will also be rolled up into that new vertical.

Marty Bicknell, president and CEO of Mariner, said his firm’s M&A strategy is primarily about talent acquisition, and the institutional expertise was “a gaping hole in our offering.” However, this new development also gives Mariner advisors access to the participants of those institutions to help them plan for retirement, he said.

“The institutional consultant very frequently will get asked, ‘Is what you’re doing available to me, or is it available to any of the participants that might be on the retirement side?’” Bicknell said. “And from AndCo’s perspective, they always had to answer ‘no,’ because they did not have a wealth offering. And so this gives us the ability for them to respond ‘yes.’”

But these are still only the initial stages of what will likely be a growing trend of RIA firms looking to connect institutional businesses with retail wealth management firms, said Lew Minsky, president and CEO of the Defined Contribution Institutional Investment Association.

“I think we’re at the early days of this next level trend, which is RIA aggregators purely in the wealth management side saying, ‘Well, having a connection to the retirement side, that institutional market can be a valuable way for us to diversify our business and create a pipeline into the wealth management business as well,’” he said.

The Next Wave

While Captrust has a history in the retirement plan space, the RIA has recently acquired more traditional institutional consulting firms that serve defined benefit plans, endowments and foundations. In 2022, it picked up Portfolio Evaluations Inc., a Warren, N.J.–based firm with more than $107 billion in assets and several hundred clients. In February 2021, it added Cammack Retirement Group, with $154 billion in assets under advisement, and in August 2021, it acquired Ellwood Associates, with $85 billion in AUA.

Creative Planning’s acquisition in 2021 of the retirement plan business of Lockton, an independent insurance brokerage, which added $110 billion to the RIA’s assets, is another example.

Minsky said one factor driving the latest wave into the institutional space is the recognition that the retirement plan and wealth management businesses complement each other.

“You can get a pretty significant pipeline of potential wealth management clients through the institutional plan relationships and at a relatively low cost, and then potentially create through that pipeline, create higher margin wealth management business and ultimately create enterprise value,” he said.

This is a sentiment echoed by Fiore.

“Some of the current people that are coming in are just looking at the outright demographics and saying, ‘Hey, there’s going to be a load of money retiring in the next half a decade to a decade,’” Fiore said. “The best way to get in there is to have been doing the work on the 401(k) to begin with, and that will provide the ultimate entrée, I believe.”

Dick Darian, founding partner of Wise Rhino Group, which provides M&A advisory services for firms focused on the retirement and wealth advisory space, said wealth advisors used to go after individuals’ 401(k) rollovers, but a lot of those rollovers aren’t happening at the pace they used to. Either folks are leaving money in plans because it’s cheaper than having an advisor manage it, or the Captrusts of the world are getting to the participants first through the c-suite relationships, he said.

“If you are already in the c-suite, and you’re providing institutional retirement consulting to a company—defined as you’re helping companies design their plans, administer their plans, invest the money, communicate with employees—you’ve already got one foot in the door,” Darian said. “You might as well kind of keep going and begin to figure out how do I engage the employees and participants in these companies in a way that I can begin to have wealth conversations with them?”

That’s essentially what RIAs like Captrust, Mariner and Creative Planning are hoping to do. But these firms are using more sophisticated approaches to “worksite engagement,” Darian said.

Fiore said he’s not just going into a boardroom and talking shop with the board of trustees of the retirement plan. Instead, his team engages onsite with participants via group meetings or webinars.

“We’re active in the demographics of the participants, and I think that’s why we’ve been so successful at that,” he said.

In addition to engaging participants, Bicknell said the acquisitions of AndCo and Fourth Street Performance Partners provided an opportunity to bring the new services to Mariner’s existing retirement plan clients. In fact, they already have 900 institutional clients.

Darian said Mariner’s existing retirement plans clients typically have $20 million and 500 participants on average, whereas AndCo is working with much larger plans.

“Marty could be thinking, ‘Well, look, that service could be migrated down market so we can provide a better product for smaller plans because now we have a more sophisticated firm that’s providing services in a different segment,’” Darian said.

Evolution of Traditional Consulting

Beacon Pointe was another RIA early to the institutional game. In fact, the firm started as an institutional consulting business when it lifted out a team from Canterbury Consulting in 2002. It had about $1 billion in AUA at the time, with a small base of private clients. The firm has about $6 billion in institutional business. Its retail business grew rapidly from the beginning.

The RIA went in reverse order than the industry has trended, building its wealth management business off the back of its institutional business. But Mike Breller, managing director, institutional consulting at Beacon Pointe, said the evolution of traditional consulting has driven more RIAs into the business, and in particular, the rise of the OCIO (outsourced CIO) model.

That model has allowed advisors to move from non-discretionary to discretionary management, a more scalable and higher-fee model.

Under the traditional consulting model, the consultant would advise the institution’s committee on recommendations for the portfolio, and when the consultant leaves, the committee would have to vote on those changes to approve them, Breller said. Then, the executives would have to go to their custodian and execute on those trades themselves. They only meet on a quarterly basis.

Under the OCIO model, the handcuffs are off, and the consultant has the discretion to make changes to the portfolio and execute those trades as ideas come up.

“This OCIO business segment represents a really large and fast-growing portion of every institutional opportunity that’s out there,” Breller said. “Being able to scale this institutional business that’s now set on OCIO model portfolios based on higher fees than the traditional consulting model, that’s more attractive for larger RIAs and wealth management firms today than it was in the old model.”

Breller said he’s now able to build a service offering that can be used by Beacon Pointe’s wealth advisors across the country. Because the firm has discretion, its portfolio management decisions are all centralized, so advisors, whether they have that institutional background or not, can add that distribution channel.

“If it’s $100 million and you’re in New Jersey, you’re probably going to refer it to our group and we’ll do it all. If it’s $10 million and it’s in New Jersey, that group now has all of our back-end potential to market, close, manage the portfolio. All you have to do is service it,” he said.

Build, Buy or Lease?

While some firms, like Procyon and Beacon Pointe, have chosen to build an institutional business themselves, it can be difficult to do so from scratch, given the long sales cycle. The quickest way is to buy into the space.

In fact, Wise Rhino has made about 150 deals over the last five years, and almost all of them have helped retirement advisory businesses sell to retirement and wealth aggregators. That activity has been driven by buyers coming in with massive private equity money looking to expand or by sellers looking for a succession plan, Darian said.

In 2010, his firm was doing five to 10 deals a year in the retirement plan space; it started to boom in 2018, 2019, and 2020, and by 2021, those accounted for over 75 of 252 total RIA transactions.

Once the deals close, Mariner Institutional will have 40 institutional consultants, and Bicknell wants to double over the next three years through a combination of acquisitions and traditional recruiting.

Breller said Beacon Pointe is also exploring acquisitions of one or more institutional OCIO businesses to expand its expertise in that area further.

Another way to enter the space is to lease or outsource the work to someone who specializes in it. In fact, Procyon offers just that, where advisors can white-label its “Total Benefits Solution.” Procyon’s consultants do the work behind the scenes, administering the plan and executing the portfolio, while the RIA manages the relationship with the client. The firm currently has five individual RIAs and two large institutions it serves with that model.

08 Jul

Posted at 16:18h in Media Articles by

“You’re literally marrying another entity that you may not have married from the beginning,” says CEO of Procyon Partners.

July 5, 2024

By Gregg Greenberg

Partnering with another RIA means more than merely hooking up, according to Phil Fiore, CEO of Procyon Partners. It’s essentially a wedding between wealth managers.

“You’re literally marrying another entity that you may not have married from the beginning,” said Fiore. “This is a whole new change as to how the firm works and what the direction will be.”

And like any marriage, it could head in the wrong direction – and quickly – if those partners enter into the arrangement for the wrong reasons, or without being forthright from the very beginning.

Fiore and four partners launched Procyon in 2017 with $2B in AUM in a single Shelton, Connecticut office. Today they manage $7B across six offices and have a team of 50 employees.

Finding the right partner, one that fills respective voids, takes time, says Fiore. In his view, getting the culture correct upfront is far more important than finding someone that will expeditiously cut a check.

“The ones that went wrong in the aggregate are the ones that were not culturally aligned,” said Fiore. “I’ve been independent for seven years, but in the seven years that we’ve done this, the successful ones are those that really understand where the partner fits, and the people that just go about it relative to a check, well, I usually see those unwind.”

So with all that in mind, what should one look for before saying ‘I do’ at the RIA altar?

The number one thing, says Fiore, is making sure the potential partner is organically growing year over year. And more than that, the ability to prove it when opening the books. Number two, if a firm has grown through M&A, then one needs to make sure those tuck-ins are accretive and profitable.

“And at the end of the day, you want to know if the business is run profitably according to EBITA,” said Fiore.

The alternative to partnering up for growth of course is selling out. And in the current market there is no shortage of large suitors backed with stacks of private equity cash seeking yet another roll-up.

As enticing as it sounds, don’t simply go for green, says Fiore.

“From a sales standpoint, you have to reconcile in your mind that what you built cannot continue in the way it has without some larger entity rebranding and refocusing the efforts there,” said Fiore.

And don’t forget about the clients either, whether the growth path is via partnership or sale.

“I think irrespective of whether or not you sell-out in the aggregate or partner up, the firm needs to align with you culturally. It needs to align with how you treat your clients,” said Fiore. “If you align with someone that’s worried about profits and just profits, and cutting, cutting, cutting, that’s a misalignment. You’ve got to spend a lot of time again being patient, making sure that the values align.

28 Jun

Posted at 19:23h in Media Articles by

Meme stocks may be flying again, but a new study shows more financial planners would not buy individual stocks even if they were blue-chips.

By Gregg Greenberg

Daytraders are once again going gaga for GameStop and other so-called meme stocks. Financial advisors likely won’t be joining in the fun, however, and not because of the quality of the companies.

Even if they were blue-chips they would not be buying and selling them. That’s because wealth managers are increasingly shying away from stock-picking, opting for ETFs instead, according to a new study.

Shares of GameStop (Ticker: GME) opened more than 70 percent higher on Monday on enormous volume after individual investor Keith Gill shared a screenshot on Reddit showing a $175 million position in the video game seller. For those who may have already forgotten, Gill, aka Roaring Kitty, started the meme stock revolution in 2021, sending stocks like GameStop and AMC Entertainment skyward, much to the chagrin of the hedge fund elite who sold short the fundamentally challenged companies.

Yet while they would not quibble with the gains from an individual stock trade (who would?), fewer financial advisors are playing that particular game. Exchange-traded funds (ETFs) are financial planners’ top choice for the investment vehicle they most often use with clients, and their popularity does not appear to be weakening, according to the 2024 Trends in Investing survey, conducted by the Journal of Financial Planning and the Financial Planning Association.

The annual survey of 208 financial planners showed that ETFs continue to dominate investment portfolios, with over 89% of respondents currently using or recommending these diversified products. Furthermore, over 60% of those surveyed plan to increase their use of ETFs in the next 12 months, reflecting a strong preference for this investment vehicle over single stock buying.

Josh Branham, wealth manager at Savvy Advisors, does buy individual stock portfolios for clients, but solely for those who have the resources to properly diversify across many different asset classes and sectors. Otherwise, he tends to use ETFs and funds.

“I’ve historically recommended these individual stock portfolios for clients with $500,000 and up in liquid assets, and the proper risk tolerance,” said Branham. “This allows me to purchase at a minimum of 25 individual stocks which I believe to be the least amount of stocks and still be considered diversified.”

Meanwhile, Jerry Sneed, senior private wealth advisor at Procyon Partners, has not stopped recommending individual stock purchases for clients “under specific circumstances.” In his view, his role as an investment advisor is to capitalize on market dislocations, which can provide various opportunities for portfolio enhancement. Those different types of dislocations he considers include secular, technical, and stock-level.

“My partner, Frank McKiernan, and I have a unique advantage as former traders, enabling us to quickly synthesize large amounts of information and make informed decisions during periods of volatility,” said Sneed. “For individual stock purchases, staying attuned to various information flows is crucial. This allows us to take advantage of market overreactions to events such as light earnings forecasts or overall market corrections.”

For example, last week they purchased Salesforce (Ticker: CRM) for clients, due to their belief that the company is poised to dominate in AI given their vast amounts of data. A longer-term example is their purchase of NVIDIA (Ticker: NVDA) in 2018, based on their analysis of the growing demand for high-end chips in sectors like the metaverse, gaming, and autonomous driving.

“We recognized NVDA’s strong market position and underappreciated developer platform early on, which has since proven to be a valuable investment for our clients,” said Sneed.

Finally, Mark Pearson, founder & CEO of Nepsis, only recommends investing in individual stocks because this approach provides “greater clarity and understanding of your investments” in his opinion.

“We don’t usually recommend ETFs or mutual funds as they often lack the transparency and control that come with owning specific companies,” said Pearson.

25 Jun

Posted at 15:12h in Media Articles by

Growth isn’t a linear, smooth path – it’s filled with multiple challenges as a firm proceeds through stages. Navigating the ship of business requires different approaches from advisory firms that recently launched, those that have reached their final intended heights, and those in between.

We reached out to three CEOs of advisory businesses – at early, middle and fully achieved stages of growth – that are affiliated with Dynasty Financial Partners: Matt Liebman, Founding Partner, CEO and Wealth Advisor at Amplius Wealth Advisors; Phil Fiore, Co-Founder, Partner, Executive Managing Director and CEO of Procyon Partners; and Michael Lehman, CEO and Founding Partner of Premier Path Wealth Partners.

We asked each of them about the challenges, strategies, insights and experiences of their stage of growth. Our questions and their answers follow.

14 May

Posted at 20:45h in Media Articles by

Three Women Advisors Explain The Common Needs Of Female Clients And Advice On Serving Them

In an industry that has been and continues to be predominantly male with a historical focus on male clients, women are advancing, both as advisors and professionals as well as clients, but gaps persist. Some, though not all, of the gaps exists because of a lack of understanding, and our industry can advance women more quickly if all advisors give due attention to the common needs and uniqueness of female clients.

To bring a better understanding of these needs and ways to meet them to advisors and other client-facing professionals in wealth management, we spoke with three women professionals at affiliates of Dynasty Financial Partners: Adrianna Stasiuk, Partner and Investment Advisor at Aaron Wealth Advisors; Daniela Pedley, Partner at Summit Trail Advisors; and Caroline Wetzel, VP, Private Wealth Advisor at Procyon Partners,

We asked each of them: What should advisors bear in mind to provide optimal service for female clients, and what mistakes do advisors make?

Their responses follow.

Adrianna Stasiuk, Partner, Investment Advisor, Aaron Wealth Advisors

In my experience, female clients tend to prefer collaborative and inclusive communication styles. I always make sure to share equitable eye contact in face-to-face meetings, making sure I don’t focus attention and eye contact towards the male participants of a meeting. I’ve witnessed cringe-worthy situations where advisors focus all the attention on the male audience in a room or pull out their cell phones during meetings.

That collaborative communication style often includes an emphasis on education and providing explanations in plain language. Providing education on financial concepts and strategies can empower my female clients. Using complex financial jargon can automatically turn off a client’s attention and interest.

While not always the case, studies have shown that women tend to take a more conservative approach to investing and risk-taking. It’s critical that an advisor provides clear guidance and tailor investment recommendations accordingly to ensure the client is taking enough risk to achieve their long-term goals. Not only do women tend to take less investment risk, but they also tend to experience unique life events such as taking prolonged career breaks for maternity, caregiving, divorce or widowhood, which can drastically impact their career earning power and financial situation.

Daniela Pedley, Partner, Summit Trail Advisors

As an advisor catering to ultra-high net worth individuals, particularly focusing on female clients, I have learned that it is important for them to feel heard, so I lead with empathy – letting them set the pace and listening closely to understand their priorities. Many women prefer to be truly understood before delving into discussions about their financial matters.

I recognize the importance of giving female clients space to express concerns and ask questions without feeling dismissed or overshadowed by their partners. Often, they worry their concerns may be unimportant, or their partners are more vocal with questions. They can, however, be just as insightful and creative as their partners, so there is value in keeping them engaged.

Sometimes wives can be sidelined. I have one who frequently is barely or not at all on screen during a Zoom, so I make a point to draw her into the conversation by asking direct questions. If I can’t spend time with her during the joint meeting, I reach out later to meet one-to-one.

To maintain my women clients’ trust, I meet them where they are at. I have occasionally spent the first 45 minutes with a client either needing to share something personal or in tears. It’s worth spending the time, because I get to know my client better and they then have more mental bandwidth to make the remaining meeting time more efficient and valuable.

By prioritizing empathy, understanding and patience in my interactions with female clients, I build trust, foster long-term relationships, and empower them to achieve their financial goals with confidence and clarity.

Caroline Wetzel, VP, Private Wealth Advisor, Procyon Partners

After resolving a difficult circumstance, a client confided in me: “Getting through this with you is like getting through life with a smart friend – thanks. I feel so much better.”

Too few advisors have the courage and confidence to “get comfortable feeling uncomfortable” with their women clients and ask them open-ended questions about what is important to them. While it is important for advisors to address financial challenges like creating cash flows in retirement to allocating assets appropriately, women I advise tell me that they chose to work with me because they felt comfortable talking to me about what’s going on in their lives “beyond portfolio returns.”

Women tell me what keeps them awake at night and I strive to listen without judgment, with a desire to understand what’s on their heads and hearts. From serving as caretakers to loved ones, to watching their partners’ physical and mental faculties decline over time, to, ultimately, surviving their spouses and facing potentially years of independent living without wanting to feel “alone,” women are navigating many ambiguous circumstances. These circumstances require creative thinking and flexibility over time when it comes to how they utilize their finances.

And when it comes to providing women value, the women I advise like both education and perspective. In addition to a solution to challenges, they like it when I provide information, context, and why I propose specific ways forward for them. This consultative partnership promotes engagement and deepens our relationship as we continuously iterate financial strategies for their unique situations.