The media is flooded with advertisements and debates about which is the best way to manage one’s wealth.
There are countless providers, service offerings, implementation vehicles and associated fees. The providers can be broken down into a handful of categories: traditional brokerages, investment banks, trust companies, Registered Investment Advisors (RIAs) and discount brokerages. The services offered are not as clear cut, obfuscated by marketing and seemingly interchangeable terminology. All of this reminds me of a conversation I recently had with a client, who turned our value proposition on its head when he joked to me, “If you’re a genius, don’t hire Waldron.” This made me to wonder, who, in actuality, shouldn’t hire us?
One of our founding principles is that wealth management is only truly delivered when an advisor understands and manages the entirety of a client’s balance sheet. While this may seem obvious, the business models of many firms are built solely around the management of liquid assets. As a natural result, this causes many providers to focus only on those assets. Which brings me to the first customer who shouldn’t hire us, the do-it-yourselfer. This person is focused almost entirely on his or her investment portfolio, and returns. They most likely are keen observers of financial news networks, monitor asset performance on a daily basis and have a short-term time horizon for their positions. This is exactly the opposite of how we approach investing, in more ways than one. First, we view investing as part of a comprehensive strategy for supporting a client’s goals. Second, we have a long-term time horizon that is integrated with a client’s cash flow management, tax planning and long-term objectives, things that are not affected by short-term volatility. Third, we are not reactionary when it comes to rebalancing a portfolio. When daily events send a ripple through the markets, we remain focused on the long-term big picture, not the daily fluctuations. If someone is watching CNBC and consistently hears stories that inspire them to act, that is not a client we can help. We understand that the investment management marketplace is facing substantial pricing pressure and that many investment gurus emphasize the importance of finding the lowest cost service possible. And if all that is being delivered is investment advice, there is some merit to this argument. But such a paradigm is antithetical to our comprehensive perspective, and “investment only” is not an ideal client for us.
While investment management is extremely scalable from an operating business perspective, wealth management is not. Which brings me to another type of client who may not be a good fit – the client with a patch work of advisors, who they must coordinate to manage their wealth. An individual with multiple brokers to handle their portfolio, an attorney to handle their estate plan, an advisor to manage their business holdings and another advisor to help with insurance and retirement planning. This individual has essentially named himself or herself as the quarterback for all of the moving parts in their financial life. In our perspective, integrating and coordinating a comprehensive strategy to support a client’s goals is the job of the financial advisor, and if someone prefers to manage this process on their own, while limiting our ability to communicate and coordinate how everything fits together, the relationship will not be satisfactory for us or the client.
The third type of client who wouldn’t want to hire us is the brand conscious, retail client. We are a boutique firm that takes on a limited number of select clients. Our approach to wealth management is a comprehensive one which requires a very low client to staff ratio, currently better than 5 to 1. For someone who values the name recognition of an investment bank or a Wall Street address, we are not the firm for you. Our focus is on helping our clients achieve their goals, not marketing or meeting quarterly earnings figures. We will concede that point without protest.
Understanding the complexities of wealth can only be achieved when a team of advisors can operate in an environment that affords them the time to deeply understand all the moving pieces of a client’s situation. These integrated services can include planning the ownership transition of a business, identifying optimal cash flow sources based on their tax structures, understanding asset protections and how best to protect the family’s wealth from outside liabilities, developing appropriate investment portfolios to support client goals and educating the family about how to manage wealth across generations.
We are an RIA firm, and our business is built on providing exceptional service at a fair price. Our boutique nature allows us to price engagements in creative and flexible ways that can be composed of consulting fees, assets under management fees or a combination of the two. The nature and terms of the pricing are driven by the value we are able to provide through the coordinated management of your entire balance sheet. If you are looking for the lowest cost provider that will only deliver part of what you need, then we are not the firm for you. If you are looking for a comprehensive, customized approach, and appreciate value, we are here to help.
