Wealth advisers ‘not just for the uber-rich’

Aging baby boomers mean business is thriving

Here’s a hot financial tip for you: You don’t need to be wealthy to have a wealth adviser.

Or so say area wealth advisers and at least some of their clients, who dismiss the notion that such advisers are only for the one-percenters.

“A lot of people are under the impression that wealth advisers are just for the uber-rich,” said Simon Hamilton, a financial adviser with The Wise Investor Group, which is based in Reston, Virginia, but has clients throughout the Baltimore-Washington area.

While his company’s typical client has more than $1 million in investable assets, which includes retirement accounts, Hamilton said some have as little as $20,000.

Similarly, Leonard Raskin, president and CEO of Raskin Global, said his Hunt Valley-based financial planning company has clients making less than $30,000 a year. Raskin has an investment minimum of $10,000, “but we’ll take someone without that much if they’re children of clients or were referred by clients. … We work with clients’ children who are not even working yet,” he said.

Both advisers agree that the only prerequisite to hiring a wealth adviser is a desire to manage what money you have in an informed, prudent way.

Wealth advisers can help people of just about any income level, they say, because they look at your entire financial picture — including spending needs (not just groceries and housing costs, but also college costs, whether you have elderly parents who might need help and a lot more), insurance coverage, gifting habits and more — and come up with an investing plan based on those needs.

“A good wealth adviser looks at where the holes are, what could go wrong,” Hamilton said. Without knowing how to do that, he said, “you’re kind of shooting in the dark.

“… You need someone to help you calibrate the proper risk and reward relationship for your particular set of circumstances. Otherwise, you’re just going out and buying the market, which sort of by definition is boilerplate.”

Raskin said money management is an art that takes time and experience.

“Most people make terrible mistakes with their money,” he said. “They let emotion and hype rule what they do.”

Typically, he said, people buy the wrong insurance or not enough insurance, or they buy stocks when the market is high and sell when it is low — “which obviously is the opposite of what prudent investing would be.”

He suggested that people find a good wealth adviser “as soon as they start making money, saving money and want to make sure they’re doing the right thing with the money.”

Jordan Weinberg, CEO of Strata Financial, a boutique financial planning practice in Baltimore, recommended that people hire a wealth adviser when they are young — for example, when they are thinking of getting married. But he said it’s never too late.

He recently met with a couple in their early 20s who are thinking of having a baby and want to make sure their finances are secure enough, he said. On the other end of the spectrum, he said, are clients in their 60s or 70s, worth millions, who worry about such things as estate tax issues.

“Pretty much anybody could have a need for a financial adviser,” Weinberg said. “It’s just the reasons to engage the services are different, depending on where you are in life.”

While some advisers charge hourly rates or base their fee on a person’s overall wealth or the specific services he or she wants, most charge clients an annual fee, typically 1 to 2 percent of their assets. Often, that fee covers not only coming up with a specific investing plan and offering regular advice, but also executing that plan as well — buying the suggested stocks, for example.

Weinberg said experience is important to look for in an adviser, but the key factor is trust.

“You have to be comfortable, so you can communicate and share information,” he said. “If you don’t have that rapport, I don’t think it’s going to be a great relationship.”

Clients, meanwhile, say a key factor in their decision to use a wealth adviser was their reluctance to tackle a task they felt unwilling or unqualified to do — or both.

Gary Johnson, a retired engineer who lives in Reisterstown, said he first hired a wealth adviser 15 to 20 years ago. He did so in part because he expected his wife would outlive him and wanted to make sure she and their four children were taken care of, and in part because, as he put it, “I don’t like to spend time screwing around with that financial stuff.”

However, Johnson, whose wife died seven years ago, said he is more than happy with his adviser, Leonard Raskin, who has helped with an array of services, from personal finances to investments to drawing up a living will.

“They look at the whole picture, things I don’t know about or have an interest in learning about,” said Johnson, 78.

Raskin also has helped with the finances of his four children, Johnson said, and even a granddaughter who inherited some money.

“The bottom line is, the Johnson family and heirs are all, in my opinion, being comfortably taken care of by somebody who knows what he’s doing,” he said.

Gail Bleach, a psychologist in Silver Spring, began using a wealth adviser about 20 years ago, after concluding that managing her money was too much of a headache to do on her own. She had several advisers at one point, but picked the one who was doing better with her money: Hamilton of the Wise Investor Group.

“Doing it myself was like an extra job,” Bleach said. “I don’t have the time or knowledge to watch my portfolio carefully. … If you’re not going to do it in an educated, orderly way, then you’re going to get in trouble.”

She said the added cost usually is made up for with a better return on her investments.

“They watch it on a daily basis and get better results than I’m able to get,” she said.

Advisers said their business is booming, fueled mainly by aging baby boomers wanting to live their retirement lives in comfort and busy young families with no time to manage their own finances.

But they agree that the Internet and the past half-dozen years of continued growth in the stock market have persuaded many potential clients, particularly young, single, tech-savvy men and women, they can do the job on their own, getting all the information they need online.

“They haven’t had any risks, so people are like, ‘Hey, what the hell do I need a wealth adviser for?’” Hamilton said. “But we’ll get another 2008. We’ll get another 2002.”

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