Given the trends toward low-cost funds, fee cuts, and self-directed investing, justifying a premium for portfolio management is becoming tougher for advisors. To be competitive, more and more firms are showing their value in other ways — even to people who aren’t clients.
US-based Stavis & Cohen Financial, which manages some US$450 million mainly for retail clients, is able to grow its book of business through education, according to Financial Advisor IQ
CEO Deborah Stavis and chief investment officer Eddie Cohen, who are also the firm’s co-founders, have been conducting a class on investment, retirement, and estate planning at Rice University in Houston since 1984. The class, which is scheduled twice per academic year and runs for seven weeks, is open to people who have retired or are about to retire.
“Financial literacy is low because education about handling one’s finances or preparing for retirement is not always readily available, and it’s not always considered polite to talk about money,” Stavis told the publication.
The course starts off with basic information, such as the functions of financial advisors and how they’re paid. It moves on to investing, risk-reward analysis, and retirement and estate planning.
The class can accept up to 35 students — typically not clients of Stavis & Cohen or people who want handle their own investments and financial planning. According to Stavis, some eventually go on to become their clients.
“They see that we are more interested in educating and so it’s not uncommon for them to seek us out,” she said. “That’s always a pleasure, because we’ve kind of gotten to know them before they become clients.”
The firm also has an in-house “university” that consists of two financial-planning workshops: one caters to their wealthy clients’ young adult children (from 16 to 35 years old), while the other is geared toward prospective female clients.
The young-adult workshop started in 2012, and has been going twice a year since then. Up to 30 participants are taught the basics of investing and asset allocation; how to use tools like smartphones for budgeting and other personal finance habits; the importance of investing early; and the roles and responsibilities of trustees and executors.
“Our clients tell us that they are even more concerned about their kids having an education about money, because they are interested not just in transferring money but also values,” Stavis said.
The Women’s Forum, on the other hand, was launched in 2005 and runs four times a year. The firm holds additional workshops for companies that invite them to educate their offices. A typical workshop has 100 participants, with a few hundred more sitting in via video streaming — a valuable option for busy women who “don’t want to come in for workshops or face-to-face meetings,” according to Stavis.
The Women’s Forum covers the same basic ground as the young-adult workshop, but it’s tailored to the needs and objectives of women. Stavis said the female professionals in Houston tend to have scientific backgrounds, such as engineers or geophysicists, because of the oil companies in the area.
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