Andrew H. Friedman
Financial Policy Expert: TheWashingtonUpdate.com; Washington, D.C.
What he expects; "You're going to [hear] a drumbeat of bringing power to bear against the financial services industry...just to show that the Administration realizes people were unhappy with the bailout."
The well-ordered mind of Andrew H. Friedman can demystify in a cogent five-bullet list the most complex of legislative developments and their likely impact on tax, fiscal and retirement policies. Then he goes a step further and gives financial advisors concrete ideas for investing client assets accordingly.
How to similarly sum up the forceful public speaker, 54, who is busily booked through October by firms including Merrill Lynch Bank of America, Morgan Stanley Smith Barney and UBS?
Three years ago, the ex-tax attorney quit the prestigious Washington law firm of Covington & Burling after a 30-year career there to become a full-time speaker. The decision was propitious: as a fiscal policy expert, Friedman is certainly in high demand.
"You've got an activist administration combined with a financial meltdown," he explains. "That's a formula for Washington to get exceedingly involved in everything. Advisors need to know how to react so they can advise their clients. There's a real hunger for that."
Chambers' guide to United States attorneys dubbed Friedman "the expert's expert." And indeed those recommendations he supplies to FAs are his added-value.
"Andy makes sense of what's happening in Washington," notes Matt Witkos, president of Eaton Vance Distributors, in Boston, to whose advisor clients Friedman has presented for the last three years. "Advisors come away with an action plan. They walk out of the meeting saying, 'He actually gave me a road map to do something with.'"
Friedman downplays his perspicacity -- and ability to boil down in layperson-speak legislation in front of the Senate or House.
"I don't think I have more insight than anybody else that's been in Washington for 30 years," he says, "but I'm willing to take a stand and then turn it into actionable ideas for advisors to use."
Two-and-a-half years ago, during the massive flight to Treasuries, he forecast the municipal bond market comeback.
"Right in the middle of the meltdown -- December 2008 -- municipal bond values plummeted," he recalls. "In all my speeches for the following six months, I said that the then-President-elect would be using a stimulus package to move money into the states to help them -- because they were no longer getting the kind of tax revenue they used to -- and that that would shore up the municipal bond market for a dramatic increase in values."
That's just what happened -- and municipal bonds took off.
Now comes this vital Friedman heads-up: "Financial advisors have to be aware that this is a hostile [legislative] environment: a Democratic president and a Democratic Congress are going to try to implement wealth re-distribution. Their view is that there are too many people without health care or education and that it's the function of this country to make sure they get it -- and if that requires the wealthy to pay more in taxes, so be it."
Friedman continues. "This is something financial advisors will have to get used to. It also means more regulation in the industry -- including a fiduciary standard [for advisors] requiring more disclosure of actual compensation and disclosure when selling products, and a more difficult business environment."
In his speeches, he suggests ways that FAs can help clients to, for example, prepare for rising tax rates: "Look into Roth IRA conversions and municipal bonds." Also, "because the Administration wants to rework certain sectors, like health care and energy, companies in those sectors [could] see profits squeezed," he says in the interview. "In moving away from coal and oil, a good investment would be natural gas."
His website, www.TheWashingtonUpdate.com, offers Friedman white papers on, among other issues, "Annuities and Trusts: An Untapped Estate Planning Tool;" "Planning for a Secure Retirement: The 401(k) Rollover;" and "The State of the Estate Tax" ("It's a mess," he says. "Clients [now] should do a codicil about dying when there's no estate tax. But it's coming back -- and on more onerous terms.")
Connecticut-born-and-bred, Friedman, while earning a BA in math and economics at Trinity College, planned to go into business. Picking up a law degree from Harvard Law School and joining Covington & Burling, he thought he'd practice a while, then turn entrepreneur.
But the stint turned into three decades at the firm, where he rose to head of its tax and corporate parent groups, and partner in charge of media relations and marketing.
For twelve of the 30 years, he was tax counsel to Major League Baseball, the National Football League, the National Basketball Association and the National Hockey League. ("It was grueling. Those owners are pretty demanding. They want answers. They want them now. And you'd better not be wrong.")
A senior partner when he resigned, Friedman figured he'd gone about as far as he could go. "It was time to move on," he says, and expand his frequent speech-making into a full-time venture -- the business he'd always planned to launch.
Injecting levity here and there within the serious topics he covers at the podium, he really enjoys question-and-answer sessions.
"When I speak, I'm strictly non-partisan. One of the games," he says, "is to try to guess what party I'm in."
Last March, attendees of a Merrill Lynch Bank of America presentation may have had, er, a hint when, discussing the Administration, Friedman cracked:
"The best comment I heard recently was that [Speaker of the House] 'Nancy Pelosi has delusions of adequacy.' That was pretty good!"
Perhaps he was just playing to the crowd.