Just about any advisor can help someone with substantial assets get his financial house in order and set up a plan for the future. Dennis O’Brien of Coastal Financial Advisors in Farmingdale, New Jersey, can do that too, but that’s not the part of the business that gives him a thrill.
It’s helping people like the newlyweds with $70,000 in credit card debt who recently came to see him that really gets him charged. “Everyone has problems,” he acknowledges. “But it’s the ones with more problems that I enjoy the most because you can really see the resolution and I get to experience their joy at having gotten through those hard times.
“For the client with a lot of debt, I get them to send in their papers and then we sit down and talk for a couple of hours to resolve their issues,” he explains, noting that his fee for such a session is $600. “Then they’ll come back and I’ll do their tax returns and we’ll do an update and find out how they are at that point.”
His clients range from those like the aforementioned couple who have, in essence, a negative net worth to those with several million dollars under management.
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“I don’t really use AUM as predictor of my business,” O’Brien says. “I view it as a doctor’s office. If somebody needs help, I’m going to help them.”
As an example, he cites a call that he got from someone in California, at the end of the day on Monday, September 30, after he had spent the entire day on the phone with clients concerned about the failure of the federal rescue plan for financial institutions that morning in the House of Representatives. That individual had called a local advisor and was told that the firm minimum for new clients was $3 million. “Clearly he didn’t have anywhere close to that,” O’Brien explains. The local advisor referred the rejected client to NAPFA’s Web site, which is how he ultimately found an advisor in New Jersey. “He somehow came across my Web site and reviewed it and he liked what I said about charitable giving and he wound up calling me,” says O’Brien. “We had a good conversation, but I don’t know if we’re going to work together because he’s on the West Coast, but it’s a good possibility.
“I believe in helping people that need it and not necessarily because they have a lot of assets,” he says.
O’Brien describes his approach as comprehensive financial advising. “I’m sure there are a lot of people that use that term, but I actually do everything,” he says. “I work on giving people tools and skills to get their house in order. Once their house is in order, then we can work on reaching their life and financial goals.”
Coastal Financial Advisors is a one-man, fee-only firm, but O’Brien’s fees are not entirely based on a percentage of assets under management. “I look at the complexity of the situation. I have a factor where I tie in the complexity, their income, and their net worth–their assets. So AUM is a portion of my fee calculator, but it’s not the whole thing, because I use their income also as a factor.” For his comprehensive planning clients, he says his fees range from about $3,000 to $14,000 a year.
“I know a lot of advisors just write up a 30-page plan. They use packaged software and give it to their clients,” he observes. “The clients take it, put it on the bookshelf, and they forget it and move on and then [the advisor] just ends up managing their money.
“I actually meet with my clients more frequently. I don’t write a canned package. I meet with them for different sessions–cash flow management, insurance review, investment management and review, I do their tax prep and then their tax planning,” if necessary.
When O’Brien starts working with a new client, he begins by organizing their various financial documents, which helps him understand the client’s situation and needs. To this end he provides each with a file container–a portable, plastic box divided into sections for important documents such as bank and credit card statements, home and car papers, wills, financial statements, insurance policies, important phone numbers, and childcare arrangements.
“No one has come in here yet that has all their documents in any one place,” he notes. “They’re usually all over the place. Some that do have files have them filed in different places and this system gives them one place to keep everything. It’s nice to have them in a file cabinet, but this kind of unit provides something that they can pick it up and run with if they have to.
“When explaining its purpose, I describe a situation like when Hurricane Katrina hit New Orleans or the fires in California, or right here in New Jersey, the flooding in Trenton a couple of years ago,” he says. “This allows people to just grab some of their most important documents and run with it. This way if they have to stay in a hotel, or wherever, they have the most important documents that they need to get their life started again. Now, it’s not their photos and it’s not their clothes or all their personal material, but it is all the 800 numbers they’re going to need, it’s their account numbers, and it’s enough to make phone calls to say, this is where I am, re-route my mail, or make the phone calls to the insurance company.”