Problem Solver

Prior to launching his advisory practice, O’Brien was immersed in the technology sector, working for Bell Labs and its various permutations, so he has a real love for and understanding of technology. He provides all new clients with Quicken software and spends an entire session showing them how to use it. “It helps them get their cash flow organized,” he says. “I have just about every client using it. It helps them see what their spending is. We print out the reports on an annual basis to look at where their money is going, and then we talk about it from there. I can also use it when I prepare their taxes. I can ask them to print out a couple of reports to tell me how much of a charitable deduction to take or how much expenses they had for something.

“I do the same thing for the self-employed and small businesses,” O’Brien continues. “The same principles apply, although with them I use QuickBooks.”

Another service O’Brien provides to his small-business clients is in the area of their 401(k) plans. He’ll typically do an analysis of their current situation and then show them the hidden and excess fees of which they may be unaware, and talk to them about bundled versus unbundled plans. “For the plans I provide true transparency,” he says. “So when we start talking about 401(k) plans or SEP plans, they know exactly what they’re going to pay, how they’re going to pay, and who they’re going to pay. The administrator gets their portion, the recordkeeper gets theirs, and I as the advisor get my share. I help them understand their fiduciary responsibility. Frequently they’re really not in touch with their fiduciary responsibility. They’ve been doing things a certain way and they don’t want to change and yet when I start talking to them, they realize that maybe they’re not doing the right thing for their employees.”

If the client is interested, O’Brien will also hold education sessions for their employees–the plan participants. Being a solo practitioner limits the size of the 401(k) plans that O’Brien is willing to take on and he sets his sights on ones with fewer than 200 participants or less than $5 million in assets.

Nonprofits for Fun and Profit

The third leg of O’Brien’s practice, and one that he intends to develop further, involves working with nonprofit institutions. He initially got involved with the local United Way chapter, putting together a class on governance for board member of nonprofit organizations. As is the case with his individual and small business clients, one of the areas of emphasis for O’Brien was helping nonprofits with disaster contingency plans so that in the event of a calamity, they can get their services up and running again as quickly as possible. He worked with the United Way to develop a curriculum for the course and then found an advisor who had done a lot of nonprofit work and a nonprofit consultant to teach it.

Through his work with the United Way, O’Brien met the executive director of another local nonprofit group–Family & Children’s Service of Monmouth County. “I ultimately joined the board there and right now am the treasurer. It’s a $5.5 million nonprofit and I’ve worked with them through the years on various committees and issues,” he says.

Although it’s been time consuming, the group needed help and O’Brien felt compelled to offer it. He’ analyzed expenditures on phone and Internet service and helped cut expenses by $10,000 a year alone. He also reviewed the group’s insurance and found it wasn’t properly covered for some of the things their members and employees were doing.

He’s currently helping them start an endowment. Although that is his area of professional expertise, O’Brien provides his services pro bono, because as a board member, it would be a conflict of interest for him to take them on as a client. “So I do not manage those assets, but I’m helping them with their investment policy statement. Interestingly, they’re going to be a hundred years old next year and they’re just starting an endowment.”

While it might seem that focusing on nonprofits would require a different set of skills, O’Brien says that’s really not the case. “It all goes back to what I do with all of my clients,” he explains. “They’re very similar principles–working with cash flow management, managing assets, helping them with basic, fundamental management issues.”

The only real change is that in some cases there may be some restrictions on investment choices that he doesn’t find with his individual and small business clients. As an example he cites Catholic Charities, where he serves on the board of trustees for the Diocese of Trenton, which has some restrictions based on Catholic doctrine about where its money can be invested.

In addition to his pro bono work for nonprofits where he serves as a board member, O’Brien has also begun to cultivate others as a part of his practice. He’s currently working with the executive directors of two New Jersey-based groups who are looking to start endowments to fund their efforts.

Although such decisions would need to be approved and ratified by each group’s board, should they go forward, O’Brien hopes to be hired to manage the assets should the endowment plans be brought to fruition.

He says his typical passive strategies would come into play and would likely include many low-risk investments. “A lot of nonprofits want a guarantee, so it would be very Treasury-oriented, very safety-driven.”

At some point, O’Brien acknowledges he may decide to expand his practice to include some support staff or even another advisor, but he doesn’t see it happening anytime soon. How big the practice gets really depends on who its clients are and what they need, he says. While he’s not out looking for new individual clients, O’Brien says he rarely turns someone away if he thinks he can really help him. “At this point I’m able to do the things I want and work with the people I want to work with, which includes the nonprofit area,” he says. “I go out looking for the kind of people I want to work with. When I fill that up, then I’ll decide what I want to do, whether I want to hire somebody or just continue doing it myself.”