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Serving the Underserved: How to Help Clients With Modest Incomes

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During the next 20 years, nearly 40 million women will reach retirement age, according to Visa. However, two-thirds of those who are now working earn less than $30,000 a year. Even women higher on the pay scale earn an average of 77 cents for every dollar earned by men.

Many of these women will need help to achieve a comfortable retirement. Unfortunately, they won’t accumulate assets soon enough to meet the typical advisor’s minimum.

Karen Ramsey, president and founder of Seattle-based firm Ramsey & Associates, which currently has a $1 million minimum for new clients, has launched an online investment management service for investors with modest portfolios.

Through, both men and women can take advantage of the same quality services that her firm provides, but at a lower asset threshold. In this way she’s helping more people take charge of their financial future.

The author of two guides to financial well-being, Ramsey has become one of my favorite fee-only financial advisors.

Olivia Mellan: What motivated you to start

Karen Ramsey: As my practice became more successful, I was able to raise my fees and my minimum to promote better work-life balance for myself. But every time I did that, my heart hurt a little because I knew there were people I was leaving behind.

As a business owner, I grappled with how to serve these people yet still have a viable business model. My parents were poor, so it’s not OK for me to ignore people who don’t have millions of dollars.

Because of this background, I kept trying to find a business model that would take care of what I feel is an underserved part of the population. Finally it came to me that I could use a combination of the Internet and conference calls to serve people who don’t meet most managers’ minimums.

OM: How does it work?

KR: Clients go to our website,, and fill out a basic profile. We then email them a risk tolerance questionnaire. When they send that back to us, we process it and come up with a target asset allocation. Then we set up a conference call with the client to go over the results of the risk tolerance questionnaire and our suggested asset allocation.

This is our “get to know you” client call, where we agree on the target allocation and determine the time horizon of the money they have to invest. We explain how the process will go and answer any questions they may have.

Additionally, we discuss the investment style options of active, passive or socially responsible investing. By the end of this conference call, we have an agreed-upon asset allocation and investment style.

OM: So the client needs to already have investable assets?

KR: That’s correct. is for individuals who have at least $50,000 to invest.

There are directions on the website about how to input the name and amount of the assets the client wants us to manage and where they are located—with Fidelity, TD Ameritrade or somewhere else. We also send documentation to move the assets to Schwab, which is the custodian we use for all Ramsey clients.

The client provides this asset information after the conference call. It’s processed by our proprietary software, which sends an email to the client with a recommendation about what investments to keep or liquidate.

Once the assets have moved to Schwab, we place the trades that are appropriate given the client’s asset allocation and desired investment style. Then we schedule another call with the client where we explain how they can see on the website that the assets have arrived and the trades have been placed, and also show them how to run performance reports. Clients’ ability to see their investment performance whenever they want is an important feature. We made sure that was part of

We rebalance the portfolio every two to four months and have an annual review call with the client. Clients are welcome to email or call us with questions or concerns throughout the year.

OM: How are you compensated for your work?

KR: We charge a 1% per year fee on assets under management, with a $1,000 per year minimum fee.

OM: What distinguishes this program from competitors’ services?

KR: isn’t just about making money. We’re passionate about serving this market. We want to make sure people with modest portfolios get top-quality investment advice. We are committed to that.

We really care about our clients. They’re not just numbers to us. That’s why we invest our time in the two conference calls. I know some of our competitors are backed by venture capital, and clients are just expected to fill out something on a website and send in their money. I would never do that, and I would never ask a client to do that.

I want clients to feel that there are real people here who really care about them. In addition, I think we are one of the only fee-only online investment websites that has three investing styles and also allows the client to run performance reports whenever they want.

OM: What else is available on your website?

KR: We have a number of free tools and resources, such as a workbook that people can use to create a personal spending plan. Our Market Commentary from past quarters is also available for free, as well as some financial calculators. There are links to my blog, where I share financial planning insights and advice. In the near future, I will also be rolling out a series of videos called The Possibility Adventure, to help viewers break through some of the mental confines that may be hampering their personal and financial progress.

OM: Looking forward three years from now, what do you hope to have accomplished?

KR: I hope we’re serving thousands of clients who wouldn’t normally be taken care of or served by a traditional wealth management and financial planning firm, while at the same time providing an extraordinary workplace for the employees of

OM: If an advisor is contacted by investors whose assets don’t meet their firm’s minimum, are you open to their referring to

KR: Absolutely! In fact, this is part of the reason I created Financial advisors often get into situations where a client refers someone who doesn’t meet the firm’s minimum, but we still feel obligated to take care of them.

It’s an awful feeling to turn someone away simply because their assets are too modest. is a way for advisors to handle that situation.

Over the years many inexperienced investors—especially women—have told me they longed for an advisor’s guidance, but didn’t have enough money to be accepted as a client. I’m pleased to know that at they will find a climate of respect, acceptance and partnership.

In the future, I hope there will be many more places where lower-middle-class and even working-class clients can find professional support and a caring relationship to help them achieve their life goals.