Professional sports and the railroad industry have been among the sectors hit hardest by COVID-19, and Harman Wealth Management in The Woodlands, Texas, has helped clients who work in both those industries navigate the various challenges created by the pandemic, according to Dean Harman, managing director of the hybrid RIA.
Most clients of the firm, which manages about $500 million combined for its clients, are 45 to 70 years old, he told ThinkAdvisor during a recent phone interview. And that means many of them fall within the demographic most at risk with the virus.
Harman’s clients include a Major League Baseball coach in his early 60s who has worked in the league as a player and then a coach for a total of more than 40 years, the advisor said.
The coach, who is also a friend of Harman’s, left his team during spring training after a family emergency and then went back, but MLB then shut down due to COVID-19 in March, Harman recalled.
MLB then restarted and the teams were practicing for the abbreviated 60-game season. “It just got impossible,” however, with all the pandemic protocol complications and the coach left the team after a few weeks and decided to sit out the season, Harman said.
Fortunately, “he’s going to have enough money coming in from Major League Baseball for the rest of his life in pension [so], if he wants to, he is able to retire and be done” right now, the advisor said, noting he went over the coach’s finances with him and made it clear he was in a good place with his portfolio and could opt out of the season if he wanted to.
A lot of coaches in general tend to be “in more vulnerable age groups” when it comes to COVID-19, Harman noted. That includes some clients of his who are NFL coaches and are “just navigating this whole process” now ahead of that season, he said, pointing out one thing they’re concerned about is what happens if there winds up not being an NFL season due to the pandemic.
Two specific concerns of theirs: Will they still be paid? And how would that affect their financial situations?
One client of his is an NFL coach in his late 50s who didn’t get picked up by a team and went to work for the XFL, but that league canceled its planned 10-game season after just five games due to the pandemic, Harman noted.
That client had a residence in Phoenix and one in San Diego and couldn’t afford both anymore, Harman said, noting he’s helped the coach reduce expenses. One bit of advice the client is following: Giving up the San Diego residence and remaining in Phoenix because it’s cheaper.
In that client’s case, “I had to communicate that he couldn’t retire” yet based on his financial situation, Harman recalled, adding he thinks the coach may have to get another job for at least the time being and needs to continue working for another six years before retiring.
Helping a Client Diversify … His Skills
Also longtime clients are a married Houston couple in their early 60s who had “about 80% of their net worth … tied up in railcars” used by companies to transport oil, among other things, Harman recalled.
The husband worked in senior management for a railcar manufacturer and owned commercial tank railcars worth several million dollars that he leased back to the company he was working for.
“I had been telling him for a number of years, ‘You need to think about diversifying this because something could happen where it affects your investment,’” Harman recalled.
The client changed jobs in 2018, joining a large, publicly traded firm whose businesses include railcar leasing, and he had to sell off the railcars he owned to avoid any conflicts of interest, Harman recalled.
“He made a ton of money” off selling the railcars, but it left him with a “huge tax bill as well, and so we counseled him through that process [and] counseled him kind of into that [new] job, and through the process of selling the railcars and then setting aside money to pay the taxes,” Harman said.
But finances weren’t the client’s only problem. He initially “really struggled with this new job because it required a lot of technology adaptation and he didn’t know if he was even going to be able to stay at the job,” the advisor recalled.
“He was just not a very tech-oriented guy and didn’t know Excel very well,” so Harman helped him learn some Excel skills, “spent a fair amount of time counseling” the couple and suggested the husband “just stick with the job” for six months to a year.
The client is now “so happy with the job,” Harman said. The only drawback was that the client had to get used to working remotely, Harman noted, explaining: “He was so used to going to the office and being with people. He’s a really people-oriented person. He loves people. And he felt very isolated.”
Harman helped with that also, advising the client to get out of the house at some point during the day to work out or do something else. The client took the advice and bought himself Apple AirPods and started taking part in conference calls while “out on the putting green,” Harman said.
Learning to work remotely and getting up to speed on computer skills and video conferencing wound up preparing the client well for the pandemic, Harman pointed out, adding: “He’s gone through the COVID thing with no problem.”
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