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Hiram Arnauld at Strategies for Wealth

Practice Management > Building Your Business

Why One Independent Advisor Avoids a Niche Approach

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Like many financial advisors who are working today in independent practice, Hiram Arnaud cut his teeth at a big wirehouse — in his case, UBS.

As a gay man with a husband and two children, Arnaud says he knows the importance of a proactive approach to financial planning that supports the client’s unique lifestyle, family situation and values. He works with many LGBTQ+ individuals on estate and financial planning strategies that vary widely depending on whether the couple chooses to legally marry, have children and create wills or trusts to protect assets.

According to Arnaud, doing this important work would be much harder in the traditional wirehouse setting. Being an independent advisor with Strategies for Wealth, he says, allows him to put the focus squarely on the client and their needs — and not on product sales or growth quotas.

Another distinguishing factor about Arnaud’s approach, as he told ThinkAdvisor in a recent interview, is the lack of a specific niche or highly targeted client segment.

“I like to work with clients from many different walks of life, who are diverse in terms of their cultural backgrounds as well as their professional and financial situations,” Arnaud says. “Working with a diverse set of clients from a demographic and wealth perspective keeps it all feeling fresh.”

One client might be an entrepreneur who is founding a new company. Another might be a mid-level professional at a premier firm on Wall Street, while another could be an older retiree who is living on a relatively modest fixed income.

In each case, Arnaud says, the key to financial success is setting clear goals alongside the client and their family, right-sizing the amount of risk-taking and, whenever possible, ensuring the savings journey starts early in the client’s working life.

As Arnaud emphasizes, “There is just nothing like the power of compounding when it comes to good financial outcomes.” It’s why his two young children already have their own investment accounts.

“That’s probably the one single thing that is true for any client,” Arnaud says. “Regardless of their walk of life or aspirations for the future, the long-term power of compounding is something magical.”

THINKADVISOR: Could you please begin by telling us about your background in the advisor industry and how you came into independent practice?

HIRAM ARNAUD: I would be happy to. My start in the financial services industry was with Moody’s Investors Service. My job was to research quantitative and qualitative information for issuer credit analysis. I covered a lot of ground across commercial and consumer finance.

From there, I went on to spend some time at UBS, where I became an associate director and credit analyst responsible for underwriting various warehouse credit facilities for the asset-backed securities lending portfolio.

By the time the Great Recession came along, I knew I wanted to make a change, but I didn’t know what direction I wanted to go, to be honest. I actually hired a career coach and worked with them over the course of about six months.

What I came to realize is that I’m really a people person, and I found the idea of working more closely with individuals and their families and helping to make a real difference in their lives to be really appealing.

It became apparent that working for an independent advisory firm would be a great opportunity for me, and I haven’t looked back. It’s hard to believe it’s already been more than 12 or 13 years since I started on this journey.

My practice is now well established. I work with some 300 clients and I have my own staff that I manage. It’s really been a journey to get here, but I love the work.

Can you reflect on how your role as an independent advisor differs from what you were doing at UBS in the wirehouse setting?

The best part of being in the independent space is that you don’t have to think about everything as being a zero-sum game where you are focused on production and competing with your peers.

I feel that the independent approach to the business allows me to more directly impact people and focus on whatever is going to add value for my clients, but I am still very grateful to all my former employers and managers. I learn a lot from them. It cemented a strong basis that allows me to do what I do today.

There are challenges that come along, of course, when you aren’t attaching yourself to a big national brand that people already know and trust and an organization with a huge amount of resources. That’s why it’s so important for me to have my practice supported by [Strategies for Wealth].

Doing everything completely on your own as an independent advisor is almost impossible in today’s environment.

Do you focus on a particular client niche, or is the book of business more diverse?

Actually, the client base I have varies a lot across demographics, income, career stage, industry, etc., and I love it that way. There are some advisors who are very niche, and that works well for them, whether they are focused on working with attorneys or doctors or whomever.

In my case, I like working with people who are like-minded, but I can bring planning value to anyone, from entrepreneurs who are supermarket owners to clients who are employees at important firms here in New York. The variety keeps it interesting.

Another thing that is really cool is that, since I’m not in just one niche, I can take lessons from across the board and help people from all different walks of life learn from others’ experiences. This applies both from a financial perspective, but also from the perspective of people’s psychological experiences and life experiences.

I often joke with my clients and tell them that I can “see” their future, because maybe I’m serving someone who is very similar to them in temperament and career trajectory, but they are 20 or 30 years further into their career or retirement.

One thing I do across all of my clients is give them a handful of books to read, and it helps me understand more about their perspectives. One is “The Psychology of Money” by Morgan Housel and another is “Happy Money” by Ken Honda.

Both of these books speak about how we come to our financial lives as part of a bigger picture. We all have our own financial background and intuition — things that have been put to us that we haven’t asked for, things we grew up with. Speaking about these things helps to deepen the relationship with any client, whatever their walk of life.

You often speak about the importance of advisors stepping up to serve the needs of LGBTQ+ individuals and families. What insight would you share with your fellow advisors about working successfully with this community?

There are a few things to point out, starting with the fact that, on an individual basis, LGBTQ people continue to face costly issues like pay inequality, especially among women, and housing discrimination. That said, many people in this community are highly successful and wealthy, so the outlook varies a lot, and you can never just view someone from one perspective in a vacuum.

But there are some planning topics to highlight, and these have changed now that more same-sex couples are able to and choosing to get married. Before, for example, getting the health directive and the right power of attorney documentation in place for same-sex couples was crucially important.

That’s less pressing now for married couples, but it is still crucial for those people who maybe aren’t married or who are not living in a partnership.

More same-sex couples have children today — as I do — but many still do not, and that changes the planning perspective, as well. Legacy planning and spending in retirement take on a different character, and it can be really interesting to work with clients as they think about their lifestyle in retirement.

One really big trend right now is talking about longevity risk in this community and making sure people understand that they need to address this risk, potentially with long-term care or just by saving very prudently. Aging with dignity is a big topic of conversation for all my clients. How do you age with dignity when the cost of care can be so astronomical?

Finally, how are your clients navigating the economic uncertainty that has defined 2022 and 2023?

There is definitely some additional stress, but the great thing is that we are able to focus on the long-term and not just market returns.

I always tell my clients that it’s better to be saving a good portion of your salary, 15% or even 20% if you can afford it, for a long period of time. That’s going to mean you don’t have to rely on taking a lot of risk and having good luck in the markets to have a successful retirement outcome.

I tell my clients that they have to accept that the market is going to do what the market is going to do. We can’t control that. What we can do is make sure we are setting the right goals and mitigating unnecessary risk.

(Pictured: Hiram Arnaud)


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