As clients lose jobs, more advisers come to the rescue

Dec 18, 2011 @ 12:01 am

By Lavonne Kuykendall

Financial adviser as career coach?

It is a hat that more advisers soon may be wearing, given the length and severity of the recession and anemic jobs recovery. Many advisers, in fact, already are seeing value in providing employment-related counseling to clients, client families and prospects.

“I have more clients facing unemployment than I've seen in 30 years,” said Michael Haubrich, principal of Financial Service Group Inc. in Racine, Wis. “Most advisers who deal with the upper middle class and lower affluent are experiencing the same thing.”

Mr. Haubrich, who manages about $100 million in client assets, said that he has offered career counseling for about six years, ever since he began to see the employment market moving from the lifelong-employment model many of his clients expected to more of a project engagement model. Some of his older clients who lost their jobs couldn't find a comparable position and were forced into an “encore career.”


“The traditional retirement model is gone,” Mr. Haubrich said, noting that more advisers are helping their clients get through these transitions.

“Their model of selling investments and telling clients the good days are coming back will not work,” he said. “We had to come to terms with it, asking what we can provide that is relevant to our clients; we had to change our model.”

Ronit Rogoszinski often is asked to give advice to friends or adult children of clients who have lost their jobs.

“The very first step is to help them get a handle on how long they can stretch their money. That tells them if they have time to look for just the right job or if they need to grab the first thing that comes up,” said Ms. Rogoszinski, a wealth adviser in the Garden City, N.Y., office of Arch Financial Group, which manages $250 million in assets.

(See: Six things to tell clients who lose their jobs.)

For older clients, sometimes it becomes a case of making the best of a bad situation and working on lowering expenses while trying to maximize future income.

With some help, unemployed clients can develop “entrepreneurial survival skills,” which Ms. Rogoszinski said is a “pleasure” to see happen.

Although she doesn't charge for working with friends and relatives, Ms. Rogoszinski said that the conversations pay off in strengthening her relationship with her primary client.

“It alleviates anxiety for both of them, and maybe five years down the road,” that unemployed college graduate could become a client, she said.

“Before the crash, there wasn't a lot of deep thinking about careers. The assumption was, "I go to college, get a good career and do it forever,'” said Bonnie Bell, director of career and life coaching for Bell Investment Advisors of Oakland, Calif.

“The hidden good thing in the crash is that people are finally waking up and saying, "I need to think this through. I just got laid off and there is no job for me,” Ms. Bell said.

“It didn't used to be part of the financial conversation, and it should be,” she said.

Ms. Bell, a trained career coach, first saw the need for providing career counseling to investment clients during the dot-com bubble in 2000, which hit technology professionals hard.

Although the unemployment rate for college-educated professionals through the current downturn is lower than for the population at large, she and others said that they are seeing more clients who not only have lost their jobs but perhaps a career, too. Beyond the routine advice on how to stretch their savings, they need help in rethinking their career and income needs, and even what their retirement will be like.


Ms. Bell and Mr. Haubrich encourage these clients to hire professional career coaches and to take a battery of assessments to find transferrable skills.

Mr. Haubrich helps them structure their finances to cover their expenses while they take a “retraining sabbatical” to transition to a new career, if necessary.

“Advisers need to make it their business to have some kind of referral source for that need, rather than saying, "I am so sorry,' and skipping over it,” Ms. Bell said. “The conversation needs to be more qualitative, not just about their money.”

At the height of the recession, adviser Robert Fragasso offered free financial advice for unemployed professionals and talked about career transitions at local outplacement centers. He wanted to get two messages out to professionals who were out of work: talk to a financial adviser right away and think outside the box when it comes to looking for a new job.

Mr. Fragasso recalls an unemployed 50-something man who came in for an informational session 10 months into his unemployment.

“He had two more months of unemployment insurance and health care coverage, and he was afraid of losing his house,” said Mr. Fragasso, who is chairman and chief executive of Fragasso Financial Advisors in Pittsburgh, which manages $700 million in assets.

“He was at the end of his rope. I could have done more if he had come in 10 months earlier,” Mr. Fragasso said.

Mr. Fragasso was able to help that client and others by helping them expand their search to related careers.

While brainstorming with an unemployed hospital administrator a few years ago, Mr. Fragasso suggested that he consider consulting for plaintiffs in medical-malpractice lawsuits. The client offered his services to law firms and continues to work as an expert witness to this day.

Having unemployed clients is becoming more common, advisers said.

“In 15 years in this business, I never had clients who were unemployed for more than a year; now I have two,” said John LeBlanc, a principal and wealth manager in the Boston office of Modera Wealth Management LLC, which manages about $1 billion in assets.

He helped a middle-aged advertising executive who lost her job and was unable to find a comparable position brainstorm a way to use her expertise on a freelance basis, working with newer companies that valued her background, he said.

“Sometimes I feel like a cheerleader,” Mr. LeBlanc said.


He also advised her on how to maintain her lifestyle on a smaller income. She sold her home and relocated from the Northeast to Florida, where she was able to buy a comparable home for $300,000 less.

Years ago, clients would resist making such big changes after a job loss, because they thought their problem was temporary.

“Now there is more willingness to make the cuts in lifestyle,” Mr. LeBlanc said.

As more baby boomers come face to face with their inadequately funded retirement accounts, advisers who offer career help will be in greater demand, Mr. Fragasso said.

“There is a general feeling within the adviser community that we are primarily financial advisers. The truth is, we are really life advisers,” Mr. Fragasso said.

“We have an obligation to do that, and the more we do, the greater chance we have to build a better business,” he said.


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