Satisfied in Seattle: More clients than competitors for RIAs
Despite is reputation for gray skies, Seattle has weathered the nation's economic storm better than most of the U.S. That fact, combined with the area's recreational opportunities and quality of life, makes some financial advisers who live and work there pretty satisfied.
Despite is reputation for gray skies, Seattle has weathered the nation’s economic storm better than most of the U.S. That fact, combined with the area’s recreational opportunities and quality of life, makes some financial advisers who live and work there pretty satisfied.
“There always seem to be more clients than competitors,” said David Hill, president of Seattle-based Sonata Capital Inc., which has $150 million under management. “It’s a healthy environment for us.”
“We’re in a growth phase,” said Rick Egan, co-founder of Cadence Wealth Management LLC in Seattle, which manages $45 million. He is adding part-time help while fielding recruiting calls, even though he set up his own shop just last summer after leaving a larger practice.
The metropolitan area that includes Seattle ranked third on a list of strongest local economies nationwide, down just slightly from its No. 1 ranking in 2010, according to research firm Policom Corp.
Stalwart employers in the area — including Microsoft Corp., Amazon.com Inc. Costco Wholesale Corp., Starbucks Corp., Weyerhaeuser Co., Nordstrom Inc., and The Boeing Co. — have helped drive the local economy and create wealth that stays put.
WEALTH IN BIOTECH
Additionally, the Puget Sound area has also been “pretty good at building opportunities in the biotech world,” said James Harvey, president of Opus 111 Group LLC, a Seattle firm with $125 million under management.
(See the latest rankings of the top RIAs.)
Washington state boasts 175 biopharma companies, 205 medical device companies and 25,000 life sciences jobs, many of them in Seattle and the Puget Sound region, according to the Greater Seattle Chamber of Commerce.
The state also is the largest exporter in the nation on a per capita basis, according to the chamber, with one in three jobs tied to international trade. Boeing and Microsoft are the biggest exporters.
Moreover, the region’s well-educated populace translates into above-average incomes. According to the 2010 Census, 62.8% of Seattle adults had a college degree, and median household income was $60,212, versus $50,046 for the U.S. as a whole.
Although many investors are retirees from corporate employers, client wealth also is generated from smal businesses.
“We see a lot of [owners of] small businesses in the liquidation phase,” Mr. Hill said. “There isn’t one particular area — there’s a nice cross section” of businesses.
Meanwhile, Seattle’s reputation for wet weather is somewhat exaggerated. Compared with most other U.S. cities, it rains more often, but as measured by the amount of rainfall, Seattle ranks only 44th among cities nationwide.
“Residents of the state like to hype [the reputation for bad weather] to keep people from moving here,” said Mr. Egan.
But having lived in the cold of New England and the sunshine of California, Mr. Egan calls Seattle the “perfect in-between place.” With a population of just over 600,000 in the city proper, he likens Seattle to a smaller version of San Francisco.
QUALITY OF LIFE
Mountains are an hour’s drive from the city, and both fresh- and saltwater recreational opportunities are nearby. Vacation homes and weekend getaway spots, such as the San Juan Islands, are a ferry ride away.
“The lifestyle is fabulous,” Mr. Hill said.
Those recreational advantages, plus the lack of a state income tax, keep retirees from moving out — although many clients spend winters in warmer climates, advisers said.
Nevertheless, Seattle hasn’t entirely escaped the economic woes that have plagued the country.
“Plenty of businesses are struggling, and people are being laid off,” Mr. Harvey said.
Boeing grabs headlines whenever it announces layoffs or threatens to move production. In November, though, the company landed several new large jet orders.
“There’s always a concern [about] what Boeing is going to be doing,” Mr. Hill said.
Like most cities, Seattle suffers from stretched infrastructure, especially the Interstate 5 corridor that runs through town.
And like other areas, the real estate market “is still a little soft,” Mr. Hill said. “Definitely, some properties are moving, but it’s slower than normal. Prices are still advantageous to buyers, and I’m not sure we’ve found a bottom.”
Even with the weakened housing market, living in Seattle is pricey. The median home sale price in the city is $387,100, about double the national average, according to Zillow.com.
The financial district in the city center is a great spot to locate a practice, Mr. Egan said
“A good portion of the financial district is in the same corridor as all the retail [stores] and the Pike Place Market district, so at lunch, you can walk out and go to great shops.”
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