St. Louis: The pros and cons for advisers
St. Louis might be brushed off as flyover country by some coast-to-coast travelers, but it has become the final destination for many financial advisers.
St. Louis might be brushed off as flyover country by some coast-to-coast travelers, but it has become the final destination for many financial advisers.
“St. Louis has almost flown under the radar as a financial hub,” said Adam Birenbaum, chief executive of Buckingham Asset Management LLC, the largest registered investment adviser in the St. Louis area and 17th-largest in the nation. “We have companies like Stifel Nicholas [& Co. Inc.], Edward Jones [& Co. LP] and Wells Fargo [Advisors LLC], as well as a growing culture of RIAs.”
Strengths include a relatively low cost of living, especially compared with cities on either coast. In 2010, Forbes magazine ranked St. Louis eighth on its list of cities with the best housing markets, due to its relatively low foreclosure rate and affordable home prices. The median sale price for a St. Louis home was $125,100 in October, well below the national median price of $162,500.
Not everything’s upbeat, however. St. Louis’ population fell 10.5% to 319,156 from 2000 to 2010, according to the U.S. Census Bureau, and about 27.8% of those left behind lived in poverty in 2010, compared with about 15.3% nationwide. The unemployment rate was 10.7% in September for St. Louis residents, well above the national average of 9%.
Crime has been a problem in St. Louis for years. In 2010, the city had the highest rate of reported crimes of U.S. cities, about four times the national average, according to a study of FBI data by researcher CQ Press.
(See the latest rankings of the top RIAs.)
STRONG SELLING POINT
Apart from the demographics and statistics, advisers point to a strength of the city, one that not only makes it a good place to live, but is also a strong selling point to investors looking for a trusted financial adviser.
Some call it “Midwestern nice,” and advisers say it is real. Midwesterners have a reputation for being honest, hardworking and friendly, advisers said, traits especially important to people looking for a financial adviser. The reputation has helped advisers in the city draw clients and assets from all over the country.
“Clients like our Midwestern feel,” said Mr. Birenbaum, a lifelong St. Louis-area resident. “It is less formal, a more intimate and personal relationship. It has helped us.”
Another plus for financial professionals is that St. Louis is a national leader in banking, finance and insurance, according to the St. Louis Regional Chamber & Growth Association. With the 2008 merger of Wachovia Securities and A.G. Edwards, creating an entity that is now part of Well Fargo Advisors, St. Louis became home to the largest number of investment firm headquarters of any city besides New York.
In 2009, according to the latest figures available, average annual pay in the St. Louis area for those in the financial services industry was about $54,000, ahead of the $44,000 regional average for all industries, according to the St. Louis Regional Chamber & Growth Association.
The St. Louis area also is headquarters to 21 Fortune 1,000 companies, including pharmaceutical prescription company Express Scripts Inc. and consumer electronics giant Emerson Electric Co.
Robert J. Blattel, a lifelong Missouri resident, founded the St. Louis-area RIA firm Blattel & Associates more than 30 years ago. He sees the local trait he calls the “Midwestern ethic” in many of his clients. He said his local clients listen well and are willing to take advice. This makes his clients easy to work with, he said, even though the average account size is probably smaller than in the nation’s biggest cities.
“There are no silver spoons here,” Mr. Blattel said. “These are people who worked hard to get what they have. Some areas have more wealthy clients. We have more middle class, and that appeals to me. I know what they are going through.”
Mr. Blattel, whose firm manages $90 million, said he sees the Midwestern ethic beyond St. Louis, as well. He points to Missouri’s triple-A bond rating, one of only seven states to hold the top rating.
SMALL CITY, BIG ATTRACTIONS
The city was already an established trading center by the early years of the country’s founding and it grew rapidly into its nickname, Gateway to the West, after the 1802 Lewis and Clark expedition left St. Louis to map a route to the West Coast.
People who are drawn to early American history will find plenty of cobblestone streets, terra cotta friezes and historic buildings, as well as the restored Jefferson Barracks, the first permanent U.S. military post west of the Mississippi, founded in 1826. The city’s variety of unique neighborhoods and architectural gems earned it a spot on the list of distinctive destinations by the National Trust for Historic Preservation.
For baseball fans, few cities offer as much everyday joy as St. Louis. The city’s beloved Cardinals are Major League Baseball’s 2011 World Series champions, the team’s second title out of three World Series it has played in since 2004. Its five-year-old home field, Busch Stadium, consistently ranks as one of the best baseball stadiums in the U.S.
Ernest Clark, principal and director of wealth management for Buckingham Asset Management, moved to St. Louis in 2006 after spending many years in Alabama. While there, he and his wife visited the city regularly.
“We went to art museums, the zoo, the natural-history museum and sporting events,” Mr. Clark said. He enjoyed the entertainment opportunities and the variety of neighborhoods that made exploring the area interesting.
When Mr. Clark accepted a position in Buckingham’s headquarters and moved to suburban St. Louis, the biggest surprise to him was the Midwestern culture.
“I thought it was the culture inside Buckingham, and I was surprised it is the Midwestern culture, not just in the firm,” he said. “It is doing the right thing by neighbors, doing what you say you will do,” he said. “There is a high level of honesty in relationships.”
Mr. Birenbaum believes there is a trend of people gravitating to what have been called second-tier cities, such as St. Louis, as well as Charlotte, N.C., along with Houston and Austin, Texas, to name a few.
“A lot of folks believe they have to be in New York, or Chicago or San Francisco to get engaged in high finance,” Mr. Birenbaum said. “That trend is changing. People from California and the East Coast are more open to making the move after they come and visit.”
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