A bit of Southern hospitality mixed with big-city benefits has helped Atlanta remain an ideal place to build a wealth management business, even though it is still recovering from an economic downturn.
“Atlanta is a big city with lots to do, and it has an eclectic community of people from all over the world who have migrated here,” said Andrew Berg, chief executive of Homrich Berg, a registered investment adviser with $2 billion in assets under management.
The wealth of Atlanta comes from myriad sources, including homegrown giants such as The Coca-Cola Co., Cox Communications Inc., Newell Rubbermaid Inc., Delta Air Lines Inc. and Home Depot USA Inc., as well as from a burgeoning entrepreneurial community growing out of its educational institutions such as Georgia Institute of Technology and Emory University.
PLENTY OF CLIENTS
“There's a pretty decent amount of high-net-worth clients to go around,” said Lee Baker, principal of Atlanta-based Apex Financial Services Inc. “There's also a decent amount as we step down below high net worth, and that may be even more significant for the industry in Atlanta.”
(See the latest rankings of the top RIAs.)
The Atlanta metropolitan region, which includes 28 counties, is home to 5.3 million people, although the city itself has only 422,338 residents. The median age is 33.2 and the annual median household income is $41,631. Nearly 21% have annual incomes over $100,000. Almost 45% have a bachelor's, graduate or professional degree.
Nevertheless, not all is rosy in the area.
Atlanta's real estate industry, which took off leading up to the 1996 Olympics when the city built up its infrastructure to accommodate the event, fueled much of the area's wealth, advisers said. That sector, however, has taken a hit from the mortgage crisis and
recession.
In fact, construction employment in the Atlanta metropolitan region is still falling. It declined by about 6% this year through August, compared with the nation's 0.3% increase in the sector over that period, according to the Labor Department's Bureau of Labor Statistics.
“Georgia got hit harder than other states as a result of the downturn and mortgage crisis,” Mr. Baker said. “Unemployment is still high here because a lot of the lost jobs were in building and construction.”
PAIN PERSISTS
The Atlanta metropolitan region — one of the nation's 12 largest — also has lost many jobs in the financial activities category, according to the BLS. In that sector, the region lost 11,700 jobs this year through August. That's an 8.3% drop — far worse than the national 0.1% decline.
Across all industries, Atlanta lost 30,800 jobs this year through August, making it the only metropolitan region to lose jobs other than Philadelphia, which lost 11,200 jobs, according to BLS data.
Atlanta, though, is Georgia's capital city and still boasts a friendly business climate and attractive recruiting factors.
“The leadership of Atlanta and the state are always looking for ways to entice business,” said Susan Parsons, a longtime resident of the city and president of the Atlanta office of GenSpring Family Offices LLC.
In fact, Porsche AG recently decided to build its new North American headquarters right next to Hartsfield-Jackson Atlanta International Airport.
The city also offers inexpensive housing. People coming from San Francisco or San Diego can find homes of the same size for half the price of their California digs, Mr. Baker said.
BLUE SKIES
Atlanta's weather also is hard to match. The climate is mild, with average temperatures ranging in the 60s or 70s for most of the year, though the summers can be hot.
“After Thanksgiving here, our kids go outside and play in the sunshine,” said Jeff Peller, co-founder of SignatureFD LLC, an advisory firm based in Atlanta. It was 66 degrees and sunny this year on Thanksgiving in Atlanta.
Advisers said other factors contributing to a high quality of life in Atlanta include nearby lakes and mountains, and sports teams such as the Falcons National Football League team and the Braves Major League Baseball team.
(The city did lose its National Hockey League team, the Thrashers, this year when it was moved to Winnipeg, Manitoba, and renamed the Jets.)
One factor that Atlanta must contend with, like most of the nation's large cities, is traffic. The difficulties in Atlanta begin with the 63-mile Perimeter that encircles the city.
“They are working on enhancing our public transportation system and working on the road systems, but there is congestion in Atlanta,” Ms. Parsons said. “But geographically, the city has plenty of room to grow.”
Those who live in metropolitan Atlanta, which encompasses 28 counties, travel an average of 28.3 minutes to get to work.
Meanwhile, the city's financial advisory community has noticed some increased competition for clients in recent years.
“It's become more competitive with the growth of the boutique wealth management firms,” Mr. Berg said. He said Atlanta probably has fewer of the large independent advisers, “which is probably a competitive advantage for us.”
Atlanta is the focus of the Financial Planning Association's Georgia chapter, which is active in the region with monthly events. The city also has many business groups that sponsor informal peer group events.
“They are good educational sessions, and it's especially useful for our young people to be around their peers and understand what the marketplace is like,” Mr. Berg said.
Mr. Peller said in recent years he's watched the sales cycle with clients take longer. Clients used to sign on after a meeting or two, and now it's more like four to six meetings, he said.
“Clients are asking better questions and getting more involved with the process,” Mr. Peller said.
Of course, Atlanta advisers still operate within a very challenging global environment of volatile markets and wearisome government instability and dysfunction.
“That makes coming up with the right advice that much harder,” Ms. Parsons said.
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