Knowing Your Niche
Sometimes it’s best for clients to stay within their niche, or at least a related field. Ben Barzideh, wealth advisor at Piershale Financial Group in Barrington, Ill., tells of an engineering client who, in retirement, became a consultant for his old employer. He was successful because of his “expert knowledge of the equipment and parts they made and sold,” says Barzideh. “What he hoped to accomplish by doing this in retirement was to still stay active, use his expertise and work on his hours and terms.”
Barzideh advises clients to “not start a business that requires a lot of capital investment or one that you have little knowledge about,” he says. “Many businesses don’t make it past three years, and you would not want to sacrifice your retirement savings to start a whole new business, in case it doesn’t succeed. … The clients that I’ve seen have success with a business in retirement were ones that [had] no significant capital investment.”
The Academic Route
In some cases, becoming a consultant means becoming an expert witness who is paid to present testimony in court. Janet Briaud, a founding partner at Briaud Financial Advisors in College Station, Texas, has helped several retired professors go that route. “Some do it on a per project basis, whenever they think a case is especially interesting, and others build a whole business being an expert witness in a particular area,” she says.
One advantage of staying within your area of specialty, she points out, is that there’s virtually no transition or learning curve before you can hang a shingle. “They have the credentials already, because they’re high-level professors in their area of expertise.”
What can be hard, she adds, is simply slowing down in retirement. But to be clear, most clients she’s known aren’t just staving off boredom. “They can charge as much as $500 an hour,” says Briaud. “It’s not always that high, but it certainly can be very high.”
She helps her clients by “talking about what it takes to start a business, how much money they can afford to put into it, how much time they can expect before it is profitable, and in many cases just brainstorming,” she says. “Often just listening is helpful as they come up with their own answers.”
The Conversation
Several years ago, Briaud started a regular discussion group for those going through this transition. “Clients were saying they wanted to retire but didn’t know what that was going to look like,” she recalls. “So we get together and talk about their interests and goals.”