“Ninety-five percent of the stables are family owned, but they have no idea how the next generation will take over,” Rubin says. “They are thinking about paying the next feed bill or what their horse will do in the next race.”
Therefore, succession planning became a natural part of the investment and planning services offered by Targeted Financial, which charges clients a percentage based on AUM or an hourly fee. Green also developed an expertise in disability insurance because of the high risk of injury that jockeys face.
Rubin and Green spend a lot of time at the tracks, which provides an opportunity for their clients to introduce them to others in the industry. They travel to farms and watch clients’ horses train and they go to horse auctions.
“For our clients, their professionals come to them. If they need a veterinarian, the vet goes to them. They do not have time to come to an office downtown somewhere. Other advisors were trying to break into the market, but they would not go to the farms. There was a disconnect between the advisors and the needs of the clients,” Green says.
Cash flow for people in the horse racing industry is problematic. The stable owners have cash when the horses are winning but they may be cash poor when they have to pay stud fees. Breeders are on the opposite cycle and have cash in hand when the stud fees are paid. And a lot of money changes hands at auctions, where prize horses can sell for millions of dollars.
One client, Joe Orseno, who trains horses for Green and others, says Targeted Financial understands his needs. “They know I may have to have money quickly to claim a horse at auction and I need to know how much I can spend,” he says.
He and Jeff Hayslett of Taylor Made Farms in Nicholasville, Ken., another client, have recommended Targeted Financial to their friends and colleagues in the horse industry.
“I manage the horses for them and they handle my investments for me,” says Hayslett. Green has 30 race horses with two trainers and 20 broodmares.
Another area of expertise developed by Targeted Financial is tax issues affecting people with dual citizenship. Many people in horse racing come to the United States to learn about the industry. Some return home, but many stay and become successful in the United States and retain their original citizenship, which raises tax issues.
The knowledge of horses that Green and Rubin have seems to have paid off. Targeted Financial has a 98 percent retention rate for clients, Green says. The partners, all of whom are in their mid-40s, want to continue growing and developing more services that they can provide for clients.