Times are going to get harder for the all-purpose generalist advisor. Those advisors who want to thrive are going to have to specialize and find new ways of doing business to be more competitive, and those who don’t are going to get left behind, says one wealth strategist who has come up with his own innovative business model to get ahead.

Fred Hubler is the president and chief wealth strategist of Creative Capital Wealth Management Group in Phoenixville, Pa. He bemoans the fate of generalists.

“They don’t have a niche; they don’t have a deep skill set. They are kind of a general doctor. But in the financial services world, clients are going to want to know someone that knows their profile and knows their path,” he says.

For his own part, he started doing alternative investments 18 years ago to be more competitive. Mutual fund giant Vanguard is in his backyard, he says. He couldn’t try to be like them. “I was always going to add value in a different way and that is providing accredited investments to investors, which is something I don’t think Vanguard is going to be doing anytime soon,” he says.

Hubler uses a retainer model—he charges a fixed fee for all services. His clients pay an hourly, monthly, quarterly or annual fee and receive “sound, comprehensive and uncompromised financial planning advice in return,” he says. His process involves holding meetings with clients in which he lays out with them specific milestones that point them toward their long-term goals. (This is done using his trademarked retainer-based plan called the “Milestone Clarification Process.”) It doesn’t require client assets to be managed by the firm or for the clients to buy products. “We can give advice on assets anywhere,” he says.

And accredited investors in particular are more likely to benefit from his fee model, he says, because they are business owners or highly paid professionals who have money in different places. “They have a lot of dollars, but they are not movable to an advisor, so they don’t have an advisor.” (Accredited investors are individuals or couples with a net worth of either more than $1 million or an income of more than $200,000—$300,000 for couples—in the past two years.)

“If they hire us, the money isn’t moving. It’s staying in your 401(k). It’s staying in your real estate. It’s staying in your business,” he says.

The firm has expanded into 19 states. “Referrals are through the roof.” He notes that people initially do not reach out to him for his retainer service, but once they come in and learn about it, they want it. “So we aren’t leading with retainer because no one really knows what that is. We are being referred to because we are solving problems … and then they find out about [the] retainer.” 

His growth has stemmed from three specialty services in high demand from clients.

The first is their need to minimize capital gains taxes. With the stock market so frothy, Hubler says many investors are trying to reduce their equity exposure. But at the same time, they don’t want to take taxes on what they sell.

To that end, he says, “We found an opportunity zone fund that allows them to sell their stocks but not the capital gains if they move the capital gains into the fund.” That’s a timely solution that’s opened big doors for the firm, he says. Once the clients come in to get their capital gains problem solved, they find out that the firm is retainer-based and they want that too.

The second driver of new business, Hubler says, is that the firm has been helping accredited investors lower their income taxes. When clients with a large W-2 income max out their 401(k)—and yet still have big income beyond that—they don’t have many other levers to push. So the firm taps into natural gas investments that come with significant tax advantages and reduce the income tax for wealthy investors.

“This is a solution that we have been working with; the tax code and the investments have been around since the 1940s, so they are not new. It’s just that most people don’t know they exist. And when their friend gets it from us, they then are talking about it at the golf course, and the next thing you know we are getting calls saying, ‘I want to lower my taxes.’”

The third source of growth has been clients who want to build wealth outside of the stock market through real estate. One way to do that, Hubler says, is through Delaware statutory trusts. These allow investors to put money into a fractional ownership of a bigger property. “So you may have $100,000 of your money in a $300 million brand new multi-family apartment complex … that allows you to build up wealth outside of the stock market in something that’s a hard asset and probably will benefit from inflation if inflation keeps going up,” he says. The trust gives you the tax benefits enjoyed by landlords without actually making you a landlord. Hubler also notes that real estate will go up because of replacement costs and other inflationary forces.

The accredited investment industry is highly regulated, he says, and both advisors and the buying public need to be educated on what it is. “Investors can’t be shown just anything unless they are vetted.”

That’s why he makes a point of finding places where he can be in a room with accredited investors so that he can educate them on investment categories they wouldn’t otherwise know about. At a recent retreat for business owners in Colorado, Hubler says there were two other advisors in the group who knew what he did, and both were eager to meet with him once they returned home.

“They said, ‘I need to talk to you because whatever you are doing is working better than what I am doing,’ and they also said, ‘You look like no other advisor in the world,’” Hubler adds.

The advisors, he says, realized that where they are in their business, they don’t have access to accredited investments. “They have a license to sell it. They have the clients that could need it. But the way they are doing it through their broker-dealer or just the way they are structured, they just don’t have the products,” he says. “So, the writing is on the wall. If you don’t have the solutions for accredited investors, they are going to find the solutions somewhere else, and I am one of the places where they will find their solutions.”

He says he’s not trying to corner the market and is more than happy to help advisors learn what he does so they can join in because the AUM model is not competitive. “Your 60/40 portfolio isn’t much different from my 60/40 portfolio,” Hubler says, explaining that the difference comes down to the makeup of the portfolio.

“Instead of a portfolio in stocks and bonds, I now have investments that aren’t even in the public market, and so they aren’t correlated to market drops,” he says. “And those things are just what [high-net-worth] clients want to have, and it’s actually what a lot of advisors, once they know these things exist, want to do.”