Corrado noted that Blue Blaze charges 55 basis points for asset management, which it outsources, and does detailed financial planning as well as tax preparation. Clients may pay anywhere from $750 to $6,000 or $7,000 for tax prep, depending on how complicated their return is. But once clients go through the arduous EVOKE process, they typically need only one meeting annually.
Gitterman has built his firm around offering ESG investments. With 5,000 college professors as clients, he has a huge base of them who don't like fossil fuels and don't "like to see Exxon and Halliburton" in their portfolios.
Building a firm based on shared values has its own advantages. But the ESG concept differs from the older socially responsible investing model in several ways.
Every giant investment firm from Pimco to Goldman, Sachs & Co. to BlackRock is building its own ESG data-driven due diligence system for evaluating the category. Gitterman cited a George Washington University study finding that clients following an ESG strategy end up outperforming others by as much as 2 percent on an annualized basis.
But the bigger benefit of ESG to advisor-client relationships may occur when the strategy underperforms. Clients "don't leave," Gitterman noted. That's because they have bought into the philosophy.
The most important issues in most clients' lives have little to do with money.
When Carson was a young advisor still in his 20s, he received his own education about clients’ goals from an 80-year-old widow.
She told him she wanted to get married, and as a 20-something, his idea of getting married at that age didn't exactly square with his view of the world.
Then she told him she had a boyfriend, adding that she told the said suitor "no marriage, no sex." Carson said he could feel his face turning redder than it ever had, but eventually he realized a prenuptial agreement was the solution to her situation.
Carson said his firms have developed time lines of client relationships pinpointing major moments when clients have made big decisions so advisors can show them the value of "planning alpha."