Randy Matz hesitates to use cliches, but one was too appropriate to pass up while he explained the benefits of an investment advisor that works closely with an affiliated accounting firm.
“It’s not what you make, it’s what you keep,” he said. “And there’s great value in understanding [that]...many advisors just really have no understanding of some of these fundamental tax and ownership structures.”
Matz, the national managing director of RSM US Wealth Management LLC, said that is one area of expertise that differentiates his firm. The company is wholly owned by the partnership, but works closely with RSM LLP (formerly RSM McGladrey), a well-known accounting firm.
He described the firm’s niche as servicing owners of private companies with roughly $10 million to as much as $1 billion in revenue. They work with about 3,500 households throughout the U.S. (although the highest concentration is in the Midwest) and the average account size is around $2 million or more.
Some accounts are much larger than others. In all, RSM US Wealth Management has $6.3 billion in assets under management. However, many clients face similar challenges throughout the lifecycle of their business or when they sell it.
The majority of small businesses in the U.S. are either limited liability companies or partnerships and those owners often put their entire life into a business—including their savings. Yet, once a business doesn’t require that level of investment from an owner, or they liquidate their share of the company, they find themselves in unfamiliar financial territory.
Several wealth management firms could properly allocate those newly available assets for a business owner. Matz said he thinks it’s more complicated than that because most business owners are “capital preservation oriented.”
“They've made a lot of money. They don't want to lose it,” Matz said. “That's a different mentality than [many in] the wealth management space and financial advisors. Their real life services, ‘We're going to make your money better. We're going to get you higher returns. We can outperform the market’, that is not our value system at RSM.”
The firm believes in planning first and making sure clients are controlling what they can definitively control alongside predictive strategies, like investing in capital markets—that’s where the affiliated accounting services make a difference.
There is no such thing as certainty in the markets, but developing better tax or business strategies for an owner might solve, for example, a cash deficiency problem or help them save money with certainty down the road.
“I believe that most clients, if they've walked this path, are going to shift from money management to planning, tax efficiency, having a well-allocated portfolio and away from predictive emphasis on what part of the world you should you invest in,” Matz said. “I don't think that's where many of the wealthier clients really are.”