“They are a challenge,” Bernhardt says. “These guys are so busy it’s hard for them to take the time to meet. One common concern these guys have is that they don’t have the time to focus on their wealth management, so you have got to be patient to try to get that [first] meeting.”
Along with patience, a certain amount of fascination with entrepreneurship also is necessary to serve this client population well, says the founder of Bernhardt Wealth Management in McLean, Va.
“Business owners are far more unique than if my niche was working with only attorneys or doctors,” says Bernhardt, whose clients' business valuations range from about $10 million to $300 million. “You really do have to enjoy working with business owners.”
Even after a business owner has agreed to work with you, he says, it can take years for them to develop enough income to provide sufficient compensation for the planner. Partly for that reason, Bernhardt doesn't rely on percentages of assets under management.
“I start by charging them a fee to do some kind of analysis,” Bernhardt says. But, “many times the business owner’s biggest asset is their business. From a pure asset management perspective, I may develop a relationship with someone today, but it may take me three years to have assets to manage.”
Building up those assets requires diverting some money out of the business and into the clients’ own accounts.
As his clients’ businesses continue to grow, Bernhard says, so do the planning needs. “Their priorities are certainly their employees and customers,” he says. But also, he says, “family is very important to them. [Eventually], they want to leave [the business] part of their life behind and focus on their family, and then ... their community and charity. Ultimately, one of their objectives is to build security for their families.”
In the end, helping this busy client demographic carve out time for wealth management can be particularly satisfying work, Bernhardt says.
“I feel very proud, from the investment perspective, of what we’ve done for our clients,” he says, “They can focus on their business. They can focus on their customers. They can focus on their families and their outside interests. It’s gratifying knowing we have helped them.”