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Thursday July 25, 2019

B. Riley Wealth Management Q&A Series: Monte Henry, Financial Advisor, New York

Recently, the B. Riley Wealth Management team spoke at length with Monte Henry, one of our financial advisors based in our Manhattan office. We discussed the state of the industry, his motivations, and his views on millennials and technology.

Talk a little bit about how you ended up in the wealth management business.

I started my career as a financial analyst at two Fortune 200 companies, CBS Television Networks and Burroughs Corporation. Upon graduation from business school, I knew that I was more interested in the finance space as opposed to working on Wall Street. However, after several years I realized I didn’t want to depend on a manager’s whim or this quarter’s corporate profitability to keep my job; I wanted to be my own manager.

I started a new professional chapter at what was then Shearson Lehman Brothers (now known as Morgan Stanley) just prior to the 1987 financial crash, and I worked there for 19 years as a financial advisor. I learned the wealth management business inside and out, I listened twice as much as I talked, and I moved my clients and their families toward positive financial outcomes and better lives.

Talk about your specific role and what you’re doing day to day at BRWM.

As a financial advisor, I think of myself as a “financial quarterback” for small corporations or high net worth individuals. Clients usually have two sets of goals; the first being the fulfillment of an obligation, like educating a child or retiring well, and the second being the willing of money to family, friends or a charitable organization after death. I also have a small group of clients who simply play the market because they love the investing game. I work to deliver the full range of planning services that B. Riley Wealth Management makes available to my clients, and I do this by articulating their goals, memorializing them in writing, and periodically sitting down with them to review our progress on attaining them.

What distinguishes BRWM as a great place to work?

My favorite aspect of BRWM is the open platform. I spent my formative years at large wirehouses; however, they ultimately became so constraining that I felt I couldn’t appropriately serve my clients’ interests any longer. After being unable to transfer some of my best clients from one wirehouse to another a few years ago, I knew I needed another business model because I couldn’t service them properly.

B. Riley Wealth Management operates in the opposite way, as the firm is aggressive about raising awareness of its various divisions and platforms internally. I can introduce a client or prospect to an investment banker, to our valuation practice, or to a professional in retail restructuring and disposition solutions. At a wirehouse that kind of integration is virtually impossible to execute.

Financial advisors encounter various people with numerous financial needs, and when you can solve those needs within your own company, there’s a tremendous benefit for the client, the firm and yourself. We have so many of the financial services tools our clients require already in-house.

What tools and resources do you have available at BRWM that have contributed to your success?

The biggest one for me has been the open brokerage architecture. The ability to work with most mutual fund companies and almost 80% percent of all insurance companies means so much. At this point in my career, I’m having more fun than I’ve had in a long time.

What areas or aspects of wealth management interest you the most?

My area of interest is often the biggest issue of concern for most of my clients: retirement planning and essentially not outliving their financial assets. When I first entered this business, the average retirement age was around 65. Few clients were able to enjoy 20 years post-retirement before passing away. Now it’s no longer abnormal for me to have 80-year-old clients whose portfolios must last them 20-30 years post-retirement. Most clients need a stream of income in addition to Social Security and a pension to live comfortably.

Among my biggest concerns are clients who were once highly functional being afflicted by dementia or diseases analogous to Alzheimer’s. The costs associated with long-term care can extinguish their assets quickly. As their wealth manger, I find myself working extensively with family, caregivers, estate and Medicare planning professionals while furiously trying to preserve the income generating potential of their portfolios.

What areas do you see currently as the greatest opportunity for success in the WM Business?

The greatest opportunities come from listening. The universe gave us two ears and one mouth, and I have come to believe that most conversations with clients should be driven by that observation. Diligent financial advisors must act as lifestyle detectives by asking the right questions of clients. In doing so, they will often find clients’ lives to be far more complicated than originally thought. Careful listening without pre-judgement allows us to map out thoughtful alternatives and solutions for our client’s fears and concerns.

Another thing I’ve learned is that getting to know the person or family member who is not directly involved in the wealth management process helps. It’s good practice and it’s critical to get to know an entire family because ultimately, it’s their money too. This strategy guards against attrition as well, as 80% of brokers lose the family relationship once their client passes away.

Do you have any perspective on what’s changed in the business over the past several years?

The changes have been staggering, with the most impactful being the democratization of information away from us to our clients. Because there is so much access to information it’s become a bit more challenging for me to help clients make good decisions. There is a risk that clients tend to think they know a lot about a topic because they read about it on the Internet. This is concerning because they attempt to make decisions about their financial futures based on this information, which often lacks the proper context or nuance.

Clients can rapidly become more financially sophisticated than in years past, which is great, but as investment professionals we must filter, interpret and synthesize the information so we can provide optimal solutions for them.

Any ideas or advice for millennials looking to manage their wealth?

There is a generational gap in that people in my generation are often more open to an advisory relationship, while millennials, despite being digital natives with relatively high technology comfort levels, often are not. Many millennials have a real desire to impact society positively while making money through investing, which I applaud, but doing so requires a clear investment strategy and a constant adherence to it. I predict that some millennials will end up considering a hybrid approach. As they amass or inherit more wealth, they will manage some assets by themselves but will also employ a financial manager for help investing in asset classes and sectors that they are less knowledgeable about.

Are there hobbies or something personal about you that provide resonate discussion points to help you connect with current / prospective clients?

I really love financial education, so I volunteer with an organization called World of Money. Every Summer, professionals from all walks of life train young people aged 8-16 in the principles of financial literacy. I teach the stock market game, and I find that if I can make one or two participants excited about planning their financial futures, I’ve made a difference. The classes have been tremendously rewarding for me, and I am increasingly convinced that financial literacy should be something we’re all exposed to and trained in, just like any other foundational academic subject.