G Squared Advisory is building its practice around a sometimes-overlooked demographic: women of modest means.
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As of this year, women control the majority of privately held financial assets in the United States. Yet for many women, having money doesn't necessarily translate into confidence about managing it. Laurie Girsky and Cindy Golub--the two Gs after which their firm, G Squared Advisory, is named--are trying to change that.
Awarded the Certified Financial Planner designations just a year ago, the two have formed a financial-advice business in the New York City suburbs of Westchester County, and they plan to focus their efforts on helping women manage their money prudently and confidently.
"We wouldn't turn down a man who came to us," Golub says. "But we think we have a lot of credibility with women because of the work we've done in the community."
Much of that has been their work serving on boards in New York City and in Westchester, where they both live. They both sit on the board of UJA-Federation, the largest Jewish philanthropy organization, which provides funding to Jewish social-service agencies. Through that organization, they have worked with agencies serving the needs of women. In addition, they are involved with a domestic-violence shelter, where they conduct financial-literacy workshops and do pro-bono work. "We both spent a lot of time raising money for various causes," Girsky says. "So we're not afraid to ask women for money."
They also plan to focus on the middle market--clients with portfolios of up to $500,000, bucking the trend in the financial-planning profession of chasing high-net- worth clients. "Rich people have access to advice," Golub says. "But people of more-modest means are the ones that really need advice."
Finding a Niche
As they begin to articulate the type of firm they'll eventually create, Girsky and Golub reflect on how they first found themselves in the financial-planning profession. Four years ago, they were both ready for a new challenge. They had worked together enough to know that they could work together full time in their own business. From the start of their conversations about the practice, they knew that women would be their focus.
Women often find themselves at the helm of their finances after the loss of a spouse or a divorce, and many of them are unprepared. In fact, 75% of women are widowed at the average age of 56 and one in four of them end up broke within two months of being widowed, according to the National Center for Women and Retirement Research.
"What we are trying to do is break things down and make them simpler for women," Girsky says.
They expect that women will find their way to the G Squared office after a life-changing event that brings them face to face with their money issues. That's a time in women's lives when they are most vulnerable to being taken advantage of, but it is also a time when they most need solid, independent advice.
They have also aligned themselves with the Garrett Planning Network, a group of financial planners organized by Sheryl Garrett of Kansas City, Mo. The network is composed of fee- only planners who mainly bill on an hourly basis. "We totally agree with the philosophy of Garrett," Golub says. "We knew we wanted to be fee-based-only, and we didn't want to be selling insurance or stocks to anyone."
In addition to referrals, Golub and Girsky are also accessing Garrett's Web seminars and the support of seasoned professionals who belong to the network. They can seek business-building advice or more-general opinions about running a financial-planning practice.
"It makes us feel that we're not two people alone," Golub says. "We're two people with this great network of hundreds behind us."
Partners in Planning
Even before Girsky and Golub met, they had a lot of similarities: Both had acquired MBAs at Columbia University (though at different times) and each had spent 15 years on Wall Street working in institutional sales (also at different times). Golub was in fixed-income institutional sales at Goldman Sachs, and Girsky held the same job on the equity side at Paine Webber. And they were both taking time off from their careers to raise families when they met through volunteer work in social service organizations. Together, they took the coursework at New York University's certified financial planning program. They studied for the CFP designating exam together and then sat for it together. Both passed in April 2009.
But being newly minted CFPs has its challenges. G Squared is not yet registered with the state of New York, so they are not allowed to bill for the work they do (they must have three years of work experience in the field before they can be registered). They do pro-bono work to build up their practice. They believe, however, that some clients will stick with them even when they begin to charge.
Right away, Girsky and Golub noticed how different financial planning is from institutional sales. They relish the emotional aspect of the profession. "When you're doing institutional sales, your clients are people whose job it is to do business with you," Golub explains. "In this business, we're dealing with things a lot of people would rather not look at."
Investing is perhaps the last thing a client might talk about with the planners at G Squared. As Golub notes, "The CFP exam has four parts, and only one of them is investments." They consider the financial plan itself to be paramount. Investing serves the bigger financial-planning picture, so they spend a good deal of time discussing budgeting, debt- management, and wealth-building strategies.
"We're not just doing a portfolio," Golub says. "We're looking at a whole host of issues: Does this person have a current will, do they have the right insurance, how well set up are they for retirement?"
After that, they will make specific recommendations, if that's what the client wants.
Girsky and Golub follow the same approach to investing as they do to financial planning: Keep it simple. Rather than constructing portfolios of top-flight managers, the pair likes to use exchange-traded funds that help keep fees low and get their clients easy access to multiple asset classes. They prefer a conservative approach that stresses capital preservation to one of potential high risk in exchange for potential high reward. Among the ETFs they use are iShares Russell Midcap Value Index IWS and iShares Barclays TIPS Bond TIP.
"There's a great opportunity right now to talk about asset allocation and capital preservation," Girsky explains. "People are more aware of risk, whereas before they were only aware of wanting returns."
At the end of the day, G Squared's unusual client focus is what makes the firm stand out, and Girsky and Golub aren't shying from the challenge.
"We are willing to put in the time to make women feel more secure," Girsky says.
Ilana Polyak is a New York-based freelance writer.
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