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A Niche Built on Trust

Kathy Shultz’s unique practice helps immigrants get the best from their money.

Kate Stalter, 12/01/2011

Kathy Shultz has a special affinity for people who came to America with very little but worked hard and built successful lives here. After all, that describes her. Shultz, who opened Shultz Financial Planning in Beaverton, Ore., in May 2010, arrived in the United States from Hong Kong in the late 1980s. She had a scholarship that covered some of her costs at Concordia University in Portland and $11,000 in cash.

She knew that wouldn’t get her very far, so she set to work, taking jobs ranging from janitor to teaching assistant. She also accelerated her studies to graduate with her B.A. in three years, rather than four.

Today, in her fee-only financial advisory practice, Shultz works primarily with first-generation immigrants and their families. “So many of these people came here with nothing, and they worked so hard to get where they are,” she says.

Sound familiar?

After completing her undergraduate degree in finance and accounting, Shultz got her MBA from Portland State University. Then, she took a job with electronics manufacturer Tektronix in Oregon. She enjoyed it, but after the tech bubble burst in the early 2000s, it was time to find something new. A friend suggested she look into becoming a financial advisor, a field she had never considered. But Shultz saw how it would combine her experience in marketing and finance, and she took a job with Waddell & Reed in 2004.

Looking for a Fit
She learned the ropes of commission-based selling and about the mutual fund industry. Hoping to increase her financial-services knowledge, Shultz moved to UBS in 2005.

“They were good companies, and I did learn, but I didn’t have a lot of good connections among high-net-worth people in Oregon,” she says. “Also, my heart wasn’t into looking for only high-net-worth clients. There’s nothing wrong with that approach, but it’s not my passion.”

But Shultz enjoyed being a financial advisor, so she continued seeking the right fit. One of her husband’s friends had joined Edward Jones as an advisor and recommended it to her. She liked what she heard, and she signed on.

It was during her work at Edward Jones that Shultz made a key realization. Part of the customer prospecting was done in a decidedly old-school fashion: by knocking on doors and pitching Edward Jones’ services. During the process, she had an epiphany.

“The people who really wanted to talk to me, who were drawn to me, were people more like me. They had come to this country from all over the world—Japan, China, Finland, Afghanistan—everywhere,” she says. “These people would open the door to me, and I could see the struggles they’d gone through. They were just like me.

“So, we took to each other,” she says. “I found it rewarding to help them. Not that other people don’t have the need for a financial planner, but here were people who worked extra hard to get what other people have. They didn’t always have the means to get the professional financial advice they needed because of language barriers and cultural barriers—all kinds of reasons.” Shultz also saw that it was time to move away from the commission-based model, which she had never liked. It became clear to her that to combine her various interests, she would have to strike out on her own.

Her client base today is exactly the group she hoped to work with: immigrants and their families. She’s now able to take her time building relationships before signing clients. That pace wouldn’t be possible at a wirehouse.

Some of the usual prospecting options didn’t make sense for her. “You have to go find these clients. They’re not in country clubs or on golf courses. They may have a lot of money— but they don’t go to those places,” she says. While some advisors emphasize the investment- management angle, Shultz, who is part of the Garrett Planning Network of fee-only advisors, believes that the key to successfully serving her clients lies in the planning process at the beginning of the engagement.

Because her firm is so new, Shultz has yet to hire any associates, handling all financial planning and investment decisions herself.

Different Views
She has learned that many first-generation immigrants view their money differently from other Americans.

“You can’t just start out being businessoriented,” she says. “People who come from places with a lot of corruption or a very unstablepolitical environment are not used to trusting people. Trust is a big thing, and it has to be built slowly.” In addition, many are accustomed to taking risks and see nothing unusual about keeping all their money in the stock market—or even, in some cases, currencies—rather than investing in other asset classes. Whereas American-born clients tend to fret about volatile markets and equity-index sell-offs, many of Shultz’s foreign-born clients don’t panic about stock-price fluctuations.

“So many of these people, especially the older generations, have seen so many different things in their lives that nothing fazes them anymore,” she says. She cites the example of a client from Cambodia, the sole survivor after 10 family members were killed in the country’s civil war. Another hails from Afghanistan and built a substantial portfolio of businesses in this country. Shultz mentions another client from China, who worked in the restaurant business in Oregon and, over the years, stashed his money in blue-chip stocks, amassing a $1 million nest egg.

Shultz often finds herself explaining the benefits of asset allocation. Once she has convinced her clients of asset allocation’s importance, Shultz uses Morningstar portfolio snapshots to create the right investment combinations. Shultz’s investment style can be broken down into three components: Appropriate asset allocation, long-term buy and hold, and a core-and-satellite strategy for the right clients.

She uses Morningstar ratings, as well as data about costs, manager tenure, and the fund family’s overall track record, to select the right instruments. Rather than having a stable of “go-to” funds, Shultz prefers to recommend fund families for her clients. Among her few specific fund picks are Ivy Global Natural Resources IGNCX and Oppenheimer Gold & Special Minerals OPGSX. Fund families she likes include American Funds, MFS Investment Management, T. Rowe Price, and Vanguard.

Shultz believes that she found her niche working with immigrants and helping them to plan for their financial futures. “I love educating people about their money,” she says, “and helping them understand they have to look at the whole picture. That’s why I went into financial planning.”

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