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Emotions can run rampant for investors these days, with the COVID-19 pandemic hitting the stock market and some stocks rebounding more than others. The quest for income can be difficult with interest rates near zero and questions about the credit ratings of many companies.
Moreover, many investors have lived through Black Monday in 1987 (when a 508-point drop in the Dow was a whopping 22.6 percent), the dot-com crash in 2000-02 (Nasdaq dropped 78 percent) and the Great Recession (the Dow Jones industrial average went down 49 percent).
With that in mind, Sherri Daniels, cofounder and CEO of SlateStone Wealth has developed the “Clean Slate” approach for new clients.
“We want to we want to start at square one. We want to get rid of all of the emotional baggage or experiences that you’ve had in your life or in your investment experience, and kind of start with what we like to call a clean slate, and it really just begins with a conversation,” says Daniels, whose company manages $1 billion with three South Florida offices and an additional one in Madison, Wisconsin.
“We like to get to understand where our clients are coming from and understand their experiences and what’s important to them, from not only an investment standpoint and their finances, but also from what they’re trying to achieve in their lives—their values, their dreams, their dreams for themselves, their children—what they want to achieve,” she says.
If clients are a good fit, then the whole financial planning process starts.
SlateStone is a fiduciary that is compensated by fees rather than by commissions on products. The plans can be basic or in-depth. “We look at pretty much everything that touches their lives or touches their finances, and that includes health proxies and trusts and their estate plan and their charitable giving and their education, retirement planning, all of that,” Daniels says.
Daniels and partner Patrick Tylander founded SlateStone in 2017 after previously working together at Banyan Partners and Boston Private.
They invited some of their fellow team members to join them on the new venture. SlateStone has since grown through acquisitions and referrals from clients, certified public accountants, lawyers and other centers of influence, Daniels says.
“We run a very open, architecture-based investment thesis for our clients. We can run the gamut from mutual funds to ETFs to individual equities and bonds. We have a very in-depth investment policy committee with [chartered financial analysts], MBAs, financial planners and chartered financial consultants,” she says. That allows the firm to custom craft investment portfolios, but SlateStone typically goes more broadly than that.
“We look at pretty much everything that touches their lives or touches their finances. That includes health proxies and trusts and their estate plan and their charitable giving and their education, retirement planning, all of that,” she says. Some clients are transitioning into marriage or out of a divorce or others have experienced a death that leads to an inheritance.
The firm works with outside legal counsel to help bring value to the process. “For example, a lot of people will have a trust document that really does not work, really fully represent what they want to achieve when they’re passing on their wealth and so we’ll sit down with the attorney and will help communicate some of the things that are somewhat more intangible that are important to them,” Daniels says.
Sometimes, the relationship is so deep that SlateStone advisers can be at hospitals with clients before family members can arrive from distant locations. “We’ve had to be that surrogate for their family from time to time,” Daniels says. “Those are the types of thing when we wrap our arms around our clients that you don’t typically find always in our industry.”
SlateStone puts together networking dinners so like-minded business owners and professionals can meet to share opportunities. SlateStone also works with entrepreneurs who want to sell their businesses.
In 2019, SlateStone Private Client acquired Weston’s Emerald Asset Advisors, which was led by Scot L. Hunter and Allan M. Budelman. The duo now lead Emerald Multi-Family Office.
The relationship with Emerald has further strengthened SlateStone in the ultra-high net worth field and helped provide more opportunities for clients, Daniels says. For example, Emerald has worked with a number of successful, income-producing real-estate ventures and operators and other alternative investments.
“People are recognizing the opportunities don’t just reside in your traditional asset classes such as stocks, bonds and cash. They want that exposure and alternatives and for the ultra-high net worth, they want the steady income stream if they can generate it without too much risk,” Daniels says.
With the COVID-19 pandemic creating the latest round of financial turmoil, Daniels says a basic question many clients have is whether they will be OK. “Every client of ours looks to us just to help them make sure that they’re going to be OK, and OK is different for a lot of different people. OK sometimes doesn’t have anything to do with their wealth. If they’re wealthy, it has to do with other issues and family issues that they’re contending with. But OK, from an investment sense, has to come back to what you’re trying to achieve for that individual client and not against some arbitrary benchmark of performance.”
Some clients want an 8 percent return while others are happy with 4 percent, she says.
“So, first, we have to determine that to then determine guidance on how best to put a portfolio together that is going to be representative and has a high probability—no guarantee, but a high probability—of meeting many of those expectations and goals. We don’t look at it from the standpoint of, the market was up 30 percent one year, it was down in the crash by 32 percent—how are we going to safeguard against that? We look at it from a very personal standpoint and individual family standpoint and then build around that. ♦
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