Firm: Merrill Lynch
AUM: $1.37 billion in assets
Location: New York
Note: This profile is part of a special series devoted to On Wall Street’s Top 40 Under 40 ranking for 2012. Every day we take a look at an advisor who made the list to find out the secrets of their success.
Eric Snyder’s practice focuses on what he calls “big-picture planning.” The emphasis is on financial planning, leading to an investment strategy built around asset allocation. “We do extensive client profiling before recommending any investment strategies,” he says. “We talk about our clients’ goals and objectives, short- and long-term; then we come back with investment ideas based on what we’ve learned.”
Those client goals and objectives may cover a range of topics. “Clients might want to buy a second home or save more for retirement,” Snyder says. “They may want to plan for their children’s education, or to leave a legacy after they die.”
Once the goals are set, investment performance is measured against progress towards meeting those goals. “A number of our clients recently retired,” Snyder says. “We did a great deal of upfront analysis, including cash flow projections and what-if scenarios. We wanted to find out how much income they’d need, and how much risk they could tolerate. For clients who need more investment income, we buy dividend-paying stocks and sell covered calls on some of their stocks. It’s a very labor intensive process.”
Making the process even more demanding, financial advisors must keep up with all the innovations on the investment side. “Some things that we use now were not available when we started our practice,” Snyder says. That list includes the wide variety of ETFs, structured investments, and “40-act funds” – mutual funds offering access to alternative investments. To deliver such vehicles to appropriate clients, Snyder uses internal research and models as well as the services of outside money managers.
Indeed, Snyder says the challenge is to “wear all the hats as a financial advisor now,” given the intensive planning involved. “Besides investments, you need to know about cash management, mortgage loans, estate planning, trusts [and] insurance,” Snyder says. “The regulatory environment is becoming a major issue. To handle all of this, we have built a team infrastructure, with different levels of expertise in these areas.”
The team now has a dozen core members, most of whom have professional designations. “We need a big team to provide the high level of service we expect to deliver to our clients,” Snyder says.
For more on how the team came together, read about Snyder’s partner Charles Balducci, who ties with Snyder on the Top 40 Under 40 list this year.