The Top 40 Under 40: Getting Clients Onboard with Tax Changes

No. 39: Matthew Fryar

Firm: Wells Fargo

AUM: $468.02 million

Location: Des Moines, Iowa

Age: 37

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.

As a finance major in college, Matthew Fryar always knew there was more to life than numbers. “When I was still in school,” he says, “I was looking for a career where I could work with people. I received an internship as an assistant to a financial advisor, and I learned that every day something new would come up. Each client was different; the advisor would come up with solutions, providing a great deal of satisfaction to the client and to the advisor.”

Fryar was offered a job at the firm and he’s still there, 17 years later, finding satisfactory solutions. (He began with Norwest, which was renamed Wells Fargo after the 1998 merger.) Over those years, his practice has evolved considerably. “Back in 2005,” he recalls, “about 40% of our team’s business was fee-based, and almost all of that was non-discretionary. Now, around 85% of our business is fee-based, and 75% of that is discretionary. Without the need to ask clients for permission all the time, we can do in a day what used to take up to two weeks.”

Fryar’s efforts on behalf of his clients go beyond money management and investment planning. “We take a financial planning approach to helping clients meet their goals,” he says. “We’ll coordinate with their attorney and their CPA, if that’s called for. In 2012, for example, we’ve been working with certain clients to use the $5.12 million exemption.”

The $5.12 gift tax exemption, effective this year, may not be extended so some high-net worth individuals are choosing to trim their taxable estates without triggering gift tax, while the opportunity exists.

“We’ve been communicating with our clients,” Fryar says, “letting them know about possible tax law changes. For some clients, it might make sense to harvest gains on farmland or a small business or other assets, to use this year’s 15% tax rate on long-term capital gains. For others, taking gains now and paying tax might not be advisable. We look at each individual client, on a case by case basis.”