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In Sickness and in Wealth Management

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What would you do if you won the lottery tomorrow? Better yet, what if you went "shootin' for some food" with your Beverly Hillbillies buddy Jed Clampett and "up from the ground came some bubblin' crude"?

Wealth happens, even if it materializes in the more conventional way like the gradual accumulation of your fortune through years of perspiration and inspiration.

What are you going to do with all of the money? Stashing the money under your mattress can't be fun. I hear that gold coins and rolls of quarters make a bed really lumpy.

Until the rubble from real estate market clears, you wouldn't chance living the nervous life of a condo flipper. Your cousin suggests that you can make a killing dabbling in penny stocks, but you're smarter than that. You can always turn to the local bank, but the meager interest rates being paid on savings vehicles like CDs and money market funds are disheartening.

As long as you have a sizable nest egg -- in the range of hundreds of thousands or more to invest -- you may be a prime candidate for a wealth management firm. As the name implies, wealth management specialists cater to affluent individuals with significant assets under their watch. More than just a conventional full-service brokerage firm, you can expect a great deal of handholding, personalized attention, and an asset management experience that is custom-tailored around your risks and expectations.

"We're financial architects," explains Myrna Rivera, founder of San Juan-based Consultiva. Ms. Rivera spent 17 years at Smith Barney before striking out on her own. She sensed an opportunity in breaking from the full-service pack, where financial advisors are often shackled to promoting a limited number of in-house mutual funds and stock recommendations. Instead of funneling client assets into costly mutual funds, Ms. Rivera seeks out attractive no-load mutual funds and low-cost exchange-traded funds, collecting a small percentage of the assets (0.5% annually on a sliding scale that gets lower with larger accounts). In other words, she collects $2,500 a year for watching over a $500,000 account, which is generally the minimum to open a wealth management account at Consultiva. The company's and the client's interests are aligned, because both want assets to appreciate.

Even though her office is in Puerto Rico, Consultiva's estimated 200 clients are scattered all over the United States, with a few in the Dominican Republic. She travels a great deal, making it a point to visit most of her clients at least once a year. When's the last time that your broker flew out to meet you? Exactly. That's the kind of thorough service that sets wealth management apart from more mainstream brokerage experiences.

Inverting the Inversionistas
Stocks have outperformed the other asset classes over the long haul, but it's hard to find Hispanic investors.

"A large percentage of Hispanics are just starting to build their wealth," suggests Sam Ramirez Jr., head of the wealth management division at Samuel A. Ramirez & Co.

As Mr. Ramirez sees it, many Latin Americans are recent arrivals in this country, merely a generation or two removed from their country of origin. They are focused on short-term goals, like housing and education for their children. Wealth accumulates over generations, a distinction that is likely to find Hispanics entering the market in larger numbers in the future, but keeping those numbers in check for now.

Mr. Ramirez knows about the generational influence. His company was founded by his father 27 years ago. Samuel A. Ramirez & Co. is one of the oldest and largest Hispanic-owned investment bankers in the country with more than $2 billion in assets directly under management.

The company's headquarters is in New York City, with several retail outlets nationwide. There is no minimum investment to open an account at the firm, although Mr. Ramirez indicates that the typical initial investment for wealth management services is between $750,000 and $2 million.

Because of the company's prominent role in underwriting securities, its products include new issues as well as more conventional commission and fee-based offerings. Ramirez's reputation was built around tax-free bonds, but these days the company covers the entire gamut of investment vehicles.

A Mountain of Opportunities
Financial education is important. Whether you subscribe to Mr. Ramirez's theory about near-term fiscal priorities or Ms. Rivera's suggestion that Hispanics have a tendency to favor hard assets like cash and real estate, time is likely to change that trend.

There are too many Hispanics in the workforce with pensions and 401(k) retirement plans that are tethered to Wall Street's fortunes. It won't be long before the stateside Hispanic mindset goes from preservation of capital to capital appreciation.

However, if you think that it's hard to find a fellow Hispanic willing to strike up a conversation about the stock market, it's even harder to find Hispanic-owned firms that cater to wealthy individuals.

"So are you out to interview all three of us," joked Matterhorn Capital's Juan Landa, when told about the premise of the article. He said it mostly in jest, but he's not far off the mark. There are only a handful of wealth management firms owned and operated by Hispanics.

Mr. Landa feels that the blame may fall on a lack of role models within the sector. "This is an industry that isn't generally talked about within the Hispanic community," he says.

There is no "Pedro Lynch" or "Juan Buffett."

Despite the ambassadorial efforts of organizations like the Toigo Foundation, established two decades ago by Robert Toigo to promote personal finance as a career and lifestyle choice for exceptional minority students, it is still an underserved vocation.

Mr. Landa's San Antonio-based firm specializes in singling out stocks and mutual funds for high-net-worth individuals. One of his partners hails from South Africa, so Mr. Landa's firm also keeps an eye out for attractive foreign stocks as well. Matterhorn currently has 42 clients, typically with an initial investment requirement of $750,000. Like Consultiva, Matterhorn's services are charged on a percentage basis. Mr. Landa's firm charges 1% of assets annually on the equity side and 0.3% on the fixed-income side.

In Sickness and in Wealth
Not every Hispanic-owned firm caters to high net-worth individuals. Prominent firms -- like San Diego's LM Capital, Chicago's Fortaleza, and Miami's Guzman & Co. -- service primarily institutional investors.

As a whole, this is a sector counting on the booming Hispanic community to grow. Even among Hispanic wealth management specialists, it's not as if their companies are attracting only their fellow Hispanics. Just a third of Matterhorn's clients are Hispanic. Just a quarter of Mr. Ramirez's accounts belong to Spanish-speaking investors, even though the company offers up its Web site in both languages.

Ultimately, they are all upbeat about the future. Recent market volatility hasn't changed that. As wealth managers go, they have the luxury to offset risk with sophisticated hedging strategies. Along with properly diversified portfolios, that strategy helps avoid any sector-specific meltdowns, like the real estate and mortgage lending fiascos of last year.

Like a fancy car or Jed Clampett's Beverly Hills mansion, having a wealth management specialist at your side is a welcome luxury. As for your lumpy mattress and what the winning numbers to tomorrow's lottery will be, you're on your own there.

Rick Munarriz is a personal finance columnist for He can be reached through, where he discusses his latest articles.

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