Port Clyde seems an unlikely headquarters for an investment advisor, but for Evelyn (Evy) Blum of Marshall Point Advisors a high-speed internet line makes it possible to work easily from her location in the center of the village. She says she especially appreciates the added benefit of working in an atmosphere of “quiet beauty” that is a satisfying distance from the financial markets.
“I’ve loved this area since childhood, when I went to summer camp in Maine and sailed out to Monhegan from Tenants Harbor. My husband, Steve Thomas, and I bought a home on Hupper Island in the 1990s. When he stopped hosting “This Old House” on Public Television and we no longer needed to be Boston-based, we renovated a small home in the village and moved here full time.”
Blum first got involved in the world of stocks and bonds by helping her father, who was an active investor, with charting stock prices. This led to a 30-year professional career that involved selling financial information to the investment community. “During that period I also assisted my father in managing wealth for a small number of family members and friends. When he retired 12 years ago, I started Marshall Point Advisors and became a registered investment advisor.”
Blum explains that being an investment advisor is different from being a financial planner. “Financial planners do worry about portfolio management, which is what I do, but they also worry about insurance coverage, budgeting and things like estate planning, which is huge. They catch all of the phases of one’s financial life—saving for college, saving for retirement. They help people from cradle to grave planning for the future.”
Blum says consulting a financial planner—ideally at regular intervals, say when someone is in their 20s, then in their 40s and then later—would benefit most people whatever their circumstances. “Take fishermen, for example. You can have lobstermen making good money for several years, but then there are bad years. Or they get an injury. Just like ball players, they have to plan for the long game.” But, Blum adds, financial planning can also be “a painful process.” The reason, she says, is that money can be a very personal issue and many people don’t have much practice disclosing the details of their financial lives to others.
Blum took all of the training needed to become a financial planner, “but when push came to shove, the only part that really interested me was investment management. So I’m only paid to handle the portfolio management itself. That doesn’t mean I can’t offer direction or offer a second opinion on other matters. I can coach and give feedback. And I’ve developed a group of professionals out and about who I know will give my clients good specific advice on, say, estate planning or life insurance.”
In terms of investment advice, Blum says the way she works is different from the way many other investment advisors work. “The main difference between what I do and what people usually get for financial advice is that I don’t sell any products. So a stockbroker who works with someone is pushing products and getting commissions to do that. When there’s a high commission on a new investment product the stockbroker will respond accordingly.”
In Blum’s case there are no commissions involved. “I’m paid a fee based on a percentage of the amount of the assets I’m managing for someone—whether stocks, bonds, or mutual funds. I want them to do well because I’ll do well. If we start with $100,000 and I get them up to $1,000,000 then I’m doing well.”
A major aspect of her work as an investment advisor, she stresses, is to help her client’s develop confidence about the investment plan she and they have put in place. This can involve a significant amount of time spent explaining about how to put a person’s “excess money”—the funds that might be left over after all the bills are paid—to work.
“People mix up saving money with putting that money to work once it is saved. Today certificates of deposit pay nothing, savings accounts pay nothing, so even with low inflation you’re not making any money.” That, she says, is where investing comes in.
A common type of investment is a retirement fund, to which a person might contribute through their job. “You usually get a choice of investment funds, typically a mutual fund. But mutual funds behave very differently, they have characteristics that a person may or may not be aware of. So until you understand how you are investing your money and in what proportion, whether in growth funds or bonds and so on, you haven’t really made a decision—it’s just sitting there. It may be safe, but if it’s not well invested you’re wasting a huge opportunity.”
Blum’s clients range from people in their late 20s to early 90s, with assets ranging from $350,000 to $3,000,000. And while she admits that it doesn’t make practical sense for someone to pay her to manage smaller amounts, she stresses that anybody can get involved in making their money work for them.
“Think about the daily coffee you drink. If you don’t make your coffee at home and instead buy it at Starbucks or somewhere else, those are dollars that might add up to $500 over the course of a year. There are now simple and efficient investment tools that didn’t exist 20 years ago. There are investment firms like Schwab or Ameritrade that allow small purchases of stock for very small fees. So you can buy $100 worth of stock for $5 or $1,000 worth of stock for $5.”
Blum acknowledges that money and finance can be uncomfortable territory for many people.
“Part of it is that we don’t teach about it to our children in school—it’s not a subject. The kids have no training in even the most basic financial management, which is a checkbook and a budget. You can graduate college and still not know the difference between a stock and a bond! The additional issue, which is probably generational, is that older women know less about finances than men do—or at least they admit to knowing less. A mature woman who is newly in charge of her own finances will say, ‘I don’t know the first thing about this, my husband took care of it, my father took care of it. My brother-in-law tells me I should buy Facebook, should I?’”
The solution, Blum believes, is not only education, but also careful, individualized planning. “So I want my clients to understand that we’re going to implement an investment plan designed to reach their specific goal. When there is a plan in place and a system of investing in place that you stick to, you develop confidence.”—JW
PHOTO: Julie Wortman