Portland Firm Redefines the 'Art' of Modern Financial Planning

From the Portland Business Journal

Modernist Financial is growing fast by providing wealth management services to an underserved market — creatives.

By Sean Meyers

Aug 17, 2017

More than most Certified Financial Planners (CFP), Georgia Lee Hussey likes to get a feel for her client.

The former installation sculpturist is president of Modernist Financial, which is carving out a niche by helping Portland’s creative contingent embrace its growing affluence.

“The artist culture has been that you’re either broke and living in a garret, or you’re a sellout. If being well compensated for what we do is thought of as selling out, then we’re in trouble as a community,” Hussey said.

Hussey founded Modernist because she saw that many of her contemporaries in Portland and New York were becoming highly successful, but had no clue how to handle money. Like her friends, Hussey learned the hard way.

“I ended up buying a house I couldn’t afford on a subprime mortgage. I didn’t know what a subprime mortgage was,” said Hussey.

Hussey burrowed into her CFP textbooks and was quickly hooked. “I found that I absolutely loved everything about it.”

That love has morphed into a fast-growing business serving the underserved market of creatives. Launched in 2013, Modernist Financial now manages $30 million in assets and has three employees. Hussey projects to grow assets under management by at least $10 million a year by adding new clients in cities with big creative hubs and, perhaps, by adding consulting services.

A broad brush

Hussey began her financial planning career in 2010 working for another firm, but was put off by a “culture of conformity.” She wanted to invest time teaching clients about money and helping couples communicate financial goals. “But the only way I could get paid was by selling their products.”

Modernist Financial, she decided, would be fee-only, emphasize extensive client contact, and offer guilt- free sustainable investment packages. It would target investors with portfolios of $1 million to $10 million.

“It was an audacious vision. I didn’t know how people would respond,” she said.

The investment advisory market for wealthy painters is limited. The market for “creatives,” as defined by Modernist, is much larger, and includes entrepreneurs, designers, architects and other “visionaries and change agents” capable of building the next Google or writing the next "Game of Thrones."

“Our target is the big thinker,” said Hussey. “Our clients include a world-famous philosopher and some of Portland’s most famous brands.”

Another primary audience is younger individuals and couples struggling to figure out what to do with newly inherited wealth. This market is much larger. CNBC estimates that $30 trillion in wealth will be transferred in the U.S. over the next generation.

How is giving investment advice to a creative different?

“If you ask business people a question, they will give you the right number. If you ask a creative, you’ll get the right answer. They’re more of a conceptualist," Hussey said. "Creatives are super-talented at one thing, but they’re real myopic. They just want to do that one thing.”

That one thing is almost never building an investment portfolio. A creative is perfectly capable of building a very successful business without ever learning how to properly vet a cash-flow statement, said Hussey. That’s where Modernist comes in.

Hussey had access to private capital to launch her business. The investment was substantial, “about the cost of a small house in Portland in the mid-2000s,” she said.

Startup expenses included remodeling of an office in Union Tower and a heavy dose of branding. She worked with Portland design stalwart Central Office and Philadelphia-based Tactile, which specializes in promoting women-owned businesses, on the latter.

The biggest expenditure was staffing. Modernist has $30 million in assets under management and three employees. Most investment firms would require $90 million in assets to support three employees, she said.

The extra staffing allows Modernist to concentrate on growth and spend more time with clients. Modernist spends 40 to 60 hours with each client in the first year, compared with the industry standard of five to 10 hours, said Hussey.

Another growth strategy was to free up staff by hiring California-based Loring Ward, a turn-key asset provider, to manage investments, billings and other office functions.

Only about 5 percent of newly formed investment advisory firms specialize in sustainability portfolios (referred to as Environmental, Social and Governance, or ESG), but that number is growing, said Matthew Carvalho, investment director for Loring Ward.

“Georgia Lee has the knowledge and the interest to go deep into the weeds about a particular financial subject, but at the same time, she has the communication skills to put that complex information into a format that is very understandable to her clients. That’s a pretty rare combination in this industry,” said Carvalho.

In the black

Hussey expects to grow her business at a $10 million to $20 million annual clip. By most accounts, the U.S. is setting up for a huge shortfall in financial planners. The average age of financial planners is 58, and is heavily skewed to white males. Only 22 percent of CFPs are women.

“There’s a lack of diversity in the industry," Hussey said. "Women, people of color, queer people, don’t feel welcome.”

Investment advisors must register with the state in Oregon. There are currently 5,594 investment advisors registered, a number that has remained stagnant over the past few years, said Jim Allen, securities examiner for the Oregon Division of Finance and Corporate Securities.

Meanwhile, the number of broker-dealer registrations, which often represents very large out-of-state brokerage houses that operate national call centers, has risen 7 percent over the same period.

One growth possibility is opening a consulting arm of Modernist to help businesses improve the bottom line. Web seminars on financial topics and invitation-only office seminars help drum up new business. Entrepreneurs’ Organization has also been a great resource.

New York and Los Angeles are the most promising markets due to high creative populations. Realtors are a surprising source of new business, said Hussey. “They’re tuned in to people who are in transition.”

Hussey’s best lure might be her progressive values.
“I thought I would have to swallow my politics, but that hasn’t been the case,” she said.