Know your niche: Financial advising for tech executives

Niche wealth management practices allow financial advisors to differentiate themselves in the industry. They’re also opportunities for advisors who have had careers before wealth management to use their previous expertise to connect with potential clients.

Our Know Your Niche series focuses on advisors who have built niches with at least part of their client bases. Hear about how advisors land on their niches, their strategies to find and develop clients and the advice they’d give to others interested in doing the same.

Eric Franklin, founder of Prospero Wealth, spent around two decades in the tech sector, most of it with Amazon. But as he started reaching more senior levels of the organization, Franklin’s time was not his own. He wanted to enjoy other aspects of his life. 

“When you work in tech, you’re always on the hook to somebody else,” Franklin said. “I mean, you just realize that while the money is good, the quality of life is not necessarily great.”

Franklin had been running an investment club for about seven years, guiding friends and colleagues on how to pick stocks, when he founded Prospero Wealth with a partner in 2017 as a side gig while still working in tech. By 2021, he was ready to make it his full-time gig.

READ MORE: How one small tweak can boost advisor search visibility

Prospero Wealth serves clients who work at Amazon, Stripe, Meta, Google, Apple and other large tech firms — mostly mid-level and senior executives.

This conversation has been lightly edited for clarity and length.

Financial Planning: I assume most of your first clients in the niche came from Amazon and other tech contacts you had. Tell me about that and how you’ve been able to grow that.

Eric Franklin: A lot of people in technology are looking to become advisors, or whatever their second act might be. One thing I’ve learned from working with tech workers is that 100% of them want to do something else, and they don’t intend to retire at full retirement age in tech. 

So I got my CFP last December. I’m now in all these CFP networks, so I have received a pretty steady stream of tech workers that I do not know coming in through, like, the XYPN Network and Find an Advisor on the CFP [Board site]. So that’s one of them. 

And then there’s a lot of cross-pollination in tech in general. So even though I worked at Amazon, a lot of the people I’ve worked with are at different tech companies now, and so once you serve them, there is a high degree of word of mouth and referral business. So I get a significant amount of my new clients via that method.

FP: What are some of the challenges these clients face that you understand on a level that someone without your tech background might not?

EF: Kind of unique to the space is the way these workers tend to be compensated with a high degree of equity, so a lot of employer stock, whether that’s via grants or employee stock ownership plans. And so there’s a lot of things around the taxation of that, depending on what kind of grants they’re receiving, the types of stock options they’re dealing with, or restricted stock. And then over time, most of them start to have some form of concentrated wealth problem. 

Most of these tech companies that we’ve been working with have experienced significant growth over the last decade, and even if people are receiving RSUs [restricted stock units], a lot of those that they’ve retained might be highly appreciated and then cause some sort of tax issue for them to resolve. So, that’s a big one. 

The other issue that we have is because these people work in careers that are so involved, they don’t work 40-hour workweeks. Most of our clients, most of these people, work 50- to 60-hour workweeks. And that means, as some of these problems accumulate, they snowball, and they need somebody to help unwind that with them.

FP: You talked about many people in tech careers not retiring in that field. When they leave, what kind of challenges does that create?

EF: A lot of these folks, when we start exploring it, they’re shocked at the gap, like what they’d have to pay in health care to cover themselves for those years. Many of them are retirement-plan rich, but they can’t access the assets in those retirement plans, necessarily, prior to 59 1/2, right? Except under special circumstances. 

They see that 4% rule, or something like that, some common financial planning heuristic, and they’re like, “Oh, I can live off 4% of my invested assets,” but they’re not taking into account the change in the expense side of the equation that’s going to happen when they leave their employer, and they’re not taking into account potential penalties and things like that that might come from tapping tax-advantaged assets too early.

FP: We talked about the challenges these clients have. But does your firm have any specific challenges serving this niche?

EF: I wouldn’t say they’re challenges. I think we have unique solutions. You’re dealing with a highly educated, highly skeptical and data-driven audience. Most of the people who work in technology are college graduates or have advanced degrees. Most of them have the intelligence to do this work themselves, if they look into it enough. 

We get a lot of clients coming in with very elaborate spreadsheets they built out. So I think when you’re dealing with that kind of an audience, you have to be able to show and demonstrate the value. It can’t be squishy at all. And so we have a lot of data tables explaining things like why I would pay to have somebody else manage my money.

Or maybe they’re coming in for only a single issue. I had that recently where a client came in and he’s been self-directed his entire career, done reasonably well, asked for help making this very explicit, single move that required an advisor to access this product. And then I spoke to him, and I was like, “Well, I will help you do this if this is what you want, but I do want to let you know you’re considering moving overseas, and your taxation is going to change. And if you do this, you are potentially subjecting yourself to a lot more taxation.” And that opened up a whole conversation with him, and now he is getting a full financial plan done and changing the way we’re organizing his investments. Now he’s actively placing initial assets with me, but when he came in, he had no idea that he needed that help or that question answered.

FP: What is your best tip for someone who is interested in finding a niche? How can they be successful?

EF: There was one exercise that another advisor told me to do at my first at my first conference I ever attended, and it’s something I redo kind of annually. He said to write down your top 10 clients by who you enjoy working with and who is getting the most out of working with you, just the most fruitful planning relationships that you have. And then separately, create another list ranking of the top 10 in terms of revenue generation. Now try to find the people that are in common on those lists. So circle those and then try to find the trends underlying what’s in common and speak to that audience. 

Once you discover that, then you have to kind of reverse engineer everything around that. Who are those people? How old are they? How do they want to engage? Under which tools are they going to engage with their advisor? Once you know who that is, then you start to find a language and a product offering that fits, and you can really customize and tweak that. We’ve done it down to verbiage on our website, which is really, really aimed at that tech audience.

FP: Is there anything about your firm that makes it successful with this niche?

EF: At this point, I have six different advisors registered in my firm, and almost all of them come from some sort of tech or startup background. We all serve a highly overlapping type of client in the tech space, for the most part. I think that has been a huge part of developing this niche, is just getting more at bats. I am able to see so many more client issues than I would be able to see on my own through the lens of these other advisors and working with other companies that they may have more ties to.

My company operates much more like a tech startup than it does what I see in most financial advisory businesses. And the advisors here are all coming out of that same space, and we’re all collaborating and learning from each other, and then using that to sort of turn the crank on what our product offering is, what our services are, what tech we use to serve our clients. If most of our clients saw the way we work day-to-day, it would be indistinguishable from the way they’re working in their tech careers.

A regular financial advisory starts from products or a knowledge base about financial services, and then they go out and they try to find their market. We kind of have a market, and then we’re finding what fits that market. So, I think it’s a reversal.