Johanna Walters, 45, and Megan Bailey, 48, met as teenagers, bonding over a shared love of horses. Almost 30 years later, the two remain the closest of friends and longtime work mates. Together, they head Walters Bailey Associates, part of Merrill Lynch Wealth Management. The 17-person firm, based in Blue Bell, Pa., some 20 miles northwest of Philadelphia, serves about 700 clients, with $6.7 billion under management. The two took over the practice in 2019, successors to a highly successful wealth manager.
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“We can finish each other’s sentences,” says Walters. “Meg knows what I’m thinking. I know what she’s thinking. We have a really good working rhythm. I have the wonderful honor and privilege of working with my best friend every day.”
Barron’s: We talk about the importance of a wealth manager’s value proposition. How do you frame this?
Megan Bailey: Our clients know they can ask us for advice and guidance on anything and everything that they do, and they trust us. Financial matters and life matters are interconnected, and to be a good wealth manager, you really need to understand that.
Could you talk about the intergenerational or multigenerational nature of your clientele?
Johanna Walters: We believe that intergenerational wealth planning is the cornerstone of successful investment management. If the generation that will inherit money isn’t informed about how to manage money, that can be a recipe for disaster. We’re very big about informing and educating, and we try to do that as early as possible.
Do you match younger clients with younger associates?
Walters: We match the advisor and the client by need and expertise. Sometimes it isn’t age.
How do you assess the needs of younger clients?
Bailey: We would normally start with the parents telling us they’re ready to introduce their son or daughter. Then, we would evaluate their situation and determine what area of expertise they need. If they’re brand-new to investing, they’re more likely to go to myself or a junior client-facing team member, just because that’s our personality. We’re good at teaching.
Walters: For clients in general, we are all referral-based. It’s very common for us to get a phone call from someone interested in working with us. My role is to talk to that prospect, learn about them, and figure out from there which advisor would be the best fit. We are huge on information gathering. Huge, huge, huge. We have detailed conversations about anything and everything about their life. That’s very important.
Is this more art than science?
Bailey: Some of it has to do with the asset level. In general, Johanna takes the clients that have $10 million or more, and I would do the $2 million to $10 million, but not always. Johanna has expertise in estate planning and executive compensation. So, if we take a new client that has sophisticated needs in those arenas, most likely Johanna will be the main point of contact.
Are client expectations changing?
expectations for investment returns, service, competency, haven’t changed much. Discussions about cryptocurrency and speculative investments—those are a bit more prevalent with the younger generation.
Bailey: I hear from people more frequently that they want to retire sooner and live life more. I think that has been a theme from the pandemic, as well.
How does extreme volatility affect your investment strategy?
Bailey: It doesn’t impact our investment strategy all that much because we have to plan for volatility before it happens. Financial markets tend to fall far more quickly than they rise. So, when you have periods of market volatility, it’s usually something that’s unexpected. One way to help clients cope in terms of market volatility is to make sure that we have really good cash-flow management and we know in advance what clients’ cash-flow needs are. Our goal is to plan for them over the next two to three years because, in general, it can take a couple of years to recover from periods of market stress. Our goal is to not be forced to sell any investments in a down market.
Thanks, Johanna and Megan.
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