Financial planner takes integrated approach
“The real test of the value and importance of what we do came in the worst days of the financial crisis, the fall of 2008 and spring of 2009. I always cautioned people this could happen and virtually without exception our clients didn’t panic.”
– Larry Elkin
Larry Elkin started out to be a journalist, working the federal court beat. He also covered tax policy. At night he went to New York University, getting his MBA. From there the next stop was Arthur Andersen in 1986.
“People used to ask me, ‘Wasn’t that a huge change from journalism to accounting?’ But it never felt like I was doing anything different. In both professions my duty was to figure out what the audience needed to know and convey it accurately so the audience can use it to make decisions. The difference with financial planning was I had a narrower audience and it paid better,” said Elkin, who left Andersen in 1992 to start Palisades Hudson Financial Group in January 1993 as a one-man operation in Hastings-on-Hudson.
“The key is communication – people pay us to inform them and help them make informed decisions,” he said.
Now in Scarsdale, Palisades has 21 employees in four offices – 10 in Scarsdale, six in Atlanta, four in Fort Lauderdale, and one in Portland, Ore. “We were going to go to the Pacific Northwest anyway, but when someone needed to move to Portland for family reasons,” Elkin said, “we decided to open an office there.”
That person is David Walters, a certified public accountant and certified financial planner who is only 32, but has been with the firm for 10 years. Elkin says he aims to hire talented young people and have them stay for a long time because the firm’s clients tend to do the same. “It’s a young group and it takes a good five to ten years to develop skill in all these areas. I’m not gonna let someone go for a silly reason like he wants to move across the country.”
All these areas are what makes Palisades more than just a money management firm, which Elkin says it does for only a quarter of its clients. “What we do for most clients is tax planning, estate planning, insurance consulting and retirement planning. We do not take any compensation from anyone other than our clients. They always know exactly what we’re being paid and for what. All these fields, any one is a profession in and of itself.”
Elkin says because the firm looks at all aspects of a firm or individual’s financial life it sometimes sees problems, or opportunities, other firms might not. “Here’s an example,” he said. “One client is an American citizen living in Brazil, married to a Brazilian and working for a unit of a U.S. company. He had always had large accounting firms doing his taxes. We sat down with him and his lawyer and pointed out that Brazil has a community property law, whereby half the income of one spouse automatically belongs to the other. Since she was not a citizen or resident of the U.S., anytime he sold an asset half belonged to her and therefore was not taxable. No one had noticed that in 30 years,” Elkin said.
Palisades now has more than a billion dollars under management. “It doesn’t make sense for us to manage accounts of less than half a million dollars. The median account is in the $3 million to $5 million range. It’s not unusual for a Westchester professional or executive to have that kind of money.” The firm charges a fixed fee per assignment, so, Elkin says, clients feel costs will not spiral out of control, as if they were charged hourly.
The state of the economy and the recent credit crisis have the firm “earning its keep,” Elkin says.
“We have certainly been through numerous traumas over the last 12 years. Especially in metro New York. The real test of the value and importance of what we do came in the worst days of the financial crisis, the fall of 2008 and spring of 2009. I always cautioned people this could happen and virtually without exception our clients didn’t panic.”
His job, says Elkin, is to be calm in troubled times, and sober when everyone else is giddy over high returns. “No one can accomplish every single thing they want to do, but you can set priorities and get the most important things done,” he said. “That’s my philosophy, and I’ve passed it on to everyone who works here.”