A Colorado Springs financial adviser has teamed up with a group in Greenwood Village.
Stephen Drexler, owner of the Colorado Springs-based Investments Stephen Drexler and T.H. Williams of Investments T.H. Williams have combined their practices. Both are Wells Fargo financial advisers and both will keep their offices open in their respective cities.
Drexler has lived in the Springs for the past 33 years and oversees a team of four financial advisers. He became part of Wells Fargo about a year ago, but was with Rural Bank of Canada for 22 years.
The move, he says, is to create a succession plan for clients of his small business.
“I am 59,” he said. “I have no plans to retire yet, but it’s clear that I needed to make sure everything was well taken care of before I start down that road. We now have a succession plan that we can craft over the next four to five years. It was a missing piece for us.”
T.H. Williams has been in the Denver market for 13 years, according to Drexler. He’s managed a 30-person office.
“In the financial world, managing both your own book of business and 30 other advisers — that’s impressive,” Drexler said. “And his expertise really fits nicely. We’re hand-in-glove as far as what we specialize in. I have the kind of specialty expertise he needed, and he provides the continuity I need for a succession plan.”
Combined, the two companies are managing portfolios in the $245 million range, Drexler said.
Clients of either financial advising company won’t notice much of a change. The bigger change, according to Drexler, is the way the Department of Labor changed the financial advising model with a new rule announced April 6.
“That’s the 800-pound gorilla,” he said. “We’re an industry going through turmoil.”
The new fiduciary rule requires independent broker-dealers who are financial advisers to recommend what’s in the best interest of clients when they offer guidance on 401(k) plan assets, individual retirement accounts or other money saved for retirement. The rule doesn’t ban commissions or revenue sharing, but it does require clients to sign a “best interest contract exemption,” and says fees must be reasonable.
The new rules mean that clients can sue advisers if they feel the advice hasn’t been in their best interest. Some financial advisers will be moving away from the traditional model of charging a fee per transaction to a set fee, one that carries less legal risks.
There will also be increased costs for financial advisers — in the form of more documentation and more monitoring for each individual client. And since charging a set fee might not make sense on smaller retirement accounts, some advisers might stop taking those accounts, focusing instead on very large accounts.