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Human Collateral: A Houston Financial Advisor Sets Out to Help Those in Need

After nearly two decades advising high-net-worth individuals through a large trust company, Matthew Russell, 41, opened MTR Financial Services, a Houston area independent fee-only financial planning and investment management firm with a unique goal: helping people who need it – for free.

My career has come full circle. I grew up in a middle-class family in Cincinnati, but then devoted 18 years of my career advising wealthy people how to make even more money. Two years ago I started my own financial advising firm with the goal of helping those who can’t afford an advisor – average Joes who are trying to get ahead.

On one hand the down economy was a horrible time to start a practice. At the same time numerous studies that found that investors were unhappy with their current advisors in the wake of the market crash and were willing to move their accounts if they found better attention and service. Yet many of my clients wouldn’t come with me to my independent firm – it was too scary for them to move all their money and they just wanted to hang tight for the time. I can respect that. But the people who I wanted to serve – the low- and middleclass – were the ones who needed the most help, and my business model allows me to give them my time.

<!–‘A Problem Differentiating Between Needs and Wants’

I grew up in a household where the theme was “Keeping up with the Joneses,” which caused a lot of stress. My father worked for the city in information technology, and when I was in middle school my mother went back to work as an X-ray technician. They made a lot of financial decisions based on the lifestyles of their more affluent colleagues and friends – taking extended vacations at the beach in South Carolina, and buying an Audi when a Honda Accord or a minvan would have been sufficient. That Audi spent more time in the shop than in our driveway.

When I went away to college at Purdue University, I resented that I had to work 20 hours a week in the cafeteria because my parents failed to plan for my education. My parents had a problem differentiating between needs and wants. I knew that when I had a family I wanted things to be different. –>

I spent 17 years in finance, most recently having worked at an independently-owned trust company with $1.2 billion in assets under management. For the past seven years I’ve also done a lot of pro bono financial advising, mostly by leading a financial planning course through my church. These are people who really need the expertise of an expert, but with a minimum of $4 million investable money, I couldn’t help them through the trust company. There was no way they could afford the fee.

In December 2008 I launched my own company with the goal of staying small, taking on a few wealthy clients to keep the business running, and use the rest of my time to help those who typically can’t afford an advisor. I’m not looking to be the next Merrill Lynch.

Life Is More Fulfilled, Despite Financial Sacrifice

In 2009 I had 12 investment management clients, five financial planning clients, and I was able to help 20 families without charge. Some of them just needed quick advice on buying insurance or allocating a 401(k), while I spent 10 or 12 hours with others.

One thing I’ve learned in my career is that money is amoral, it takes on the characteristics of the person holding it. My wealthiest client at the trust company was worth $500 million and was a very caring, giving individual. Another was worth $300 million and he was the most arrogant, egotistical SOB I’ve ever met. Others are trust fund babies who have more than enough money to keep their lifestyle going through age 200, yet they complain about how unfair life is. I’ve found my passion: helping people who know what they want but don’t have the means or resources to get there.

Launching this business did mean taking a financial hit. In 2008 I made $90,000 while employed at the trust company. Last year I grossed $35,000. I’m more focused on how many people I can help, not how much money I can make. There is a segment of America that really needs help, and I feel my calling is to give them the hope and confidence to live out the rest of their lives. As long as I can put food on the table for my three daughters – and it’s not macaroni and cheese every night – I’m quite content.

Now I’m much more at peace and my life is more fulfilled even though my checkbook doesn’t look that way.

Emma Johnson is a New York based journalist who writes about money, business and finance for publications including the New York Times, Wall Street Journal, Entrepreneur, Forbes, MSN Money and others. Reach her at emma@emma-johnson.net.

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