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November 3, 2022



Wealth Management for Engineers

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Over the years we have experience working with engineers in the Aerospace and Defense industry as well as Oil and Gas. It is this experience that surprises many of our peers in the wealth management industry. If you asked most financial advisors who the most challenging clients are, odds are their number one response will be “Engineers”. We get feedback like, “they are too analytical”, or “they get into the weeds about everything”.

But that’s exactly why we love working with engineers. Working with clients that ask the tough questions and analyze every aspect of what we do does 2 things. It helps makes them comfortable during volatile markets and it helps makes us better advisors. They often say that a true friend is the person that tells you the things that nobody else will tell you. That is how we feel about our clients. Working with clients who hold us to a hire standard and pushes us every day to help us be better, and to think different is important.

Why we love working with engineers

1. They are hardworking and self-made.

Most of our engineer clients made their wealth the hard way, through hard work and diligent savings. Many of them started their careers without much in terms of financial resources and just worked hard, living within their means and saving as much as possible. They have been through many market cycles in the economy and most have experienced many changes in their companies. Culture changes due to mergers and acquisitions has helped give them the understanding that nothing is static, changes happen, and we must adapt to them. This mindset helps us as advisors because it removes any form of complacency that could set in and always has us looking for new opportunities.  

I can relate to this type of thinking as I had a similar journey. I started my career in the financial services industry right out of college. With no resources, no assets, no family money and no real influence, I was told over and over again from managers and veterans in the office that this business has about a 15% success rate and that being young, the odds were not in my favor. I realized early on that there were no shortcuts and the only way to be successful was to focus, work hard, and serve clients as best as possible.

2. They want to understand and value planning

A jet engine doesn’t just get put together and tested in the air. It goes through rigorous analysis, testing and retesting. Engineers can’t just go to their boss and say, “this design will work, TRUST ME.”. They have to deliver analytics and be able to explain not just the what, but also the why and how. This is the same expectation our clients expect of us as their advisor. Every recommendation we make has to have analytics behind it. We have found over the years that our engineers want to understand our process and they want to be confident that it is being executed for them and their families.

Many of our engineer clients work for companies that provide employee incentive programs such as pensions, restricted stock (RSUs), employee stock options and/or an employee stock purchase plan (ESPP). These different plans can often be complicated and make financial planning more challenging. Luckily for our clients, we deal with these different nuances constantly. Working the specifics into each client’s financial plan and investment strategy is important to make sure the appropriate amount of risk is being taken and that there is not a concentration in company stock that is more than necessary.

Starting with a plan and being analytical with our investment process is the main reason we don’t get many panicked calls from engineers when the market hits a volatile patch. The work that is done on the front end of our financial planning process allows us both to continue to make educated and informed decisions over time – especially during challenging times

3. They have very high standards.

We have seen real life consequences of what happens if every single detail of a major engineering project isn’t perfect. Just look at Boeing and the 737 Max issues. I think the same is true of comprehensive financial planning. Over the years, I have seen lives ruined because of a lack of proper planning. I have seen people retire and ultimately end up back at work because of financial planning mistakes or investment mistakes.

Running out of money in retirement is the number one fear that retirees face. Working with clients who not only understand what it means to have a comprehensive plan, but actually expect it helps avoid turning that fear into a reality. By being held to a higher standard their entire career, it is exactly what they expect of us.

How we work with engineers

Everything we do starts with a plan. We do not offer blanket recommendations for investors. We believe that every investment must fit into a specified plan. An investment strategy for one client may not fit for another. Just as one drilling process might work for on petroleum deposit, but not for another. Or how you are not putting the same engine on the Boeing 787 as you would on a Gulfstream G550. Everything we do is individually based.

Just to test the outcomes, we run all of our retirement planning models through a number of real-life scenarios such as:

  • Inflation is much higher than anticipated. Most financial planning is done with a common inflation rate. We want to test higher levels to determine the worst-case scenario.
  • The sequence of returns is severely negative in the first few years of retirement.
  • Healthcare costs are much more than planned

These are just a few of the many tests we put our financial plans through. From there, we reverse engineer our asset allocation needed to make the financial plan successful. Our security selection is a detailed and analytical process that considers both fundamental and technical analysis.

In short, we make sure we place the same analytical mindset to everything we do. We test, analyze and retest. As a fiduciary, we pride ourselves on providing analytical clients with an analytical wealth management process they can not only trust but verify.

Registered Representative of Sanctuary Securities Inc. and Investment Advisor Representative of Sanctuary Advisors, LLC.– Securities offered through Sanctuary Securities, Inc., Member FINRA, SIPC. –  Advisory services offered through Sanctuary Advisors, LLC., an SEC Registered Investment Advisor. – Theorem Wealth Management is a DBA of Sanctuary Securities, Inc. and Sanctuary Advisors, LLC. This communication has not been reviewed for completeness or accuracy, does not necessarily reflect the views of Sanctuary Securities, Inc. or Sanctuary Advisors, LLC., and is not a recommendation or endorsement of any product, service, or issuer. Third party posts do not reflect the views of Theorem Wealth Management or Sanctuary Securities, Inc. or Sanctuary Advisors, LLC., and have not been reviewed for completeness and accuracy. All further communications from this representative must be sent from and received by johnathan@theoremwm.com. For additional information, please refer to one of the following consumer websites: www.FINRA.orgwww.SIPC.org.

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