Matthew Chester launched Tableaux Wealth, an independent financial advisory practice, last month. Shelley Wojtkowski serves as director of client services. Photo courtesy Tableaux Wealth, taken by Tricia McCormack Photography.
The U.S. economy continues to rebound from the economic collapse brought on by the COVID-19 pandemic.
While travel, entertainment, and financial services spending was down in 2020, these and more industries are finally starting to recover. Personal spending rose 11.3 percent in the first quarter of 2021, caused partially by the distribution of $1,400 stimulus checks included in the American Rescue Plan passed and signed into law early March.
The pandemic may not have long-lasting effects on how people spend, but it has prompted responsible budgeting habits that are likely to stick around. Last year, Americans repaid nearly $83 billion in credit card debt, a record high, and a majority of middle- and upper-income adults are saving about the same or even more than they were before the pandemic according to the Pew Research Center.
While some older Americans faced early retirement and financial insecurity in 2020, most retirees have remained confident in their financial future post-COVID, although their vision for the future might have changed.
“I’ve been having a lot more conversations with my clients about what they really want to do with their money,” said Matthew Chester, a financial advisor. Baby Boomers who were inclined to spend their retirement assets on a new or remodeled home, travel, or entertainment are reconsidering their options in the wake of the pandemic and subsequent recession.
“They are asking, ‘What is my legacy? What are these resources for if I can’t do what I thought I could do with them?” he said.
Chester found himself engaging with these clients more intimately over the past 15 months, helping them shift or adapt their goals in a personally fulfilling yet financially sustainable way. For example, discretionary funds can be used to create a charitable foundation, a second home near family, or a 529 college plan for children and grandchildren.
This client-first approach is what Chester enjoys the most about financial planning. He is affable and curious, possessing a genuine interest in people’s stories which grounds his personal and professional philosophies.
“I started delivering newspapers at age ten and worked many jobs through college,” he said. “I have always been interested in how people use money and what kind of freedom and independence it gives [them].”
Given the panic and anxiety that many felt during the pandemic, Chester said he now spends much of his time helping clients understand what is and isn’t in their control. That same drive prompted him to launch his own independent advisory practice, Tableaux Wealth, last month.
“When I can control my location, technology, employees, and expenses, I can help my clients feel more in control of their financial life,” he said.
Chester, who was raised in Seattle, studied economics at George Washington University and received a law degree from Cardozo School of Law in New York City. After working as a lawyer for two years and interning at the New York Stock Exchange, he moved to Stockbridge where he transitioned to financial advising.
“I wanted to find a team to work with to learn the business and add real value to people,” he said. He spent eight years with RBC Wealth Management, a regional broker-dealer and subsidiary of the Royal Bank of Canada, before venturing off on his own.
According to a TD Ameritrade spring 2020 survey, 40 percent of broker-dealer agents are more likely to go independent than they were six months earlier, and those who have made the move are happy about it. 73 percent said that removing their employer’s national brand was better for their bottom line and 77 percent have a better quality of life.
Like many others, Chester found working from home during the pandemic to be particularly freeing, which provided additional motivation to break away. “More people in my field are recognizing the importance of flexibility,” he said.
While going independent can provide a sense of freedom, it can also be daunting—and costly—to manage regulatory and software needs. All-in-one financial advisory service platforms, or “turnkey asset management programs” (TAMPs), exploded in the last decade as newly independent advisors found themselves lacking the infrastructure provided by large brokerage firms.
For Chester, who partnered and registered with TCWP LLC, the ability to outsource accounting, payroll, compliance, and other services in order to focus on his clients’ experience is invaluable. “TCWP LLC helps handle the back office for advisors but at a much lower cost,” he said. “It keeps me organized and saves me a lot of time.”
In addition to streamlining expenses, Chester has also simplified his income, opting for a fee-based model—as opposed to a commission structure in which advisors receive compensation when they buy or sell a stock—which more independent financial advisors are embracing.
“[With fees, a client] is paying for advice rather than a sale,” he said. “The incentives are much better aligned for me to be thinking about a client’s financial life.”
Broker-dealer agents want and expect to make more money as independent advisors according to the TD Ameritrade survey, but the goal for many, including Chester, is to better serve clients and build long-term wealth. While he intends to prioritize current clients who have multiple investments to manage, he is considering offering consulting services for a fixed fee to younger families and others who need a financial plan, although not until his firm is better established.
“Anybody who is starting a business has worries about making it work, but if there’s something I need, I’ll have the full flexibility to [make a decision],” he said. “Moving on my own opens the opportunity for more ways to help.”