Tech millionaires detest advice from wealth experts

New York: When the nine-person startup he co-founded was bought by Facebook for a reported $15 million in January, Cemre Gungor, 27, was inundated with phone calls and emails from wealth advisers.

Yet he spurned them all, opting instead to open an account with Betterment, an online financial adviser launched in 2010 that automatically invests in a portfolio of exchange traded funds based mainly on a client’s age.

“My personality doesn’t lend itself to being the sort of person who would research good wealth managers and then trust them with making decisions. I don’t want to spend any time thinking or caring about that,” said Mr Gungor, who grew up in Turkey and Finland before moving to the U.S.

He and others of his generation are posing a challenge for wealth advisers who are streaming into Silicon Valley and San Francisco after the public stock offerings of companies such as Facebook, LinkedIn and Twitter helped California create more millionaires than any other U.S. state since 2009.

But even as traditional financial firms battle for office space and seek out new customers, they’re finding that the pickings aren’t easy.
The youngest winners of the thriving tech economy, many of whom came of age during the last financial crisis, aren’t often interested in the ideas that attracted clients in the past. Nor are they fans of the old-school model of letting a financial planner make decisions with minimal client input.

In response, traditional advisers are changing the way they practice. They’re finding that young clients need help with lifestyle issues ranging from how to give money away to how to deal with old friends who are jealous of a sudden tech windfall.

And they are giving clients more of the hard data behind their decisions than they might with clients who inherited their fortunes or built them up over time.

Debra Wetherby, an independent adviser whose Wetherby Asset Management manages about $3.6 billion in assets, has fielded questions from young, single workers about when and how to tell potential spouses about their fortunes.

Christine Leong Connors, who heads J P Morgan’s Palo Alto office, has talked with tech clients about how to donate money effectively when their own net worth is larger than the charity they are giving to.