INTERVIEW: Long Island Advisor On His Specialized Offering For HNW Families Impacted By Autism

Harriet Davies Editor - Family Wealth Report 14 September 2012

INTERVIEW: Long Island Advisor On His Specialized Offering For HNW Families Impacted By Autism

Charles Massimo, founder of CJM Wealth Management, launched a specialist offering within his practice around three years ago catering for families impacted by autism.

Charles Massimo, founder of CJM Wealth Management, launched a specialist offering within his practice around three years ago catering for families impacted by autism. He has since found that there is latent demand for such specialized services.

Massimo, who has two sons on the autism spectrum, says the practice is “something near and dear to my heart.”

It is also something that affects many, and – as with other disabilities or long-term illnesses - has serious financial consequences. A Harvard study in 2006 estimated it could cost about $3.2 million to take care of an autistic person over his or her lifetime – a figure which has presumably risen since.

Data from the Center for Disease Control and Prevention indicate that around one in 88 children have been identified with autism spectrum disorder by the age of 8. Meanwhile, Mark Roitmayr, president of Autism Speaks, estimated in a CDC press briefing this year that around $137 billion annually is spent due to autism in the US. Massimo says that breaking this down to an individual family level is an indicator of the challenge families face.

Autism also impacts the family practically. “I know, day-to-day, what a 24/7 job it is,” says Massimo. “Many of these children will be dependent on their parents for their entire lives.”

Discussing families’ reactions when confronted with such challenges and costs, Massimo says: “They feel incredibly overwhelmed.”

His clients are wealthy families, but he says “even wealthy families feel overwhelmed by cost” because they have so many other goals – education of descendants, retirement planning, philanthropic giving, lifestyle – that they’re also hoping to meet. However, “wealthy [people] are used to this kind of planning, so they’re more aware…but it’s an educational process.”

Essentially, caring for a person with autism reinforces the need to approach wealth in “buckets,” earmarking capital for certain goals and expenses, and ensuring liquidity meets costs.

Who to work with

The needs of a family impacted by autism are complex, and extend beyond the more obvious financial requirements. For example, Massimo says some children on the spectrum may have more of a tendency toward violent behavior, or to wandering off, for example, posing risks to the family if they were to cause harm to anyone. These sources of risk can be managed in advance with insurance, for example, then of course there is the planning needed to ensure they are cared for after their parents die.

Because of this, it’s important to consider all angles of financial planning – insurance, estate planning, cash flow management – with this in mind, and to work with specialists in these industries.

“It’s the same thing in every walk of life – it’s the same thing with a lawyer, you absolutely need a very specialized attorney used to dealing with disabilities – you need to seek these out, that’s what we bring to the table,” he says. “You have to really do your homework.”

One challenge for the business is that, although there may be latent demand, “a lot of families out there don’t know about these services,” which is why he not only works on referrals but also holds seminars to raise awareness about these challenges and the way financial advisors can help.

However, he stresses that this sort of business offering is not for all advisors. “If financial advisors don’t understand and aren’t sympathetic” to the situation, they are likely to miss the less obvious risks to the family, he says. It also takes certain relationship skills, and the most rewarding conversations can only take place once the family has let its guard down.  

 “Unfortunately we’re in an industry that’s been mired in corruption” so to work with any family “you have to be able to establish efficacy but also compassion” first, he says.

Of course, this kind of practice could be expanded to families caring for people with a long-term illness or other disabilities, but Massimo wants to stay highly specialized for the time-being.

He operates from Long Island, and manages assets on behalf of families, for which he’s paid a fee directly. This is based on assets under management, rather than on a per-service basis. “That’s a decision I made, because I didn’t want them to feel they couldn’t pick up the phone,” he says.

As documented in these pages, some advisors are moving towards fees on a time or service-provided basis to match them more directly with costs, and certainly providing this kind of personalization is time consuming.

For this fee, Massimo says he tries “to be able to bring as many resources as possible” to the relationship – so a network of suitable insurers and lawyers for instance.

The future

When asked whether this kind of service might become more common, he says: “Absolutely, I think you’re going to see more and more…but as a wealth manager, you can’t just say ‘I’m going to into this’…you need to be dedicated [to it].”

His advice to families is “you have to take a leap of faith” – he thinks one of the most common emotions is to feel debilitated when confronted with difficult financial and emotional issues, but he says the worst thing is to “do nothing.”

Financial services providers are starting to wake up to these kinds of needs. Mass Mutual, for example, offers an outreach program for individuals caring for a person with a disability or other special needs.

For this, the firm has designated “Special Care Planners,” which have received advanced training and information in estate and tax planning concepts, special needs trusts, government programs, and the emotional dynamics of working with people with disabilities and other special needs and their families. The certificate program was offered by The American College in Bryn Mawr, PA, exclusively for the firm’s financial professionals.

On the education and certification front, Massimo says he's "started to see certain things pop up” at individual firms. Eventually though, he thinks some kind of industry-wide accreditation signifying that a professional is trained in the wealth management needs of families affected by disabilities such as autism could well be on the cards. “I’m sure we’ll see the industry going that way,” he says.

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