Adviser David Workman often finds himself doling out financial advice in a setting that looks like it came straight from a Norman Rockwell canvas.
Sometimes there is warm raspberry pie on the table. Often a kitchen window offers a picturesque view of the sun setting over endless fields of green.
But from there, the idyllic scene usually turns serious. Mr. Workman is all business when talking to his clients: farmers in central Indiana.
Outsiders might not think farmers require the services of a financial adviser. But farming is big business — one that requires as much planning as planting.
Indeed, the average farmer is a unique combination of business owner, property manager and a commodities trader, said Mr. Workman, an LPL Financial adviser who manages $250 million in assets in Logansport, Ind. Many of the 200 or so farmers who are clients of Mr. Workman have average net assets worth nearly $5 million.
“It's a shame that people look down on farmers. They're brilliant people,” said Mr. Workman, who describes these “millionaires next door” as his ideal clients. “Farmers are a group of extremely hardworking and technologically savvy people.”
Mr. Workman began building his niche of farming clients 22 years ago when he moved to Logansport. He spent his summer evenings at local 4-H fairs meeting farmers. He also hosted a weekly radio call-in show that helped him gain trust with farmers.
Now he crafts complicated strategies for problems that are often unique to farm work.
For example: His clients often generate steep annual income, but they also have the unique ability to go an entire year purposefully not generating any taxable income by holding back a crop from market to reduce taxes.
Timing is most important in using this strategy, and Mr. Workman helps farmers determine when they should utilize this tool. To do this, Mr. Workman works closely with his clients' attorneys and tax accountants.
Another crucial factor for farming clients is helping them determine appropriate times to utilize tax write-offs for farm equipment which can sometimes run $250,000 or more. On top of this, he's also advises his clients on appropriate times to pour money into their individual retirement accounts.
Not surprisingly, estate planning is also a hot topic. Many of his clients own hundreds of acres worth several million dollars, but their heirs may need access to cash to pay taxes. So he helps clients with life insurance policies and also advises them on family limited partnerships.
Mr. Workman said his clients tend to favor slightly conservative investment strategies. That makes sense, considering a farmer's income is dependent on something that is as unpredictable as the weather.
Still, Mr. Workman truly enjoys working with these clients.
“They're just a wonderful, giving group,” he said. “And you get some of the finest pieces of pie you'd ever want to eat.”
Shop Talk is a regular column detailing how financial advisers run their businesses. The column focuses on unusual or innovative ways to attract more clients. Suggestions or tips for Shop Talk? E-mail Lisa Shidler at [email protected] or visit the Shop Talk page at InvestmentNews/shoptalk.
