In 2008, BusinessWeek magazine noted that Boston was one of the U.S. cities best equipped to ride out the recession, thanks to a near-perfect mix of industries that are not only stable but complementary
In 2008, BusinessWeek magazine noted that Boston was one of the U.S. cities best equipped to ride out the recession, thanks to a near-perfect mix of industries that are not only stable but complementary.
In fact, with world-renowned universities such as Harvard and the Massachusetts Institute of Technology serving as de facto incubators for tech start-ups, and top-flight hospitals fueling the health care sector, Boston fared better than most urban areas through the downturn and is riding the wave during the nascent recovery.
In September, for example, unemployment in New England's major city stood at 7.3%, well below the national rate of 9.6%, according to Mark Melnik, deputy director of research for the Boston Redevelopment Authority.
What's appealing for advisers is that Boston has a strong high-end job market. In fact, nearly a quarter — 24% — of the city's households have incomes of $100,000 or more.
The most recent Census Bureau data show that 43.4% of Bostonians work in management, professional and related occupations — nearly twice as many as the next-largest category, sales and office occupations, at 23.7%. Although the city has long enjoyed a reputation as an insurance and finance hub, that category accounts for just 10.2% of the work force now.
By contrast, health care and social assistance account for 18.2% of the jobs in Boston, growing 24% since 2001, Mr. Melnik said. Educational services remain robust, with a 7.5% share of the labor market, up 2% in the past year and 12.7% since 2001.
Two other employment categories — scientific research and development, and management, scientific and technical consulting — have been growing at a healthy clip, rising 36.8% and 31%, respectively, since 2001.
“The city has placed a lot of attention in growing the life sciences sector, as well as developing the Innovation District,” Mr. Melnik said. The district, located near Logan International Airport and dubbed “Geekville,” is a mixed residential and high-tech industrial area designed to attract and retain highly educated workers.
And although Boston is a young town — 69% are 44 or younger — advisers will find ample opportunity for retirement planning, with 12% in the 45-54 age bracket and 18.6% of the population 55 or older.
The Boston blend of affluence, stability and sophistication means ample opportunities for canny financial advisers.
“We have a pretty sophisticated client base,” said Lyman H. Jackson, a certified financial planner in Newton, Mass., noting that most of his clients have advanced degrees.
“Many of the immigrants who came to teach at Harvard or MIT stayed, and started high-tech and biotech firms,” said Herbert Daroff, an attorney and CFP at Boston-based Baystate Financial LLC, noting that the region has many prosperous privately held businesses.
He has found success by working with the owners of these closely held businesses, as well as with their employees.
John F. McAvoy, a CFP at Waterstone Retirement Services in Canton, Mass., has found a solid niche in retirement services. He noted that the recession actually has been a boon for business, as people have become more anxious than they were 10 years ago when their portfolios were going up.
“Professionals and blue-collar workers alike are retiring, and they need a lot of advice,” he said.
COMPETITIVE MARKET
Of course, the city's prosperity has not gone unnoticed. This has led to stiff competition among advisers, especially within the I-495 beltway, said Mr. Jackson.
Because the market can be tough to crack, Mr. McAvoy suggests that an adviser coming to Boston find an established firm and work with them.
“Because wages are above the national average, and we live in quaint, old New England towns steeped in colonial history with many restrictions on building and construction, our cost of living is high,” Mr. Jackson said. “Also, being a liberal bastion, environmental concerns contribute to the higher cost of many items.”
High salaries also mean that many of Mr. Jackson's clients are subject to the alternative minimum tax and high Massachusetts state taxes. Despite that problem, “I have found my client relationships very rewarding,” he said.
