Military vets best served by those who have served

Military veterans working in wealth management have a ready-made market niche because of the myriad and nuanced issues and benefits that are unique to members of the military and their families.

“Being a veteran became an interesting touch point for me because veterans and their families have opportunities that the rest of the citizens don’t have,” said Daniel Adams, a wealth adviser at Latitude Wealth Management.

Adams, who was on active duty for 11 years in the Navy before spending 19 years in the Reserve, said it's common for veterans to miss out on benefits and government programs because they simply aren’t aware they exist or don’t know how to access them.

Common examples include low-interest Veterans Administration home loans and educational benefits that can be transferred to dependents. But Adams said having a financial planner with military experience can give a vet a fighting chance to take advantage of the various twists that can come with serving in the military.

For example, he said, a certain portion of combat zone pay can be exempt from federal income taxes, which could be an ideal opportunity for a Roth IRA conversion.

There’s also something called the Yellow Ribbon Program that partners with colleges to pay the out-of-pocket difference between what the standard GI Bill covers and the total cost of college tuition.

“I think the military does a pretty good job of directing you into your benefits while you’re in the military, but once you’re out a while it can be difficult to figure out,” Adams said. “You have to do a little digging.”

Adams is currently working with the family to help secure the benefits of a disabled veteran who recently died.

“Navigating that process would be really challenging and time-consuming if you didn’t get the help of somebody that knew their way around the system,” he said.

While active-duty members of the military might not fit the typical target market for financial advisers in terms of income and net worth, their constant and evolving needs stand out as an area that is typically best met by those who have served.

“We’re known as being veteran-friendly and [military clients] are usually referred to me to work with,” said Nathan Smith, a wealth manager at Stivers Financial Services.

Smith, who served in the Kentucky National Guard, came to realize the need for financial planning through his participation in local veteran groups.

“I wasn’t really seeking out veterans as clients, but it came to my attention that vets have some awesome benefits and that the Army never taught people how to be financially responsible,” he said.

John Verfurth, partner at VWG Wealth Management, served in the Navy for 10 years before entering the financial services industry in 1995. His passion for the past decade has been pro bono efforts to help veterans make the transition to civilian life.

“The hardest part about transitioning is understanding the finances, because in the military you get paid for housing, food, medical care, life insurance, so there’s nothing you need to do because it’s all covered for you,” he said. “But in civilian life none of that is covered, so the household budget is a big issue.”

Most of Verfurth’s pro bono efforts are channeled through the Dog Tag Fellowship Program, which operates above the Dog Tag Bakery in Georgetown in Washington, D.C.

“We teach veterans inside the fellowship, and we help advise the nonprofit entity,” he said.

For a lot of military veterans entering the wealth management space, the years of military service drive a natural migration toward clients affiliated with the military.

That’s the case with Daniel Kopp, a former Air Force officer who helped launch the Military Financial Advisors Association last year.

Kopp, who founded Wise Stewardship Financial Planning in 2018 after leaving the Air Force, said the MFAA evolved from a study group for veterans in financial services.

The association is fledgling, with just 11 members so far, and the membership is selective, with the mission of “providing more access to fee-only fiduciary advice to members of the military,” Kopp said.

“It’s very niche because there’s not a lot of people focused on serving the needs of the military,” he said. “It’s a community, and it’s good to be around like-minded people.”

That kind of community connection is what Michael Hunsberger is banking on to help launch his brand new advisory firm, Next Mission Financial Planning. Hunsberger launched his firm Nov. 1, the same day he retired after 25 years in the Air Force.

Currently, he has no assets to manage and no clients to serve, but he has completed the course work for the certified financial planner and chartered financial consultant designations.

Hunsberger has also joined the Financial Planning Association and the National Association of Personal Financial Advisors to help in developing his network.

He realizes the start of his work as an adviser might have had more momentum if he joined an existing firm, but that’s not where he feels he wants to be.

“Some of what I was looking for was flexibility and the ability to do my own thing,” he said. “I looked at my situation and figured my retirement benefits will help provide some cushion while I build a business.”

In essence, Hunsberger is living the kind of advice he hopes to impart on other veterans.

“It’s important to understand your VA benefits and how the transition to civilian life works,” he said. “Think about how you’re going to use your last leave before getting out, and then think broader than that you just have to go to work right away.”