Nuances of Advising Young Tech Workers

Nuances of Advising Young Tech Workers

Deane Wealth Management serves millennials working for technology companies.

Reviewed by: Advisor Views
Edited by: Advisor Views

Samuel Deane

This article is part of a new series from highlighting financial advisors. 

Samuel Deane is founder and CEO of Deane Wealth Management, which focuses exclusively on clients working in the technology sector. It’s a younger demographic, and his practice is designed to meet their specific needs. Here, he speaks with about what sets his business apart. Tell us about Deane Wealth Management and what makes it unique.  

Samuel Deane: As of today, we're at around $6.5 million in assets under management. In terms of my client base, I work exclusively with the tech community. Most of my clients are at pre-IPO startups.  

Most of them are software engineers, designers, a few folks in sales and marketing, and so forth, but for the most part, they're mostly entry IPO startups.  

I [also] have quite a few clients at big tech companies like Google, Microsoft and so forth, and then a decent amount at the newly public companies like Coinbase, Squarespace and Uber. Most of them are millennials. My youngest client is 27, and my oldest client is about 43. It's a bit of a younger demographic than a traditional retiree. Does having a client base in the technology field affect how you manage their portfolios? 

Deane: Yes, to some extent. I have three main strategies I use within my firm. For clients that are maybe rolling over their 401(k)s or are starting from scratch and really building their portfolio from nothing, 99% of the time we’re doing a simple five-ETF portfolio where we're using ETFs to give them global diversification. There's some home country bias in that the majority of that ETF portfolio is in U.S. stocks. 

We tilt to small cap value. We also have exposure to developed markets and emerging markets, as well as a little bit of real estate. That's as simple as it gets in terms of the ETF portfolio.  

For clients that have maybe about a quarter million dollars or more, we've recently implemented a direct indexing strategy where we have a third-party asset manager to implement that strategy. We have pretty much all the control to give them exposure to different areas of the market. I think that really comes in handy when you have a client with a ton of Twilio stock, for example. We can sort of adjust our exposures to tech using the direct indexing strategy.  

Another good value add [from] the direct indexing strategy is that we have more control over losses compared to ETFs and mutual funds. We're really focusing on tax loss harvesting and tax loss harvesting optimization there.  

The last strategy is covered call options, where we’ll write covered call options for clients where it makes sense. If I have a client that’s a bit hesitant on selling their stock outright, for one reason or another, we can write covered call options contracts. 

The last two [strategies] that I mentioned, direct indexing and covered calls, [apply to] relatively few [clients]. I don't think any of my clients have any fixed income exposure because they're all relatively young and don't plan on retiring anytime soon. Most of my portfolios, if not all of them, are 100% equity. 

With both the direct indexing and the covered call strategy, we're leveraging a third-party asset manager to implement those strategies for our clients. Do you have any “go to” ETFs?  

Deane: I feel like you can't really go wrong with Vanguard. Three out of the five funds that I use are the Vanguard funds VTI, VWO and VEA. I don't think there’s a money manager that will be too surprised at that. But another ETF company that I really like is Avantis. We use their small cap value fund, AVUV, and their REITs fund, AVRE, as part of our portfolio. Do you get a lot of questions about cryptocurrency given your clients are mostly working in the technology sector?  

Deane: I used to, but I can't say that's the case today, considering that no one wants to talk about crypto. The asset class has pretty much had a deep discount, [which is] when folks should be buying. Everyone wants to talk about it when valuations are [high]—typical human psychology there.  

If I'm working with younger folks who grew up as digital natives with mobile devices and screens in front of them, I think it's only natural for them to navigate to crypto or at least to have some level of exposure to crypto.  

From my experience, most of the folks I'm working with who are invested in crypto assets, they're not necessarily coming to me for exposure. They're more or less doing these things on their own and just letting me know what's going on so that we're all on the same page. Then I can look out for things that they may not necessarily be paying attention to.  

But for the most part, if a client has crypto, they're managing it on their own. They're making decisions on their own and just keeping me in the loop.  

However, I do have one client that is fairly young. She's in her early 30s. [She said], “I know I want exposure to crypto, but I don't want to actively manage it. I don't want to actively do anything with it. Can you do that for me?” So I do have one client where I have to have a crypto brokerage account where I am making decisions on her behalf. That is far from the norm. 

There’s a company called OnRamp Invest. It doesn’t have to be complex. OnRamp has model portfolios, such that we can set an allocation to 60% bitcoin, 40% ether and it'll automatically rebalance on its own, where there's literally nothing that I need to do.  

We consider rebalancing frequency—monthly, quarterly—and whenever the model deviates from its allocation by anything more than 20%, [it will] automatically rebalance. 


Contact Heather Bell at [email protected]


Advisor Views is a bi-weekly Q&A-style series that features voices from across the financial planning industry sharing insights on investment strategy and portfolio management as it relates to the current economic environment.

The format enables advisors to respond in their own words to specific questions designed to provide readers with practical tools and tactics that can be applied to managing client portfolios.