"Everybody sees fresh meat out there. There's a big golden egg, and everybody is trying to get it."
27 April 2000 - When it comes to money management, many of the freshly minted dot com millionaires zipping through traffic in their bright new convertibles, cell phones glued to their ears, can be compared to professional athletes, said Gary Schatsky, chairman of the National Association of Personal Financial Advisors.
"They have the same interest in enjoying their money as sports figures," he said, "and they might go overboard."
But the Internet economy has been good to more than just entrepreneurs and those lucky enough to take the initial public offering ride with them. Financial advisers, the people who make a living telling others what to do with their money, are also seeing boom times. Increasingly, Schatsky said, before buying that yacht, that country estate or that sports team, dot com millionaires are turning to financial advisers to deal with their overnight windfalls.
The NAPFA, which represents financial advisers who work for a fee instead of a commission, has ballooned by about 50 percent in the past four years.
In his nearly 20 years in the business, Schatsky said, there has been "one major change" in his clientele: the new-money millionaires.
"For the most part, the Internet millionaires tend to be extremely bright, so where they might not be accustomed to dealing with money, they pick it up very fast," he said. "It doesn't mean they enjoy it. There's a learning curve, and some don't want to climb the whole curve. There are some that are tooled for delayed gratification, and others that feel every day that goes by is a wasted day and not a penny should be held back."
Holidae Hayes, vice president at Sanford C. Bernstein, a New York-based investment research and asset management firm, said she has a great time with the Internet millionaires, most of whom aren't "trust-fund babies" who have grown up surrounded by wealth. Dot com millionaires, she said, are as likely to hold a meeting on the back of a Harley-Davidson motorcycle as in a board room.
"It's nice working with your peer group," Hayes said.
Hayes, 35, said she works with a 22-year-old millionaire and a 30-year-old worth hundreds of millions of dollars. About 70 percent of her clients are under the age of 40, and roughly 15 percent are younger than 30. At least half of the clients in her stable toil in the tech sector.
Instant windfalls aren't always easy to deal with, she noted. "There ought to be a guide on how to be rich," Hayes said. "It's an overwhelming, terrifying experience. Suddenly, you are faced with the responsibility to make sure you don't do something stupid. You are looked up to as a leader because you are successful. And you are in the public eye."
The new rich are also targets for all kinds of charity, loan and other pitches, she said. Which may mean the new economy will quickly look a lot like the old — it just has freshness now. But a hand extended is still a hand extended.
"Everybody sees fresh meat out there," Hayes said. "There's a big golden egg, and everybody is trying to get it."