Abdus Sikder, CLU, ChFC • New Hyde Park, NY
Matrix Partners Network Inc. • Ameritas Investment Corp.
Read full biography below

Proactive Advisor Magazine: Abdus, talk about your path from engineering student in Bangladesh to owner of an advisory firm.

It is just a fact that many top students in Bangladesh gravitated toward engineering, science, or medical degrees when I was entering school. My parents encouraged me along the engineering route, and I did very well in my studies. My dream was always to come to the United States. I was fascinated with the areas of economics, business, and investments.

I received my MBA from Ohio University and studied a broad curriculum, with an emphasis on finance and marketing.

Following school, I worked for several of the top U.S. financial-services firms and rose to a managerial role. It became clear to me that I wanted to run my own business, and that took several forms and various partners. I started Matrix Partners Network in 2011 and am very pleased with how the firm has progressed. The name was chosen carefully, as I believe it represents what clients are looking for today: The examination of their financial and planning needs from many different angles and bringing multiple resources and strategies together to meet their objectives.

What lessons did you take away from your senior roles at different firms?

That is also reflected in our firm’s name and mission statement. While I worked with some great companies, there is always the inclination for organizations to favor their own product or service approach. That is natural, as they sincerely believe they are offering great strategies for clients. But I think there is a tremendous benefit to clients in working with an independent advisor who can, in effect, pick and choose from a variety of sources. We are unbiased in our advisory practice and are looking to pull together the integrated resources that work hardest for our clients.

How does that philosophy apply to the area of portfolio management?

I believe in an updated and modern method of asset allocation. Instead of a client devoting the bulk of their assets to a particular mutual fund, sector, or specific investment, they should be allocating assets in several different types of investments.

The underlying assumption of asset allocation is that each class will react somewhat differently to a given event in different markets and economic conditions. Different asset classes can offer returns that are not perfectly correlated. Based on a client’s personal risk tolerance, investment objectives, time horizon, and other factors, their portfolio might include U.S. equities, non-U.S. equities, fixed income, real estate, alternative investments, and cash.

What brings this into a modern perspective is not only venturing out beyond a simple, traditional stock and bond allocation, but also bringing professional outside managers into the process and, for some portion of a portfolio, actively managed and tactical investment approaches.

I tell clients that our firm has access to a number of nationally recognized professional money managers, over 12,000 mutual funds, and more than 100 top insurance carriers. We do not work for any of these companies and can be completely objective when recommending strategies and products for our clients.

Talk about the active management component.

We have a significant percentage of client assets with outside money managers, and the rest is in a blend of the investment vehicles mentioned earlier, all dependent upon the client’s risk profile and objectives. I like the professionalism and track records of these third-party managers, the variety of strategies available for virtually any client profile, and the philosophy of portfolios being able to respond to different market conditions.

I think advisors should have learned some hard lessons from the early 2000s and the financial crisis seven years ago. Risk management has to be at the top of the list when you are advising clients on how they should be investing their money. You don’t have to be a genius to make money when everything is going up, but you do need to take smart actions when the sky begins to fall. Helping clients preserve assets in times of stress is one of the most important things an advisor can do.

The money managers we work with have invested heavily in their staffs and their technology. I think it is unreasonable for an advisor to expect to be able to manage risk as well as they do, let alone have the time and experience to make portfolio adjustments the way these professionals do. The model for my practice is moving toward more third-party asset management, with my time well-spent on building the client relationship and bringing professional resources to that relationship.

“I like the professionalism and track records of third-party managers and the variety of strategies available for any client profile.”

Do you have a specific target market?

My primary focus is on the physician market. It is a natural fit for so many reasons, starting with the fact that the health-care market is so large a part of the economy and only going to grow more. Doctors tend to be consumed with their work and are the type of clients that are receptive to the message of a turnkey approach to financial planning and implementation of that plan. They are usually quite affluent. They are intelligent and open to thinking about planning and investments in a more sophisticated way. They also often are the owners of their practice and have many financial needs beyond a personal financial and investment plan. They have tax-planning needs, business-insurance needs, and their practice and its employees can be a candidate for a 401(k) plan. The tax-planning piece is extremely important, as is legacy planning, which is why I have affiliated with a CPA firm and have relationships with attorneys.

I literally say to physician prospects, “You could hire us as an outsourced CFO and let us take care of the many issues you have, bringing in highly trained professionals to help you.” It is a 360-degree view of their needs. Third-party money managers and my other professional associates are integral to that approach. I am so optimistic moving forward that I am bringing in new advisors and training them in the needs of the physician segment. We have some very aggressive growth targets and hope to hit them.