During the pandemic, Martin A. Smith made an educational video explaining event risk. Like most advisors, Smith had to rely more on online marketing when coronavirus shut down the world. He posted the clip on Facebook and LinkedIn. The video paid off almost immediately. Within two months, Smith, 55, the president and owner of Wealthcare Financial Group in Peachtree City, Georgia, had signed up new clients representing about $2 million in assets.
The response made Smith believe that he had tapped into an underserved market. He discovered that most of his new clients had graduated from historically Black colleges and universities, or HBCUs, and that they wanted more financial education and guidance on how to grow their wealth.
Smith launched a robo-advisor platform last year with the goal of attracting recent HBCU graduates. The service, HBCU Legacy, is currently available in only a few states (where Wealthcare has clients), but Smith has big plans for the platform. It offers diversified model portfolios tailored to clients’ risk tolerance and includes education and self-guided financial-planning services. Smith pledges to give 15% of fees, which range from 0.20% to 0.75% depending on clients’ assets, to the alma mater of each participant. Smith, himself a graduate of Howard University, is looking to get young Black professionals to invest their earnings while giving back to the schools.
“HBCUs, historically, have not been adequately funded,” Smith says. “If there’s any promise this nation could and should make for all the years of slavery and the Jim Crow era, it’s fully funding and protecting these schools.”
Finding His Way to Finance
Finance wasn’t on Smith’s radar while growing up in East Palo Alto, California—a community that was predominantly Black. After high school, Smith’s goal was to make a career as a bass guitarist and music industry executive. He played for an R&B band, but just as the group was taking off locally, it broke up, and Smith turned back to academics. “It was either college or music,” he says. “The music dream didn’t work out.”
Around that time, he read The Autobiography of Malcolm X, which further motivated Smith.
“As a civil rights activist and intellectual, Malcolm X was inspirational,” Smith says. “As a Christian, I did not agree with his religious beliefs, but his life story, how he courageously confronted racism as an African American—including the devotion he had towards his wife and children—was admirable.”
After earning straight A’s at a community college, Smith went to Howard in Washington, D.C., in 1988. He majored in communications and minored in philosophy and became acquainted with the Rev. Tom Skinner, who ran a ministry and leadership training organization. Skinner would come to the university to talk about politics, money, and ethics. He became a mentor to Smith and took him and other students to Wall Street. And that’s where Smith first took notice of the world of finance.
After graduating from Howard in 1992, he wanted to become an attorney and interned on Capitol Hill for Eleanor Holmes Norton, who still serves as a delegate to Congress for the District of Columbia. After working for Norton, he shifted to IT in 1996, eventually designing and selling telecommunications data networks for AT&T and Unisys. He moonlighted in financial services during the evenings and weekends with a Georgia broker/dealer. In an effort to go full time, he approached broker/dealers in the Washington area but received no offers.
Undaunted, he knew he could succeed once he got in the door by tapping into his Washington connections developed since college, in part through working on Capitol Hill and networking via an organization called the African American Leadership Family, a group of friends and acquaintances who met regularly at the time. The group included an A-list of VIPs and civil rights activists, including the Rev. Jesse Jackson, who lived around the corner from Smith; Marion Barry Jr., who served four terms as D.C. mayor; the writer Maya Angelou; Earl Graves Sr., a businessman and entrepreneur; and Skinner.
Finally, he broke through. A manager at A.G. Edwards liked his moxie and offered Smith a job.
Cold-Calling to Success
Starting out, Smith says he made 300 cold calls a day. He calculates that 300 calls led to 60 conversations, with two to five of those becoming clients within a year. By his third year, Smith had gathered $17 million of assets under management, with $250,000 in annual revenue.
Smith continued to build his financial knowledge to better manage his clients’ money. During the 2001 recession, he studied to improve his portfolio management skills, and he learned about economic cycles. He retooled his clients’ portfolios and positioned them to soar during the recovery.
In 2003, Smith started his own firm. Drawing on his expertise working in IT, he built his own technology stack, including workflow automation for customer relationship management.
“I just figured, let me find out how I can build a platform that suits the way I like to do business,” he says. Morningstar fulfilled the investment part of the technology stack. He uses Morningstar Advisor Workstation to build the firm’s model portfolios.
In 2018, Smith moved the business to Georgia. Today, Wealthcare, a registered investment advisor, offers clients financial planning and portfolio management, as well as fixed annuities.
The firm also does plan design and fiduciary support for retirement administrators. Wealthcare has five other financial advisors and two insurance salespeople.
For his own book of business, Smith manages about $30 million in assets. Most clients have $250,000 to $1 million in assets, with an average of about $300,000. He doesn’t have account minimums. Fees start at 1.5% for assets of $250,000 or less and step downward as assets rise. Forty percent of Smith’s clients are people of color—mainly Black. As HBCU Legacy ramps up, that number could rise, with some revenue streams flowing back to the schools.
“I’m doing just fine with Wealthcare,” Smith says. But “imagine what we can do to really support HBCUs.”
This article originally appeared in the Q4 2023 issue of Morningstar magazine.