We recently had the pleasure of sitting down with Lauren Pearson, Managing Partner & Director at Somerset Advisory, to learn more about what makes her team and approach unique. It is always a pleasure to have a conversation with Lauren. She is extremely intelligent but also very practical and down to earth. If you are looking for someone who can provide wealth management and tailored financial planning inside of an authentic relationship, then Somerset Advisory may be just the right firm for you.

1. What is Somerset Advisory and where is it located?
   Somerset Advisory is a boutique wealth management firm specializing in complex planning and asset allocation with three locations across the Southeast in Charlottesville, Virginia, Birmingham, Alabama, and Beaufort, South Carolina.
2. Why did you build Somerset Advisory?
   I wanted to have a responsible place to practice and to build a team that was oriented around the client experience focusing on specific and, perhaps, underserved communities.
3. You recently moved to Charlottesville and opened an office.  Why Charlottesville?
   My husband went to UVA and some of our closest friends and family are still living in Virginia. We were looking to be part of a community that had a similar value set as us, and where we could establish a long term home with our three daughters. We love the emphasis on gathering, being outdoors, and how it is so community centric. We purchased a farm just outside of Gordonsville and my husband actually just opened a restaurant on Main Street in Gordonsville called Près des Prés. It is French inspired cuisine with a focus on great food and great people.
4. Who is your target client?
   We focus our practice on communities, and we do a lot of research around these communities of people. The main four that come to mind are attorneys, women and families, high-capacity givers, and entrepreneurs. We take a community into a deep dive which takes several years, so this is a work in progress. We studied attorneys and women and families, and we are in the process of doing research on high-capacity givers. The reason we do things this way is because we believe that if we really dive in and get to know how these people create wealth over a lifetime, we will be able to better serve other people in similar communities. Most of our clients fall in at least one, but usually more than one of our communities.
5. What makes Somerset stand out within the Financial Advisor industry?
   At the moment our firm makeup is an all-women team, which is highly unusual for an industry that only has 14% of women that are client-facing. They say if you want something done give it to a busy woman, and I’d say that is true of our team! Somerset focuses on serving a smaller client base so that we can spend valuable time with our clients. In addition, we take a very hands-on approach and pace our meetings with what the client prefers. We focus on customized portfolio construction, but thoroughly enjoy working on the financial planning side as well.
6. What is the biggest need surfacing as interest rates rise?
   I think the greatest need we have seen come to life in our practice recently is the need for cash flow planning. Everything has gone up. I mean, the reason interest rates are going up is to battle inflation, which means things that you buy are increasing in price. So, I think one of the most impactful things as we think about the world is really taking a deep dive into cash flow. We are seeing clients who, in the past, have not had any issue with cash flow that are all the sudden having issues with cash flow because interest rates have increased their debt payments around five or six times. As a result, they are feeling the pinch of cash flow where they have never felt that before. Clients are asking us to research cash flow spending patterns so we can determine where dollars are actually being spent, help them strategize on ways to cut back, and help them focus on what spending is in line with their value set for their family. Typically, when people think of cash flow they think, “Oh, they just want us to spend less money,” but that’s not true! We just want people to be spending money in the way they think they are. When that happens, you feel a deeper connection to your wealth, your job, and even the health of your family. That’s what we really are looking to achieve through cash flow planning.
7. What is cash flow planning?  How is it different from financial planning?
   The number one piece of information we need in order to make a financial plan work is how much a client is spending on an annual basis. More often than not, clients who are spending less than they earn do not have a full grasp on exactly how much they’re spending. Cash flow planning is designed to help those who have a more complex financial picture hone in on how much they’re spending each year and discover where that money is going. Cash flow planning is NOT retirement planning, and I think that is one thing that can be a little quirky in our industry and the terms we use. Cash flow planning is doing a deep postmortem into what you actually spend. We need to do this before financial planning begins.
   The reason being, if we put in the wrong number for how much you spend, that can make a plan look completely different – it can either give you too much credit or not enough credit; so, if you’ve never met with a financial planner before, that number is actually the most important number to know about yourself. We help you get there because a lot of people have no idea what they spend.
   The process entails giving us basically everything from your financial life over the past year. We look into PayPal, Venmo, credit card statements, and any checking accounts and do a deep dive in all the different areas you spend. Amazon is an area we see a lot of people not understand which categories things are going into. We investigate all of this – it takes a little while and is very time consuming, but we walk alongside you. After that, we put the information in what’s called a Sankey diagram, and this shows how your actual money flows from your year. Cash flow planning is a four-tiered approach: It’s the 30,000-foot perspective all the way down to in-the-weeds. We go all the way through from each individual item to the big picture. Usually, there are emerging trends clients are glad they know after the process is through.

Thank you for sharing your time & knowledge with us, Lauren! If you are in the market for a financial advisor contact Somerset Advisory. Make sure to tell them that The Scout Guide sent you!

Somerset Advisory // [email protected] // 205.518.7494 // @somersetadvisory