Interview by FeeOnlyNetwork.com
What steps do you take so that clients are assured that your fees are transparent?
We initially discuss with clients how they will be charged-either a fixed fee for an upfront financial plan or a fee as a % of assets managed including financial planning. For accounts that we manage we send a performance report each quarter which clearly shows how the fee for the period was calculated. Clients also get a quarterly statement from the custodian.
Take me through a recent workday that was challenging but rewarding.
Here are two-
-I onboarded a client who is a senior executive who had significant non cash compensation (ESOP, RSU and ESPP) from a company he was parting ways with. Some of these instruments had complex structures and were nearing expiry dates so I had to race against the clock to coordinate and efficiently manage them.
-An elderly client who had been divorced for quite some time was drawing a very low social security benefit. I was able to work with the Social Security administration, unearth some records and ensure that she received the benefits on the work history of her ex-spouse. It was a lot of work but her delight when she was told about the result was a great reward.
Tell me about a client where you were able to help them solve a unique problem.
Here are three…
-A client wanted to give his granddaughter most of his assets which included taxable and tax deferred accounts (His daughter had died in a tragic accident.) but wanted her to only use the money for her education until a specific age. I worked with an estate attorney to create a trust that would carry out his wishes, while being mindful of the different tax rules for the two types of accounts.
– A client had a significant position in a single stock that his previous advisor did not want to sell because it had considerable unrealized capital gains. I reviewed his tax filings and saw that he had a large loss on a real estate transaction a few years ago that was left out of subsequent tax filings when he changed his CPA. We were able to use that loss to offset the gain on the sale of the single stock.
-A client wanted stock market exposure but did not want steep declines in line with the stock market. I created a portfolio that did that.
What do you wish more people knew about the process of creating a financial plan?
Many people think financial planning is all about complex technical finance concepts, but the most important steps in financial planning is understanding yourself, your situation and your objectives.
This is something I help my clients articulate.
What is the biggest misconception about your job?
That I only manage money – there is so much value that is added in the non-investment areas.
What has been your “aha-moment” during your financial services career?
Investing is a bet on human enterprise and therefore aligned incentives are very important.
How do you hope the industry will evolve, and how are you contributing towards that change?
I am very hopeful that the industry moves from selling products to solving problems for the consumers and that advisors are incentivized to work in the client’s best interests. I am very involved with the National Association of Personal Financial Advisor (NAPFA), an organization of Fee-Only advisors, that is committed to that goal.
What advice would you give a college student wanting to enter the industry?
Know yourself and the type of profession you would thrive in- don’t blindly get into a profession because of the money or because it is the most popular.
How has your family background influenced your personal financial mindset today?
My parents instilled in me values of integrity, hard work, discipline, and excellence. When my father, who was a very successful executive lost his job, we had to make some adjustments- my parent’s resilience during that period left a lasting impression on me.