Game On: Sports Finance Poised to Make a Major Play in the Stock Market by Advisors Magazine

ADVISORS JAN 2018

ISSUE 82

magazine

ZACK

ward all sports market

Putting Clients at Ease

Money and anxiety in America

Women Gaining Ground

Women to control US wealth by 2030

The Female Financial Perspective Professional women underserved

Middle-class Millionaires

Insights from wealth authority Paul Byron Hill

GAME ON

Sports finance poised to make a major play in the stock market.

publishers note

ISSUE 82 | JAN 2018

Publisher Erwin E. Kantor Managing Editor Michael Gordon Editorial Robert Jordan Harold Gonzalez Samantha Jones Staff Writers Robert Jordan Judy Scinta Amy Armstrong Hadrian Scott Matthew D. Edward Joel Kranc Martin Frost Jane Meggitt Contributors & Guests Steven Selengut, IAR Vitaliy Katsenelson, CFA Ben Schrock, BFATM Illustrators Paul Kales Khalil Bendib Marketing / Advertising Sean Rome Billing

Eric Daniels For advertising inquiries, to order prints, contact: editorial@advisorsmagazine.com No part of the Advisors Magazine may be reproduced or transmitted in any form of by any means, without prior written consent of the editor. Due to the nature of the printing process, images can be subject to a variation of up to 15 percent, therefore Advisors Magazine cannot be held responsible for such variation.

2017 Year Review: Empowered Women

t the start of 2018, “Advisors Magazine” takes a look back at the top-level female executives we featured in 2017. These women are successful, accomplished, and have encouraged and inspired others by trailblazing paths that light the way for the future. One of our most notable pioneers is Lori Greiner, who is now regarded as one of the most prolific inventors of retail products, having created more than 600 products, and holding 120 patents. She is one of the star “Sharks” on the Emmy winning show, “Shark Tank.” We find inspiration from the financial industry from straight-talking personal finance expert, Suze Orman, a leader who delivers the message that the financial services industry ought to better acknowledge the financial power of women. As 2017 came to a close, Maria Bartiromo of Fox Business News delivered back-to-back interviews with President Trump and Vice President Pence reaffirming her position as a leading financial news journalist. Advisors Magazine also featured women whose names aren’t as publically familiar, but who are also making strides on their own, and for women within their industries. Sharon Birkman transformed a personality test from a clinical tool into an industryleading method for building teams within companies. The Birkman Method is now a personality assessment system translated into ten different languages. Innovator Amanda Brinkman, Deluxe Corporation’s chief brand and communications

officer, created the “Small Business Revolution” to revitalize small-town America, and brought “Shark Tank’s” Robert Herjavec aboard to help business owners revamp their business and marketing plans. These are some of the names that embody the spirit of what it is to be an entrepreneur and change-maker in the corporate world. We look forward to bringing you further coverage of engaging and successful women who are making a difference. In our premier issue for 2018, check out our cover story on page 10 to learn about AllSportsMarket, the first sports stock market technology platform. Zack Ward, Canadian actor, director, writer and entrepreneur discusses the first of its kind sports platform offering a new playing field for experienced investors and novices. On page 7, we share advice from advisors for advisors. “4 Ways Financial Advisors Put Clients at Ease” by Amy Armstrong covers the strategies used by advisors – in their own words – to help their clients minimize feelings of angst when discussing important financial issues.

Happy New Year,

Erwin Kantor Erwin Kantor, Publisher

jan 2018 CONTENTS COVER STORY

digital issue

Zach Ward and AllSportsMarket develop financial technology offering a new playing field for experienced investors and for people who, until now, sat in the bleachers.

ZACK WARD

10 4 ways financial advisors put clients at ease

ADVISORS JAN 2018

ISSUE 82

magazine

ZACK

wArd all sports market

Putting Clients at Ease

Money and anxiety in America

Women Gaining Ground

GAME ON

Sports finance poised to make a major play in the stock market.

Women to control US wealth by 2030

The Female Financial Perspective Professional women underserved

Middle-class Millionaires

Insights from wealth authority Paul Byron Hill

COMPREHENSIVE PLANNING FOR THE FEMALE FINANCIAL PERSPECTIVE

INSIGHTS FROM WEALTH MANAGEMENT AUTHORITY, PAUL BYRON HILL

FINANCIAL PERSPECTIVE OF WOMEN GAINING GROUND

16 By the year 2030, two-thirds of the wealth in the United States will be controlled by women. p.4

ADVISORS MAGAZINE - JAN 2018

What’s so special about middle-class millionaires?

SIMPLIFYING THE JARGON

business / finance

PERSONAL TOUCH ESTABLISHES TRUST TO BUILD WEALTH

What are your fees? Are you a CFP

Is there a minimum

FINANCIAL EDUCATION

THERE ARE NO BAD QUESTIONS

CLIENT FOCUS AND INNOVATION LEADS FIRM’S 25-YEAR GROWTH

WEALTH MANAGER FOR THE MILLIONAIRE NEXT DOOR

42 52 Putting Education and Strategy First A holistic and comprehensive approach

54 Laws of Physics Spur Economic and Financial Growth

EDUCATING YOUTH

Rolling back on regulations across a broad scope of industries

58 Letting the Client Drive Decisions Taking the time to answer client questions

60 Human Capital Important Asset Empowering organizations to succeed through people

62 A Passion to Serve Clients Happy families enjoy financial success

66 Teaching Clients

SIMPLE TALK SINCERE RELATIONSHIPS SAFETY FIRST FOR RETIREES INSPIRED BY THE GREATEST GENERATION

Putting financial needs first

68 Empowering Women Through Education A need to educate women about financial planning

70 Algorithms, not Hunches Guide Market Decisions If you fail to plan, you plan to fail.

76 ADVISORS MAGAZINE - JAN 2018 p.5

GLOBAL CAPITAL MARKETS EDUCATING CLIENTS IS KEY TO FIDUCIARY DUTY

BUILDING RELATIONSHIPS TO HELP CLIENTS BUILD WEALTH

HELPING FAMILIES GET COMFORTABLE TALKING ABOUT MONEY

HELPING CLIENTS PLAN A SECURE RETIREMENT

88 Establish a Financial Plan Earlier Than Later in Life 94 Ensuring the Well Being of Clients Saving for their golden years

90 Creating a Partnership with Clients Partnering with client and meeting financial goals

92 Educating Public on Investing

No one reads the prospectus. It’s too cumbersome.

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ADVISORS MAGAZINE - JAN 2018

Taking a holistic approach

96 From Agriculture to Assets Using farm values to help people

by amy armstrong

4 WAYS FINANCIAL

advisors put clients at ease

Since 2007, the American Psychology Association (APA) has ranked “money issues” as the number one stressor for Americans. More than one-quarter of Americans reported “feeling stressed about money most or all of the time,” according to the APA’s 2015 Stress in America survey, and the stat holds true to date. Most survey respondents identified the “feeling” to be anxiety, and worse yet, many admitted they dealt with it by avoiding the topic causing it. While that might be effective for dealing with your annoying in-laws, avoiding finances only worsens the problem.

Do Some Dreaming

Eliminate Industry Jargon

Educate

Address the Elephant in the Room

ADVISORS MAGAZINE - JAN 2018 p.7

o, what steps can financial advisors take to create a comfortable and safe environment that puts clients at ease and helps them let down their financial emotional guard, so to speak? “Advisors Magazine” asked numerous advising professionals to share their approach. Here is what they said: Address the Elephant in the Room Don’t dance around the fact that people are uncomfortable talking

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ADVISORS MAGAZINE - JAN 2018

about money. Even though the topic isn’t as taboo for today’s investors as it was for previous generations, engaging in an open and honest financial discussion ranks lower than annual health exams on the todo list for most folks. Be upfront with your clients by telling them that you, as their advisor, understand that economics – especially personal finances – can involve a lot of conflicting emotions. “We talk about it right away,” said Wesley Kotys, president of Kotys Wealth Professionals based in Valparaiso, Indiana. “We start our

conversations with clients by letting them know we want to know how they view money.” Long before Kotys begins to formulate or recommend investment strategies, he talks with clients to learn about their history with finances and money. And if he’s working with a couple, he asks about their individual histories as well as their experience together. “We ask them what money meant to them when they were growing up because that forms much of how we view money as adults,” he said. “Then we ask them, ‘How do you view money today? Are you scared of it? It is a tool that allows you to live a certain lifestyle, or is its impact on your life something

you don’t understand but wish you did?.” Gaging the client’s financial personality is key to easing their emotional distress regarding money, he said. Timothy M. Mitrovich, CEO and chief investment officer of Ten Capital Investment Advisors, LLC, in Spokane, Washington, agrees. “We have a deliberate and objective process that first and foremost helps us to understand the client’s background regarding finances,” he explained. “We want to know what it was like for them growing up, we want to emphasize to our clients that we want to get to know them as people and that is when the walls come down.” Eliminate Industry Jargon Many advisors agree that the lingo or jargon used in the financial industry is not part of their clients’ everyday vocabulary. While some clients will know the definitions of terms such as benchmark, compounding, expense ratio and standard deviation, many will not. Most financial advisors readily say it is their job to teach those definitions; some advisors go well beyond teaching to actively illustrating these complicated industry terms in ways investors can grasp. Matthew Page, a partner with

Lucas Group Financial Planners, Inc., of Sacramento, California, began his career in the financial services industry doing 401K education for employee benefit plans. “I quickly realized the audience did not have the same background I did and that I just cannot use industry lingo to communicate effectively with them. So I started to paint mental pictures for them,” he said. “I use analogies, illustrations, metaphors and stories from everyday life that people can relate to. It makes it much easier for them to see if they are going to run out of money.” Do Some Dreaming Clients might not be fluent in financial lingo, but the majority of clients can articulate their dreams

and goals. “They know how to talk about that,” Mitrovich said, adding that advisors should encourage clients to talk about the positive “whatifs” such as what they want to do in retirement. “You get clients talking about what they want for their lives, you get them talking in those terms and much of the apprehension regarding financial discussion disappears.” Educate The unfortunate reality in America today is that most folks remain financially illiterate. According to recently-released findings by the National Capability Study, at least two-thirds of the American population cannot pass a basic financial quiz. Combine this with the fact that people fear the unknown – especially the “unknown” when it comes to their financial wellbeing – and financial advisors are presented with ample teaching moments when meeting with their clients. “Education is key for us in building trust with our clients,” Amy Novakovich, co-founder of Nova Wealth Management in Bonita Springs, Florida. “We educate until they understand. When clients understand the ‘what’ and ‘why’ of what you as an advisor are doing for them, they become much more comfortable talking about money.”

ADVISORS MAGAZINE - JAN 2018 p.9

COVER FEATURE BY JUDE SCINTA

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ZACK WARD. GAME ON: All Sports Market

Sports Finance Poised to Make a Major Play in the Stock Market Let’s say you’re a sports enthusiast. And, let’s also say that you like to invest in the stock market. You could blend your interests by investing in a stock like Madison Square Garden Company, a powerhouse in live sports and entertainment venues. Or, you could “Just Do It” with Nike Inc., the leading global designer of athletic footwear and apparel. But, if you do your research you’ll see that Nike’s North American sales struggled to keep pace with that of their rival, adidas who enjoyed a strong financial performance both in North America and China during the past year – so choose carefully.

ADVISORS MAGAZINE - JAN 2018 p.11

ut what if there was a different way to invest in sports? What if you could invest in shares of your favorite sports and your favorite teams? And, what if your earnings – and losses – were based on their performance each game? Well, if you’re a fan of the NFL, NBA, NHL, or MLB sports organizations, AllSportsMarket (ASM) has been very busy developing financial technology that will offer a new playing field to experienced investors – and promises to open up the world of investing to many people who, until now, have sat in the bleachers. For the last three years, ASM has operated a beta stock trading exchange that allows participants to buy and sell shares with “learning currency” – think “Monopoly” money – in sports teams, just like traditional stocks, and earn dividends when their teams perform well. Global Sports Financial Exchange, Inc., is the California licensee of ASM’s financial technology platform, and their CEO, Zack Ward just may look familiar to you. As a veteran actor, Ward has appeared in many movie and television roles including “Transformers,” “CSI,” “Lost,” and “American Horror Story.” But, his first movie role as a child actor is his most notable. He played Scut Farkus, the bully in “A Christmas Story.” The holiday classic airs every year earning Ward a new generation of fans who love to hate him. “It’s an honor and blessing,” said Ward. “When I walk into a room I get an extra 15-second grace period of people being nice to me before they decide whether or not they really hate me.” The World’s First Sports Stock Market™ So, just what is sports investing? How does the ASM exchange work? Ward explained these details and more at length in a recent interview with “Advisors Magazine.” “The sports stock market is exactly the same thing as a stock market; you buy shares in your team, and the shares are performance based. So, if you buy 100 shares of your favorite sports team, and they win their game, then the share value goes up in price. At the end of that game, you get dividends. Also, at the end of each quarter, for the teams that have continued

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ADVISORS MAGAZINE - JAN 2018

to win, you get dividends from each of those teams. When your team loses, your shares go down in price, but you still keep all your shares.” Some may be thinking, is this just gambling in disguise? Or, is it just another version of daily fantasy sports? Emphatically, it is not according to Ward, and The New Sports Economy Institute (NSEI) which is the parent company of ASM. NSEI, whose mission is “transforming society through sports,” is a 501(c)(3) nonprofit, tax exempt organization registered in California, and approved by the Internal Revenue Service. “Unlike gambling where if you put down $100 on a game, as soon as they lose that game, you’ve lost $100, you don’t get anything. But when you buy stock in your team, the value may go down, but you

PLAY MONEY

still have your shares,” explained Ward. “For instance, if you invest shares worth $100 dollars in your team and they lost the game, the price of your shares may have gone down to $85. The next time your team plays a game, those shares may go up in value.” To further distance the sports stock exchange from gambling, and align it with regulated investing Ward added: “Also, during the game, you can adjust your position in real time. So again, unlike gambling where you put your money down and make a bet, and no matter what happens you can’t change your bet. Once the game starts, you are locked in. With investing, you can make realtime adjustments to your position in the market based upon the information you’re getting.” As an investor, you can watch a game

REAL MONEY

“

Gambling has its place in society. That’s going to be for everybody to make their own personal decision,” he said. “But here are the facts: gambling built Las Vegas; investment and the stock market built the United States of America.”

ADVISORS MAGAZINE - JAN 2018 p.13

and either purchase additional shares, or sell your shares based on your judgement of the team’s performance, and your own prediction of the outcome. For instance, Ward offered the example of a baseball game where an investor’s team has lost the first three innings. As the shares have gone down in value, the investor may decide to purchase more shares at this time at a lower value because he knows that a couple of heavyhitters are on deck, and the shares may go back up in value. Another investor may opt to sell her shares to reduce her loss if she feels her team can’t make a comeback.

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“

The only way that people have connected sports and money for the past million years has been through gambling – and the problem with gambling is that the house always wins

“

Regulation Technology entrepreneurs, Ace Underhill and Chris Rabalais are the inventors and creators of AllSportsMarket. Over the last five years, Ward has helped them with branding and communication to tell the story of this new sports investing platform. Together, the team created the Sports Integrity Protection Amendment (SIPA) for the state of California. The purpose was to bring awareness to the sports stock exchange market so that the state could create legislation and be aware of it prior to the platform becoming regulated. While SIPA did not become a law, it did help the ASM team show a history of transparency. As the company continued to move forward towards a regulated market, Ward was appointed as CEO of Global Sports Financial Exchange to oversee branding, and as Ward said, “...to create the conversation and make it digestible for people.” Explaining the concept and the financial technology to politicians and the legislature has been a challenge because of the stigma of gambling. What’s required is a paradigm shift for society. “The only way that people have connected sports and money for the past million years has been through gambling – and the problem with gambling is that the house always wins,” said Ward. For the last three years, ASM’s sports stock exchange has been a beta test market. “Like any type of platform, you have to ensure that your algorithms and that the platform are working perfectly, that there are no bugs in the system, and that everything is 100 percent transparent, so that it can be auditable,” Ward said, adding that this helps

ASM show the state, the SEC, the U.S. Commodity Futures Trading Commission, as well as federal regulators, how the system works “so they can look at it an understand the process perfectly.” Some transactions on ASM’s beta platform have been conducted with learning currency. Those interested in participating can go to allsportsmarket. com to sign up. You will be given $2,500 in learning currency to start making investments and create your “sportfolio.” Another version is the limited money “pilot market” which trades real money. Ward referenced the track record of Elon Musk’s, PayPal as an example of a company that regrouped after its initial launch to follow the proper protocol dictated by the rules and regulations of the federal government. On the flip side, he points to the daily fantasy sports industry, whose legality is determined by each state, and has been the subject of many lawsuits across the country. ASM wants to follow the path of the former. “Our goal, learning from the people who have come before us when it comes to financial technologies, is to make sure that we are transparent, and make sure that we abide by all federal regulations before we start excepting monies,” said Ward. New Path to Financial Literacy The NSEI mission also states that its objective is to “create a strong economy with strong ethics and bring financial literacy to the masses via sports trading instruments.” According to Standard & Poor’s Ratings Services Survey, “Financial Literacy Around the World,” the U.S. adult population placed 14th in financial literacy rankings. Currently, only 17 states require high school students to take a course in personal finance. Many financial advisors want to see financial education for Americans start in grammar school – not in early adulthood once they start working and managing their earnings. Ward suggests that participating in ASM’s sports stock market is a great way for parents to teach children about investing. Investment is put inside a lens that children can relate to. “If you try to talk to your 10-year-old about market fluctuations and dividends, their eyes are going to roll back in their

head, and you’ll lose them. But if you ask them, ‘What’s your favorite team?,’ they’re going to tell you. If you explain that you’re then going to buy shares in that team and watch how they progress, by the end of that season, your kids are going to understand the ebb and flow of a market. They’re going to understand the difference between investing money and wasting money,” said Ward. “So now when they’re in their 20’s, they may be set with enough financial literacy to make good decisions because it’s been engrained in them through the thing they love the most, and can enjoy with their parents – sports and their favorite team. They didn’t even know they were getting educated.” When ASM started the beta test, they were at a $100,000,000 market cap of learning currency. With some 7,000 beta investors – or sports traders – across 81 countries over the last three years, the beta users have raised the market cap to over a billion dollars according to Ward.

“My ambition in my life over the last 38 years has been in the entertainment industry, and I’ve been very fortunate in my levels of success. However, my mission is, ‘What does the world need?’” said Ward. “I think this can do something incredible bringing investing to people who would never consider it before, and that could change their world.” “Gambling has its place in society. That’s going to be for everybody to make their own personal decision,” he said. “But here are the facts: gambling built Las Vegas; investment and the stock market built the United States of America.” For more information on AllSportsMarketing visit: allsportsmarket.com

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by amy armstrong

FINANCIAL PERSPECTIVE of Women Gaining Ground

y the year 2030, two-thirds of the wealth in the United States will be controlled by women. So proclaims the Federal Reserve Bank, the Social Security Administration, the U.S. Department of Labor (DOL) and a variety of think tanks that analyze these sorts of things. “As financial advisors look back at their business over the past year, many will take note of the larger number of women among their clients,” Matt Sommer, vice president and director for the retirement strategy group at Janus Capital Group, said in a CNBC commentary. “This should not be surprising, since the number of wealthy women in the United States is rising twice as fast as the number of wealthy men.” Yet, women are underrepresented in the gender ranks in the financial services industry despite the fact that they make significant decisions where economics and money are concerned.

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Males Still Outnumber Females In a press release accompanying their 2017 report comparing the number of female financial advisors to their male counterparts, Marina Shtyrkov, an analyst with the Boston-based Cerulli Associates, said: “Women remain outnumbered in financial advisor communities despite efforts to recruit more female advisors; only 16 in every 100 advisors are women.” The report also stated that just shy of 16 percent of the nation’s 310,504 financial advisors are women and labeled this statistic as one that “stubbornly lags” behind today’s reality that a woman’s financial viewpoint is increasingly driving economic decision-making. To back up that statement, economists point to stats released in summer 2017 by the U.S. Census Bureau regarding the female influence in household spending. According to government data, women are the final say in making the following choices: • 80 percent of health care decisions • 65 percent of new car purchases • 91 percent of home buying That’s a lot of decision-making power, and even more notable is its rapid rise. Women’s Net Worth Growing Exponentially In 2014, women earned $14 trillion nationwide representing a 50 percent increase as compared to just three years earlier in 2011, according to the DOL. So, what’s the deal? Why is the number of women working as financial advising professionals so skewed when compared to other industry stats regarding women? Why only16 percent when women represent 50.8 percent of the general U.S. population? One long-time financial industry pro attributes the imbalance to the fact that girls in secondary education and young women in college are not encouraged to seek careers as financial advisors. It’s Time Ursula Daley, CEO of Daley Financial Partners in Oak Brook, Illinois, said her own daughter – who grew up watching her mother work as a professional advisor and is now a business major at a leading East Coast college – told her that the option of becoming a financial advisor isn’t really being discussed at the university. “She said that exploration of that career path isn’t being encouraged or even talked about,” Daley said. “That needs to change. I hope that more exposure to this career field will lead to greater demand for education regarding it at the university level.” But if the past does guide the future, Daley has some well-founded concerns that women’s role in the financial services industry might be slow to increase.

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While she sees unlimited opportunity for female financial advisors in the landscape of today’s industry, she also notes that the landscape itself hasn’t changed much through the years. She remembers reading an article about 15 years ago regarding the status of female financial advisors – less than 20 percent of the active advisors were female. Just recently, she saw another article stating the same information – except it was regarding the industry’s current status. “Nothing has changed,” she said in reference to the percentage of female to male advisors. Loreen Gilbert, president of

WealthWise Financial Services in Irvine, California, echoes the sentiment. “In the 30 years that I’ve been in the business, I’ve seen the stats remain the same – it is one female advisor to nine male advisors,” she said in an interview with “U.S. News and World Report.” As a member of the executive board of National Association of Women Business Owners, Gilbert knows her own chosen industry has a long way to go to achieve gender balance. “Unfortunately, statistics tell us that the industry is still not attracting many females and I think a concerted effort is needed to educate female college students that there’s a great opportunity in the industry.”

changes within the industry over the past decade and female financial advisors may have an advantage, according to Marcella Behman, a Boston-based financial advisor. Movement away from competitive commission-based compensation for advisors toward a fee-based approach based on developing relationships can benefit female advisors. Women are more likely inclined to succeed in an environment where family values – not benchmarks – guide decisionmaking. “Women tend to be good communicators and are adept at understanding wealth through the lens of family values and goals,” Behman told “Barron’s” in 2016.

Hope on the Horizon

The good news from Cerulli Associates is that there is a significant uptick in the number of female rookie advisors in 2017. Nearly 30 percent of newcomers to the financial advising profession were women last year – a

According to a 2013 Insured Retirement Institute survey, 70 percent of women of any age indicate they would rather work with a female advisor. Couple this with fee structure

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More Gals Giving it a Go

dramatic increase from just a few years ago when first-year female advisors was half that. Younger women joining the industry are also embracing its professional development side. The Financial Planning Association (FPA) based in Denver, Colorado, offers its NexGen as a professional development community for advisors ages 36 and younger. Its membership is now 32 percent women, according to Pamela Sandy, founder and CEO of Confiance LLC, in Cleveland, Ohio, and the 2016 FPA president. Women are receiving more genderspecific support from within the industry. FPA launched its Women and

Finance Knowledge Circle – an online community for its female members – in in 2015. The Lincoln Financial Network introduced its WISE (Women Inspiring, Supporting, Educating) also in 2015 to support the unique needs of female advisors and clients. Perspective from Other Industries Perhaps the numbers for the financial services industry aren’t too alarming in comparison to other traditionally male-dominated career fields. According to 2014 numbers from the U.S. Bureau of Labor Statistics, women represented approximately 16 percent of the following work forces: aerospace, civil, computer and

industrial engineers as well as parts salespersons. The following traditionally maledominated industries had slightly higher percentage of employed women in 2014: • • • • •

Butchers, 23.5 percent Chefs, 21.4 percent Chiropractors, 22.4 percent Detectives, 21 percent Environmental scientists, 24.5 percent

As women in greater numbers move in to career fields – especially higher-paying ones – their economic prowess is something leaders within the financial services field may wisely accommodate.

ADVISORS MAGAZINE - JAN 2018 p.19

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COMPREHENSIVE A PLANNING FOR THE FEMALE FINANCIAL PERSPECTIVE

She had just retired from a 38-year corporate career at age 55 and had taken a lump sum payout from her pension plan. She was combining it with the dollars in her 401K plan in an attempt to find a financial advisor that could help her recover the more than $250,000 she had willingly spent from her own retirement fund for her mother’s long-term care and still live the kind of lifestyle she desired.

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fter five interviews with advisors with impeccable credentials and glowing recommendations, she was still searching. Jeannette Bajalia was frustrated. She couldn’t connect with an advisor that understood she sought more than just a transactional relationship. She wanted an advisor that would select the product vehicles and facilitate the financial transactions after a “lifestyle plan” was first tailored. “I personally walked away feeling so underserved as a professional woman,” Bajalia recalled. “I felt so disrespected and felt demoralized. I realized that I was asking

them for what they did not understand. I was asking for a retirement plan and they were trying to sell me investments.” There is indeed a large difference between those two approaches to financial advising, she said. It’s the impetus behind Bajalia creating the Jacksonville, Florida-based, Woman’s Worth®. As the company’s CEO, Bajalia combines helping women improve and maintain their emotional and physical health, along with their financial needs, as a comprehensive approach to the gender she believes is underserved by her industry. Bajalia knows women’s needs go unmet by other financial advisors

on a regular basis. She is on a mission to change that, she said. “The industry needs to stop treating women as a little niche that it can possibly serve,” Bajalia said. “They are the market; they are not just some niche.” According to statistics and Bajalia’s own personal experience, along with what she has witnessed take place in other families, women make 80 percent of the purchasing choices in the current market. As baby boomers age and husbands die in unprecedented numbers, women are taking control of increasing amounts

of wealth. Estimates vary from report to report and study to study, but most agree that at least two-thirds of American wealth will be controlled by women within the next two decades. It’s no secret that women view money and money matters much differently than men do. The deep, vast abyss separating the gender viewpoints is often the punchline in a successful comedian’s stand-up routine. Our society routinely mocks the routine economic spats dotting the lives of married couples. We laugh at it and nod our heads. Yet, while understanding that men and women have different approaches to financial matters, the bulk of the financial services industry still allows itself to operate under a blanket service model that is supposed to make everyone underneath it feel warm, cozy and secure, but does not do so. At least not in Bajalia’s estimation. “The financial industry is predominantly full of male

“

Woman’s Worth® | Providing Retirement Lifestyle Protection Planning® Services in NE Florida.

advisors speaking the financial language of a left brain,” she said. “I love men. Don’t get me wrong. But they do not speak the same financial language as women do. Women process what money means and does for them very, very differently than men do.” Women tend to view investing as a way to preserve their wealth as compared to the male view of investing as a way to increase their wealth – and even dominate against other men by having more. Men tend to be more willing to take risks, or at least risks that offer greater reward and failure than the ones women will take. “Women – especially widows – want to know how they can protect their lifestyle and not become a financial burden

on their children. They ask, ‘how do I manage to not end up penniless?’” Bajalia said. How today’s mature women was raised to view money is at the heart of the female perspective. It’s a twist on the old adage: who you are now is where you were when. Bajalia remembers believing as a teenager that her financial success was tied to finding the right guy and getting married. This was her experience even though she went to college, got a degree and began a career. Yet, still in her mind, her financial success was tied to her relationship with a man. That all changed when she was 26 years old and her father died unexpectedly putting her in the position of being the financial provider for her mother and her great aunt.

ADVISORS MAGAZINE - JAN 2018 p.23

She had a graduate degree in her chosen career field, but she did not understand the language of the financial industry. “Here I was: not married and providing the sole support for two family members,” she said with a knowing laugh. Three decades later when Bajalia decided to begin a second career in the financial services industry, that experience – and the recollection of the anxiety and confusion she felt trying to map out a strategy for herself, her mother and her great aunt – has provided not just a guide book, but also the emotional reminders that keep her work open to the specific needs of women. Bajalia knows a larger percentage of widows live on incomes below the nationally-delineated poverty line. It is a big part of why she has no minimum requirement for investable assets for clients. “I am going to help them,” she said. “As long as God keeps bringing them to my door, I am going to help them.” Of course, she is able to do so because other clients of her fee-based firm are in that high net worth category that so much of the financial services industry courts. Bajalia’s overall professional goal is to take the complexity out of the “mumbo jumbo” of the financial industry by educating her clients what that complexity means in terms of daily living, and planning

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not just for tomorrow, but for years in advance. She isn’t in a hurry with her clients. “If it takes two visits, or three visits or four or more visits to talk through their specific financial issues, then that is what I do,” she said “My relationships with clients cannot be merely transactional based. Each person absorbs the information differently and, thus, we walk the pace that the person sitting across the table from us needs to walk at.” Bajalia knows a bit about staying in it for the long haul. Her mother lived to age 93; her great aunt to 100 years of age. Fulfilling her commitment to their care by keeping them in her home to age in place until death is what she considers to be her greatest success in life. “I made that commitment to my mother and my great aunt and it is indeed the greatest accomplishment in my life and now the push that has made me go where I now am professionally serving women and helping them remain secure in their financial lives as they age,” Bajalia said. “I recognized at age 55 that there had to be more and better ways for women to be served.” Today, Bajalia is ten years into her sec-

ond career. Technically, she is a financial advisor, but she prefers the title of life advisor. She chuckles when discussing the fact that people ask why at age 66 she is still working so much. “They ask me, ‘why are you doing all this crazy stuff, why aren’t you enjoying your own retirement?’” she said. Oh, she is ... she is enjoying this latter half of her life because she believes what she is doing to educate women in their own financial language is making a difference and setting a new precedent for future generations. “There is still a very long way to go in this,” she said. “As long as there are women out there that need my help, I will keep on working with them as long as I possibly can.” Learn more about Jeannette Bajalia and Woman’s Worth® online at www.womans-worth.com

Insights from Wealth Management Authority,

PAUL BYRON HILL WHAT’S SO SPECIAL ABOUT MIDDLE-CLASS MILLIONAIRES?

he number of millionaires in America is on the rise according to recent research published in the “2017 Market Insights Report” published by the Spectrem Group. At the close of 2016, there were 1.6 million more millionaires than there were in 2007, which was just before the historic financial crisis that wreaked havoc on the country’s economy in the years that followed. Recently, Bloomberg also supported the rising trend and predicted that some 1,700 Americans will become millionaires each day during the coming years based on projections by the Boston Consulting Group.

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Within this prospering segment, there is a group of people often referenced as “middle-class millionaires,” and Paul Byron Hill – a nationally recognized wealth management consultant and co-author of the new book, “Retire Abundantly: The Proven Principles to Create a More Worry Free Retirement with Less” – has been guiding clients like these for nearly twenty years using his proprietary Professional Wealth Management Process™. In a recent interview with “Advisor’s Magazine,” Hill, who is also founder of Professional Financial

someone who has received an inheritance, or lottery winners, or who comes from a wealthy family. People who have always had something, or have it handed to them just by lucky circumstances see life differently. You can know the price of everything, but the value of nothing.” Continuing with his observations, Hill says that middle-class millionaires usually express surprising attitudes about money. For instance, while they are very involved in their businesses or professions, they are often interested in helping others because of where they came

Strategies, Inc., an independent investment advisory firm, shared his observations on middle-class millionaire personalities, describing their work ethic, and behavioral tendencies, and why he finds working with them so rewarding. “A middle-class millionaire is someone who accumulated their wealth on their own. Typically, they begin with very little or nothing, and through a business or their professional efforts, they – and often their spouse – have saved seven figures of income,” explained Hill. “I’m not referring to

from. Those with inherited or sudden wealth tend to be passive with their new wealth, or trust in luck, which exposes them to salesmen who take advantage of their ignorance about money. “Study after study shows that half of the people who acquire wealth suddenly have lost all the money within three years, regardless of the amount of money they receive. That won’t happen with a middleclass millionaire. They behave differently with wealth, and understand risk and money’s value because of all the hard work and sacrifices over the

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years,” Hill said, adding that they tend to be very oriented towards family, their community, and to worthy causes.“ “We target “middle class millionaires” or those on the way. These people are in the top two or three percent of Americans. They think differently than people simply earning a wage. An ethical moral character and a connection with wealth are closely related,” he said. “It’s not a passion, it’s a mission.” After graduation from the University of Rochester’s Simon Business School, which is consistently ranked as one of the best business schools in the world, Hill started his career in the financial services industry. It was there he learned some things he hadn’t expected. He learned that the financial industry created products to be sold. Salespeople who worked at major financial institutions were encouraged to promote products and services that served their company and themselves (think commissions); the customers’ needs and best interests weren’t the foremost priority. Hill also realized that there is an enormous lack of knowledge on the part of Americans about the difference between working with a brokerage firm representative and a registered investment advisory firm, and that the role of a fiduciary for making sound financial choices is a gray area. “A fiduciary is someone entrusted to act solely for the benefit of another. At the end of the day, it’s all about integrity. For Certified Financial PlannersTM, it’s keeping client interests first and foremost. Where a conflict of interest exists, you disclose it or discontinue the relationship, Hill explained, adding that being independent and paid only by fees puts the client and advisor on the same side of the table. “When I make a recommendation, my clients don’t think in the back of their minds, ‘How much is he making from this?’ Our fees encompass that, and allow for hourly engagement or referrals to our network of experts that we work closely with to help our clients

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in areas of accounting, insurance, tax, and law. And, none of them pay me kickbacks,” Hill said. Based in Rochester, New York, Professional Financial Strategies’ evidence-based approach to investment management integrates their exclusive Professional Wealth Management Process, a six phase multi-disciplinary, multi-dimensional process developed by Hill. “We have a model for retirement planning based on the science of capital markets. Disciplined clients enjoy both

the process we use and the outcomes they see,” he said. The firm’s consultative process determines what issues and concerns are causing worry, fear, and confusion about a client’s future, and give them a new experience with money. “We’ve helped so many people over the last 25 years. Some struggled with overwhelming obstacles. We enable clients to take control of their financial futures, manage life’s uncertainties, gain piece of mind, find financial freedom, and make an impact so they can finish life strong. It’s not a passion, it’s a mission,” said Hill. “What we do is help those willing to plan to have dignity throughout their lives. An independent advisor can do that where a company doesn’t tell him or her what to do, and have the strength of character to let some people walk away.” Hill tells the story of a couple from India who came to America with seven dollars to their name 40 years ago. They settled in Buffalo, New York to build their life. Today, they are middle-class millionaires worth eight figures. But they had many hard struggles along the way.

When Hill met the couple many years after establishing themselves in this country, they had recently lost over 70 percent of their wealth working with a brokerage firm. They were ready – more than ready – to learn about a different investment approach to get their financial future back on a positive path. “Our process brought them back, and they did their job by discipline and saving. Now the wife wants to give back, so she is putting together a foundation to give $2 million to a health and wellness organization in her native India. Those are the kind of people I love working for, and just helping them do that, I can participate in what they’re achieving,” said Hill. In addition to authoring his new book, Hill has been featured in national financial publications such as, “Money,” “Fortune,” “Forbes,” and “Bloomberg Business.” He holds several professional degrees and certifications including, Certified Financial Planner (CFP®), Chartered Financial Consultant (ChFC®), and Accredited Tax Advisor (ATA), and he has led Professional Financial Strategies to rank multiple times as

a “Top Wealth Manager” in Wealth Manager magazine. “When I was young, I used to think I had to show-off what I knew, but I think it was my own insecurity. As I get older, what I’ve learned is to try to make it as simple as possible,” said Hill, who avoids using financial jargon. “If people don’t understand what I’m talking about, they won’t trust me, and if they don’t trust me, they won’t take action.” For more information on Professional Financial Strategies, Inc. visit: professionalfinancial.com

Professional Financial Strategies, Inc. is an investment advisor registered with the Securities and Exchange Commission. No information herein is a substitute for personalized fiduciary financial advice, and readers are encouraged to consult with a retirement specialist for their situation.

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by joel kranc

simplifying the jargon

The Florida-based wealth management team puts education above all by matthew edward else to ensure individual strategies are given to each client In their prior lives, James and Amy Novakovich were like other money managers. They were acquiring more and more clients, gathering assets and creating what felt like “cookie cutter” strategies for wealth creation. However, they felt there was a disconnect between the asset manager and the client that just didn’t sit well with them. “We decided to go independent, so we have no bias towards any company and are not an employee of any company. We chose to manage every client individually and have no two clients that look alike,” says Amy Novakovich, CFP® CRPC® founder and partner of Nova Wealth Management, “and because there is no cookie cutter approach, each client is managed with various tax strategies, wealth strategies and financial planning that suit their individual needs.” This approach also represents the philosophy of Nova Wealth Management, where each client is managed as if they are the only client and no one is grouped in terms of risk – each person is managed with their own needs taken into account. This is, in part, where the education comes in. “Clients don’t even know what questions to ask or where to start, but the more we educate, the better the clients, and we understand what they truly need and want”. Nova Wealth operates in an interesting environment. Based in Bonita Springs, Florida, which boasts a high degree of retirees, the company has fierce competition within the financial advising space. “What we try to do is excel beyond the title of financial advisor,” notes Amy, adding that advising is just one of the services they provide along with the customized management, cash flow projections and more. “We are on a mission to create wealth without risking peoples’ futures. We are so passionate that we share this message through our podcast, weekly Facebook live, and courses we have created on how to

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invest --so that people at all income levels can benefit from what we do for our clients.” James Novakovich, also a partner and founder, says, “We care, and it comes across, that’s probably why we do so well. We are never ‘selling’ anything. The one thing we do well is we tell clients we’re going to meet on a quarterly basis and ‘you’re going to learn something every quarter so in a year from now you’re going to know exponentially more than what you know right now.’” James adds that although you cannot promise much in the investment industry, what you can promise is to educate and help families understand what they own and why they own it. As the population ages, Nova Wealth Management gets to know what clients are comfortable with in terms of their own retirement needs. At that point, they are able to, again, customize a strategy that can get ahead of the types of returns and risk strategies that are necessary. Both James and Amy will work with estate planning attorneys, accountants and insurance companies to help aid clients that are already near or in retirement. Amy says the lessons learned in times of crises such as the 2008 financial meltdown is applicable at all times. “Active management is important. Buying on the downturn is important, and if emotions can be managed, which is different for each individual, then together, we can create a strategy to, over the long term, come out where they want to be.” To learn more about Nova Wealth Management, visit: novawealthmanagement.com

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by frost bymartin amy armstrong

CUT THROUGH THE CLUTTER

T PERSONAL TOUCH establishes trust to build wealth The décor in the conference room at New England Private Wealth Advisors (NEPWA) is very personal in nature. There are photos featuring each of the families of the 17 people that work there. p.32 p.32 ADVISORS ADVISORSMAGAZINE MAGAZINE- -SEPT JAN 2017 2018

hat’s not the norm for a financial services office, but it is the choice thoughtfully selected by the folks running NEPWA based in Wellesley, Massachusetts. It represents a decision made with the intent to convey a message to clients that relationships – especially those closest, most intimate family relationships – come first, and that NEPWA’s goal is to best secure the financial futures of each client and his or her family. “At the end of the day, after all of the conversations about which investments are the most appropriate, the bottom line is always about

relationships and trust,” said Ira Rapaport, the firm’s CEO. That’s why clients won’t find investment mantras or stock market price indexes pandering for their attention. Instead, the focus at NEPWA intentionally highlights the family household and multigenerational planning that most clients make their priority. Women – whether they are clients, or the 10 of 17 employees currently working at NEPWA – are highly valued by Rapaport. He knows that more and more women are in control of wealth. It is estimated that by 2030, women will control at least twothirds of the wealth in America. Yet, according to statistics from the

prefer to work with their own gender on financial issues. Rapaport recognized this trend and took steps to address it, and now his firm is ahead of the industry curve. NEPWA has more female advisors and support staff than male. The firm is poised and ready to serve the needs of a growing trend indicating that out of every ten women, nine will at some point in their lives be the sole financial decision-maker for their household. Rapaport explained that women tend to live an average of seven years longer than their husbands or male partners. Yet, many women often live many years beyond that

Our team is talented, experienced and committed to keeping you informed.

federal Bureau of Labor, only 35 percent of all financial advisors in America are women. The industry lags way behind in terms of providing qualified female advisors to meet the growing demand of female investors – 55 percent of whom indicate they

since statistics show that one-third of married women are widowed before age 65, according to the Women’s Institute for Secure Retirement. Understanding and valuing the different manner in which women view finances is something

OUR MISSION Ira Rapaport, CEO New England Private Wealth Advisors NEPWA provides highly customized and integrated investment advisory/ wealth planning services, while striving to deliver exceptional client care. Our fiduciary responsibility is to continually educate, provide clarity and transparency, and always act with the utmost integrity. As an independent firm, we are proud to earn our clients’ trust and friendship through objectivity, dedication and competence.

Rapaport says his firm specializes in. “Family is important for everyone, but especially for women because they tend to focus on how they can help their children and grandchildren,” he said. “This is especially true after they face the loss of their spouse.” Financial education is one way in which NEPWA assists all clients, regardless of gender. Rapaport considers education as something that goes hand-in-hand with his fiduciary duty as a fee-only advisor committed to, and legally required to, put the client’s needs ahead of his own. “We owe our clients our undivided loyalty,” he said. It is a big part of what motivates NEPWA to further educate clients. Rapaport wants clients to understand what the firm does on the client’s behalf, as compared to what type of transactions occur at brokerage firms or wire houses. That understanding is the most important thing he believes needs to change within the financial services industry. Moves by the federal Department of Labor to put all financial advisors under a blanket definition of what a fiduciary is and does are concerning because consumers may not fully appreciate the vast difference ADVISORS MAGAZINE - JAN 2018 p.33

between the work of a fee-only advisor compared to someone working on a commission basis to sell a product, Rapaport said. “The universe of financial advisors is very fragmented,” Rapaport said. “The fee-only advisors, in my opinion, are the only ones offering fiduciary care.” A look at how Rapaport and his team conduct client meetings, quickly reveals that his process puts the needs of his clients – emotional as well as financial – first. Client meetings are generally scheduled for one and a half hours –

two of the nation’s largest firms. That experience serves him well today combined with having earned his CPA designation and master’s degree in taxation. Rapaport believes his background lends itself to supporting his current consultative approach with an emphasis on creating fully customized and client-specific tailored financial solutions. “We take a long-term strategic approach when building client portfolios. Each client is unique when it comes to goals, objectives, time horizon, tax considerations,

firm at a glance •

SEC Registered Investment Advisor Fee-Only

•

Professional Certifications include: CFP® Professionals, CIMA®, CFA®, AIF®, CPA/PFS, ChFC®

• •

•

Utilize a Fiduciary Process

•

Broad Based Planning Services include Income Tax, Estate, College, Retirement, Insurance, Charitable Giving and Executive Compensation

Assets Under Management: Approximately $1.7 Billion (as of 9/30/17)

•

Open Architecture and Customized Portfolios

Serving high-net-worth relationships and institutions throughout the country

•

Incorporate Active and Passive Managers / Funds as well as Alternative Strategies

and about 30 minutes of that is spent discussing investment options and strategies. The other hour is spent talking about what is happening in the client’s life and in the life of family members. Has there been a shift in priorities in terms of what their assets should accomplish for the dreams and goals of the family? Each client meeting includes a lengthy discussion agenda that covers all potential financial planning needs for that client. This is the time used to further develop the personal relationship Rapaport and his team have with clients. “That discussion time has to be lengthy so we can appropriately propose potential suggestions and strategies to meet the goals outlined in the meeting,” he said. Rapaport, who launched NEPWA in 2005, began his financial service career in the audit and tax public accounting industry with stints at p.34

our distinctive approach

ADVISORS MAGAZINE - JAN 2018

liquidity constraints, and other planning opportunities. We, therefore, create custom portfolios utilizing both active and passive investment strategies. Many of our clients have acquired significant wealth, so we have found it important to continuously focus on risk-adjusted returns and preservation of wealth,” Rapaport explained, adding that ETFs are an important tool within client portfolios, especially within taxable accounts. “We believe ETFs have several attractive attributes, including tax-efficiency, transparency, liquidity, and low expense ratios.” “With a strategic approach that limits high turnover and no product sales with commissions, we have built a talented team with advanced degrees and industry designations that puts the needs of our clients first,” Rapaport said.

That, again, is why Rapaport sees NEPWA as the firm poised to take the lead in terms of meeting the specialized needs of all clients in the financial services marketplace. “Many of our clients are simply more focused on personal relationships and on building trust in those relationships. They generally don’t maintain strict lines of separation between business and personal. Their mentality is not ‘how are my investments doing against the benchmark,’ but instead, they want to know, ‘are my investments meeting my goal of providing security for my family.’” Those are the questions being answered on a daily basis at NEPWA, Rapaport said. “Our team does an outstanding job providing each client with a unique customized, detail-oriented approach,” Rapaport said. “We need to communicate this every day to all of our clients because it develops authentic trust, and trust is the key to our relationships.” Learn more about Ira Rapaport and New England Private Wealth Advisors online at nepwealth.com

Fiduciary | Integrated | Objective Flexible | Personalized | Transparent

36 Washington Street Suite 280 Wellesley , MA 02481 P: (781) 416‐1700 F: (781) 416‐1718 www.nepwealth.com

ADVISORS MAGAZINE - JAN p.35

IF YOU ARE LEARNING.

THERE ARE NO “BAD” QUESTIONS by amy m. armstrong

When it comes to understanding one’s finances, there is no such thing as a bad question. Right?

ell ... maybe not. It could become a bad question if it is one that a person brings to a meeting with a professional advisor, but doesn’t ask it, and then leaves the meeting with the question still in tow and even worse, unanswered. So believes Jon McCardle, president of Summit Financial Group of Indiana based in Lafayette, Indiana. With more than 60 percent of his clientele being people working in the education industry – whether at the high school or university level – McCardle views his job as their financial advisor as more than just a numeric transaction. The relationship, in his estimate, is about learning – him learning what his clients’ goals, needs and wants are – and his clients learning from McCardle about what options and strategies can provide the best possible outcome toward fulfilling those goals.

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He is all about education, that is, the financial education of his clients. Yet he knows that even his clients – the folks that do the teaching – often feel overwhelmed by financial issues, but also do not wish to be embarrassed by a lack of knowledge. “I always start our meeting by asking them, ‘do you have a question?’ and I check the pulse of what they are understanding throughout the meeting by asking again if they need something further clarified,” McCardle said of his approach to keeping dialogue between himself and clients focused on their continuing education. “Then at the end of every meeting, I ask them once again, ‘Do you have any other questions. Does this make sense to you? Is there anything you do not understand?’” McCardle knows that clients won’t comprehend all the ins and outs of the financial world, but that isn’t necessarily his top

ADVISORS MAGAZINE - JAN 2018

priority as their advisor. He seeks to build a relationship in which he serves as an accountability partner to the client; a relationship in which the full definition of a fiduciary – doing what is in the client’s best interest, no matter what – is the sum of what occurs. “Early on I was taught a lesson by my father: Take care of your customer first and everything else will take care of itself,” McCardle said. “I have put that as the core of our philosophy. That has been the culture we have built from the beginning.” He knows his clients – educators themselves – are very intelligent people. They will quickly catch on to the concepts he presents, and be able to make educated decisions. Yet, they will need assistance muddling through the hundreds of pages of investment account prospectuses to distill down the necessary information. “There is the good, the bad and the ugly when it comes to all the fine print in these prospectuses,” McCardle said, noting that the bulk of the documents outlining the fees, procedures and rules for 401K and other investment accounts are written by lawyers for other lawyers for legal reasons and not necessarily to help clients. “We spend that extra time – a fair amount of time – with our clients just walking through these investments to help them get a precise understanding of what they are signing up for.” One particular area that McCardle devotes that extra time to is making sure that clients understand the fees associated with their investment options. He doesn’t believe simply laying out a list of fees in a vacuum. This, he said, is often the case when clients are presented investment options through their workplace. The client may have as many as 35 different investment options – each with varying fees – presented but no context by which to gauge what is in his or her best interest. “This exposes the client to what all of the fees are but it also does it in a manner that is incredibly unfair to the client because they have no power to change or alter the choices,” McCardle said. “Just having it disclosed to them that it will cost say $5 to participate is no way for a client to determine if that is appropriate for them.” He sees the financial services industry as having made progress in the appropriateness of fee disclosure and education, but he also believes much more work is in order. “Access and simplicity. Those are the two things this industry must work on,” McCardle said. “We have to offer

ADVISORS MAGAZINE - JAN 2018 p.39

access to those who want financial help – not just the wealthy – and we, as advisors, have to improve the way we communicate and translate very complicated information so that we make it much simpler for our clients to understand.” McCardle views financial education as an effort that ought to begin within the home and then be supported by schooling – even starting at the youngest grades. But he also knows that education without a sincere interest on the part of the individual being educated has no lasting value. He points to the endless stream of information regarding health and obesity and even the “gym craze.” People purchase memberships for clubs they may not faithfully attend, and the American population still struggles with increasing rates of diabetes, high blood pressure and heart failure. Perhaps the recent surge in online games and tools – highly popular with younger generations – will help spark increased interest in financial literacy. McCardle sees evidence that “financial literacy” is an often used buzzword in his industry, yet the sheer volume of available information can be burdensome and overwhelming. Thus, people are left feeling frustrated instead of feeling more emotionally secure about their finances. “My attitude is the more you can have good baselines of financial education, the better off you are going to be,” McCardle said. But he has concerns that online resources presented without any context will provide that baseline. “I just have my doubts about the whole concept of turning on the easy button. People have to take time to be educated. It comes back to the fact that people simply have to have some interest in how their money works for them.” Knowing and noting that education is also a time-consuming process for him, McCardle said he makes a point of surrounding himself with the very best mentors possible. And he makes a point of listening to and following through with the advice they share. “I have never considered myself to be the smartest guy in the room,” he said. “But one thing I can control is my attitude and my actions. I have learned that it serves me well to try to employ a new strategy or philosophy or approach that someone smarter than me has experienced success in p.40

ADVISORS MAGAZINE - JAN 2018

using.” McCardle has come a long way since Sept. 11, 2001, when he was hosting his first face-to-face meeting with a client and seeing on TV the second plane was hitting one of the World Trade Towers. “That was quite a beginning for my career,” he noted in a somber tone. His career had several stops at other financial services companies before moving back to the Midwest in 2002. He was settled back in Lafayette, Indiana, managing executive planners for the Summit Financial Group of Ohio, and in 2008 he opted to purchase the firm. Today, McCardle is licensed in 12 states, and has received the 5-Star

Wealth Manager Award in 2010, and each year from 2012 through 2016, and he was featured in Forbes Magazine as one of the top seven financial leaders in Indiana. While expanding Summit Financial Group of Indiana is certainly a priority, McCardle is also focused on mentoring his own children, as well as giving back to his community by taking an active role in its successful development. He believes, “To whom much is given, much is required.” Learn more about Jon McCardle and Summit Financial Group online at summitfinancialgroupofindiana.com

Securities offered through Regulus Advisors, llc. member finra/sipc. Investment advisory services offered through Regal Investment Advisors, llc., an SEC registered investment advisor. Regulus Advisors and Regal Investment Advisors are affiliated entities. Summit Retirement Advisors, llc and Summit financial group of Indiana are affiliated entities. Summit Aetirement Advisors, llc and Summit financial group of Indiana are independent of regulus advisors and regal investment advisors.

by judy scinta

CLIENT FOCUS and

“

Innovation leads firm’s 25-year growth

Last year, BARR Financial Services, LLC marked its 25th anniversary by celebrating with clients, staff and family. At the event, Kirk Barr Young, founder and president of the firm, expressed his gratitude to the people that he calls the

“

BARR Financial Family.

He told them the concept of family drives all client relationships, and that he measures his firm’s success on the quality of those relationships.

here’s a palpable vibe at BARR Financial Services that serves as the fuel for the firm’s growth and speaks to the longevity of its client relationships – some of which extend across family generations. “I think the success of the firm has been built around our approach, which is about helping people and being client-

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OVERVIEW Kirk Barr Young President & Founder Kirk’s coaching approach to Life Planning assists families in creating, protecting and transferring wealth in accordance with their Family Mission Statement. As a graduate of Florida State University with a degree in Finance and a minor in Accounting, Kirk realized continuing education would be an on-going endeavor in his goal of becoming a highly skilled financial professional. That mindset serves him well today as he continues to grow his impressive list of designations in the financial services industry.

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focused versus product-focused,” said Kirk, who began his career as a stockbroker, but left to start his own Registered Investment Advisory firm after his first child was born. “We separate advice from product acquisition or sales. What we found is that a lot of people are looking for help – you can get products anywhere.” Kirk emphasizes that, as a Registered Investment Advisor, his fiduciary duty is to always work in the best interests of the firm’s clients; he doesn’t receive compensation or incentive from any organization. “That’s the true definition of fiduciary, in my book. All my compensation is from my clients – who are the people I work for. So, if they need a product, my job is to find the best program out there to meet their particular needs.” While there is current legislation pending to regulate fiduciary responsibility, Kirk suggests

ADVISORS MAGAZINE - JAN 2018

that it’s not enough. He would like to see a universal ruling by the federal government that all financial professionals – no matter who they work with or work for – must be transparent with clients. But, he says, many advisors don’t disclose the benefits they receive from the provider of the products they represent. “It doesn’t mean that you can’t do a good job for your clients if you work for some of those organizations, that’s not what I’m saying. What I’m saying is you’re not being square with your client,” said Kirk, adding that the proposed legislation from the Department of Labor, initiated during the Obama administration and rewritten by the current Trump administration, leaves too many gray areas. When choosing a financial advisor, Kirk has advice for the search. First, the advisor should have a detailed, yet easy-to-explain planning process. Second, the client should feel that the advisor is focused on him or her, and that the dialogue and interaction feel comfortable. Finally, the advisor should offer full disclosure of all compensation in writing. Because BARR Financial does offer an in-depth advisory solution, Kirk looks for full commitment from prospective clients; for married couples, he requires both spouses attend all meetings. “We offer a fee-based comprehensive financial planning process. It’s like taking a financial physical, where the results of the tests guide us to areas of concern and solutions for them,” he explained, adding that it’s a structured and layered approach. Using a collaborative coaching and educational process, Kirk acts as a guide through discussions – and oftentimes serious conversations – about their financial future. “We help couples open up the financial communication with each other. We’re here to make sure you accomplish your goals while you’re here, and then transfer those successes to those you love in the most effective way possible,” said Kirk, describing the firm’s mantra. Cash management and estate planning

are two areas that people need assistance with, and that begins with educating clients about the available options. In order to best inform others, Kirk knew that he had to be at the top of his own game. That’s why he pushed himself over the years to achieve seven of the leading designations in the financial industry, including CERTIFIED FINANCIAL PLANNER™ (CFP®), Chartered Financial Consultant (ChFC®), and Registered Financial Consultant® (RFC®). Not only does this extensive expertise form the foundation of BARR Financial Services’ approach to money management and customized solutions, it has been central to Kirk’s development of an innovative investment model. “After the recession, I spent an enormous amount of time developing a new investment strategy called ‘duration investing’ that I think is on the forefront of managing money,” Kirk explained. The approach focuses on customized portfolios for clients already in retirement facing an uncertain and sometimes volatile financial market. “It’s a duration-based modular approach that allows me to measure how things are going and customize the position for my clients. We’re in a new world. We have to be very adaptive and position our clients to benefit no matter what occurs. Clients leave our meetings feeling very comfortable and confident in how we have them positioned,” said Kirk. Achieving seven designations, managing portfolios through volatile markets, designing innovative new investment models – all in a day’s work for Kirk. But, connecting with millennials – now there’s a head-scratcher! Millennials are one of the largest generations in history, and reportedly now outnumber

baby boomers. Many could use financial guidance pertaining to cash management and debt, mainly student loans. But, this generation is a challenging one to reach, as Kirk concedes. “They don’t trust advisors like their parents do, and they think they can get the answers to everything on their phones. I’m really concerned about that, so I hired a millennial because I want to know how they think and how I can better serve them,” said Kirk. “When you take education and experience and put them together, that’s what true knowledge is. People need a coach to guide them and hold them accountable. You can’t get that from an app. That’s why all the websites that tried to commoditize what we do have turned into product websites. You can’t do comprehensive financial planning through their programs; they’re not advisors, they’re salespeople,” he said. To fully serve its clients, BARR Financial Services reaches out to their children, sending important messages about comprehensive financial planning and the benefits of sitting down with an advisor. There is no account minimum because that kind of requirement doesn’t fit the family

approach, mantra and philosophy of the firm. “The number-one comment I hear from people after they go through our process is, ‘If I’d only met you 20 years ago,’’’ Kirk said. “I know when they go through it, they’re going to be extremely happy with the results and be glad they did – I’ve never had anybody go through our process and not find significant value in the outcome.” He added: “I don’t want to give away my trade secret, but if you help people, it’s amazing what good things happen. I’ve been very blessed in many different ways just by helping people.” For more information on BARR Financial Services, LLC, visit: BARRLLC.com

Securities offered through Triad Advisors, LLC, Member FINRA/SIPC

ADVISORS MAGAZINE - JAN 2018 p.45

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by jane meggitt

FINANCIAL EDUCATION, ONE CLIENT AT A TIME Behavior more telling than financial Literacy. An educated client is the best client. That’s according to Philip Smelser, a financial advisor and president of Financial Education and Achievement.

melser conducts financial education classes along with offering financial advice. He finds that an educated, informed client is generally more satisfied with the advisory process. “I’m fully aware those that do show up are the most motivated people. Too many people are overwhelmed by life and overwhelmed by the topic,” said Smelser. The Mass Affluent and Retirement Smelser started out going to night school while holding a full-time job. A friend in the insurance business got him started selling medical policies, and he quit night school to embark on a long, self- guided apprenticeship. He opened his own practice in 2004.

Smelser calls his typical clients the “mass affluent,” everyday middle-and-uppermiddle class people who worked hard all their lives, looking for someone they trust to manage their nest eggs. He meets most clients when they are about five years from retirement, and he relies “100 percent” on a retirement planning course he wrote to provide his clients with a common basis of knowledge. “The client and I can have a conversation at much higher level after taking the class,” he says. If a client comes in on referral, it’s more work as he must give a mini-workshop. So what advice does Smelser give the typical client? Besides recommending the basics – reducing tax flow, a diversified investment strategy, and having

emergency funds set aside – he knows that cash flow solves all problems. “When the inevitable downturn occurs, you can show the client they are still getting paid and shares are reinvested. For 98 percent of people, that calms them down and keeps them grounded. You don’t want to just say, ‘don’t worry, it will come back’ to a client who just saw a loss of 20 percent of account value,” he said. Financial Education and Achievement also dissuades people from taking early Social Security, encouraging them to wait until they get to full retirement age, even if they must dip into an IRA beforehand. “No advisor can offer a

government program that will pay you for life,” Smelser said. Annuities have vastly improved through the years. Smelser calls them viable and is comfortable using the “g word” – guaranteed. In the past, he personally bailed out many clients who got put into “almost criminal” annuity products. Financial Literacy vs. Behavior Although financial literacy programs are beneficial, they don’t really change people’s behavior, in Smelser’s view. However, what does have an impact is personality type. He notes that his wife and daughter “came out of the womb” geared toward savings, but that’s not true of everyone. The increasing availability of online tools will help with financial literacy, but before they were available, the same people seeking this information would head to the library. In short, there’s no substitute for a human being sitting across the desk that really wants to help clients. Giving Back Asked about his greatest success, Smelser quickly replies that it’s teaching his classes. “Part of the fee per class $39 per household – is that whether you become a client or not, I will help you all I can in that hour. I feel proud I helped a lot of people who did not become clients. It’s part of giving back.” To learn more about Financial Education and Achievement, visit: financialea.net

ADVISORS MAGAZINE - JAN 2018 p.47

by jude scinta

WEALTH MANAGER FOR THE MILLIONAIRE NEXT DOOR From Child Actor to Financial Advisor Mitch Silberman is one of those rare individuals who made a lot of money before hitting puberty. He was a child actor, working all the time in TV and movies and doing voiceovers. When he was older, he used that money to pay for college, travel, and buy used cars. Then the money was gone. Later he wondered if he would have been wealthy had his parents hired a financial advisor to manage his funds.

ast forward a few decades, and he’s now President and CEO of his firm, Silberman Wealth Strategies, Inc., based in Westlake Village, California.

What Keeps You Up At Night? Silberman says his sole focus is to help his clients make intelligent choices with their money and to avoid common, costly mistakes. His typical client is the millionaire next door and he aspires to help them achieve all that is most important to them. These are people with $2 million or more who have worked their entire lifetime, lived below their means, socked their money away, and don’t want to lose it. “I relish being their safe money guy,” he says. These clients want the help of a financial advisor to help their families, alma maters, and favorite charities, and are willing to pay for advice. His greatest gratification comes from clients who can travel the world or pursue their true passions because they feel confident his firm is taking care of their financial future. He points out there is no such thing as a financial planning emergency, but there are emergencies due to lack of financial planning. Silberman’s approach is very personalized. The initial meeting is complimentary and all about the client – p.48

their goals, dreams, what keeps them up at night, and what they want as a legacy. He does his best to put clients at ease, adding he strives to provide them with financial well-being. “If you’re a dolt, you’re a bigger dolt with money. If you’re nice, you’re nicer with money,” he says. Silberman adds that money is a sensitive issue. People may go on The Oprah Winfrey Show and talk about their sex lives, but ask the same people how much money they have, and it’s private. He understands the pivotal role he plays in his clients’ lives. “We allow them to delegate to us their financial worries and pains, so they can live their lives. They can’t delegate taking care of health, family, friends or faith. They can delegate financial planning for their lives, so they can live the life they dreamed of,” he says. Silberman limits his clientele to about 70, since he wants to serve them appropriately and have the client enjoy the journey along the way. He uses a feebased approach, noting in commissiondriven transactions, human nature tends to take over. While online financial advisory programs are growing, Silberman says some people want to deal with a live person, privately. “If you’re out in the wilderness, do you want someone to hand you a compass and say you are on your own? Or do you want someone to

ADVISORS MAGAZINE - JAN 2018

say, ‘Take my hand and I’ll help guide you?’” he says. A Gift to Your Future Self “My kids are teenagers. I always tell them to save until it hurts,” says Silberman. One of his children asked exactly what that means, and Silberman gave him this example: If you earn $1,000 per month, live off $700 and save $300. “No one ever said they regret money they save – save early and often. It’s a gift you are giving to your future self. The earlier we can get people to pay themselves first, the earlier we can build wealth.” He advises keeping two to six months’ worth of living expenses in cash reserves, not invested, for short-term emergencies – or two years’ of living expenses, if that’s what the client wants. The rest is invested for growth-oriented, long-term retirement planning. Some mid-term, less volatile investments are also recommended, which the client can tap into if they must.

L-R Allen Silberman and Mitch Silberman

“It’s simple, but not easy. You must have the discipline and patience to let the market grow and the money do what you want it to do,” says Silberman. “Planning and investment is a gift to yourself. You need to have your money outlast you, not the other way around.” Risk Averse Millennials While most of his clients are Baby Boomers, the passage of time means more millennials are coming in for financial advice. They differ from their parents’ generation in that they’re tech natives. “They’re more risk averse than they should be,” he says, noting that they saw 2008 and may have seen parents or relatives lose homes or jobs. “They’re scarred by it and don’t want it happening to them. They tend to be more conservative than they should be for long-term, successful investing,” according to Silberman. With these clients, it again comes down to education. He lets them know that markets want

to go up, and they want money in those markets. “Whether you are searching online, streaming, or using a mobile device, you want to own shares in the great companies of America and the world – you already support them. They’re very receptive to this kind of education and wish they were taught it in school. They will search online and migrate towards someone who can guide them,” he says. The Crisis of Not Saving for the Future More high schools are implementing financial curriculums, and Silberman sees this type of education as imperative. “People are not saving for the future. In the old days, they had pensions and Social Security,” he says. “Pensions are going away; Social Security is potentially in jeopardy – so that leaves savings. The secret of the wealthy is that they pay themselves first. The not-so-secret of the not wealthy is that they spend first and save whatever is left over – it could be zero. You have to pay yourself first,” he says. If Silberman had his way, financial education would be formalized in public school from middle school on up.

personnel. “What if I am promising something that is too good to be true? I have nothing to hide, and it’s another way to protect the consumer,” he says. Silberman Wealth Strategies, Inc. has social media, websites, and an online digital wealth platform where clients can access everything in a single place, from 401(k) and mortgage balances to reward miles, along with their investments. “Tech is not going away it’s only getting better. Clients want access to these things at their fingertips, and they should,” according to Silberman. The Trust Factor Silberman jokes that there are more hugs than handshakes in his practice. “People crave to work with someone who they can trust and know is looking out for their best interests and doing what is best for them,” he says.

Tech and Financial Planning Silberman tells his staff and clients that his emails are read by compliance ADVISORS MAGAZINE - JAN 2018 p.49

by amy armstrong

educating youth

Key to Changing American Spending Habits Too many Americans have troublesome spending habits. They use credit cards to pay for basic daily necessities, and they aren’t saving enough to create a retirement nest egg. That’s not exactly a news flash, but here are some numbers to put the situation in perspective:

American household debt totaled $12.84 trillion in the second quarter of 2017 – up $552 billion from the previous year, and 14 percent higher than it was during the Great Recession of 2007 to 2009, a period that most adult Americans now look back on as “the worst economic period” in their lifetimes. How can this trend of increasing indebtedness be reversed? How about some “Budget 101” for American teenagers. How about if parents gave teens a budget for going to the prom – and then didn’t let them exceed that dollar figure? How about if kids played financial games online? Sound too simplistic? Maybe not. One financial advisor from Washington State thinks these ideas are part of the solution that may change the spending habits of the next generation of Americans – and in doing so, perhaps loosen the debt stranglehold the country finds itself in. “The millennials and kids today like that approach,” William Morrissey, president of Sound Financial Planning,

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Inc., said of the increasing presence of gamification within financial education. “It gets them engaged. They like it. And if they can learn something from that experience, then I am all for it.” His firm has two offices – one in Mount Vernon, Washington, an agricultural and bedroom community to the greater Seattle area in Western Washington – and one in Friday Harbor on San Juan Island, the second largest of the series of islands hugging the state’s shoreline and a highly visited tourist destination with a robust year-round population of retirees. The prom budget scenario is one Morrissey believes would resonate with today’s teens. “It is relevant to their lives,” he said. “They would gain an understanding of

Prouty’s been with Morrissey for nearly two decades and became a partner a couple years ago. She leads the firm’s pro bono financial education work at Mount Vernon High School

Harmonizing Your Money With Your Life. the value of money through that type of experience.” Morrissey believes financial education from a young age – as early as elementary school will cover a lot of territory in changing the financial attitudes of the next generation. So does his partner, Tammera Prouty CFP®.

where she works in conjunction with the local affiliate of the national Junior Achievement program. The curriculum she works through with the students includes topics such as budgeting, career preparation, credit scores – and what they mean for financial security and potential employment – investing, personal finance basics and

saving. “I see the students involved in this training as being ahead of the game, and I really appreciate that the high school now offers a few different finance classes for its students,” Prouty said. The reactions students have toward her presence there and the presentations she makes to them make her effort feel worthwhile. “It really is great to see how much the students like this topic. They always have great questions and sometimes they even ask questions that stump me. They are already becoming highly knowledgeable in financial issues they will face as adults,” she said. Prouty also said that many of the current students were old enough to understand the personal implications of the Great Recession of 2007 to 2009. They have told her they watched as family members lost jobs or homes, and they want to find practical ways to avoid that same fate.

Giving back to the community is also a value Morrissey demonstrates. His first wife died from breast cancer in 1991 when his sons were ages 10 and three. He is assisting the Foundation for Financial Planning with the development of volunteer training for financial planners who will assist those impacted by cancer He is also a past president of the United Way in San Juan County helping more than 5,000 families annually with financial needs, and he is a member of the Nazrudin Project – a group of financial advisors that meet to discuss the emotional and psychological issues surrounding financial matters to determine ways to better help their clients. While the bulk of their clients are people with a half million dollars plus of investable assets, Sound Financial Planning offers its services at no charge – for a predetermined period of time – to the children and grandchildren of those established clients to get them started in the discipline of sound investment and regular savings. After a long career in commercial and residential real estate in the Seattle

area, Morrissey started Sound Financial Planning in 1982 with the principle that financial planning ought to be much more than just investment selection and a transactional relationship. “It is a waste of time to talk about what investment options to use until we develop a comprehensive plan that addresses all financial areas of their lives,” he said. “Our firm’s approach focuses on increasing our clients sense of financial well being and life satisfaction. We won’t normally take clients that just want us to manage their money. We believe money management is just a part of good financial planning.” In addition to being a Certified Financial Planner, Morrissey is an Accredited Estate Planner, a member of The National Association of Personal Financial Advisors which is the country’s leading professional association of fee-only financial advisors, a member and past national board member of the Financial Planning Association, and has been published in “Money Magazine,” as well as several newspapers in Western Washington. He has hosted financial planning programs for radio and television. Learn more about William Morrissey, Tammera Prouty and Sound Financial Planning, Inc., online at soundfinancialplanning.net

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by jane meggitt

PUTTING EDUCATION AND STRATEGY FIRST

A Holistic and Comprehensive Approach JOHN CASERTA, ChFC Managing Director (203) 272-9111 (203) 272-8894 jcaserta@caserta-dejongh.com

For John Caserta, the managing director of Caserta & de Jongh, LLC, based in Cheshire, Connecticut, financial planning must involve people sitting around a table, having those critical conversations. Always interested in personal finance, Caserta had family friends in the industry, and liked the entrepreneurial aspect and helping clients with complex topics.

e started out at Mass Mutual Financial and learned about the industry. Caserta’s own practice was evolving as more holistic and comprehensive. His vision for his company’s financial planning is akin to a “one-stop shop” for all a client’s needs. While his firm has no minimum, Caserta says the type of services provided makes sense for people with a net worth of at least $1 million. Clients have reached a point where their finances have grown beyond “a few mutual funds and a 401k,” becoming more complex. His approach starts with educating clients about all aspects of their finances, and includes financial strategies, portfolios, retirement and non-retirement investments and the rules associated with different accounts. “We provide clients with a general understanding of how all these things really work together – what they are doing correctly and what may not be in line with what they are trying to accomplish,” Caserta says. “The more time and effort you take into gathering information – budget, cash flow, any planning you’ve done – the more you’ll get out of the experience. We emphasize educating people regarding the different aspects of personal finance, including investment portfolios, insurance, legal documents, tax returns and tax strategies. We take time to talk about different aspects of those vehicles.”

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Robo-Advisors vs. Financial Planners Caserta says that robo-advisors serve a niche for those getting started who don’t have a lot of money to invest. While it introduces financial planning, the shortcoming with robo-advisors is the emphasis on fees. “It’s important, but when fees are driving the investment situation, it can get problematic,” he says, also pointing out that a robo-advisor will not sit down and go through tax returns, or speak with the client and their attorney about legal documents and tax strategies. “Once you get into more sophisticated planning, you need people sitting around a table having a conversation.” Additionally, Caserta says that anyone considering hiring a financial planner should know their compensation structure. “I address that first and foremost,” he says. Other important questions to have answered at an initial meeting include what the planner is expected to do for the client, and the exact fees

and services. He recommends clients use tools like Brokercheck beforehand, so they know the planner has a clean record. Advocate for Clients Rather than defining successes or failures, Caserta says there have been lessons along the way helping Caserta & De Jongh, LLC evolve. “Our success comes from the approach we’ve developed – making sure the client knows why and what they are doing and how it fits into bigger picture, really being an advocate for clients,” he says, adding that the challenge is making sure “the right people are sitting in the right seats. Have we learned lessons from having the wrong people in the wrong seats? Absolutely. We must identify those early, know it isn’t a fit, and what must change.” For more information about Caserta & De Jongh, LLC, visit: caserta-dejongh.com

Registered Representatives of and Securities and Investment Advisory Services offered through Hornor, Townsend & Kent, Inc. (HTK) Registered Investment Advisor, Member FINRA/SIPC. 210 Park Avenue Suite101, Florham Park, NJ 07932 (973) 538-9100; Caserta & de Jongh, llc is independent of HTK, Inc. HTK does not provide legal and tax advice. Always consult a qualified tax advisor regarding your personal tax situation and a qualified legal professional for your personal estate planning situation.

Preserve your wealth with CitiTrust’s knowledge and

Financial Management Solutions www.cititrust.biz

by amy armstrong

LAWS OF

PHYSICS SPUR

ECONOMIC AND FINANCIAL GROWTH

As the Trump administration continues to make good on the president’s campaign promise to roll back regulations across a broad scope of industries, there is at least one financial advisor from the Midwest whose boisterous sideline cheering is nearly spilling onto the field of play.

e is unrestrained in his viewpoint that deregulation will help the American economy. It’s because F. Patrick Cunnane, managing principal of Masters Consulting Group, which specializes in creating and managing employer-based retirement plans out of its Chardon, Ohio, offices, believes that deregulation removes yet another barrier to the positive economic growth his corporate manufacturing clients need to grow their businesses and continue providing good wage and benefit-paying jobs to their employees. “Regulation is a counter force that works against the laws of physics as applied to finance,” Cunnane said. “Reduce the amount of regulation and the process that produce positive impacts on finance such as mass, distance and time when energy is applied to them will inevitably create more wealth.” Hang in here with him for a just a moment: His tying of economics to the laws of physics is indeed a new and perhaps even revolutionary concept, but its germination came from Cunnane observing the production work of his clients – agricultural companies, parts producers and steel manufacturers to name a few – and noting the things that caused declines in their economic output and productivity. These “negative forces” include, but are not limited to, government debt, taxes, unemployment rates, trade deficits, excessive government regulation and the natural counter force due to friction. Cunnane began to ponder the idea of applying the

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F. Patrick Cunnane, MBA, CIMA®, AIFA® Managing Principal 440.285.7777 f.patrick.cunnane@mcglpl.com

laws of physics to economic models. And while he had worked with numbers all his life, he sought help from math tutors with expertise in the mathematical models used in physics. He searched for minds that could take his theories and develop equations to prove on paper what he suspected from his observations. “For seven years, I had a weekly math tutoring session and learned more and more and more,” said Cunnane. “More

models, more thoughts of just how true it is that physics does govern economics kept coming alive for me.” Hence, his proprietary statement, the “Physics to Economics Model,” expressed in mathematical notion in his firm’s official logo as, “E= 1/2e(Tr)2” now influences his every decision as he advises clients. For Cunnane – and ultimately his clients benefitting from his application of his innovative economic approach – the

E 1/2e(Tr) =

words, “mass, distance and time,” usually found with lengthy explanations in university science text books, have just as bold a heading in his economic glossary. Mass – the actual material that resists force of something or the amount of area it takes up in scientific terms – is translated in economic terms to represent the physical object used in a specific industry such as a lump of coal to create electricity, or steel to build a car, or a cow to milk to produce cheese or yogurt. It takes energy to cause objects to change position or move to enable production. Distance – again the scientific term for how far something travels – becomes the economic idea of how far a producer has to ship raw materials to combine together to make a product, as well as how far that product then has to travel to get to its purchasers. This is what occurs in a transaction; things go from A to B as distance. Time – science’s definition of how long it takes – is similarly applied to economics in measuring the amount of space between final production and consumer purchase. Transactions happen in time. The big “E” in Cunnane’s mathematical notation equals energy or what does it cost to cause the mass, distance, and time to change behavior to get to the end product: an airplane part, a ball bearing or an ice cream cone in the hands of a toddler. It is the use of this energy concept that Cunnane believes impacts financial success. “A change in energy is what creates the amount of wealth someone has. Increased energy puts more money; more wealth in the bank and decreased energy detracts from wealth,” he explains. Cunnane recognizes he is on the bleeding edge of this concept’s acceptance. In economic activity something must change. From iron to car, from tree to house. In the laws of physics only energy can cause a change in the behavior of an object. He understands how Samuel Morse, the inventor of the single-wire telegraph, must have felt just before the U.S. Civil War when he invented the machine that ADVISORS MAGAZINE - JAN 2018 p.55

Client Needs Always Come First With fluctuating markets and ever-changing goals, maintaining an appropriate personal or corporate retirement plan can be a daunting task. At Masters Consulting Group, our goal is to help make the process simpler and more effective.

allowed people on the East Coast to communicate instantly with people on the West Coast and parts in-between. Prior to that, the Pony Express letter-carrying service did its best to facilitate communication, but even the work of sure-footed ponies and dedicated riders took months to get letters back and forth. Yet, despite the ground-breaking advance of Morse’s telegraph, it would be decades before the technology was in full use. Most of the wires necessary for the system to work weren’t hung until after the war. “Now I am hanging out my wires,” Cunnane said in reference to his book, “The Physics to Economics Model (PEM): A Natural Science First Principle of Economics How to Increase the Gross Domestic Product of the United States by 100 Percent in Eight Years,” published in Feb. 2017. Cunnane’s financial-advising approach in his view is more rational than economic policy that advocates printing unearned money, but may seem a bit unorthodox for a man whose company sets up employee pension plans. But he remembers the faces of the workers he talks to on the shop floors of the manufacturing plants he visits. They are Jane and Joe Americans – folks doing the best they can to earn a paycheck producing products needed to keep American manufacturing in the fight against foreign competitors. He remembers addressing a factory full of workers giving a speech about the problems facing retirement planning. One guy from the shop floor shouted out to him, “Well, then; just fix it.” Cunnane stopped speaking and asked, “What do you mean?” To which the worker responded, “If you are so smart, then you fix it. Just fix it for the rest of us. You are telling us you know how to do all of this,

The Cunnane Building - 113 North Hambden Street Chardon, OH 44024-1166 866-275-0409 mastersconsultinggroup.com

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so just fix it. Fix the whole thing. Fix the whole economy. Fix the entire thing and make it good.” It stopped Cunnane in his tracks. “I said to him, ‘that is the best question I have ever heard, and it makes more sense to me than anything else.” And so Cunnane started on a path to do just exactly what was asked of him. Hence, the book now available on Amazon based on a “physics” oriented approach to financial advising for his corporate clients – the mainstay of his firm’s business – and his individual clients – which compromise approximately 35 percent of the workload at Masters Consulting Group. The bulk of his corporate clients are doing over $100 million in business each year. The sweet spot for marketing his firm is with companies bringing in between $25 and $50 million annually. “We can easily handle firms with 1,000 participants,” he said. Masters Consulting Group works with corporate clients and business owners that don’t just talk about helping their employees achieve well-funded retirements. He is honored to work with those demonstrating that notion by regular facilitation of meetings with employees – even if that means right on the shop floor where the employee does his or her work. Even if that means getting in where the sparks fly, the grease flows, and the nitty gritty happens. Cunnane wants to look at every individual account within a corporate benefit plan to help the average guy. “I want to talk face-to-face on an ongoing basis with all employees and make sure their account is achieving what their goals are,” he said. “We look to work with companies run by people and the kinds of owners that believe their employees are paramount to their success and are willing to go the extra mile on their behalf to ensure when retirement comes, they are prepared.” This business axiom of “employees first” is observed to cause significant business success and we want to be part of it. Cunnane has three patents and patents pending on energy generation related to his theories. Learn more about F. Patrick Cunnane and Masters Consulting Group online at mastersconsultinggroup.com. Find his book online here: “The Physics to Economics Model (PEM): A Natural Science First Principle of Economics How to Increase the Gross Domestic Product of the United States by 100 Percent in Eight Years”

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by joel kranc

LETTING THE CLIENT DRIVE DECISIONS Rodney Rollins and his team at NorCal Financial Group always take the time to answer client questions and ensure they have the knowledge to make good investment decisions

With a Dow average around 25,000 it would be easy for investors to be relaxed about their investments. Yet working with an advisor to understand nuances and goals can help through times that might not be as good as they are now. Such was the case with Rodney R. Rollins. In 1992, Rollins had to cope with the premature loss of his 46-year-old father. Rollins and his mother were not only grieving the loss, but they were counting on the

“

ting across the table from clients, I’m looking at my mom and I try and do the best I possibly can.” Over the years, Rollins said he worked as an IT manager in the financial services industry, eventually got licensed as an advisor in 1999 and decided to start his own firm, which he opened in 2007. Trust is an important part of Rollins’ investing philosophy. He looks for clients that can put their faith in his decisions and do the right thing when the market dictates it. “I love doing it fee-based

We implement prudent strategies to achieve those goals and objectives, and, finally, we monitor and report our progress to our clients.

advice of a financial planner who ultimately steered her in the wrong direction regarding her inheritance and retirement savings. “That really gave me the drive to want to do the right thing for clients, said Rollins, CEO of the Chico, California-based NorCal Financial Group. “I feel like every time I’m sitp.58

because then there are no questions about, ‘Am I doing it for commissions, or am I just trying to get paid more?’” Rollins and the team at NorCal Financial Group are sure to take as much time as needed to educate clients. Not everyone is at the same level of knowledge, so each client is

ADVISORS MAGAZINE - JAN 2018

interviewed at length and is encouraged to stay in touch by phone or email to ask any and all questions necessary. And just as it is important to educate clients about choices to make, Rollins said it is equally important to help clients not make decisions they may later regret. “When the market goes down, having a financial advisor to tell you not to sell those funds is key… you have to have that hu-

man element – that person sitting across the desk.”

3201 Esplanade Suite 110 Chico, CA 95973 530.345.1400 www.norcalfinancial.com

by jane genova

HUMAN CAPITAL

AS THE MOST IMPORTANT ASSET Empowering Organizations to Succeed through People

recent article published by the Harvard Business School reported that a Harvard Business Publishing survey of global professionals found that only 32 percent of global leaders are confident they have the right leadership talent and skills for their organizations to meet their goals. And, according to the Center for Creative Leadership, less than a fifth of new hires achieve their performance goals. Yet, as the Harvard article states, human capital is more important an asset of an organization – more so than technology, intellectual, and physical property. “Our mission at D.G. McDermott Associates, LLC, is to help organizations – public, private, and non-profit – succeed through people,” says its founder and chief executive officer Donald G. McDermott. “Human beings all want the same thing: recognition. That’s what motivates them.” The challenge is for each organization to identify the unique structure, culture, processes, and policies which will enable that kind of passion. Launched in 1985, McDermott Associates, a human resources consulting firm based in New Jersey, serves mid-sized and small organizations. They provide

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strategic planning along with hands-on services for solutions for a broad range of issues facing business owners. One major category is compensation and to ensure they are in front of industry trends, McDermott Associates conducts an annual survey in cash management, human resources consulting, human capital outsourcing, actuarial consulting, and middle market management. However, McDermott has found that what might appear as a compensation issue frequently is masking other problems. The firm can also guide organizations in analyzing and, if useful, restructuring other major human resources systems. Those include organizational design, culture, executive development, performance management, succession, and recruiting. For the latter, McDermott advocates tossing out conventional job descriptions. Instead of the usual laundry list of requirements, he suggests that job descriptions should describe the competencies needed and how those directly link to the business plan. That change can prevent hiring the wrong people since success

ADVISORS MAGAZINE - JAN 2018

comes from placing the right people in the right jobs. An emerging challenge in human resources is motivating gig employees, that is independent contractors. According to Intuit, they currently constitute 34 percent of the workforce. By 2020, that will be 43 percent. The traditional reward system, of course, usually doesn’t apply. Instead, organizations have to create ways to recognize their performance. When McDermott begins working with an organization, the first step is listening. Seemingly magically, the leadership of the organization begins to open up. They reveal who they are as human beings and what gets them up in the morning. By talking about the organization out loud, they, themselves, come to see what’s unique about what they do. Also, in the process, they allow the consulting team into their world. During the next phase of the process, the team asks a series of

questions, including what value the program adds, and there is an analysis of operations, the business environment and challenges such as upstart competition, and opportunities. “What we discover is never black and white,” McDermott explains. “Where we and the client will focus on together are the gray areas.” Amid the ambiguity, the “WE” configures the new strategies, processes, and policies. That is, the consulting firm and the client operate as a seamless partnership. The advantage McDermott brings to his clients is that he worked on the client side. His career in human resources began as an executive in the Fortune 500, so he understands the clients’ particular stresses. That empathy is the platform for the kind of partnership McDermott Associates establishes with organizations. For more information, please visit: dgm.com

by jane meggitt

A PASSION TO SERVE CLIENTS HAPPY FAMILIES ENJOY FINANCIAL SUCCESS

ith new policies and uncertainty over tax reform on the horizon under the new Trump administration, the next few months are a great time for people to review and possibly revise their current estate planning. Just because most people don’t have to worry about the estate tax per se doesn’t mean estate planning isn’t an important part of overall financial planning, according to a California wealth manager. That’s just one aspect of how Peter I.M. Shusterman protects his clients. Shusterman, founder and wealth manager of Shusterman Wealth Management, based in San Diego, California, says he’s exactly where he wants to be today, because his passion is serving clients. His own background contributes to his philosophy. Because of his parent’s business, he grew up mostly overseas, and didn’t come to live in the United States until college. “Growing up in various cultures, I was always fascinated as why some people can be happy and joyful while others struggle and are stressed,” he recalls. “I discovered happy families enjoy financial success, mostly due to having a disciplined approach to managing finances. That insight was a seminal, Aha! moment, and it drove me to financial planning and wealth management.” Later, when studying investments and financial planning, Shusterman realized he loved economics and markets. “It was like putting puzzle pieces together,” he said. A Holistic Approach At Shusterman Wealth Management, where there is a $500,000 minimum for their services, the firm stresses a holistic, comprehensive approach. Since all aspects of life touch upon money management, one decision affects others.

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Shusterman notes that the subject of money intimidates most people. “It’s a common family taboo subject. Most families spend more time planning their vacations over the course of a year than managing their finances,” according to Shusterman, adding that’s why proper guidance is important. “It’s really helpful to have clear, structured advice – that’s what we do here.” Shusterman understands that most people get confused with financial jargon, and want something simple and clear that they can understand. His firm stresses discipline and structure. Every client receives a written plan, which incorporates where they are now and where they want to be. “It’s our roadmap – a critical tool,” he says, adding that statistics and money management theories are useful tools for advisors, but creates create unneeded complexity for the client’s decision-making process.

Gamifying is Limited When asked about current online financial trends such as robo-finance and gamifying, Shusterman replies that while the trend is here to stay, gamifying in particular is quite limited. “Planning is a collaborative exercise, the experience of navigating the maze of input and making sense of all the choices can’t be fully analyzed by an inanimate object,” he says. A computer doesn’t take emotions into account, and those are often key to many of life’s critical decisions. As for robo-investing, it lacks insights into today’s non-tech influences. Though Shusterman concedes that robo-investing is helpful, but “not the end-all for everyone.” Brett Tomlinson, a financial advisor at Shusterman Wealth Management, believes some online tools are useful for new, young investors, but those tools look at a very narrow scope

of someone’s financial position. Preparing Clients for Longer Lives and Longer Retirements With the pace of modern medical advancements and people’s desire for healthier lifestyles, money managers need to plan for nest eggs for a longer stream of financial support. “It’s important to have many choices, many arrows in the quiver,” according to Shusterman. Those arrows must take into account all the possibilities of economic and financial market cycles, along with asset protection, long-term planning, tax minimization planning and heir planning, of which the latter is an essential component, says Shusterman. “There are a lot of tools we use. One size doesn’t fit all. We look at all possible solutions to figure out what is

most appropriate for our client’s circumstances,” he said. Tomlinson added that to ensure retirement planning will last, they take a further-out approach. That includes looking at family history and longevity. “If appropriate, we move a client’s plan from age 85 to 95 or 100. These are tools we utilize so people will have assets and income if they happen to live that long.” They run those calculations and projections through their software. Says Shusterman, “On academic and statistics basis, we know the probabilities are as high as they can be. We use analytics, but we also use

still having an impact in the financial planning industry. Shusterman says it’s a great area of controversy right now, and suspects that will continue as the public becomes more aware of it. “From a legal perspective, we think of a fiduciary as a person whom another person places trust and confidence in and relies on that person for appropriate advice. We think of it in terms of the relationship to the people we serve,” he explained. For Shusterman Wealth Management, it means doing the right thing and putting the client’s interests above their own interests.

different products as solutions.” Right now, most people in their prime working years no longer have pensions, and Tomlinson points out that what was available for one generation is not available for the next generation. “That’s another consideration to take in, whether or not they’ll have that additional source of income,” he said. The DOL Fiduciary Rule Impact The Department of Labor’s (DOL) new fiduciary rule has had its final compliance date delayed, but it is

The new regulations are trying to put a basic requirement on what constitutes best interest, such as full disclosure and the impact of that advice. “The regulators are trying to remove conflict, specifically in terms of compensation. If advice is given, compensation should not come from a third party,” Shusterman said. “In terms of the DOL regulations, the biggest thing is the industry needs to go through is the separation of financial compensation. When you are a money management firm

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“

WE PARTNER WITH OUR CLIENTS IN A WAY THAT GOES BEYOND TRADITIONAL WEALTH MANAGEMENT*. WE WILL WORK WITH THEM TO CREATE THE IDEAL PLAN TO SET THEM ON THE PATH TOWARD THE LIFE THEY’VE ALWAYS HOPED TO LEAD.

“

and designing products, you put too much effort in considering what your competitors are doing, so you structure products based on compensation, which of course muddies the choices. We need better standardization in fees and compensation. That’s key.” Shusterman is also concerned that the new regulations will limit availability of giving advice to everyone. “In the past, we were able to give advice to almost everyone. I think the danger of the new regulations is that the so-called fiduciary standard will limit advice. I don’t know what the solution is – there has to be a balance. It will be trial and error, evolving over time, with the rules constantly changing,” he said. An Agreement is Everyone’s Responsibility Like many financial advisors, Shusterman concedes that most clients don’t read the prospectus. “The issue is a delicate balance between those who understand the law and write rules based on law, and people who have to live with it. The general population is not educated for that. The language attorneys use is very specific, and new rules are equally confusing to the old rules. The job of the advisor is explaining things in a way that can be absorbed by a person and p.64

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make sense to them, which happens to be something I love doing,” he said, adding that he doesn’t know if that is possible to regulate, as speech is a variable thing, based on deliverer and receiver. “I don’t know if there could be a standardized approach for that.” Tomlinson says it is everyone’s responsibility to know what their agreement is with their money manager, advisor or client. It is the responsibility of the fund manager to relate that to the advisor, and the advisor must understand what the agreement is with the fund manager and how it affects the client. Ultimately, everyone needs to be on the same page with the execution of a

particular strategy,” said Tomlinson. Who Do You Serve? When asked what questions a person should ask a prospective financial planner, Tomlinson said the first order of business is determining whether the individual is a money manager or financial planner, and how they are compensated. “Understand how will they be paid and where that comes from. Those are important considerations for clients to understand,” he said. Shusterman recommended asking who the planner serves the most, to figure out if the person has special insights and understands the needs of groups of people they serve. “I’d like to know their philosophy of money management, what money represents, and their appreciation and understanding,” he said. As far as their own mission and service, Shusterman said simply, “I’m trying to improve the lives of people that we touch.” To learn more about Shusterman Wealth Management visit: shustermanwealth.com

16935 W Bernardo Dr #223 San Diego, CA 92127 Phone: 858-676-3300 shustermanwealth.com Securities and Advisory services offered through Sagepoint Financial Inc., member FINRA/SIPC. Listed entities are not affiliated

Peter I.M. Shusterman, Founder / Wealth Manager Peter spent his childhood living in the Philippines, Japan and Germany. He received his Bachelor’s degree in Finance from the University of Utah before getting his MBA in International Finance from Temple University. Then, he studied law at California Western School of Law and Western State University in San Diego. He started Shusterman Financial Services in San Diego in 1985. It was renamed Shusterman Wealth Management in 2017. Peter’s passion is to help his clients accumulate, manage and preserve their family wealth. He specializes in investment portfolio design and optimization, retirement planning and advanced estate planning.

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URSULA DALEY, JD

lpl financial advisor daley financial partners

BUILDING CLIENT CONFIDENCE through Education and Expertise

Armed with a Doctor of Jurisprudence degree from the Pace University School of Law, Daley started her career as an attorney working in the financial services industry.

er first stop was a mutual fund company where she wrote prospectuses. Next were positions with a transfer agent, and then a large law firm. Her last stop before becoming a financial advisor in 2003 was as an attorney p.66

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for LPL Financial, a broker dealer. Today, Daley leads her own financial management firm, Daley Financial Partners, and a cornerstone of their approach is an emphasis on educating clients, whether it’s the basics of investing, industry

vocabulary, or more intricate financial concepts. “We have always placed a value on education and to make sure that the clients know what they’re investing in and why,” said Daley. “It’s essential that they understand the products that they are purchasing, and because of my varied background in the industry, I’ve been able to provide them with background information they might not understand.” Daley’s approach to education is not only customized for each client, it is molded around generational preferences. Recently, the firm held a financial education seminar for millennials, and the Daley Financial Partners team said that they learned that this tech-savvy generation felt stymied by information overload. “One of the biggest complaints that the millennials in our audience had was that they felt inundated with information which was paralyzing them,” Daley said. While there are benefits to having information accessible through 24-hour financial news channels, websites, and apps that provide content and do-it-yourself tools, Daley says that an over-abundance of information can become counterproductive in its intent to inform and, instead, succeed at causing confusion and indecision. “These younger folks tell me, ‘I really want to get involved and I’m reading all this stuff online, but I don’t know where to start and I’m afraid I’m going to make a mistake,’” Daley said, adding that she is seeing a larger influx of younger clients at her practice at the urging of their parents, who are clients of the firm. This attention to generational trends, preferences, and mindsets, balanced with understanding each client as an individual has helped Daley Financial Partners manage its own growth over the years as they have acquired four separate books of business. “We do not use a cookie-cutter approach – every client is different, and it is our philosophy that they need to be treated as an individual.

Each person comes to the table with their own set of risk tolerances, educational background, and experience. We tailor the relationship to the clients that we’re working with,” said Daley. “I’ve always treated my clients in the same capacity no matter what type of account that they’ve had. We’ve always explained investments to our clients, we’ve always talked about fees, and I’ve always tried to be as transparent as I can possibly be,” she said, circling back to the prominence of education within the firm’s process

and touching on her role as an investment fiduciary. As a previous attorney, Daley said the word fiduciary has been engrained in her since law school, and while she said her clients may not fully understand what a fiduciary is or does, she believes they do understand that it comes with a higher legal obligation on the part of the advisor. “A fiduciary is easily defined as an ethical and legal obligation of trust imposed on another person. As a prior attorney, I’ve always

taken that a step further, even prior to the DOL, because a client has to have a level of understanding of where they are going,” Daley said, referencing the partially implemented U. S. Department of Labor (DOL) fiduciary rule calling for all financial professionals – including advisors, brokers, and insurance agents – to act as a fiduciary when dealing with retirement accounts. Complete implementation of the rule is currently in limbo as government and regulatory agencies duke it out. “I will often say to my clients, ‘You’re not going to know everything that I know, but it’s important that you know that I know.’” Daley said, adding that as financial advisors go, her background as an attorney who worked in the financial sector coupled with her experience as an advisor is unique and allows her to better serve her clients. Daley Financial Partners, currently an all women firm, went through a major rebranding initiative during 2016. Referring to her team as highly motivated in the future of the firm and in their own futures, Daley says that members of the staff are currently working towards additional industry credentials. “My goal,“ she said, “is to help them get there.” Realizing goals, whether for her employees or her clients, is clearly her priority. For more information on DALEY Financial Partners, LLC daleyfinancial.com

Ursula Daley is a registered representative with, and securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC.

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by joel kranc

Empowering Women Through Education Pamela Plick saw the need to educate women about financial planning and turned it into a career

recent survey from Mercer Consulting called “Inside Employees’ Minds: Women and Wealth,” showed that men and women see financial issues differently. While 62 percent of men feel financially secure, only 41percent of women feel the same. The survey also reported that women tend not to seek financial advice. Pamela D. Plick, founder and owner of Pamela Plick Wealth Management in Palm Desert, California, explains that she wants to empower women – something she says is a passion of hers. “I want to help them confidently build financial wisdom and wealth. I do that through financial education, active planning, and customized financial solutions,” Plick said, adding that her ideal clients are women who are financially independent, are “CFOs” of their family, and who want to partner with an advisor to assist with financial goals. At one time, Plick found herself in a financially insecure situation after going through a divorce. She says she was in a scary place. “I realized I needed to create a new relationship with money. My son was young and I needed to understand how I could plan for our future, take control of my money, and my life,” she explained. This understanding led Plick to study and learn everything she could about wealth management and financial planning. Seeing that other people were in a similar situation, she decided to turn her new knowledge into a career. After leaving a successful career in banking and cutting her teeth at a full-scale brokerage, Plick started her Empowering Women Through

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Education firm in 2011 to help customize financial planning solutions for clients. One of her primary missions is education. “I tell clients that an informed client is a better client, and they may not understand all the ins and outs of all the investments, but they do need to understand the strategies and the ‘whys’ of what we are doing.” Given that the U.S. population is living longer and spending decades in retirement, Plick advises clients to invest with a longer time horizon in mind, rather than a shorter one. Long-term care is also part of every conversation because it is these types of life events, says Plick, that can derail even the best retirement plan. Since starting her firm seven years ago, Plick says her greatest success has been finding the courage to set up her own practice. Working for a brokerage, in between her first career and starting her firm, was both a challenge and the push she needed to get started.

ADVISORS MAGAZINE - JAN 2018

“I believe in the financial planning process. I think that’s where it starts, it’s where you’re going to build a portfolio, and you’re just not able to do that in a brokerage firm environment,” said Plick. “Even though the environment was a challenge, it was a wonderful learning experience for me because it gave me the knowledge I needed to manage my financial planning practice.” To learn more about Pamela Plick Wealth Management visit: pamelaplick.com

Purpose Based Planning The Different Levels of Your Financial "House"

long term care

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Trusts

Powers of Attorney

Health Insurance

Life Insurance

Roof Represents Protection

Taxes

Health Care

Longevity Risk

Inflation

Market Risks

Fees

Interest Rates

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Family Needs

Main Level represents Investment Concepts

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Pensions

Annuities

F o u n d at i o n R e p r e s e n t s R e t i r e m e n t I n c o m e

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Investment Advisory Services offered through BWM Advisory, LLC. A Registered Investment Advisor Office (360) 464-2979 | Toll Free (877) 658-0354 | Fax (360) 334-7782 Aaron@SteeleCap.net | www.SteeleCap.net BWM does not provide legal or tax advice. All investing contains risks, including the loss of principal. Insurance services provided under separate license. Claims paying ability based on individual Carrier financial strength.

ADVISORS MAGAZINE - NOV p.69

by amy armstrong

ALGORITHMS, NOT HUNCHES GUIDE MARKET DECISIONS

If you fail to plan, you plan to fail. It is an adage American history attributes to one of the founding fathers: - Benjamin Franklin.

“

We seek to work with clients who are interested in going through a systemic financial planning process,” -Laurence Lof

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nd, it is one Laurence Lof, CFP®, CEO of Laurence Lof Financial Advisors, LLC, based in Tucson, Arizona, embraces as well. “We seek to work with clients who are interested in going through a systematic financial planning process,” Lof explained. “Our primary strength is our financial planning process.” Becoming a Lof Financial Advisors client requires a threemeeting process to ensure that the expectations of a prospective client align with the standard operating procedures of the firm. The trio of meetings also provides Lof and his staff with an opportunity to get to know prospective clients on an indepth personal level. The first meeting is much more than a “meet and greet.” “We ask them questions such as, ‘Do you like your son-in-law?’ and ‘Have your parents done any estate planning?’ and ‘What kinds of insurance do you currently have?

and “Tell us about your bucket list’,’” Lof said. The client’s answers are used to generate a “suggestions” letter – a glorified laundry list or a to-do list – of financial-oriented tasks that the firm provides to the prospective client for his or her review. “We let them know things that may need to be buttoned up,” Lof said. The agenda for the second meeting includes reviewing the findings from the first meeting and introducing the firm’s retirement software analysis program. Rather than having an outside vendor provide analysis of a client’s current retirement picture, Lof has the client participate in the determination process. “We build their retirement plan with the client sitting there with us,” Lof said. “The clients fully participate in putting together the plan and see the retirement analysis for themselves.” It isn’t until the third meeting

L-R TOP Sue Lubbers, Tom Forsythe CLTC, Jill Jewett CRPC / L-R BOT Larry Lof CFP®, Stephanie Mayoral CRPC

that Lof and his clients actually begin talking about the “how to” of the investing process. It is when clients are introduced to Lof’s version of Investing 101 – a crash course covering the basics of investing, as well as its associated vocabulary. Lof borrows heavily from the CFP® courses he has taught. Topics include outlining how stocks work, how stocks are affected by earnings, how the interest rate affects bond prices, what managed futures are, and what it means to use “trend following” as a guide for investing. “Only after that, if the prospective clients want to become current clients do we start the process of transferring money and investing money,” Lof said. Lof Financial Advisors offers clients a choice two portfolios to employ in their respective investment strategy. One is a very conservative approach characterized by various fixed income vehicles often used by investors who have met their accumulation goals and are less interested in growth

as they are in maintaining their current financial position. The other – a more growth oriented portfolio guided by a software program identifying current trends – also uses investments in emerging international markets, bio technology, small and mid-cap domestic and international funds, individual stocks, and various EFTs for diversification to lower the overall volatility of the portfolio. Lof recognizes that other financial advisors focus on “customizing”

concentrate on client relationships and teaching them how to achieve their financial dreams and goals. Trend following – an investment strategy that aims to seek market gains by analyzing the trend a particular asset is experiencing – is a concept Lof believes in. It relies on technical analysis of market prices, rather than focusing on the fundamental strength of a company with stock available on the market. Various technical calculations monitoring

each client’s portfolio. He believes offering one of two portfolios focused on either a growth or a maintenance strategy, and trusting the algorithm provided by the software, frees his time to

the time frames that each asset moves up or down in price are used to determine when an investor should move in and out of a particular asset. The software Lof uses provides

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guidance as to when to adjust the two different portfolios his firm employs. The days of the “hot tip” from the stock broker are long over for Lof as he, instead, puts his trust in the complex mathematical computations performed by the software. “Today, roughly 30 percent of all the money on Wall Street is invested via computer algorithms,” he said. “I am a firm believer that computergenerated mathematics is going to win over the opinions of humans. Lof doesn’t like to take losses – even in the short term. He said the trend following software used by his firm tells when the trend has turned down. When that happens, Lof will exit that market. Despite his own reliance on technology, Lof isn’t a big fan of the online robo advisors. In his view, the robo advisor provides its user with a false sense of security.

Bucky company mascot

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“If the market starts to decline, the robo advisor does not automatically take an investor out of that declining sector,” he said. “People think they are protected when really they are not.” The need for a human financial advisor is one he advocates with those members of the tech-savvy millennial generation more likely to use a robo advisor. They are often the children of his baby boomer clients now headed to retirement while watching their children’s adult lives take shape. Lof knows the younger generation has a great divide – nearly 30 percent of millennials live with their parents; a fair portion of them did not acquire employable skills in high school. Yet, the other half – give or take a few percentage points – are the types of clients featured in a financial advisor’s best dreams. “They are very smart and many of them make very, very good salaries,” Lof said. “I am somewhat amazed at how much money some of them make. And, interestingly enough, they are what I call ‘informed delegators.’ They want to know what is going on with their money but they do not get involved in the nuts and bolts of the actual investing. They are interested in a steady accumulation and they are excellent investors and savers.” Those characteristics ought to serve the millennial generation well in a few decades when they reach retirement age and face the financial uncertainty that long-term care brings. As American longevity continues to increase, Lof uses age “99” life expectancy as the target for retirement analysis. He encourages clients to figure out long-term care long before it

becomes a necessity. On average, an American couple in their golden years will spend an additional $250,000 on medical care between copayments, deductibles and other items not covered by standard health insurance and Medicare. His goal is for aging clients to have an extra $10,000 to $12,000 above their regular expenses available per year to cover health costs. It is a balancing act for sure, but one thing Lof and his clients have in their favor is Lof Financial Advisors’ business manager, Tom Forsythe, who is a long-term care specialist. His expertise in evaluating insurance policies and annuities with longterm care riders, assists clients in selecting the approach that’s best for them. “Dealing with the long-term care issue is a big part of our practice because of the threat it represents to the financial security of our clients,” Lof said. “The greatest success we experience is the security our clients experience when we have done a good, complete financial planning job for them.” Learn more about Laurence Lof Financial Advisors, LLC online at lofadvisors.com

Registered Representative, Securities offered through Cambridge Investment Research, Inc., a Broker/ Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Laurence Lof Financial Advisors, LLC & Cambridge are not affiliated.

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by amy armstrong

inancial planning: There’s an app for that. Neato.

That’s a bit snarky, but in reality, it is what most financial planners are thinking when the topic of online financial tools is mentioned. Bring the subject up among financial planning professionals and you will readily hear that there ought to be a real live advisor handling the application of that app and educating the client, or app user, on how it impacts his or her financial situation. “These apps and all the technology are tools,” said Russell G. Luce, president of Planning Legacies Financial Group in Oak Lawn, Illinois. “But you cannot have one without the other. If the tools are not used in a team approach with an advisor educating the client, it won’t achieve the client’s goals. Education and application go hand in hand. You cannot solely rely on the tool.” Luce also said that unless your expertise or interest is centered on financial matters and investing, why take time away from your family, hobbies, or other interests by struggling to learn something that a professional can help with more easily. He gets the notion that some folks want to dabble. Go ahead. But do it with a limited amount of money that does not impact your future financial security. “Some people just love playing with investments and that is just fine,” Luce said. “Here is what I tell clients: ‘Sure, you want to do some day trading? Okay, here is a small pot to do that with, but let’s make sure that I continue to manage what is important – the money you need to grow for later in life – so that when you go to retire, you can continue your day trading hobby but still be secure.’” Luce is a “tell it like it is” kind of guy, so he will tell you straight when it comes to dealing with financial matters. It’s due in part to his 25-years in the

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SIMPLE TALK L-R Brendan Schafer, Russell G Luce, John Rhode

AND SINCERE REL financial services industry – his second career, and to his first career with the police department. But a big part of why Luce doesn’t mince words comes from his own life experiences: a mother who died penniless in long-term care, and his two children who have been diagnosed with autism and planning for their financial future. He has seen the nit hit the grit. He knows first-hand the reality that life and its interaction with money can create. Most families with special needs children simply cannot afford Luce’s services, but he works with them anyway on a pro bono basis because he knows the great difficulties these families face. While special needs planning is a niche that some planners may be drawn to

Our mission is to get to know and understand your needs, wants, and long-term goals. We want to help you develop, implement, and monitor a strategy that’s designed to address your individual situation.

serve, Luce’s advice to them is simple: “Don’t do it just because it is niche. Do it because you care.” He understands the challenges and nuances of special needs planning. “I live it,” he said.

ATIONSHIPS

Securities and investment advisory offered through: Foresters Equity Services, Inc./ Member FINRA, SIPC. Branch Office: 17199 N. Laurel Pk. Dri, Suite 210, Livonia, MI 48152 (734) 542-7360. Planning Legacies Financial Group and Foresters Equity Services, Inc. are unaffiliated entities.

All financial planners – just like bartenders and beauticians – are part psychiatrist, Luce said. At least it’s true if they are doing their job correctly in getting to know the client well beyond a financial transaction. But with special needs planning, the emotional and mental aspects of the job take on a whole new meaning. “You have to help the client deal with the emotional side of this before the financial and legal issues can be worked through,” he said. “Often times, you have to help them identify who is going to help with that special needs child when they are an adult after the parent has died.” It’s not a topic neatly tied up in ribbons and bows, but it is one of life’s realities. Planning in general is something Luce knows people – including those without special needs concerns – would rather not do. It’s why he strives to keep the process – and the lingo – as simple as he can while not losing the context of what he is trying to convey to the client on their behalf. At age 54, he knows he won’t be around forever – someone else will take over his practice when he either retires or dies. He wants his clients to be in the position of being able to clearly communicate with his successor regarding the “how, what and why” of their financial plans.

We believe in thinking “out of the box” and we are not afraid to challenge conventional wisdom in our approach to investing and preserving wealth. “I want them to be able to say, ‘this is why Russ did this,’ and ‘this is the plan we made with Russ,’” Luce said. His goal in educating the client is not to overwhelm them as if they were prepping to take an exam. Instead, his goal is for clients to leave meetings feeling that they learned something, and that their time with him was well-spent. “There is no point in talking all the jargon and the language and the abbreviations that are associated with this industry with clients,” Luce said. “My goal is to keep things real simple and present the information to the client in a manner in which they can repeat it back to me. Then I know I have done my job.” Learn more about Russell G. Luce and Planning Legacies Financial Group online at planninglegacies.com

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by jane meggitt

SAFETY FIRST FOR RETIREES Inspired by the Greatest Generation

They grew up during the worst economic straits the country had ever seen, then went on to defeat the forces of fascism. The Greatest Generation inspired David Hudson, CEO of Masters Estate and Financial Services Inc., based in Hickory, North Carolina to build a career helping those to whom America owed so much.

n 1985, Hudson started in the insurance business selling Medicare supplements. “I spoke to people each day who lived through the Great Depression and World War II,” he recalls. “These were people who sacrificed so much for our country, you had to love them. I gained wisdom from the life experiences of clients.” Hudson decided he wanted to help these people more, which lead him to financial services and estate planning. Today, Hudson’s practice revolves around educating, servicing, and protecting his clients. “We help clients understand the process of gaining and retaining wealth,” he said. “We want our clients to be protected against risk – market risk, inflation risk, the risk of having too little liquidity.” For retirees, it’s always safety first. His firm helps clients deal with longevity risk through the use of annuities, the inflation risk through a diversified portfolio, and health care risk by developing a comprehensive plan for long-term care. “We make individualized recommendations to clients. I would encourage the next generation to get involved as soon as possible and get permission from parents to be part of planning process,” said

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Hudson. Estate Planning One way Hudson’s firm differs from other financial advisors is that they have attorneys working with them to provide estate planning services to clients. “A huge percentage of clients have their estate planning done through those attorneys,” he says, adding that the use of Transfer on Death, Payable on Death and other forms of beneficiary transfers that avoid probate helps pass on legacies to future generations. The Door is Always Open At Masters Estate and Financial Services, the door is always open to clients. “If they feel unsure about a financial product or investment, they can call for a one-on- one interview,” Hudson says. The firm does a lot of educational events, many of which are open to public. A client review is scheduled at least annually, and they welcome having the client bring a family member to a seminar or review. The DIY Investor Hudson notes that most of his clients enjoy a carefree lifestyle, focusing on vacations, grandchildren and travel. While some clients like to invest on their own, others don’t enjoy it. “If an individual is willing to spend the

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countless hours needed to get a [financial] education, I think that’s fine,” says Hudson, yet, he does offer a word of caution to anyone who wants to focus on a DIY investment strategy.. “Test your skills with a small amount of assets in a bear market. It’s easy to feel invincible when you’re in the eighth or ninth year of a bull market and everything is going up.” What Clients Need to Know About a Financial Advisor When asked about what clients should ask a financial advisor at the first meeting, Hudson said it’s important to do research before then – such as checking if the firm has had any complaints filed with the powers-that-be. He also suggested asking how the advisor is paid, what products they offer, and how clients did in the last economic downturn. Potential clients should know how comprehensive the planning service is, and programs the advisor has in place to help educate clients. The Year Ahead Hudson isn’t planning anything particularly different for his firm in 2018. “We always offer unparalleled service to the clients we have, and clients send a lot of referrals our way. Any financial

advisory firm will need referrals to stay in place,” he said, adding they are also planning to increase the number of clients through client and educational seminars. Masters Estate and Financial Services’ mission is using the knowledge, wisdom and experience they have been blessed with to help provide a safer, more enjoyable future for each client. For more information on Masters Estate and Financial Services, Inc., visit: masters-estate.com

InvestmentadvisoryservicesofferedthroughAlphaStarCapitalManagementLLC, a SEC Registered Investment Adviser (“AlphaStar”). SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability. AlphaStar and Master’s Estate and Financial Services Inc. are independent entities.

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by jane genova

GLOBAL CAPITAL MARKETS

capturing opportunities and managing risk According to Bloomberg economists, global capital markets volatility is historically low. There also has been sustained recovery in myriad economies. But, given all the interconnections in a global economy, no one can predict 2018 and beyond will be “smooth sailing.”

“ O

ur mission at Northstar Financial Planners is to educate clients how global markets actually operate,” says its president Allen Giese, ChFC®, CLU®. “Given the realities, we emphasize that there is no margin of error – no room for inefficiency in portfolios.” But, Northstar’s approach is that markets are allies, not adversaries. Their objective is to customize client portfolios that capture opportunities in global capital markets with the goal to build, increase, preserve, and transfer wealth. To accomplish that, Northstar supplements its expertise with a network of attorneys, CPAs, and insurance professionals. Founded in Florida in 2000, this Registered Investment Advisory

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firm is independent and fee-based, with a minimum funding requirement of $500,000. That business model has always provided the fiduciary accountability the recent DOL ruling advocates. “The clients are not only first,” explains Giese. “We aim to provide an overall experience beyond compare. That’s why they market for us.” The unique Northstar process begins with the discovery meeting, or what Giese describes as a “deep dive” into the clients’ current financial and life situation. Their concerns could include cash flow management, tax mitigation, pre-retirement funding and post-retirement spending, estate planning, and philanthropy. Given the increasing

longevity of Americans, the most common requirements are the ability to maintain a lifestyle during 30 or 40 years of retirement and protecting assets if long-term care is needed. Because of this comprehensive consultative approach, Northstar Financial Planners Inc., is known for providing solutions for specific challenges. One is ensuring life-long financial support and care-taking for special-needs dependents. Giese understands this challenge first-hand as he is the father of a special-needs child. Another niche expertise is guiding special risk employees of the Florida Retirement System. Following the discovery phase of the Northstar process are the investment planning meetings, a 45-day follow-up meeting, and ongoing reviews of progress. Frequently clients’ situations change and simultaneously there are shifts in global capital markets. No surprise, Giese smirks at the notion that solely applying algorithms or “robotic investing” can be successful in managing a large portfolio. As Millennials build wealth, he predicts, they will recognize do-it-yourself investing is too risky. Giese’s career began as a hybrid of hands-on management of the family’s retail operations along with an introduction to professional money management when his mother became a certified financial planner. In 1991, he followed her path as an agent in securities and insurance, then went on to launch his own boutique firm providing comprehensive financial services. Northstar’s advisory fee is based solely on the assets managed and the services provided. The focus is on low-fee investment vehicles. For more information, please visit: northstarplanners.com

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by amy armstrong

Educating Clients is

The Key to Fiduciary Duty

o matter what twists and turns the federal government takes on its travels down Fiduciary Definition Lane, Joseph Rinaldi believes he will arrive at his desired destination: his client’s best interest. Doing right by his clients is the foundational cornerstone on which Rinaldi built his firm, Quantum Financial Advisors, Inc., nearly two decades ago. He had just left his work assisting the federal government regain losses associated with the federally-backed banking assets taken over during the S&L crisis in the late 1980s. After trading more than $40 billion of assets, Rinaldi has more than a hands-on knowledge of the importance of transparency in financial transactions – he wears the glove that fits.

“If you, as an advisor, focus on putting your clients’ needs ahead of your own, you will always satisfy any fiduciary rule or definition twist that comes out in the law,” Rinaldi said. “The key is that being a fiduciary starts and ends with educating clients and especially always explaining what fees are involved.” Rinaldi believes that financial education ought to begin long before an individual is even age eligible to become a client. He suggests that children as young as age nine should have a parental-supervised online account – with a small dollar amount – by which they can begin dabbling in the stock market buying and selling stocks via the guidance of their parents or guardian. Exposing young minds to the power of investing

and to the power of compounding is key, Rinaldi believes, to changing the prevalent instant gratification culture in America to one that values long-term financial stability. Rinaldi, the president and chief investment officer, of Quantum Financial Advisors, Inc., is active in promoting financial literacy beyond his direct work with clients. He teaches a course titled, “Futures, Options, and Derivatives” at the Robert H. Smith School of Business at the University of Maryland in College Park, and also at the Stern School of Business at New York University, District of Columbia campus. Along with one of his

partners at Quantum Financial Advisors, Inc., Howard Lodge, Rinaldi co-authored the book, “A Beginning Guide to Alternative Assets” that is also translated into Chinese and Spanish. “We are reaching out to promote financial literacy to other cultures within the United States and abroad,” he explained. “Language should not be a barrier to financial literacy. There is no reason why people that want to learn what investments are all about can’t do so in their own language.” Learn more about Quantum Financial Advisors, Inc., online at: qfainc.com

Joseph F. Rinaldi President & CIO 51 Monroe Street, Plaza West 06 Rockville, MD 20850 Direct Line: +1(301)296-6203 customerservice@qfainc.com

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by amy armstrong

HELPING FAMILIES GET COMFORTABLE talking about money

money is an uncomfortable conversation topic. often people simply get “weird” about it.

“

Money conversations between family members can be awkward,” said Jim Tucker, co-founder of Tucker Bria Wealth Strategies based in Durham, North Carolina. “Even between a husband and a wife of the same generation, it is tough. Then when you go to a different generation – be it aging parents and their adult children, or young families talking to their children about the basics of money management, in my experience, it still is a taboo subject. Often there are not open avenues for these types of discussions until there is a critical issue such as an illness or loss of job.”

any Americans don’t like to discuss their finances. Perhaps we can blame Emily Post – the 20th Century minder of manners – who in 1922 advised Americans to keep their financial affairs private. For decades, her newspaper columns reinforced the notion that openly discussing one’s financial situation is simply a major social faux paus. For a large percent of older Americans – especially baby boomers either nearing retirement or already well in to their Golden Years – talking about their bottom line ranks low on their enjoyment scale, somewhere near getting an annual medical physical. Yet to achieve a retirement marked by fulfilled dreams and goals, talking about finances and putting that four-letter word, “plan,” to work is necessary, financial professionals such as Tucker say. “We try to provide opportunities to break down some of those barriers regarding finances by either having a formal family meeting, or at least introducing ourselves to either the aging parents, or to the children of our clients, so that there is a crossgenerational conversation going on,” Tucker said. “This is done within our relationship as their trusted financial p.82

advisor so they can feel more secure about sharing very private details about their lives as related to finances.” Tucker knows how awkward these family meetings can be. Even as an industry professional, he felt as if he had two financial left feet when he and his parents had “the talk” about their money situation for retirement. “Even being in the industry myself, it was clearly among the toughest conversations I have ever had to have,” Tucker said.

L-R Patrick Bria and Jim Tucker CFP®

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That’s why one of his most soughtafter goals as a financial advisor is to transform his relationship with clients into one that goes well beyond the financial transaction to a place of complete security. This includes the ability to discuss private financial details of their lives and ask questions regarding any aspect of the planning process that they do not understand. “Client education is critical,” Tucker said. “I tell my clients when they first join the firm that they should feel they have the ability to ask any question they need to. If a client does not understand a strategy that I am proposing for them, then in my view, it is my fault. I need to hear from them that they need me to explain it even more clearly. They need to be comfortable enough to ask any question that they need to ask.”

Tucker knows that the industry’s technical jargon must be translated in to “standard English” for clients, and he believes he is successful at doing so. He points to an experience during the Great Recession of 2008 and 2009. A client of his called to thank him for answering his wife’s questions regarding the couple’s account. “The husband was so amazed and impressed, and so proud that his wife felt comfortable enough to take the initiative and call me up to address her concerns regarding their retirement savings,” Tucker recalls. “She wanted my thoughts on how the current market was impacting their portfolio and I was able to convey to her that the current market condition would change. That phone call from her husband was one of the most satisfying calls I have ever taken because he told me that because of the relationship we had built through the years as my client, his wife was comfortable talking about their financial situation without him also on the call.” Tucker’s journey as a financial advisor has come a long way since age 13 when he bought his first stock – a utility company that did not have much price appreciation

but paid a “great” dividend. On the advice of a family friend who was a stockbroker, Tucker sold the utility and bought Viacom stock. The now world-wide entertainment company was established in 1971 and the young Tucker was impressed when in the mid 70s he sold his Viacom stock for a profit. “I’ve always had an interest in the stock market,” Tucker said, and added with a knowing chuckle, “But selling Viacom in the mid-70’s was my first investment mistake.” Learn more about Jim Tucker and his firm, Tucker Bria Wealth Strategies, LLC, online at tuckerbria.com

Jim Tucker co-owns Tucker Bria Wealth Strategies with Patrick Bria. You may contact them at 919-381-5780 or schedule a visit in person at 3100 Tower Boulevard, Suite 117, Durham, NC 27707 or at 225 N. Bennett St, #C, Southern Pines, NC 28387. Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser.

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by jane genova

Building Relationships to

Help Clients Build Wealth

nly 19 percent of those surveyed by Mintel in 2017 rated themselves as confident about their financial literacy. Many of the rest are confused by all the conflicting “advice” out there, especially in social media, about how to manage money and build wealth. Meanwhile, research by CreditCard.com found that 62 percent of respondents they surveyed lose sleep over the stress of money worries. Those realities are what drove Kirk G. Collins, CFP®, ChFC®, to co-create Collins and Guilford Wealth Advisors, LLC. “Our mission at Collins and Guilford is to educate,” said Collins. With offices in Indiana and Ohio, the education process at Collins and Guilford, begins with explaining to anyone seeking financial advice to “shop around.” The local insurance agent selling annuities might not have the ability to offer comprehensive investment expertise. What p.84

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is the fee structure? How about the personal chemistry? “Usually, after doing their ‘due diligence,’ clients will wind up choosing us,” reports Collins. “Our edge is that we are independent, no parent company imposing sales quotas, no shareholders with their demands, and no pushing proprietary products. Therefore, even before the Trump administration’s emphasis on fiduciary accountability – impartial conduct standards – prospective and current clients recognized that we put them first.” How Collins and Guilford ensures their advisors acts in the clients’ interests and not their own self-interest, is by taking the time to understand their unique financial situation and objectives. Then they present clients with options in as simple a manner as possible. No financial jargon. Only the must-knows, such as the sectors to invest in and the fee structures from those 100-page prospectuses. And,

no overloading information and recommendations in any single meeting. Regarding the latter, Collins notes, “The 50-year-old needing to contribute more to a 401k and IRA probably won’t be able to absorb anything about long-term care insurance and details of Social Security during the initial consultation. That’s why we focus only on what’s most important to wealth creation and preservation at that time.” Collins wants to give everyone access to building wealth. That’s why the firm has no minimum dollar-amount investment requirement. In college, as part of the pre-dental school curriculum, Collins took business courses. There he was introduced to the power of compound interest, or using money to earn money. He was hooked. He changed majors. After Collins began working as a financial advisor he recognized how much he still had to learn. That’s why he took on the grueling task of studying to be a Certified Financial Planner®. “That was one of my key achievements,” he said. Since Collins is 32 years old and his partner Matthew Guilford is 26, they have many Millennial clients. But, from the getgo, the team focuses on funding retirement. Other services provided include creating budgets, estate planning, and creating strategies that seek to manage taxes while maximizing the return on investment. For more information, go to collinsandguilford.com

Kirk Collins and Matthew Guilford are registered representatives with and securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC

Amanda Brinkman

Chief Brand and Communications Officer, Deluxe Corporation

Amanda Brinkman

Chief Brand and Communications Officer, Deluxe Corporation

Robert Herjavec

Business Entrepreneur, The Herjavec Group

Robert Herjavec

Business Entrepreneur, The Herjavec Group

by jane meggitt

HELPING CLIENTS PLAN A SECURE RETIREMENT When you’ve been in the financial advisory business for 40 years, you have a good perspective on what works and what doesn’t.

ick Ohanesian, President and Partner of Ohanesian / Lecours Investment & Advisory Services based in West Hartford, Connecticut, has worked as a financial advisor since 1977. “I started in the industry in a more traditional format, having worked for number of larger firms on Wall Street,” he recalls. Back then, no one could begin as a financial advisor until they toured the back office operations, so that’s what he did. “It’s been a long stretch, and I’ve seen an awful lot,” Ohanesian said, adding that he was always interested in the industry because it has so many parts to it. Junior partner Catherine Jaeger took a different path some years later. “I was always fascinated by markets in general and how they affect people’s lives, and knew I wanted to work in financial services,” she said. Jaeger started in the technical side of the industry from a systems operation standpoint. She learned the life cycle of trading and how investing worked from the back end. Because she wanted

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to use her knowledge to impact people on a more direct, personal level, she eventually found herself working at Ohanesian/Lecours. “I worked with in-house advisors and learned how they interacted with clients. I knew switching to an advisor role was where I wanted to take my career,” she said. The Fiduciary Rule While the Department of Labor’s pending rule on fiduciaries is getting a lot of attention, Ohanesian says the fiduciary concept was “one of the reasons we started the firm in 1989.” “A fiduciary is someone who owes another the duty of good faith and trust. You must be bound ethically to act in another person’s best interest above your own,” he said, adding that in the late ‘80s, larger companies were creating proprietary products, and brokers were paid more if they sold those products. “Seeing that happening is what lead us to walking out the door and creating our own independent company. We felt strongly it was not the right way to do this. It’s the way we have operated for over 25 years, and the best format to work from.” Retirement Specialists Ohanesian says that half of the firm’s business comes from retirement plans, and they work with a wide variety of companies in a number of industries. They are co-fiduciaries to plans they advise, applying a methodical, yet thoughtful approach to their initial plan analysis and design—and that carries through to their ongoing management of the plan. Ohanesian says they start with an in-depth analysis of all plan documents, and moving on to perform a thorough review of the existing fund lineup, as well as a comprehensive benchmarking of all plan costs and fees. They have also developed a participant education plan which includes more than general investment education, but is focused on overall participant outcomes. The other half of their business focuses on managing assets for high net worth individuals. While there aren’t strict minimums, the typical client has at least $1 million for management. When interviewing clients, Ohanesian thoroughly

explains his firm’s style of investing. “We make sure they understand how we structure portfolios –so they can be sure our firm’s style is what they are looking for. We want to make sure it’s a good fit on both sides,” he said. Their clients also run the gamut from recent college graduates who are new to the concept of saving for retirement, to the sophisticated investor who already understands the markets. One thing both types of investors receive from Ohanesian/ Lecours is a customized portfolio. The Long-term Care Fund Since people are living longer, Ohanesian / Lecours addresses long-term care through a planning process. “We try to accomplish a long-term care

sinking fund. Rather than rely on insurance, we create funds dedicated to meeting the inevitable costs of long-term care, but selffunded. It puts the client in the best possible position,” Ohanesian said. The process requires time, effort and planning, but for clients who have such a plan, it “serves them in an extremely strong fashion,” and for the “sandwich generation,”– those trying to take care of aging parents while raising children – it’s a difficult balancing act. “Most people will deal with aging parents as longevity increases. We try to have a plan in place taking that into account,” said Ohanesian. Missing the Mark on Fundamental Changes When asked about fundamental changes needed in the industry, Ohanesian notes there’s a lot of talk about transparency, fees and other buzzwords – all clearly important – but says a lot miss the mark. “We’ve seen, for a number of years, that most investors have no understanding of what it will take to actually retire,” he said, adding that includes how much money they’ll need and how much they need to set aside today to retire on. “We can talk about fees, etc., but if you’re failing to set aside the proper amount of money nothing else will make the difference on whether you can retire well or not.” In his view, that fact is not getting nearly enough dialogue. “Every congressman and senator can talk about transparency and fees, but in reality, they have no concept. One of our chief tasks is helping people make smarter choices,” said Ohanesian. The Rise of Women By 2030, it’s estimated that single women will control 2/3 of the wealth in the U. S – but only 35 percent of financial advisors are women. When asked if there will be a lag in the number of qualified female advisors, Jaeger says she’s encouraged by a recent study showing 55 percent of younger women prefer to work with a female finance advisor. “I don’t think finance is a man’s game. Careers in financial services directly impact

people’s lives, the resources to take care of themselves and families, and retirement,” said Jaeger, who is hopeful that young women will become empowered to seek out careers in math and science. Jaeger also points out that women who do invest are very capable. “Women outperform their male counterparts in investing in the market longterm,” she said, noting that they are more likely to buy and hold securities and not move in and out of stock as quickly as men. At some point, 90 percent of all women will be solely responsible for their financial lives. On average, they live longer, which means they need more money and need their money to work harder for them. New Year’s Resolutions Many of the firm’s goals for 2018 remain the same as previous years: Continuing to serve existing clients and adding to its client base. They are obviously doing something right. “We are proud of the job we’ve done achieving returns for clients while minimizing risk,” said Ohanesian. “When we look at client retention, they stay with us for a large number of years. I still have clients—original and next generation family members-from 1977. The same is true for our staff.” Currently, Ohanesian / Lecours is focusing on women-owned companies and how they can assist them in managing and setting up 401k plans. Jaeger adds they are also emphasizing new business and employer retirement plans. “401k plans are powerful tools for investors – we focus on participant outcome,” she said. They gear education toward various ages. For younger employees, a 401k plan is often the first exposure to the market. For those in mid-career and people with retirement on the horizon, a different approach is needed. Whatever the age, a company retirement plan is a versatile and effective investment tool. For more information on of Ohanesian / Lecours Investment & Advisory Services, visit: ol-advisors.com

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by amy armstrong

ESTABLISH A FINANCIAL PLAN EARLIER THAN LATER IN LIFE Her father was a roofer; her mother was a stayhome mom. There was no pension; there was no retirement savings for their golden years.

oday, her mother currently resides in a long-term care memory care unit paid for by federal Medicaid. She and her three siblings’ support Mom’s other financial needs – careful not to exceed program maximums for her mother to remain qualified. As founder of the Jones Advisory Group based in Kansas, this situation is one that Megan Jones is adamant she does not want to see anyone face when their working years come to an end – especially her clients. “I know what this is like,” she said. “I know the reality. I have not only seen this, I live it. I am doing all I can with my clients to make sure they do not have to face this same situation.” Perhaps the only way to avoid this type of scenario is reverting to the use of a four-letter word: plan – a plan that exists across decades, a span of time that is often uncomfortable for today’s instant gratification society. Yet, Jones hears regularly from her older clients – sometimes a bit too late in the game – that having a plan is what they needed. “I can’t tell you how many times clients say to me, ‘Will you talk to my son or my daughter who are in their late 30s now? I don’t want them to make the same mistakes,’” Jones said.

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She recognizes the struggle that folks in their 20s, 30s and even 40s face in saving that first larger sum to invest. It is a big reason why she doesn’t enforce a firm minimum. She actually finds the concept offensive. “You hear these ads indicating that if you have $500,000 to call this firm, or that firm, and they can help you get started with your investment,” Jones said. “I am even terribly put off by that. I can only imagine how offended potential clients are.” Regardless of the starting value of the account, Jones said she will take on a client that is committed to creating a savings and retirement plan. “Sometimes, the people with the most limited resources are the ones that might need our help the most,” she said. When meeting new people interested in her services, Jones noted that a prospective client’s desire for professional money management is perquisite number two. The first requirement might sound a bit cliché, she admits, but for the Jones Advisory Group team the “nice” factor is their first consideration. “We do want to fill our days working for people we enjoy and who enjoy us,” Jones said. “We don’t have to be best friends and hang out together on the weekends,

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but we do have to have a mutual respect and like for each other. The dollar value in their starting bank account is not nearly as important as the relationship that we can build together.” The bulk of her clients are age 50 or older – folks who might not be ready to retire quite yet, but the coming decades will quickly take them to that fork in life’s road. At the very least, people need to divide their assets among two buckets – one dedicated to conservative investments that protect their savings, and another

dedicated to as much risk as they can tolerate to grow their assets against the inevitable impact of inflation, Jones said. Having started her advisory firm in 2008 just prior to the Great Recession, Jones remembers the struggle investors

faced as the housing market collapsed triggering an overall economic decline and a stock market plummet not seen since the Great Depression of the 1930s. Jones knows that today, investors remember the fear and uncertainty of a decade ago. She knows the market is riding high now, and that another rollercoaster-like drop is inevitable, according to historical records. But, she believes her hybrid investing approach has made her clients ready for the ups and the downs of the market and to use the cycles toward their advantage. “I believe our philosophy

of having money allocated in both options allows us to have a floor beneath our feet when the market takes a big dip,” Jones said. “But it also gives us growth opportunity when the market takes off again.” Client confidence in those concepts takes education and Jones is happy to provide that for her clients, as well as for students in high school, middle school, and even in elementary school. Financial education for today’s youth provided by industry professionals is what she believes is missing within the financial services trade, that is why she went

back to her high school in Topeka, Kansas, to offer financial education courses. “Our kids today need to know what it means to get a credit card and start creating credit, and they need to know how to create a budget and how to balance a checkbook even if that is done online,” Jones said. “In general, we just are not having these conversations

with our youth and I believe that needs to change. As advisors, I believe it is our responsibility to take the lead in making sure this happens for our children’s future so they don’t end up making the same mistakes that we did.” Learn more about Megan Jones and the Jones Advisory Group online at jonesadvisory.net

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by joel kranc

C R E AT I N G a PA R T N E R S H I P WITH CLIENTS Prizm Financial Group uses a simple approach to educate clients and partner with them in meeting their financial goals

ndustry jargon, fiduciary rule changes, and a lack of investment knowledge can sometimes make meeting with financial advisors relatively daunting for people. Some may feel that the process of speaking with an advisor feels more like an exercise in futility, instead of a partnership to achieve their financial goals. Improving the lives of her clients on that personal level is the mission of Stacie Leake, CEO and founder of Prizm Financial Group. After working as a senior vice-president in sales while managing advisory relationships for a large international bank, Leake saw there was room for improvement in advising clients and helping them meet their goals. That was the impetus for the creation of her firm. p.90

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Simplicity, she notes, is key. “What I like to offer clients is a simple and understandable approach to their financial household needs,” she said. In so doing, Leake works with clients to understand their goals, where they are in terms of retirement saving, and where they want to be. Going forward with recommendations becomes easier once goals and milestones are understood. Getting to that point takes time, she adds. “We will do two or three meetings before we begin to even suggest products or anything like that, so our focus is to really understanding the client first.” And the simple approach is not only part of the advice provided to clients, but is used in the way all communications are conducted. Leake explains the best way to

educate and communicate with the client is without industry jargon or complicated language so often used in the business. “I want the clients to see what I see in understanding their financial picture,” she said. In today’s world, however, the rise of technology, smart phones and apps that can be used by individuals to assist with their finances and investing, is perhaps eclipsing the need for an individual approach to education. “It’s missing the human element and relationship, and that human element and approach to investing is important. I don’t know that a robo-adivsor, which is truly just a computer, is going to be able to be as responsive as quickly as it may need to be,” said Leake. Being responsive and helping clients meet goals takes customization. The goals of clients

are all unique and individual, notes Leake. Although investment strategies might be similar to reach certain milestones, each client receives a customized approach that fits their individual household needs. That is why Leake says she works very closely with money managers at crafting individual portfolios for her clients. One part of the discussion with clients will inevitably lead to longterm care. Leake explains that clients are often in denial about the risks and needs for long-term care. Her firm takes into account the inflationary effects of long-term care costs that could double or triple in the next 25 years. The discussion is different based on the client, whether they are a Boomer near retirement, or someone in the sandwich generation caring for parents and children. Scenarios will be built around those needs and longer-term goals.

But client understanding has to go beyond just goals and milestones and further into the legal elements of what it means to be a fiduciary, and who is responsible for the planning and decisions around financial planning. Advisors, as a result of recent Department of Labor (DOL) rules meant to extend the definition of fiduciary, may change the types of clients they take on or the ways in which they conduct business. “I think that the [DOL] recognizes that we have an issue in the industry and that there isn’t enough information for the client. That relationship should be much deeper than it exists today in some cases,” Leake said, adding that clients are given material that helps them understand what a fiduciary is and what that relationship is like. In today’s environment, Leake says fiduciary standards are missing from the dialogue and this prevents

solid relationships from being built. Sometimes, there is a lack of dialogue between advisor and client. She adds that advisors need to go beyond risk tolerances and standard strategies, and open a meaningful dialogue that helps them understand the assets and how future assets will be needed to meet certain goals. “I think that is a fiduciary standard,” she stresses. Over the course of running Prizm Financial Group, Leake says her greatest success comes from the great client base she has built. As she puts it, they act almost as partners with her in creating the quality advice and financial planning they need. “I would say it’s my greatest success – having clients that want to come here and want to sit with me. I will help educate them along the way to make it a good relationship and a good experience for both of us. I’m very fortunate to have that kind of business and have built that kind of client base,” said Leake. Her own challenges have come from within. She says being able to believe in herself and her approach took about 10 years to master. However, the end result has been the ability to work with clients believing in her individual approach to education, advice and wealth creation. For more information on Prizm Financial Group, visit: www.prizmfinancialgroup.com

ADVISORS MAGAZINE - JAN 2018 p.91

by amy armstrong

RETIREMENT

EDUCATING PUBLIC

ON INVESTING

leads to successful wealth management firm

“

No one reads the prospectus. It’s too cumbersome. Frankly, to be kind to its writers, even just a front-page summary is, for most investors, a boring read, let alone the following pages and pages of a prospectus that accompany any financial investment.

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ost people don’t read them and even if they do, they don’t understand all that fine print and what it really means,” said David Damm, co-founder and managing partner of Carolina Wealth Management, Inc., of Greenville, North Carolina. Yet, it’s where all the fees and legalese are, and its contents impact the investor’s pocketbook whether or not he or she takes the time to read it thoroughly, or even glance it over. “It is our job to take that interest for the client,” Damm said regarding his philosophy on the role a financial advisor plays in helping clients navigate the often confusing world of fee structure and the myriad of notices that clients receive regarding their investments. “Even though the industry has been promoting transparency now for the past decade, it still is way too complex. It is very difficult to understand and, thus, we help our clients gain a better understanding of the prospectus as much as we possibly can.” It’s why the investment philosophy used by Carolina Wealth Management is to keep the process simple. Damm identifies the best investments available through an analysis of the manager’s track record as well as identifying, asset allocation, risk and fee structures with the best value for the investor. This provides him with a list of investments he and his firm is confident in recommending to their clients. His well-honed interest in the

ADVISORS MAGAZINE - JAN 2018

LONG TERM CARE

MITIGATING RISK

WEALTH PRESERVATION

investing world began in graduate school when he started his own IRA by chipping in a $100 a month while working toward his master’s degree in finance. He was reading every financial investment magazine he could get his hands on. But, little did he know that he would also meet a professor who would lay a track for Damm to follow for decades. “This professor took it upon himself to teach the public the principles of investing through workshops,” Damm said. “I admired what he was doing and the approach he was taking and I really wanted to be a part of what he was trying to build in terms of financial literacy for the community at large.” In the late 1990s, Damm went

to work with the professor as he left the university and set out on a nation-wide campaign conducting workshops and bringing average Americans under his financial wings as clients. “He started educating people about the practice of investing, and to some extent was the one of the first people to crack the door on explaining the difference of how fees and portfolios were constructed between brokers and advisors,” Damm said. It was a time of significant professional growth for Damm as he met with citizens across the country. Time and time again he listened to their stories of confusion and frustration with the investing process. He knew the professor was

on the right track with his emphasis on teaching first, then entering in to a business relationship with the people that attended public workshops. A few years later, Damm and Derek Pszenny, also a co-founder of Carolina Wealth, decided to focus more on client service within the local community and formed Carolina Wealth Management based on the professor’s principles. “We built Carolina Wealth on the same foundation he used: an investment practice that started with education (of the clients) first,” Damm said. “We felt that was of tremendous importance to fulfill our role to the client. We take the management of their money and their portfolios very seriously.” Damm earned the accredited investment fiduciary designation from the Center for Fiduciary Studies at the University of Pittsburgh’s Center for Executive Education in 2005 – long before the federal Department of Labor began writing its own definition of fiduciary to be enforced for financial advisors handling 401K accounts. The fiduciary topic is one Damm holds near and dear. “Becoming an independent advisor from the beginning, I always felt that I

was on the right side of the track,” he said, noting that he has never held any of the “series” designation necessary to sell investment products. “I never wanted the incentive to sell products. I have always felt the best approach to help clients navigate how to grow their money was for me to stay away from commission and be fee-based only.” Damm hopes the new national emphasis on the fiduciary role helps the general public better understand the concept of an advisor putting their needs first, as well as the various fee structures through which advisors are paid. But the biggest change he sees that could help the investing public would have to come from within the industry itself. “The financial services industry has a greed problem,” he said. “Fees are the number one driving force for too many of the investment models. Changing that is what will make a difference for investors. This has to be a service industry and not a sales industry.” Learn more about David R. Damm, AIF ®and Carolina Wealth Management, Inc., online at mycarolinawealth.com ADVISORS MAGAZINE - JAN 2018 p.93

by joel kranc

a holistic approach

ENSURES CONTENTED CLIENTS

Treece Financial Group’s client relationships go beyond portfolios to encompass other big picture goals

nder the Trump administration, the first new tax bill in a generation has passed, and the stock market is on a tear. Yet, planning for retirement is never just a market-watching activity. It takes time, effort and there are more issues such as healthcare, estate planning, and caring for loved ones to consider. This is where Treece Financial Group comes in. David Treece, a financial fiduciary and president of the firm, has never worked for a major wirehouse or insurance company. This, he said, is a good thing. “I didn’t have to unlearn things from other people who are basically trained to be sales people,” said Treece, adding that the main philosophy he has employed in the more

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ADVISORS MAGAZINE - JAN 2018

than 12 years since opening his own firm is to be on the side of clients and act as their advocates. The Miami Shores, Florida-based firm specializes in retirement planning, so most of its clients are near or already in retirement. With a focus on retirement security, Treece Financial Group looks at investment strategies holistically and from a perspective of the client’s well-being. This includes educating them to recognize and avoid signs of fraud and ensuring that their legal documents are in order. To understand the goals and tendencies of a new client, the firm’s approach uses a three-step process. “We look at their risk-tolerance, their

timeframe, and their goals, and try to get to know as much about them as possible,” said Treece. On the second appointment, the firm provides feedback on how their risk-versusreturns work out, and how aggressively the client may or may not be investing. The third appointment is where clients are provided with recommendations and given direction on how to move forward. “We have a very non-threatening approach. To educate clients, we go through a whole process. We don’t want them to make fast decisions. We have a squeakyclean regulatory record and I think our slower, more thorough and methodical process helps us make sure we are doing the right thing for the client,” Treece said. “We focus on long term care, because nothing will blow up a retiree’s whole nest egg and cause pain and suffering for a spouse or children like long term care,” Treece said. Some of the services Treece Financial

Group provides include an asset allocation review, a portfolio review and performance evaluation and estate and financial planning. “I think people can tell we are really trying to help them, that we care and that we want to treat them the way we would want to be treated,” Treece said. Treece Financial Group is also committed to financial education. In fact, the firm provides public seminars without a sales pitch. Topics include IRA planning, long term caregiving, social security and saving for college education. “These are not necessarily about investments, but they are designed to prepare people and make sure they understand what is coming,” explains Treece. Interestingly, Treece further explains that what is most important in educating clients and creating a strategy around their needs are not things like active versus passive management or other investment strategies. What is most important is looking at the client’s overall financial health – things like their debt, their savings, their mortgage,

their insurance, their business success or failure, and so on. “These are the big decisions that will really affect someone’s well-being and this is where they need help, so that is what we do. We do all the investment management but we look at the big picture, and it is our approach that really distinguishes us, and that is where we can add an enormous amount of value,” he said. “We want lifelong relationships with our clients -- for them to know us and for us to know them and their families. I host a popular annual holiday party in our home to help foster that. Those evenings are magical -- there is so much positive energy. I want people to feel at home in my home and get to meet other clients. We have attracted great people, and I am grateful for it. We are really blessed in this way,” Treece said. But beyond helping just those people close to, or already in, retirement, Treece Financial Group can work with those people who are a part of the so-called “sandwich generation,” who are dealing with the needs of their aging parents and also the needs of their own kids. Treece collaborates with attorneys and other professionals on various situations like reverse mortgages or medical issues to create solutions for clients. He advises that when helping either parents or children, that people should not to spend too much and sacrifice their own retirement savings. “We think of anything that could affect the client’s wellbeing—having their legal documents done and stored electronically, cyber-security, end-of-life planning, coping with aging, dealing with grief. We work with a psychologist and have presented programs such as “Coping with Grief at the

Holidays,” Treece said. Treece says there has been a shift, in many cases, away from simple investment decisions to broader planning questions about saving, retirement planning, debt and more. “These are not investment choice questions, they are real planning questions,” he said. “Much of our industry is tied to assets under management so the planning might be given as part of the assets under management and there might be a bit of a disconnect there.” “We have a diverse clientele who come from all over the world. A large number of LGBTQ singles and couples, racial, and ethnic minorities and various religious backgrounds. Unfortunately, the financial industry can be viewed as very white, conservative and unwelcoming to many. We believe in the inherent worth and dignity of every human being and everyone can feel welcomed and accepted in our office.” What Treece does is provide the education and information. “It’s been well worth it to spend the time and make sure people are happy, and we get people to agree to be thorough…and we have success stories to prove it,” he said. “We assisted an elderly client who lost $9,000 in an Internet scam and were able to recover every penny that was lost.” The firm’s greatest success reflects the company’s mission to help people in retirement with regard to their overall wellbeing. “We have access to money managers who will go to all cash in a crisis, which is a plus for retirees who are worried about another recession like 2008. We don’t ride their accounts down to the bottom and just tell them to wait it out, the market will come back with ‘It’s long term money,’ kind of excuses. People don’t want to hear that, and that’s what most advisors tell people.” “What drives us is to make sure that everyone is on track with their goals and positions,” said Treece. For more information on Treece Financial Group, visit: treecefinancialgroup.com

ADVISORS MAGAZINE - JAN 2018 p.95

by joel kranc

FROM AGRICULTURE

TO ASSETS

Daniel S. Miller, CFP® was raised on a farm and his values for helping people and working hard have helped him build a growing advisory firm.

n a recent essay for “Time Magazine” penned by billionaire Warren Buffet entitled, “The Optimists,” he states: “In the years of growth that certainly lie ahead, I have no doubt that America can both deliver riches to many and a decent life to all. We must not settle for less.” And a “decent” and “fulfilling” life is something close to Dan Miller’s heart. As the co-owner and president of Miller Financial Group, Inc. in Red Oak, Iowa, Miller came from what some may consider a non-traditional background. Born and raised on a farm in Missouri, he says: “I’ve always known and appreciated the value of hard work and doing the right thing

p.96

for people.” Miller acquired a degree in animal science and business which he utilized in various agricultural positions and in the banking field. In 2004, he was recruited into his current advisory firm and in 2013 he, along with his wife Denise, had the opportunity to buy the firm and expand it to where it is today. Miller Financial Group, Inc. today has office locations in Iowa, Nebraska and Missouri. “We are a planning firm first, and everyone that works in our firm has the philosophy that we’re not going to make recommendations without really getting to know our clients,” he explains of his firm’s philosophy. Miller says it is very

ADVISORS MAGAZINE - JAN 2018

important to our team that we learn about the client and to understand their full financial picture. “We want to know as much about our clients’ goals and financial situation as we can before any recommendations are made,” he stresses. Miller Financial Group, Inc. works with clients from all different walks of life, residing currently across 22 states. The

financial picture? Investment recommendations and planning strategies are then designed around those goals and that’s how we customize [the plan for our clients],” he said. Education is also a key component of that customization, and Miller encourages clients to ask questions to explore what their “pain points” are and how they may be able to help.

firm has a minimum investment requirement where associate advisors will take on clients with no less than $100,000 and Miller personally taking on clients with no less than $250,000, something he says he may raise in the future due to the sheer size of their current client base. The firm’s approach is to build around the planning process and risk management. As part of our process, Miller says his team asks their clients the following types of questions: “What is the purpose of your investments, how soon will you need to utilize them, and what are your goals going forward? Also, how can we add value and enhance your

“I believe knowledge is power, and I feel that understanding one’s own financial picture is very important. We want to work with clients that are very wellinformed,” Miller said, adding that the work we do is based

around education with the desire that people will make decisions which will enhance their own financial situation. When asked his thoughts on the DOL ruling and the fiduciary standard, Miller believes a fiduciary is someone who always acts in the best interest of another person, no matter how it affects them monetarily or otherwise. And when looking at how the Department of Labor has weighed in on the definition of a fiduciary, Miller says they overstepped their bounds and should not have been the entity to put in a fiduciary rule. “FINRA or the SEC should have been the entity to write

these new rules, not the DOL. Much of the required implementation is not realistic and burdensome for those of us already acting in a fiduciary capacity. I agree 100 percent with the spirit of the rule, but to have people who have never been out in the field, try to regulate the actions of others, is not realistic. You have to walk in our shoes before you try to govern us,” he explains. Miller and his team are also strong believers in employing technology to enhance the client experience with their firm. “Our process is fully collaborative, completed not for the client but with the client. We utilize interactive financial planning software, provide online access and use risk management and portfolio tools – we’re believers in the collaborative process,” he notes. He also adds that even though they are suitable for some, there are limits to the pure robo-applications seen in the marketplace today. “Robots aren’t human. For instance, they can’t meet with a grieving widow, or throw a

retirement party for a client. Our profession is about much more than an algorithm based on a simple questionnaire. We’re about adding value to our client’s lives, not just about growing a balance on their investment statement.” Over the years, Miller says one of his greatest successes has been seeing the growth of young people he has helped mentor. Also, about a year and a half ago, Miller published his 1st book: “Retirement Built to Last: Planning for When the Paychecks Stop.” Looking back at his time with

the firm, he does however, wish that they would have embraced the advisory and AUM model sooner. The predecessor to his firm was more interested in annuity and mutual fund accounts and didn’t embrace the AUM model as soon as some others. “We changed that when we took over the firm. Unfortunately we still have a lot of those older, small accounts to service and they often don’t generate much revenue for the firm. Those accounts, are now handled by our associate advisors,” Miller said, adding that this is slowly correcting itself as minimums have been put in place. Overall, Miller Financial Group, Inc. is a firm that looks to add value to the clients they serve, and to the lives of their employees that work as part of their team. “Our goal is to continue to build a firm that is held in the highest regard and known for its’ honesty, integrity and doing what is right. If you don’t have those things in our business, then you are in the wrong industry,” Miller said. For more information visit: planwithmillerfinancial.com

Daniel S. Miller is an investment adviser representative of, and securities and advisory services are offered through, USA Financial Securities Corp. Member FINRA/SIPC. A Registered Investment Advisor located at 6020 E Fulton St., Ada, MI 49301. Miller Financial Group is not affiliated with USA Financial Securities.

ADVISORS MAGAZINE - JAN 2018 p.97

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2016 EDITORIAL

TSM

January Game Changers in the Financial Industry Bipartisan Budget Act of 2015 Key Economic trends to watch in 2016 Suitability Vs. Fiduciary Standards Choosing the right Financial Advisor

March

September

Small and Mid-sized Business Growth Educating our Kids Financial Literacy Markets & Personal Finance

Innovation and Leadership Estate and Succession Planning Inspiring Comeback Stories Small businesses have faced

May

November

Big Data and Cloud Monetizing the Web Information Privacy and Cyber Security Trends Do-It-Yourself Models Expand Role of Technology & Outsourcing

Business of Presidential Politics Reading Between the Lines PACK Money Misappropriated Recovery and Growth of the Middle Market

July Important Trends and Challenges for Executives Startups Overvalued Silicon Valley Bubble Retail Financial Advice Consumer Changes in Attitude & Behavior Wealth Concentration

Editorial Department Michael Gordon The Suit Magazine 718.619.8520 editorialdept@thesuitmagazine.com www.thesuitmagazine.com