Helping Clients Preserve Their Wealth

HELPING CLIENTS TO PRESERVE AND GROW THEIR WEALTH

A good, healthy retirement requires an active lifestyle.

And for some would-be retirees, that means finding a job.

“I should be retired now,” said John G. Rumbold CFP®, EA, the proprietor of Rumbold Financial & Tax Advisory, who certainly is not retired. “I stay active, I stay alert, it keeps the mind alert learning new laws and regulations.”

Rumbold encourages his clients to seek new opportunities after they retire so that they can build a reliable income stream, in addition to their investments. Clients often take his advice and start a small service business, or sell handmade crafts to provide a trickle of money — and as an activity to occupy their time, energy, and mind — while others take the non-remunerative route and volunteer.

Rumbold Financial & Tax Advisory, based in Tustin, California, provides services in income tax preparation, IRS and state audit representation, payroll reporting, QuickBooks setup and support, and business startup services. The firm also provides personal financial planning and investment advisory services, and requires a $25,000 minimum investment.

Financial literacy remains a challenge for advisors and planners who often struggle to explain the basics to their prospective clients. Taxes are no different, with the government presenting taxpayers with a byzantine code of rules and regulations to follow. The average person attempting to prepare their own tax return spends roughly eight hours trying, and then often deals with the anxiety that comes from fearing they missed something minute. Arguably, investing and retirement planning, are even more complex.

Clearing up misconceptions about the market usually is Rumbold’s first step with many prospects. Often prospects approach him hoping to beat the market, and are disappointed to find out that aiming to outperform the S&P 500 typically amounts to a fool’s errand.

“Clients are really best-suited by helping them to build their wealth through their own careers and businesses,” Rumbold told “The Suit” in a recent interview. “Once they have some wealth established I can help them to preserve that wealth and grow it at a normal pace.”

Rumbold points to a friend who sold a small business for $5 million and then asked how to grow that money by beating the market.

“I told him, you know how to build wealth more than me,” Rumbold said. “My goal is to help clients preserve and grow their wealth, in that order.”

Many clients, however, come to Rumbold after working with another advisor, often to poor or even disastrous results.

“When I help a client who isn’t one of my financial planning clients, I see the results of bad decisions,” he said.

Investors often lose money because their advisors neglect to consider tax implications, costing the estate enormous sums of money. Soprano’s actor, James Gandolfini, notably fell into this category when his estate planners failed to properly protect his assets from taxes; in the end, the government raked in $30 million from Gandolfini’s estate.

And some elderly savers simply fall victim to bad information. Rumbold offered the common example of an elderly

John G. Rumbold, EA, CFP® Main Office 17461 Irvine Boulevard, Ste G Tustin, CA 92780 Main Number 714-425-7202 Email jrumbold@rfta.biz

person transferring the deed to their home to their children before they die to “make it easier” for the family. It’s a bad idea, however, because it leaves the transfer vulnerable to significant taxes.

Investors’ inability to sort their own finances often leaves them with no way to determine whether an advisor is leading them in the wrong direction. A lack of financial literacy, coupled with misconceptions and the fear of asking the wrong questions, can drive would-be investors into financial blunders that can be difficult to recover from, or, in some cases, prevent them from ever getting started at all.

“I don’t have the answer to reach these people and make them ask for advice,” Rumbold said.

Rumbold said he assures new clients that the industry is complicated, and that a lack of financial know-how is fixable. He added that he is a fiduciary, meaning client concerns come before commissions. As a result, he tries to help his clients sort through the ever-changing morass of rules and regulations so that they can effectively protect their assets from taxes, and grow their wealth through investment.

“[Regulations are] even very complicated for somebody like me who’s been trained in the industry,” he said.

Many would-be retirees continue working after 65, and sometimes it’s because their planning went awry, or never happened. Rumbold sees several people each year who can’t afford his services, but as a fiduciary advisor and member of the community, he still provides them with advice before referring them to free or low-cost community services that can help.

“When people come in and don’t have enough money to pay, I give them advice anyways and then send them over to the senior center,” Rumbold said. “I feel compassion for people who don’t understand finance … I’m willing to give back to the community in that way.” For more information see www.rfta.biz

RUMBOLD TAX ADVISORY

Tax Preparation & Audit Defense

For more information see www.rfta.biz