Marcus Lemonis Lemonade-Fund

ADVISORS

JAN 2021

ISSUE 100

magazine

marcus lemonis empathy & entrepreneurism

Is Your Advisor a Fiduciary?

New rules maintain dual standards

Cleaning 5G Data

The art and science of data crunching

The Prosperity Project Building a prosperous life

Coach Weldon's Corner

market predictions post elections Page 25

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contents jan 2021 on the cover

14

Marcus Lemonis His latest initiatives including the Business Learning Center and the Lemon-aid Foundation

features

6

Is Your Advisor a Fiduciary?

New rules maintain dual standards for responsibilities

20

Cleaning 5G Data The art and science of data crunching in 5G technology

47

The Prosperity Project

14

How do you define prosperity, as it relates to your individual circumstances

COVER STORY: MARCUS LEMONIS

47 6

is your advisor a fiduciary cleaning

5g data

20

made for you

54

Our picks from around the globe

coach weldon's corner

25

Where is the market going now that the election is over?

4 / ADVISORS MAGAZINE

JAN 2021

jan 2021 advisor interviews

10

Financial Edcuation

10

FINANCIAL EDUCATION

A personal touch to tackle financial literacy

28

Bringing it All Back Home Fulfilling retirement dreams

32

Y.O.Y.O. Economy Often Overlooked Failing to consult with financial professionals

34

28

BRINGING IT ALL BACK HOME

GETTING OUT IN FRONT OF CHANGE

The 'Personal' CFO

PUTTING CLIENTS FIRST

40

TAKE EMOTION OUT OF THE QUESTIONS

38

36

Creating calm through coordination

36

Getting Out in Front of Change One stop, proactive mission

38

48

Set specific time horizons

Address money's emotional aspects

Take Emotion out of the Question

Building Trust Fortifies Client Relationships

40

52

Understand what people need, being there for them

Simplifying the financials

Putting Clients First

Subscribing to Advice

44

56

Advisors help beyond retirement

Better money know-how improves outcomes

Securing Seniors' Futures

Improving Financial Literacy Skills

ADVISORS MAGAZINE / 5

by bobby l hickman

Is Your Advisor

A FIDUCIARY?

New rules maintain dual standards for responsibilities

C

onsumers often assume that their financial advisors are putting the customer’s interests ahead of their own, but that is not necessarily the case. Although two federal regulators have now harmonized their rules for financial advice, two different standards remain in the marketplace that are likely to continue causing confusion for consumers.

For decades, Registered Investment Advisors (RIAs) have been classified as fiduciaries, requiring them to act in the best interests of their clients – regardless of their own interests or those of 6 / ADVISORS MAGAZINE

JAN 2021

their firms. Meanwhile, brokerdealers were held to what the SEC termed a “quasi-fiduciary” standard to make suitable recommendations to clients. An attempt by the U.S. Department of Labor to hold brokers to the same fiduciary standards as RIAs was struck down in 2018 by a federal appeals court.

Earlier this year, the SEC addressed the issue with Regulation Best Interest, which requires brokers to act in the “best interest” of their clients. After the SEC regulation survived a federal

court challenged in June 2020, the Labor Department adopted an identical rule that aligns its regulations with the SEC. The Office of Management and Budget provided final approval for the Labor rule in November.

The new rules do not hold brokers to the fiduciary standard, but they do provide a higher standard than the previous “suitability” standard. However, none of these new rules alter the fiduciary standard for investment advisors.

With each type of financial professional held to a different

ethical standard, consumers are likely to continue facing confusion when trying to distinguish between the duties of brokers and investment advisors “Unfortunately, I think it is very difficult of consumers to distinguish between a fiduciary, broker, and dual registered advisor,” said Brice P. Carter, CFP®, CIO and financial advisor at Financial Strategies Group, Inc., in Flint, Michigan. ”We all have similar titles and often similar designations, confusing the matters even more,” Carter noted. “As an industry we need to do a better job of educating consumers on the differences between these business models and the

corresponding obligations to clients.”

Randy Kurtz, CFP®, chief investment officer at Upper Left Wealth Management, LLC, in Chicago, agreed the differences can be confusing.

“Technically, a broker has a Series 7 license {obtained by passing the General Securities Representative Qualification Examination} and works at a broker dealer such as Wells Fargo or Raymond James,” Kurtz explained. “A broker must ensure that investments he or she recommends to a client are ‘suitable’ for that client.”

In contrast, a fiduciary is governed by a Series 65 license (Uniform Investment Advisor Law

Examination) and is often referred to as an investment advisor, he continued. As a fiduciary, they must act in the client’s best interests – a much higher standard than recommending “suitable” investments or acting in the client’s “best interest”. A dually registered person has at least two licenses, a Series 7 and a Series 65.

“At the end of the day, these are technical structures that say little about the broker or advisor,” Kurtz added. “I have seen brokers act in the best interest of their clients, and I have seen advisors not do the same. While I am a fiduciary, I find it more important to know the broker or advisor as a person. Character counts more ADVISORS MAGAZINE / 7

than which test someone has taken and passed.”

Kurt C. Jackson, CFP®, CEO/Founder, Central Coast Wealth Management, San Luis Obispo, California, added, “Most clients today who have done homework on the various types of ‘professionals’ really don’t know the difference. In general, the accepted standard that seems to be the ‘right’ way is the fiduciary standard.

Unfortunately, clients don’t know what they don’t know.”

There is no one “right” answer for every client’s needs, Jackson said. While the term “fiduciary” might sound like the ideal solution, a fee-only professional may not necessarily be the right choice.

Jackson is a dual-registered 8 / ADVISORS MAGAZINE

JAN 2021

IRA (independent investment representative) of a RIA, a FINRA-registered representative, and an insurance agent. He typically deals with high-networth multigenerational families who prefer work with a certified financial planner who will oversee all their financial affairs alongside their CPA and estate planning attorney.

“There are plenty of fee only RIA ‘fiduciaries’ who don’t understand the complexities of insurance policies, LTC contracts and older annuities,” Jackson said. “They are primarily interested in simply gathering client assets, and putting them in preprogrammed, lowmaintenance, outsourced money management with the long-term intent of selling that business as

part of their own retirement plan.”

Jackson noted most fiduciaries operate on a fee-only basis and market that characteristic heavily. There are few brokeronly professionals are now in the industry, he continued, as most people entering the business prefer to also offer additional services such as financial planning.

However, Jackson continued, most CFPs tend to fall in the dual-registered category. A dualregistered advisor can charge a fee for fiduciary work as well as perform some broker functions that use investments or strategies where they are compensated by commissions rather than fees.

“I pity the client looking for a new wealth management specialist because they may pick the wrong one – someone who may not be set up to do business, or who elects to focus on the one specialty that is most lucrative for them,” Jackson added. “In my opinion, only dually registered professionals can truly access all of the various vehicles to get clients from where they are now to what they want their legacy to be. Unfortunately, clients who focus on just working with feeonly professionals or brokers may unknowingly be limiting themselves.”

Jackson added, “Wouldn’t it be nice if someday, the CFP – like the MD or JD – was the barrier into this profession and the term ‘financial advisor’ actually meant that you had to advise on all aspects of a client’s financial life, no matter how you were paid?

Perhaps I am biased, but in my professional opinion, until that day comes, the dually registered CFP is your next best choice.”

By bobby L. Hickman

A PERSONAL TOUCH TO TACKLE FINANCIAL LITERACY

"The best vechile is telling true clients stories"

F

inancial illiteracy was already a major problem for many American families before the 2020 global pandemic reemphasized the importance helping people manage their current needs and prepare for future ones.

An August 2020 Charles Schwab financial literacy survey found more than half of U.S. adults expressed a desire for better money 10 / ADVISORS MAGAZINE

JAN 2021

management skills. The study also found 63 percent of U.S. adults list financial education as the most important post-graduation need for young people, versus 43 percent who favored health and wellness education (despite the global health crisis). Another 2020 study by the National Financial Educators Council found almost 40 percent of Americans turn to family members for financial guidance, versus some

36 percent who consulted financial professionals. More than 24 percent said they have no one to help them with money issues.

Often the simplest and most effective way to educate clients about financial matters is simply sharing stories about other people’s experiences, according to Charles (Chuck) Cooper CFP®, owner and president of The Master's Financial Group in Greeley, Colorado.

“The best vehicle we have is telling true stories about people we’ve worked with,” Cooper said. “When they didn't do what we suggested and something unplanned happened, it hurt them big time.”

Cooper said he and the advisors he helps train find people tend to relate to true-life stores better than any other approach. Those stories help illustrate the reasons why his firm makes various recommendations, as

well as the consequences that can arise from a poor decision.

While other people’s experiences are a helpful starting point, Cooper added, it is also important to be honest with clients about how their daily decisions will affect achieving their long-term goals.

“You have to tell people, ‘This is where you are at; this is where we need to go; and this is how we’re going to get here’,” he said. “You

may say, ‘We need to cut up your credit cards. We need to pay down debt and to get money we can set aside. You may have to adjust your lifestyle somewhat.’ Those are the tough things we need to say.”

Cooper said his firm’s recommendations are based on a thorough review of current income, assets, spending habits, and future goals. He said advisors show clients how much they have available and ADVISORS MAGAZINE / 11

Tomorrow’s Financial Services Practice Today

6500 29th Street Suite 210 Greeley, CO 80634

12 / ADVISORS MAGAZINE

JAN 2021

– if they continue their current habits – how much money will be available when they retire.

“You aren't going to have a very good retirement if you continue on this track,” he tells clients, “so we need to make adjustments here and here. Here's what we need to do. It's going to be up to you to agree and tell us to do that.”

Cooper said he believes one of the shortcomings of the financial services industry is the emerging need to educate people that they need to have more equities in their portfolio over the longterm.

“One of the challenges I see that doesn't get talked about much concerns target date funds,” Cooper said. “With these funds, the younger you are, the more stocks and equities you have. As you get closer to retirement, you drastically reduce your equities, and invest more in bond and fixed-income instruments.”

A recent Vanguard study found that 77 percent of people who participate in a retirement savings plan invest in at least one target date fund. Over a range of many years, as the owner’s retirement grows near, these funds automatically reallocate investments from stocks to more conservative options. However, with U.S. interest rates falling to almost zero percent in recent years, bond performance rates have also declined, reducing fund availability in later years.

“This is definitely a lesson failed because when you the investor reaches age 65 now, you may have 20 percent of your money in equities and 80 percent in bonds.

You're trying to pay out a 5% return at retirement, but you're not getting any growth {from the

bonds}. Therefore, inflation is going to eat you alive. Yet I don't hear that concern discussed frequently enough.”

Another recent concern for retirement planning is end of the stretch IRA. This estate planning strategy allowed a non-spouse beneficiary who inherited an IRA to take reduced distributions over a period that could last decades. Ultimately, a stretch IRA could pass its funds along from one generation to another while they grew tax-free. The SECURE Act of 2019 ended the practice by requiring beneficiaries to take distributions within 10 years of the IRA holder’s death.

“What a multi-generational wealth building tool you had there!” Cooper said. “It does make a difference now in estate planning, with the shorter period of time you have to pay out the IRA (except for the spouse to spouse).”

Some plans are designed for one spouse to inherit the IRA when the primary owner passes away. Other IRAs may allocate some money to the children on the first death, or they may receive the entire distribution when both parents die. Cooper said his firm tries to meet with the children so make sure they understand how the IRA funds will be distributed, particularly in light of the recent tax law changes. Thus far, he added, the transition has been relatively smooth.

How retirement funds will be distributed are one of many considerations in succession planning for businesses and retirement planning for families.

Americans are also living longer than ever before, making it more challenging to create financial plans that ensure retirees will not

outlive their money.

“Every plan we build involves succession planning for whichever spouse lives the longest,” Cooper said. “If we sit down with two 62-year-olds who don't smoke, one of them is going to live into their mid-90s. We've got a plan for that.”

He said the best response to increased longevity risk is building an investment portfolio strongly around equities. Over a typical person’s lifetime, he said, the S&P index has risen 37 times and dividends have gone up 22 times.

However, the cost of living has only increased by eightfold.

“Equities are the only thing that is going to hedge inflation,” Cooper continued. “When you take a look right now at bonds paying four percent, and inflation running three percent, how are you going to live on one percent? You sure can’t pull the principal out that way. So one of the things we really encourage people to understand is the upside of equities or stocks in their portfolio over the long haul. We'll have some volatility in the market, but hopefully we can still continue to keep you retired. Even if you make it to your 90s, your principal is still going to be there for your kids.”

Cooper also said his firm is seeing larger asset levels for both retirees and estates. His clients are preparing wills and financial planning documents that make sure they can provide funds for their children, the charities they support, and to take care of the surviving spouse.

Another significant longevity risk arises from the cost of long-term medical care. Companies that sold early long-term care policies priced the premiums too low and encountered heavy losses, leading to higher prices, Cooper said. Now

it has become tougher to find companies that offer affordable long-term care coverage, which forces advisors to find other solutions. He noted one common option is buying a life insurance rider to address medical future costs.

“Many life insurance policies now offer a long-term care rider that will help pay for long-term care in home and in a facility,” Cooper said. “They use some of the policy’s death benefit to fund medical care. This at least provides a method to finance some long-term care expenses, and it is far more affordable that the current limited offerings.”

Like many firms, The Master's Financial Group’s normal business routines were disrupted in 2020 by the pandemic, recession, and stock market volatility. The resulting shutdown largely ended face-toface visits in the office, replaced by calls or meetings in coffee shops and restaurants. Cooper and his team continue making a concerted effort to contact clients, keeping the lines of communication open and reassuring them that things will be okay in the long run.

“I called people on Saturdays and

in the evenings, just to let them know I was thinking about them. I told them that we are going to be okay; that we’ll get through this like we have the last time. I tell everyone in our firm to reach out and talk to your people. Don't be afraid take their calls and answer their questions. If you remain stable and communicate, they'll stay with you.”

Cooper has not seen an increase in business as a result of the pandemic, even though the health crisis has made some people more aware of their own personal risks. As the year winds down, he hopes his firm will do even better than it did in 2019.

“We've actually had a number of newer clients who are much more on the upper end of the wealth spectrum,” Cooper said. “They are concerned with making sure that they pay as little estate tax as possible so that the maximum amount of money goes to their heirs.” And he added, “Going into 2021, I plan to just continue helping people stay strong and build their assets, no matter what the economic and political environment looks like next year.”

For more information on The Master’s Financial Group, visit mastersfinancialgroup.com

ADVISORS MAGAZINE / 13

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MARCUS LEMONIS Lemon-Aid Foundation $50 Million Pledge 14 / ADVISORS MAGAZINE

JAN 2021

By Joe Innace

MARCUS

LEMONIS at the Crossroads of Empathy and Entrepreneurism

M

arcus Lemonis was merely an infant in his native Lebanon as the nation was enduring the ravages of war in 1974, but when a bomb exploded in Nashville, Tennessee on Christmas Day 2020, the TV personality (CNBC’s The Profit and now Streets of Dreams), entrepreneur, advocate and philanthropist sprang into action.

What started as a $250,000 reward to anyone who provided information leading to the arrest and conviction of the perpetrator, was converted to donate to victims that were directly affected. Through an application process, Lemonis’ Nashville 30 Day Fund provided qualifying people and businesses, within a half mile of the bomb site, forgivable loans of up to

$100,000.

"The Nashville 30 Day Fund is designed to be quick, easy, and free of red tape, as small business owners and individuals work to recover from the effects of the Christmas Day bombing in Nashville," Lemonis said in a recent press release. "All we ask in return: if you can, pay it forward."

He personally donated $500,000 to the cause.

Lemonis, left at the steps of a Lebanese orphanage at just four days old by his birth mother, knows the value of paying it forward. His success as a businessman and entrepreneur is perhaps only surpassed by his sense of community and his compassion.

At nine months old, he was adopted and brought to Miami, Florida where he was raised by loving adoptive ADVISORS MAGAZINE / 15

"People respect you more if they get the truth as opposed to a bunch of fluff."

- Marcus Lemonis

16 / ADVISORS MAGAZINE

JAN 2021

parents, Sophia and Leo Lemonis.

Sophia nurtured his unique qualities, allowing him to embrace his own traits and learn that he had a head for business and a gift for helping others. He says she made him promise to “kick down doors for others.”

As a young man, Marcus honed his entrepreneurial spirit while working at his family’s automotive dealership.

By the age of 25, Marcus seized upon an opportunity to reshape the way recreational vehicles and outdoor equipment were sold.

It’s been reported that former Chrysler CEO Lee Iacocca, a friend of the family, consulted with Lemonis about getting into the RV industry. Iacocca saw the RV sector as fragmented and ripe for consolidation. He reportedly helped Lemonis start and acquire Holiday RV Superstores.

Lemonis served as CEO of Holiday RV Superstores in the early 2000s, then co-founded Freedom Roads and began acquiring RV dealerships.

In 2006, Freedom Roads merged

with Camping World with Lemonis as CEO. Good Sam Enterprises is also part of the group.

Camping World Holdings went public on the New York Stock Exchange (CWH) in October 2016.

Still serving as chairperson at Camping World and Gander RV & Outdoors, Lemonis’ leadership and vision have helped make it America's #1 source for RVs, camping accessories, RV maintenance and repair.

As noted on his website: “Marcus Lemonis may have been born in Lebanon but he is 100% Americanmade.” And, perhaps fittingly, what’s more American than camping in the great outdoors, or RV-ing from sea to shining sea?

The January 5th airing of CNBC's "Streets of Dreams with Marcus Lemonis," featured Lemonis visiting Music Row – an unassuming Nashville street that is at the heart of America's multi-billion-dollar country music industry. The five-episode series, from the same producers of Anthony Bourdain: Parts Unknown,

showcases small businesses across the country and explores the stories of the entrepreneurs and the unique business cultures that define America’s most iconic streets.

"It was surreal for me to visit Nashville five days after the bombing and see the destruction firsthand, knowing I was here a year ago filming in this iconic city,” he added in the same statement.

“I met with many business owners to start the process of rebuilding and to let them know, they are not alone."

Also in late 2020, during the Covid-19 pandemic, Marcus launched The Business Learning Center, a free online educational tool on his website (marcuslemonis.com) aimed at helping entrepreneurs and business owners succeed during challenging times. The site also includes The Business of Life section, which helps people understand how to make the best use of their money – from applying for student loans to buying a first car or home.

As noted on the website, The Business Learning Center is a place for ideas, information and inspiration. One of the recent courses featured focuses on Consumer Confidence. In that course, Lemonis advises how to listen and learn from customers to create a business that delivers products and services that earn brand loyalty and trust.

Most of the courses consist of seven to nine online lessons. They deal with topics such as managing teams, how to reinvent yourself or a business, managing the finances, negotiating strategies and many more.

“Maybe this is the business part of my brain, but I didn’t want to just reach out a hand to a few

“There is a passion to ensure that small businesses feel supported & people in need have a meal.”

people,” Lemonis explained the motivation behind his learning center. “I wanted to create a huge place of opportunity, then open the floodgates and give it away to everyone for free.”

He says the online learning center is designed as a place for everyone to grow. Lemonis has taken a lot of what he’s learned over the years, and is now passing that along to others. Articles and podcasts, in addition to the courses, are posted about everything from business to lifestyle.

“Think of this as a reference library for your entire life,” he explains. “But most importantly, I wanted everyone to have access.

So, this is all free. Yes. Free … I think everyone should have a right to learn regardless of their income.

And I want to be your bridge to knowledge and opportunity, not just in business but in life.”

Learning and Lemon-Aid The Business Learning Center is clearly part of Lemonis’ ongoing mission of paying it forward.

He also recently launched The Lemon-Aid Foundation to provide resources and lending to the many struggling businesses and individuals during these pandemic-challenged times.

"I have dedicated my life to working with small businesses and understand the urgent need for both financial and educational resources," he said in an October issue of the Chicago Business Journal. "Business leaders have a responsibility to empower other entrepreneurs so that they can flourish and succeed in today's world. Our best and only option is to support each other and I implore others to join me in the cause."

Lemonis pledged $50 million ADVISORS MAGAZINE / 17

“I wanted to create a huge place of opportunity, then open the floodgates and give it away to everyone for free. And that’s how this online learning center was born…”

18 / ADVISORS MAGAZINE

JAN 2021

to his Lemon-Aid Foundation for supporting and investing in underserved communities and small businesses. These investments take the form of loans and equity investments and are designed to have measurable charitable impact on the communities and businesses being served by the foundation.

The foundation also aims to make grants to other charitable organizations that share the same mission and goals.

Lemonis says he intends to apply the same type of rigor that he applies in his own investments to the impact investing of the foundation.

This past holiday season – in one of its first initiatives – The Lemon-Aid Foundation challenged Americans to give back to their local restaurants and help those who are food insecure.

Lemonis, Grubhub and others combined forces to support community restaurants and those people most in need.

The mission is to get people to round up food orders and donate the change – and not just during the holidays, but throughout the continued COVID-19 pandemic. Dubbed “Plating Change,” Lemonis kickstarted the program through The Lemon-Aid Foundation with a $1 million donation and the newly formed partnership with Grubhub.

The "Plating Change" program works with Grubhub to give back to World Central Kitchen, supporting its Restaurants for the People program, and also providing meals for communities in need. A $500,000 donation in November through The Lemon-Aid Foundation jumpstarted the program, allowing World Central Kitchen and Grubhub to take immediate action in New York, Chicago, Boston, Los Angeles, Miami, and Philadelphia, bringing food to those who need it most.

"This year has been a struggle for so many people and businesses around the country, and we know winter will

bring a new set of challenges," said Seth Priebatsch, chief revenue officer at Grubhub, in a November joint press release with Lemonis. "We're so appreciative of Marcus' partnership and contribution to World Central Kitchen to provide meals to those who need them most while also supporting the restaurants we all know and love."

The Lemon-Aid Foundation is also donating the remaining $500,000 to other charitable organizations that fight food insecurity, as well as local restaurants affected by the COVID-19 pandemic. By going to wck.org/platingchange, people across the country can still donate to World Central Kitchen in support of the program, whether it’s a single meal (value of $10) or more.

are seeing the tremendous impact that we're making in the community for both small business restaurant owners and those in need of food aid and want to help make a larger impact in their lives. I'm grateful for their support."

When visiting Lemonis’ website and learning center, one of his credos prominently displayed is: “Don’t compromise who you are.”

He stresses that with each great success, the lessons of humility imparted by his mother have helped keep him grounded, reminding him that the true riches of life are found in giving back.

For more information, visit: marcuslemonis.com

What’s more, some major sports leagues have each dedicated to being an extension of the "Plating Change" program through their donations and commitment in raising awareness.

"When you work tirelessly to try and do good and create bridges, you find that there are always people along the way who want to help in your mission," said Lemonis in an official statement. "My friends at MLB, NASCAR and NHRA

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ADVISORS MAGAZINE / 19

CLEAN DATA

KEY TO MAXIMIZING

5G'S POTENTIAL TO AUGMENT MARKETING by daniel mutter

20 / ADVISORS MAGAZINE

JAN 2021

D

Data crunching is both a science and an art; many prominent proponents of 5G technology—the newest cellular wireless to help us navigate the online world—are focused on the breathtaking speed of content delivery. Sky Cassidy, CEO of MountainTop Data, says 5G’s most important impact on marketers is the ability to connect, analyze the needs and desires of customers, and combine customer data with 5G’s potency to personalize their journey from intrigue to sale.

When it comes to 5G—the fifth generation of cellular wireless technology helping us navigate the online world—most businesses are focused on speed. The key to progress is processing the data. Connection is one thing; giving context to the vast amounts of information coming is an unprecedented challenge, according to Sky Cassidy, CEO of MountainTop Data.

“How marketing professionals, gather, process and employ the data that 5G enables is the real key to success,” says Cassidy. “It’s a transformation that could revolutionize the relationships between customers and vendors.”

Speed is only one consideration. The trick with 5G is that it’s powerful enough to smoothly power not only cell phones and the mobile apps we’ve all come to rely on, but everything else, too: televisions, streaming services, computers, smart speakers, and other smart devices.(1) Faster load times are great but the ways 5G can move a customer through their journey is more interesting.

So, what does that journey look like? We’ll be seeing more digital advertisements, which isn’t surprising, but where and how marketers connect with one another is where the attention needs to be focused.

Faster network speeds may enable more sophisticated visuals and content, but it’s inevitable that marketers—B2B as well as B2C—will have a heightened need for more information points.

In a paper that examines the impact of 5G-enabled data collection, the Institute of Electrical and Electronic Engineers (IEEE) wrote, “5G promises to enable intelligent network and data application services ADVISORS MAGAZINE / 21

with connectivity to remote sensors, massive amounts of IoT data and low latency data transmissions. Big Data analytics will no longer be an afterthought, and it will play a significant role in the evolution of 5G standards enabling the intelligence across network, applications, and business.”(2) The conundrum for B2B marketers is dirty data. When we extrapolate the fact that 5G technology will be able to collect an unprecedented amount of customer data, it’s obvious that inaccurate data inevitably adds costs and potentially ruins longstanding relationships.

“The easiest way to keep your sales and marketing or ‘customer interaction’ data clean is to start with a clean database and have strict rules around each data point including automatic data expiration where necessary,” explains Cassidy.

“The main areas to cover are getting your foundational in-house database cleaned, 22 / ADVISORS MAGAZINE

JAN 2021

thoroughly vetting the quality of any new data providers, and having any contact and account data that’s automatically fed into your systems screened.” (3) Because customer data is critical to 5G’s potential applications, data hygiene is the place to start. Starting with clean data is ideal but in a variety of sectors, it’s not always an option. That’s where companies like MountainTop Data come in. They attack dirty data and inaccurate customer information with sophisticated algorithms that go beyond basic email verification. Beyond elementary actions like purging duplicates and fake contacts, true data cleaning can help you fix, enhance and cross-reference your customer data to produce marketing intelligence that is accurate, actionable, and effective.

“As I’ve said before, no information is perfect, and all data has inaccuracies,” Cassidy says.(4) “Ronald Reagan famously adopted the

Russian proverb ‘trust but verify’ and it’s a good rule to apply to 5G-boosted applications and customized campaigns.

These new technologies, combined with 5G’s multifarious augmentations, will accelerate mobile commerce, produce more targeted and accurate customer personalization, and enhance the customer experience. But those companies that start their initiatives with clean data will reap the benefits a lot sooner than those who let the opportunity pass them by.” *CNET. “Not just speed: 7 incredible things

you can do with 5G” cnet.com/news/5g-notjust-speed-fifth-generation-wireless-tech-letsyou-do-vr-self-driving-cars-drones-remote/ Accessed 10 January 2021 *IEEE. ”Big Data Analytics in 5G” futurenetworks.ieee.org/images/files/ pdf/applications/Data-Analytics-in-5GApplications030518.pdf Accessed 10 January 2021 *Grit Daily. ““Dirty data” tops brands’ hurdle list in serving their customers” gritdaily.com/ sky-cassidy-dirty-data-brands Accessed 10 January 2021 *E-Commerce Times. “3 Critical Steps to Startup Success” ecommercetimes.com/ story/86177.html Accessed 10 January 2021

COACH WELDON'S

Jeffry Weldon & Carolyn Weldon Weldon & Weldon Financial Coaching

WHERE IS THE MARKET GOING NOW THAT THE ELECTION IS OVER?

The Case against Forecasting

W

ho can help you figure out where the market is headed after an election?

Let us look at some of this year’s chatter.

In an article in Kiplinger magazine1 they state that “since 1930, the Dow Jones Industrial Average has gained an average of 10.0 percent in a president's first year and 7.9 percent in the second…” This appears to be great news. But as Paul Harvey Jr. used to say, “now the rest of the story.”

Later in the article they share that “there are exceptions, of course. In George Bush's final year of service (January 2008 through January 2009), for instance, the Dow sank nearly 32 percent.” Ultimately admitting that “election results might not be so great at predicting stock market returns…” Real rules have no exceptions and when it comes to investing a single exception could lead to a catastrophic financial result.

Paul Harvey was a broadcaster who had a variety of radio shows but also reported financial news and was a friend of Warren Buffett.2 My favorite quote from Paul Harvey

is, “It's only people who jump off the roller coaster who get hurt.” If you are looking at election results as some barometer of the market, it could end up like jumping off a rollercoaster. Outside the academic world, many stock forecasters attempt to use knowledge of past behavior of stock price movements to predict the probable future behavior of stock price movements.

For example, many investors moved out of stocks and into safer investments when Donald Trump was elected president. Wall Street’s predictions following the 2016 election were based on the belief that fear and uncertainty would drive the market down.3 During Trump’s first year as president the stock market rose some 20 percent. The results are not correlated with the predictions.

Now, we are not talking about fake news. In 2013, for example, $130 billion in stock value was wiped out in a matter of minutes following an AP tweet about an “explosion” that injured Barack Obama.”4 That was fake news and shortly thereafter stock prices recovered. The AP said

its Twitter account was hacked.

The history of the written word and the thought that it affects stock pricing is not new. Every financial services advertisement has a disclaimer at the end that reads, "Past results are no guarantee of future performance." We assert that searching for historical correlations between election results and market performance, however interesting, is of no real value to the stock market investor.

Smith, Anne Kates, and Kyle Woodley. “How Presidential Elections Affect the Stock Market.” Kiplinger, Kiplinger, 26 Oct. 2020, www. kiplinger.com/investing/stocks/601629/how-presidential-electionsaffect-the-stock-market#:~:text=But over the past century,second, according to YCharts data.).

1

Boorstin, Julia. “The Rest of the Story From Paul Harvey.” CNN MONEY, CNN, 18 Dec. 2000, money.cnn.com/magazines/fortune/ fortune_archive/2000/12/18/293098/index.htm.

2

Mullen , Jethro. “Global Markets Drop as U.S. Election Results Shock.” CNNMoney, Cable News Network, 9 Nov. 2016, money.cnn. com/2016/11/08/investing/global-markets-stocks-trump-clinton-uspresidential-election/index.html.

3

Rapoza, Kenneth. “Can 'Fake News' Impact The Stock Market?”

Forbes, Forbes Magazine, 15 Dec. 2020, www.forbes.com/ sites/kenrapoza/2017/02/26/can-fake-news-impact-the-stockmarket/~sh=344159f72fac.

4

Securities offered through Leigh Baldwin & Co., LLC Member FINRA/SIPC

ADVISORS MAGAZINE / 25

by joe innace

BRINGING IT ALL BACK HOME fulfilling retirement dreams

A

visit to RVA Wealth Management’s website homepage puts it all in perspective as the firm’s tagline is readily clear: “We help Richmond

retire.”

At a time when financial service providers are scrambling for business almost anywhere, RVA Wealth Management’s local focus and community spirit is by design – and it’s worn as a badge of honor.

David Koren, MBA, ChFC®, CLU®, retirement planning specialist and founder of RVA Wealth Management, always wanted it that way. It’s a reminder of both what he wanted to create — and what he wanted to leave behind.

Koren has had a successful career in the financial services sector. He started out as a college agent for Northwestern Mutual Life in 1980 while still at Virginia Tech. He was a wholesaler on the insurance side for many years after that, and then got into management as a vice president in healthcare insurance. Koren became head of sales for Aetna, tasked with building the company’s book of business nationally, and crisscrossing the country along the way.

But more than two decades of corporate life and a heavy business travel schedule can wear on anyone. “I got to the point where I decided

28 / ADVISORS MAGAZINE

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that I was too tired of all the travel and living out of a suitcase every week,” Koren told Advisors Magazine in a recent interview. “Just the thought of going to the airport for another flight made me ill.”

He decided to become a financial advisor.

“I had called on and worked with advisors for many, many years. I really respected what they did,” Koren said. “I wanted to become more locally focused, and become more involved with the community because when you’re traveling around the country all the time that’s hard to do.”

Initially, in 2010, Koren helped build a company called Capstone Financial Partners.

He left to form RVA Wealth Management about two years ago.

“I have a really good team with me here now and we love what we do; we love our clients,” Koren said of his four-person firm. “I don’t even feel like I’m working anymore. I come in and have a great time meeting with people I really care about and enjoy spending time with.”

His passion is teaching and coaching others, and it’s a strength that allowed him to build the business. “One of my historical fortes has always been teaching. I’ve loved hiring people; I’ve loved teaching and mentoring people

throughout my career and I felt like those skills would translate over into the personal finance world,” Koren said.

And such skills would also fill a void, since most people are financially illiterate.

According to a Northwestern Mutual study, 70 percent of Americans say their financial planning needs a lot of work.

“I saw that people really didn’t know how things worked, what they needed to do to prepare for retirement—all of the estate planning issues they were unaware of,” Koren noted. He decided to offer personal finance educational classes on a regular basis and he still does. It’s how he built and continues to grow the business.

“I do it as a service; I don’t push people to come and meet with me,” Koren said. “But if they need an advisor, I’m here as an option.

Sometimes it works out and sometimes it doesn’t. Sometimes there’s a good match.

But many people don’t come to meet with me—still, they get a good education and that makes me feel good,” he added.

Generally, RVA Wealth Management looks for a flat, $4,000 per year fee from either assets under management, or just a flat financial planning services fee. That’s equivalent to roughly $400,000 in assets, which effectively represents the minimum investment.

Robust and regular meetings are the firm’s hallmarks, and a source of pride for Koren.

“We have a tiered approach,” he explained.

“We meet with our top clients anywhere from three to four times a year. Face-to-face if possible, or now with COVID, virtually.”

The review of the client’s financial plan is extremely thorough. “The meetings can run anywhere from an hour to two hours; our record is three hours,” Koren said, “because we do a very, very deep dive into everything financial for the client.”

Clients have told him the time spent, and attention to detail, sets the firm apart from other advisors they’ve dealt with.

“We have a very long, structured agenda that we follow that is unique to each client,”

ADVISORS MAGAZINE / 29

as an independent firm our clients benefit from our ability to consider a broader range of solutions as we are not beholden to any bank, brokerage firm or insurance company to sell their products.

30 / ADVISORS MAGAZINE

Koren continued. “Kids, net worth, risk scores—everything is in there for each client. The risk scores we always double check at least once a year.”

In fact, RVA Wealth Management recently started its client-by-client risk score review cycle and found that a lot of people are more risk adverse now than at this time last year.

“Remember in late 2019 everything looked great,” Koren recalled. “Then we had the pandemic and all of sudden things are not so great. So, people are a little more cautious.”

But the deep-dive reviews help take some of the edge off such worries. Koren and his team consider all types of ‘what if’ scenarios to make sure that clients can handle anything. These are all designed to hard test each client’s portfolio and determine how each financial plan will hold up. Considerations might include things such as what happens if a spouse dies next year, or what if a long-term care stay is necessary, and what if there’s a severe bear market that lasts for a couple of years with no recovery.

One of the programs used by RVA Wealth Management for such scenarios is eMoney®. It and other planning tools allow the firm to make longevity assumptions that can push the client’s age out to over 100, and then determine what kind of impact that has on the

JAN 2021

overall financial plan.

For example, if a client’s plan can handle 10 years in a nursing home with no reduction in current expenses, or selling the primary home – at a 60-70 percent probability of success – that means the plan is in pretty good shape.

“We also always make sure our retired clients are in a cash or short-term liquid position so that for the next five years, they don’t need to sell any equity if they don’t want to,” Koren said. “Because you’re going to be able to withstand any economic downturn if you can weather it for five years without trying to sell anything – and that’s a nice position to be in.”

Koren, however, warns that a lot of people make the mistake of investing everything and not having that shortterm cash on hand.

He does prefer that any client has taken his class, and understanding cash flow needs is one of the key lessons in his six-hour session. “Know your net worth, and know what’s coming in and what you are spending,” he said. “If you don’t have a handle on those two things, it’s really hard to be successful financially.”

In 2020, the pandemic rendered such classroom work inoperable. But RVA Wealth Management, like other financial advisor firms, answered the challenge virtually with videoconferencing. Zoom,

YouTube and GoToMeeting.com were all deployed.

For Koren, the key challenge was maintaining privacy for each client. “We had a password for every meeting,” he said. “Just being able to set that up was a learning process. Most of our client meetings we’d conduct with GoToMeeting, because their encryption is better and it was critical to safeguard passwords and usernames.”

Zoom was used for quarterly market updates, but was logistically challenging with often 70-80 people on a call. YouTube was ultimately favored for large presentations because it could be broadcast with minimal background noise. “YouTube can be watched at the client’s convenience, and then they would send us emails for us to answer directly,” Koren explained.

“This has been a whole lot more effective in reaching out to larger groups.”

Meanwhile, Koren has several thoughts to share on changes taking place in the industry. He loves disruptive technology in general (Amazon, Uber, etc.) but believes online trading platforms and so-called robo-advisors fall short as bonafide financial planning tools “I think banks need to be more concerned than financial advisors,” Koren said. “It’s much easier to automate almost everything on the banking side. On the financial planning side, most tools I’ve seen are just scraping the surface, and are not really robust at all. Fullblown financial planning requires a lot of work.”

Over time, Koren thinks most advisors will become fiduciaryonly rather than dual-registered, which is the case for many in the

L/R: CALEB VAUGHAN, DAVID KOREN, ROBBIE KOREN, MICHAEL P. SMITH

industry now, but it will be a gradual transition.

“As a dual-registered advisor, I can sell a commissioned product, but as a fiduciary, I choose not to sell commissioned products,” Koren said. “The only reason we maintain the dual-registered advisory status is to do what I call annuity rescue— and we do a lot of that. I’m not a big annuity person, but many times clients come here, stuck with annuities and I need to be able to deal with them.”

He added: “There are a lot of dual-registered folks out there that really focus on selling commissioned products. I don’t agree with that.

It encourages the advisor to do things that are not in the client’s best interest.”

As far as prospectuses and fee disclosures, Koren maintains that transparency has improved, but once again, it comes down to education.

“In my classes I talk about knowing what the expense ratio is on any kind of fund that you’re using and a lot of people are shocked to find out that there’s an expense ratio on their

401 (k) funds,” he said. “At this firm, we want to have as much money as possible that clients earn on their investments to go back to them,” Koren said. “Our expense ratio (fee average) is about 0.85 overall for our clients. 85 basis points is a very low number.”

But beyond the fees, RVA Wealth Management prides itself on looking at each client holistically and at each client’s family and extended family.

“We have a number of clients who are the next generation of previous or existing clients,” Koren said.

Nowadays, while his business travel is far more limited than early in his career, Koren is content helping to pilot others to wherever their retirement dreams may be – exotic destinations, charities close to their hearts, family legacies, or elsewhere.

For more information, visit: rvawealthmanagement.com

ADVISORS MAGAZINE / 31

by bobby l. hickman

ECONOMY TALK

SMALL BUSINESS OWNERS OVERLOOK FINANCIAL PLANNING Y.O.Y.O. ECONOMY PLAYERS OFTEN NEED ADVISOR SUPPORT

Small businesses owners who are part of the “Y.O.Y.O.” economy – short for “You’re On Your Own” – often fail to consult with financial services professionals who could help them plan for the future.

R

esearch by The American College found that 60 percent of small business owners had not consulted a financial advisor to construct a plan for their personal or business future. The survey also found that fewer than one-third of business owners had a formal plan to manage expenses and income during retirement; had estimated how much capital they would need for retirement; or had created a succession or sale plan for their business.

Kevin A. Brown, CLU® ChFC, president and owner of Gateway Financial Advisors in Albuquerque, said the majority of his clients operate are part of the “Y.O.Y.O” economy.

“In my world, that mostly means people that are private practice owners, such as attorneys and dentists,” Brown explained. “There are also people who have come into 32 / ADVISORS MAGAZINE

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money. They might be rolling over a 401(k) plan because they changed jobs, or they’ve inherited money.

Sometimes they are about to retire, and they need to figure out what to do with their money after they are no longer working.”

Brown addresses those clients’ needs through his P.A.I.L. planning program, which stands for “Protection, Asset Management, Income for Retirement, and Leaving a Legacy.” The P.A.I.L. approach looks at each client’s entire financial situation, develops independent recommendations, and creates a roadmap to help them reach individual financial goals for each stage of their lives. The program incorporates such tools as the eMoney financial planning software platform.

“The plan is the basis for everything we do,” he explained. “Everybody is different. We’re really trying to

INTERVIEW

figure out what each person wants, what's important to them, and how much volatility they are willing to handle. We want to get a feel for their situation, their attitude, and their experience. It’s an ongoing process that puts people first.”

Brown added he tries to keep things as simple as possible for each client. He uses concrete terms and makes the approach accessible so people can understand what he is proposing and what is happening with their portfolios.

“I don’t want to be intimidating,” he added. “I want to be sitting on the same side of the table as the clients to help them make better decisions.”

At one presentation he attended, Brown said, a financial advisor stated that about a third of Americans prefer to do their own planning and investing by themselves, and they are capable of doing so. Another third believe they can handle their own financial planning but soon find they are not capable. The other third know they cannot do it alone and do not want to try.

Brown said he believes automated trading platforms and robo-advisor apps appeal to those who prefer handling their own financial planning.

“But there are still two-thirds of the people who either want help, or try it and realize that they need help.

Even though technology is available, there are still a lot of people who want to have that connection with a real person. Our practice is all about helping the clients.”

For more information on Gateway Financial Advisors, visit kevinbrownfinancialadvisor.com

by joe innace

PERSONAL CFO

THE 'PERSONAL' CFO

for people that require such services. A typical client is age 40-50 with a family, who either has their own company or is high up in a company, with an estimated net worth in excess of $2 million.

“I’m looking for individuals that have an appreciation for proactive, coordinated financial planning,” he explained, adding “not silo planning where they have one individual handling their tax information, another handling insurance, another handling investments and those parties never talk. A coordinated approach often results in a different solution than those offered in a silo environment.”

Bloch Private Wealth spends a great deal of time educating clients and getting them to understand what the firm is doing and why. “I’ve had multimillionaires tell me ‘Just do what you think is best,’ but I won’t operate that way,” Bloch said. “It’s their money and with coordinating taxes, investments, they need to take responsibility for it — insurance, estate planning and bill paying” Bloch told Advisors Magazine and I’ll take as much time as is required to help them understand why decisions in a recent interview. are made.”

“I saw a need in the market for Such decisions are often made with personal CFO services at an income preparedness in mind, which allowed level below the ultra-wealthy,” Bloch Bloch and his clients to remain mostly said. “So, I went and obtained my Certified Financial Planner designation, unfazed during 2020. “My clients did not freak out during the pandemic,” combining it with my background in tax law as an attorney, and opened up Bloch said. “I didn’t have to reach out any more than normal during this a multi-client, personal CFO type of time because part and parcel of our practice.” approach is to do disaster planning. My He left LA for the Dallas area, bringing with him the same approach to clients know the financial implications of undesired circumstances long before business, after seeing a similar market opportunity in Texas. “You have people they may occur.”

Preparing for worst-case scenarios, here who traditionally had four or five different financial service professionals coupled with a cool, composed CFO, kept everyone calm. handling various aspects of their For more information on Bloch Private financial world, but it was never under Wealth LLC, visit: blochprivatewealth. one coordinated umbrella, or there wasn’t one individual who could speak com everyone’s language and coordinate the various service lines,” Bloch explained.

And that’s what Bloch Private Wealth provides; it’s a personal service company that coordinates insurance, investments, taxes, financial planning, risk management – the whole gamut

Creating calm through coordination

T

he role of a chief financial officer (CFO), usually the third-highest position in a company, is no longer confined to the boardroom. Fact is, individuals — especially those who run their own small businesses — are realizing the benefits of having a personal CFO to coordinate the various components of their financial world.

Steven J. Bloch, Esq., CFP™, Managing Partner of Texas-based Bloch Private Wealth LLC, formed his company to provide those CFOtype financial coordination services to his clients. After graduating from Harvard College and Fordham Law School, Bloch spent a decade in the international tax departments of Deloitte & Touche and Ernst & Young (“EY”) doing proactive tax planning.

He and his two partners then acquired EY’s Los Angeles-based Business Management Practice group. Bloch saw how the ultra-wealthy used family office services to manage their global finances. “We were really more CFOs at that point for the client base, charged 34 / ADVISORS MAGAZINE

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TALK

by joe innace

GETTING OUT IN FRONT OF CHANGE A one-stop, proactive mission

S

mall businesses are the lifeblood of the United States economy, according to the U.S. Small Business Administration. An SBA report in 2019 showed that such businesses create more than twothirds of new jobs and account for 44 percent of America’s overall economic activity.

With an eye on providing financial services to such business owners, as well as individuals, Alabama-based Baker Camp Arnold Capital Management LLC takes a hands-on approach.

36 / ADVISORS MAGAZINE

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“Our goal is to always be proactive,” Joshua Baker, principal owner/managing director of Baker Camp Arnold Capital Management, told Advisors Magazine in a recent interview. “For example, we’re going to see some tax reform — whether Republicans or Democrats take office,” he continued. “We’re going to see some tax changes and we’re going to see some businesses still trying to come out of this (pandemic), whether it’s some SBA or bank help.

Our mission is to be proactive, hone in on such changes and try to help a lot of these small businesses because that’s the backbone of America.”

Baker notes that his firm, which

services clients accross the country, can and does personal financial planning, but the primary goal is to make an impact in the small business world.

“Just to deliver them some ideas because every small business owner out there probably feels that they can outwork it and they’ll be okay,” Baker said, “But our goal is to build a plan for them so they don’t have to outwork every single day, just hoping that they make it.”

Founded in May of 2017, the firm handles everything — from insurance planning to investment planning, home and auto and commercial insurance planning, group medical

getting out in front of change

needs and more.

“From a financial services standpoint, when you look at property/casualty/life/disability insurance, investment planning, 401(k) plans for business owners, supplemental group insurance — we can offer it all under this umbrella with this company,” Baker said.

“So, it allows us to just really have a different piece of the market, instead of a client having to go to two or three different companies to get that type of comprehensive planning.”

The firm has no minimum investment level because its large platform can accommodate a broad spectrum of potential clients and Baker does not want to turn anyone away.

Baker Camp Arnold Capital Management aims to build sound financial plans that don’t necessarily

just deal with today or getting to the retirement finish line. “We want to leave lasting impressions and legacies for future generations that are not even here yet,” Baker said.

Much of the work, using retirement planning as an example, is squarely planted in data, analytics and mathematics.

“For retirement planning, we utilize eMoney software and we do not charge planning fees, which is a huge value add,” Baker explained.

“We’ll look at existing assets, existing planning, savings, and budget. We then take what they have, stress test through Monte Carlo simulations and if we need to make some changes, we’ll make changes.”

The firm relies on Senior Partner Tyler Camp, CFP®, who runs the asset allocation models.

He creates all the financial plans, tailored with appropriate types of investment solutions.

“I go in and then build more of the advanced planning solutions with insurance — just to make sure that things are not all taxed in retirement,” Baker said. “If we can take taxes out, whether it’s using insurance or a Roth, we will.”

With people living longer nowadays, all plans are built to age 100, and at least two models of diversification are run: one focuses on how to get investment growth and more money for active retirement, and another focuses on capital preservation in passive retirement.

“I think everyone is on the same page, right now; taxes are going to rise,” Baker said. “So, if we can go ahead and do some of that planning now, then that’s going to mitigate and allow more income in retirement.

You got to have a blend of a lot of diversified solutions to do that. One portfolio cannot fix it all.”

interview

While each client case is different, the firm’s approach is consistent.

“We’ll look at all the different financial iterations we can have and then from there, that’s when we figure out where the missing links are,” Baker said, “or if we need to shift from the right pocket to the left pocket, whether we pre-tax or posttax on savings – we can make those solutions. And then hopefully, extend income for clients another five or ten years in retirement.”

Client education, which Baker views as critical, is well-timed and ongoing.

“We take clients from the very beginning through the planning process and to the end in real time,” he said. “We don’t ask a bunch of questions and then come back and create these real nice charts. When we’re running our plans with our clients and prospective clients, the first time they see a chart is the first time we see a chart.”

The educate-as-we-go focus allows Baker Camp Arnold Capital Management to show clients what’s going on behind the numbers.

“And by the time they leave here, they have a very clear and intricate understanding of what they have,” Baker said. “And therefore, you know, they’re a lot happier. And they’ll refer more clients to us. We really don’t have an attrition issue at all. They’re happy here.”

For more information on Baker Camp Arnold Capital Management, visit: bakercamparnold.com

Securities and investment advisory services offered through qualified registered representatives of MML Investors Services, LLC. Member SIPC (www.SIPC.org). Supervisory Office: 1050 Crown Pointe Parkway, Suite 1800, Atlanta, GA 30338. 770-551-3400. Baker Camp Arnold Capital Management is not a subsidiary of MML Investors Services, LLC, or its affiliated companies. CRN202301-275450.

ADVISORS MAGAZINE / 37

by joe innace

TAKE EMOTION OUT OF THE EQUATION Set specific time horizons

A

ccording to a 2019 survey conducted jointly by CNBC, and investment-trading platform Acorns, some 75 percent of Americans manage their own finances with no help from a professional provider or online service.

Stuart Schiffman, founder and managing director of Compound Wealth

to put it all together,” Schiffman added.

Schiffman says he’s seen all kinds of mistakes. “The common ones include chasing performance, thinking you know something the market doesn’t, and listening to TV commentators for stock advice,” he noted.

“My suggestion is to treat your financial health the way you would your

"We are fiduciaries. We are legally bound to place your interests first. Our advice will always be thoughtful and objective."

Advisors LLC, understands that desire, he once was one of those people.

“As a Wall Street veteran, I thought I could do everything myself which turned out to be a mistake,” he told Advisors Magazine in a recent interview. “First, you have to learn to take your emotion out of investing. And second, you have to invest with specific time horizons in mind.”

“Even though I worked on Wall Street early in my career it wasn’t until I completed the CFP® certificate program in financial planning that I really began 38 / ADVISORS MAGAZINE

JAN 2021

physical health,” Schiffman advised.

“Always get a second opinion. I’m willing to look at anyone’s portfolio to see if it matches up with their goals.”

Schiffman’s Connecticut-based firm focuses on creating and managing portfolios for pre-retire to retirees with a minimum of $250,000 in investable assets. He creates unique portfolios for each client based on an in depth understanding of their circumstances.

“I believe it’s vitally important to get to know your clients and then tailor custom solutions around them,” he

said. “Each client is unique and I want to give them portfolios that match their personality. If it’s a good match they will stick with their investments for the long term.”

His client service philosophy is to deliver outstanding value. “I want my clients to be really successful. To me that means treating them as I would myself,” Schiffman commented. “I want them to get the most out of their money so they can have more freedom in their lives; so I offer my skills and experience at a very reasonable price.”

He stays in touch with clients frequently and always asks them if there is anything that he needs to know that might have changed since they last spoke.

He noted that he has been reaching out a little bit more due to the market volatility this year, but overall his clients are not concerned.

“I spend the time upfront educating my clients about volatility so when we get a sell-off no one panics. In fact, it’s often an opportunity,” Schiffman said.

He maintains that the secret of becoming a really good investor has been gleaned after years of experience.

A lot of investing is counterintuitive and highly fluid.

“I certainly would not want my clients spending their time trying to understand investing,” Schiffman added. That’s a brain drain. They are better off leaving that to dedicated professionals. I’ve been investing for over 40 years and I’m very confident in what I do.”

As for online investment platforms, like Acorns, he notes that he likes their business concept, getting people to invest early and often compounds over time and that is the best free lunch of all.

For more information on Compound Wealth Advisors LLC, visit: compoundwealthadvisors.com

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Civil | Commercial | Financial Securities | Healthcare 140 Grand Street, White Plains, New York 10601 P: (914) 686-1500 • M: (914) 686-1504 E-mail: russell@yankwitt.com Please visit us a: www.yankwitt.com

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by bobby l. hickman

PUTTING CLIENTS

FIRST Understanding what people need, being there for them

Michael Calvelli spent more than 30 years working in financial services in New York and San Francisco before he began working directly with clients as a financial advisor. During that period, he spent his career at investment firms, custodial banks, clearing firms, and working with independent broker-dealers. He also started a broker-dealer in San Diego.

“Through all that, I really thought that I would love to work with individuals,” Calvelli said. "It just felt like there was more to the financial industry that I was not experiencing.”

That concern grew during the Great Recession and the economic fallout that continued for years afterwards.

“Living through the 2008 mess, I really felt that clients were being underserved by the industry,” he said. “They were just looking for some more passion and understanding from their advisors about what they were going through.”

Calvelli took some time away from the corporate environment to seek opportunities to work one-on-one with clients. He met a woman who ran a successful financial advising practice in Santa Rosa, California looking to retire who needed someone with Calvelli’s background to take over. The two worked side-by-side for a smooth transition. In 2015, Calvelli officially took over which brought him to his current

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JAN 2021

role as the founder and registered principal at Open Trail Financial Consultants, and Office of Supervisory Jurisdiction (OSJ) supervisor of Protected Investors of America.

Calvelli’s early experiences in the industry help shape Open Trail’s client service philosophy and their approach to helping clients, he said. That philosophy calls for team members to listen attentively and make every effort to understand their clients’ needs and then be there as a partner to help them.

“Our Customer Relationship Management system is the key to executing on that philosophy,” he added. “We keep good records, so we never forget anything people have done. Before you make a call, you know exactly what's going on with the client. That high-touch approach is felt throughout our clients. They notice the difference in the attention to detail and genuine interest in what is going on in their lives.”

Client education is another critical component in the Open Trail approach, whether they are new or existing clients.

Advisors go through the entire process in detail with clients, reviewing reports and explaining procedures. The goal is to meet clients where they are and help them understand what is in their portfolios and how their money will be managed.

“I've always felt that, when we meet with our clients, they honestly believe we do have their best interest at heart."

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“In the beginning, we do a lot of education,” Calvelli said. “For new clients, you can get a feeling for what is going on in their lives and where they have been in their financial journey. Then we can really start to focus on what areas need attention in order to build their financial literacy.”

Calvelli said the younger partners in his firm, Lauren Maston and daughter Angelina Calvelli, have helped him recognize how much industry jargon can confuse and frustrate new clients. Lauren came from the hospitality industry in 2017 and Angelina came from a marketing background in 2019.

Both arrived at integral times in the business and continue to make invaluable contributions to Open Trail’s current success. They push the envelope in developing thoughtful ways of building the firm’s client relationships and expanding their technological solutions.

“They did not know any of the jargon,” he said, “and they felt overwhelmed by it when they first started here. They've been great in those first meetings with clients where we need to talk about the topics clearly and they are empathetic to how dauting and unwelcoming the industry can feel. We definitely spend extra time on education, and we feel it is empowering for everyone involved.”

Financial education also involves making sure clients and prospects understand that not every financial advisor in the market is required to act as a fiduciary. Many do not realize that different types of professionals are held to different standards of conduct. Not all are held to a fiduciary interest to put the client’s interests ahead of the advisor’s or their employer’s.

“I've always felt that, when we meet with our clients, they honestly believe we do have their best interest at heart,” Calvelli said. “Even

in situations where we are not acting as a fiduciary, we are still guided by the client’s best interest, so we do not do anything that puts our interests first.”

Clarifying the fiduciary role and their fee structure are among the important issues to address when consumers meet with a potential financial advisor for the first time.

Calvelli said potential clients need to hear the firm’s entire process in clear terms, and to understand what will happen after they trust the firm with their investments.

"THE CORE BELIEF OF OUR TEAM IS TO ALWAYS ACT IN YOUR BEST INTEREST. OUR FINANCIAL ADVISORS BRING EXPERIENCE AND PERSONAL ATTENTION TO EACH RELATIONSHIP." 42 / ADVISORS MAGAZINE

JAN 2021

“One of the first things new clients should ask is why the advisor is working in the industry,” he added. “You should also ask them what drives them to do what they do. Those answers help you understand how and why they got there. Maybe it was simply interest in the mathematics or the market analytics,” he continued. “Maybe their grandparents didn't have enough money, and they watched their parents try to help them as they got older, so they decided they wanted to make a difference in people's life. Those are two totally different answers, but I think an investor will learn more about the advisor and their motivations by asking point blank why they are in the industry.”

Calvelli feels that many clients are looking for a safe place to talk about something they may not feel comfortable talking about with most people. He feels his role is to establish those deeper relationships where he can learn about client’s values and goals. This helps him to do multiple layers of due diligence when it comes to the wide array of investment products that are available. He can help determine not only if the product makes sense to invest in, but whether it make sense for this particular individual in terms of their personal values and goals.

Another area that needs improvement is for the industry to be more inclusive, he added.

Calvelli said considerations such as financial education and community outreach are important areas where the industry can interact with underserved segments of the public.

So many people feel like financial advisors are only for a certain type of person. There can be a lot of shame in asking for help or exposing your finances to another person. Helping people to feel comfortable and open is more important than ever.

Over the last several years, Calvelli said he has been enjoying mentoring

the younger partners of Open Trail.

“One of the nice things for me is that I can pass this practice on to younger people who are inspired by the business. Through the many challenges 2020 presented, Lauren and Angelina have done a great job working remote and feeling connected to the clients this year.

Our team continues to think about ways we can engage with clients, meet them where they are on their financial journey and help guide them from there. This year has highlighted the importance of our personable approach to financial planning. What we do matters greatly to our clients, and we want them to know that they matter to us as well.”

Calvelli added one of the greatest personal benefits from leading Open Trail has been taking advantage of philanthropic opportunities to help other people in the community.

The company supports a number of charities and community foundations both through giving and volunteer work. Open Trail also assists many of their clients with extensive annual and legacy philanthropic planning.

“It has been an absolute joy and blessing to be part of that,” he said.

“I never thought that having my own business would lead to a practice where I would be surrounded by so many like-minded peers and clients who have a passion for helping others. It just might be my favorite part of the job.”

For more information on Open Trail Financial Consultants, visit: opentrailfc.com

Registered Representative offering securities through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Open Trail Financial Consultants and Cambridge are not affiliated

ADVISORS MAGAZINE / 43

by bobby l. hickman

SECURING SENIORS' FUTURES

Advisors help beyond retirement

A

s Americans increasingly live longer lives, the need for professional financial advice also grows. People not only need help to prepare for a successful retirement, but also to make sure they can maintain financial security once they enter their golden years.

More than 30 percent of Americans ages 65 and older use a financial advisor to help them manage their money, according to a recent CNBC-Acorns survey. However, the 2020 Financial Literacy Survey by the National Foundation for Credit Counseling found 68 percent of seniors believe they could benefit from professional financial advice.

Meanwhile, the U.S. Census Bureau

44 / ADVISORS MAGAZINE JAN 2021

projects the number of seniors will almost double to reach 3.8 percent of the population by 2040.

Helping older Americans secure their financial future covers more than just preparing for retirement, according to Richard Shields, CFP®, financial advisor and CEO of Synergy Financial Group of Arizona in Scottsdale.

With more Americans living longer, Shields said, he has had many clients ages 95 or older.

“The longevity of our clients is a reflection of their health and how well they take care of themselves,” Shields said, “We want them to focus on their lives. They're not just retiring because

they turn 65. Many of our clients gain benefits from continuing to work that have nothing to do with a paycheck.”

In today's world, many older Americans are particularly concerned about their risk of Alzheimer’s and dementia. Long-term medical care can be extremely expensive, adding extra costs on top of those retirees already face. Shields said his firm helps families prepare for the high cost of nursing homes and medical care, which can otherwise dissipate retirement assets quickly.

“We have also discovered that, with some older clients going into nursing homes, they are sometimes not in the best circumstances,” Shields continued.

“We try to help by going the extra yard

to make sure their finances are in order, and that the nursing home is doing an appropriate job.”

Shields recently spent three years

someone needs to be involved in their lives to make things work like they should,” he added.

“There's just no way that our systems at Social Security or even the state agencies are prepared to deal with those. I'm involved in trying to right those wrongs.”

Retirement planning is one of many services that Synergy Financial Group provides to clients of all ages. Shields said the firm’s central focus is the client relationship, which he views as long-term and multi-generational.

The transition of assets between generations after the death of a parent is challenging and emotional, he said.

“Clients are like our family and we treat them as such,” he added.

“Every one of our clients is unique. They have different visions, needs, and fears. Each client has a portfolio that is built and maintained for them, which we create by researching and selecting a range of investment options.”

Financial education is the foundation

"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." working to resolve a situation where a residential nursing home had stolen about $70,000 of a client’s assets.

Ultimately, the employee was convicted of a felony and a restitution plan is in place. Unfortunately, the client passed away about a year ago.

“There are a lot of areas like that

of that practice. That applies not just to the firm’s advisors – who maintain multiple licenses designations – but also to clients.

“Our philosophy is to educate our clients so they have a clear understanding of their investments and the purpose they serve within the

portfolio,” Shields continued. “Investing can be intimidating within the financial community, so we strive to empower clients to make educated decisions.”

Advisors use a range of investments within each portfolio, and they take time to ensure clients fully understand each aspect. They also use technology to provide clients with access to additional information they can use to expand their financial knowledge.

“Technology continues to evolve in the financial arena,” Shields added.

“It is a tremendous tool that should be used in conjunction with an interpersonal relationship between the client and the advisor. We see online platforms as the wave of the future because technology is becoming more available to everybody. But we also see that it lacks the personal touches a financial advisor can provide.”

Since the pandemic, the firm has relied more heavily on videoconference meetings and telephone consultations, particularly for clients in retirement communities who were put in lockdown.

When it is necessary to meet in person, Shields said, advisors follow CDC guidelines by wearing masks and social distancing. Although there is no substitute for meeting face-to-face meeting, he said, the firm has easily adapted to what works best for current and prospective clients.

“In our relationships with our clients, we have not dealt with much fear, panic, or upset during the pandemic,” Shields added. “This is due in a large part to our efforts to educate clients on what actions we should take during periods of volatility. We have a concrete, proactive plan so clients did not have to react hastily during what have been unprecedented times.”

For more information on Synergy Financial Group of Arizona, visit https:// www.synergyfinancialgroupaz.com

ADVISORS MAGAZINE / 45

VION Receivable Investments, headquartered in Atlanta, Georgia, is an international provider of receivable investment services to businesses managing consumer and commercial receivables.

VION provides a single, comprehensive source of expertise in commercial receivable factoring and consumer receivable purchasing, valuations, and process consulting.

VION Receivable Investments 400 Interstate North Parkway Suite 800 Atlanta, GA 30339 877.845.5242 phone 678.815.1557 fax Mesquite Corporate Center 14646 N. Kierland Blvd.

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RE C E IVAB LE

Atlanta MAGAZINE • Phoenix • NOV Fort Collins • Reston • Los Angeles • Madrid 46 / ADVISORS 2020

IN VE S TM E N TS

BOOK REVIEW

The Prosperity Project: Building Abundance and A Map for A Life Well Lived WELCOME TO THE PROSPERITY PROJECT!

H

ow do you define prosperity, as it relates to your individual circumstances? Would more money make you feel prosperous? Better health?

More friends? The truth is, all these things matter, notes Wall Street veteran and author John Lohrenz.

“Your health, wealth, relationships, self-growth and sense of adventure are all part of the equation for a happy and prosperous life,” he says in his new book, The Prosperity Project: Building Abundance and A Map for A Life Well Lived.

Lohrenz draws upon his professional and personal experiences and seamlessly blends them with the principles of modern psychology, health, wellness, and finance to inform his Pyramid of Prosperity—a reimagined version of Maslow’s hierarchy of needs that reflects present-day fundamental truths. The Pyramid of Prosperity gives readers a visual representation of Lohrenz’s point that multiple contributors to happiness need to exist in

harmony for the pinnacle of prosperity to be reached.

Chapters dive deep into the layers of the pyramid—Health, Wealth, Relationships, Growth, Adventure, Legacy—to help readers discern what true prosperity means to them.

“The goal of The Prosperity Project is to give you a formula that you can use every day to make sure you are at your best for yourself, those around you, and your work,” Lohrenz writes. “It is so much more than a wellness checkup or a financial plan. The point of the project is to provide you with tangible tools so you can develop a complete personalized and achievable plan for prosperity.”

The result is a clear, easy-to-navigate path forward with calls to action that you can implement daily.

The Prosperity Project isn’t a quick fix. Lives of abundance don’t just happen. They are cultivated through mindfully planning and pursuing your purpose.

And if living your best life isn’t a purpose, what is?

The Prosperity Project author John Lohrenz is a wealth manager with over 25 years of experience.

He spent much of his career at Merrill Lynch before deciding to open his own firm, JKL Wealth Management. John now spends his time nurturing relationships with clients and advising them on living a life of true prosperity.

For more information, please visit www. johnlohrenz.com

The Prosperity Project: Building Abundance and A Map for A Life Well Lived Publisher: Merack Publishing Release Date: January 5, 2021 ISBN-10: 1949635473 ISBN-13: 978-1949635478 Available from www.amazon.com ADVISORS MAGAZINE / 45

CLIENT TALK INTERVIEW

by bobby hickman

BUILDING TRUST FORTIFIES CLIENT RELATIONSHIPS Address money's emotional aspects to deliver more value

F

inancial professionals often overlook the emotional aspects of helping clients manage their money, despite their importance in building an enduring client-advisor relationship.

In 2020, Vanguard published a research paper assessing the role of emotions in the advisory relationship. Researchers estimated that emotional factors, such as trust and personal connections, 48 / ADVISORS MAGAZINE

JAN 2021

account for 40 percent of a typical investor’s perception of the professional advice they receive. The other 60 percent comes from functional activities, such as planning and portfolio management. Moreover, Vanguard found that having a relationship with a trusted advisor contributed 72 percent of the client’s perceived emotional value, while the service aspects of the financial advisement process accounted for the

remaining 28 percent.

“In our industry, it's all about trust and confidence,” said Elliot Kallen, wealth manager and registered principal at Prosperity Financial Group Inc. in San Ramon, California. “Those are the two pillars of the client relationship. If you don't have their trust and confidence, you won't have the client anymore.”

Kallen founded Prosperity Financial Group in 1993 to help business owners make money and keep their money. Today, about 60 percent of the firm’s clients are entrepreneurs while the remaining 40 percent are pre-retirement or already retired. The independent Registered Investment Advisor now has 1,200 clients and about $300 million dollars in assets under management.

“Our clients have trust and confidence that we will do the right thing for them,” Kallen said.

“We rarely lose clients because we convey that trust. We also communicate with them over and over again, so they know what we're doing on their behalf.”

One reflection of that approach is the firm’s solid retention rate, both with existing clients and with those clients’ children.

Across the industry, after clients pass away, 98 percent of those clients’ children do not stay with the parent’s advisor, Kallen said. The reason: the children lack confidence and trust in someone they considered to only be their parent’s advisor. “We are the opposite: we keep the next generation,” he continued.

“About 80 percent of our clients’ children stay with us. We have been reaching out to them and including them in everything we do all along.”

Much of the firm’s success stems from addressing the emotional side of money, which many in the industry prefer not to talk about, Kallen said. Parents understand that they will not have a good relationship with their children if they do not deal with emotional issues, he noted.

A solid relationship helps create and manage expectations, and the children buy into those expectations. “That's exactly what needs to happen on the money side,” he added. “Clients want to know that our arms are figuratively around them; that we're listening and paying attention to them; that we're part of their lives and not just talking at them.”

Honest discussions around the purpose of money, as well as the emotional value money brings to people, are what’s missing in the financial industry today, Kallen continued.

Industry advertising focuses on security and financial roadmaps, but that approach neglects the social aspects of money for family

members.

One example arises while advisors help clients planning for retirement and the possible expense of longer-term care.

Older Americans are living longer than their parents did and, mathematically speaking, many will spend some portion of their lives in nursing homes. Kallen said families need to discuss how they would finance long-term care while still funding other priorities, such as helping children attend college, taking care of aging parents, or traveling after retirement. “This is not just a financial drain, but also an emotional drain” he added. “We have that very difficult conversation over and over with our clients about the emotional drains on their finances and on their energy.

Where will that money come from: out of retirement savings?

These choices are as much emotional as they are financial. That's an area where I believe we do a really good job of managing emotions and expectations.”

Leading these types

Nothing beats feeling confident about your retirement Focus on what's important.

We'll take care of the rest.

of personal conversations are more important for setting Prosperity Financial Group apart from other firms than features such as financial planning software, Kallen added.

He said half of his conversations with clients do not focus on money or financial details. They range from upcoming holiday plans to taking a COVID-19 test to the turmoil people on both sides of the political divide experienced during the recent national elections. “ It’s those ongoing conversations that make the difference,” he said. “It’s how we listen and then do what we said we would do: actively manage their portfolios to meet their needs. There's a lot of fear in the marketplace because of politics and the negative 24-hour news cycle, but we're able to keep our clients happy.”

The current environment has also made increased communications with clients an even higher priority.

Fortunately, Prosperity Financial Group was already positioned for 2020’s world of sheltering-at-home and virtual relationships. In 2019 the firm decided to shift from the traditional marketing approach of meeting clients at luncheons and dinners to new business models.

“We invested heavily on creating an entire Marketing Department at our firm,” Kallen said. “We wanted to stay in touch with clients through social media and online portfolio platforms. We wanted to take advantage of the quicklychanging times that we saw coming.”

When the impact of COVID-19 began in March, the firm had already built in their marketing department and reformatted its portfolios around technology.

Advisors began conducting Zoom ADVISORS MAGAZINE / 49

meetings immediately. They also continued operating from the office, rather than closing the doors and working from home.

“We over-communicated with clients,” Kallen said. “We went from weekly to semi-weekly newsletters, covering what was going on in the market and how we were dealing with it. Most of our clients had never used Zoom before, so we did several Zoom meetings a day to explain what we’re doing and how we're doing it. Now our clients are used to doing Zooms with us all the time and it's the wave of the future.”

That trend has helped many client portfolios enjoy record growth during 2020, he added.

He said advisors got out in front of the market trends and actively managed each portfolio to meet clients’ risk profiles. Kallen said Prosperity Financial Group offers 50 / ADVISORS MAGAZINE

JAN 2021

eight customized portfolios. It places each client in one of those portfolios depending on their level of risk and what they want to do with the money. “You can’t have 200 different portfolios for 200 different clients,” he said. “We are not buy-and-hold people, and we’re not stock jockeys. We are much more sector-oriented. We basically cherry-pick the sectors we think will provide each client the right stability for the next three months or the next three years. So we use strategy to figure out how we build the portfolio. Then we watch that portfolio every single day. Nobody's perfect, but we've stayed ahead of the game.”

Beyond finances, the firm also spends a great deal of time involved with philanthropy and has consistently donated 10 percent of its revenue to various

charities, Kallen said. He also runs A Brighter Day, a charity that helps teenagers deal with stress and depression. “People feel very comfortable talking to us about their own stress and what goes on in their lives: money, family dynamics, COVID-19, stress, whatever it might be,” he added. “That's why we have truly become a trusted advisor to our clients and not just a financial advisor.”

For more information on Prosperity Financial Group, visit prosperityfinancialgroup.com

by joe innace

Subscribing to Advice

SIMPLIFYING THE FINANCIALS Helping clients retire with confidence

T

he Subscription Economy® is a phrase, coined by analytics platform Zuora, to describe a new era of business models, and it’s growing exponentially. Inspired by companies across diverse sectors, such as Netflix, Peloton, Fitbit, and extending to major carmakers and physicians, the adoption of subscription business models is happening in many industries that might come as a surprise.

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Even financial planning. And at Cuyahoga Falls, Ohio-based Impel Wealth Management, a subscriptionbased service is one of the options it offers, President and CEO Jesse W. Hurst, CFP®, AIF®, told Advisors Magazine in a recent interview.

“We call our subscription-based model ‘Simplifynance,’ and it’s geared to older millennials, or people 30 to 45 years old,” Hurst said. He further described the target market

as ‘Henrys’, short for ‘high earner not rich yet,’ a term first used by Fortune Magazine nearly 20 years ago.

“This might be a client who’s about 30 years old, making $85,000-$90,000 per year and his wife is making around $70,000 per year,” Hurst explained.

“Combined, they have very good income. They’re young, but they don’t have significant wealth yet, so they wouldn’t be good candidates for a traditional assets under management model.”

Such Henrys can benefit from the Simplifynance model and are charged a monthly consulting fee of either $50, $75 or $100 per month.

“We build a personal financial website for them, and we help them develop goals.” Hurst said. “We typically connect all of their accounts— bank accounts, benefit accounts, mortgages, anything like that—on their personal financial website, which is updated daily,” he added.

“Our associate wealth manager Nathan Ollish, (CFP®, AIF®) is dedicated to our Simplifynance model,” Hurst noted. Meetings are conducted quarterly to make sure all is on track and still relevant.

Hurst views Simplifynance as an on-ramp to more rigorous financial planning. And for that, Impel Wealth Management has its more traditional service: SAIL, an acronym for Sound Advice…Inspired Life, a customized planning process that connects a client’s financial reality with their vision for the rest of their life.

For this service, Impel Wealth Management is usually looking for a minimum of $500,000 of investable assets from individuals who are still working, still saving and preparing for retirement. There’s no minimum for Simplifynance – it’s just a matter of being willing to pay the appropriate subscription fee and then following the

guidelines and the goal planning.

Hurst’s niche has been retirement planning for more than 30 years now.

He chuckles today when he recalls a favorite TV show, Family Ties, as early inspiration. “I kind of identified with a character on that show, Alex P. Keaton, who had many of the same interests as I did—the economy, wealth and finance.”

Not long after starting his career in 1987 with John Hancock’s financial planning unit, Hurst realized he wanted to consult and help people more than he wanted to just sell product-centric solutions. In 1990 he joined an independent financial planning firm where he and a colleague developed a niche doing retirement planning—workshops and individual consultations—for corporate executives.

He very much enjoyed that business and became quite proficient. In 1997, he and two partners formed Millennial Group. But by 2016, with the oldest partner retiring, Hurst and his other partner decided to separate, and Hurst formed Impel Wealth Management.

“We’re about four years old now, but it’s largely all of my staff that I’ve

worked with for 25 years at the other firms,” he said.

Today, Impel Wealth Management remains focused on retirement issues and helping people get there.

“We help them manage their investments—build the resources they need to help them transition successfully,” Hurst said, “and once they’ve made that transition, we help them manage their assets to maintain a certain standard of living.”

The company now manages about $250 million in assets for 160 client families. And for each of those families, there is a unique financial strategy.

“While not every client has a customized portfolio, every client does have a custom-tailored financial strategy that is unique to them, their family, and their objectives,” Hurst said.

“So, if I run into any one of those 160 clients at the grocery store, I would know their name and what they did for a living; I would probably know their kids’ names; I would know where they lived; I would know what their resources are; I would know where they like to travel and their hobbies.”

That personal approach extends to his role as an accredited investment

fiduciary. “In my opinion, fiduciary is more about what you are inside than with what you’re wearing,” Hurst said.

Financial education is a big deal to Hurst. In fact, the company name reflects its significance. “The definition of impel means to impart motion towards a future goal or a future destination, or to give someone the confidence to move forward,” he explained. “And that’s really why we chose the name. It’s congruent with who we are and what we do, and a lot of that is the education-based approach that we take with our clients.”

Pre-pandemic, the education process may have taken the form of an in-person Town Hall—especially during times of market volatility. But like other financial advisory firms, Impel Wealth Management used Zoom videoconferencing and built an extensive YouTube library, as well as made personal phone calls to keep clients informed.

Such virtual experiences, Hurst said, will continue even after the pandemic because they’re highly effective and efficient. They can also be innovative and fun.

“My wife and I love to cook,” Hurst noted. “In February, for Valentine’s Day, we’ve scheduled a virtual online cooking class for clients and we’ll share recipes.

So, we’re going to try some new stuff on Zoom.”

Still, all the while, Impel Wealth Management will be serving up helpings for transitioning from work life to retirement.

For more information on Impel Wealth Management, visit: impelwealth.com

ADVISORS MAGAZINE / 53

made for you

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In a world of fast food and one-size-fits-all sensibilities, how often does something feel made especially for you? The "Made for You" section celebrates those items that are created with such high quality of hand workmanship and degree of customization that they become individual to you. In each issue, our editors will endeavor to bring you special things from anywhere on the globe, choosing them solely on the basis of outstanding quality. Our goal is to give you guidance on the best of everything.

1 BALVENIE AGED 12 YEARS — DOUBLEWOOD Crafted by expert distillers from start to finish, this Scotch sets itself apart from the rest. Balvenie focuses on using meticulous care and attention from a group of top distillers to produce some of the finest whisky on the market. The distillery has been producing top quality whisky since 1962 and has built up a name for itself over time. Its character focuses on black pepper, raspberry, cinnamon and milk chocolate. It’s a varied selection resulting in a big-flavoured dram that works very well together.

Balvenie’s 12 Year Doublewood is known for being smooth and especially enjoyable with a cigar. thebalvenie.com

4 ARMOUR SUPPLY CO — BEST TACTICAL WALLET Some wallets are very much what you see is what you get.

Others hold intriguing secrets and exciting features that take a wallet from useful money-carrier to essential toolkit. Yes, we’re talking about tactical wallets. But inside you’ll also find a multitool card, with features such as a bottle opener, ruler, and allen key. In addition, you’ll get an aluminium and steel key holder, elastic cash strap, a mini screwdriver, and a stainless steel money clip. But it’s not all about extreme functionality.

Despite its multitude of different gadgets, this wallet retains an inconspicuous and sleek look. armoursupplyco.com

2 ORIBE — BEST LUXURY SHAMPOO FOR MEN Oribe is a haircare authority famed for cult classics like their Texturizing Spray — which seems to add an instant magic and health to your hair. This quality extends to their custom-blended signature shampoo. It’s weightless, it protects your hair from environmental damage, it imparts shine, it restores strength.

What more could you want? With a light citrusy scent and gentle yet powerful extracts of watermelon, lychee, and edelweiss, the Oribe Signature Shampoo will make you feel fresh and clean all day long. It’s also got built-in UV protection and is free from parabens and sodium chloride. mrproter.com

5 OMEGA SEAMASTER — DIVER 300M COLLECTION An edition of Omega’s iconic Seamaster dive watch, the Seamaster Diver 300M was a big hit when it emerged on the dive scene in 1993, complete with what has become the brand’s signature blue dial. Water-resistant up to 300 metres, from scuba holidays to deep-sea discoveries, this is the perfect underwater timekeeping accessory. It’s also pretty slim at only 36 millimetres, making it a highly versatile buy. This vintage model, dating from 1993, has a clean and classic aesthetic with its stainless steel finish and skeleton arrow-shaped hands. Best for: an iconic and durable diving timepiece that will last you a lifetime. omegawatches.com

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by bobby l. hickman

IMPROVING FINANCIAL LITERACY SKILLS

BETTER MONEY KNOW-HOW IMPROVES OUTCOMES F Financial literacy continues to

provide challenges for American families, despite industry-wide efforts to strengthen consumers’ understanding of basic money management techniques.

An October 2020 study by the FINRA Investor Education Foundation found that financial literacy skills are a significant predictor of future financial outcomes. However, FINRA also found little change in financial literacy levels over its six-year study period. According to a recent Gallup poll, only 24 percent of Americans use professional financial planners. The National 56 / ADVISORS MAGAZINE

JAN 2021

Foundation for Credit Counseling’s 2020 Financial Literary Survey also indicated 78 percent of Americans felt they could benefit from professional guidance.

Providing educational training and tools to improve financial literacy was the driving force behind creating Trusted Capital Group (TCG) in Austin, Texas, according to John Pesce, CEO and co-founder.

He said his own experiences as a youth and his early days working in the financial industry convinced him that people from all walks of life need objective advice to help them better manage their money. TCG began as a consulting advisory firm

to address that need.

“It's in our fabric of our company to be out there educating people,” he said. “We have always felt if we educate people and they know what we're truly about, they would come to us and the money will take care of itself. That's how we built this company.”

Pesce said TCG primarily works with two types of clients. One group consists of institutions including private and public (such as school district and local governments) sector organizations where TCG manages both retirement and pension plans along with operating capital cash management strategies

for over $3 billion dollars in assets and 700,000 participants. TCG acts in a fiduciary role, monitoring the performance of institutional plans and making adjustments as needed, that benefit the client.

The second client group comprises approximately 1,000 individual investors. Most of those retail clients are business owners and executives, with many referrals generated through the advisor platforms at TD Ameritrade and others.

“We deal with both ends of society,” Pesce said. “If you look at our institutional clients, there's an abundance of people who are living paycheck to paycheck.

We feel that as a mission for our company, it is just as important to help those people as it is to advise the business owner. In fact, even some business owners need help with credit scores and things of that nature.”

Pesce grew up in a poor

neighborhood in Brooklyn and later served in the military. In both those settings, he said, opportunities for financial education were limited or non-existent, enabling numerous financial firms to take advantage of consumers.

“When we talk about helping people, we’re talking about avoiding the predatory lenders,” he explained. “We don't want people going to payday loan lenders, pawn shops, or rent-to-own places. That's all the stuff that I knew as a kid and saw when I was in the military.”

In 2019, TCG began supporting Foundation 99, a 501(C)(3) nonprofit public charity that seeks to build economic security through financial education to help the 99%. The company contributes funding and other resources to the foundation.

Christopher J. Jamail, CFP®, partner and chief marketing officer at TCG and also a founding board member of Foundation 99, said the nonprofit helps those individuals who need assistance the most. Many people are not taught good financial habits growing up, he said, or are not born into situations where they can learn from their mistakes without detrimental consequences to their finances.

TCG focuses considerable efforts, time, money and energy helping to build Foundation 99 so it can provide coaching to people with the greatest needs.

“There are large segments of our community where people never receive financial education,” Jamail said. “As a result, they need extra help building strong financial habits.

In school, people are taught to think and process in a rational, logical manner, he continued.

However, most people make money decisions emotionally rather than rationally, and make decisions on autopilot.

“This is why good financial habits are important, and why we also spend so much time educating and working with our clients,” he said.

“We focus on better financial habits with our clients, so this behavior becomes commonplace for

"To me, there is no better evidence of our success than the number of referrals we receive from our clients and business associates."

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them.”

Pesce said many groups talk a good game about coaching and financial wellness. However, in reality, the guidance from those companies often encourages clients to improve their lives by buying the firms’ products and services.

“We felt instead of just talking, we should put our money where our mouth is and start the nonprofit,” he added. “We have coaches available who do not have an agenda to sell anything. We truly are there to help people.”

One priority in coaching is to teach people how to improve their credit score.

“If you have a 500 or below credit score, life is difficult,” Pesce said.

“We're trying to help get people's credit scores up over 680, but people don't know how to do that.

Many people don't even know what their credit score is.”

Another example is helping people understand what the term “fiduciary” really means. Pesce said that question goes to the crux of why he and his partner started the firm more than 20 years ago.

“This is an area where the industry doesn't have a good track record,” he added. “I got irritated over the years with people calling themselves a financial planner and an investment advisor, and using these names interchangeably. For the client, it is confusing to know who really does have your best interest at heart.”

Jamail added, “It seems accountability has been missing for too long in the industry. Many people ultimately do what is in the best interest of themselves, rather than in the best interest of their clients.”

TCG also sets no financial minimums for clients. Pesce said not establishing a firm minimum was a conscious decision that grew out of his upbringing.

“I never wanted to tell someone, 58 / ADVISORS MAGAZINE

JAN 2021

*

Christopher J. Jamail, CFP®, partner and CMO

“the most effective plan is one that's tailored to the specific needs of each person we serve,” he said.

“It's not an easily automated process – nor should it be, as you're working with clients on what is their livelihood.

‘You're not good enough for us and you don't have enough money’,” he said. “Everyone in our entire firm feels it does not matter whether you have $500, $5 million or $50 million dollars. To the person who has $5,000, their money means as much to them as it does to the person who has $50 million.”

While there are only certain portfolios available to those with lower account balances, Jamail added, the firm has also developed sophisticated investment management strategies for wealthier clients. Those include estate planning, trust, wills, and tax preparation. Increasingly more of these services are being offered in-house as TCG evolves into a fullservice advisory firm.

Jamail said that TCG creates a financial plan for each client. As their lives change and financial planning needs evolve, advisors hold conversations with clients and

provide tools to modify those plans.

“The most effective plan is one that's tailored to the specific needs of each person we serve,” he said. “It's not an easily automated process – nor should it be, as you're working with clients on what is their livelihood. Our client service model meets each person where they are.

Doing what is right for the client means tailoring the approach to them and their individual needs.”

An innovation that has proven particularly useful during the COVID-19 pandemic has been TCG’s new TeleWealthTM platform, introduced in early 2020. TeleWealthTM allows clients to schedule virtual meetings with their financial coach and conduct them remotely through telecommunications technology.

Jamail compared the service to the emerging telehealth platforms now found in the medical field, except TeleWealthTM provides remote assistance for financial matters.

“Our TeleWealthTM platform provides new ways to continue connecting with our clients,” he added. “We allowed clients to reach out to us when they were more stressed, as opposed to waiting for an office hour time slot. Just because clients are behind a screen doesn't mean that we were not able to connect just as deeply with them.”

For more information on Trusted Capital Group, visit: tcgservices. com and foundation99.org

Preserve your wealth with CitiTrust’s knowledge and

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