EXPANDING FINANCIAL LITERACY

ADVISORS PROVIDE FREE COMMUNITY PROGRAMS

BOBBY L. HICKMAN

Levels of financial literary remain “alarmingly low” in the United States, according to a study by the FINRA Investor Education Foundation and the Global Financial Literacy Excellence Center. A recent Gallup poll found just 30 percent of U.S. households had a long-term financial plan. Meanwhile, an August 2020 Charles Schwab financial literacy survey found more than half of U.S. adults desire better money management skills.

Helping both clients and the general public improve financial literacy is a top priority at Integra Capital Advisors, a fee-only fiduciary advisor with offices in Bradenton and Naples, Florida. “We do see financial education as being very important,” said Thomas Breiter, the firm’s president and CEO. “We don't consider ourselves a financial university, but we do want to teach our clients why we're doing what we're doing. Some are less interested in the information than others. Some seek us out because they just want us to take care of them. But the others are interested in what we're doing.”

Improving financial literacy also plays a significant role inIntegra Capital’s community outreach activities which include serving on non-profit boards and public service volunteer work. The firm is a member of the Association of Financial Educators, a nationwide non-profit educational bureau that provides free educational workshops across the United States. AFE includes financial professionals in dozens of fields, such as investing, estate planning, accounting, tax, and real estate. Members provide complimentary financial education programs to companies and organizations that strive to enhance attendees’ chances for financial success.

L/R: John Michael Hinkson, Brad Campbell, CLU®, ChFC®, MStax, CFP®, CFA®,

Breiter said members of his firm provide financial education seminars to community groups. Sessions were originally done through live meetings, but most currently are provided through video technology such as Zoom video conferencing. Seminars cover such topics as retirement planning, working with your 401(k), and how to plan for your estate.

“We have a broad spectrum of workshops that provide financial education,” Breiter added. “We do these as volunteers in our community. If someone attends a seminar, likes what they hear, and then decides they want our help, we make ourselves available to chat with them on a one-on-one basis. However, there's no obligation for them to become a client.”

Integra’s “second opinion service” is another no-obligation offering to help the general public. If an existing client knows someone who is not getting the assistance they need to address a financial challenge or decision, Integra staff will meet with the person and provide the best advice we can. If that person ends up being a good fit for the firm, they may become a client.

Breiter said his personal interest in investments originally led him to become a financial professional. Over time, his focus expanded from investing to a deep planning process to help people plan their financial futures and reach their goals.

“We've seen that so many people have a hard time dealing with the emotions of the markets when we reach the inflection points of extreme fear or greed,” he said. “Then people tend to make mistakes if they don't have a comprehensive plan. We want to help people plan for their financial futures so they can be ready to deal with critical life events as they come along, whether they are good or bad events. We all need to be prepared for those.”

In the financial services industry overall, Breiter said, there had been a greater trend towards planning services in recent years. However, he said, a fundamental change is still needed to focus less on transactions. “What’s missing is there are too many people getting advice from commissioned salespeople,” he explained. “They earn a commission by helping someone get their money invested, and then have little incentive to continue to help them. We need more focus on continuous planning that includes investment management, taxes, wills, trust, legacy giving, and other ways to help client work toward their personal goals.

Joe Samuelson

Integra Capital provides services to help a wide spectrum of clients. Breiter said the firm generally looks for clients with at least $500,000in assets (although it does make exceptions for referrals). He noted the ideal client is a successful couple with more than $1 million to invest. The practice also focuses on female clients who have are dealing with life transitions arising from such critical events as divorce and becoming widowed.

The firm’s service philosophy is built around financial planning. If a client only needs investment management, for example, the firm can provide those services. But most clients are encouraged to construct and follow a comprehensive plan. Financial planning is not a one-and-done experience, Breiter said. It should be an ongoing process where someone develops a plan, implements it with the advisor’s help, and reviews it periodically to adjust it as their lives change.

“This isn't about us helping them beat the market,” Breiter explained. “This is about helping them become successful in reaching their financial goals. It’s more than investment performance: it's about controlling risk. Our client service philosophy is to blend risk tolerance and return. We want to find a comfortable spot where people can have the least amount of stress in their financial planning process as they work towards their goals.”

Other core values include maintaining high levels of integrity and empathy. Integra Capital Advisors defines integrity as having the courage to be honest with themselves and their clients with the advice they provide.

“Empathy means we want to do our best to understand our clients’ situation, and then be able to render the best advice for them,” Breiter added. “Even if we disagree with how they've handled something, we need to understand their situation and have the right human interaction with them so we can maintain a good relationship.”

L/R Christina Sherman / Thomas H. Breiter, RICP®

Those interpersonal skills are particularly important when helping people plan for retirement. Breiter said each client and each retirement plan is unique, so the firm draws from several investment models as starting points to create a customized plan.

“We don’t try to fit everyone into one model, but we don’t see the need to create something new for everyone who comes in the door,” he said. “We assess their objectives; the rates of return they need to success; their personality for assuming risk, and so for. Then we blend different investment programs to structure their overall portfolio. The building blocks may come from different models, but the amount of money in each model is different. Everyone’s plan varies because of such factors as the amount of Social Security they will receive and lifestyle expectations during retirement. Every plan is unique in some way.”

For most clients, Integra Capital uses a time segmentation approach (also known as a bucket approach) to calculate post-retirement income needs. Advisors determine how much money the client will need during the first five years of retirement, and then decide how they can provide that income stream regardless of how the stock market performs. As the plan looks forward to the second five years, the third five-year period, etc., time segmentation introduces more stock market risk as the investment horizon increases.

“We believe strongly in the time segmentation approach,” Breiter added. “When we present this to our clients, they sit back and breathe a sigh of relief. They say, ‘Hey, I'm going to be okay. I've got enough money to do this and I don't need to worry so much about what stock market might do in the first year of my retirement.’ We've become very good at putting those plans together and providing people a lot of peace of mind and confidence about the future.”

For more information on Integra Capital Advisors, visit: integracapitaladvisors.com