As I write this, we are a mere 84 days away from College Football season. Yes, this means that we are in that period of the summer where I feign neutrality and a “let’s wait and see” approach as it pertains to my expectations for the Win / Loss column for my beloved Nebraska Cornhuskers. If history is a guide, I’ll throw this hard-earned neutrality to the wayside around mid-July after watching one too many highlight reels and reading too many optimistic articles. By the end of fall camp, I’ll have lost all sense of direction and realism, and so goes the sad story of all but a handful of college football fans. Yes, we pick our team’s or they pick us when we are but 6 or 7 years old and then we spend the rest of our lives paying a dear price for it.
But since we don’t have football right now, I thought I’d settle for the next best thing, which is making a football analogy for the landscape of financial services. So, without further delay, I want you to answer the following two questions as they relate to your current financial situation:
- Who’s on your team
- Who’s leading your team?
When you think about your financial resources specifically, these are important questions. Today, unfortunately, the marketplace offers a very fragmented approach and model for consumers. It is common to see the client at the center of the team leading the huddle. Because of this, you are forced to run to three, four, five, or maybe even six different subject matter experts to put your financial plan into motion. Rather than being an owner of the team, you are the head coach holding all your various position coaches accountable, and they all live in different locals and have separate schedules. Sounds efficient, right?
This can work, but usually, it takes up quite a bit of time and margin. Frankly it’s not the picture of financial independence many envision. Worse yet, this process only works until there are breakdowns in your health or communication or turnover of advisors. And, as I said, while it can work, it’s less than optimal. Far too often, the one big thing that everyone focuses on is investment allocation and investment returns rather than planning with the end goal in mind. Finally, the client sends in their information to their CPA and hopes for the best. Tax planning is something everyone thinks is going on, but sadly, it rarely is and because of this, very few experience the fruit of it. In this model, a tax return often becomes an autopsy of cash flow and investment decisions made in a vacuum.
If the client is really a “type A” personality, they will check in with their estate planning attorney every few years to ensure that no changes have happened that might adversely affect their financial plan and their goals. But outside of that, there are all sorts of other things that might come into play that should be considered.
Are you an Owner or Head Coach?
Today, I’d like to suggest that there is a better path. I think that you pay really good money for financial planning and wealth management. I furthermore believe that you, the client, deserve proactive planning based on your vision for financial independence. Is your investment bringing you more responsibility and complexity, or is it bringing you the independence you had in mind? You are not paying for the privilege of having to run to more separate meetings, you are paying for someone else to take the meetings, do the analysis, and help you make an informed decision. To use a football analogy, are you the owner of the franchise, or are you the head coach having to hold everyone accountable? I think that if you’re partnered with the right team, they should be taking everything but vital decisions off your plate. They’re coming to you proactively with advice that is guided by the intent that you have laid out for them.
I firmly believe that planning is at the center of this relationship. The best planning stems from an specialist in the field fully hearing and understanding your hopes, dreams, and vision for the future. It also comes from being intimately acquainted with the cash flow necessary to achieve that vision. This comes from being aware of the tax return that is going to be generated for the coming year because of the investment decisions that are being made today! So rather than forcing you, the client, to be at the center of this matrix, chasing down random pieces of information and trying to manage a group of advisors, I would rather see what I’ll call a family office-style approach. This is a strategy that places whoever you’re partnered with at the center of that relationship, and you become the owner of your life’s vision rather than the prime mover and operator.
So, in this different world of mine, I envision you having quarterly meetings with your planning team, and they, in turn, are going forward and proactively reaching out to the necessary authority, which allows you to make timely decisions with the information that’s given to you. Often, too many of my neighbors just assume this type of engagement is not possible.
Lastly, I’ll leave you with this. If your wealth advisor has never asked for your tax return, I would submit to you that there’s a lot to be desired in that relationship. Secondly, if they haven’t asked for your estate plan or even asked if you have one, I would submit to you politely again that there’s a lot to be desired for that relationship. Those who know me well almost get sick and tired of me asking for this information. And I ask for it because it’s the basis and backstop for so many other planning decisions that we are going to need to make in a long-term relationship. Those two documents are the building blocks of a lot of decisions that need to be made, not just from a portfolio perspective but from a planning perspective. It is important to remember that a large part of why you partner with someone is so that you can hold each other accountable.
I’ll leave things here for now, but hopefully, this has given you just a brief taste of what we like to call our multifamily office-style approach to wealth management and financial planning. If you are currently a head coach who is struggling to hold your coaching staff accountable…reach out. If any other piece of this has resonated with you, please feel free to reach out with questions, as I appreciate those and enjoy them. And as always, know that I’m wishing you and your family continued Truth, Beauty and Goodness on the road ahead.
Have a great day.
Josh Klooz
Associate Private Wealth Advisor
jklooz@thebahnsengroup.com
Trevor Cummings
PWA Group Director, Partner
tcummings@thebahnsengroup.com
