The Smart Take:
Sue is a recent widow and has gone through significant life and money transitions. Listen to Sue’s unique story and learn why her financial concerns are likely the same as yours. And be sure to listen to why Sue refused to shake hands at the end of our initial meeting and what she did instead.
Prefer to read? See below for the transcript of the show.
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The Host:
Kevin Kroskey – About – Contact
Introduction:
Welcome to Retire Smarter with Kevin Kroskey. Find answers to your toughest questions and get educated about the financial world. It’s time to retire smarter.
Walter Storholt:
Welcome to another episode of Retire Smarter. Walter Storholt here alongside Kevin Kroskey, president and wealth advisor at True Wealth Design, serving you throughout Northeast Ohio. Going to have a great show on tap for you today. But first, let’s say hello to the man of the hour, Kevin Kroskey. How are you, sir?
Kevin Kroskey:
The man of the hour. Thank you very much, Walter Storholt. That’s a… I love these little entrees where you just kind of beef up my, I don’t know, my ego I suppose but my wife may say that that’s not needed. I would disagree. It always feels good, but yes. How are you today, Walter?
Walter Storholt:
Everyone needs their ego stroked from time to time. So, we’re happy to get you off to a good start here on the show each and every time. And it’s not really the man of the hour. You’re really more like the man of the next 30 minutes, 30 to 40 minutes.
Kevin Kroskey:
All right.
Walter Storholt:
So, we’ll give you a little extra and say the man of the hour today just so it can linger even after the podcast has done, a little bit.
Kevin Kroskey:
Lives on in perpetuity.
Walter Storholt:
That’s right. That’s right. We’ve got a great show today because it’s one of my favorite kinds of shows that we do here on Retire Smarter. It’s a case study, a story, the opportunity to hear of what it really looked like when somebody came into Kevin and met with the team at True Wealth Design with a problem, with a situation that they were going through, and what all transpired and happened from that meeting and what the problems were, Kevin, how you guys help problem-solve it all, and can’t wait to hear what all the different directions that this week’s story takes us into.
Kevin Kroskey:
Sure. So yeah, I enjoy sharing these stories too. I mean, it just why we’re in business, right? To help people. And I think we can all learn from other people’s stories. Frankly, it’s just how people communicate, and we learn much better than just having some sort of a droning podcast or professor kind of lecturing you.
Kevin Kroskey:
But stories we can relate to, sometimes hopefully, if I do a decent job telling it or Walter, you help me out as you helped me be the man of the half-hour, we can bring it to life and people can glean some good information from it. And whether it directly applies to you in terms of maybe age or life circumstance, certainly, that helps. But I don’t think that’s necessarily required. Essentially, I think the story is going to have a commonality between a lot of people that face these questions, “Hey, do I have enough? Should I hire a financial advisor? How do I find somebody that’s both trustworthy and competent, and can help me make the most out of what I have and sleep better at night?” And hopefully, at the end of the show, that will be very clear.
Kevin Kroskey:
So, a friend of mine, I hadn’t talked to in probably 10 years or so. It’s been quite some time. He was a college buddy of mine and knew me when I was younger, had hair, and was probably in the process of killing a fair amount of brain cells going through my undergrad at college. And he reached out to me. He had been in Denver for many years and moved back to Northeast Ohio. And unfortunately, he lost his dad about a year ago, he had shared with me. And his mom, still living, and he was calling me for help about his mom, and we’ll call her Sue. And one of the things he shared with me was, Sue was in her early 70s and had never lived alone. She lived at home. And she lived at home until she met his dad, her husband, and they got married and then she lived with him for more than 50 years.
Kevin Kroskey:
Now, here she is in her early 70s and a widow. And her husband had handled the finances for all the years that they were together. So here’s Sue, early 70s, still mourning the loss of her husband that she had been with for more than 50 years. He had handled all the money for all those years and she had never lived alone and now she’s completely starting over. And why Chad called me was, she had already been to two other financial people. They had one that they worked with whenever her husband was still living. And there was another one that somebody had introduced her to, she went into their office and met with them as well. And the reason why Chad called me was, frankly, his mom had no peace of mind, did not have a good experience. Somebody sold her something that they probably shouldn’t have, and he was just begging me to help figure out, what should Sue do?
Kevin Kroskey:
So, to paint a little bit more of the picture for Sue, after I spoke with Chad, I suggested that he and Sue come in. And they came into the office and actually met with Marissa, Marissa Beyer, who is also in my office. Frankly, Marissa has a lot of widow clients that she works with. She’s very good, very patient, does a good job listening and understanding and just kind of being there for them and guiding them. And when we sat down with Sue, it turns out she had around a half a million dollars. She had income streams coming in for a small pension and social security and she had sold her house as well and was now in an apartment. And in her words, she was scared. Not only was she scared, but she said she was really scared. This was still completely new to her.
Kevin Kroskey:
She, again, I mean, didn’t handle money for all those years, pretty much for her lifetime, just kind of handling some of the spendings, buying groceries, things like that. Never lived alone. I mean, all this is completely, completely new. And I don’t know about you, Walter, but the older I get, the more set in my ways I seem to be. Would you say that’s been the case for yourself?
Walter Storholt:
Well, yeah. And then you don’t have previous experiences to really draw on to help you then get through this new challenge. So, I mean, it’s 70 years of not doing a task and then all of a sudden, it’s all on your shoulders. That’s a big shock to the system.
Kevin Kroskey:
Yeah. And I think being scared is certainly not only understandable but probably expected. So, we certainly had a lot of sympathy for what she was going through.
Kevin Kroskey:
But frankly, we also had a lot of anger. We had a lot of anger about some of these other financial salespeople that were in her life and not really helping her get the clarity and get the peace of mind that she needed. And we’ll get to those guys in a minute. So, Sue has a few kids, several grandkids. She’s in this new apartment. She’s not sure how much she can spend. She’s not sure if she’s going to run out of money. She’s not sure if she has enough. She’s not sure if she might have to go back to work. And understandably, all of this contributes to her being very scared. So, one of the time-sensitive things that we had to deal with right away was, she had signed paperwork to buy an annuity and… Walter, as you’re aware, as soon as you hear that A word from me, I’m not overly enthused about them, but… And it was one of the worst types, in my opinion. It was one of those indexed annuities.
Kevin Kroskey:
So, she went into this person’s office. Again, somebody had taken her into the office and referred her. And literally, she wrote a check for more than a hundred thousand dollars and put it into an annuity. So, no plan, no thinking like, “Hey, does this make sense?” Or “Hey, how much can you spend?” Or really, even getting to know her for that matter. It’s just like, “Hey, I have a hammer, you look like a nail. Boom. Here you go. Here’s an index annuity. Write me a check.” And I’m sure the sales pitch sounded a lot better than that but when you dissect it, that’s really, in my opinion, what it came down to. So, she was in what is called a free look period and basically could go ahead and get out of this and surrender and get her money back.
Kevin Kroskey:
That’s what we encouraged her to do. And that is, in fact, what she did. And the reason being, we said, “Look, let’s just put the brakes on. Let’s back up, let’s slow it down. Let’s actually take a look at your spending. Let’s go ahead and take a look at the income sources that you have. Let’s take a look at the assets that you have.” Most of it was in cash, some of it was in stocks, stock-based mutual funds. Some of it, at least for a short period of time, was in this annuity that she was getting out of, given that she was in this free look period. And she liked that. We started talking about just… You could kind of tell by looking at her situation that she was really underspending.
Kevin Kroskey:
I mean, it was after you do this for a while and you work with potentially 100, 200 clients and you’re updating their financial plans every year, we’re doing their tax returns. We’re kind of looking at what they’re spending for healthcare, for kind of core expenses, for more discretionary things that add a little bit of spice to life, to go ahead and dote on grandkids or whatever it may be or take a trip and get out of the cold for a little while. But we have all that information. You build up that wisdom and that experience over time. And here again, this was all new for Sue and her son was trying to help her out, but he didn’t know. That’s why he called us. And we could plainly see, Sue was definitely underspending, she could do a lot more.
Kevin Kroskey:
So, we started asking her, “Is there anything else that you may want to do?” She would regularly take a trip with her husband and go down to Florida for a little while. And she said she’d like to continue to do that but she wasn’t. At least, she wasn’t allowing herself to do it because she didn’t have that clarity. She didn’t know she could. Again, she might run out of money in her mind. She has these grandkids that she loves and arguably, maybe loves them even more now that her husband’s not here, and has even more time to go ahead and fill and devote to something meaningful, being that he’s not here. And we asked the question, “Is there anything else you’d like to do?” And then, the grandkids, grandma’s almost… Their eyes almost always sparkle when you mention the grandkids and Sue is no different. So, we just started talking about that and what that means. And you could just tell that she derives so much enjoyment from that. And I’m sure the grandkids welcome it as well, right? Who wouldn’t?
Kevin Kroskey:
So, we just had a… We just listened to her and we asked what we think are somewhat thought-provoking questions, really about the lifestyle that she has, and that she did have before when she was with her husband. Then some of those, “Well, what if you could spend more, but you could go ahead and do it in a very safe way so that you didn’t have to worry about running out of money, would you? And if so, what would you spend it on?” So, it’s that kind of conversation. Granted, her situation was unique in that she never lived alone. She was married for more than 50 years. She lost her husband and she didn’t handle money. All that is Sue’s story. And there are other people that are like Sue, but almost everybody has the same sort of questions that Sue had. “Do I have enough? Am I going to have to either keep working or go back to work? How much can I spend? If I spend more, am I going to risk running out of money or harming myself in some way?”
Kevin Kroskey:
All those questions are common to every single client that we sit down with. And even for clients that have several millions of dollars, I think everybody still has to have some healthy skepticism and ask themselves if they have enough. Certainly, you get to a point, it becomes plainer to see that you do. And maybe the focus becomes more discretionary, if you will, rather than, “Hey, are my needs covered? Maybe some more of my wants, are they covered?” Or things along those lines. But nonetheless, I think we all have to start with those core questions about, “Do I have enough? Am I going to be okay? What kind of rate of return do I really need to go ahead and make my financial plan work? And can I invest in a way where I can get that sort of rate of return on a reliable basis at a risk level that I’m comfortable with?” So, those were the questions that we started going down the road with Sue. And it was a good meeting. It was just under an hour-and-a-half that Sue gave Marissa.
Kevin Kroskey:
Marissa wanted to shake Sue’s hand at the end of the meeting and Sue declined to shake her hand and instead gave her a hug. And she just listened to her. She started giving her that clarity and that peace of mind that everybody deserves to have around their money and their finances, and not be jammed up and sold with some annuity or money management program or any financial product. All those other things are important but they come later. First, you have to understand the person and what they want to do and formulate the plan, and then you can get down to, “Well, how are we going to actually implement the plan? What sort of products do we need to go ahead and make the plan work?”
Walter Storholt:
So many different little considerations that need to go into stuff before you start even talking about what the fix is. You’ve got to understand the other goals and the other moving parts that swirl all around the problems or somebody’s life in these issues. And yeah, listening ends up being the most important thing, especially out of the gate in meeting number one. I’m going to guess, Kevin, you don’t even really do much planning in the first meeting with somebody. It’s just all that listening that’s taking place in getting to know your clients.
Kevin Kroskey:
There’s a lot of listening and there’s a lot of understanding. Frankly, the thing that we have to be careful about is, after you’ve been doing this for as long as we have and building up the experience and wisdom, it’s easy to start solving problems somewhat quickly. I mean, certainly, you have to understand the person, but a lot of times in that first meeting, you start identifying some issues and you can start fixing them. But a lot of times, there’s a path that you need to take. The goal isn’t just to fix the problem but to have it fixed and fixed in a way where people understand what’s occurring. Their peace of mind is going up. They have a better sleep at night factor if you will. But it’s a little bit of an education process and connecting the dots and kind of unpacking things and then showing how the pieces of the puzzle fit together.
Kevin Kroskey:
And again, all that is predicated on understanding the person, who they are, if they’re married, and understanding them together and their family and what’s important to them. Frankly, men in general, the whole Venus-Mars thing, men are fixers. Women are a little bit more… Again, these are broad stereotypes but blame the book if you don’t like it. But they like to talk about it some more. Again, it comes back down to the client and not only who they are, but your communication style. And we have some clients that want to get down to business and do it right away. They may be married to a spouse that wants to really kind of talk about it. So, it’s not only, is it important to understand and listen, but you really have to communicate potentially very differently with a couple in the same room, in the same meeting, which really is a skill that, I think, developed over time for an intuitive, maybe self-aware advisor that is kind of bringing them down that path.
Walter Storholt:
So, have you gone beyond the initial meeting and the hug? What followed kind of the initial interactions here with Sue?
Kevin Kroskey:
We can confirm that the annuity has been canceled and so, the free look means that she could basically void the contract without penalty. She has her money back in her account. Sue is actually coming in. I don’t… Frankly, it may be today or next week, but the… I checked in with her son the day after the meeting just to see how mom was doing, and he just said it couldn’t have gone better. They’re really looking forward to the plan that we’re putting together, that Marissa’s going to share with her when she comes back in. So, we don’t have that yet but on… And I don’t want to presume anything but frankly, the bar has been set really low with these other financial people that she’s encountered in her life. So, I wish everybody would take this sort of approach and not just kind of a sales approach. But anyway, the bar has been set pretty low. I’d be really surprised if we didn’t take care of Sue for the rest of her life.
Walter Storholt:
Well, that’s great to hear, Kevin, and glad that she’s going to be able to get the assistance that she needs to get a better plan in place. And like you said, a lack of confidence was just a really big part of that situation, the lack of an overall plan. Now, she’s going to get that in place. I’m sad that it took three different advisors for her to finally be able to find the right fit and to be able to get the kind of planning that she needs.
Walter Storholt:
But a good moral to the story to where it’s not a bad idea if you’ve done some shopping around for an adviser before… If you’ve never shopped around for an advisor, maybe do that. Not all are created equal. That is a big takeaway from this as well. Just because somebody who’s called a financial advisor doesn’t mean they do the same things as the next person who might be labeled as a financial advisor. The range of services, attention to detail and care, can vary very much. So from firm to firm, make sure you’re working with one that’s going to be a good fit for you and provide this kind of comprehensive planning and this level of care as well.
Kevin Kroskey:
Walter, you bring out some really good points in what you just said and let me summarize that in a different way. I think there are two ways that you can get hurt in working with a financial person. There’s a lot of ways you can get hurt without working with a financial person. But when you’re working with a financial person, they need to be trustworthy and they need to be competent. The competency goes without saying, I would say. Well, how do you make sure that they’re competent? At a bare minimum, make sure they’re a Certified Financial Planner. If you are going to go see a doctor, you’re not going to go see somebody that had some medical school. Hopefully, not only did they graduate medical school, which medical schools have a very high graduation rate, but they’re board-certified. They’re always sharpening their saw. They’re out there and they’re doing it and hopefully, they have a good bedside manner as well.
Kevin Kroskey:
So, having a Certified Financial Planner is kind of akin in our industry to being a doctor. With that being said, I certainly think you want somebody with some experience under the belt in helping people like you. So that part is good there. As far as trustworthiness, how people get paid is a good way to start. If they are earning commissions on products like the annuity that she avoided, the annuity contract that she avoided, well, there’s a big incentive to sell something that may not necessarily be in your interest. So, having somebody that is working in a very clear and transparent fashion, that gets paid the same regardless of what they recommend is certainly a really good starting point there. But those are the two things. They need to be competent, they need to be trustworthy. At a minimum, they should be a CFP. Hopefully, they have a lot of experience helping people like you. If you need brain surgery, you don’t want to go in and have somebody that’s working on feet, for example, or whatever kind of analogy you want to use, but you get the point there.
Kevin Kroskey:
And then trustworthy. Again, trust is built over time. You look at somebody like Bernie Madoff, and I don’t know if he was, he was certainly trusted by some, but if you’re turning over the management of your money, and it’s one of the things that people typically do when they work with somebody like us, you have a custodian, whether it’s Schwab, Fidelity, TD Ameritrade. We use Pershing, which is owned by Bank of New York Mellon. It’s the largest custodian in the world. They hold the money, we don’t hold the money, they hold the money. We have limited discretion to go ahead and make buys and sells in the client accounts in accordance with their investment policy. So, those are the things that you want to make sure that they have. Competent, trustworthy, transparent, not making commissions. If they are, at minimum, make sure that they’re putting the disclosure down in writing. But if you can just avoid somebody that’s making commissions altogether, I think that would be even better.
Walter Storholt:
Well, I’m sitting over here chuckling over your reference to the foot doctor doing heart surgery. I can just see the sign outside the business now. “Bob Jones, Podiatrist” and then a slogan underneath, “We do hearts too.”
Kevin Kroskey:
Right.
Walter Storholt:
And maybe even under that, “Walk-ins welcome.” You got to be careful of a doctor like that. In many cases, that’s how an advisor might be kind of presenting themselves or that might be the reality behind how they’re presenting themselves is sort of the, “Hey, we don’t really specialize in these things but we’ll do it anyway. Come on in.”
Kevin Kroskey:
We’ll practice on the patient.
Walter Storholt:
That’s right. That’s exactly right. So, if you want to talk with an experienced financial advisor on the True Wealth team, you can certainly do that. Go to TrueWealthDesign.com and click on the Are We Right For You button to schedule a 15-minute call with the team. Again, TrueWealthDesign.com. We’ll put a link in the description of today’s show in the show notes, where you can find that link and access the site from there. You can also find out about upcoming events in Northeast Ohio, and learn about upcoming workshops and other great details about the True Wealth team, all there on the site, TrueWealthDesign.com. Or call Kevin and the team directly at (855) TWD-PLAN. That’s (855) 893-7526. Kevin, thanks for the help on this week’s show. You were the man of the half-hour certainly, and we’ll look forward to another great episode with you next time.
Kevin Kroskey:
All right, thank you, Walter.
Walter Storholt:
Take care. And we’ll talk to you next time on the episode as well. Thanks for listening. For Kevin Kroskey, I’m Walter Storholt. We’ll talk to you soon on Retire Smarter.
Disclaimer:
Information provided is for informational purposes only and does not constitute investment, tax, or legal advice. Information is obtained from sources that are deemed to be reliable, but their accurateness and completeness cannot be guaranteed. All performance reference is historical and not an indication of future results. Benchmark indices are hypothetical and do not include any investment fees.
