Listen Now:
The Smart Take:
We’re excited to make a big announcement on this episode of Retire Smarter. Kevin is joined by True Wealth Design’s newest partner, Ron Wyatt, who brings more than 25 years of financial planning experience to the firm. A lot of existing listeners will be hearing from Ron for the first time, so we’ll spend some time today getting to know his background and professional journey. And new listeners will also get to learn more about Kevin’s experiences.
The two will also cover why they’ve chosen to join forces now, and why it’s going to be a benefit for all current and future clients. Join us as we celebrate the growing of True Wealth’s footprint from northeast Ohio and southwest Florida to Pittsburgh!
Have questions?
Need help making sure your investments and retirement plan are on track? Click to schedule a free 15-minute call with one of True Wealth’s CFP® Professionals.
Timestamps:
1:11 – Introducing Ron Wyatt
2:21 – Ron shares a little about his background
5:58 – Kevin gives a brief review of his background, including his time as a high school physics teacher
8:23 – Kevin tells us about one of his first clients, Tom, and the lessons learned from an emotional meeting in 2009
10:55 – Ron explains why he and Kevin are joining forces at True Wealth Design
16:56 – How does this impact clients? How will their experience change or remain the same with this transition?
24: 53 – Big picture: becoming a “bigger small firm”
Subscribe:
Click the below links to subscribe to the podcast with your favorite service. If you don’t see your podcast listed with your favorite service then let us know and we’ll add it!
The Host:
Kevin Kroskey – About – Contact
Intro: 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: Hello and welcome to another episode of Retire Smarter. We’ve got a special edition of the show on the way today. I’m Walter Storholt, as always joined by the President and Wealth Adviser of True Wealth Design serving you throughout Northeast Ohio and Southwest Florida. He is Kevin Kroskey, and you can find out more about the team by going online to truewealthdesign.com. Kevin, great to have you with us today. How are you, sir?
Kevin Kroskey: Walter, I am great and excited for a special announcement that we have today.
Walter Storholt: We do have a special announcement. In fact, we are joined by a special guest on the show today. Ron Wyatt is with us, and Ron is going to be partnering with Kevin and the True Wealth team. We’re excited to talk a little bit about that partnership, what that’s going to entail, and introduce Ron to our audience as well, because Ron’s going to be joining us from time to time as we go into the future of the podcast, as well as you guys moving True Wealth forward over the next many years. Ron brings more than 25 years of financial planning experience to the table. He has about 100 clients that he’s bringing into the firm with him as well. So, just very excited to bring Ron on board, and I’m interested in getting to know a little bit more about you, Ron. But before we get into all the details, just let’s introduce everybody to your voice. How are you, sir?
Ron Wyatt: I’m doing well, thank you. How are you, Walter?
Walter Storholt: I’m doing great, thanks for asking. Glad you are as well. Let’s dive into it and get to your perspective here, Ron. What you’re bringing to the table, and Kevin, I know, is going to talk a little bit about why you guys are partnering and what’s going to be changing as you guys merge your efforts here going forward. But Ron, before we get into all of that, just tell us a little bit more about yourself, a little bit about your background and where you’re from and what makes you tick.
Ron Wyatt: I was born and raised in Pittsburgh. My wife, Bethanne, and I met when I was in college through friends. We’ve been married for over 30 years and raised three children in the South Hills of Pittsburgh in an area called Peters Township. Chad’s our youngest. He went to Colorado State University and works for Lockheed Martin, and lives just outside of Denver. Our daughter Morgan went to Ohio University, lives in Pittsburgh, and works for WVU Medicine. Ryan’s our oldest. He just moved back from Richmond, Virginia, where he was employed by Charles Schwab as an adviser. The reason he’s moving back to Pittsburgh is to join me at True Wealth. Like me, he has a degree in finance and has also earned his CFP and CIMA designations. By the way, he went to the University of Alabama.
Let me now take a few minutes to explain my educational background and why I entered the profession. I graduated from the University of Pittsburgh, where I majored in finance and accounting. I had an interest in the stock market and becoming a financial adviser because I’m analytical in nature, but I delayed entering the profession because I didn’t know how I’d meet people at such a young age, so I pursued a career in consulting. I started by working with a company in Columbia, Maryland, a consulting firm, and my job involved a lot of travel, and my days were pretty mundane. I spent a lot of time in front of the computer working on spreadsheets. It became apparent the one thing I was missing was interaction with people, and it was at this point I knew I needed a change. So I began my career as a financial adviser.
At first, when I made the career change, I thought the best way I could help clients was to become one of the most highly educated advisers in the industry, so I earned a bunch of designations. You can look at them on my bio. They’re related to financial planning, investment management, working with high net worth individuals, retirement planning, and also insurance. And while being qualified is a must, what’s more important is being able to take that knowledge and apply it to the best interest of my clients.
One of the proudest moments of my career was earning a net promoter score of over 90 out of a possible 100, which was the highest actually in the entire firm. So why it meant so much to me is it’s based 100% on clients’ feedback about their experience with me as an adviser and if they’re likely to promote me to others. And by the way, the industry average net promoter score is only around 34 out of 100. If I had to do it over again, I’d pick the same career. It offers me the perfect blend of allowing me to be analytical or having strong client relationships, and also, I can see how my guidance plays an important role in improving my clients’ lives.
Walter Storholt: I know working with people sounds like it’s very important to you. And so, glad that you’re joining the True Wealth family because you’re going to get to interact with that many more people going forward and delve into people’s lives. I think that’s going to be fantastic. Now, this show is not only about Ron getting to know and you getting to know Ron, but Ron has a lot of clients under his own firm that he’s bringing into the umbrella, and Kevin, we want to introduce you to them as well. Now, long-term listeners of True Wealth and Retire Smarter podcast will certainly know some of this information about you, Kevin, but we may still learn a few new nuggets about you as well. Why don’t you do the same and take us into a little bit of your family background and personal life, and your career arc as well?
Kevin Kroskey: Yeah, sure thing, and I look forward to meeting all of our collective new clients. But, similar to Ron, I was born and raised near Pittsburgh. I was actually on the north side of town, but half of my family, my mom’s side of the family, is actually all through the South Hills, similar to where Ron’s at, and still have a lot of family and friends there today. But in the late ’90s, I ventured out to Northeast Ohio and went to grad school at the University of Akron and spent the last 22 years there. I met my wife while in grad school, and we made a home there. We have two daughters age soon to be seven-year-old and soon to be two-year-old. And also, for the last five years, we spent, as I guess you could call it, Florida snowbirds.
So we go back and forth and really consider both our homes and feel very fortunate that we can do that. Unlike Ron, and unlike my six-year-old, who states that she wants to be an American Ninja Warrior when she grows up, I really didn’t know what I wanted to do. Actually, Walter, she’s pretty firm about that as well.
Walter Storholt: That’s an ambitious goal, though.
Kevin Kroskey: I’m all for it, so we’ll see how she can make a living at it, but I’m encouraging it for sure. But I had no clue what I wanted to do. However, I had a few teachers that really made a big, positive difference in my life when I was going through high school. And so I just thought, “Well, hey, that sounds pretty rewarding. It really helped me out. Maybe I can help some other people out.” So, I became a high school physics teacher. However, even though I had some really good experiences with these teachers in my own maturation and development, I really didn’t like high school. So, in hindsight, I’m not sure what the heck I was thinking. I didn’t like the rigidity.
Frankly, it wasn’t a good fit for my personality and my more driven side of me, if you will. But I went back to grad school for finance. It was the late ’90s, the tech bubble was going, so everybody, either their barber and the taxi cab driver, was talking about stocks, and so it was just in the air. And I had an interest in it, and I was really good at math. I love solving complex problems, and I kind of fell into financial services while I was in grad school.
And so I felt like I could marry the two and teach people about money. What keeps me there, though, what keeps me here is really a short story that I can share about Tom. Tom was one of my first several clients, and he was 62 at the time. He was completely financially secure, nothing to worry about in terms of money, and nor did he worry about money. He was retired. It was 2009. I remember it very clearly. He and I were sitting in my office, and it was two months into his retirement. I just simply asked him, “How’s retirement going?” And then the room got really quiet, and then Tom started to cry, and I could just see it in his face that it wasn’t about money, but you could just feel the void and feel the frustration that Tom was experiencing.
It was two guys in a room. It was, I think, a little awkward for both of us, but very bonding for both of us as well. And to me, it really taught me firsthand that life is a heck of a lot more than just about money. And so is work. And for Tom, working ever since he was a young boy delivering papers, he was always getting a lot of benefits out of helping people and being there for people and just the comradery of it. And so, his life satisfaction was tied directly to the work that he was doing. And here he is in retirement when everything is supposed to be sunshine and rainbows, and Tom just felt a big void.
Today I call this financial life planning. The technical competency that drew Ron and me into the business about the investments, about the planning, it’s a must, it’s critical. However, it’s also table stakes. It has to be married with emotional intelligence, with the empathy that Ron mentioned but done right. I’ve seen people get so much more out of their life and it’s amazingly fulfilling work, and it’s definitely what keeps me here today.
Walter Storholt: It’s like in the medical world, a doctor with some bedside manner just feels even more rewarding to work with somebody like that. You want the technical proficiency there, but, boy, it makes it so much better when they can account for and understand some of the emotional sides that come along with dealing with a medical issue. It’s the same thing in the financial landscape. I’m sure it’s something that you have seen not just in Tom’s story, but time and time again. So, good to hear a little bit about both of your backgrounds. Obviously, you both love helping people get into better financial positions and more solid situations and just building more confidence in their financial plans. But why come together? Why are we making the Retire Smarter and True Wealth Design team grow a little bit here?
Ron Wyatt: So first, let me start with why I left Goldman Sachs. It’s a great company. Financially staying there would have been rewarding. They provided me a lot of great referrals. I simply didn’t enjoy working there, and as a result, I would have retired earlier than I wanted to. I’m in a stage in my life where enjoying what I do day-to-day is more important than ever. So next, why am I partnering with Kevin at True Wealth Design? I always wanted to run my own firm, but I didn’t want to spend time on the operational side of the business. I knew the solution was to partner with someone. By doing so, I can gain complementary skills. We get to share ideas, split duties, and gain additional resources. The problem was finding someone that had the same values and beliefs as me about putting clients first, investing, and also planning.
I never found someone I wanted to partner with until starting discussions with Kevin about a year-and-a-half ago. So by partnering, what I’ll gain is first the flexibility to invest in the business, looking beyond short-term profitability, and second, I’ll be able to focus on what I like to do and what I’m good at, and Kevin can do the same. So, I mentioned about investing in the business, and what I mean specifically is investing in people, technology, and research. Our goal is to be big enough to offer a broad and deep level of services at a competitive price. However, we don’t want to be so big that our partners are far removed from our clients. Also, my goal is to have a business be an ongoing concern past my retirement. By the way, I don’t have plans on retiring anytime soon.
Part of my new responsibilities will be mentoring our younger advisers. The second thing we’ve invested in is technology, and instead of explaining all the tools we have, I’ll explain what they’ll do to you in a little bit. Lastly is research. It’s very reasonable to think that the mega-companies have an advantage when it comes down to research. However, with our custodial partners like TD Ameritrade, Charles Schwab, and Pershing, and also vendors like Dimensional Fund Advisers, Research Affiliates, BlackRock, and JPMorgan, we’ll have the latest research on what drives returns and also new products. And by the way, since we’re fiduciaries, we don’t receive any compensation from our vendors at all. We select only what’s in the best interest of our clients.
Kevin Kroskey: Yeah. And for me, I’ve pretty much always, or early on, had my own business and a lot of the time banging your head against the wall figuring out what’s the best way to do things. It’s not like we run a McDonald’s franchise and doing what we’re doing for clients. I guess the proof is in the pudding. We were able to be successful at it and help a lot of people and have additional people refer to us, and continue to grow and serve more people. And really, about five years ago, I just made a conscious decision to slow down our growth and really shore up the business in general to support both our current clients as well as future growth. And over the last several years, we’ve made significant investments in people, in technology, to do an even better job and to go ahead and support that growth.
Some of this we’ve added even more robust tax and estate planning services, which has been great and a direct benefit for our clients to make their lives simpler and easier and more effective, and we’ve enhanced the experience overall in working with us, whether it’s through technology, how we’re communicating, what have you, but simple, better is always our mantra here. From a competitive perspective, we always strive to be a really high-value provider. We’re not the cheapest, and we’re certainly far from the most expensive, but we want to and need to have really high-quality people like Ron, and we need to be able to strive to deliver a lot more, and we do than what other financial firms charge for a similar price. That’s what we’ve always tried to do. We always try to provide massive value for what clients pay us.
Frankly, I feel like the bar has been set pretty low in our profession for what good advice and good service is. So even though we’re striving to be excellent, I think some of the industry and some of the competitors are making it easy for us in a way. And that’s unfortunate for the people that aren’t getting better advice and a better experience and more clarity, more confidence in their planning. We want to continue to grow in a controlled fashion to help more people realize those benefits and get more out of their money and more out of their life.
Ron fits into this vision. He shares it culturally. We’re born and bred from the same area and have that strong blue-collar work ethic. We have a near-identical investment philosophy, and Ron has just incredibly excelled at client service, the large firm that he’s coming from. He’s won awards out of many, many thousands of advisers that are similar to him for client satisfaction. I think with him being at really big firms and then with smaller firms and just having the experience that he’s had over the 25 years and the wisdom that he’s gained from it, he can really make a choice about what is best for his clients going forward, and I’m proud that he has chosen to partner with us. I do that.
Walter Storholt: Well, I know that there are probably many meetings that take place leading into a merging of operations and a partnership like this, and I know that some of those meetings are on that topic of, “All right, well, what’s in it for us as companies. What helps us as business owners?” But a huge element I would imagine of your conversations over the last many months have been, “How is this going to help my clients? How’s this going to help our people?” So, can you layout for us maybe some of the ways that you see this really benefiting each of your client bases as you come together?
Ron Wyatt: First of all, we’re going to be able to expand our investment offerings, but before explaining what’s new, let me address what’s going to be the same. Our equity and bond strategies are very similar. We actually use many of the same investment management companies like Dimensional Fund Advisors and have very similar allocations. We’ve been comparing notes, Kevin and I, for the past year, bringing our portfolios closer together. But what we’ll be doing is adding a stock strategy we call smart design direct. What it does is it duplicates a mutual fund portfolio, but we’ll be owning individual stocks directly. It’s based on the same belief in research as our existing portfolios, but it offers three main advantages. First of all, it’s cost. By using the stock portfolio, we get to eliminate mutual fund operating expenses and also third-party money management fees. That should save about 2,000 to 2,500 per million dollars of equity value compared to our existing institutional mutual funds and third-party money managers.
Second of all, it can help save taxes. The turnover won’t be high, so when there are gains, they’ll be long-term gains. And we can also do something called tax-loss harvesting, which I’ll explain in a little bit what that is and how it benefits you. And lastly, there’s a chance for better risk-adjusted returns. What we do with our strategies is we overweight characteristics that we were seeking, such as buying companies that are highly profitable and reasonably valued, and we try to underweight stocks that don’t have those characteristics. That’s what happens with mutual fund portfolios. However, with a stock portfolio, what we’ll be doing is buying only 75 stocks that have the most favorable characteristics, which may lead to better risk-adjusted returns. So, by the way, it’s not new. It’s an updated version of what I designed and ran previously.
Another way we can help save taxes is through something called asset location. What asset location is, is we take tax-inefficient investments like higher-yielding bonds and put them into retirement accounts like an IRA. And we put tax-efficient investments like stocks and put them in non-retirement accounts. What this does is obviously it saves a great deal of taxes. The second thing we’ll be able to do is something called tax-loss harvesting. When we harvest losses, what we’re doing is replacing one asset that has fallen in value with a similar asset to realize a capital loss. So by realizing that capital loss, you get to offset current and future capital gains, but because we’re replacing it with a similar asset, you’re still in the market, and if the market rebounds, you should rebound in a similar manner. By the way, this is something I did in March and April when appropriate. I had to do it manually, but now I’ll be able to do it much more efficiently.
And the last thing that we’ll be able to offer is an increased level of tax and estate planning. We actually offer to do tax returns without additional cost. And by the way, if you want to stay with your existing CPA, that’s fine. But by doing the tax returns and by also having additional resources, we’ll be able to do a better job with things like, should you do a Roth conversion, do some gifting, or maybe set up a trust to save taxes. I would like to wrap things up by explaining what to expect now. So, first of all, let me address fees. The advisory fee will be almost identical to what it is now, but for people using the stock strategy, the fee should be lower and sometimes by a pretty good margin because, as I mentioned before, we’re able to eliminate the mutual fund internal operating expenses and also third-party money management fees.
The second thing I’d like to address is account safety. Obviously, True Wealth Design is a smaller company than Goldman Sachs’s personal financial management, so you may wonder how safe your money will be. We’re still using the same third-party custodian, such as Charles Schwab and TD Ameritrade. Your money’s held by them. Your deposits are payable to them. They’ll provide you, just as now, your statements and online access. All you give us the ability to do is manage your money and charge you the agreed-upon fee. Lastly, Goldman Sachs and I have been working together on the move for over a month now, and it’s been a very friendly process. After about 60 days, they have agreed that if I show them the clients that have joined me by showing the signed advisory agreements, they will share information with me, such as your financial plan. So this will allow me to pick up where we left off without any interruption.
Kevin Kroskey: Yeah. And Ron’s investment expertise and experiences are incredibly welcomed. He’s definitely going to be able to help me share that workload. And just with the environment that we’re in today, low-interest rates, how fast things are changing, if you go back and listen to the episodes in March, I think everybody could hear it in my voice and with some of the things we talked about, just how quickly things were changing. The process was similar, but the inputs were changing pretty quickly. And it’s probably going to continue. I don’t think the rate of change is going to be there, but when you have zero interest rates, it just puts a lot of stress on the portfolio and meeting return objectives of clients’ needs. So it’s definitely going to be welcomed there. With Ron sharing the investment workload, I’m going to be able to further specialize as well in some areas that I’m passionate about and also can help all of our clients, specifically retirement planning.
As anybody that’s been listening to the podcast I hope can hear, I have a lot of passion for just retirement planning in general. There’s a lot that goes into it. It’s not just putting some numbers into a black box and having something being spit out on the other side. When you have low-interest rates and maybe a challenging return environment, the planning is so much more important and something that much more reliable as well to lean on. So I’m going to continue to do some more work there. And then if I harken back to the story I shared about Tom, just the softer side of things, retirement and life satisfaction, this was something that I always wanted to do.
I kind of have this, you know, I named the firm True Wealth. It was something to me that was certainly more about money. Tom really drove that point home when we had that experience. But my family and I have done the same thing in a different way, just making this change to Florida and just, hey, we’re happy to work longer. I just want to try to get a little bit more out of our life and a little bit more enjoyment together. I think there’s a lot more that we can do there, and I’m excited to have even more time to devote to that.
Taxes, it sounds boring, I’m sure for many, but I love it. And that’s something that probably comes out on the podcast as well, and who doesn’t like to save money? It’s become a real strength of mine, but there’s some additional work that I’m going to lead in this area, and it’s certainly an area that continues to change and is going to require ongoing attention. And then lastly, Ron’s going to certainly help out with some communication, particularly around investments and some other areas where he’s just gleaned a lot of wisdom over the years. But having the knowledge that we have is great, and we have to have it, but we need to be able to share it with clear and concise communication so our clients and others that may become clients can have more clarity and confidence around what they’re doing in their financial life planning. So whether that’s podcast writing, some other ways that we can engage people, we’re looking to do even more of that.
A little bit bigger picture to me, it allows us to become an even bigger small firm. That’s the phrase that I like to think of when I think about our future. Collectively we’re going to have more scale. We’re going to have a more robust business. Something happens to me, and the business can continue on without me now that Ron’s part of the team. We need to do a little bit more additional hiring and have a little bit more specialization in the roles, but doing what we do and really integrating the investments, the planning, and the taxes together, you really do need to be a pretty good generalist overall in those areas. But then, within our team, we’ll be able to drill deeper in certain areas, I think, to make our advice even more effective overall.
But intentionally, we’re going to remain small. I think we’ve all had the experience of calling into a big company and getting passed around, something that I’ll use air quotes here and call “Customer service,” where they don’t know you, and then you tell your story to one person, and then they transfer you to somebody else, and you have to retell the whole story. Nobody likes that. I mean, collectively, we’re going to have north of about 300 families manage roughly about 300 million on their behalf, which is a decent size for a firm like ours, but we’re going to be small in the sense that we know our clients very well.
We’re going to have several CFPs. Our client to adviser ratio is definitely small by design because we need to know them and we need to understand them, and we need to manage all the myriad details in their lives to make sure that we can align their money to go and head and best support them. We’re in the financial business, but it’s one that’s definitely built on personal relationships and managing all these details. So as we continue to grow and share what we’ve built with more people and be able to help more people, this big small firm mentality is always going to be a guiding principle for us.
Walter Storholt: Neat that you’re maintaining those philosophies and values that have gotten you to where you are and have helped so many, literally, hundreds of families at this point, and not overlooking the fact that that personal attention is still very important. But will it be able to serve more and maybe even more efficient service in some ways by merging these two companies and you guys growing together as True Wealth Design in the future? So, very cool.
Well, we wanted this podcast to serve as just a great introduction to both of you, to new listeners to the podcast, and also for all of Ron’s families and clients that he’s bringing into the fold so they can get to know you, Kevin. I can now change my note card here, Kevin. Instead of serving Northeast Ohio and Southwest Florida, I can now add Pittsburgh-
Kevin Kroskey: Sure can.
Walter Storholt: … to the list as well. So, Northeast Ohio, Pittsburgh, and Southwest Florida, where the True Wealth Design team is. It just sounds like you guys are poised to have a better team in place and a better business in place to serve your clients and benefit your clients into the future. I’m excited, Ron, to be able to talk with you more often here on the show and get to know you some more and for our audience to be able to do that as well and looking forward to the future with both of you.
Kevin Kroskey: I’m very excited to have Ron join and certainly feel the same.
Ron Wyatt: Kevin, I’m very excited as well. Very much looking forward to it.
Walter Storholt: Well, thank you guys for joining us on the show today. As always a reminder to any listeners, if you want to get in touch with Kevin, Ron, ask any of your questions about the show, about your own situation, you can go to truewealthdesign.com and click on the “Are We Right For You” button to schedule a 15-minute call with an experienced adviser on the team. That’s truewealthdesign.com. And always the old-fashioned way, as I like to say, 855-TWD-PLAN is the phone number if you want to reach out directly as well. And we’ll put contact info in the description of today’s show, so it’s easy for you to find.
For Kevin Kroskey and Ron Wyatt, I’m Walter Storholt, and we’ll talk to you again next time, right back here 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.
