My Journey As A Financial Advisor Part 3: The Holistic Advisor

My Journey As A Financial Advisor Part 3: The Holistic Advisor

My name is Tyler Emrick, CFP®. I am writing a story about my journey since 2007 as a financial advisor. In the beginning, I didn’t know what I didn’t know. I am in a position now where I can reflect on my journey with understanding and knowledge that comes with being a professional for 10+ years.  My hope in sharing what I learned along the way is to help you better understand the financial person you’re working with, including his or her incentives and whether or not you are getting value commensurate with what you are paying.

At this point in the story, after being a Fishbowl Financial Planner and a Discount Broker, I was coming upon ten years into my professional career. It was a big deal for me, a milestone if you will, and the path hadn’t an easy one. But I was working in an industry I loved, helping people I cared about and was recognized in the top 5% of professionals at my firm. However, when I  looked to the future at the discount broker where I worked, it wasn’t the future I wanted.

At the discount broker, not much advice was provided nor time for personal relationships with clients. It was vital to keep things simple and not delve into the complex. Complex requires time and expertise. Likewise, relationships take time and are not scalable.

I didn’t want to be a McDonald’s-level advisor making financial burgers. I knew I could do and help more, and I believed clients deserved it.

The Big Move

I joined True Wealth Design in 2018. I liked the depth of their financial, tax, and investment planning capabilities and was excited to learn and grow. I also liked – and required any firm that I would consider joining – that they were fiduciary advisors for clients 100% of the time.

The term ‘fiduciary’ isn’t a common one outside the industry, so let me explain. A fiduciary is someone required to act impartially and provide advice that is in their clients’ best interest. A fiduciary must act with the care, skill, prudence, and diligence that a prudent person would exercise. Clients can expect that a fiduciary will act with transparency. An attorney is a fiduciary to their client. Some financial advisors are fiduciaries, but unfortunately, they’re in the minority within the industry.

Most importantly, I would now be able to help families in ways that I never could before. I could spend more than 30 minutes in a client meeting. I was able to take the time to get to know and understand my clients. Then I could carefully consider what financial path would be best and take the time to lead them down it. And no longer would I be judged on a scorecard for selling particular financial products, as I was at the discount broker.

A Telling Example

I think back to a family I started working with in the past year. They were fortunate in that they spent 30+ years at their respective employers, building what any of us would consider successful careers. They had raised three children, lived within their means, and were finally coming to a point in their lives where they felt they could focus on themselves and their retirement.

They talked about how retirement brought on feelings of excitement and joy. However, as they began to think through what retirement would look like — how should their investments be managed, when and what accounts should they withdraw from, when should they start Social Security — that excitement quickly turned to concern and confusion. This uncertainty is why they were talking to me about their future, and it took time.

Not only were we still getting to know one another, but we were also beginning the planning process from scratch. They had some added complexity trying to retire in their late 50s with some unique tax considerations and challenges around healthcare. Over the year, we had multiple meetings with our team, spending many hours working through different scenarios to find the one that best met their needs. Then I took a couple of hours walking them through the reasoning why this path was going to best meet their goals. What a far cry from the 30-minute quickie retirement plan meeting I had to use at the discount broker!

The Last 20%

Over the last two years at True Wealth, I spent many hours focusing on what I call the last 20%. Throughout most of my prior career, positions only required me to get 80% of the solution solved for my clients. I could list off a multitude of reasons for this, but none of which were good enough once I realized how much that missing 20% impacts the lives of my clients.

I think about an individual I met with early in my career at True Wealth.  This person was referred to me by another client. At the time, he wasn’t looking for a new advisor but had a couple of questions regarding his Medicare costs. Specifically, he could not figure out why his premium increased over $2,000 from the year prior.

After getting to know one another a bit, he tells me about a large IRA distribution he made to pay off his house two years earlier. His advisor warned him about the income tax consequences. However, the advisor failed to explain that the withdraw would also increase his income to a point where he would be subject to Medicare premium surcharges, increasing his healthcare costs two years later. His advisor failed to understand how taxes and Medicare worked, only solved 80% of the solution, and it cost the client.

Sometimes, taking the extra time needed to find the best solution (or avoid a bad one in the case above) has monetary benefits. Other times it provides clients the perspective required to make decisions they otherwise would not have. It is terrific helping people understand and be comfortable with retirement. It is even better when you give them the confidence to do things they did not think were possible.

Gaining Knowledge

A couple I recently started working with are in their early 60s and were under the assumption that they were going to have to work for another four to five years. It seemed logical to them as they weren’t yet eligible for Medicare or full retirement age for Social Security purposes.

We did some initial planning based on what they thought they needed for retirement spending. I was able to confirm they were on track to retire when they wanted. Early in my career, that would have been good enough – 80%. They were happy with the plan, confirming what they were expecting. Thankfully, over the last couple of years, I have learned about evidence showing how retiree spending changes through retirement.

I was able to be a better advisor and incorporate the changing spending goals into their plan. In actuality, they did not need to work a few more years and could retire now if they wanted. It hit home with the wife, as she was worried about getting laid off from her current employer. Since I had the knowledge and time, I was able to instill in them the confidence they could retire on their terms when ready.

As I look back over my journey, it was definitely an interesting one. Not knowing what I didn’t know, it was easy to buy the company line. Marketing was slick. The sales pitch to the staff and the customers sounded good. But as I learned more, I continually found cracks and why the company fell short of taking great care of the client.

Imagine: If I was in the industry, informed and still didn’t see the cracks until much later, how difficult is it for an average consumer to discern these differences when considering who to hire and trust. I hope my articles have helped shed light on this.

I’m sure I’ll look back on this article years from now and have a similar experience. I’ll continue to learn and grow and become an even better advisor. I’ll know other things that I may not even be aware of today.

Yet, I’m happy to be in a place where the business structure allows me to have adequate time and a fiduciary environment to always take great care of my clients while continuing to grow and do even better.