Successfully Navigating the Uncertainties in Wealth Management
If you have ever asked yourself the question “Who really requires the services of a financial planner?”, the answer might be “you do.” Once believed to be the exclusive domain of the mega-wealthy, the truth is that each of us can potentially benefit from the services of a qualified and dedicated financial advisor. The uncertainties in today’s financial marketplaces combined with the accounting, tax, and legal complexities facing Americans of even modest wealth present a daunting task for most of us.
In response to the need to plan for both the present and the future, many of us turn to online financial calculators, books, seminars, and a host of other tools that often create a feeling of uneasiness that results from this piecemeal approach. Others seek the professional advice of a financial planner, but selecting an advisor can be as challenging as creating a financial plan itself. There seems to be an endless line of professionals, most of who offer an à la carte menu of services that may address a particular client’s needs but ignores the necessity of a more comprehensive approach which recognizes the correlation that one important decision may have on other, seemingly unrelated areas of the client’s life.
Heritage Investors, an independent wealth management firm based in Knoxville who was recently featured in Forbes magazine, has distinguished itself among its many clients as a trusted financial concierge company that provides the comprehensive approach to planning that is often neglected when creating a financial roadmap for the future. In this issue of Everything Knoxville, we are pleased to feature this interview our staff writer, Michael Filut, conducted with Heritage Investors founders Justin Goodbread and Jim DeTar.
EK: Justin, how is Heritage Investors different from the numerous financial planning companies already in existence?
Justin: When we started our company in 2009, during the height of the financial crisis, we were determined to be different. We decided early on that we did not want to be all things to all people, but rather all things to a few. In the financial world, many advisors seek to just gather assets, sell products, or pitch their idea. These approaches often result in confused, angry, and disappointed clients. We recently listened to a new client state, “I’m just another number to my advisor.” How unfortunate. At Heritage Investors, we intentionally keep our client/advisor ratio small, allowing us to create true, comprehensive wealth planning. We have built a network of trusted attorneys, CPAs, bankers, insurance agents, realtors, brokers, etc. who work with us to offer a comprehensive wealth management approach to our clients. Many of our clients are busy business owners or retirees. And while our clients are well educated, they choose to focus on business or recreational pursuits rather than trying to keep up with current interest rates, market trends, estate planning laws, tax reduction strategies, insurance changes, etc. We truly act as our clients’ “private CFO.” We work on behalf of our clients with our team of experts with the goal of building net worth for each of them.
EK: You favor a more comprehensive approach to planning rather than the à la carte selection of services typically offered by many advisors. Why do you feel this is important?
Jim: The world of finance has drastically changed in the last 15 years. There are many products, players, laws, regulations, etc. to contend with. Ignoring these complexities can be an extremely costly reality. We often see the effects of people who utilize this à la carte approach in some areas which can result in unintended consequences in other areas. We recently welcomed a new client into the Heritage Investors family that had been so focused on fees that they ignored the impact of higher taxation and lower interest rates in the other areas of their financial life, which cost them far more than the small amount of fees they were focused on. By introducing this holistic approach to our clients, we are able to demonstrate the larger picture so often ignored, including business profitability, business succession, buying and selling a business, taxation, estate, debt restructuring, debt elimination, and other critical areas of concern.
EK: Describe your current client mix.
Justin: We currently work with about 50% business owners and 50% retirees. Many of our clients are retired small business owners, including CPAs, attorneys, dentists, teachers, nurses, chiropractors, optometrists, veterinarians, CFOs, CEOs, financial advisors, bankers, law enforcement professionals, and trades people. We also advise current business owners, including pool contractors, sales professionals, retired coal miners, and building contractors.
EK: You are both CERTIFIED FINANCIAL PLANNERS™. Help our readers to differentiate between CFPs® and other financial advisors.
Justin: The CFP® is one of the most recognized and sought after financial designations an advisor can earn. In all of East Tennessee, there are fewer than 100 CFPs®. This comes as a surprise to many. Clients should exercise caution when selecting a financial advisor who may lack the prerequisite knowledge and training.
EK: Many people are unaware that making a change, say to an investment or trust, can have a significant impact on, let’s say, their taxes. They are often unaware of the correlation that exists between these different areas of their lives when making these important decisions. How does your approach to planning help to avoid these unintended mistakes?
Jim: Estate planning, investment planning, protection planning, business planning, retirement planning, education planning, and tax planning are all affected by a few factors. Because none of us can predict the future, planning must be nimble enough to adapt to future uncertainties. When we develop a wealth plan, the plan may incorporate many of the areas of planning mentioned or just a few and include multiple contingency plans. An area of great interest for business owners looking to retire or launch a new business in the future is the development of a “10 and Out” plan. This permits the business owner to accumulate enough wealth during the 10 year period to sell or transfer their business while providing for their retirement while minimizing their tax liability.
EK: You recently provided guidance to a physician that saved him a significant (six digit) amount of money. Explain.
Justin: Entrepreneurial physicians are savvy, kind, and intelligent and value the expertise of other professionals. However, they often seek the advice of their peers who themselves are not trained in business. This client worked hard to produce the necessary revenue required to meet his expenses, but he recognized that his approach to financial planning was piecemeal at best. We noticed that he could drastically reduce the interest on his loans by repositioning assets, so we sought offers from reputable lenders that significantly reduced his interest expense. In addition, we also discovered several other areas where improvements could be made, including a plan to increase his net income while working fewer hours, the discovery of an important error in his company’s retirement plan, gaps in both his business and personal insurance coverage, and creative financing resulting in a virtual interest-free loan. This client is now on a 10 year debt-free plan with a projected net worth in the millions.
EK: Would you say that the savings or increased returns on investments that your clients experience generally offset the fees that a client will pay?
Justin: We take the approach that a fee must be fair. We work closely with our clients to create a wealth management plan designed to maximize the return to our clients. When a client retains us, we enter into a relationship with one principle objective in mind, which is to help our clients achieve their quantifiable dreams. If we feel that our fee is an obstacle to achieving their goals, then the relationship is likely to fail. We are proud to state that we maintain a 100% client retention rate.
EK: How have your self-employment experiences helped you in assisting your self-employed clients?
Jim: Both Justin and I love being self-employed. In fact, Justin, who has never received a W-2 form in his entire working career, has successfully launched and sold three businesses. Our experiences allow us to show our many self-employed clients how to grow and maximize their businesses. Because most business owners do not view their business as their largest asset, we guide the owner in maximizing the net profit of their business.
EK: Is it true that you offer prospective clients complimentary consultations?
Justin: Absolutely. Many of your readers probably think that a CFP® or Wealth Manager is only for the uber-wealthy. Nothing could be further from the truth. We routinely meet with prospective clients in our relaxed and non-sales charged environment, and we are grateful to our existing clients who routinely refer friends and family. We also appreciate the area CPAs and attorneys who refer their clients to us that can benefit from our comprehensive approach to wealth management.
EK: In closing, is there anything you would like to add?
Jim: We look forward to the opportunity to serve those individuals who desire to create a comprehensive wealth management plan that will allow them to experience the peace of mind that comes from knowing that their financial house is in order. Heritage Investors offers the type of high touch and high trust relationship that produces results with our customized service and our low client to planner ratio of 27 to 1. If you truly desire the benefits of the one-to-one custom private CFO approach to your financial life, then we invite you to schedule your no-cost, no-obligation introductory meeting with Heritage Investors.
11470 Parkside Drive, Suite 201
Knoxville, TN 37934
Heritage Investors is an independent firm with securities offered through Summit Brokerage Services, Inc., Member FINRA, SIPC. Advisory services offered through Summit Financial Group, Inc., a Registered Investment Advisor. Opinions expressed are that of the author and are not endorsed by the named broker dealer or its affiliates. Although the opinions expressed are based upon assumptions believed to be reliable, there is no guarantee they will come to pass. The information may change at any time due to market or other conditions. Past performance is not an indication of future results.