To start, I grew up in Northern Virginia, right outside of Washington D.C. I am the youngest of three boys who live all over the United States and proud son of my mother and father. Growing up my parents or schools never taught me the importance of investing or planning. My parents taught me to work hard, get a good job, and make sure you buy things on sale. My mother, no matter what, cooked every night and took pride in providing us the best life possible. Health was her main focus and my father’s area of expertise was academia. However, my great grandfather was a pioneer in the investing space. His legacy provided three generations the ability to go to college debt free. This provided my parents the opportunity to give us the best that education had to offer and catapulted me into where I am today here in Boulder. His desire to give future generations this opportunity is something I’ve now dedicated my life to as well.
Early in my life I learned that the greatest currency in life is the effect that you have on other people. When I was at summer camp as a young man, I learned invaluable lessons that I still live by today. Those lessons taught me that if I dedicate myself to others and help guide them through one of the most difficult things we have to handle as individuals, finances, then I will find all of the fulfillment I need.
Unfortunately, our education system does a very poor job of educating our youth to make good financial decisions. We’re taught the more you make the more you can have and we live in a never ending cycle of wanting more. Over the past decade of working in Boulder with individual clients and families, I’ve learned some of the biggest mistakes people have made and why they make them. I’ve also learned what the most successful people in some of the most affluent cities in the U.S. do to accumulate and keep wealth. The financial advising world, however, has a bad name and for good reason. For far too long, advisors were and still are, compensated for the wrong reasons like selling their own products for commissions. In my opinion, financial advisors should never be able to sell products for commissions. It represents far too big of a conflict of interest and should be done away with. However, we aren’t there yet even though there is a big movement to do so.
That leaves me with where I am today. Starting my own advisory firm with a business partner that shares my same vision in Boulder, CO. Now I can proudly say, I’ve never sold my own product or fund to a client. At big firms, you’re told to stay in the corporate lanes of what can be offered to clients. This goes beyond not being able to help clients with questions around stock advice. You’re given strict instructions to never tell clients about third-party solutions that would better meet their needs, or share a name of a company/person for tax planning, estate planning, insurance planning, mortgages, 529 plans, brokers, or retirement plan administrators or companies. Even when you’re a CFP® professional, you’re bound by the same restrictions. How could I continue serving clients in a holistic manner as their fiduciary when I can really only help them with the investment piece? The investment solutions I was selling though were fine. They gave clients well-diversified portfolios for a percentage of assets under management. The problem was, we were giving clients a solution that met the company’s guidelines, meaning, it wasn’t really my advice. If the clients had a certain net worth, made a certain income, and said they could handle a certain amount of risk, the ‘algorithm’ spit out a couple of portfolios that the company said we could give to the client. This is not financial planning. Although it was appropriate for some clients that just wanted something very safe and didn’t have the time, desire, or expertise to do it on their own, it wasn’t adequate if you truly wanted to be their fiduciary and meet the standards of the CFP® Board. So I left.
I no longer could work for a firm that wasn’t allowing me to serve clients in the manner they need to be served. I needed to offer clients solutions that would serve them more than investment management based on a theory (Modern Portfolio Theory) that was developed almost 70 years ago. Now I am not saying or attempting to say the theory is incorrect by any stretch of the imagination, but what I am saying is, right now a large portion of the theory isn’t doing what it has in the past and portfolio managers across the country aren’t adapting accordingly.
The clients I worked with for many years here in Boulder, knew they didn’t get rich with their investment strategy. They got rich with their savings and spending strategy. They focused on key elements like automating a certain amount of savings for their retirement and after-tax accounts before spending. They knew if they could save 20%-30% of their income they could retire earlier and live a more fulfilling life. To clarify, they didn’t live a better life because they had more in their retirement accounts. They had prioritized what was important, like focusing on shared experiences with family and friends, traveling, exercising, eating better instead of buying the newest and shiniest clothes, cars, and things. They stayed disciplined with their strategies as they knew that tinkering with their investments or savings meant prolonging their working days. They surrounded themselves with the right people, the right process, and the policies to hold them accountable and that’s what my business partner and I at InSight will do for our clients. As fiduciaries in Boulder, we will always put the client first.
