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Practice Management > Marketing and Communications

Living the Dream

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ROY GAGAZA, RFC, CFP, of Journey Wealth Management, LLC, has a successful advisory practice in the high-tech haven of Manteca, Calif. As if one paradise was not enough, Gagaza has a successful practice in Waipahu, Hawaii as well. That’s right, Gagaza, a retired military officer who served a year in Kuwait during his tour of duty, really is living the dream as a financial advisor. Senior Market Advisor editor Daniel D. Williams met with Gagaza in his Manteca office to discuss his unique (and enviable) advisory practice.

Senior Market Advisor: You have a very interesting story. Talk about your journey to financial services and what led you to this industry?

Roy Gagaza: I retired from the military on Sept. 30, 2008 after nearly 25 years of service. But about 10 years into my career I started thinking about what I would do outside of the military. I began thinking, if I stay in too long, I won’t be marketable and it was at that time I started looking for something I could do where I could help people. Also, I had been a marketing major at San Jose State so there was a business background. Eventually, I looked at financial services. For 10 years I was able to remain in the military (which included a year in Kuwait in 2004) while seeing clients and conducting seminars. During that time, I got my credentials, including my certified estate planner and a registered financial consultant.

SMA: Seniors make up a key part of your practice. What is it about them that led you to this demographic?

RG: The main thing is I find I really like working with senior clients—that 55-plus market. I get along better with older people. They’ve gone through so much and seen so many things in their life. And, with the seniors, they’re the ones that need more help. They have bigger assets, but they’re not putting more in. For them, it’s about preservation. A lot of people know how to get the money in the first place, but not preserve it.

SMA: So, do you see a disconnect in their retirement planning? 

RG: Yes. Even with the 55-plus clients, they still don’t know that they should be preserving. They’re still being aggressive when they need to be reallocating. The biggest mistakes occur five years before and after retirement. People get in their “red zone” where they believe they’ve made it. And they begin to say: “Let’s go on that cruise. Or let’s go on 12 of them.” But there needs to be a fine balance and there needs to be a plan in place before doing that.


SMA: At that point, what do you do to help them?

RG: The key is to develop spending plans instead of developing a retirement plan. Most people have too high of a projection when taking out 10 percent of their assets per year. That’s too high. You have to give them the facts. You can say, “Yes, you can do that, but here’s the reality: If you do what you’re doing, you could be out of money at X date.” By the time they realize what’s going on, they’re in panic mode. So they either go super aggressive or they go super conservative. Usually the extreme they take is of the total conservative approach of CDs, which puts them in the hole. It does not outpace inflation. If you look at 20 years of CDs versus the last 20 years of inflation, CDs have been outperformed. It’s a negative. Your dollar has shrunk. And that’s not even taking taxes into account. If you want to keep your money safe, there’s only so many options and I’m a firm believer in putting a percentage of that savings in FIAs (fixed indexed annuities).

SMA: Was there a particular client or event that led you to emphasize FIAs?

RG: I was a young advisor in 2000-01. At the time, there were a lot of people in my client base that were into tech stocks. I needed to find products that guaranteed income. I gravitated to FIAs. But I don’t want to paint myself as one of those one-track guys. For me, there’s red money and green money. Green money is money that you know what it’s going to do. With red money, there’s more upside, but you don’t know what it’s going to do. The risk goes up. But to get back to your question, the dot-com crash in 2001 was the impetus. The safety of FIAs was the guarantee I needed for my clients versus the risks involved in tech stocks. Then, there was another build-up in risk until we had another crash in 2008. Again, people gravitated to safety after that. But you constantly need to educate the clients and explain to them that they need to know how much they are willing to risk and how much they want to keep safe. When times are good people forget very quickly the risk that’s out there.


SMA: You have a practice that’s really unique with clients in the tech valley of Northern California and also in Hawaii. If you could tell us about the niche you’ve carved out and what you consider the foundation to success in your practice?

RG: First of all safe money works anywhere. That theme resonates everywhere. The investors in the two areas are very different. In Hawaii my clients are much more conservative. While in the tech valley, it can be a very hard push to get people to that safe money. We have big challenges [in the tech valley] because people want to play the stocks. The task is to convince them to look at their assets and ask: “How much do you want to keep safe? Let’s at least reallocate to get your risk tolerance in line.”

SMA: Talk a little bit more about how those client bases are different.

RG: In Hawaii the clients are more laid back, practical, reserved. You see a lot more pensions there, and houses are paid off and maybe they have a second house they’re renting out. They have money, but they want to hang on to it. While in California, you find people totally caught up in the latest, greatest widgets and cars. They’re keeping up with the Joneses. That’s why they got caught up in the housing bubble. At this point, you’re still talking to people, helping them answer the question: “How do I keep my home?” In California, the housing bubble has been harder for people to overcome. With the tech bubble, they still had equity in their home. That’s why the recovery this time will be longer and more difficult.

SMA: You already had a successful practice in California. How did you make the leap to include Hawaii?

RG: With the Hawaiian market, I had frequented there throughout my military career. When I retired, I decided: Hey, let’s see what happens with a seminar. It went very well although I made many cultural mistakes like when I wore a suit. After that initial misstep, I switched to a Tommy Bahama shirt and khakis. The interesting thing is looks can be deceiving. Prospects might come into the seminar wearing flip flops and shorts. They might look like they have nothing, but have assets in the millions.


Gagaza’s Keys to Success:

“I’d rather build a business of referrals than have a few big clients.”

“There’s the whole idea of managed money. I don’t like charging a fee, but I can. I can still help manage their money. So there’s a fine balance of red and green money. And there are lots of things to do in managed accounts to help manage that risk.”

“I don’t want to become a jack of all trades. That gets you nowhere. The key for me is to help my clients preserve their money and have lifelong income.”

“Safe money. I want to help clients keep their money as opposed to having too much at risk. It’s all about preservation of principal. I’ve always believed in preservation of principal, but now I emphasize that more than ever and I emphasize the risk in the market.”


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