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Why Educating Clients Is Critical to Advisors' Success

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A third-generation financial planner with a passion for educating, Jacob Gold tells ThinkAdvisor in an interview, “I’m trying to do my part to further the cause of spreading financial literacy to the masses.”

It’s safe to say that a talent for financial planning seems to be in Gold’s DNA. His grandfather and father were both planners, and now his 18-year-old son is his apprentice.

An adjunct professor at Arizona State University, Gold, who is founder, chair and CEO of Jacob Gold & Associates, created a new bachelor’s degree, in personal financial management, for the college. It was available for the first time last year. 

Students who earn the degree are permitted to take the certified financial planner exam immediately after graduation.

Gold recently became the recipient of a ThinkAdvisor LUMINARIES award in thought leadership for his innovation, as well as another LUMINARIES award for advisor growth. 

The hybrid FA manages about $240 million in client assets; two other planners working under him manage approximately $39 million each.

The boutique firm’s client list numbers 450 to 500 households of mostly retired or about-to-retire people in their 70s.

Educating clients is critical, Gold says. To be sure, not only is it good for them, it’s good for his five-person boutique practice too: 

“It creates a bond, and it’s a very effective way to keep assets sticky,” he says.

Gold’s enthusiasm for education extends to teaching executives of large corporations how to manage their personal finances. This also allows him to meet younger prospects.

The Gold family’s evolution as planners is a microcosm of financial services’ evolution in compensation: Gold’s grandfather focused mostly on insurance products; his father was a transactional broker; Gold’s comp is based on assets under management.

He began apprenticing to his father when he was just 10 years old. Indeed, all three of his children — two of them daughters — have followed in his footsteps.

At 10, they ceremoniously don a Brooks Brothers suit jacket — Dad has a matching one — and are allowed to go to the office and sit in on Gold’s client meetings.

A fourth-generation Arizonan (“My mom’s ancestors literally came in on the wagons”), Gold was Series 7-licensed at 21 and worked in his father’s firm for the next six years.

But no longer wanting to be a broker and eager to “get out from behind [his father’s] shadow and create something of [his] own,” as he puts it, he indeed created something of his own: He left the firm to form a brand-new practice.

ThinkAdvisor recently interviewed the CFP by phone. He was speaking from Scottsdale, Arizona, where he is based. Discussing his son’s intention to become a financial planner, he said:

“Like me, he’s going to have to reinvent a new career within the existing financial services space.”

Do his daughters aspire to be planners too? Replied Gold: “They look at it as a good Plan B.”

Here are highlights of our interview:

THINKADVISOR: What differentiates your practice from others?

JACOB GOLD: We lead with education. It’s all about being financially responsible. I’m trying to do my part to further the cause of spreading financial literacy to the masses.

You just won a ThinkAdvisor LUMINARIES award for thought leadership. Please explain what led to your being honored with that recognition.

When I started teaching as an adjunct professor of finance at Arizona State University six years ago, I proposed creating a personal financial planning degree that would allow students to sit for the CFP examination immediately upon graduation.

It took a good four years working with the president of the school and others, including the law school and accounting department, to create the course, and then working with the CFP Board. 

Turning to client education, what else does it accomplish?

It creates a bond between the client and us because they appreciate knowing things they never understood before. 

The intimidation factor goes away. They really feel that we’re partners and can work together as partners. 

In addition, it’s a very effective way for us to keep assets sticky. The clients know that we really want to empower them and that everything else is secondary.

What prompted you to get into the industry?

I’m a third-generation financial planner. My grandfather Everett Gold was a planner. He trained my dad, Kelvin William Gold, and my dad trained me. 

I started as an apprentice to my father when I was 10 years old. Now, my son Kelvin, who’s 18 and a freshman at Arizona State University, has been apprenticing to me.

Did he start when he was 10 years old?

Yes, and my two daughters as well. As soon as they each turned 10, the kids could start coming into the office. It’s a big day to be working with Dad. 

To mark the occasion, they put on a special Brooks Brothers suit jacket. I have a matching one. It’s very ceremonial. 

My youngest, Bella, just turned 10 this year. It was a big deal for her to come to work with Dad and sit by me in my meetings.

You’re 43. How long have you been a planner?

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I got licensed in 2001, when I was studying at ASU and working under my father. It wasn’t until 2007 that I completely broke away from him and started my own shop.

How does your practice differ from those of your father and grandfather?

In the ’60s and ’70s, my grandfather focused more on the insurance side of financial planning. In the early ’80s, my father made the migration to utilizing more securities. He was very transactional.

But right off the bat, I saw the advantage of having assets under management.

So it’s been interesting to see how each generation has evolved as the [financial services] business has evolved.

What do you think your son will focus on?

Like me, he’s going to have to reinvent a new career within the existing financial services space. If he ends up working with me and taking over, who knows where his career will go within personal finance.

Do your daughters want to be planners?

They look at it as a good Plan B. Of all the kids, Bella is the most entrepreneurial-spirited. She has a real business mind. 

Savanna, who’s 15, enjoys hearing the clients’ stories. She’s more in touch with the interpersonal relationships.

Why did you leave your father’s practice?

Because his business was transactional; and also, I wanted to get out from behind his shadow and create something of my own. 

The thought was that when he retired, we might unite the firms. But as it turned out, it didn’t make sense to buy his practice and convert it from brokerage to advisory. 

And we’re both alpha males to a degree; we each had ideas on what we wanted to do. 

My father is retired now, and he’s a really great sounding board.

One aspect of your practice is teaching corporate executives how to manage their financial affairs. Clients have included P.F. Chang, Mercedes-Benz and Taco Bell. What does this entail?

It’s become a big part of our business. I teach personal finance to the executives at their home offices. I talk about 401(k) plans, RSUs [restricted stock units], estate planning.

One would think that executives know the ins and outs of personal finance, but you’d be surprised how little some of them do know.

How are you compensated for this consulting work?

The corporations pay for the teaching. If any of the executives want to do some personal planning, they can sit down with me and my team, and we charge them a fee to actively manage their personal assets.

You’re an NFL Players Association registered financial advisor. Please explain.

I’m on a preferred list of 150 advisors nationwide that the Players Association [union] put together.

If any player, retired or active, is looking to work with an advisor, they can go through the directory and see the advisors that were thoroughly vetted and have the right credentials. 

It’s a good way for the players to feel confident that they’re not going to be taken advantage of by advisors.

Do you have any NFL clients?

Not yet. This is just my second year with [the program].

We’re getting to know agents, and that’s the way to go: First get on the directory, then start meeting with the agents. We’re just now getting our feet wet.

You have a boutique firm. Any plans to expand?

No, but I did. However, when 2008 hit, I realized that it’s manageable to grow a business when there’s stability — but the moment the world turned upside down temporarily, I [decided] I didn’t want to be the biggest shop in town or have the most AUM. I wanted quality over quantity. 

I’m not looking to grow exponentially, as I did when I first got into the business.

But we’ve really tried to increase the bandwidth through service and providing educational experiences for our clients. 

Where would you like the industry to put more focus in the future when it comes to programs, innovation or any other areas?

If you empower your employees to manage their financial affairs better, they’re going to be more effective. 

My hope is that as corporations start to have their employees come back [as the pandemic recedes], they’ll be creating programs for that.

I’d like to see companies take more ownership of educating their employees on personal finance matters.

If more companies do that over the next decade, the employees will be more loyal.