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Taylor Schulte

Industry Spotlight > Advisors

How 9 Financial Planners Handled Tough Client Situations

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“It’s important that the financial plan is the ‘diagnosis’ and the investment is the ‘prescription,’” argues Taylor Schulte, founder of Define Financial, specializing in helping reduce retirees’ tax bills, in an interview with ThinkAdvisor. “Consumers need to … make sure that the financial plan is done first and the investment recommended after that.”

You can be certain that the 28 savvy CFPs spotlighted in Schulte’s new book, who discuss a variety of ways they’ve helped clients, never prescribe before diagnosing.

“More Than Money: Real-Life Stories of Financial Planning” (Harriman House, March 2023) was curated by Schulte and Justin Castelli (founder of RLS Wealth); it was edited by Shanna Due (founder of Due Financial). The foreword was written by Christine Benz, director of personal finance and retirement planning at Morningstar.

The CFPs relating specific client situations are well aware that “financial planning is about improving lives in the near term and beyond,” as Schulte, a certified financial planner, puts it.

Schulte, the No. 2 independent advisor in 2022, according to Investopedia, has about $150 million in assets under management. His clients have between $2 million and $10 million in investible assets, with an average age of 50 and older. They are either near retirement or already retired.

Schulte is a big advocate of “oversaving,” enabling clients to cope financially should a sudden life-changing event — like a spouse’s death — occur.

Host of “The Stay Wealthy Retirement Show” podcast, Schulte has been co-host, with Michael Kitces, of Kitces Summits since 2021.

In the interview, Schulte gives insights into the client challenges and solutions related by nine of the CFPs featured in “More Than Money,” and he provides tips used in his own practice concerning changes to financial plans.

These scenarios include taking Social Security early, a woman widowed by her husband’s suicide, what to do before and after clients show cognitive decline, morphing into an entrepreneur after a layoff and how to help high earners who are lax savers.

Schulte was an advisor with Morgan Stanley before opening his own firm in San Diego in 2014.

He and Castelli are co-founders of AGC (Advisors Growing as a Community), a private online network whose member financial advisors share ideas and best practices, and learn about professional and personal development.

ThinkAdvisor recently interviewed Schulte, who was speaking by phone from San Diego. His motto for financial planning is “life is fluid” — and financial plans should be too.

Here he opines on several real-life financial planning stories:

THINKADVISOR: Why is a financial plan critical?

TAYLOR SCHULTE: Financial planning is as much about the now as it is about the future to plan for and play out potential scenarios.

Some of the [negative possibilities] we don’t like to talk about and think might never happen, but if they do, we’re so thankful we went through this planning exercise.

Your book has real-life stories from 28 financial planners. Let’s look at nine of the chapters.

First, Cathy Curtis, CFP, founder and CEO of Curtis Financial Planning. A client’s investment advisor cousin put the woman’s assets in highly risky investments — among them, inverse and leveraged ETFs, and oil and gas partnerships.

The relative had been following the advice of a “doomsday prophet” and basing all his clients’ investments on his personal recommendations. Curtis took over and reinvested the client’s accounts.

When consumers are looking for a financial planner, it’s always a red flag if there’s no diagnosis, that is, no plan. Cathy’s client trusted a family member, who skipped the diagnosis, and the client got caught in a bad situation.

It’s important that the financial plan is “the diagnosis” and the investment is “the prescription.” In this case, there was no diagnosis; there was just a prescription. That’s often where the problem lies.

Consumers need to do their due diligence and make sure that the plan is done first and the prescription recommended after that.

What I absolutely love about Cathy’s chapter is that she showed true empathy for the client: “This isn’t your fault. Let’s see what we can do to fix it.”

Next, a story from Todd Bryant, CFP, founding partner, Signature Wealth Partners: A client couple’s daughter died suddenly, and the responsibility to raise her two young children fell to the grandparents.

This couple were diligent savers. They oversaved to allow for such an unknown event to be covered.

If you’re living paycheck to paycheck or have saved only enough to barely meet your necessary expenses, if there’s any sort of occurrence, like a long-term care event, a death, or in this case, having to raise children, any [lifestyle] plans that you have fall apart quickly.

So it’s important to plan ahead and oversave to take care of such unknowns.

Michael Baker, CFP, is manager and founding member of Vertex Capital Advisors. A client required a whole new financial plan when her husband died: His priorities had been stock selection and special tax provisions; the widow had different priorities in order to achieve a particular, new lifestyle.

A plan needs to provide for scenarios that we don’t think will happen but could happen; in this case, when a husband dies, and all of a sudden, his widow has to take over.

Financial planning is not a one-and-done thing. You don’t put together a plan on Day One, print it out and it’s done.

In this situation, when her spouse died, the plan needed to change to better match the widow’s goals, desires and values. She needed an entirely new blueprint.

Marguerita Cheng, CFP, founder, Blue Ocean Global Wealth, recommended early retirement, at 62, to a client who had survived cancer, though a recurrence was likely. Because he started Social Security early, he was able to live a satisfying life before his death not quite four years later.

There is the textbook answer, and then there is [the advisor’s] answer. Often the textbook answer is to delay receiving Social Security till age 70. But someone might need to take it earlier.

It’s important not to get stuck in the textbook answer and spreadsheets but to have conversations with clients to determine what really makes the most sense for them.

Sometimes they have unique situations or preferences [that warrant] starting Social Security earlier.

I’m there to support that as long as it doesn’t put my client’s financial plan in jeopardy.

Even though our clients have saved more than they need, they’ve still paid into Social Security over their working career.

It’s their money, and they want to optimize it. So most of our clients typically do follow the textbook and delay benefits till age 70.

Jordan Benold, CFP and co-owner of Benold Financial Planning, discussed a couple who were high earners but spending too much and not taking the future into account. Benold put them on a regimen of budgeting, saving and planning — a path to becoming wealthy, he said.

This couple was making good money but enjoying life a little too much and overspending. They didn’t have a process for understanding where their money was going.

Just knowing that allows you to have more intentional financial conversations and make more informed decisions about spending. In fact, understanding where your money is going is often more impactful than trying to create and stick to a budget.

Jessica Fahrenholz, CFP, financial planner and investment advisor, Tudor Financial, discussed clients who have dementia or seem headed in that direction. She puts together “Family Management Journals” with ongoing notes and signed papers.

I loved her idea about the journal. It’s great to capture everything for the client and their family to review, to stay up to speed and to pass on.

We have to keep a close ear and eye on clients who show behaviors that [signal cognitive decline] and handle them very sensitively.

As does Jessica, we stress that before their mental health might start to slip, clients should get things organized and consolidated.

A lot of people have accounts that spill out all over the place. We try to drive home the importance of getting things cleaned up now so you don’t have chaos if [your] mental health declines or dementia settles in.

Vincent Barbera, CFP, co-founder, Newbridge Wealth Management: A laid-off client launched his own company using a Rollover Business Startup (ROBS) solution. More than 90% of his and his wife’s investible assets would be held in one concentrated position.

Vince’s client decided to take a very big risk that matched up with his desire and goals to be an entrepreneur.

What we do for our own clients is put together plans that “make work optional” so that they know they have the ability to make a big life change, whether it’s starting a new business or stopping work tomorrow.

Often, clients continue to work but still want to know they have the ability to retire.

Matthew Ricks, CFP, founder, Haystack Financial Planning, serves the disability community. He highlights a divorced woman with two children and how she has provided in advance for her daughter with autism.

Ricks’ work brings to the surface how important it is for financial planners to specialize.

Unlike the legal and medical worlds, many planners are generalists.

But we do have a trend toward people like Matthew with expertise to specialize in working with a certain type of client.

There are unique circumstances that not all planners are equipped to handle, and we need to put our egos aside and recognize that.

If someone came to me with disability needs — an area in which I don’t have expertise — I’d refer them to people like Matt, who can give them the proper help.

Melissa Joy, CFP, founder of Pearl Planning: When a client’s husband committed suicide, Joy had to create a different budget for the widow, which included the cost of a therapist, given the difficulty in coping with her spouse’s death on her own.

One thing I often hear is, “If my husband predeceases me, I’ll be OK — we have plenty of money,” or, “I have a job — I’ll be all right.”

But if your spouse dies, are you going to be in a place where you can actually go to work?

Again, advisors shouldn’t get stuck in the numbers and the spreadsheets and not think about how the client might feel physically and emotionally.

In your own practice, Taylor, do you regularly schedule meetings with clients to go over their financial plans?

We do. We meet with all our clients twice a year. Every May, just after tax season, we get copies of their tax returns and update their financial plans. We review them and talk about opportunities and updates for the year.

Then, in October, before the holidays are in full force, we meet again and start to implement necessary changes before any year-end deadlines.

By being proactive, we always make sure things are on the right track.

Under what circumstances do you generally make substantial changes to a plan?

When a client’s life changes, that usually triggers a [plan] change. Or if a client’s goals or personal preferences have changed: Say, they’ve decided to sell their house and relocate or retire tomorrow instead of in two years.

This is not to say that we don’t recommend changes to a plan, but it usually starts with the client’s having something new happening — because life is fluid.

(Pictured: Taylor Schulte)


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