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Bonus: Planning for Your Financial Future · What's Your Problem?

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  Speaker 1: Pushkin. I'm Jacob Goldstein, and this is a special bonus
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  Speaker 1: episode of What's Your Problem? My guest today is Christine Chase.
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  Speaker 1: Christine is a vice president, financial consultant at Fidelity Investments. Also,
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  Speaker 1: I should say that today's show is sponsored by Fidelity.
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  Speaker 1: Christine's problem is this. How do you help people come
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  Speaker 1: up with financial plans that address their changing priorities and
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  Speaker 1: complex needs? I was curious to learn the kinds of
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  Speaker 1: things that Christine helps her clients figure out and to
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  Speaker 1: see what I could learn from her that might be
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  Speaker 1: helpful for people like me, people who don't have a
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  Speaker 1: financial consultant but are trying to plan for the future. Christine, hi.
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  Speaker 2: Hi, Jacob.
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  Speaker 1: Thanks for coming on the show. I thought it would
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  Speaker 1: be helpful to do kind of a hypothetical here where
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  Speaker 1: we talk about what it's like when a new client
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  Speaker 1: comes to see you for the first time. That way,
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  Speaker 1: you know, we can talk through some of the big
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  Speaker 1: themes that tend to come up, the main problems people
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  Speaker 1: tend to be thinking about, things they're not thinking about
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  Speaker 1: but maybe should be, that kind of thing. And so
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  Speaker 1: I wonder, would it make sense for you to pick
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  Speaker 1: a kind of hypothetical client that we could talk about?
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  Speaker 3: Sure.
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  Speaker 2: Yeah, I think that's a great idea. Maybe someone... potentially.
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  Speaker 3: Just got promoted maybe into the C-suite and maybe their
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  Speaker 3: financial picture just got a little bit more complicated. So
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  Speaker 3: maybe they're finding or trying to find a financial planner
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  Speaker 3: to help them get organized.
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  Speaker 1: So what's it like? Somebody's walking in, you've never met
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  Speaker 1: with them before. Just like briefly, what is a first
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  Speaker 1: meeting like?
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  Speaker 3: So in that first meeting, I really just want to
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  Speaker 3: get to know this person, right? What matters to them?
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  Speaker 3: What are their goals and what do their finances look like?
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  Speaker 3: So I'm asking about their family, who's important to them,
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  Speaker 3: I'm asking what the goals are, short, medium, long term.
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  Speaker 3: I'm asking about their finances, income, expenses, assets, liabilities, and
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  Speaker 3: also asking about them as an investor, understanding their strategy
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  Speaker 3: up until now, how they feel about it, how they're
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  Speaker 3: feeling about risk, and also a little bit about what
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  Speaker 3: their estate plan and what their insurance planning looks like
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  Speaker 3: as well.
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  Speaker 1: So basically everything. You're asking basically everything. And I'm sure
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  Speaker 1: it varies from person to person. But are there sort
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  Speaker 1: of quick wins you often see? Are there common things
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  Speaker 1: where you look at someone's kind of financial picture and say, oh,
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  Speaker 1: here's a thing we can improve right away?
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  Speaker 2: Yes.
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  Speaker 3: I'd say two of the biggest things I noticed right
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  Speaker 3: away are in an investment portfolio, a lot of times
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  Speaker 3: people lack diversification.
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  Speaker 2: And that could be stemming from a number of issues, right?
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  Speaker 3: Whether it's growth in the market and they're concentrated in
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  Speaker 3: certain parts of the market or they've just never gotten
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  Speaker 3: exposure to international or fill in the blank. So we
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  Speaker 3: definitely want to diversify and take any sort of undue
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  Speaker 3: risk off the table while still positioning them for growth.
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  Speaker 3: And the other thing I tend to see is a
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  Speaker 3: lack of tax efficiency planning in the portfolio. So that
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  Speaker 3: can look like people are not utilizing tax advantaged accounts.
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  Speaker 2: They might have a.
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  Speaker 3: Taxable portfolio that's incredibly inefficient and they're paying 1% or 2%
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  Speaker 3: on their taxable assets every year when they could be
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  Speaker 3: moving things around and being more intentional about what they
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  Speaker 3: hold in that account.
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  Speaker 2: So that bleeds into asset location.
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  Speaker 3: That's where we start to take a look at what
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  Speaker 3: types of securities we hold in which accounts. We might hold, say,
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  Speaker 3: your bonds or international in a tax-advantaged account and hold, say,
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  Speaker 3: long-term equities in a non-retirement account and then prioritize tax-loss harvesting.
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  Speaker 2: When and where we have volatility.
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  Speaker 1: I have to admit, I actually made a mistake like
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  Speaker 1: that in my life. And it's sitting there in my
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  Speaker 1: account now. And I should have known better, right? Like
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  Speaker 1: we sold, my wife and I, we sold an apartment
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  Speaker 1: and we had some extra money from it. And I
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  Speaker 1: thought I was being very responsible. I bought a target
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  Speaker 1: date fund, but I put it in a taxable account.
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  Speaker 1: And as I'm sure you know, but I didn't know,
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  Speaker 1: that is not a good thing to put in a
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  Speaker 1: taxable account. And so now... I pay all these gratuitous
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  Speaker 1: taxes on it that if I had asked an advisor,
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  Speaker 1: I presume I wouldn't be paying.
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  Speaker 3: Yeah, so that's a mistake I see a lot of
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  Speaker 3: people make, right? Those, say, target date allocation funds, usually
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  Speaker 3: in their retirement accounts. So we're very well aware of them.
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  Speaker 3: And they do help with asset allocation management over time
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  Speaker 3: and risk management. But oftentimes there's a lot of turnover
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  Speaker 3: in the funds, which leads to distributions that are taxable
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  Speaker 3: to you.
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  Speaker 1: So if you think about the long term, the kind
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  Speaker 1: of bigger picture, like what should the client be thinking about?
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  Speaker 1: What should a person be thinking?
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  Speaker 3: So when we think about this person who recently got promoted,
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  Speaker 3: I want to firmly understand their compensation package. To get specific,
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  Speaker 3: this could be equity grants, for example, and there might
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  Speaker 3: be trading restrictions on that. We could look at ways
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  Speaker 3: to manage their new cash flow, strategies for concentrated stock positions,
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  Speaker 3: planning for upcoming liquidity events, and certainly tax planning and
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  Speaker 3: investment strategy. So that's a big piece of it, right?
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  Speaker 3: Trying to figure out, are they right in their asset allocation?
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  Speaker 3: Are we diversified as much as possible? And are we
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  Speaker 3: being really cognizant of taxes?
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  Speaker 2: We also want to make sure this is all integrated
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  Speaker 2: with their full financial picture.
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  Speaker 3: So their estate plan, charitable giving intent, lending opportunities that
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  Speaker 3: they might need and can get from their portfolio. And then,
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  Speaker 3: of course, bring in anybody to the table that we
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  Speaker 3: need to.
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  Speaker 2: This could be spouses.
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  Speaker 3: This could be their kids or grandkids. And really just
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  Speaker 3: figuring out how I can serve as that trusted advisor
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  Speaker 3: in the middle of all that and making sure that
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  Speaker 3: we understand how where they want to go and help
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  Speaker 3: build advice that's tailored to them.
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  Speaker 1: What are some other things that you often find people
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  Speaker 1: are not thinking about that you can just say, hey,
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  Speaker 1: you know, here's something you should pay attention to?
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  Speaker 3: I find estate planning is probably one of the biggest
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  Speaker 3: things that people aren't thinking about.
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  Speaker 2: And for obvious reasons, right?
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  Speaker 3: We don't want to have to think about ever having
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  Speaker 3: an estate plan go into action. But that's crucially important
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  Speaker 3: to make sure that your loved ones are protected and
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  Speaker 3: that the assets flow the way you wish. But even
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  Speaker 3: in capacity planning, right, that's part of an estate plan.
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  Speaker 3: So do you have, say, a will? Do you have
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  Speaker 3: a trust? Do you have a power of attorney set up,
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  Speaker 3: health care proxy, et cetera?
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  Speaker 2: So that's a big one that gets put on the
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  Speaker 2: back burner.
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  Speaker 1: So, OK, so we started out talking about this sort
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  Speaker 1: of hypothetical first meeting. You talked about all the questions
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  Speaker 1: you might ask somebody. As the meeting is wrapping up
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  Speaker 1: and the person's leaving, what's the homework? What do you
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  Speaker 1: send them off to do?
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  Speaker 3: So I'd say one thing is sometimes I'm asking folks
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  Speaker 3: and they don't necessarily know the answers, right? So maybe
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  Speaker 3: it is gathering all the information that I've requested, right?
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  Speaker 3: They might know some things off the top of their head,
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  Speaker 3: but do they understand what sort of insurance coverage they
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  Speaker 3: have or what their estate documents say that they wrote
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  Speaker 3: 30 years ago?
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  Speaker 2: Or they don't actually really know what their expenses are.
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  Speaker 3: So some of just the homework is really gathering that
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  Speaker 3: data and bringing it back to me so I understand
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  Speaker 3: where we stand today. And I think, again, that big
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  Speaker 3: picture stuff, right? Defining success. What do we want our
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  Speaker 3: wealth to create for us? And a lot of times
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  Speaker 3: we have competing priorities. So ranking those. So a lot
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  Speaker 3: of times these questions come up and then they have
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  Speaker 3: to go down and kind of think about it. Gathering,
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  Speaker 3: of course, the hard data, but also maybe talking to
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  Speaker 3: their spouse and sitting down and doing some self-reflection in
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  Speaker 3: terms of what we want this money to do for
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  Speaker 3: them and their families.
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  Speaker 1: So last question, kind of just a big one to
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  Speaker 1: leave on. What is one thing that you wish everybody
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  Speaker 1: knew about financial planning?
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  Speaker 3: One thing is I firmly believe that the earlier you start,
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  Speaker 3: the better you're off. I think sometimes people think that
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  Speaker 3: there's a certain dollar amount that they need to start
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  Speaker 3: financial planning.
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  Speaker 2: They don't have enough money yet.
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  Speaker 3: But think about it as, again, we're figuring out the
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  Speaker 3: destination and working backwards to today.
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  Speaker 2: And I also think having.
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  Speaker 3: a financial planner or advisor in your corner that you
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  Speaker 3: trust ahead of time, kind of ahead of even needing
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  Speaker 3: them for big decisions is absolutely key. There are going
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  Speaker 3: to be things that come up, right? You get promoted
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  Speaker 3: to the C-suite, some good things, right? There might be
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  Speaker 3: some sad things like someone passes and you get an inheritance.
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  Speaker 2: You already want to have that foundation of trust established.
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  Speaker 3: With somebody so that when you're in those moments, you
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  Speaker 3: can ask them what you should do and you trust them.
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  Speaker 2: You're I want.
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  Speaker 3: People to have their wealth allow them to live the
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  Speaker 3: life that they want and creating a cohesive strategy across
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  Speaker 3: all facets of their financial life in order to do that.
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  Speaker 1: Thank you so much for your time. It was great
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  Speaker 1: to talk with you.
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  Speaker 2: You're welcome. Thanks for having me.
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  Speaker 1: Visit fidelity.com slash wealth. Information presented herein is for discussion
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  Speaker 1: and illustrative purposes only and is not a recommendation or
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  Speaker 1: an offer or solicitation to buy or sell any securities.
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  Speaker 1: The views and opinions expressed by the Fidelity speaker are
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  Speaker 1: his or her own, as of the date of the recording,
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• 9:19
  Speaker 1: investment decisions are based on numerous factors— Thank you. Thank
• 9:48
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• 10:02
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