Steven Merrill, Financial Planning: Why can’t I keep up with the market?

Question: I have been investing for years, but I never seem to do as well as my friends. I own high quality mutual funds, but I don’t even earn as much as the mutual fund company says I should earn. Do you have any idea why my portfolio always seems to lag? This is getting frustrating.

Answer: Without knowing your portfolio history, it is impossible for me to explain exactly why your portfolio might be underperforming. However, there are several things you need to consider when you think about your investment performance.

First, keep in mind that measuring and reporting investment performance can be tricky. If you want a thorough discussion of the issues involved, check out the “Global Investment Performance Standards,” or GIPS. This 447-page document is the gold standard for investment performance reporting. It is published by the CFA Institute and is used by all reputable investment advisors as the basis for reporting performance. GIPS is available to the public at

You should also keep in mind that comparing your investment returns with your friends’ returns is a foolish exercise. Your situation is different from their situation in ways that you cannot possibly understand without digging into the intimate details of their financial lives. Investments that are appropriate for them may not be appropriate for you and vice versa. Focus instead on making sure that your investments match your circumstances and that your portfolio is properly constructed.

Consider also that your friends are probably not giving you the full picture. I’m not saying that your friends are lying, but they may not know what they are talking about. Remember what I was saying about the complexity of investment measurement and reporting? In any case, do yourself a favor and tune out the external noise and focus on your situation.

When it comes to your own investments, there are a number of reasons why you might underperform—even if you own a well-managed mutual fund. These reasons include the effect of loads or commissions, the timing of your investments or withdrawals, and what you choose to do with dividends. An example will help illustrate what I mean.

Let’s suppose you invest $1,000 in a particular mutual fund at the beginning of the year. At the end of the year your mutual fund company reports that your fund was up 10 percent. Without any extenuating circumstances, you would expect your investment account to now be worth $1,100.

However, suppose you paid a 3 percent load to buy the fund. In that case, you really only invested $970, and your investment would have grown to be only $1,067. You did earn 10 percent, but on a lower invested amount. Over time, the effect of that load will diminish, but if you pay a load on every addition you make to the fund, your performance will always lag. The Securities and Exchange Commission has tried to help investors better understand the effect of loads on portfolio performance by requiring fund companies to report load-adjusted returns in their prospectuses, but many people gloss right over those disclosures.

Mutual fund companies also report performance assuming you made a single lump-sum investment at the beginning of the year and held the investment for the entire year. To the extent you make multiple investments over the course of the year, or take withdrawals during the course of the year, your actual performance will differ from the fund’s reported performance. If the market is going up, your performance will lag the market.

Finally, published fund performance numbers assume you immediately reinvest dividend and interest payments back into the mutual fund. If you withdraw dividends or interest payments or invest them in something else, your actual performance will not match the fund’s reported performance.

Steven C. Merrell is an investment adviser and partner at Monterey Private Wealth Inc., in Monterey. Send questions concerning investing, taxes, retirement or estate planning to Steve Merrell, 2340 Garden Road Suite 202, Monterey 93940 or

Your Money: The true value of a financial planner

Choose the plan that’s right for you. Digital access or digital and print delivery.

A Scorecard for Your Financial Adviser

Sometimes it can be difficult to fully grasp the value of a financial adviser. Do they mostly manage my money? Are they doing a good job for me? How would I even know? These are important questions that can often be difficult to answer.

SEE ALSO: 5 Ways Your Financial Adviser Should Hold You Accountable

There are many resources available that can help provide guidance when choosing a financial adviser. Perhaps the more challenging task arrives after you have selected one.

Nowadays, with technology as good as it is, the differences from one firm to another can be marginal. To help you in gauging the nature of your advisory relationship, let’s establish some updated metrics you can use. To do this, we have divided the scope of planning into two distinct areas, Financial and Lifestyle. For ease of illustrating, we have mapped below some areas of importance relative to each.

At first glance, the idea of quantifying the value delivered in each of these areas might seem daunting. No worries. We’ll simplify this process with an easy-to-use, objective way to continuously monitor the value of your adviser/client relationship.


We suggest taking the areas above and creating a simple, one-page scorecard. The below template can serve as a basis for periodically scoring each planning area.

Adopting some version of this practice becomes a positive for both you and your adviser. Your scorecard can provide ongoing transparency as to the value you are receiving, while also yielding invaluable feedback for your adviser as to any areas requiring more time to explore together.

Evaluating the ‘Financial Planning’ Components of Your Plan

When looking at the planning areas, the financial components may not require a 50- to 100-page document, but more so a mutually agreed upon strategy for achieving success within each of them. Almost all of the financial planning areas — investment, cash flow and taxes, retirement and estate planning and risk management — are self-explanatory.

The “behavioral” component of financial planning is like getting adviser coaching. It represents timely, rational advice provided by your adviser during volatile times with high investor emotion.


See Also: Financial Advice May Not Be Your Adviser’s Specialty

Evaluating the ‘Lifestyle’ Components of Your Plan

To better understand each of the lifestyle areas, it’s first worth noting as to why they are included in a financial plan. To some, the financial services industry is evolving into more holistic planning or financial life management as its primary objective. It seems natural that financial and lifestyle planning might marry, because they have positive correlation in many respects.

Let’s drill down a bit further in defining each of the lifestyle areas as to provide you more clarity.

  • Health Wellness: How lifestyle habits can impact one’s ability to enjoy retirement with quality of life. Afterall, you save all of those years not to be sidelined when you have more freedom of time. What would you prefer your plan to include as metrics for improving or sustaining your quality of life?
  • Energy Excitement: Areas you are most passionate about. Your plan can account for consistent time spent in those areas most meaningful to you.
  • Connectivity: Relationships are important to us as human beings. Staying in balance with our personal and professional lives is a metric worth including in your plan.
  • Contribution: Any intentions you have for involvement in your community or philanthropy. This could be expressed financially or with your personal time.
  • Challenge: Establishing some goals that will promote self-growth through courage and commitment. This could range from learning a new language to running a marathon as some examples.

Do some or all of these areas relate to your present plan? Do they sync up well with the financial components? In other words, is there collaboration between your intended lifestyle design and financial plan?

Designing a simple scorecard to encompass these areas will provide you and your adviser with a framework for quantifying value and satisfaction on a regular basis.

See Also: Investors Should Watch Out for Revenue-Sharing Agreements

Chris Giambrone is a co-founder of CoughlinGiambrone, LLC, a boutique wealth management firm based in New Hartford, N.Y. He is a CERTIFIED FINANCIAL PLANNER™ and Accredited Investment Fiduciary® (AIF®). Chris has also earned a Certificate in Retirement Planning from the Wharton School of Finance at the University of Pennsylvania.

Comments are suppressed in compliance with industry guidelines. Click here to learn more and read more articles from the author.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.


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Blucora to buy independent broker dealer 1st Global

Jack Oujo admits he may have flubbed the initial call.

The 26-year HD Vest Financial Services advisor and former minor league baseball umpire first balked at the largest tax-focused independent broker-dealer’s clearing switch to Fidelity’s National Financial Services. Upon further review, he says, it looks much better, thanks to tools like eMoney and a new client portal.

“I questioned the whole thing when it happened, but I was wrong,” says Oujo, who has an eponymous New Jersey-based practice and notes he previously “had a bitter taste” toward National Financial. “It’s clear now that they’ve upped their game tremendously.”

HD Vest parent Blucora’s pending $180-million acquisition of 1st Global would mark a further change at the IBD, which also made Envestnet its advisory platform in September and bid goodbye to former CEO Bob Oros three months earlier than expected at the end of 2018.

Blucora has admitted to delays in its conversions. Still, the clearing transition “exasperated” some advisors, according to IBD recruiter Jon Henschen, who says one longtime HD Vest advisor told him service has since improved but the firm is “getting much more corporate” overall.

HD Vest is navigating a closely watched evolution — not just for the parties involved in the deal, the vendors and the 4,500 advisors with the IBDs, but also for the sector as a whole which is adjusting to record consolidation amid increased competition and tighter margins.

Envestnet and Fidelity, noting the clearing migration involved some $22 billion in assets, have acknowledged difficulties for advisors typical in any large-scale transition. Even so, HD Vest roughly doubled its recruited client assets in 2018 to $700 million, while setting record net advisory flows at nearly $1 billion in assets, according to its annual proxy statement.

HD Vest - 1st Global

Combining firms
Combining HD Vest with the second largest tax-focused IBD would move Blucora’s wealth management unit near the top 10 firms in the sector based on revenue. The deal would also result in a new brand under Blucora after folding in some 850 advisors from 1st Global.

What’s more, it reverses the long-ago breakaway move that led HD Vest’s largest-producing advisor and a money management executive to launch 1st Global in 1992, says Carolyn Armitage, a former HD Vest employee who is now a managing director at consulting firm Echelon Partners.

She adds that the deal makes sense “from a philosophical standpoint beyond the economics,” given the proximity of the firms’ headquarters in the Dallas-Fort Worth Metroplex and their complementary focus on supporting tax professionals’ wealth management businesses.

“Given how strong both brands are, going with a neutral brand probably helps both sides overcome some of the emotional aspects and legacy issues of the two organizations,” Armitage says. “I’m really encouraged that there’ll be some new leadership and hopefully additional stability to HD Vest through this acquisition.”

In particular, Armitage praises 1st Global President David Knoch — also chair of FSI’s board — as a talented leader who “knows this space very well.”

However, the structure of Blucora’s wealth unit after the expected close of the deal later this quarter remains unclear.

In an interview, Knoch declined to discuss plans for the combined unit in detail, including leadership positions, whether the firms will consolidate their headquarters and if one firm will adopt the other’s technology. He noted the deal is in its “regulatory approval phase.”

“We’re going to be further empowered to make people’s lives better,” says Knoch. “We’re very passionate about helping tax-focused financial advisors enrich their communities and also enrich the people who live in those communities.”

In a message to shareholders included in the April 10 proxy, Blucora CEO John Clendening wrote that the wealth unit’s “future potential is unbounded” after the deal and its 2018 results.

The deal “gives us greater scale and new opportunities to leverage efficiencies, capabilities and technology to better serve our combined advisor base,” he said. “We will also be able to better to reinvest in our business and take advantage of the ‘best of breed’ across both platforms.”

FP50 2018: Which IBDs have the most producing reps?

Tobias Salinger | Lists

Executive moves
In the longer term, Clendening added, the company expects advisors to be able to increase client assets in advisory accounts and potentially bring in more directly held assets. The Fidelity conversion alone will also generate $120 million in additional segment income over the 10-year contract, he wrote.

Before joining Blucora in 2016, Clendening, 56, served for 11 years in executive roles in investor services and other divisions at Charles Schwab. Since he took over in April 2016, the company’s stock value has surged to roughly $35 per share from below $5.

The proxy states that Blucora, which also owns the tax software firm TaxAct, has transformed itself since 2015 from operating a portfolio of internet companies to a tech-enabled financial firm. In that timeframe, the parent firm also moved to Irving, Texas, from the Seattle area.

Todd Mackay — HD Vest’s interim CEO — spearheaded Blucora’s purchase of the IBD from private equity investors in 2015 for $580 million. Wells Fargo previously owned the firm, which was launched in 1983 by CPA-planner pioneers Herb Darwin Vest and his wife Barbara. Most recently, the 30-year company veteran Roger Ochs led the firm until 2017.

Oros had spent less than two years at HD Vest when he left to become CEO of Chicago-based HighTower in January. He left on “very good terms,” solely to be closer to his ailing mother in Michigan, he said at the time.

His separation agreement with Blucora called for him to provide transitional services through March 1 after stepping down Nov. 15, the proxy shows. Oros later “agreed to a general release of claims in favor” of Blucora, and the company waived nearly $220,000 in expenses, it states.

Oros would have been required to repay the costs of commuting, relocation and other expenses under his employment agreement. While he received none of his targeted $487,500 bonus, since he didn’t finish the year, Oros received $1.5 million in total 2018 compensation.

Representatives for HighTower — which previously stated it sought an earlier start for Oros — declined to make him available for an interview.

Blucora spokeswoman Andrea Dorsett said in an email that the company and Oros “separated with a mutual understanding and on amicable terms,” calling the proxy disclosure a “routine update” made in keeping with public companies’ standard reporting practices.

HD Vest didn’t make executives available for an interview nor did it provide responses to other questions.

Blucora wealth management metrics

Heated calls’
The acquisition would combine 1st Global’s specialty in serving large accounting practices with HD Vest’s focus on individual CPAs and enrolled agents. Tony Batman, the majority owner of 1st Global, had sought out “higher-end producers” in breaking away from HD Vest, Henschen says.

One advisor told Henschen he couldn’t process any business for two weeks because of the Fidelity conversion. Henschen says he’s taken some “pretty heated calls” from HD Vest representatives in the past six months amid the array of changes.

“It used to be a rep-driven broker-dealer; now it’s like they’re an employee of Blucora,” Henschen says. “They need to do a one-eighty on the culture. If the current management seems befuddled on how to do that, then put 1st Global’s management in there.”

On the other hand, two of HD Vest’s largest practices expressed support for the firm and the pending deal. Oujo and Kyle Brownlee of Oklahoma-based Wymer Brownlee Wealth Strategies both say they look forward to collaborating professionally with the 1st Global advisors.

“When you’re doing a major conversion at that level, you have to expect that it’s not going to be completely smooth,” says Brownlee. “Due to that investment and capital and time to convert, we’re really in a position where this merger makes a lot more sense.”

Brownlee has been affiliated with HD Vest for 20 years, and the practice spans six locations with nine reps managing some $600 million in client assets. The 50-year-old business aims to double its client assets in the next six to eight years under a strategic growth plan.

Oujo’s practice has six advisors managing $440 million, including the accounts of many Major League Baseball umpires who came up in the minors with him. Through multiple ownership structures, HD Vest’s culture remains centered on accountants who are advisors, Oujo says.

“There’s a meeting of minds that takes place between a rep force that has to stay modern, and an ownership group that has to appeal to a rep force,” he says. “There’s a lot of moving parts here, and the clients can handle change as long as they’re coached through it.”

Conversion process
As for the Fidelity conversion, Oujo credits his team for being well prepared, saying “a lot was thrown” at smaller practitioners who didn’t have as much bandwidth or, in some cases, didn’t even know about it or didn’t approach it with positive or proactive attitudes.

HD Vest’s move to Fidelity spanned 15 months of close work between the firms, Fidelity spokeswoman Nicole Abbott says. The custodian’s preparation included training, resources in the field and an app for communicating directly with advisors, she said in an emailed statement.

“Conversions are always a process and questions inevitably come up during times of change, particularly when advisors are shifting to an entirely new platform, so Fidelity had up to 40 team members onsite for the four weeks around the conversion and will continue to work with the team at HD Vest,” Abbott said in a statement.

Any conversion, especially one involving switching wealth technologies and custodians simultaneously, requires time to adapt, agrees Lincoln Ross, Envestnet’s executive vice president of product and operations. Envestnet supports client firms and their advisors during such moves.

“Firms that make transformative changes to their infrastructure like this are pointing themselves toward the future,” Ross said in an emailed statement. “Once the change is absorbed, these firms experience accelerated growth.”

In February, Envestnet, with launch partner 1st Global, announced it had rolled out advisor-facing tools under the new Vision platform, which combines data from various product providers while using machine learning and analytics for client insights.

Additionally, 1st Global started a client texting tool under MyRepChat that integrates with Redtail customer relationship management software and reached an agreement with Broadridge to develop an enhanced advisor compensation system, according to Knoch.

New blood
The firm has also tapped four new executives to lead its ongoing enterprise projects and recruiting. 1st Global has added at least one new CPA advisor per month since the fall, and the company sees the new tax law as a growth driver, Knoch says.

“CPA wealth management firms are really positioned to give great advice to their clients,” Knoch says. “We think that now is probably the best time that we’ve ever seen in that regard. We have been and we remain really excited about this market.”

HD Vest rep headcount

For its part, Blucora came within a percentage point, met or surpassed eight stated performance goals around metrics like EBITDA and revenue in 2018, the proxy says. The wealth management unit’s net advisory flows soared above a target of $900 million to $957.3 million.

HD Vest also brought in more than $700 million in recruited assets from 75 experienced advisors and 120 tax professionals it trained as wealth managers. The firm is only in the early stages of its efforts, but production per advisor jumped 20% in 2018, the proxy states.

“Last year we actively pruned the advisor base by setting engagement requirements, which led to the termination of hundreds of advisors,” Clendening wrote. “This has created more capacity for our team to focus on our highly engaged advisors while enhancing our ability to support our most productive advisors and teams.”

About 150 advisors at HD Vest, including Brownlee, are also beta testing a new tax-smart investing platform which is designed to automate their strategies. He says he’s thankful for Blucora’s investments in the wealth unit, including in technology and the 1st Global deal.

“It’s a much more powerful company going forward,” Brownlee says. “Anytime you can have peer collaboration for the betterment of the clients that we serve, I think everybody wins.”

Tobias Salinger

For reprint and licensing requests for this article, click here.

Not a millionaire? Pay for expert financial advice the same way you pay for Netflix

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Millennial man budgeting

Want to get your financial house in order? There’s a monthly subscription service for that.

The same payment model that you use to cover Netflix and Spotify each month has arrived to the world of financial advice.

Charles Schwab recently announced it would start charging investors in its Schwab Intelligent Portfolios Premium service a one-time $300 fee for financial planning and a $30 monthly subscription.

Participating clients have access to a certified financial planner who can give them ongoing advice. Investors can then view and update their plan online as their goals shift.

Start saving for retirement as soon as possible, says financial advisor

The new subscription fee replaces an advisory fee of 0.28%, which was charged against the assets clients invest in the program. Clients need to have at least $25,000 to invest in order to participate.

“Having a set premium model with an ongoing subscription is the right solution for a given client,” said Cynthia Loh, vice president of digital advice and innovation at Schwab.

“These are clients who are looking for advice, particularly in pivotal moments in their lives, including getting married or having a baby,” Loh said. “They want to speak with an expert on how to better plan for their future.”

Individual financial advisors are also offering subscription-fee planning — and you can get it without a huge nest egg.

“It works really well for younger people who don’t have assets or who are looking to manage money on their own, and they want financial planning guidance along with that,” said Eric Roberge, a CFP and founder of Beyond Your Hammock in Boston.

Gen X advisor and Gen Y clients

Traditionally, financial advisors have charged investors about 1% of the assets they manage in order to pay for their services.

“If you have an assets-under-management fee model and your investments do well, your revenues go way up,” said Vanessa Oligino, director, business performance solutions at TD Ameritrade Institutional.

However, as the cost of investing has gone down — for instance, Fidelity launched its zero-fee funds last year — investors want advisors to justify their fees and provide more value than just their investment prowess.

“Most people at the wirehouses don’t want to help someone who is 25 years old, has $30,000 in a 401(k) and $1,000 in the bank.”
-Rockie Zeigler, CFP and founder of RP Zeigler Investment Services

“Advisors have to be much more articulate and deliberate in saying ‘Here are the financial planning services,'” said Dennis Gallant, senior analyst at Aite Group.

“There’s fee compression, the commoditization of asset management to some degree, boomers retiring and millennials moving up — all of this accelerates the solution toward advice,” he said.

That guidance includes budgeting, understanding employee benefits and investing in your 401(k), as well as advice amid major life changes, including marriage, having a baby and paying for college.

financial advisor with young family

The amount you pay for a subscription-based relationship with an advisor could vary.

For instance, financial advisors who are part of XY Planning Network don’t require clients to have a minimum level of assets in order to work with them. They may charge a start-up fee, along with a monthly retainer fee.

“Most people at the wirehouses don’t want to help someone who is 25 years old, has $30,000 in a 401(k) and $1,000 in the bank,” said Rockie Zeigler, a CFP and founder of RP Zeigler Investment Services in Peoria, Illinois.

He charges his subscription-fee clients $500 upfront, plus a $150 monthly fee.

For that cost, clients get four to six personal conversations annually, ongoing communication with the firm, a twice-yearly review of their 401(k) plan and more.

More from Personal Finance:
A Roth 401(k) offers tax advantages. Here’s how it works
Here’s what attending a top college is really worth
Expected Social Security shortfall won’t prevent expansion

The level of interaction you’ll get will also vary based on your circumstances and the advisor’s service offering.

“Some advisors are very hands-on and meet monthly each year because they’re doing cash-flow coaching and it takes that intensity to learn how to build those savings habits,” said Roberge.

He charges an upfront cost of $2,000, and a monthly retainer of $200 for the first year of service.

In that time, Roberge builds a plan for the client, implements it over the year, and meets with the client about six times.

“In between, you have access to me if there’s something urgent and that can’t wait,” he said.

It’ll take some footwork to find the best advisor for you, but here’s where to begin.

• Vet your professional: Dig up your advisor’s details on the Securities and Exchange Commission’s website, as well as the Financial Industry Regulatory Authority’s BrokerCheck page. These sites provide details on disciplinary actions, state licensing and years of experience.

• Ask if your advisor is a fiduciary: Confirm in writing that your financial advisor is acting in your best interest and puts your needs before his or her own.

• Find out how they’re paid: Whether you’re selecting an advisor under the AUM model or the subscription-fee model, ask about how much you’re paying and how often will you pay your professional.

• Know what you’re getting: Whether it’s a set number of meetings, infinite access via phone or email, or a written financial plan with quarterly goals, understand the service you’ll get – and get it in writing.

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News Tips

UNT student wins financial planning competition | News

Rebecca Boyle, a senior at the University of North Texas, won the International Association of Registered Financial Consultants 2019 national financial plan competition. 

The competition had participants create financial plans for a fictional couple and was judged by a panel of financial consultants.


“I learned the importance of having a process for doing this, about the order of which things need to be done and how things affect each other,” Boyle said in a press release about the competition.

Boyle will graduate this spring debt-free and helps host the UNT Mean Green Money podcast.

Financial Planning 101: Where Do I Start?

Understanding what your advisor handles personally and what will be outsourced is a good place to start in your search. 


When you’re ready to take the leap from DIY financial planning to seeking professional advice, the first step is to choose who you’re going to trust with your financial future.

A financial advisor is likely going to be someone that you work with for many years—maybe even someone who works with your family for generations. It’s important that you choose the right advisor for you. That means taking the time to ask the crucial questions that will tell you whether or not it’s a good fit.

In this blog and more to come, you learn the big questions you should ask all financial advisors you’re considering, starting with this one: What exactly do you do?

What services are provided?

There are a lot of different areas in which a financial advisor can provide expertise: real estate, banking, mortgages, insurance, law, tax, investments…

Some firms offer one of these. Some offer two or three. There are probably very few that offer all of them—which is a good thing. Jack of all trades but master of none is not what you’re looking for. Knowing exactly what services an advisor can provide is the first step in knowing if he or she is a good fit for you.

What is done in-house?

With financial advisors, not every service they provide is done personally, or even by someone in the same office. Some services are outsourced.

While this is not a bad thing nor should it be a deterrent, it is important to know what your advisor is doing personally so you know what you’re paying for.

Do you have an advisor or a salesperson?

Going to a financial advisor to help make sense of financial products that you own or are considering can be extremely helpful, but it’s important to know that your advisor has your best interest in mind.

If the advisor works for a specific insurance company or investment product provider, he or she is a salesman who may be incented to recommend a product that his or her company manufactures and has on the shelf.

Make sure you have an advisor who will search multiple companies and options and who is agnostic about the ultimate decisions to find what fits best for you.

How does the firm invest?

If you’re seeking help with investments, understand how the advisor or firm chooses where your money is invested. Some firms will personally allocate your assets and manage your portfolio in-house. Some will manage your portfolio design and outsource certain components—like stock picking—to a third party.

Beware of firms that outsource the bulk of your asset management to a third party. This is often much costlier for you. If your advisor is handing off your money to someone else to manage, at least make sure you know what other services you are paying him or her to provide for you.

The lesson:

When you’re looking for a financial advisor, be prepared to ask questions so you know what to expect and if the advisor is right for you. Understanding what your advisor handles personally and what will be outsourced is a good place to start in your search.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Brotman Financial Group, Inc. and BFG Financial Advisors are not affiliated with Kestra IS or Kestra AS.

Ask your folks about their financial plans

Parents are often more than happy to offer financial advice to their kids. They like to feel needed and want to make sure you’re on solid financial ground. But it’s important to turn the tables and ask about their financial plans, too.

Are they saving for retirement? Have they updated their will? What’s their plan for long-term care, should they need it?

It doesn’t matter if you’re living on ramen or running your own business, asking your parents about their financial future can feel odd. But life moves fast. And your parents’ financial plans can and will affect your own, eventually. So it’s important to talk early and often about how they’re planning for retirement and the often high cost of aging.

“It’s never too soon to have this conversation,” says Greg Young, owner of Ahead Full Wealth Management LLC in Rhode Island. “If something happens to your parents, not only there goes your safety net and a key part of your support network, but their affairs will likely pile onto you.”

Tact is everything when talking about money. Show them you want to learn and you want to help. Use your own life events, like a new job, a new house or an expanding family, as an opening to talk about their plans.


It’s important to know if your parents are saving, but this conversation isn’t just about money. It’s also about their dreams for retirement.


Your first real job (or any new job) is a good chance to ease into the conversation. Ask your parents for advice as you navigate 401(k) contributions. A simple “What did you do?” gives you insight without being invasive.

House hunting? That’s another opportunity to check in with your folks about their retirement plans. You know, in case you need to add “in-law suite” to your wish list.


The cost of extended care is staggering — assisted living carries a median price tag of $48,000 per year, while the annual median cost for a nursing home is nearly $90,000 for a semi-private room, according to an annual survey by Genworth, an insurance company. In-home care can be just as costly, depending on the services needed.

Long-term care insurance helps offset the cost of nursing care and help with routine activities like eating, bathing and dressing, whether at home or in an assisted living or nursing home.


Long-term care insurance gets more expensive with age, so most people who buy it do so in their 50s or 60s. It’s good to start the conversation early to have the topic on your family’s radar.

“‘Do you have long-term health care insurance?’ That’s a specific question that is pretty palatable,” says Thayer Willis, a wealth counselor. “If they say yes, the follow-up question is: ‘How does it work exactly?'”

If the direct approach doesn’t jibe, try backing into the conversation. Use someone else’s experience as an example and ask whether your parents have considered assisted living in the future and how they would pay for it.


Sorting through an estate without clear directives can tear families apart. That’s the last thing your parents want. Talking openly about things like wills and trusts, life insurance and advance medical directives can help you understand what they have in place, and give you insight into their intentions, Young says.

“Knowing what to expect from them, or that they’ve done some planning, will certainly make an emotional eventuality a little easier,” he says.


Starting your own family, and setting up your own estate plan, is a great opportunity to ask your parents what they have in place. You can also use someone else’s experience to start the conversation.

“Ask questions like: ‘A friend from work had a parent pass and they could not find any paperwork. … Do you and Mom have all your paperwork together in one place? If you were to pass, who has access to it?'” says Mark Struthers, owner of Sona Financial, a wealth management firm.

Your folks might not be comfortable talking about their finances. That’s OK. Don’t push them. Instead, make it clear that you’re ready and willing to talk another time, Willis says.

“You might need to take the approach of planting a seed, and that’s all you do in the first discussion,” she says. “Which is another reason for beginning early.”


26-Year-Old CFP Offers Financial Planning for Nerds

Ian Bloom Ian Bloom.

If financial planning and new, younger clients are key to the future of the financial advisory industry, then the industry needs to attract young advisors who are interested in planning and not just investment management.

Ian Bloom, a 26-year-old who opened his own financial planning company in Raleigh, North Carolina, less than a year ago, is one example of that advisor of the future.

He’s most interested in financial planning; does not want to push product, but provide clients what they need to reach their financial goals (which aligns with the desires of many millennials); and has his own YouTube channel through which he delivers primers on personal finance topics.

He believes deeply in financial education, transparency of fees and the development of long-term ongoing relationships with clients.

“My generation wants to make a living, but we also want to make a difference,” says Bloom.

He came by the profession through the father of his college girlfriend (now wife), who was in the business, working for a large insurance firm.

Bloom had been a psychology major, hoping to specialize in adolescents, but changed his mind once he realized he would have to get a master’s degree to earn “any meaningful salary” and a doctorate “to make really good money.”

His girlfriend’s father, who worked at Metropolitan Life, helped get him started there, working initially for a salary, then a salary plus commissions earned through the sale of products. Bloom ultimately found himself at MassMutual, which had acquired the MetLife business, disliking the pressure to push product.

During his year at MetLife and MassMutual, Bloom passed his Series 7 and 66 exams and licensing exams to sell life, health and long-term care insurance. Last June he set up his own firm, Open World Financial Life Planning, named for a type of video game that allows players to interact however they want and is “legendarily difficult,” says Bloom.

He’s a gamer who shares an affinity with the gamers and software engineers in his target market. “There is a way that gamers think about the world,” says Bloom. “They’re used to overcoming challenges and setbacks. If you can show a gamer a progress bar comprised of six separate steps [like quests] to overcome, you can help them get their financial life in order.”

He has a YouTube channel called Nerd Finance where he explains in three- to 10-minute videos the importance of investing, the differences between traditional and Roth IRAs and why people need financial advisors, in addition to many other topics.

“Chances are if you have a single financial question I have either addressed it on the channel or have plans to in the near future,” says Bloom in his advisor profile on the XY Planning Network, to which he belongs. He’s also in the process of writing a gamer’s guide to finance, which he hopes to self-publish.

Bloom calls himself a “financial planner first” who got into the business to help people become wealthy rather to work primarily with people who already have millions to invest. He earned his certified financial planner designation in December.

“This is the career I wanted but I didn’t know anything about it,“ says Bloom, recalling his college days. He attended Appalachian State University in Boone, North Carolina, where there was no financial planning program, but a business finance program that focused on the finances and balance sheets of corporations, not of ordinary people.

Still, Bloom’s psych courses at the university have helped him connect with clients in ways that help them reach their financial goals. He likens the connection to a “coaching relationship.”

Bloom will manage clients’ investments but doesn’t view that as his primary purpose. “When I designed the firm I didn’t have asset management at all but added it when two clients asked for it.” He outsources asset management to XY Investment Solutions, which uses East Bay Financial Services for that purpose.

Bloom has two methods of charging clients. A comprehensive financial plan costs a minimum $2,400 — half up front, then $100 a month for the first year and $200 a month for the second — “Gamers are used to paying for subscriptions,” says Bloom. A project-based financial plan is more limited in scope and costs about $1,500 on average. For asset management he charges an additional 1% of AUM, which includes the fees he pays to his outsourced manager.

When this reporter noted that his total annual fees were on the rich side — especially when compared to Schwab’s new subscription service, which charges just $300 up front and $30 a month — Bloom said he was “excited” about Schwab’s subscription plan, “charging for advice. The industry needs to move closer to that. It has not been transparent, has not been clear what the client gets for what they pay for.”

Bloom says he doesn’t understand why advisors who call themselves planners only collect revenue on an AUM basis. “They are not getting paid for the planning work they do,” only for the assets they manage, according to Bloom. He, on the other hand, gets paid for the work he does, and charges separately for those services.

Asked if the new Schwab model means more competition for his business, Bloom said he’s “not competing for the same people. My clients aren’t shopping for costs. They’re shopping for answers.”

— Related on ThinkAdvisor:

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