Choosing the Right Financial Advisor | Part One: Work with Someone You Trust
As financial professionals, we\u2019re often asked one simple question: \u201cdo you know what I should buy right now?\u201d In truth, we don\u2019t believe it\u2019s possible to successfully predict market behaviors most of the time. But, we do believe that a qualified financial advisor can help you devise a plan for long-term success. In this episode of Unfiltered Finance, our own Tom Romano, Head of Strategic Relationships and Product Development, is joined by Symmetry\u2019s Michael Storer, Senior Regional Director, and a financial advisor from our sister firm, Apella Wealth, Peter Leppones, CFP\xae, to answer a more important question: \u201cwhat should you consider when choosing a financial advisor?\u201d
If you have any questions or would like more information, reach out to us at https://symmetrypartners.com/contact-us/
You can also find us on Facebook, YouTube, Twitter, and LinkedIn. As always, we remain invested in your goals.
Symmetry Partners, LLC, is an investment advisory firm registered with the Securities and Exchange Commission. The firm only transacts business in states where it is properly registered, excluded or exempted from registration requirements. Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. No one should assume that future performance of any specific investment, investment strategy, product or non-investment related content made reference to directly or indirectly in this material will be profitable. As with any investment strategy, there is the possibility of profitability as well as loss. Due to various factors, including changing market conditions and/or applicable laws, the content may not be reflective of current opinions or positions. \xa0 Please note the material is provided for educational and background use only. Moreover, you should not assume that any discussion or information contained in this material serves as the receipt of, or as a substitute for, personalized investment advice. \xa0 Transcript:00:00:01.900 --> 00:00:07.400
Hello and
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\xa0welcome to unfiltered Finance. I'm your host Tom romano.
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\xa0And thank you for joining us this episode today. We
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\xa0are talking about choosing the right financial advisor and
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\xa0I have the perfect guests for this topic
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\xa0joining us here today first and foremost Mike
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\xa0store who is a senior Regional director
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\xa0at symmetry Partners. I asked Mike to be
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\xa0on the podcast because he works with thousands of financial advisors across
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\xa0the country. He knows which ones
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\xa0are doing the appropriate job and due diligence and
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\xa0planning for their clients and the others who might be dare. I
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\xa0say fake it Mike faking it and of
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\xa0course a long time friend of mine Mr. Peter loponis
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\xa0who's a certified financial planner and financial advisor
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\xa0with Apollo wealth and happens to be
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\xa0my personal financial planner. So gentlemen, thank you both for joining
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\xa0us here today. You're welcome, Tom. Thanks Tom. Great to be here. I thought
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\xa0this was appropriate topic for us to discuss.
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you know coming out of the pandemic I travel a
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\xa0lot for business and I've been on many planes
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\xa0over the last few months and you know, whether it's an
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\xa0airport or
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Are sitting next to someone on a plane and just bring
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\xa0up some small talk and people understand
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\xa0that I'm working in the financial services a business.
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\xa0And the first question. I always get is got any
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\xa0tips. What should I be buying? What
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\xa0should I be selling? Right? It's a very common question and for
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\xa0years, my response has always been and I'm
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\xa0a firm believer of this is the best advice I can give anyone in
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\xa0that moment is to work with
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\xa0someone you trust financial planner financial
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\xa0advisor that's working in a fiduciary capacity. I
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\xa0have a number of reasons why I say that but
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\xa0Mike I'd love to hear it from your perspective. Why should
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\xa0investors people planning for
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\xa0retirement or for any other Financial need be working
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\xa0with a financial professional? That's a great question.
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\xa0I think you hit on it at the in your opening
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\xa0remarks Tom is that
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You know.
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Having traveled the country for many
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\xa0years working with a number of different types of advisors and meeting
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\xa0with clients at the same time, you know clients have
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\xa0different desperate needs in terms of when it
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\xa0comes to financial Financial advice so they can
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\xa0certainly learn about it on on a website if they
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\xa0want to but I found that especially the
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\xa0best advisors are working working with
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\xa0clients and from that
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\xa0perspective. I know who these advisors are.
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And I know they're doing a great job for their clients. And for me,
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\xa0the one thing that comes to mind besides everything
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\xa0else at a financial advisor does because I think about it in
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\xa0my own world is comfort and peace of mind, right? There's lots
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\xa0of different moving Parts when it comes to planning.
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And and what you're going to do with your money for the long term and even myself
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\xa0being in this business, I worry about am I making
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\xa0the right decisions? So I think a lot of it comes down
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\xa0to peace of mind and comfort. I think that that's high
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\xa0level. There's a lot of you can drill down from there
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\xa0but I think for most clients if you think about it, it's getting that
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\xa0pressure off of you and bringing a
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\xa0professional and to make sure that you're meeting your life goals, whatever those might
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\xa0be sure. No, absolutely. I think what I'm hearing you say, I
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\xa0hear things like planning and long-term and Peter
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\xa0I'll shift over to you. So
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\xa0what I'm hearing Mike say and I loved for you to plan
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\xa0on this when someone asks me got any tips,
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\xa0why is that the wrong question?
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well, I think
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the answer they're looking for everyone wants something
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\xa0that's exciting and and sexy that
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\xa0they can tell.
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Their friends. I think you've used the term water cooler alpha or
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\xa0Golf Course Alpha everyone thinks somehow because we're
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\xa0sitting here on the inside. We're insiders. We've
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\xa0got more information than than they do
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\xa0as as retail investors, but
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\xa0that's just not the case and and it's not about
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\xa0hitting that home run with the stock because
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\xa0if you're gonna be picking individual stocks, there's gonna
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\xa0be some home runs in there, but there's got to be some singles and
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\xa0doubles there's gonna be some losers too. It just
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\xa0it's gonna happen statistically, but when
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\xa0we talk about a plan and what
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\xa0it can do for you long term the sense of confidence
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\xa0that it's going to give you. That's what you really need. Hey, it's
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\xa0great to be able to say Jesus I bought in at this stock when when it
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\xa0was at 10 and it went to a hundred and in two years. It's a
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\xa0great story, but
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Is better to have a sense of confidence and comfort with your
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\xa0plan and with your financial outcomes, and that's why
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\xa0sitting down and taking the time to go through a plan with a
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\xa0cfp with someone who's a fiduciary is really in your
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\xa0best interest versus getting that that hot stock tip.
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\xa0Yeah, I would agree. The one thing that
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\xa0I always comes to mind when someone says got any tips the first
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\xa0thing I'm thinking well if I had some I wouldn't tell you I'd keep
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\xa0it all for myself, right? There's wildly more Capital
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\xa0to be to be earned when you keep those secrets to yourself right quick
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\xa0short story. Tom and
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\xa0Peter. My son is out in gainfully employed
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\xa0in the Working World now and he has a little bit of money and he
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\xa0asked me about a year ago a year and a half ago to Dad what
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\xa0stocks should I pick? And so I immediately opened
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\xa0up the Barron's journal and
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\xa0I just looked at the stocks to pick now I said, hey, you
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\xa0know, if you want to buy some technology, here's a bunch of Technology names. I said,
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\xa0you know, the market has been involved, but if you want to buy stocks, here's a
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\xa0couple of names that you can just
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Your portfolio. So of course he did that on my advice and
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\xa0then about a year later. He
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\xa0was blaming me because I'm the one that picked the stocks from in the
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\xa0stocks were Downs.
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I just thought that was kind of interesting because it I did
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\xa0exactly the opposite of what I should have said to him right in terms
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\xa0of how we should be approaching these but you know, this was play
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\xa0money for him. So I let him learn a little bit about what it
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\xa0really means to invest in those types of questions of the wrong questions,
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\xa0right as you just mentioned Peter and so I thought it was
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\xa0a really good it was a it was a learning moment for him to understand that
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\xa0you don't just pick stocks and they go up. Oh, absolutely and like
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\xa0I I actually I do that with with clients. I'll
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\xa0say to them.
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If you want to open up a small account and I
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\xa0use the term your Casino money. Hey, you got to go to
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\xa0the casino and sit there and maybe go out to dinner have a drink play the
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\xa0slot sit at a table if you lose a hundred or 200
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\xa0or $300.
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It was a night of entertainment you had a good time.
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I see take your Casino money and put it into an account and
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\xa0buy a couple of stocks and just it's it's
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\xa0good education for you. You might learn some valuable
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\xa0lessons, but you're gonna pay really close attention. Even
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\xa0if it's only five or 10 shares of a
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\xa0company and you'll you'll learn a lot for it. So I think there is certainly a
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\xa0value in that but with large sums of Money Retirement accounts
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\xa0brokerage accounts. Absolutely not none of
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\xa0this stock picking. It's got to be a low cost. Well Diversified portfolio.
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\xa0So I'm hearing you say it's okay to sit in a
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\xa0little bit.
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Any bit tiny bit? Absolutely. No, I didn't. You
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\xa0know, I like to play the market myself, but I'm only doing
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\xa0that with my my entertainment dollars not my
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\xa0long-term assets that that my family
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\xa0and I are going to need at some point in time. Right? So Peter
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\xa0you've been talking a lot about planning right and and
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\xa0I've been in this business for a long time as with you
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\xa0you and I've worked together for many many years. I've noticed
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\xa0the value proposition of financial advisor
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\xa0has changed right at one point. It was that
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\xa0stock picker many many years ago. So this
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\xa0day and age what what do
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\xa0you see as the value proposition to a financial advisor?
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In my opinion, it has to be the plan because that's
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\xa0where we've had success as a firm. I've
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\xa0had success as an advisor clients have had success
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\xa0following that advice and and really
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\xa0it's about the planning and that's the most
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\xa0valuable advice. I give to my clients. Hey, we're with
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\xa0a low cost. Well Diversified portfolio. We're going
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\xa0to get a market return the market for us
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\xa0taking risk. We will get a market return and my
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\xa0return will be no different than my clients because we invest in very similar
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\xa0similarly constructed portfolios, but
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\xa0really
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Whether we get an 8% return 9% 10%
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\xa0return long-term. It's really
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\xa0the plan.
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That is is going to drive all that and just because
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\xa0their portfolio is up a certain year that that's
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\xa0great and they like to see that.
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But again, the plan is going to say well geez, I
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\xa0know now I can retire at age 62. I'm
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\xa0going to take Social Security at 67 when
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\xa0I retire at 62.
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I'm going to be able to pay for my own health insurance until
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\xa0I hit MediCare at age 65. I mean, those are questions
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\xa0that aren't even related to a rate
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\xa0of return or a stock pick or any of that. They're planning
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\xa0questions, but they're extremely important to people the very
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\xa0comprehensive list of questions versus should you be in a
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\xa060% stock 40% bomb for far beyond that
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\xa0correct? Correct, but it's it's about the the layers and
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\xa0the investment management risk reward asset
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\xa0allocation being allocated appropriately.
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According to your risk tolerance that's all part of it. But you
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\xa0do when I sit down with clients we talk about the
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\xa0performance we talk about what the markets have been doing and we really start
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\xa0to get into those those items Healthcare Medicare long
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\xa0term care gifting money to people grandchildren
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\xa0setting up a 529
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\xa0accounts. All those types of things. These
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\xa0are the goals and the things that are important to clients and they come
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\xa0through the planning process. Yeah, that's extremely valuable right life
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\xa0comes at you fast, and there's a number of instances in
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\xa0my personal life where I've leaned on you for things that
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\xa0are fun far beyond investable assets.
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So that's that's good. So what so far listeners out there.
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\xa0I mean you're looking for a financial professional that
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\xa0is planning focused.
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But also from a very comprehensive standpoint Beyond
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\xa0stocks bonds mutual funds Exchange Trade
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\xa0funds Etc.
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So let's one of the things that's a
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\xa0change gears a little bit.
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You know, there's over 300,000 financial advisors in
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\xa0the United States, right? The term
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\xa0fiduciary comes up quite a bit and I'm
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\xa0always surprised maybe I'm not as surprised
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\xa0as I once was that investors are don't
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\xa0necessarily understand that sometimes advisors are
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\xa0acting any fiduciary capacity and sometimes
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\xa0they are not before we
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\xa0jump into that.
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Explain to us Peter. What is a fiduciary? Well, it's
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\xa0it's the highest standard of care in in
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\xa0our industry. And I've sort of I've been on both
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\xa0sides of it. So I have to act in my
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\xa0clients best interest not only being affiliated with with a
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\xa0palette but also being a cfp and really
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\xa0what that comes down to at the end of the day
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\xa0is the type of
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Investment product. I'm going to refer to
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\xa0everything as a product that we put our clients into and
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I've got a really focus on the cost the level
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\xa0of care below a fiduciary. It's
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\xa0referred to as the suitability standard. Does that mean if I'm
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\xa0not a fiduciary? I'm doing something unethical absolutely not
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\xa0the last thing I want to do because I again I was there I've worked
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\xa0with clients where I was just doing by this suitability standard. I
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\xa0was not a fiduciary at the end of the
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\xa0day. I'm putting my clients into something that is putting more money back
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\xa0into their pocket meaning the fees
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\xa0and the costs associated with those products are
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\xa0much lower. We have
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\xa0no Front End Sales charges. We have no backend sales charges.
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\xa0So I said to clients that are that are coming on board.
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I will bend over backwards to make sure that you are happy but at some
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\xa0point if you don't realize the value
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\xa0of our services or you chose to go elsewhere, you
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\xa0can do that. You're going to be able to take what you have here and
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\xa0move that elsewhere. You're not going to be tied up for three or
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\xa0five or ten years. No surrender charges or big
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\xa0fees to go acting in their best interest and that helps
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\xa0to protect them. And I think it's extremely important that people
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\xa0need to ask
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Are you a fiduciary is your firm of fiduciary? And how
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\xa0do you work? So when?
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Investors are looking for a financial
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\xa0professional to work with right what I'm
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\xa0hearing someone the first things I should look for and they should ask about it potentially
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\xa0even get it in writing. Are you acting any fiduciary
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\xa0capacity? Are you acting in my best interest? Correct? They
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\xa0absolutely should and and interview multiple
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\xa0people Tom has
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\xa0been not only a great client. But I've worked
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\xa0with many of Tom's family members. Why because they come to Tom. Jeez
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\xa0Tom. I've got some questions. Who should I work with? Well talk
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\xa0to Peter. So if you have a friend or family member who you
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\xa0know works with an advisor ask for that that person's name.
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\xa0And if they will if you have a friend or family member they'll
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\xa0refer them over if they enjoy working with them. So I think that's a
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\xa0good place to start but interview them there's many checklists
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\xa0online and I think one of the things you want to ask about are
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\xa0you a fiduciary understand what that means and it's
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\xa0it's something important because there's
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\xa0plenty of us out. There aren't as many as probably there should
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\xa0be but there's plenty fiduc.
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He's out there for you to work with.
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Absolutely. You made a really good point. I was doing a little research.
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Knowing that we were going to have this.
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Talk today the three of us and you know,
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\xa0the number one way investors find their financial advisors through
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\xa0through referrals. Right number two is through
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\xa0you know online searches and things like that. So
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\xa0I think that's that's really important
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\xa0when you're looking for financial audience advisor talk to your family
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\xa0your friends people who have or may have similar Financial
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\xa0situations as you do but I
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\xa0think you know, the important thing. Is that the very good question. Are
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\xa0you acting and a fiduciary capacity at all times, right?
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We talked about the planning process one of the things I want to
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\xa0touch upon and Mike will turn to you is that sometimes giving
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\xa0good advice means saying no not giving
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\xa0the client what they're looking for. Right and
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\xa0I've seen advisors who act
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\xa0as more of a facilitator
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\xa0very high service level but whatever the client
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\xa0wants they they get what are some of the Perils of
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\xa0that?
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The Perils are that you become all
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\xa0things to all people and as I think
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\xa0Thomas you have famously said if everything's
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\xa0important nothing's important and
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\xa0I think from the perspective of advice that we work with
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\xa0it's it's you know
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\xa0when you when you think about that kind of cafeteria style
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\xa0service.
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It becomes very difficult to.
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Address clients needs concerns or
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\xa0fears because you know
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\xa0in terms of of investment investment advice,
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\xa0if you're if you've got clients that are in individual stocks
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\xa0and you have clients in Diversified portfolios, or they're in a more passive
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\xa0investment or they're in a tactical investment. You're constantly
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\xa0pivoting to try to answer questions to
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\xa0all these different constituencies within your practice what we
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\xa0find in our in our work is that you know advisors that
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\xa0have a philosophy advisors have a way that
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\xa0they approach the capital markets and how they construct portfolios I
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\xa0tend to do the best because their clients are like-minded and
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\xa0it keeps them in their seats even when markets are
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\xa0difficult. So having a
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Kind of a carte blanche or
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\xa0I like to say cafeteria style investment or at
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\xa0least offering makes it more difficult for you to keep your
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\xa0clients in line. I think over time and I think what I
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\xa0like like best about being at symmetries, we do have that investment philosophy. That's
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\xa0straightforward. It doesn't deviate and most
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\xa0of the advice that work with us tend to have
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\xa0that same philosophy. The interesting thing about that too is you notice
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\xa0when markets are fairly volatile which where this is really important
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\xa0is that you know investors that
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\xa0kind of adhere to similar investment
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\xa0strategy like symmetries is that they tend
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\xa0to have less gap between What markets are doing and what
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\xa0their Investments are doing because they tend to stay in their seats. They're not
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\xa0moving around behaviorally moving in and out of the market or moving in and
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\xa0out of Investments. And I think that's sometimes can be the
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the offshoot of having a strategy where
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\xa0you're just trying to be everything to everybody.
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I'm going to unpack use it a lot of really yeah, I get
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\xa0there. Sorry, but no. No, I just want to make sure our listeners get it to get
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\xa0some really really good insight there Mike. So first
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\xa0and foremost you talk about an investment philosophy
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\xa0and what I'm hearing you say is that we're talking
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\xa0about advice, right and if someone wants to
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\xa0give advice you have to have a stake in the ground.
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You have to have that place where your your view on
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\xa0how Capital markets work?
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And if you don't have that view you might fall into that
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\xa0facilitator capacity.
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The other thing that she said I'm glad you
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\xa0said it as you talked a lot about behavior and what I'm hearing you
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\xa0say is the study we've used many times the dial
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\xa0bar study for our listeners. Could you talk a little bit about what that dial bar
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\xa0research shows us sure is that it shows that the the investor
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\xa0over, you know?
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Many time periods. I mean they updated every year but it goes
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\xa0back a number of years and it looks at what investors
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\xa0do in terms of investing in
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\xa0the let's say the S&P 500 as an index versus what the
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\xa0index does and we find year in and year out that investors
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\xa0tend to underperform the
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\xa0index and the question always is Peter and you know this why
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\xa0and it's because they're holding period is
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\xa0tends to be I think it's less it used to be in the old days three
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\xa0three plus years now. It's three minus here. It's less
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\xa0than three years of holding period of time, which means they're
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Behaviorally trying to in some
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\xa0ways time the market and so what we
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\xa0try to do at least in as I talk
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\xa0to advisors is to try to educate them and educate clients as
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\xa0well that you know, we want to close that Gap we
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\xa0call that the the performance Gap right?
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\xa0There's a gap between what investments do and what the investor
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\xa0does right? We know this plenty of Dad out
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\xa0there to show that so how do we do that? Peter had talked about a little
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\xa0bit earlier is we look at things like, okay, what's important? How do
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\xa0we close that Gap? It comes from financial planning. It comes
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\xa0from portfolio selection, not necessarily portfolio
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\xa0management, but portfolio selection in terms
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\xa0of picking the right model of the right strategy for for clients
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\xa0education and communication with clients. I
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\xa0think those are great ways that we see that behavioral Gap
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\xa0closing through time and that and
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\xa0ends up being a an experience
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\xa0that clients will be with their advisors for a long time
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\xa0because you focus on the things that matter not the investment
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\xa0itself.
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a great computer
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You're the the man in the seat here. So talk
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\xa0to us a little about that. Right? I mean that dial bar study is
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\xa0pretty telling every year investors are underperforming.
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You focus on planning. How does planning help with the
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\xa0long-term thinking that is required for
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\xa0successful experience. It comes into
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Not only the planning but educating clients and
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\xa0communication and the example I'll use and we were
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\xa0all.
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working from back home during the the pandemic and
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the markets dropped about a
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\xa0third
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so about 33% in about a month's time thinking
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\xa0the numbers are 33% over 34 days 1/3.
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And we're sitting here stuck at home. We think the world is going
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\xa0to end and my message to my clients because
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\xa0it's the message of our firm message that I truly believe.
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And it wasn't easy.
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No, we're not doing anything this too shall
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\xa0pass.
404
00:20:00.600 --> 00:20:03.600
You know, this is the.com bubble. This
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\xa0is 911. This is the
406
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\xa0great financial crisis of 2008.
407
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It doesn't necessarily matter what the event
408
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\xa0is because everyone know Peter is a pandemic. It's different like you're
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\xa0right, but you're not it's the uncertainty and what
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\xa0lo and behold what happens after the
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\xa0market drops a third.
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In March February and to March it
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\xa0shoots back up. It comes roaring back why we
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\xa0had no vaccine. We still were unemployment had
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\xa0still not hit its peak because of
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\xa0all the you know, retail and entertainment losses
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\xa0that that took place in in this country and around the
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\xa0world. We still have this crazy election in front
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\xa0of us. There was still uncertainty but why why did it happen and I
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\xa0don't think there's necessarily an answer but the lesson learned
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\xa0is we stay in our seats regardless of what's going on because
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\xa0the markets have they've always come back and I
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\xa0believe any time we hit something.
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They'll come back again. We just don't know when so that
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\xa0experience because I I think
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\xa0you use the term staking in the stand or stake in the ground. That was my
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\xa0stake in the ground. And now as we went through all of this in
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\xa02022 with all of the uncertainty and inflation and
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\xa0gas prices and all of that impacting
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\xa0the markets interest rates being increased.
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People said yeah, I remember what you said back during the
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\xa0pandemic. So yeah, okay that that makes sense. It's the
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\xa0messaging my messages consistent.
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And when people hear that, there's a sense of confidence like, you know what he was
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\xa0right last time. He'll probably be right this time, too.
436
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Fantastic, and I remember that Panda right that
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\xa0first quarter of 2020 was one of the top 10 worst
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\xa0quarters in the United States history going back to 1926. The
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\xa0second quarter of 2020 was one of the top 10
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\xa0best quarters the United States ever experienced going
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\xa0back. And and the funny thing is if we had
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\xa0been if we had moved our money out of we did
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\xa0not stay calm and we moved money out
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\xa0of the market in March. What would
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\xa0we have missed? When do we get back in? It's it's
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\xa0difficult. It's difficult to sit there
447
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\xa0when the market is dropping and say my gosh we have to do
448
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\xa0something but you're also playing the same game when you get out. It's like
449
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\xa0well if you get out, okay well, but then the market will eventually
450
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\xa0come back. Well, when do you get back in?
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And and and we just see long-term what the
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\xa0results are you're better off.
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Staying going dealing with the rollercoaster ride
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\xa0staying in your seat versus making rash decisions based
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\xa0upon fear and emotion Peter Michael. Thank you so much
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\xa0for joining us here today that concludes part one of our discussion
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00:22:39.400 --> 00:22:42.200
\xa0on choosing the right financial advisor. I look
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\xa0forward to continuing the conversation at part two, and if you want to
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00:22:45.200 --> 00:22:48.800
\xa0look at any of our previous unfiltered Finance podcasts, they're
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00:22:48.800 --> 00:22:51.700
\xa0available wherever you might be getting your podcast today. So,
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00:22:51.700 --> 00:22:53.400
\xa0thank you till next time bye-bye.
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00:22:53.900 --> 00:22:56.500
Symmetry Partners LLC is an
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00:22:56.500 --> 00:22:59.500
\xa0investment advisor firm registered with the Securities and
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00:22:59.500 --> 00:23:02.200
\xa0Exchange Commission The Firm only transacts business
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00:23:02.200 --> 00:23:06.200
\xa0in states where it is properly registered or excluded
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00:23:05.200 --> 00:23:10.000
\xa0or Exempted from registration requirements registration
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00:23:08.100 --> 00:23:11.700
\xa0of an investment advisor does
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00:23:11.700 --> 00:23:14.900
\xa0not imply any specific level of skill or training and
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00:23:14.900 --> 00:23:17.400
\xa0does not constitute an endorsement of the firm
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00:23:17.400 --> 00:23:20.500
\xa0by the commission. No one should assume that future performance
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00:23:20.500 --> 00:23:23.600
\xa0of any specific investment investment strategy
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00:23:23.600 --> 00:23:26.900
\xa0product or non-investment related content
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00:23:26.900 --> 00:23:29.200
\xa0made reference to directly or indirectly in
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00:23:29.200 --> 00:23:31.400
\xa0this material will be profitable.
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00:23:32.400 --> 00:23:35.400
As with any investment strategy there is the possibility of
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00:23:35.400 --> 00:23:38.600
\xa0profitability as well as loss due to
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00:23:38.600 --> 00:23:41.600
\xa0various factors including changing market conditions.
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00:23:41.600 --> 00:23:44.800
\xa0And/or applicable laws the content
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00:23:44.800 --> 00:23:47.800
\xa0may not be reflective of current opinions or
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00:23:47.800 --> 00:23:50.500
\xa0positions. Please note the material
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00:23:50.500 --> 00:23:53.800
\xa0is provided for educational and background use only moreover.
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00:23:53.800 --> 00:23:57.000
\xa0You should not assume that any discussion or information
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00:23:56.700 --> 00:23:59.700
\xa0contained in this material Services the
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00:23:59.700 --> 00:24:03.300
\xa0receipt of or as a substitute for personalized
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\xa0investment advice.