How To Turn Your Portfolio into a Financial Plan with Nick Nelson — EP 011
How To Turn Your Portfolio into a Financial Plan with Nick Nelson — EP 011
When most folks come into our offices for the first time, they have a portfolio of mutual funds, stocks, bonds, annuities, cash, real estate, and other assets. What they don’t have is a full financial plan.
At SHP, we have a team dedicated just to financial planning, and today’s guest, Nick Nelson, leads that team. Nick joined SHP Financial in June 2016 after beginning his career with an independent financial planning firm in downtown Boston. He’s a registered Financial Advisor, is Securities licensed, and he’s motivated and passionate about making a difference in the everyday aspects of people’s lives.
In today’s conversation, Nick joins the podcast to talk about his financial planning process with new clients, the risk factors you should be thinking about as you approach retirement age, and the key components of a comprehensive financial plan designed to allow you to live comfortably into old age and protect your legacy.
In this podcast discussion, you’ll learn:
How strong financial planning helped us add a million dollars of value to a client’s portfolio.
Why so many people are comfortable with not having a plan–and how this can negatively impact them sooner than later.
The three worlds of money you can invest in in retirement.
Why tax strategy is coming up more than ever–and how to manage your liability when investing in a 401(k), IRA, 403(b), or 457.
The five key areas where retirees make critical mistakes when it comes to planning.
“Performance is important, but our alpha–or our value add–is in planning.” – Matthew Peck
“If you don’t have a full comprehensive plan in place, it’s very hard to have peace of mind and confidence as you approach retirement.” – Nick Nelson
Derek Gregoire: Welcome everyone to another edition of the SHP Financial Retirement Road Map podcast brought to you, of course, by SHP Financial. And I’m Derek Gregoire, joined by my partner Matthew Peck and our head of planning, Nick Nelson. So, we’re going to get into the topic in a second, but welcome to the show, Nick.
Nick Nelson: Thank you, Derek. I appreciate it.
Derek Gregoire: Basically, we’ve talked on other podcasts and previous shows about the importance of planning. And it cannot be overstated that when most folks come into our office for the first time, a huge percent of them have a portfolio. When I say that, I mean, they have mutual funds, stocks, bonds, annuities, cash, real estate, all of that. They have a portfolio or a basket of investments. But unfortunately, very few have a full plan.
And here at SHP, we have a dedicated team just to financial planning, and Nick Nelson, who’s with us today, heads up that entire team. And obviously, this goes without saying, but Matt knows and everyone knows he’s been an amazing employee for a lot of years and he’s very, very detail-oriented which you need for planning. And so, we appreciate it. And I guess, Nick, first of all, what year did you join us at SHP?
Nick Nelson: It was 2016.
Derek Gregoire: Okay. 2016 in?
Nick Nelson: June.
Derek Gregoire: June of 2016.
Nick Nelson: Yep, it’s been a while.
Derek Gregoire: And so, what brought you? Because I remember 2016 when we hired you, you had a couple of offers.
Nick Nelson: I did.
Derek Gregoire: So, how did we win that race?
Nick Nelson: To be honest with you, I think it was our second interview, and just the level that I connected with you guys in that interview really brought my attention here. I remember Derek, we talked even just about baseball and that concept and just those little things that made it a little more unique to me, a little more personalized, really went a long way because there was other firms that I had met with, and they were just so serious, so down to the point and asking me if I could read this Morning Star Snapshot or whatever it may be. And I wouldn’t say it rubbed me the wrong way, but I didn’t connect on the level like I did with you guys.
Matthew Peck: You had come from a corporate background, right?
Nick Nelson: I had.
Matthew Peck: Which was just very kind of cold and numbers-driven and all of that.
Nick Nelson: Correct, yep. Very sales-driven. And that’s really the main focus of everything that we did. Did you hit your numbers? And that was really all we looked at. And for me, I think there’s a lot more to this industry and I think I found that here with you guys, and it’s been great.
Matthew Peck: Well, and that’s why I just want to pick up, Derek, a point that you were making about just the importance of planning here at SHP. I mean, I think for all of our clients listening, they probably heard me say this ad nauseum, where it’s like, okay, performance is important, but our alpha or our value-add is in planning. I mean, I always talked about planning and people, and that’s why I think this is a perfect sort of podcast, if you will, is because it’s a planning that we do, it’s the tax planning that we do, the income planning that we do. And I can chew anyone’s ear off about stocks, bonds, mutual funds, but it’s like that extra percentage of return or alpha, as they call it, is more about, okay, I don’t know, how we provide that extra return or that extra value is in the type of planning that we do, the attention to detail that we do. And I think that’s part of our success.
And then it’s the people behind it. It’s the people that are putting those plans together that are paying attention to every last detail, that are looking under every nook and cranny. And so, I think, today, really talking about why that’s so important to us and all the different aspects of it is just a nice, refreshing spin.
Derek Gregoire: Well, think of like, Nick knows the story I’m talking about, but we had a client who was very performance-oriented. And this is one story out of 100. But he wanted to get a good performance. And just so, obviously, the investments are still important. We dedicate, I think, four or five employees just to our investment committee that Matt heads up with all the licenses. And you can imagine, in terms of the designations and alphabet soup, something we take very seriously is our performance and investments and portfolios that we manage. But one of our clients, and again, this is one of 100 came in and wanted to do, we looked at some tax planning strategies.
And long story short, with some tax planning strategies based on the brackets, the timing where we are now, the strategy based on pretty conservative assumptions could add over a million dollars of value to their plan in their lifetime. And so, the joke was, even if the performance is not good, which we know it’s going to be, so it’s a joke, that’s why performance is important because even if let’s say you’re with another advisor and they were so good, they made you an extra $5,000 a year than anyone else, well, if you can add a million dollars in value in that, again, every situation is different, but if you can add that much value from tax strategies, that’s a lot of years of performance. So, you’d have to make up for that. And that’s why the value of planning is just, we’ve said it for years, but that’s a big differentiator. Like Matt said, it’s having not only the people, people are the most important, but having the planning aspect.
Matthew Peck: Well, in essence, things turning up. So, Nick, how does that work in a sense of like where do you start? As I know, obviously, Derek and I will sit down the client and we’ll be asking different questions about what’s important to them. But in your role, when do you first sort of get involved in the client’s planning?
Nick Nelson: Yeah, good question, Matt. So, after your first appointment, when you sit down with the client, we get involved between meeting one and meeting two, and really…
Derek Gregoire: Make sure someone sees this on TV or hear the podcast, I want to meet with those guys from the podcast or referral or whatever. One of our advisors sits down, does an introductory meeting, gets all their information to our team, and the potential client decides if it makes sense to book another meeting. And at that point, that’s when…
Nick Nelson: Correct. Thanks for clarifying. So, between those two meetings, really what we’re starting to look at is most importantly, what are their primary concerns and goals? We really want to do our best to tailor each of our plans to each individual client and what they’re looking to accomplish, but at the same time, we’re also looking to identify potential problems that we may see or potential opportunities as well within that client’s plan. So, right off the bat there, you were trying to dive into that and starting to build out potential strategies that we may look to implement if they do come on as a client.
Matthew Peck: So, I’ll kind of take one each, what would you say the most common goal is? And what would you say one of the more common problems are?
Nick Nelson: I think the most common goal is just to have a successful retirement. And that’s one thing I would argue if you don’t have a full comprehensive plan in place, it’s very hard to have peace of mind and confidence as you approach retirement and as you are retired because there really is so many different variables and strategies and unforeseen circumstances that can come into play.
Derek Gregoire: So, when you say, generally speaking, why would you say planning, just beyond the portfolio? We talk about all the time, give a portfolio or a plan, but as you approach retirement, what is the thing that you see as a result of good planning?
Nick Nelson: Yeah, so as a result of good planning, first and foremost, is this confidence, like I was saying before, but it can also relate that to the various aspects that we cover here at SHP as well. So, I think everybody knows at this point, we focus on income, investment, tax, health care, and legacy. And a common topic of conversation right now is investments and market volatility, which also ties into income planning. And that’s very important because I think a lot of people, when we first sit down with them and they’ve been on the ride through the accumulation phase basically their whole life, and because we’ve been on a bull market for about the last 12 years or so, people have gotten very comfortable with making money and just kind of let it ride.
And so, I think a lot of people kind of got away with not having a plan. And I’d also argue that having a plan during the accumulation phase isn’t as critical as the distribution phase. So, I think that’s very important as you approach that distribution phase is to start to think about what are my goals? How am I going to address them? What things do I have to be careful of? And that’s really what we try to do for all our clients at SHP.
Matthew Peck: And I think one good example of that is just recently, at least with the recent market volatility, is that sort of firmwide, we have been slowly but surely going through each individual case and then applying a bear market, but it’s also an individualized bear market. Like, Derek, in some of our past podcasts, we’ve talked about the importance of technology in risk analysis and whatnot. So, we do have this very handy risk report that we’re able to kind of put clients all their portfolios, stocks, bonds, annuities, whatever it might be into a holding and then we get them stress-tested back to 2008 and what happened in their bear market, so each individual. The Gregoire household has a…
Derek Gregoire: My risk score might be 42.
Matthew Peck: Exactly. And the Nelson household, their bear market scenario, and in the Peck household have theirs. But it’s an idea of, okay, what’s the current market volatility now? And let’s add on an additional anywhere from 15 to 22 to more loss. What does that mean for you long term? And then helping to explain to somebody, say, okay, alright, that’s a big deal if it happens now, it’s oddly enough, it’s less of a big deal if it happens in the future because the sooner it happens, the worse it is. But I think it’s a good example of just taking sort of something that’s obviously topical, to say the least, in the current correction bear market we’re in right now and then saying, okay, what if it gets worse? And what does that mean to you long-term?
Derek Gregoire: And Nick, one of the things just to clarify too, I know because we always use these industry terms like accumulation or distribution, but really, like Nick said, it’s still important to have a plan when you’re accumulating assets, but it’s even more important than the distribution of assets or accumulation stages when you’re working. You have an income, you don’t need your portfolio, you’re just growing your assets and building them up over time. And then eventually, when you’re within 5 to 7 years or less of needing to draw off your portfolio, that’s when we transition to the distribution phase. That’s when the mistakes can be critical because it’s tough to overcome them if you’re not looking at volatility, taxes, Social Security decisions, estate planning, health care, all the things that come into play.
And one of the things you said that was also so important is like so many people, like you said, they’ve got away with not having a plan because the markets just saw it upwards, and it’s like, yeah, I’ll get to that at some point. Now, I think, and again, who knows how long these little bubbles in Alaska get worse, could get better, but now, I think people are realizing, oh, my gosh, I can’t believe I want this long without having a plan because now they see what’s happening, what can happen when you don’t have a plan.
Matthew Peck: And sorry, not to cut you off, Derek, I got some to say, but just the idea of the whole distribution phase, that one last thing I want to add to that is like, you don’t want to make that mistake because you don’t want to come back out of work. If you retire, you want to stay retired. And the idea of ever having to come back because of mistakes made, oh.
Derek Gregoire: People have come to us ask our a way into that. I wish I met you five years earlier because now I’m working because I didn’t have a plan, 12 and 13 people were saying they couldn’t recover.
Matthew Peck: Well, just say so next, how often when you do the planning, too, I mean, is it sort of coin flips versus are people in generally better shape than anticipated? And kind of what are the major pitfalls that you see people kind of, I guess, major risks?
Nick Nelson: Yeah. Well, I would say one of the most common things is when we first sit down with somebody, as you guys know, a lot of people will just have a portfolio, like Derek was mentioning earlier of their various stocks, bonds, mutual funds, ETFs. And they’ll say, I know what I need to spend in retirement. Let’s withdraw from this portfolio. And I know I have plenty of money saved away. And now, we like just kind of laughed at that a little bit because there are so many other factors that they have to take into consideration.
So, I think one of the biggest things where we provide value is helping them provide a good direction and purpose behind each of their accounts, behind each of their investments so they know why exactly they hold that ETF, that bond, that mutual fund, or why exactly this portfolio is invested the way it is, which ties into a concept that you hear us say a lot, which is the three worlds of money that we think you can invest in, in retirement, which is a simple concept of safety, income growth, but one that shouldn’t be overlooked.
Matthew Peck: Tell us more about that. That’s what I’m saying. It shouldn’t be overlooked, Nick. Let’s talk more.
Derek Gregoire: Let’s dive in.
Nick Nelson: That is the plan, Matt. Yes, so I mean think of safety as anything that’s fully liquid and anything that’s not subject to market volatility. So, a very easy common example of that is your savings account or a general money market account, something that you can easily get your hands on if unforeseen circumstances do come up in retirement. And that’s a pretty general concept I think everybody’s aware of, but also something important that you need to make sure you have some money dedicated towards.
Derek Gregoire: What’s that usually end up being like $50,000 to $100,000 for most?
Nick Nelson: Yeah. So, I think it really depends on what the client’s comfortable with. And we see certain clients are comfortable with six months, certain clients are comfortable with 12 months. It really depends on what’s ideal for them. I think at the minimum, and you guys can give your spiel here too, but I would say at the minimum, six months would probably be ideal. But if you are more comfortable with 12 months or something in that range, that’s okay too. It’s about being comfortable with where you’re at.
Derek Gregoire: Okay, so that’s safety. What about income?
Nick Nelson: Yeah, so income. So, most people will have their general Social Security, their pension, maybe rental income even, which is kind of the baseline for their fixed income in retirement, but the majority of people that we sit down with also have an income gap of some sort. So, that income bucket as you will is really about filling that income gap and dedicating assets towards that that you can rely on regardless of market volatility, even something that might help keep pace with inflation, for example, really making sure that your lifestyle is taken care of.
Derek Gregoire: So, the income bucket, it’s like if they need $100,000 a year and they have $60,000 from Social Security pension and so forth, we want to make sure there’s enough money in the income bucket, whether it’s dividend-oriented or however it’s set up to be somewhat. We don’t want to have to sell holdings in the market when the market’s down.
Nick Nelson: Exactly.
Derek Gregoire: To cover the majority of that gap, maybe a piece of it, but you want to make sure that income is covered.
Matthew Peck: Yeah, and I think too just to kind of go back to the whole idea of accumulation phase or as a distribution phase, the whole safety income growth is important during the accumulation phase, but in the income column is your labor or is your job, right? Well, guess what? Once you retire, once you’re now in the distribution phase, the job is no longer in unless you again want to have a second career. The job or working income is no longer in the income column. So, now, you have to completely switch your sort of financial or your investment philosophy because your job, which got you there is now no longer an option.
Derek Gregoire: But that’s something you want to develop if you can five, six, seven years before retirement is build that income column in because you don’t want to, let’s say you retire and the markets down 40%, then you don’t want to shift the assets at that point and then take a loss. The idea of the income bucket is if you have 5, 10, 15 years or more of income coming out of that bucket without having to sell equities or risky investments at a low, that gives you confidence because the final bucket, which is the growth bucket, and you’re going to get into a second, isn’t needed for many years, right? So, what’s usually in the growth bucket?
Nick Nelson: So, before I get to the growth bucket, I’ll say, between that safety and income bucket, ideally, if we didn’t already say this, your lifestyle is taken care of. At that point in time, you have a steady, reliable income stream that you can continue and enjoy retirement on. In an ideal situation, you’d have additional assets that you can dedicate towards a growth bucket, and that might be your stocks and your ETFs and your mutual funds where you can afford to take some additional growth because your lifestyle does not depend on it.
So, as the market goes up and down, you have time to let that bounce back. And people have that growth bucket dedicated for various things, maybe if there’s a good year in the market, we get to go on another vacation that year, whatever it may be. Other people have large legacy goals. They’re trying to grow those assets for the next generation. Sometimes, it’s just general growth. It really depends on the client’s situation, but the importance of having the base between safety and income allows you to have and take on more risk on that growth bucket.
Derek Gregoire: So, the client has a million dollars. Let’s use a round number, right? Let’s say they had $100,000 safety, $500,000 in the income bucket, and $400,000 in the growth bucket. So, that could be a series of multiple holdings, funds, stocks, ETF, everything, savings accounts. So, that’s a million dollars. Well, the first bucket, the neat part about the growth is like if the first bucket has no market risk and the second bucket has little to no market risk, the third bucket is where your risk is.
So, if you have a million dollars and the markets getting hit pretty hard, well, the safe bucket is fine. So, if you need money for a rainy day, car, roof leaks, there you go, it’s there and available. The income bucket is fine because we’re not taking the same type of market risk or any, potentially. So that to cover your income, we know that $500,000 is going to be covered for the next– if you need $40,000 a year, that $500,000 with no growth, it’s like 12, 13 years before you need. And then the growth bucket, let’s say the final $400,000 is aggressive and it loses $150,000, well, that’s a big loss on that $400,000, but on the whole portfolio, it’s really 15%, and the market might be down 30% or 40%, and that money that you lost, we don’t need that money in that account for 10, 15 years. So, like Nick said, the confidence allows our clients to continue to spend and not worry about, oh, the market’s going to change my retirement.
Matthew Peck: And I think it’s also just a great example of, as you were saying earlier, Nick, when people come in, they generally have a portfolio. It’s like when you have a plan, you know why it’s invested the way it is. So, it’s like, oh, so, this guy didn’t move that much. Let’s say it’s something in your income bucket, whether it’s annuities or bonds or dividend-paying stocks, oh, this didn’t really grow that much, but it also didn’t lose that much because it’s more income. And this guy in my growth bucket is all over the place, but that’s okay because that’s my growth money.
So, I definitely love to hit that home with clients and say, look, at least with us, you understand why it’s invested, not just what it’s in, this, that, and the other thing, but also why it’s invested. And as you were saying, Derek, about confidence, I think that gives people confidence because now, they understand that there’s rhyme to this reason, not just a bunch of status.
Derek Gregoire: Well, they understand the playbook. And even people that don’t look at finances every day understand, okay, I get this. And so, we know volatility is one aspect of a full retirement plan, Nick. So, on the topic of planning, what are the common areas of opportunity that are overlooked? So, if someone comes into our office, and has a portfolio, great. We build a safety income growth, we get them situated that some people are like, oh my gosh, this is amazing. That’s only one little piece. We’re just getting started. So, what are some of the other areas?
Nick Nelson: Yeah. So, one of the common areas, especially right now, is tax planning and tax strategies. And I think it’s obviously a common area because taxes are uncertain in the future. We’re not sure if they’re going to go up, or well, we do think they’re going to go up, but it’s the question of if and when and by how much is the ultimate question. So, I think that topic is becoming more and more common. You’re seeing it more out on the Internet and on TV in terms of commercials and just more talk really around everything. And one of the things that we look is, are there any strategies that we can implement that might put them in a better situation, whether it’s during retirement or for the next generation? And that’s something that we always look at.
So, on that topic, one of the most common right now, especially that we’re looking at, is Roth conversion strategies because if taxes do go up, it’s a way to pay taxes now, where we know taxes are, and I think of it as a defensive strategy. If taxes go up, we’re like, okay, we already pay taxes on these. We can let these defer our growth. And eventually, if we leave them in long enough, take it out tax-free as well.
Matthew Peck: And think about how much of an issue this is. I mean, I think part of the reason why it got to kind of what you were saying, Nick, is strictly because how many people out there have pretax dollars, IRA dollars, 401(k) dollars, 403(b) dollars. I mean, it’s not to say that it wasn’t a good strategy back in the day, but it’s just more the idea that when you got that write-off way back when, when you lowered your salary with that contribution as you should have done, got that free money, etc., built up your nest egg. But if your nest egg is still in 401(k) or IRA or 403(b) or 457, if it’s in those forms, chances are it is pretax dollars, which means that you have a big debt, a big liability to Uncle Sam. And so, how do you manage those taxes? And that’s basically kind of what you were talking about.
Nick Nelson: Exactly.
Derek Gregoire: I’d much rather have $2 million in a Roth than $2.5 million in an IRA. On paper, it looks better. So, what are some other areas that are overlooked in terms of planning?
Nick Nelson: Yeah. So, another common area is legacy planning. So, it’s a big one here in Massachusetts, as you guys know, because of the Massachusetts estate tax. So, for people that aren’t aware of it, basically, if your net worth is over $1 million, it’s something that you should be paying attention to because you could be paying an additional tax when you pass on assets to the next generation. And simply by implementing a proper estate plan and the proper estate planning documents, you can potentially save your heirs’ thousands, if not hundreds of thousands of dollars, in taxes. And again, that’s just one area on the legacy front.
Derek Gregoire: So, we’re looking at legacy planning as an opportunity, estate planning, tax planning, anything else that is commonly overlooked beyond just market and volatility?
Nick Nelson: Yeah, I think health care is one as well. And everyone knows that health care is expensive, but not everybody’s aware of how drastically it can impact their retirement plan, especially if they do end up running into an unforeseen expense or having to go into a home or whatever it may be. No one likes to think about that stuff, but when it comes to retirement planning, it’s very important. And we’ve seen situations where some of those problems do arise, and it can totally, drastically change the outlook of their plan.
Derek Gregoire: I heard a cool thing, a friend of the family was a CEO of an airport in Colorado. And we had some conversations recently, and he made it. He said something he knew, I didn’t even tell him. It was impactful, but I thought about it the next day because I was talking about being like him in pilots and the errors in planes and all this stuff. And he said, just like you, he’s like a pilot’s job is to mitigate risk. You can mitigate all that, make sure you have enough fuel, make sure you do your pre-check. And I was thinking about, he’s like, yeah, in our business, think about– a Vanguard study said a good advisor can add about 3% a year in value.
And really, we’re mitigating risk in the market, we’re mitigating risk in estate planning by doing proper planning so that we pay less taxes. We’re mitigating the risk of taxes going up by hedging our bets and getting some converted over to Roth. We’re hedging our bets and mitigating risk with health care by having a plan for that. And so, when you stack up all these little things, really what we’re doing is we’re trying to be a leader for our clients and to mitigate as many risks as we can. Sure, there are one-offs. There’s Ukraine and Russia battle. There’s gas and oil and the cost of fuel and there’s inflation. The list goes on and on. But our job in light of all those events, we are trying to mitigate risks all across the board, just like a pilot does when he goes in the air.
Matthew Peck: And just to add to that about kind of how we do it and who does it is the idea of having that team surrounding you because I think you need that team to both mitigate the risks, as you were saying, Derek, on the volatility side of it. But then, working with our CPA partners, and so making sure that all of our tax questions are answered. And so when we do make recommendations, they’ve sort of been reviewed and at least blessed by CPAs as well as like, Nick, your talking about estate planning so we have sort of our attorney, estate planning attorney allies.
And so, you need that in order, as you’re saying, Derek, to kind of mitigate risks, in order to mitigate all of those risks and have that comprehensive plan. You need that team because of all the different things that can happen, tons of different things that can happen. But at least, talking about confidence, when you have a conference, you know you have a team that’s working tirelessly for you, then you have as much confidence as you can and then the world at large.
Derek Gregoire: We’ve been lucky to train other advisory firms across the country and even clients that, oh, my gosh, they’re growing so fast, but the reason is we keep realizing how much planning, so much of our hiring has been around planning and helping to have a team so our clients know that we’re going to have that experience that they deserve, have the plan that they deserve. So, Nick, in the last 10 years alone, give us an idea of just the development and how the advisory team at SHP has developed and the importance of a team approach.
Nick Nelson: Yeah, yeah, it’s very exciting for me because kind of when I started out with you guys, there wasn’t much…
Matthew Peck: It was a team of one.
Nick Nelson: That’s correct. That’s a good way to put it. And I think now, our team, our Advisory Solutions team is up to about 17 people now. And it’s pretty amazing to see, and we have some exciting things in the works that I’m sure our clients will see soon. But regardless of that, I think what we’ve been able to do is just fine-tune and have more defined roles, and that allows us to be focused on specific areas. It allows our team members to be more energized and more passionate about the specific area that they’re focusing on.
So, some of those areas, like Derek was saying, includes the planning team, like having a team that’s dedicated to building the most comprehensive and best plans for our clients. Another area you mentioned earlier is also our investment committee. I consider that a part of our overall team as well, someone dedicated to make sure our portfolios are the best possible portfolios that we can offer our clients. And then outside of that, you need to make sure that there are also people readily available to speak to our clients on a daily basis and answer their general questions and let them know that they’re going to be okay and get the responses in a quick turnaround and all that good stuff as well.
On top of that, being proactive with client outreach. If we see an opportunity for a client, make sure that we bring that to their attention, or if we see a potential problem, make sure we do that same thing. So, having this team grow in the capacity that it has allowed us to do that, it allows us to create the best possible experience for our clients, and the ability, which I think is very important, is to help additional families that also could be of value to our support.
Derek Gregoire: Yeah, I think it’s like that. Did you read the book, the Ritz-Carlton?
Nick Nelson: Yeah. I like to think we model our service approach after that book. So, the book is called The Ritz-Carlton Experience, and it’s kind of co-written by a co-founder of the Ritz-Carlton Hotel Company. And I think anybody that’s been to a Ritz-Carlton Hotel knows that their level of service is, in my opinion, at least probably a little bit better than some of the other hotels that you might go to.
Matthew Peck: I can’t relate right now.
Nick Nelson: I’ve been there once as one time, just one time.
Derek Gregoire: I always say, like when folks come on board, I think you don’t realize, and this is obviously, definitely patting ourselves on our back, but I’m so proud of the team just listening to Nick talk. He knows this, think about you can hear all the stuff that goes into the clients that are listening to this into your plan, behind the scenes. You might see an advisor in front of you going through, hey, here’s a couple of things. Chances are, Nick and the team have their hands all over that plan to bring up all those situations. And if you’re working with a smaller company or one that doesn’t do the planning, no offense to that advisor, but how could they possibly bring all these things to the table, Matt? Like, how do you do it?
Matthew Peck: I don’t think there’s enough time in the day. I’ll just to add to it and sorry to continue to pat ourselves on the back, Just seeing the team of 17, they care, the people care. And that just means a lot to me because I know that any time that people or clients going through a tough time or whatever that may be, that we just know that the whole team is going to be there for them because they genuinely care, sincerely care about the client’s situation. And so, I’m sure that happens at other firms, don’t get me wrong, but that always struck me.
Derek Gregoire: One of the things, I think, just as a value-add because if you think of like a while ago, I recorded a quick webinar, it’s like 20 minutes, super easy, and it’s on really the five top planning mistakes that we see people make. And I’ll give you the Cliff Notes, it’s really, I think about the five areas Nick just talked about today. It’s not having a cash flow, an income plan. It’s not building a plan around investment and market volatility and building out those safety income growth buckets. It’s not looking at taxes as a strategy. It’s not looking at health care and the impact of what the health care situation could do to you. And it’s not looking at estate planning, especially in Massachusetts and all the taxes and probate and everything that goes into there.
And so, just as a value-add, if you want to learn more about that process because whether you’re a client or not, I just want to get a second look, it’s BostonRetirementMistakes.com. I know it’s a long one, but the goal is there to build that webinar so that people could look at it and say, okay, what am I missing in my plan? Am I missing anything? So, if you want to watch, it’s 20 minutes, BostonRetirementMistakes.com. I think it’ll help you continue the spirit of this discussion.
Nick, before we let you go, I know this has been super valuable. I mean, you do a great job of explaining the difference between portfolios and planning. Any final thoughts that you want to leave our listeners with?
Nick Nelson: I think just if you have any questions that you’re thinking about or any uncertainty with your plan, don’t hesitate and don’t wait because chances are that you could run into one of those issues sooner than you’d expect. For example, if you were thinking about sitting down with an advisor just recently and you’re retiring this summer, for example, with all this recent market volatility, it could have a negative impact on your plans. So, my advice would be, if you have those questions, just don’t wait, get a plan in place for the future.
Matthew Peck: Yeah. And just to really chime in on that because I could never imagine someone, before actually giving their notice to their boss, not crunching those numbers, not having some type of runway built out, they know what they’re doing, they know what they’re spending, so forth and so on. I mean, that’s what I tell my clients, the fact that I can’t guarantee the future by no means, but at least you’ve done all your due diligence before you went in to say, hey, boss, I’m out. You’ve done everything you possibly could, you prepared, you laid the groundwork. And I think you were saying early, Derek, it’s like obviously, we’d love to get people three, five, even seven years before their retirement, but I think just having what Nick was saying in place just allows you to kind of walk properly and confidently into the boss’s office before you do give him your notice.
Derek Gregoire: And I always joke around about being on a beach somewhere in a sunny vacation in the winter up in New England and being down south and like maybe I’m just Type A and OCD, but I’d hate to sit there and say, you know what? No one even talks to me about taxes or estate planning. I think I’m missing something, and we want every stone to be on turn.
Matthew Peck: Yeah, well, and also, what always amazes me, and it’s just strictly the fact that people, how much they need that confidence, too, because we’re all saying, but what amazes me is that I still have people that have multi-million dollars, and I’m like gosh, you’ll be fine.
Derek Gregoire: Spend your money.
Matthew Peck: Yeah, right, spend your money. Don’t worry about the market volatility, etc., but they still feel like they don’t have enough. And that’s just because of who they are, where they were raised, they didn’t have much money growing up, and they didn’t inherit any money growing up. So, they earned it in for every last penny of that. So, all I’m saying is that I just love being able to– I can never completely eliminate that from their mind because that’s how they’re wired, but at least I can say, look, Bob, Mary, whomever it may be, you guys are fine. Look at the numbers, look at how they’re played out, look at where you’re going to be on average, above average, below average. And so, at least we can help just take the pressure off of a good plan, if not eliminates, but certainly takes all that pressure off.
Derek Gregoire: And my closing thought is if you’re a pilot back to that mitigating risk, if your advisor’s a pilot who just doesn’t check the fuel gauge, doesn’t check the wings, doesn’t check the weather, doesn’t do the pre-check list, it’s like you might be okay, make it lucky and be okay, but I’d much rather have someone that write down the manual, full checklist, looks at the weather, has put the time in, checks the fuel gauge, basic stuff that seems pretty obvious, so.
Matthew Peck: Check the parachutes.
Derek Gregoire: Yeah, exactly.
Nick Nelson: Everything.
Derek Gregoire: Yeah, that’s the same thing with financial planning. So, hopefully, you found this useful. Thank you, Nick Nelson, a ton for joining us.
Nick Nelson: Thank you. Appreciate it.
Derek Gregoire: It was very valuable to you. And we’ll talk to you soon. And have a great day everyone on the SHP Retirement Road Map podcast.
No statements made during the Retirement Road Map® podcast shall constitute tax, legal, or accounting advice. You should consult your own legal or tax professional on any such matters. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk, and unless otherwise stated are not guaranteed. Our Investment Advisory Services are offered through SHP Wealth Management LLC., an SEC registered investment advisor. Insurance sales are offered through SHP Financial, LLC. Our advisors and insurance reps may offer clients advice and/or products from each entity. No client is under any obligation to purchase any insurance product.
Was this information helpful? Should we publish more like this?