Exploring the Five Pillars of Holistic Wealth Management | Episode 11

Step into the world of finance as we sit down with Alison Wealth's newest team member, Conrad Levesque, CFP®, CPA, BPC, a seasoned professional who has been navigating the intricate labyrinth of the finance industry since he was a mere 16 years old. Conrad’s journey is an intriguing one and brings a fresh perspective to our show.

Join us as we unravel the concept of holistic wealth management, a principle that has over time shaped the foundation of our practice. Listen as we bring to light five pillars that serve as the backbone of our approach and discusses how these can positively influence high net worth and ultra-high net worth families. As the conversation progresses, we delve into the crux of coordinated wealth management and the need for a more synergistic approach among professionals from different fields such as financial advisors, investment advisors, tax advisors, business advisors, insurance agent and attorneys. We will also give you a quick assessment to rank the execution of holistic wealth management in your own personal financial lives.

In the latter part of our discussion, we spotlight the value of having a personalized financial plan. With an emphasis on  the benefits of the bucket plan, our bespoke strategy designed to provide retirement income, long-term growth, and legacy planning. We also touch on the vital role of asset management and protection planning, while exploring the cost-benefit of transferring liability to an insurance company or self-insuring. Don’t miss out on this insightful episode as we uncover the many layers of wealth management and financial planning.

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The information provided in this podcast is not intended to be individual investment advice or legal advice.  The information provided is for informational and training purposes only.

Investment advisory services are provided through Prosperity Capital Advisors LLC (“PCA”) an investment advisor registered with the United States Securities and Exchange Commission (SEC). For a detailed discussion of PCA and its investment advisory fees, see the firm’s Form ADV and Form CRS on file with the SEC at www.adviserinfo.sec.gov. The views expressed herein represent the opinions of PCA and are not intended to predict or depict performance of any particular investment.

Advisory services are provided through Prosperity Capital Advisors LLC (“PCA”) an investment advisor registered with the United States Securities and Exchange Commission (SEC). Views expressed herein represent the opinions of PCA and are not intended to predict or depict performance of any particular investment.

All data provided, including any reference to specific securities or sectors, is provided for informational purposes and should not be construed as investment advice. It does not constitute an offer, solicitation, or recommendation to purchase any security. Consider your investment objectives, risks, charges and expenses before investing. These views are as of the date of this publication and are subject to change. Past performance is no guarantee of future performance.

Transcript

Speaker 1: 0:11

Hey everyone, welcome to the Complete Wealth Management Podcast. I'm your host, dave Allison. Today I've got my two colleagues as usual, conrad and David, joining us. How are you, fellas, doing today?

Speaker 2: 0:23

Doing wonderful. How are you, Dave?

Speaker 1: 0:25

I am doing awesome. How about you, David? Yeah, I'm doing great. Yeah, the weather turning up there in Boston.

Speaker 3: 0:31

Yeah, it's a beautiful 60 degrees in the middle of October.

Speaker 1: 0:34

Nice, Conrad and I were just talking. We got the 80s down here, don't we Conrad, down here in the south it's a little bit hotter.

Speaker 2: 0:43

It's not exactly football weather right now, so we'll get there Exactly.

Speaker 1: 0:47

Well, hey, I want to kick things off, conrad, I know you've been on a couple of the previous episodes now, but some of our clients, some of our followers, some of our traditional listeners, are probably like who the heck is this Conrad guy? And, of course, some of your clients that may be starting to jump on this podcast and listen and interact with Allison Wealth might be like, hey, who the heck are these Dave and David guys? And so we want to kind of bring some of that together and talk a little bit about your background. In this episode. You joining the team at Allison Wealth Management and also something that I think the listeners and viewers will find just a ton of value in, and it's this concept of kind of the five pillars of holistic wealth management. Really, you know the principles that I built Allison Wealth Management off of initially, and I know one of the big reasons David joined the team three years ago. So, conrad, share a little bit about your background, tell us who you are.

Speaker 2: 1:49

Yeah, sure, I'm happy to be here. I'll try to keep my background as high level as I can because we can go down the winding path much like everybody else. But you know, I'll start with saying I started my journey as a 16 year old in the tax industry and I want you guys to just take a step back in a pretty good way. Would you misbehave as a child a lot when?

Speaker 1: 2:10

your parents were punishing you.

Speaker 2: 2:12

Yeah, I was a glutton for punishment. I started working and somehow enjoyed myself working with clients as a tax preparer for a Liberty tax service here locally. Hey, listen, it was an awesome experience. I got to meet a lot of people and I found out that I have a passion for actually helping people right. And so fast forward 10, 12 years, I'm through college and really I'm kind of working as a in the accounting industry not as a CPA yet, but working towards the CPA license and I figured out I don't really like doing corporate accounting right, I don't want to sit behind a desk and be looking at a screen and not helping people. And so I kind of started looking at where my passion is and I've always remained kind of kept a foot in the tax industry.

Speaker 2: 3:03

I decided it's time to really push further into it and so I opened my own firm, started helping clients on the individual level and even some small businesses, and then ultimately just continue to grow and expand from there. It was always referral. It was originally designed as a side business and turned into a full time gig, right. But along that journey I really figured out that clients always come to me with about 10 to 15 questions a year, right, and they were always repetitive and I always thought why is nobody answering these questions? These are something that, if I looked at somebody that said they're a financial advisor or wealth manager, those are the questions they should get right. But they're always coming to me as the tax preparer or, at the time, CPA.

Speaker 2: 3:51

And so I started looking at what is a wealth manager, right? What's a financial advisor and what are they supposed to be doing and what do I think they should be doing, right? And so, along the way, I decided I'm going to become a CFP. I think that's a gold standard for fiduciary financial planning, right. And so I earned the CFP mark. I got my series 65, series seven, got licensed in the industry and started trying to help clients along the way. But let's kind of rewind there. Right, I initially got into the industry, much like most people. Right, you go and you're recruited by one of these. What I'm going to I'm not going to name names, right. These large insurance providers that say, hey, you should go out and sell life insurance. Right, I made my mistake, stopped it pretty quickly.

Speaker 2: 4:44

Have you tell me if you've heard that story before. It's pretty unique, right.

Speaker 1: 4:49

It is a pretty commonplace. I did not start on that side of it, I came through a different channel, but I'm definitely in the minority in the financial services industry. Those are breeding grounds of recruiting kids out of college and trying to get them to go sell their friends and family. Absolutely.

Speaker 2: 5:05

Absolutely, and so when I got into that, you know I was sold. Hey, we want to do real financial planning, I thought this is it.

Speaker 2: 5:14

This is the ticket, this is where I want to be, and I figured out they really just want to sell insurance and there's nothing wrong with that. But that's not what I wanted. And so I spent the next couple years really what I'm going to say designing and refining right, I wanted to design how I expected my clients to go through a process and then ultimately refining that to where I think it would work well for them right. And along the way, I didn't really define it as well as I should until I found C2P right, and this is going to be my shameless plug for why we're here today right. And actually, what we're going to talk about today, which is perfect, right.

Speaker 2: 5:51

I looked at it and said what do I really want to do for clients? And I want to number one, help them make good decisions financially. Number two, I want to help them accomplish their goals right. And then, number three, along the way, let's have some fun. Right. Let's enjoy life. Let's not worry about leaving millions of dollars to your kids, but eating dog food today, right, you better enjoy it along the way. And so, really, when I had the opportunity to join C2P and then further Alice in wealth management right. I found that standardized process to say these are the five pillars, this is what we build your financial house on right, and this is what we're going to do for you not just one time, but throughout time.

Speaker 1: 6:38

Yeah, and I'll share just a couple of things. When you mentioned C2P, so for those of you who don't know, c2p is a national financial services company that I founded with a couple partners about 12 years ago and we have about 60 plus offices around the country and really help them scale holistic financial services within their business. And I remember it like it was yesterday, conrad. I think the first time you and I really got to meet face to face. We were at dinner. I think we were sharing a couple bottles of wine together and I was just really impressed with your technical background. I mean that always attracts me because I'm kind of a nerd and, david, I'll call you a nerd too, because you would call yourself a nerd. I mean that was what attracted me for David to join the team is. He was just very technically capable and I thought he would bring a ton of value to our clients.

Speaker 1: 7:29

And I remember meeting you and you were the same way. I was just really, really impressed with your technical expertise and capabilities and thinking outside the box and bringing unique strategies to your clients. And I was super proud to have you on the team at C2P and our national registered investment advisory firm, prosperity capital advisors. But then when you reached out to me I think it was in like June or something I was actually in my office in Palo Alto, california, and you were like hey, is there a bigger opportunity that maybe we can partner together and I can join Alice in wealth? And you know, really kind of come and work with the clientele you're dealing with and be part of a bigger team and have access to more capabilities and really transform what we're doing to in a much more systematic and process driven way. Bring these five pillars of holistic wealth management. Like I just couldn't believe it. I remember calling David and being like I think our team's going to expand in a really good way and having you join and having.

Speaker 1: 8:31

Brittany join, of course, has been a game changer just in the short, you know, two months that we've been working together and you've been coming into a lot of our client meetings with some of our high net worth and ultra high net worth families.

Speaker 1: 8:45

You know taking that, you know what I always consider us to be that household CFO approach to really helping them manage their family finances, just like a CFO would help a business manage the business finances for the CEO.

Speaker 1: 9:03

I've always used that analogy over my career is that you know, as a person building wealth which you all are you're like the CEO of your own family, of your own company. And again, at a certain level, while you're small, while you don't have maybe much wealth, while you're just building things, you know you might be just fine to be the CFO and the CEO of your family. But once you get to a certain size, a certain amount of complexity or just limited resources and knowledge, skill set or, quite frankly, time, it's now time to go hire a CFO like Conrad I know. You know, just being a tax expert and a business advisor, you do a lot of, you know kind of fractional CFO work for companies that are looking to expand, grow, scale or exit. And again, I've always looked at what we do on the personal side, very, very similar kind of that fractional CFO that that CEO, the head of the household you know, the husband and wife, can essentially kind of outsource to us on. So, just so excited to have you on the team.

Speaker 2: 10:12

Yeah, I am as well. And listen, I I appreciate the fact that you call me a nerd. That's probably putting it lightly. I'm a. I'm a bit of a reader, so you'll find me and I think you got a glimpse right. I have about 30 open tabs on my computer. Any publication that comes through my email. I'm gonna try to pull up and read. So, yeah, I appreciate that you made me busy, conrad.

Speaker 1: 10:36

Conrad shared a screen with me yesterday and I was like how many tabs do you have open on your computer right now? It was like 30 is an understatement. It was closer to like a hundred, I think. I'm surprised your browser didn't crash.

Speaker 2: 10:49

It did this morning, so don't worry, it just took a little bit more time to crash.

Speaker 1: 10:53

Nice Well, and you know the same thing, david. I remember distinctly, like what set you apart when we were interviewing and talking about joining forces is you made a comment to me and I Could totally relate to it, because you're like, yeah, I'm the kind of guy that goes on vacation and I read tax Quate court cases on the beach, you know, instead of like a sci-fi book or a few, you know. So it was just like I was like you're the guy, we need you on the team also.

Speaker 3: 11:19

Now let's turn into instead of late night scrolling, tick-tock, it's late night reading tax court cases.

Speaker 1: 11:24

Exactly, I always hesitate. Be careful on the financial advice you get on tick-tock. I see some of the tax stuff that's posted on tick-tock and I'm like, oh my god, that's so illegal yeah.

Speaker 2: 11:34

We need five more episodes just to talk about what is wrong with tick-tock advice. Yeah, we're not gonna go down that rabbit trail today.

Speaker 1: 11:44

We're not going down that rabbit trail. Well, let's talk a little bit about stuff I think our listeners can use. I want to talk about kind of going a little bit deeper into these, these five kind of pillars of holistic wealth management. I'm gonna go kind of screen on for a second here to show our viewers a Visual that we use in our planning process with our clients. And again, this is what I really deemed to be the foundation of what I wanted to bring together for our clients.

Speaker 1: 12:11

Because what I saw in working with clients initially almost all of our clients were out of the San Francisco Bay Area. They were in tech, they were earning a ton of money, they had all this complication like restricted stock units and incentive stock options and paying 50% marginal rates between state and federal Taxation and being able to buy real estate in a hyper inflated environment. And obviously, since then we've continued to grow Alice and wealth management across the United States. We have clients all over the country. Of course, conrad, your office in the Atlanta area we're gonna be continuing to grow and expand there. I'm in Charleston, south Carolina. David's up in the Boston area now, so we really have a pretty good reach.

Speaker 1: 12:56

But what I saw was that, you know, these five pillars were Insurmountable and kind of having an efficient plan and building and maximizing wealth, whether you were in the accumulation phase of the money cycle or you are maybe getting ready to retire or stop working or at least leave your full-time job and maybe tap into that distribution phase of the money cycle. And so much of this for the Traditional consumer is not coordinated because, conrad, as you mentioned earlier, most Professionals, they operate in silos and you know what we've seen is the ultra, ultra high net worth. You know the Jeff Bezos, the Mark Zuckerbergs, the Elon Musk's of the world. They have what's called a traditional family office. That family office is a staff of team members that Only work on behalf of that family, and it's a huge amount of money to run a family office, right, it could cost hundreds of thousands, if not millions of dollars. And so what the benefit of that family office approach was is that it was a team of professionals sitting down at the table all working in In coordination on behalf of the client.

Speaker 1: 14:16

The attorney was talking to the investment advisor, who is talking to the tax experts, who were talking to the business advisors who are helping with the overall planning, advisory and strategy, and what we saw was that, for anybody else, right, if you weren't the the Titans of the world when it comes to capitalism you were not getting that coordinated approach. Your financial advisor Wasn't really coordinating with your investment advisor or stockbroker or Maybe you were doing it yourself on, you know, e-trade or Schwab that wasn't all being coordinated with the CPA or tax advisor, that wasn't being coordinated with your insurance advisor and, last but not least, it certainly wasn't being coordinated with your attorney who drafted maybe your will or your trust or other legal documents like LL C's, to make sure all of these things were really working in harmony and that they were being kept up to date. The up-to-date part is the big issue, because what we've seen is you could have all of this stuff put in place Three, four, five years ago, but two big things happen. Number one, your life changes and number two, certain laws change. Right, if you set up, let's say, a living, revocable trust five or six years ago, there's a good chance it's out of date, because we've seen two massive laws Secure act 1.0 and secure act 2.0 that Dramatically changed the way we use trust, and so that's just one example of you know, if your legacy planning, your estate planning isn't well Coordinated with your asset management, your tax management, your protection planning in your financial planning. You may have gaps in your plan and not even know it. You could pay excessive taxes, fees or just have lack of efficiency as you're building and growing wealth. So we want to dive into these and kind of talk through some common things that we see with clients that maybe they're doing well, that you could take away Maybe they're not doing so well, might give you an action item to kind of revisit your own plan and just kind of some of the value of Working with a holistic wealth management offering.

Speaker 1: 16:37

And I know, conrad, you know just kind of looking at this visual here, this was big for you because you know I think like being a CPA and David and I are both enrolled agents as well, which is the highest designation that the IRS awards but you know it really focuses a lot more on Individual income taxation, where the CPA is like the mecca of taxes, right, like you can do public accounting, you guys are individual tax experts, you can do audit, but you were like Excelling at tax management. You know that was one of the attractions of you joining our team is. You know you know more about taxes on your little finger. Then you know a lot of tax professionals know over their whole career of experience and so you really had that pillar down pat. But you know you were looking to expand your team and your resources on asset management, financial planning, legacy and estate planning, protection planning.

Speaker 1: 17:33

So talk about kind of your experience coming through the industry and what you've seen, you know just in the last two months of joining Allison wealth and how you think this can Help some of your existing clients, whether you know it's just a tax only client that maybe has entrusted you for tax planning or tax preparation and you know We'll talk about the difference of tax management from tax prep and tax planning in just a few minutes here. But you know, just love to hear some insight from you on this, absolutely you know, and in seeing this, this visual to me is so powerful, right?

Speaker 2: 18:10

This is really why I joined C2B and Allison. Well, when you look at these five things right, look at and look at what's happening, right, it's like a dial you and you're turning it. Let's go the opposite way. What's unwinding, what happens right, and this is what I've seen so many times, right, when you unwind it, you have the individual pieces that don't work together, and so a lot of times, what I'll have is somebody say hey, you know, I want to do this, what should I be doing? Well, here's your tax advice. That may not be good from an asset management perspective, right, it may not actually be good from a legacy planning perspective, but from a tax perspective it works really well. Does that mean it's good for the client? And the answer is no, right. The other part of that is I can give really, really good, valuable advice, but if we're, if you've ever played the game telephone, you know by the time you get to the fourth and fifth person, what's actually happened. It doesn't work, right. And so I think what you can do is take, replace holistic wealth management.

Speaker 2: 19:09

Clients can look at this and say that's me, that's me and I have all of these things surrounding me and I have a team that works together to actually accomplish this From a tax management perspective. I see it all the time, right, clients come into my office and say, hey, should I be doing this? And I always tell them, hey, I can tell you if we haven't gone through, really, the bucket plan. I can't tell you if this is really good or bad for you, but I can tell you whether it makes sense from a tax perspective. Right, and I hate having to do that because I wish every client had a bucket plan that we can pull up and say this is really good for you, we should be doing this and we should do more of it. Or this doesn't accomplish the fact that you want to pass on these assets to your kids or grandkids, right, it's going to be the exact opposite. So I think seeing this is huge, but I think clients, as we start to unwind it and talk about it, I think we're going to see why.

Speaker 1: 20:10

So I just had a visual. So I'm not the most handy person in the world, but I just had to build a bench and some storage in my garage and I went and bought a circular saw. Conrad, I know you're a handy person, so you're just going to laugh at me here, but it reminded me when you just said that of if you put the blade on the circular saw the right way, it's going to cut a really efficient cut through the piece of wood. But imagine if you put that saw blade on backwards right, it's not going to be very efficient. And when we look at holistic wealth management, this is a visual of kind of putting that saw blade on the right way.

Speaker 1: 20:49

Financial planning as the foundation leading into asset management. We all want to grow our investments, earn the best rates of return we can, given the right amount of risk we're willing to take. We want to pay the least amount of taxes legally possible, not just in our lifetime but upon our passing as we transfer our money to that next generation. We want to make sure we have proper protection planning so that all the what ifs in life are covered. And, last but not least, we want to ensure legacy planning is set up, because none of us like to think about our own demise or passing, but we need to ensure that when we're no longer here, our money goes to our intended beneficiaries under the set of rules that we want them to abide by right. We don't want unintended beneficiaries like the IRS, the Internal Revenue Service, taxes, state taxes or, even worse in some cases, probate court, where assets can get tangled up for months and months and months and it can be extremely costly. And so just kind of a great visual as you're talking about it, and I want to just jump into the bucket plan. You mentioned that terminology and, for those of you who aren't familiar, that is the foundation of our financial planning process. So for every new client, when they decide to work with Alice in Wealth Management, you can see the bucket plan up on the screen If you're watching right now. If you're not, I'll verbally just walk you through this. But this is really our client on boarding to help really deliver holistic planning that is in your best interest.

Speaker 1: 22:26

See, at Alice in Wealth we are all fiduciaries, meaning we are legally obligated to serve your best interest and your best interest alone, not sell products, not represent a certain company, but really to advise, and one of the things that I've really distilled in the culture of the company and it's the most important thing to me is we're educators. We educate you on the trade-off, because personal finance is more personal than it is finance. There's not two people that can make the same decision and have the same outcome, and so what we do with the bucket plan is we start with an introductory meeting. It's called our Discover Meeting. It's all about where you want to go, learning about you, your goals and objectives, your current finances and taxes and your priorities and what services we might need to prioritize on your behalf to deliver to you, to start to lay the foundation for a really solid financial plan.

Speaker 1: 23:25

From there we move into our design phase. This is where I lean on David a lot, and Conrad, bringing your expertise in, because this is where we start to crunch the numbers. Analyze the data, organize your financial life, understand your net worth, assess your cash flow, review your taxes to see if there's any areas of optimization or improvement, not just today, but your future lifetime taxes. Analyze the risks that you're taking both in your investments as well as liability risks in your life Simple things like understanding if you have an umbrella policy. Again, I have little kids, I have a swimming pool, they have friends over all the time. Boy, is something as simple as an umbrella policy very, very important. We take a look at all of those risks that you could be faced with and we focus on tailoring a customized plan for you.

Speaker 1: 24:23

Then, in step three, we deliver that customized bucket plan to you. The foundation is your assets, really simplifying them into three buckets and now, soon and later. The now is the money that you may need or will need in the next year or so. The soon bucket is the money you may need or will need in the near term, maybe the next three, five or 10 years If you're retired or about to retire. That soon bucket is designed to provide you that reliable retirement income in the first phase of retirement. Then, of course, the later bucket, where we have long-term growth and legacy planning. This is where we want to accelerate the growth of our money, because we know we have a long time horizon before we're going to need to tap into it. It's also where we look at legacy planning, not just for the kids, the grandkids or the charities, but, if you're a married couple, most importantly for the surviving spouse, because Conrad and David, we know as tax professionals what happens when one spouse passes away. What is it, conrad? Huh, taxes go up and taxes go up right.

Speaker 1: 25:33

Taxes go up, you go from married filing jointly to a single filer, and then not only that, for a retired couple, social security could go down, because you would lose the lower of the two, and so we need to make sure there's a plan in place for that. So we finalize your bucket plan. We align your investments with your market volatility tolerance how much risk you actually want to take. You know right now, the last three years have been a tremendous test of volatility. The markets have been all over the place, and so, again, it's ensuring that you're taking the right amount of risk. But not only are you taking the right amount of risk, you're actually getting compensated an appropriate return For the amount of risk you're taking. We'll look at optimizing your cash flow. If you're working, it's figuring out how to optimize your cash flow for an accumulation plan for the goals that you have in life. If you're going into retirement, it's an optimized retirement income distribution plan. How do you take the right amount of money out of the right account so that you could maximize your purchasing power in retirement, your reliable income in retirement and, ultimately, minimize your taxes? And we lay out all those solutions and we educate you on them and we lay out a transition and implementation plan to get you from where you are right now to how you should be, based on our expertise. And then, last but not least, step four is our dedicated service and support. This is where you are now an active wealth management client. We're here to provide Continual, active plan management, because this is not a set it and forget it and put the plan in a drawer and let it, you know, pile up dust. You're gonna get our team for ongoing advice, proactive communication and education and really just the Continual focus on these five pillars of holistic wealth management. And so that's just a quick overview of the bucket plan, as Conrad mentioned, because, again, you know, sometimes we'll use terminology like the bucket plan, and so I thought it'd be good to spend five or six minutes there just explaining what that process actually is when a new client comes on board with Alice in wealth, so that then we can have all of the foundational information to actually Optimize these other areas.

Speaker 1: 27:57

Right, that was financial planning. Right there, understanding your goals, your objectives and how to get you there in the most efficient manner. David, you know I'd love to hear from you here, because you've brought some great perspective that, like, I think the industry is a little bit Backwards where you know, the financial services industry is kind of set on Selling investments first. Right, they look to, hey, let me be able to manage your money, let me buy, let me sell you this product or this vehicle to put your money into. And they do that without really kind of diving into financial planning. And you know, do you have any kind of insight into? You know, when you establish that plan first Even though maybe it's a little more time consuming to go through than just buying an investment what that really does kind of on the back end of helping you expedite achieving your goals and objectives.

Speaker 3: 28:51

Yeah, and just to kind of take a step back is I love how you laid out the whole Four-step process and how it goes through, but one question I always like to ask myself or ask, ask clients, is do they have a well-defined Strategic financial plan? Is it simple, easy to understand, is it written down and is it up to date? That's the key one. And, dave, what you were mentioning is is it, how do these integrate? And and what's? Is it an investment?

Speaker 3: 29:20

First approach as it attacks first approach and, as we've mentioned before, they really interplay with one another and we've seen it many times where we've come With a new, new person who comes in and they'll, they'll come in and they'll say we have these investments. We don't know why we have them, we don't know what they're doing, we don't know if they fit our situation, if they're, they're tax efficient, we just know they're there. We haven't touched to touch on them in the last, however many years. It could be one, two, three, four, five, and that gets back to that last point Is it up to date? So, even if you do have a financial plan, if you set it into place one time, is it up to date, is it current? And that's one thing that I really like about this integrated approach is that, as we go through each year, each quarter, whenever we have these reviews, we can always update and continually make adjustments to the plan.

Speaker 1: 30:10

Yeah, I would say for everybody listening you know, grab a pen and piece of paper, except for if you're driving right now I know that's where I normally listen to my podcast but if you have a pen and a piece of paper, write down that first pillar financial planning and Score yourself on a scale of one to ten, which means you know one is you don't have a plan at all, right, you're just flying by the seat of your pants. A ten is Everything David just mentioned. Do you have a well documented, simplified plan? You understand all of the investments and why you have them and what their purpose is and when you might access them and what your exit plan is, and so, again, that's a ten. A one is you have nothing.

Speaker 1: 30:56

And I just kind of close out the financial planning section with. It's like going on a cross-country journey. If I was going to drive from Charleston, south Carolina, to my Palo Alto California office which I would never want to do I Would certainly want a GPS that showed me Directionally the right way to get there. Now, could I take detours along the way? Of course I could, that's life. But I still want that plan that helps me directionally get there the most efficient way, or else I'm going to be zigzagging all across the world, and so, again, that's exactly what a financial plan does for you. Any additional comments, conrad or David, on the financial planning aspect? Before we jump into pillar number two?

Speaker 2: 31:44

Listen, I think the most important thing that we can reiterate and you've said it twice, I'm gonna say a third time I what's the science? Yeah, here's seven times before it actually sinks in, maybe we should just all say it another time is Is it up to date? I can't tell you how many times I've had clients come in and say hey, you know, I've got this will great. When's it? When? When's the last time it's been updated? Oh, it was updated just a couple years ago, 1993, that's not a couple years ago. What's, shane, since then? You got married. Yet kids Start a business, close business, all of those things happen in the in the meantime. So keeping something out to date and kind of creating as it is, this is active management. This is not a creative once and hope for the best and hope it stays there.

Speaker 1: 32:30

Well, and I would say this too, I hear from people yeah, I had a financial plan so and so, developed it for me, but so and so might have only been an expert in one discipline like investment management. Right, and that's one of the things I've been really proud of of our team, too, of advisors. We have CFPs. All of us do certified financial planner, gold standard and personal financial planning. We're all investment advisor Representatives under an SEC registered investment advisory firm, so we have expertise on investment advisory solutions. We're all insurance licensed so that we could look and analyze the risks or protection products to optimize. We're all tax experts.

Speaker 1: 33:14

Conrad, you're a CPA, david and I are enrolled agents admitted to practice before the IRS, and All of us have a deep expertise in legacy planning and estate planning. And while none of us are attorneys, we have an attorney, a couple attorneys, depending on what our clients need that come into the planning process and work with our clients on the drafting of legal documents. And so again, you got to really challenge the advisor if you're working with somebody already on what their expertise is, because if you know, again they're a hammer, everything's going to look like a nail and the plan might not actually account for all of these different areas that are so important to your personal financial situation. And so let's let's chat a little bit about asset management. You know, this one, I always say, is kind of the no-brainer, because the goal of asset management, in my opinion, is just to earn the most amount of money that we can write. We want to maximize our performance, but Do it within the confines of the amount of risk that you're personally comfortable with taking. I had a mentor this is going to be kind of gross, but he used to say no, two people can eat tacos before riding a roller coaster and have the same outcome, and the stock market is the same way, right? Just because you might want to try to earn 10% annualized returns and that sounds great you might not have the stomach for that type of volatility, because to be able to earn 10% annualized returns, you might have to see your account balances fall by 50% or more. If we have a big black swan event like the great financial crisis or the pandemic of 2020, the dot-com bubble of 2000 and 2001 or, quite frankly, some of the volatility we saw last year in the markets with the Fed and their Historic rise in interest rates to try to fight inflation, and so Investment management is not a cookie cutter one-size-fits-all approach for everybody.

Speaker 1: 35:22

It's very individualized and customized, and not only for optimizing performance. But it's not just about what you make, it's about what you keep. And, conrad and David, what can be one of the biggest Errosions of wealth when it comes to folks that have non retirement assets and they're thinking about investing it? Whether it's the stock market, the bond market, real estate, it doesn't matter. What can erode wealth quicker than anything? Tax Taxes right.

Speaker 2: 35:57

I mean taxes are likely your, and both people don't realize because we pay them so far over time. Taxes, if we calculate true impact, is going to be your biggest expense in what 99% of people's lives? That's a massive amount. Why not focus on that? I want to take a step back, though, and really, outside of taxes, let's take a look at what asset management really is right. Assets aren't only market investments. How many times have we advised clients on real estate? How about small business holdings? I have so many clients that look at it and say, yeah, I know I need to have passive income. How do I deploy assets in the market? But I know my industry. I've started a business, I've run it successfully and sold it. I want to go buy, build and sell those assets right.

Speaker 1: 36:53

But I need to have 100%. I mean, I look at myself. My biggest assets are my two businesses that I have Allison Wealth Management and C2P. Honestly, if I had a financial advisor I do some people on this team here but if I had an outside financial advisor and they weren't incorporating or advising or helping me with strategy and direction on my two biggest assets, I'd be looking for a new advisor pretty quickly, right, and the same goes with your home equity. That's an incredibly valuable asset that needs to be optimized within an overall retirement and holistic financial plan.

Speaker 2: 37:31

Right, yeah, david, I think you've sent it out to one of the clients. Last you ran an analysis on a rental property, right? And this person they're not a rental management company, but talk through some of the decisions that you actually looked at and how to say, hey, is this a good thing or a bad thing? Right now, it's a very valuable conversation we can have that clients can probably understand.

Speaker 3: 37:55

Yeah, I mean and just from a high level, you look at it like any other investment is what is the initial outlay, what's gonna be your yearly income and what's gonna be the overall return on investment when you're through with this property? So you can take any asset, whether it's a rental property, an alternative investment, traditional stocks, and say what is the true cost of having this and what's the true risk and what is your expected outcome, and then you can take and look at it and say is the risk worth the reward of this for any investment, Not just your traditional assets that you would buy in the stock market, but, like you said, real estate or anything else.

Speaker 2: 38:34

Yeah, and for all my clients listening, I have to tell you this is exactly why I was so excited to join House wealth. Most of the time I hear people talk about their advisor that shies away or says we don't do that, we as a team lean in and say we're gonna figure it out.

Speaker 1: 38:52

Yeah, I mean I share. When it comes to assets, our number one goal is helping our clients maximize their wealth, and there's a lot of ways to do that. There could be stock market assets, there could be bond market assets, there could be real estate assets, there could be private equity assets, there could be life insurance assets, right, and so there's a lot of different ways to optimize somebody's financial situation. Let's transition over to tax management, and I know we spoke about taxes a little bit, but when I think of tax management, there's a big difference between tax preparation, tax planning and tax management. So tax preparation is the scorecard. It's if you're a golfer, when you're in the clubhouse adding up your score and seeing how well you did, but you can't do anything at that point. There's very little strategy that could be implemented after the clock strikes midnight on December 31st. It's a use it or lose it tax code, and so tax preparation is necessary.

Speaker 1: 39:53

It's like if I were gonna go build a home, the first thing that I would do is I would hire an architect to design a blueprint. That's a service. I pay the architect. I'm doing it right now for a project we're working on in our backyard. The architect charged me a fee. They're gonna design and write up the blueprint. That's very much like tax planning. You could hire us at Allison Wealth Management for a tax plan. It's traditionally a one-time event. Hey, I have this big situation, I'm gonna sell my business. Help me think through this tax plan. We'll design a blueprint, we'll deliver it. The next step is implementation, though. Once I hire that architect and they design my blueprint, now I need somebody to go build it for me and do it. I'm gonna hire a builder I already have one and they're actually gonna take care of the construction, the building, the implementation and the upkeep of the renovation that we're gonna do.

Speaker 1: 40:53

The third component is the inspector signing off to make sure everything's up to code. That's like tax preparation just signing off to make sure it's up to code right. Tax planning is like the architect, tax management is like the builder, and then tax preparation is like the inspector. Now, we're a little bit different at Allison Wealth in that we offer all three of those under one roof. We're CPAs and enrolled agents. Of course, we can do the tax preparation that's the least fun side of it but we engage in a lot of tax planning specifically for clients that have big one-time events that they just need an expert to help them guide on the right decision.

Speaker 1: 41:36

Then, of course, our biggest area of focus, and where I feel we provide the most value, is tax management. There's three areas of tax management how do we maximize your tax situation each and every year? How do we maximize your lifetime tax situation, meaning, how do we get the most value out of your wealth with paying the least amount of taxes legally? And then the third is upon transfer, because if you've been successful at building wealth, there's estate taxes that you could be subject to Now. Today they're only for our clients, over 24 to $25 million, but in 2026, that is set to sunset and get cut by half, and so 2024 and 2025 are some of the most important years to get your estate in order for transfer tax.

Speaker 1: 42:30

And that really integrates with legacy planning because, again, I know for my legacy that I wanna live, leave to my family. I don't want the government to be part of that. I wanted to go to my three little girls and other charities and causes that are important to me, but not to the IRS. And when it comes to legacy planning and tax management upon your passing, there's three places your money can go. There's your family, there's charities that are important to you, and then there's to taxes, to IRS, and you always have to pick two of the three. So is it your family and charities? Is it your family in the IRS or is it charities in the IRS? And these are the decisions that we help clients think about, because news flash, if you pass away, it's too late to make any of these decisions. You're going on the government plan at that point and they're gonna try to take as much as they can.

Speaker 2: 43:28

I have someone very unfortunate what I'm gonna call horror stories, right. And there's one recently that I have a client that his catalyst, unfortunately, was what caused his passing. He decided that it was time, after getting diagnosed with a blood disorder, that he needed to really do some financial plan. Right, he wasn't working with anybody and his estate was not in good order, hadn't been updated in 25 years. Well, what, simply? What happened was he started a business that grew to a 20 plus million dollar valuation in that time, right. And so we started the process. We literally went through the first Discover meeting and he passed away, right.

Speaker 2: 44:10

And so we're now scrambling trying to figure out well, we've got this bomb that just went off, how do we address it? Right. And then the remaining spouse how do we now mention that 24 to 25 million? Well, that's now cut in half, right. Even if we roll forward a spousal exemption, we still have a problem. So we better start planning today, because in 2026, if we don't do anything right, think about what the government's going to get if we don't really involve charity Millions of dollars of that business in that estate. And so I think that to me, I've got a couple of those unfortunate stories where planning was not done timely 100%, and I want to show the importance of how these three things integrate together.

Speaker 1: 45:01

So again, financial planning rank yourself one out of 10. 10 is the best one. You need some work. Asset management all of your assets, not just your stock and bond portfolio or your 401k. Rank yourself or your advisor. You're currently working with One out of 10. Tax management helping you maximize your wealth and minimize your taxes each and every year your lifetime taxes and, ultimately, the potential transfer tax. Rank that one out of 10. Protection planning is the next one.

Speaker 1: 45:37

This is for all the what ifs in life, and it's not just insurance, right. There's core insurance that I think is very important for everybody. If you're a high income earner or the wage earner and provider for your family and you have a young family and you're not financially independent and wealthy, life insurance is critical, right? If you were to pass away, I always joke and say if the Budweiser truck was driving down the street and ran you over, how much money would you want your family to sue Budweiser for? Well, how you think about that is what was kind of your human life value If you were to continue to work for the next 20 or 30 years. That's your human life value. That's what you would want your family to sue Budweiser for. That's probably the amount of life insurance coverage that you should have, if you're really worth that much. Now you could dial it back and say, yeah, but you know what? I don't need that much. I just need enough to make sure my family can live the lifestyle that we wanted them to live had I been around and that's a fair statement as well.

Speaker 1: 46:43

There's disability insurance. If you were to become disabled and not be able to go to work, how do you make sure the paycheck comes in? There's property and casualty insurance. I have a boat. I have boat insurance if I were to do something out on the water. Of course, we have cars. We have car insurance, we have homeowners insurance and we have an almighty umbrella policy that protects us for a lot of things. That is incredibly cheap. My umbrella policy for $5 million of coverage is less than $600 a year. So these are things that are no-brainers. But there's also protection planning around things like market volatility. There's portfolio insurance. We have investments that can provide complete downside protection so that if the market crashes, you don't experience those losses.

Speaker 1: 47:31

There's protection planning against longevity risk. Some people are worried what if I live into my 90s or hundreds, or even later? How do I ensure that I don't run out of money? Well, there's protection planning for longevity risk. There's long-term care planning right, the big unknowns of healthcare and retirement and the things that traditional Medicare doesn't cover, and so protection planning encompasses all of these different things together to be able to analyze and mitigate risks. Because there's only two ways you can do this you either self-insure or you shift that liability to an insurance company for a cost, and you need to weigh that cost-benefit analysis For some people.

Speaker 1: 48:19

They don't have the stomach to self-insure.

Speaker 1: 48:22

They'd rather carve off a small piece of their portfolio or their income for the shifting of liability.

Speaker 1: 48:30

For my house, I have homeowners insurance because I don't think a fire is going to happen, but boy I know, if it did, I would certainly want an insurance company to be able to cover the cost of rebuilding this house. And so those are just examples of protection planning and how they fit into a financial plan, how they fit into your asset management, and we didn't even discuss but there's a lot of benefits from a tax perspective of some of these things, like life insurance in an estate plan, because the biggest purchases of a life insurance aren't somebody who's looking to replace lost wages If a wage earner passes away. It's the ultra, ultra wealthy who are looking at creating dynamistical, tax-efficient wealth, because life insurance is the only product that can pass on to the next generation income tax-free as well as estate tax-free. And so these are all the things that we think about in combining tax management, asset management, protection planning and legacy planning. Fellas, anything to add on protection planning as we go to kind of land the airplane here.

Speaker 3: 49:40

I would just go back to that question Is your protection planning up to date? It changes year to year and I can't tell you how many times we've gone through and it's not. Do you have protection planning? Is it up to date? Because the rates change every year for some products, so does a landscape, that's a great point.

Speaker 1: 49:59

I just fired my property and casualty agent because I was frustrated they weren't proactively updating my policies. I shopped it around. I found a new company, independent Property and Casualty Brokerage, that ended up saving me $4,000 a year on my homeowners, my auto, my boat, my umbrella and my personal liability insurance $4,000 a year and improved my coverage. And the other company was just being lazy. Right, they knew I was a customer so they weren't proactively doing that. And so again, we don't do property and casualty in-house, but we help you coordinate that with the right experts who can understand coverage in your state, because that is a very state-specific thing.

Speaker 2: 50:48

Clients in California might have earthquakes, we here in Charleston, south Carolina, have hurricanes and floods, so let's I'd like to add one more thing that we also do and we did it recently with a client is talk through business liability right, the use of LLCs or escorts or whatever structure. How do we separate liability so that assets that are personal stay personal and that are business stay business and they don't affect each other?

Speaker 1: 51:17

Absolutely. And then the last but not least of the five pillars. So go ahead and rank yourself on protection planning, one through 10. The final pillar is legacy planning. Legacy planning for this surviving spouse, if you're a married couple. How do we protect their lifestyle? How do we protect their purchasing power? How do we continue to draw assets in the most efficient way for their supplemental retirement income? How do we deal with, maybe, a lost pension or social security? But also legacy planning for that next generation. Right Asking those simple questions of when you're gone, where does your money go, who's in charge and what are the rules?

Speaker 1: 52:01

Where does your money go, who's in charge and what are the rules? And there's a lot of strategy that you could think about while you're alive that help really direct and achieve your goals and objectives. One of the exercises I personally do and I think this is incredibly important for any business owner is every year I kill myself off. Not really I'm still here, but every year I hypothetically kill myself off and I say where does my money go, who's in charge and what are the rules? Who's the trustee of my money? In this case it's my older brother. He's going to be the fiduciary to make sure that the trust is invested and managed and distributing the right amount of money for the benefit of my three children. What happens to my businesses? Who's going to be put in charge? Who's that next succession? Who's going to be able to make sure all of our clients are served and that the business carries on its goals and its objectives? And so these are things that, again, I would say if you're working with a big wire house or an investment advisor, these are not the things they're typically doing and these are the conversations we're having with our clients all day long in helping be that household CFO or that fractional CFO in their business.

Speaker 1: 53:22

And I'll just close with this from my perspective, one of the biggest benefits that we have the amazing fortune of at Allison Wealth Management I could speak for myself, conrad David is we get to see what's going on in the lives of other very successful families who are dealing with these same issues. And while we can't prescribe a one size fits all answer, we can help educate you on the tradeoffs of the decisions that are in front of you and I want to share with you. Hey, we had another family that went through something similar. Here's what they did, here's what worked. Here's what didn't work. Here's how it changes a little bit based on your situation, and all we do is help bring perspective, and that perspective could mean a huge, huge difference in the outcome and in your total wealth and what you're able to do to achieve your goals and objectives throughout your lifetime. So, conrad, again, I'm so excited for you to be on the team here. David Conrad, any kind of words of wisdom as we close out here?

Speaker 2: 54:29

No, I think you landed the plane brilliantly with with legacy planning out. Well, we could probably spend a whole episode on that alone, I think. For today, I just want to close with I'm excited to be here, I'm excited for what we can do as a team, and I've, for the first time in a long time, really, really look forward to coming back into work every day and learning. I think it's a great thing. We're going to do really good things together.

Speaker 3: 54:57

Yeah, I'm really excited to have you on the team, conrad, and looking forward to continuing to grow.

Speaker 1: 55:02

Yeah, all right. Well, don't forget, subscribe to our channel here. Don't miss an episode. Follow us on YouTube. Follow us on social media. We're always putting out content, even if it's not the right time for you to hire a holistic wealth advisor. We put out tons of content blogs, podcasts, social media posts that can continue to help bring value to your situation, and we'll see you on the next episode.

Speaker 4: 55:53

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