1 00:00:15,396 --> 00:00:32,316 Speaker 1: Pushkin. I'm Jacob Goldstein, and this is a special bonus 2 00:00:32,376 --> 00:00:35,756 Speaker 1: episode of What's Your Problem? My guest today is Christine Chase. 3 00:00:36,276 --> 00:00:41,156 Speaker 1: Christine is a vice president, financial consultant at Fidelity Investments. Also, 4 00:00:41,296 --> 00:00:44,036 Speaker 1: I should say that today's show is sponsored by Fidelity. 5 00:00:44,756 --> 00:00:47,476 Speaker 1: Christine's problem is this. How do you help people come 6 00:00:47,516 --> 00:00:50,996 Speaker 1: up with financial plans that address their changing priorities and 7 00:00:51,076 --> 00:00:53,816 Speaker 1: complex needs? I was curious to learn the kinds of 8 00:00:53,836 --> 00:00:56,676 Speaker 1: things that Christine helps her clients figure out and to 9 00:00:56,716 --> 00:00:58,326 Speaker 1: see what I could learn from her that might be 10 00:00:58,366 --> 00:01:01,126 Speaker 1: helpful for people like me, people who don't have a 11 00:01:01,186 --> 00:01:05,086 Speaker 1: financial consultant but are trying to plan for the future. Christine, hi. 12 00:01:05,646 --> 00:01:06,266 Speaker 2: Hi, Jacob. 13 00:01:07,086 --> 00:01:09,586 Speaker 1: Thanks for coming on the show. I thought it would 14 00:01:09,626 --> 00:01:13,566 Speaker 1: be helpful to do kind of a hypothetical here where 15 00:01:13,586 --> 00:01:16,346 Speaker 1: we talk about what it's like when a new client 16 00:01:16,386 --> 00:01:18,846 Speaker 1: comes to see you for the first time. That way, 17 00:01:18,986 --> 00:01:20,566 Speaker 1: you know, we can talk through some of the big 18 00:01:20,626 --> 00:01:22,846 Speaker 1: themes that tend to come up, the main problems people 19 00:01:22,886 --> 00:01:24,946 Speaker 1: tend to be thinking about, things they're not thinking about 20 00:01:24,986 --> 00:01:27,246 Speaker 1: but maybe should be, that kind of thing. And so 21 00:01:27,266 --> 00:01:29,706 Speaker 1: I wonder, would it make sense for you to pick 22 00:01:29,776 --> 00:01:32,376 Speaker 1: a kind of hypothetical client that we could talk about? 23 00:01:33,516 --> 00:01:33,716 Speaker 3: Sure. 24 00:01:33,736 --> 00:01:38,056 Speaker 2: Yeah, I think that's a great idea. Maybe someone... potentially. 25 00:01:37,636 --> 00:01:41,296 Speaker 3: Just got promoted maybe into the C-suite and maybe their 26 00:01:41,316 --> 00:01:43,756 Speaker 3: financial picture just got a little bit more complicated. So 27 00:01:44,216 --> 00:01:47,476 Speaker 3: maybe they're finding or trying to find a financial planner 28 00:01:47,496 --> 00:01:48,496 Speaker 3: to help them get organized. 29 00:01:49,156 --> 00:01:51,756 Speaker 1: So what's it like? Somebody's walking in, you've never met 30 00:01:51,796 --> 00:01:53,536 Speaker 1: with them before. Just like briefly, what is a first 31 00:01:53,556 --> 00:01:54,016 Speaker 1: meeting like? 32 00:01:54,816 --> 00:01:56,426 Speaker 3: So in that first meeting, I really just want to 33 00:01:56,476 --> 00:01:58,986 Speaker 3: get to know this person, right? What matters to them? 34 00:01:59,206 --> 00:02:01,846 Speaker 3: What are their goals and what do their finances look like? 35 00:02:02,226 --> 00:02:04,866 Speaker 3: So I'm asking about their family, who's important to them, 36 00:02:05,436 --> 00:02:08,866 Speaker 3: I'm asking what the goals are, short, medium, long term. 37 00:02:09,386 --> 00:02:14,006 Speaker 3: I'm asking about their finances, income, expenses, assets, liabilities, and 38 00:02:14,186 --> 00:02:17,426 Speaker 3: also asking about them as an investor, understanding their strategy 39 00:02:17,516 --> 00:02:19,776 Speaker 3: up until now, how they feel about it, how they're 40 00:02:19,796 --> 00:02:23,256 Speaker 3: feeling about risk, and also a little bit about what 41 00:02:23,296 --> 00:02:26,266 Speaker 3: their estate plan and what their insurance planning looks like 42 00:02:26,306 --> 00:02:26,546 Speaker 3: as well. 43 00:02:27,426 --> 00:02:31,466 Speaker 1: So basically everything. You're asking basically everything. And I'm sure 44 00:02:31,506 --> 00:02:33,686 Speaker 1: it varies from person to person. But are there sort 45 00:02:33,706 --> 00:02:36,216 Speaker 1: of quick wins you often see? Are there common things 46 00:02:36,236 --> 00:02:38,616 Speaker 1: where you look at someone's kind of financial picture and say, oh, 47 00:02:38,696 --> 00:02:40,116 Speaker 1: here's a thing we can improve right away? 48 00:02:40,636 --> 00:02:40,856 Speaker 2: Yes. 49 00:02:40,916 --> 00:02:43,416 Speaker 3: I'd say two of the biggest things I noticed right 50 00:02:43,456 --> 00:02:46,956 Speaker 3: away are in an investment portfolio, a lot of times 51 00:02:47,026 --> 00:02:48,706 Speaker 3: people lack diversification. 52 00:02:49,086 --> 00:02:51,406 Speaker 2: And that could be stemming from a number of issues, right? 53 00:02:51,446 --> 00:02:54,466 Speaker 3: Whether it's growth in the market and they're concentrated in 54 00:02:54,486 --> 00:02:56,546 Speaker 3: certain parts of the market or they've just never gotten 55 00:02:56,586 --> 00:02:59,786 Speaker 3: exposure to international or fill in the blank. So we 56 00:02:59,806 --> 00:03:02,046 Speaker 3: definitely want to diversify and take any sort of undue 57 00:03:02,106 --> 00:03:05,196 Speaker 3: risk off the table while still positioning them for growth. 58 00:03:06,016 --> 00:03:07,796 Speaker 3: And the other thing I tend to see is a 59 00:03:07,916 --> 00:03:12,256 Speaker 3: lack of tax efficiency planning in the portfolio. So that 60 00:03:12,296 --> 00:03:16,106 Speaker 3: can look like people are not utilizing tax advantaged accounts. 61 00:03:16,606 --> 00:03:18,146 Speaker 2: They might have a. 62 00:03:18,166 --> 00:03:23,506 Speaker 3: Taxable portfolio that's incredibly inefficient and they're paying 1% or 2% 63 00:03:23,506 --> 00:03:27,046 Speaker 3: on their taxable assets every year when they could be 64 00:03:27,106 --> 00:03:29,626 Speaker 3: moving things around and being more intentional about what they 65 00:03:29,726 --> 00:03:30,606 Speaker 3: hold in that account. 66 00:03:31,226 --> 00:03:33,886 Speaker 2: So that bleeds into asset location. 67 00:03:34,086 --> 00:03:35,846 Speaker 3: That's where we start to take a look at what 68 00:03:35,946 --> 00:03:39,836 Speaker 3: types of securities we hold in which accounts. We might hold, say, 69 00:03:39,856 --> 00:03:44,036 Speaker 3: your bonds or international in a tax-advantaged account and hold, say, 70 00:03:44,116 --> 00:03:48,816 Speaker 3: long-term equities in a non-retirement account and then prioritize tax-loss harvesting. 71 00:03:49,216 --> 00:03:50,616 Speaker 2: When and where we have volatility. 72 00:03:51,206 --> 00:03:54,366 Speaker 1: I have to admit, I actually made a mistake like 73 00:03:54,426 --> 00:03:56,626 Speaker 1: that in my life. And it's sitting there in my 74 00:03:56,666 --> 00:03:58,786 Speaker 1: account now. And I should have known better, right? Like 75 00:03:58,846 --> 00:04:01,886 Speaker 1: we sold, my wife and I, we sold an apartment 76 00:04:02,406 --> 00:04:04,646 Speaker 1: and we had some extra money from it. And I 77 00:04:04,706 --> 00:04:06,766 Speaker 1: thought I was being very responsible. I bought a target 78 00:04:06,786 --> 00:04:09,276 Speaker 1: date fund, but I put it in a taxable account. 79 00:04:09,336 --> 00:04:11,036 Speaker 1: And as I'm sure you know, but I didn't know, 80 00:04:11,676 --> 00:04:13,356 Speaker 1: that is not a good thing to put in a 81 00:04:13,396 --> 00:04:16,806 Speaker 1: taxable account. And so now... I pay all these gratuitous 82 00:04:16,846 --> 00:04:19,366 Speaker 1: taxes on it that if I had asked an advisor, 83 00:04:19,496 --> 00:04:20,656 Speaker 1: I presume I wouldn't be paying. 84 00:04:21,016 --> 00:04:22,476 Speaker 3: Yeah, so that's a mistake I see a lot of 85 00:04:22,516 --> 00:04:26,196 Speaker 3: people make, right? Those, say, target date allocation funds, usually 86 00:04:26,236 --> 00:04:28,596 Speaker 3: in their retirement accounts. So we're very well aware of them. 87 00:04:28,636 --> 00:04:31,616 Speaker 3: And they do help with asset allocation management over time 88 00:04:32,056 --> 00:04:35,286 Speaker 3: and risk management. But oftentimes there's a lot of turnover 89 00:04:35,326 --> 00:04:37,926 Speaker 3: in the funds, which leads to distributions that are taxable 90 00:04:37,986 --> 00:04:38,326 Speaker 3: to you. 91 00:04:38,526 --> 00:04:40,626 Speaker 1: So if you think about the long term, the kind 92 00:04:40,646 --> 00:04:43,766 Speaker 1: of bigger picture, like what should the client be thinking about? 93 00:04:43,806 --> 00:04:44,646 Speaker 1: What should a person be thinking? 94 00:04:45,736 --> 00:04:48,336 Speaker 3: So when we think about this person who recently got promoted, 95 00:04:48,776 --> 00:04:52,456 Speaker 3: I want to firmly understand their compensation package. To get specific, 96 00:04:52,496 --> 00:04:55,156 Speaker 3: this could be equity grants, for example, and there might 97 00:04:55,176 --> 00:04:57,976 Speaker 3: be trading restrictions on that. We could look at ways 98 00:04:58,016 --> 00:05:01,826 Speaker 3: to manage their new cash flow, strategies for concentrated stock positions, 99 00:05:02,426 --> 00:05:05,646 Speaker 3: planning for upcoming liquidity events, and certainly tax planning and 100 00:05:05,666 --> 00:05:08,166 Speaker 3: investment strategy. So that's a big piece of it, right? 101 00:05:08,186 --> 00:05:10,526 Speaker 3: Trying to figure out, are they right in their asset allocation? 102 00:05:10,686 --> 00:05:12,986 Speaker 3: Are we diversified as much as possible? And are we 103 00:05:13,006 --> 00:05:14,966 Speaker 3: being really cognizant of taxes? 104 00:05:15,726 --> 00:05:17,286 Speaker 2: We also want to make sure this is all integrated 105 00:05:17,346 --> 00:05:19,046 Speaker 2: with their full financial picture. 106 00:05:19,206 --> 00:05:23,686 Speaker 3: So their estate plan, charitable giving intent, lending opportunities that 107 00:05:23,726 --> 00:05:26,786 Speaker 3: they might need and can get from their portfolio. And then, 108 00:05:26,806 --> 00:05:28,726 Speaker 3: of course, bring in anybody to the table that we 109 00:05:28,786 --> 00:05:29,146 Speaker 3: need to. 110 00:05:29,206 --> 00:05:30,556 Speaker 2: This could be spouses. 111 00:05:30,626 --> 00:05:34,456 Speaker 3: This could be their kids or grandkids. And really just 112 00:05:35,076 --> 00:05:38,656 Speaker 3: figuring out how I can serve as that trusted advisor 113 00:05:38,716 --> 00:05:40,916 Speaker 3: in the middle of all that and making sure that 114 00:05:41,256 --> 00:05:44,016 Speaker 3: we understand how where they want to go and help 115 00:05:44,056 --> 00:05:46,076 Speaker 3: build advice that's tailored to them. 116 00:05:46,956 --> 00:05:49,416 Speaker 1: What are some other things that you often find people 117 00:05:49,616 --> 00:05:51,416 Speaker 1: are not thinking about that you can just say, hey, 118 00:05:51,576 --> 00:05:53,556 Speaker 1: you know, here's something you should pay attention to? 119 00:05:54,866 --> 00:05:57,006 Speaker 3: I find estate planning is probably one of the biggest 120 00:05:57,026 --> 00:05:58,626 Speaker 3: things that people aren't thinking about. 121 00:05:59,086 --> 00:06:00,226 Speaker 2: And for obvious reasons, right? 122 00:06:00,246 --> 00:06:01,946 Speaker 3: We don't want to have to think about ever having 123 00:06:01,986 --> 00:06:06,146 Speaker 3: an estate plan go into action. But that's crucially important 124 00:06:06,186 --> 00:06:08,306 Speaker 3: to make sure that your loved ones are protected and 125 00:06:08,356 --> 00:06:11,146 Speaker 3: that the assets flow the way you wish. But even 126 00:06:11,186 --> 00:06:13,346 Speaker 3: in capacity planning, right, that's part of an estate plan. 127 00:06:13,686 --> 00:06:16,386 Speaker 3: So do you have, say, a will? Do you have 128 00:06:16,426 --> 00:06:19,346 Speaker 3: a trust? Do you have a power of attorney set up, 129 00:06:19,756 --> 00:06:21,936 Speaker 3: health care proxy, et cetera? 130 00:06:22,116 --> 00:06:23,456 Speaker 2: So that's a big one that gets put on the 131 00:06:23,476 --> 00:06:23,996 Speaker 2: back burner. 132 00:06:24,396 --> 00:06:26,436 Speaker 1: So, OK, so we started out talking about this sort 133 00:06:26,456 --> 00:06:29,516 Speaker 1: of hypothetical first meeting. You talked about all the questions 134 00:06:29,546 --> 00:06:31,806 Speaker 1: you might ask somebody. As the meeting is wrapping up 135 00:06:31,846 --> 00:06:35,246 Speaker 1: and the person's leaving, what's the homework? What do you 136 00:06:35,266 --> 00:06:35,946 Speaker 1: send them off to do? 137 00:06:37,336 --> 00:06:40,676 Speaker 3: So I'd say one thing is sometimes I'm asking folks 138 00:06:40,736 --> 00:06:43,676 Speaker 3: and they don't necessarily know the answers, right? So maybe 139 00:06:43,716 --> 00:06:46,276 Speaker 3: it is gathering all the information that I've requested, right? 140 00:06:46,296 --> 00:06:48,096 Speaker 3: They might know some things off the top of their head, 141 00:06:48,136 --> 00:06:50,836 Speaker 3: but do they understand what sort of insurance coverage they 142 00:06:50,876 --> 00:06:53,716 Speaker 3: have or what their estate documents say that they wrote 143 00:06:53,716 --> 00:06:54,636 Speaker 3: 30 years ago? 144 00:06:55,196 --> 00:06:58,356 Speaker 2: Or they don't actually really know what their expenses are. 145 00:06:58,806 --> 00:07:01,586 Speaker 3: So some of just the homework is really gathering that 146 00:07:01,646 --> 00:07:03,806 Speaker 3: data and bringing it back to me so I understand 147 00:07:04,106 --> 00:07:06,866 Speaker 3: where we stand today. And I think, again, that big 148 00:07:06,906 --> 00:07:10,146 Speaker 3: picture stuff, right? Defining success. What do we want our 149 00:07:10,246 --> 00:07:12,506 Speaker 3: wealth to create for us? And a lot of times 150 00:07:12,546 --> 00:07:15,886 Speaker 3: we have competing priorities. So ranking those. So a lot 151 00:07:15,906 --> 00:07:17,866 Speaker 3: of times these questions come up and then they have 152 00:07:17,906 --> 00:07:19,866 Speaker 3: to go down and kind of think about it. Gathering, 153 00:07:19,886 --> 00:07:22,266 Speaker 3: of course, the hard data, but also maybe talking to 154 00:07:22,306 --> 00:07:25,126 Speaker 3: their spouse and sitting down and doing some self-reflection in 155 00:07:25,166 --> 00:07:26,916 Speaker 3: terms of what we want this money to do for 156 00:07:26,926 --> 00:07:27,626 Speaker 3: them and their families. 157 00:07:28,556 --> 00:07:32,636 Speaker 1: So last question, kind of just a big one to 158 00:07:32,676 --> 00:07:36,486 Speaker 1: leave on. What is one thing that you wish everybody 159 00:07:36,546 --> 00:07:37,966 Speaker 1: knew about financial planning? 160 00:07:40,316 --> 00:07:44,796 Speaker 3: One thing is I firmly believe that the earlier you start, 161 00:07:44,976 --> 00:07:48,016 Speaker 3: the better you're off. I think sometimes people think that 162 00:07:48,036 --> 00:07:50,346 Speaker 3: there's a certain dollar amount that they need to start 163 00:07:50,406 --> 00:07:51,246 Speaker 3: financial planning. 164 00:07:51,266 --> 00:07:52,466 Speaker 2: They don't have enough money yet. 165 00:07:52,926 --> 00:07:55,266 Speaker 3: But think about it as, again, we're figuring out the 166 00:07:55,306 --> 00:07:57,346 Speaker 3: destination and working backwards to today. 167 00:07:57,406 --> 00:07:59,006 Speaker 2: And I also think having. 168 00:07:59,746 --> 00:08:03,436 Speaker 3: a financial planner or advisor in your corner that you 169 00:08:03,536 --> 00:08:06,496 Speaker 3: trust ahead of time, kind of ahead of even needing 170 00:08:06,556 --> 00:08:09,596 Speaker 3: them for big decisions is absolutely key. There are going 171 00:08:09,616 --> 00:08:11,376 Speaker 3: to be things that come up, right? You get promoted 172 00:08:11,406 --> 00:08:13,666 Speaker 3: to the C-suite, some good things, right? There might be 173 00:08:13,706 --> 00:08:16,766 Speaker 3: some sad things like someone passes and you get an inheritance. 174 00:08:17,326 --> 00:08:21,746 Speaker 2: You already want to have that foundation of trust established. 175 00:08:21,266 --> 00:08:23,386 Speaker 3: With somebody so that when you're in those moments, you 176 00:08:23,416 --> 00:08:25,656 Speaker 3: can ask them what you should do and you trust them. 177 00:08:25,756 --> 00:08:28,996 Speaker 2: You're I want. 178 00:08:28,856 --> 00:08:32,276 Speaker 3: People to have their wealth allow them to live the 179 00:08:32,316 --> 00:08:35,916 Speaker 3: life that they want and creating a cohesive strategy across 180 00:08:36,016 --> 00:08:38,976 Speaker 3: all facets of their financial life in order to do that. 181 00:08:39,516 --> 00:08:40,976 Speaker 1: Thank you so much for your time. It was great 182 00:08:40,996 --> 00:08:41,596 Speaker 1: to talk with you. 183 00:08:42,376 --> 00:08:43,606 Speaker 2: You're welcome. Thanks for having me. 184 00:08:44,926 --> 00:08:50,166 Speaker 1: Visit fidelity.com slash wealth. Information presented herein is for discussion 185 00:08:50,246 --> 00:08:53,406 Speaker 1: and illustrative purposes only and is not a recommendation or 186 00:08:53,446 --> 00:08:56,386 Speaker 1: an offer or solicitation to buy or sell any securities. 187 00:08:56,836 --> 00:08:59,596 Speaker 1: The views and opinions expressed by the Fidelity speaker are 188 00:08:59,636 --> 00:09:02,596 Speaker 1: his or her own, as of the date of the recording, 189 00:09:02,696 --> 00:09:05,896 Speaker 1: and do not necessarily represent the views of Fidelity Investments 190 00:09:06,056 --> 00:09:09,116 Speaker 1: or its affiliates. Any such views are subject to change 191 00:09:09,176 --> 00:09:12,096 Speaker 1: at any time based on market or other conditions, and 192 00:09:12,136 --> 00:09:16,256 Speaker 1: Fidelity disclaims any responsibility to update such views. These views 193 00:09:16,296 --> 00:09:19,496 Speaker 1: should not be relied on as investment advice and, because 194 00:09:19,536 --> 00:09:48,926 Speaker 1: investment decisions are based on numerous factors— Thank you. Thank 195 00:09:48,946 --> 00:10:01,806 Speaker 1: you for having me. without the permission of FMR LLC. 196 00:10:02,486 --> 00:10:06,656 Speaker 1: Investing involves risk, including risk of loss. Investment minimums apply. 197 00:10:07,136 --> 00:10:12,556 Speaker 1: Advisory services offered by Strategic Advisors LLC, a registered investment advisor. 198 00:10:12,996 --> 00:10:19,326 Speaker 1: Brokerage services provided by Fidelity Brokerage Services LLC, member NYSE SIPC. 199 00:10:19,566 --> 00:10:22,926 Speaker 1: Diversification does not ensure a profit or guarantee against loss.