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“Always ask to see a sample plan.” with Ken Stern and Tyler Gallagher

Always discuss expectations and scope of service. How often you plan on talking and getting together? How often the portfolio is reviewed? Will there be meeting with other advisors such as your accountant and/or attorney? We call this a Board Meeting — one I highly recommend. I always highly recommend an advisor that does family […]

Always discuss expectations and scope of service. How often you plan on talking and getting together? How often the portfolio is reviewed? Will there be meeting with other advisors such as your accountant and/or attorney? We call this a Board Meeting — one I highly recommend. I always highly recommend an advisor that does family meetings. Could you imagine becoming incapacitated and having your child not know exactly what to do? These items are covered in the family meeting. Further, what will the scope of service include? Are tax and estate planning included or is it specific to investment strategy?

I had the pleasure of interviewing Ken Stern, Senior Managing Director, Lido Advisors. Ken Stern is Senior Managing Director with Lido Advisors, LLC. Ken is focused on executing Lido’s vision in growing Lido Advisors into a nationally recognized leader in advanced wealth management and investment strategy. After working with and helping grow various financial institutions, Ken saw a need for a client-centric financial advisory firm focused in comprehensive planning and dynamic investment management. As a result, he founded both Asset Planning Solutions, Inc. and Ken Stern & Associates. As a Registered Investment Advisor, Ken Stern & Associates focused on portfolio solutions, wealth-planning strategies, and family office services. Mr. Stern has authored seven personal finance books and appeared in or been quoted on several TV and radio shows including: The Today Show, CNBC, and CNN. Authored books include: To Hell and Back, Pounce, Secrets of the Investment All-Stars, Senior Savvy, Safeguard Your Hard-Earned Savings, and Comprehensive Guide to Social Security and Medicare. Mr. Stern holds a Certified Financial Planner, CFP designation and speaks extensively on wealth transfer, alternative investments, and legacy planning. Originally from Farmington Hills, Michigan, Mr. Stern enjoys spending time with his family, traveling, skiing, public speaking, writing, and reading.


Thank you for joining us! Our readers would love to ‘get to know you’ a bit more. Can you tell us a story about what brought you to this specific career path?

I love all things financial; I also like helping people, growing a business and finding opportunities! What better field to operate in? There are so many complexities to investing and wealth planning. There are economic cycles, valuation techniques, asset allocation decisions as well as emotional (behavioral finance) aspects that impact a successful outcome. All this is even before a personal plan is created. When I was young, I remember when “Black Monday” hit and reading about the lost fortunes and the devastation it caused. I also saw how people made bad decisions as a result of poor planning and guidance, making this Black Swan event even worse. I knew then that I wanted to set myself up for success not failure, knowing that down days and markets would come and believing that these could be planned for and ultimately prove to be an opportunity rather than adversity.

Can you share a story about the most humorous mistake you made when you were first starting in the industry? Can you tell us what lesson or takeaway you learned from that?

I remember being told that I should invest in a real estate deal by a smart and respected person. I was showed pretty pictures, got emotional and invested without knowing all the fees and expenses, leverage and experience of the manager. It turned out that the real estate never really needed to be sold at a profit for the general partner to make money, but for the investor to make money the property would need to appreciate significantly. Lesson one: invest in what you know. And don’t invest unless the investor has significant protections for the risks they are taking!

Are you working on any exciting new projects now? How do you think that will help people?

Yes! So many exciting projects. I’m finishing an outline for a new book; “The Stern Word on Money”. Want to guess the premise? My firm, Lido Advisors, and I, are continually creating and refining strategies to “hedge portfolios” should markets experience a sell-off. The hedge is designed to cushion the downside if and when the markets sell. We are also deepening our planning capability to get much more involved in tax and estate planning, though to be clear we do not provide tax advice. Without truly coordinating tax, estate and investments into one plan the overall outcome is sure to be less robust and impactful to the client. Remember the goal: make more money, pay less tax, protect the estate for the legacy.

Are you able to identify a “tipping point” in your career when you started to see success? Did you start doing anything different? Is there a takeaway or lesson that others can learn from that?

It’s important to remember that success is defined in many different ways. We all know that there are many talented people that do what they do successfully, but don’t have successful careers from a monetary perspective. For many years my company delivered an extremely high level of service to our clients, based on client retention it was clear our service was applauded, but we weren’t growing. It became apparent that changes needed to be made if we wanted to grow and scale our business. We needed credibility. So I wrote a book, Senior Savvy focusing on retirement issues. This turned into seven books and countless interviews and third party “street credibility”. We also decided to focus primarily on a fee (as opposed to commission) model. About the same time, we merged with Lido Advisors, I created a three-step plan. A plan we are still implementing today. These steps included: Focus on the solutions that our clients found necessary and timely. Invest in marketing and sales to “tell on ourselves”. Specifically, we have deployed a number of steps to “tell on ourselves”. Something as simple as hosting client and referral dinners and lunch and learns have been a huge success. Three; we invest in our team and put the right people in the right jobs. For example, a portfolio manager may create investment solutions that are incredible but not know how to sell this. The lesson is to not ask a portfolio manager to sell. Our vision is to grow Lido Advisors into the nationally recognized brand standard in wealth planning and investment strategy. We will do this by solving our clients’ financial problems, sharing the knowledge and getting the buzz out in the world, hiring great people, and giving them the vision and a map to execute the vision.

What three pieces of advice would you give to your colleagues in the finance field to thrive and avoid burnout? Can you give a story or example?

First, you have to love what you do. Love people. Love finance. Second, just like you would advise your clients, have a plan. What steps will you take to get the scale and reach the critical mass you need to grow and have a team that can properly advise your clients. Three, take time. Time to think, reflect and recharge.

Ok. Thank you for all of that. Let’s now move to the core focus of our interview. As an “finance insider”, you know much more about the finance industry than most consumers. If your loved one wanted to hire a financial advisor (not you :-)), which 5 things would you advise them to find out about before committing? Can you give an example or story for each?

I would also ask the advisor a series of EQ and IQ questions.

1. Why do you do what you do? I feel like some people are in the wrong field. I remember once asking someone I was interviewing their interest in being an advisor, they responded “to make a lot of money”. Wrong reason. So, when you interview an advisor look at their passion for finances and planning. For finding better strategies.

2. Always ask to see a sample plan. If the advisor doesn’t have a sample plan how can you feel good about hiring someone with a strategy that is sight unseen?

3. Explain the compensation. Does the advisor get paid a fee to manage the assets or get paid a commission? Are there additional fees such as planning fees? What additional services such as tax or estate planning are included in the fee?

4. Always discuss expectations and scope of service. How often you plan on talking and getting together? How often the portfolio is reviewed? Will there be meeting with other advisors such as your accountant and/or attorney? We call this a Board Meeting — one I highly recommend. I always highly recommend an advisor that does family meetings. Could you imagine becoming incapacitated and having your child not know exactly what to do? These items are covered in the family meeting. Further, what will the scope of service include? Are tax and estate planning included or is it specific to investment strategy?

5. Experience and expertise. What qualifies the advisor to represent you? Can they give you names of people to call? How many years have they been doing this kind of work? Do they have credentials such as a Certified Financial Planner designation? To this, I always recommend going on line either to the SEC or FINRA website and doing a background check. If there are client complaints, wouldn’t you want to know?

I think most people think that financial advisors are for very wealthy people. This is likely not actually true. Can you explain who would most benefit from hiring a financial advisor and why? Can you give an example?

Great question!!! Wealthy individuals can absolutely benefit from hiring an advisor. Complex tax questions, estate and investment strategies are important for this demographic. However, those that are not extremely wealthy could arguably benefit even further. When there is less margin for error, there is an additional benefit to the planning process and the right planner. Incorporating the time value of money with prudent budgeting and tax considerations could truly make the difference between financial freedom and not.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

My father and his partner started out as stock brokers. They taught me the difference between saving and investing. They also inadvertently taught me to separate emotions from investment process as behavior has a big impact on investment success. These early teachings were invaluable and set the foundation. But they also taught me that more was needed to truly add value to a client. The personal finance angle was what was missing. With a shared love for retirees, another gentleman who recently passed recommended that I write a book for retirees. Senior Savvy was the result. I am grateful for all these guides in my life.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.

Kids in school must understand money. From an early age we can/should teach financial literacy. By relating directly to their world, we can teach personal cashflow. We can later teach budgeting, investment and advanced planning. My suggestions are to make these classes much more available in middle and high-school. Personal finance should be a college requisite as well.

Thank you for all of these great insights!

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