Always Choose a Fiduciary Advisor — One of the biggest mistakes a person can make when preparing for retirement is signing on with a financial advisor who isn’t legally obligated to uphold their client’s best interests. A non-fiduciary professional may try to sell you products that don’t match your needs in the hopes of netting a higher commission. Your best bet will be to entrust your financial future to a fiduciary advisor who is legally bound to prioritize your best interests over their personal financial interests.
As a part of my series about The 5 Essentials of Smart Investing, I had the pleasure of interviewing Anthony Pellegrino.
Anthony Pellegrino is the owner and principal of Goldstone Financial Group, an SEC-registered wealth management firm specializing in retirement planning services. In his role, Pellegrino is responsible for guiding his clients through difficult investment decisions and facilitating the success of Goldstone Financial Group’s associated specialists throughout the Midwest. To date, he has helped over 1,500 clients manage their assets and set a solid financial foundation for retirement.
Thank you for doing this with us! Our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?
Finance was always something I gravitated to, even as a kid. It just seemed like the most intuitive path for me. But getting into wealth management — well, that was different. That I did because I felt I could help people.
In the early years of my career, I realized the vast majority of the companies that promised retirement planning support handed out generic investment advice to everyone who walked through their doors. It didn’t matter what your situation was, what assets you had, or what your goals were — you received a cookie-cutter solution. Sure, these fixes might work for some people. But for most, they fell flat.
This was incredibly frustrating because I knew how emotional the process of entrusting your retirement investments to someone could be; I’d heard clients talk about how stressed and hopeful those funds made them. Retirement accounts don’t just hold money — they also encompass a person’s hard-earned hopes for a peaceful, well-funded future.
With this in mind, my business partner and I began Goldstone Financial Group. We wanted to provide our clients with a customized and more supportive wealth management experience. We had four main goals: first, to help our clients design income plans that will keep them comfortable through the entirety of their retirement. Second, to design client-tailored investment portfolios. Third, to help our fiduciary advisors create realistic, manageable plans. Fourth, to give our clients the guidance and support they needed to leave a legacy.
Our focus is on being collaborative, helpful, and client-first. It’s an approach that takes more time and effort than genericism, for sure — but it’s worth it.
Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?
I’d say my most interesting anecdote is a mistake I made when I was first growing Goldstone Financial Group. In business, there’s this mentality that you should always be expanding and taking on new clients. But that’s just not a good idea for every firm — and it certainly wasn’t for ours.
We found this out years ago. We had decided to cast a bigger net and bring in clients that, in retrospect, weren’t the best fit for us. Over time, the mismatch began to cause tension; our clients grew frustrated and our employees were demoralized. It just wasn’t working.
I didn’t know what to do, so I ended up speaking to a friend who had worked in corporate leadership. He gave me advice that seemed shocking at the time — to go back to basics and fire every client that didn’t suit our target base and service offerings. The suggestion rocked me back on my heels. Get rid of paying clients? It sounded crazy.
But after some more time passed, my business partner and I decided that narrowing our client base was worth a shot.
That scale-back was one of the most stressful periods of my corporate career — and it worked. By focusing on a smaller group of clients, we were able to achieve more as a business. It was remarkable.
In the end, I learned that you don’t need to take on every client in town to be successful. You owe it to yourself and your employees to ensure that the customers you accept are the ones you’re well-suited to serve. Growth, for its own sake, makes no one happy.
Are you working on any exciting new projects now? How do you think that will help people?
I wouldn’t say it’s necessarily new, but it’s certainly exciting.
Over the next decade, 78 million Baby Boomers — 10,000 people per day — will be transitioning into retirement. People in my profession face a slow-motion tidal wave of clients; we have the opportunity and privilege to help usher Boomers to a well-earned retirement. There isn’t another project I could mention that would rival that for excitement.
Ok. Thanks for all that. Let’s now jump to the main core of our interview. According to this report in Fortune, nearly two-thirds of Americans can’t pass a basic test of financial literacy. In your opinion or experience, what is the cause of these unfortunate numbers?
Financial literacy isn’t taught in schools. I have three sons, and I know they’ll be able to crunch interest rates and balance a checkbook by the time they go to college because I’m their dad. But a lot of kids out there don’t have parents in the financial sector; they have to figure out their finances through trial and error. I fully believe that financial literacy should be taught to every high school student.
If you had the power to make a change, what 3 things would you recommend to improve these numbers?
- I would establish basic financial literacy classes in high school and college.
- I would encourage employers to host optional financial literacy workshops once per year
- I would encourage community organizations (like the YMCA or the Boys & Girls Club) to host financial literacy classes for various age groups.
Ok, thank you! Now to the main question of our interview: You are a “finance insider.” If you had to advise your adult child about 5 non-intuitive essentials for smart investing what would you say? Can you please give a story or an example for each?
I wouldn’t say that any of the advice I have to give is non-intuitive — as I said before, the problem is more that people don’t have enough financial background to intuit helpful strategies in the first place. Here’s what I would recommend to my boys:
Always Choose a Fiduciary Advisor
One of the biggest mistakes a person can make when preparing for retirement is signing on with a financial advisor who isn’t legally obligated to uphold their client’s best interests. A non-fiduciary professional may try to sell you products that don’t match your needs in the hopes of netting a higher commission. Your best bet will be to entrust your financial future to a fiduciary advisor who is legally bound to prioritize your best interests over their personal financial interests.
Don’t Just Prepare Your Taxes, Plan for Them
Most tax filings are approached reactively; you report your financial situation and pay your tax bill accordingly. But you don’t have to limit your tax strategy to preparation alone.
Take the 2020 tax season as an example. Because the market experienced both massive drops and a substantial recovery, investors had an unmissable opportunity for tax-loss harvesting — that is, selling their losing funds to create losses that will partially or entirely offset capital gains taxes.
Don’t just prepare your taxes; plan for them.
Set Realistic Goals
The first two months of 2021 gave us a dramatic illustration of how damaging mismatched expectations can be for inexperienced investors. In January, an unexpected short squeeze rocketed GameStop’s stock up to lofty but unmaintainable heights. Countless amateur investors piled onto the stock, wanting to “get in” on the hype — and many lost hundreds, if not thousands, when GameStop’s stock price fell to more reasonable levels.
No investor should expect to make a fortune overnight. Set reasonable expectations and connect with your fiduciary advisor before making any hype-driven decisions.
Plan for the Best (and Worst) of Retirement
One big mistake I see clients make is forgetting to set aside money for their long-term healthcare needs. Many people assume that they’ll be healthy until the day they pass — but unfortunately, that’s not usually the case.
According to Health and Human Services, a person who is 65 today has a 70 percent chance of needing long-term care services during their remaining lifetime. This care is expensive — and only covered by Medicare up to a certain point. If you don’t plan for future healthcare costs, you could find yourself paying more out of pocket than you ever intended.
Build a Portfolio That Suits You, Specifically
No two people have precisely the same situation. As I mentioned earlier, applying a cookie-cutter approach to wealth management just doesn’t work; you need a tailored plan to maximize your financial earnings in retirement. It’s essential to find a fiduciary advisor who will work with you and craft a plan that suits you, specifically.
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?
There are so many people who helped me get to where I am today. I’m thankful for my business partner, Michael, who has celebrated every victory and commiserated over every setback since we started Goldstone Financial Group. Michael’s my copilot; without him, we never would have gotten our firm off the ground.
Can you please give us your favorite “Life Lesson Quote?” Can you share how that was relevant to you in your life?
I’ll quote Warren Buffett: “It is insane to risk losing what you already have in order to make what you don’t need.”
I couldn’t agree more. Every time I see a well-off retiree put their money into unnecessarily risky investments, I think of this quote. My job has taught me that while risk has its place in life and business, it should not define either.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. 🙂
If I could spark a movement that bolstered financial literacy for all, I would. The world would be very different if everyone had access to the information they needed to make savvy financial decisions.
Thank you for the interview. We wish you continued success!