Lauren Pearson of The Wealth Edit: “Begin investing”

Begin investing. It seems so much scarier than it really is. There are so many great and basically free ways to begin investing, and for most people who have never done it before, it doesn’t seem fun, it feels like jumping off a diving board for the first time. If you just do it, you […]

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Begin investing. It seems so much scarier than it really is. There are so many great and basically free ways to begin investing, and for most people who have never done it before, it doesn’t seem fun, it feels like jumping off a diving board for the first time. If you just do it, you will want to keep investing over and over again, which will help you accumulate wealth.

As a part of my series about strong female finance leaders, I had the pleasure of interviewing Lauren Pearson.

Lauren Pearson is the managing director and partner at Somerset Advisory and the co-founder of The Wealth Edit, an online membership-based community which aims to give women more confidence and expertise when talking about money and their individual financial needs.

Thank you so much for doing this with us Lauren! Can you tell us the “backstory” about what brought you to the finance field?

I entered the financial field in 2007, right before the great recession. I was recently married, and my husband moved me to a small Southern town where, unless you were credentialed in a specific field like law or medicine, there were not many professional opportunities. Financial advisory firms were everywhere, so I pivoted my career to financial advice.

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?

Our industry misses on heart issues often. We don’t get to the root of how people relate to their money. I had a business owner come see me who had the opportunity to sell their business for around 25 million dollars. Very sincerely, after congratulating them, I said, “What are you going to do with all your time — and with the money?” This person looked at me like I was crazy, and I thought, how did this person nearly sign their business away without exploring these questions? This issue is a gap that we frequently address in our private practice, Somerset Advisory.

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

Our most exciting project is The Wealth Edit, a private community for women to talk about wealth. Data shows that 47% of women don’t feel comfortable working with a financial advisor, and 87% of women are looking for an advisor but can’t find one they connect with. This reflects how the industry was set up: for men, by men. There is nothing wrong with this — half of our clients at Somerset are men — but what it does point to is that women are largely underserved. There is a confidence gap for sure. We founded The Wealth Edit to fill this space.

Women make financial decisions all the time, they just don’t do it in the context of a traditional advisory relationship — at least not at the beginning. What we do know about women is they thrive in community. I get the best recommendations from my friends and women that I trust and respect. The Wealth Edit is a network of women who are entrepreneurs, high earners, and stay at home moms. In our experience, these identifiers aren’t as important as the financial trajectory you may be following, which we call a “glidepath” at The Wealth Edit.

What do you think makes your company stand out? Can you share a story?

We just couldn’t find another community that existed like ours — that’s why we built it from scratch. There are many companies interested in giving individual advice and guidance to women, and lots of financial firms who are creating programming for women, but not all women have the same situation. My co-founder and I are a great example of this. While we look similar on the surface — we run in the same social circles and have a lot of similar interests — but she was widowed at a young age and had to transition from a dual to a single income. Our financial circumstances are very different. This is a great example of how we are on different glidepaths at The Wealth Edit.

Ok. Thank you for all that. Let’s now jump to the main core of our interview. Wall Street and Finance used to be an “all white boys club”. This has changed a lot recently. In your opinion, what caused this change?

I think companies are (finally) interested in diversity and inclusion as a result of consumers being more conscious of their choices — largely due to innovations and changes in the consumption of technology. This is good for women and people of color.

Of course, despite the progress, we still have a lot more work to do to achieve parity. According to this report in CNBC, less than 17 percent of senior positions in investment banks are held by women. In your opinion or experience, what 3 things can be done by a) individuals b) companies and/or c) society to support this movement going forward?

This statistic gets me every time. Individuals now have access to make conscious and informed decisions about who they do business with. Businesses will curve to meet consumer demand when forced to do so. Women often have to vote with their feet and wallets if they want things to change. As a society, we should celebrate these wins — small, and then eventually, large.

Let’s now turn to a slightly new topic. 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? If you had the power to make a change, what 3 things would you recommend to improve these numbers?

1) Financial literacy classes beginning in middle school.

2) Not shaming children about money, particularly young girls when they ask financial questions. And when they do ask, being sensitive to the fact that how you respond is an educational opportunity.

3) Eliminate or greatly reduce the dependence on student loans.

You are a “finance insider”. If you had to advise your adult child about 5 non intuitive things one should do to become more financially literate, what would you say? Can you please give a story or example for each.

What a great question.

1) If you make 10 dollars, only spend 9 dollars. This is a concept that anyone (adults and children alike) can grasp. It’s perhaps intuitive but not often implemented.

2) Write down everything you spend money on for a week. Doing this brings awareness to spending, which is a really important step. Through The Wealth Edit, we bring awareness to how women spend through our Financial Minimalism course. We often find that people don’t realize where their money is going, and once they find out, they make strategic shifts to align their interests with their dollars.

3) Read Your Money or Your Life. It’s a great book, originally published in 1992, but was recently updated. If you read this, you will think differently about money. It’s transformative in all the best ways.

4) Begin investing. It seems so much scarier than it really is. There are so many great and basically free ways to begin investing, and for most people who have never done it before, it doesn’t seem fun, it feels like jumping off a diving board for the first time. If you just do it, you will want to keep investing over and over again, which will help you accumulate wealth.

5) Giving is an underutilized investment goal. Don’t put boundaries on it, especially for children of any age. If giving is part of the fabric of your family, it’s worth noting the tax code is so generous, and it is a great way to talk about money and pass along family values from one generation to the next.

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?

Susan Ketchum was my mentor when I worked at a large investment advisory firm. She taught me so much about investing, confidence, and taking care of other people well. When I broke away from the large firm to start Somerset Advisory, she was incredibly supportive. I owe her so much.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

One of my great friends is a federal judge. She looked at me once and said, “It is never too late for a do over.” This has been so true in my career. I got into this business to serve families with complex planning needs or gifting initiatives. Then, as you grow and progress, you all of a sudden are putting on the hats of business owner or manager. I think sometimes people need permission to reset or start over. I have reinvented my business without my clients knowing or being interrupted several times, because I knew it was right for them, and right for the next season of the company. This also works in my practice for clients who come in and feel self-conscious about the amount they have saved. It’s just never too late.

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.

The mission of The Wealth Edit is to help the everyday woman be good with her money. So maybe it should be called the “Good With Money” movement? According to Boston College’s Center on Wealth and Philanthropy, it’s estimated that women will inherit 70 percent of the Great Wealth Transfer. This means that it’s more than likely that women will possess two-thirds of the nation’s wealth by 2030. We are all in for the next decade in getting women ready for this.

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