Passion. Does the advisor have a passion for the business? More often that not this can be determined by designations they have achieved or the groups they are involved with. But be careful. There are a lot of designations that sound great on paper but don’t take a lot of dedication to achieve. Designations like the CFA or CFP show that the advisor is dedicated to her or his craft and has the curiosity to learn. That is important.
As part of our series about what one should look for when hiring a financial planner or adviser, I had the pleasure of interviewing Marc Lieberman, CFA. Marc is the founder and principal at Shorepine Wealth Management in Northern California where he advises families, individuals and companies on all aspects of their financial well being. Marc has spent more than 20 years working in the investment industry with roles ranging from clerking on the floor of the NYSE to managing large institutional level portfolios. Early in his career, Marc earned the right to use the Chartered Financial Analyst (CFA) designation. This rigorous course of study is globally recognized as the designation of distinction for institutional and private wealth money managers and analysts. Marc was a board member of the CFA Society of San Francisco from 2009–2015 where he served as president in 2013. Marc is a proponent of Socially Responsible Investing, a lifelong learner and a strong champion for professional ethics. Marc is a true advocate for his clients and a respected member of the San Francisco Bay Area investor community.
Thank you so much for doing this with 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?
Tyler, thank you so much for having me here to speak with you and your readers! I have always found my career path a bit unorthodox when compared to people that normally end up as financial advisors. I seemed to have had a great many different interests as I grew, some of which had little to do with being a financial advisor. For example, I used to spend a lot of time building and racing remote controlled cars and boats which taught me patience. That patience that has helped me be a better advisor today. As I look back I realize that all of the disparate passions I had growing up were intertwined by a sense of curiosity for the world that surrounds us. That curiosity has allowed me to become the well-rounded advisor I am today. Curiosity is an extremely important trait in this business. You need to be curious to truly learn about people and their financial situations. You need to be curious to find that next investment idea that can enhance your client’s returns.
I originally got the “bug” for investing when I was offered the opportunity to be a clerk on the floor of the New York Stock Exchange. The business of allocating capital and its ability to enhance individual wealth immediately enthralled me. That led me to a self directed thesis program at my University where I was exposed to and studied Socially Responsible Investing. I continued to learn after college working at a mutual fund company and finally at a money manager in San Francisco before launching my own firm. It was during the early years of my career in San Francisco that I enhanced my studies by earning the right to use the CFA designation.
However, I did not realize all of this was going to lead me into the realm of providing advice to individuals until my father passed away early on in my career. My mother was left to manage her finances by herself and chose to work with a financial advisor at one of the large brokerage houses at the time. I thought everything was fine because I assumed all advisors were the same. Several years passed while I was away from her and learning in the business. Once I had enough knowledge to understand this business I began to research and learn about what this so called “advisor” was doing for my mother. Unfortunately, the end result of his work was a disparate portfolio of “financial products” he sold to her that did little to reduce my mother’s costs and taxes and seemed to enrichen the advisor, not my mother. I knew then that there had to be a better way to do this for people. Needless to say I immediately began to manage her portfolio myself with better results and once I did that I knew this industry held the right path for me.
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?
Great question. When I first moved to San Francisco I got a role with a sales desk at one of the large brokerage houses. My job was to support three salesman that called themselves “advisors”. I quickly learned that in reality these people were looking for clients that they could just sell the next product to. There was no research behind their recommendations. There was no money management or asset allocation strategies being employed. It was just a simple way to get paid for pandering “advice”. I quickly soured of the situation and after two months I quit.
That firm was Lehman Brothers and within 9 years of my leaving the entire firm had collapsed due to the financial crisis of 2008 in the U.S. It was a really transformative experience for me. I learned that I never wanted to “sell” financial products for a living. The experience also taught me to always look past the fancy offices and pretty views. Corporate America is amazing at putting a façade over it’s true intentions. The good analyst will always look deeper than that to find the truth on an investment or company.
It also was one of the first times I listened to my heart on a career choice. I am a very head-driven person, truly analytical by nature. Although it took 9 years to prove me right, listening to my heart was the right thing for me in that situation. I learned that there is a place in this business for both art and science. A good advisor balances the two for their clients. By the way, I still have one of the paystubs from Lehman Brothers. It keeps me grounded to look at it once in a while.
Are you working on any exciting new projects now? How do you think that will help people?
Yes. My firm, Shorepine Wealth Management, is still relatively new so the vast majority of my time is taken up with counseling my current clients and growing the firm. I am so fortunate that I get to work with clients that are humble, grateful and dedicated to their financial journeys. It is so fulfilling and exciting that I am now in a position where I get to choose who I work with. Being in control allows me to really focus on and deepen my relationships with my clients. At prior firms I’ve worked for the focus was on enriching the partners. That is always a bad thing. Honestly, how many homes or cars do you need to be happy?
How does this help people? I view my work here as generational in that I work with entire families to help them grow and preserve their wealth. I am also happy to have several clients that have bought into the process of investing alongside their values. Socially Responsible Investing is near and dear to my heart and I love the fact that it has become more mainstream. With technological advances in our industry it is not hard to produce a portfolio that acts well at the same time it is performing as well or sometimes better than investments without a social screen. I hope to be able to continue to promote and grow this aspect of money management using my firm as a vehicle to do so.
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?
What a great question! I really think things began to change for me when I was younger and decided to have a career in finance, not just a job. It happened shortly after I left that bad job I had at Lehman Brothers. I quickly realized that sales wasn’t for me and I wanted a career that fulfilled me. That mental change really slowed down my decision making and allowed me to focus on the long term. I have met many people in this industry that don’t take that view. Let me tell you, they bounce from firm to firm or job to job and they are more often than not miserable with it. Once you decide to make a career in this business things change. You begin to get educated about the career path you chose. You begin to get better training, You begin to seek out others like you and find camaraderie in that. You begin to make experiences as opposed to the job giving you experience. I think the takeaway is to act quickly when you know something isn’t right for you and to always take the long term view on your career. A good manager will reward you for that and it will benefit you greatly.
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?
Sure. Number one is about money. We work with and around money and more often than not people allow themselves to be driven by it. As I mentioned in my last answer, never let the job drive you. If you are unhappy, make a change. I’ve been in extremely toxic work cultures before where senior management didn’t care about anything but money. It’s not worth it to stay in those situations just because the money is good. Life is too short and if you dedicate yourself to the long term everything else will fall into place.
Number two is to always give back. Shortly after I was awarded the Chartered Financial Analyst designation I began to volunteer for my local CFA society. This culminated with me being president of the society and a board member for many years. The amount of time I put into this endeavor was immense. At its height it was very close to a second full time job. Most people would shy away from that. However, looking back I can say that the friendships I formed and the the experiences I had were worth way more than what I put into it. I am still amazed they didn’t make me pay to volunteer, it was that rewarding! So be sure to do things like that.
Lastly, be sure to have passions outside of finance. As passionate, hyper-focused people we more often than not forget to spread our focus around. It is important to spend time away. Whether that’s golf, boating, hiking, skiing or just spending time with my family. I have often found that the best results I achieve with Shorepine come at times where I am most relaxed and not pushing too hard. I have better client or prospective client meetings when I don’t overdo it. I have better stock picking results when I am more relaxed. It’s amazing but true.
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?
1) Is the advisor a fiduciary? I would tell my loved one first and foremost to learn about the difference between a fiduciary and someone who works under the suitability standard or some other standard. I know many great advisers that work at the broker-dealer level, which are the big name firms you are probably very familiar with. However they all currently fall under the suitability standard where the incentives for advisors at those firms may not be in line with their client’s goals. Furthermore, many of those firms are publicly traded companies. Publicly traded companies have a responsibility to the shareholders of the firm, not their clients. This means they will always look to grow their bottom line, sometimes to the detriment of their own clients.
2) Do a background check. Go to advisorcheck.com. Review the advisor’s record for any issues around customer complaints. One complaint over a 20 year period may be excusable but if the advisor you are talking to has a series of complaints you may want to walk away. There’s just so many advisors without issues, why take the chance on one that has proven to be less than scrupulous?
3) Passion. Does the advisor have a passion for the business? More often that not this can be determined by designations they have achieved or the groups they are involved with. But be careful. There are a lot of designations that sound great on paper but don’t take a lot of dedication to achieve. Designations like the CFA or CFP show that the advisor is dedicated to her or his craft and has the curiosity to learn. That is important.
4) Go with your gut. I know this is a hard one to understand. Most people have a gut feeling after spending some time with an advisor. Some advisors are masters in sales pitches and will do everything to sound like the perfect fit for you. Be wary when your gut is telling you something different than your head. For example, if the prospective advisor is telling you they can produce vast riches of wealth for you they undoubtedly are preying upon your greed. Your gut will tell you that there is something wrong. Listen to it.
5 )Interview several and find one that is a good fit. Make sure the financial advisor and their business focus fits well with your personal financial situation. If you are a 45 year old person, in the middle of your career and well compensated it makes no sense for you to sign on with an advisor that only specializes in social security and medicare planning. Sure, they may take your business but you will do much better to work with an advisor that has most of their business in catering to people like yourself, with your unique needs.
6) I am going to throw in a sixth one here because I think it is as important as the others. Compensation. Find out how the advisor is going to be compensated. Incentives drive behaviours. If an advisor is only compensated by selling you the next product they will do exactly that. Your entire relationship with them will center around them selling you things. That is not a consultative relationship and eventually will fail. Ask them if they are compensated more for selling you their firm’s products. If the answer is yes I can assure you that your portfolio will be full of their firm’s products. Be wary of compensation and incentives in this business.
Your primary goal with choosing a great adviser is going to be to ensure that there aren’t any simple points of failure in your decision making process. While each of the points I just made doesn’t ensure you’re going to get a great advisor, if you do these things you put the probability in your favor. Alternatively, if you don’t do any of these things you may still find yourself with a great advisor but the chances just become much slimmer. All we’re doing here is trying to put the probabilities in your favor, much like we do when we manage a good portfolio of stocks for our clients.
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?
Yes. It is actually quite the opposite than most people would think. Financial advisors are everywhere and there are so many different focus niches that exist. The term financial advisor is rather ubiquitous. However, if you dig deeper you will find that there are advisors that do a great many different things. For example, there are financial planners that focus on debt reduction. There are planners and advisors that focus on college savings. The industry really has become a bit more specialized than many would think. So if you are on a tight budget and struggling to plan for your children’s college expenses there’s an advisor for that. The internet has offered us as a society the ability to find the advisor that best fits what it is you need.
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?
Absolutely. My father was a very successful CPA in New York City and I can vividly remember playing math games with him whereby me and my siblings would try to stump him with really hard multiplication tests. If he got it right he could then try and stump us. I loved it. I watched him build a very successful accounting firm by being a fair practitioner that took care of his clients first and foremost. Naturally, as I got older I began to gain an interest in the stock market because to me it was all about math. I guess you could say finance has been in my blood from the start. But the passion for it came from the experiences with my father at a very young age. Although he is no longer with us I carry that love of math and that responsibility of care for my clients to this day. I guess you could say it is a fitting tribute to him.
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. 🙂
Well, this is already starting to slowly happen but I truly believe that investing by Environmental, Social and Governance factors can change the world. Our system here in the United States was built in such a way that money drives behaviours. Alexander Hamilton and the founding fathers did a great job at this, it just took several hundred years to get to the point where we have moved from incentivizing individual or shareholder gains at the corporate level toward more of a goal of societal good. If everyone invested in only companies that were doing well for society, soon every company would have to focus upon that. Or perish.
The results recently have been amazing. Major corporations are starting to hire Sustainability Officers and recently over 200 CEO’s signed on to a new definition of the purpose of a corporation. No longer are they just beholden to driving shareholder value. As they stated: “investing in employees, delivering value to customers, dealing fairly and ethically with suppliers and supporting communities are now just as important as generating long-term value for shareholders”. This is a significant shift that is great to see. I want it to continue and become so imbedded in our culture that no one even questions the efficacy of doing well for the environment and society.
How can our readers follow you on social media?
I have several points of contact. If you visit my website you can sign up for my newsletter there. I send out a monthly market update and a few educational pieces each year. Reading them is a great way to get into my head and better understand where I think the markets are trending and how I am reacting to that for my clients. The website is www.shorepinewealth.com. I am also on LinkedIn at https://www.linkedin.com/in/liebermanmarc/ . The firm has a Facebook presence and can be found at https://www.facebook.com/shorepinewealth/ . Lastly, my twitter is https://twitter.com/ShorepineWealth
Thank you so much for joining us. This was very inspirational.