Whether you are Joe Rich or Joe Just Getting Started you want a trusted advisor in your corner for two reasons. First, the world of personal finance and investing is constantly changing. You want someone to be there for you thinking about your financial challenges five days of the week and thinking of innovative ways to improve your financial life. Second, you need an outside the box perspective. Much like trying to figure out what text to send to your crush it sometimes takes a non-interested friend to give you the cleverest line you have ever heard off. Making critical financial decisions when you are emotionally tied to the outcome can be close to impossible. Having professional advice that is non-biased and non-emotional can be the difference-maker.
As part of our series about what one should look for when hiring a financial planner or adviser, I had the pleasure of interviewing Alex Caswell CFA CFP®. Alex is a Wealth Planner at RHS Financial. Alex partners with entrepreneurs, business owners, and employees of start-ups to understand their unique needs and provide a boutique financial planning and investment management experience. His mission is to help people that are changing the world live a life unbound by their personal finances. His belief is that financial success is at the intersection of financial rationality and emotional satisfaction and that every day is an opportunity to grow. To execute on these beliefs for his clients, Alex brings years of experience and knowledge working as a Trading Specialist and a Financial Advisor at Charles Schwab and Fidelity respectively. He has attained the Chartered Financial Analyst designation and the Certified Financial Planner® designation, indicating his skill in the wealth management industry and his oath to uphold the highest ethical standards. In his free time, you can catch Alex enjoying distance running in the city of San Francisco and nearby trails, working on his amateur photography, reading the next best business book, and trying to perfect a variety of culinary dishes. Alex sits on the San Francisco board of Junior Achievement. A global non-profit organization dedicated to providing financial education for children K-12. He is also on the board of the Financial Planning Associations NexGen committee, fostering the growth of future financial planners.
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?
Ilove this question because it is really at the core of my career to this day. I was born and raised in Latvia and Russia. Unfortunately, when I was 8 years old my father passed away from cancer. My now single mom decided to move us to the US after a couple of years to give me the best chance at having a bright future. As a child, I never fully comprehended the burden that it was for my mom to not only be an immigrant but also to be a single mom. As I grew older, she started sharing with me more and more about her personal financial life. I started to quickly realize how great of a disadvantage someone is when they don’t have the proper support system or education to navigate the complexity of the American financial system. My mom in her infinite wisdom and foresight bought me Rich Dad Poor Dad book when I was only 14. I was instantly hooked on finance and the rest is history. Now I primarily work with immigrants, newfound wealth especially with tech employees, and women. I want to make sure that people like my mom that don’t traditionally have the support system have someone in their corner to make the most of their financial lives.
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?
This is more embarrassing than humorous but taught me a great lesson. While I take my job and career choice extremely seriously, I can be a bit of a goof and love to have a light spirit around the office. I have a tendency of never knocking on people’s doors and barging in. I take the open door policy very seriously… The first year of my work as a financial advisor in San Francisco I had a good friend and coworker that I would bother at least twice a day. On this particular day, I peeked into her office and I saw another woman of her age in there, mid 20’s or so. You know what they say about assumptions. Well, I assumed it was her friend. So being the friendly guy that I am, I made a grand entrance into her office and at the top of my lungs I said “Wassssupppp!”. My friend and co-worker looked like a deer in the headlights and her friend was slightly shocked. When the initial shock wore off my friend calmly said, “Hey Alex I am in a client meeting…”. The only thing I could mutter as I stumbled out was “I am so sorry I thought this was your friend”. I have never been so embarrassed.
Well, what is the lesson here? I certainly did not learn how to tame my workplace enthusiasm. But what I did learn was the importance of never assuming who a client can be. I think in our industry both advisors and clients think that the traditional financial adviser client is a white male in his mid 50’s. That may have been the case in the ’80s but nowadays wealth is being democratized between both men and women of any age and any background. Everyone deserves to be heard out and you never know who could end up needing your help.
Are you working on any exciting new projects now? How do you think that will help people?
We are doing a complete redesign of our firm image, website, and focus and I am leading this project. In the world of boutique independent fiduciary financial advisors, it is important for people to understand how you are different and how you are an ideal advisor for them. Since I joined RHS Financial I have been beating on the drum that we need to focus our efforts where we have the best ability to serve. We are really good when it comes to helping people with equity compensation, investment management, and crazy appreciated stocks and the tax burden they bring. Well, the ideal client that encompasses all these problems is someone that works at a tech firm. With this North Star, I have been working with web developers, UI designers, content writers, and consultants to completely redesign the message our firm sends. This has been a really exciting project as I had to really dive deep into the world of digital marketing.
I really think that people in a unique situation that we are well suited to help will have a much better impression that we are right for them. If we can even reach a dozen more people a year and help them make an impact in their personal and work life it will have made this project a huge success.
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?
I really hit the ground running when it came to my career in finance. In fact, I would say that the tipping point was when I finally got the opportunity to work in finance. I was living overseas in London working for a start-up. Our office was on a boat on the Thames and I just felt that things weren’t going anywhere. I applied to maybe a hundred different jobs back in the US and the only one that took a chance on me was Charles Schwab. I was so eager to prove my worth that I put my heart and soul into every single day. I rose very quickly through the ranks with promotion after promotion. At that time it seemed like I have attained my own definition of success.
When I look back at that critical moment in my career, the beginning, I realize that the real definition of success was not in the fact that I got promoted quickly but in the fact that I spent every day trying to make myself better by learning as much as I could and taking on more and more challenging projects. I think this is the lesson that everyone should take away from my experience. How you measure your success is almost as important as how you attain this success. It is very important to measure your success by your day to day input not what ultimately comes out of it. You can’t control the outcome, but you can control your actions and your attitude.
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?
I am going to piggyback off my last answer for advice number one. Always prioritize self-improvement through education if you want to thrive. Finance is an increasingly competitive industry. If you are to make the most of it, you need to keep up and excel in your knowledge.
Advice number two, don’t be afraid to look for a new employer if you feel that you are not happy. Whether you hit a wall, you don’t think you are doing that well, you aren’t learning as much, or a variety of other reasons you should always explore your career options. No one is going to appreciate you as much as you. So, go out there and see if you can find that next challenge that is going to get you amped up to wake up every morning.
Advice number three, help others in their journey. The financial community is a very tight-nit group of people. You helping others will not only allow you to connect with others in the industry in a positive way but it will also demonstrate your ability as a leader. Some of the best relationships in the industry I have, came directly from me trying to help college students and junior advisors find their next job or simply discover what is out there.
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?
While there is a much larger list of things you should find out about a potential financial advisor here are the top 5 things as an insider I think are critical for anyone to know before making a very important decision.
The number one thing you need to understand about a financial advisor that you are considering hiring is how they get compensated. There are primarily three types of compensation an advisor can receive.
Commission based, fee-based, and fee-only. The reason, why this is so important, is that it will help you better understand how well their interests are aligned with your own.
Someone that is commission based will be compensated based on what they sell to you. In most cases what this means is that the more they sell to you, the bigger the dollar amount is, and the more expensive that product is to you as a consumer the more they will get compensated. This is the compensation structure that is most riddled with conflicts of interest. While there are plenty of moral and ethical advisors that work on commission structure it will require you to second guess every piece of advice they give you as you try to decide if that advice is really in your best interest.
Fee-based advisors have a mix of commission from sales and fee that you pay them directly for their services. This is very common when an advisor sells insurance products but offers investment management and financial planning on a fee basis. While this is a huge improvement from solely based on commissions you still will need to be careful when they speak to you about insurance products like life insurance and annuities.
Finally, someone that is fee-only receives their entire compensation based on the fee’s that you as a client pay them directly. This tends to be the cleanest, most transparent, and devoid of conflicts of interest compensation system. A fee-only advisor can advise on investment strategies, financial planning, and insurance products with complete independence.
If you are looking for financial advisor be careful that you understand how they get compensated. Better yet just find a fee-only advisor and save yourself the headache of constantly double-checking their advice for conflicts of interest.
The second question you want to ask your future financial advisor is who exactly do they serve? While some financial advice is broad in nature some of the most critical financial decisions are very case-specific. You want to be sure that who you will pay to dictate your financial future has the expertise and the resource focus to help you. If you find out they work with others in your shoes you can be sure that during the time they are not working with you, they are working with someone on a situation you may experience in the future. As an example, if you are a young tech employee working for a privately-owned start-up you want to make sure that your financial advisor is versed in equity compensation and has the resources and time to dedicate to your complex situation.
The third questions you should ask is what their specialties are? Very few advisors know everything about everything. There is just too much out there. You want to find a financial advisor who can cater to your needs. If you feel that what you are lacking in the most is your ability to budget, then find a financial advisor that specializes in just that. If you feel that you don’t have the time or the expertise to invest your own money, then find an advisor that specializes in investment management. List a few things that you would like the most help with and see if your potential advisor has the expertise in that area.
The fourth question should ask them what the service experience is like when working with them? This is an exercise of setting the right expectations. If you are someone that prefers a high touch experience you definitely need to know how frequently your advisor will reach out to you and for what reasons. If you prefer to fully delegate and come back to it once a year you want an advisor that understands that and can set the experience to match.
A classic example of this is someone that comes to a financial advisor exclusively to have their money managed. If they feel confident in their personal financial situation and ability to make the most of personal finance decisions, they would not be a good fit for a financial advisor that prioritizes reaching out to the client about financial planning four times a year.
Finally, you want to know why the advisor does what they do. While most finance roles are black and white and number focused when it comes to giving financial advice it is an emotionally charged experience. You want to understand what drives your financial advisor to come to work every day and deliver a personalized, human, and passionate experience to their clients. There is no wrong or right answer to this question. If it resonates with you then there is a good chance that your personalities will be a good match, you will take their advice well, and you will have a successful working relationship.
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?
I am biased in this because I am a financial advisor, but I truly believe that everyone can benefit from hiring a financial advisor. Whether you are Joe Rich or Joe Just Getting Started you want a trusted advisor in your corner for two reasons. First, the world of personal finance and investing is constantly changing. You want someone to be there for you thinking about your financial challenges five days of the week and thinking of innovative ways to improve your financial life. Second, you need an outside the box perspective. Much like trying to figure out what text to send to your crush it sometimes takes a non-interested friend to give you the cleverest line you have ever heard off. Making critical financial decisions when you are emotionally tied to the outcome can be close to impossible. Having professional advice that is non-biased and non-emotional can be the difference-maker.
Finally thinking that you don’t have enough money to seek professional help is by far the biggest misconception and can be crippling to your financial future. This is very common among young people. While you may not have the assets that your parents or grandparents have accumulated you have so much potential in the form of human capital. Every time you make a good financial decision that will compound over the remainder of your life. It is never too early to start seeking financial guidance and with all the different ways you can pay for an advisor, such as per hour, it is accessible to almost everyone.
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?
That must be my grandmother. She raised me up until I was 8 and has been such a positive force in my life. She is by far the strongest and most positive person that I know. She is back in Latvia and I usually speak to her once a week and every time we speak, she shares with me some form of wisdom and encouragement. The one piece of advice from her that really resonates to me the most must be about effort. When I was in the first year of my career I was really struggling through a tough designation. I would call her constantly complaining about the hours I was putting in and the stress of not knowing if I am going to pass the rigorous exam that was in front of me. Time and time again she told me that the best I can do is give it my all everything after is not in your hands and you shouldn’t stress about it. Time and time again she beat this message into me, and it really helped me put my struggles and challenges into perspective. I don’t think that without her voice I would have persevered during some of the toughest times in my professional 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. 🙂
Financial literacy is dear to my heart. I am on the advisory board of Junior Achievement which is a global non-profit that teaches kids in K-12 about personal finance, business, and entrepreneurship. While the organization has made great impact over the 100 years it has existed there is still so much work to be done. I really think it starts by having people vocalize the need for financial education in schools. So much personal suffering can be alleviated if we set young people to succeed financially when they start their lives as adults.
How can our readers follow you on social media?
The best way to follow me is definitely on LinkedIn at https://www.linkedin.com/in/alexcaswellwealthadvisor/. I am trying to make LinkedIn a thing.
Thank you so much for joining us. This was very inspirational.