“Redefine your understanding.” With Tyler Gallagher & Michael Kay

Redefine your belief about what wealth means. Redefine your understanding between ‘more’ and ‘enough’. Redefine your understanding of what is really important to you and why. As part of our series about what one should look for when hiring a financial planner or adviser, I had the pleasure of interviewing Michael Kay, CFP® Advisor. How […]

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Redefine your belief about what wealth means. Redefine your understanding between ‘more’ and ‘enough’. Redefine your understanding of what is really important to you and why.

As part of our series about what one should look for when hiring a financial planner or adviser, I had the pleasure of interviewing Michael Kay, CFP® Advisor. How you grow up factors into your life and financial decisions in a big way. Michael’s dad was a Depression baby, and worked two jobs as a teacher and a musician. His mom was a child prodigy violinist and had no problem spending. Discussions about money were generally “forte”. So, Michael’s money mindset eventually resolved toward a balance between thrift and spending. He started working toward his true calling from an unlikely place. After deciding that a career as a trumpet player wasn’t in the cards, he earned my CPA and worked in public accounting for 10 years. It was his background in accounting and passion for working directly with families that led him to Financial Life Planning. Michael founded Financial Life Focus to work with people who put success at the forefront of everything they do; people who understand that finding balance is a journey. He built a team whose expertise and working styles complement each other.

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?

AsThe Beatles song goes, ‘a long and winding road’. My life before college was steeped in music. I was a pretty accomplished trumpet player and music was my life. After an earth-shattering moment, which I won’t bore you with the details, I discovered that I was pretty much wasting my time and the goal of being the greatest trumpet player was rendered to dust. My father suggested I talk to a friend of his who was a successful CPA. After a few minutes, he announced in no uncertain terms that I would make a GREAT CPA! So I changed my major to accounting and voila’ I graduated with a degree in Accounting and even during the Recession of 1976, found a job in a medium sized accounting firm. I spent almost ten years working both on my own practice and with other firms. I learned tons and had an incredibly wide span of experiences from SEC Audits to Tax Exams, from Expert Testimony on Divorce cases to taking physical inventory in a chicken processing plant in Salisbury Md. Yes, lots of different experiences that took me all over the country and working with a wide variety of businesses and individuals.

During this time, my wife, who worked for a law firm, introduced me to the brother of one of the partners. He was in the insurance business and had a very robust firm. We became friends and referred business to each other. At one point, he asked me to lunch and told me that he wants me to join him in his firm handling investments, planning and insurance for clients. That was my entry into financial services.

There were a myriad of ups and downs, but each challenge led me to know that I needed to create my own firm with a very special and specific mission-that did not include selling products.

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?

During the early part of my career, I was taught that in order to do business, you need to get in your car and drive to meet prospects and clients at their homes. I found it tedious and a waste of time as too often meetings were distracted by ringing phones, screaming children and other interruptions that took away from the focus of trying to get anything done.

One day, I met with a new prospect in their home and about 15 minutes into the meeting, I felt a searing pain in my calf. I jumped and looked down, wondering what the heck had happened. I saw a kitten with its claws embedded into both sides of my calves; holding on for dear life. I reached down and took the kitten off, gently, but purposefully….and looked at the smiling people and said, “I believe this is yours.” and handed them their precious little kitty. I picked up my bag and left the house telling them that if they wanted to help to make an appointment in my office. That was the last time I’ve ever met with prospects in their homes. It was a turning point and the blood stains never came out of those trousers!

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

My newest project is called “Chapter X” and is focused on helping men transition from their work life to their next chapter. Men spend so much time ‘being’ their jobs/professions for not only monetary gains, but also socialization, ego gratification and purpose, that when it’s over (by their choice or not) they are frequently left in a vacuum of depression, confusion and dissatisfaction. Chapter X is a self-defined path to shifting from the mindset of “achievement” to “fulfillment”. The project is a natural progression of financial life planning.

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?

Ahhhhhhh..who doesn’t love to talk about their tipping point. As a CPA, I sold my time. It was pretty simple. Entering the financial services field, it was all about commission. While my focus was to help people plan, there was the sale of investments and insurance that was the inevitable outcrop of providing “free” planning. It never sat well with me and always felt like a conflict of interest (which of course it was; at the very least, in appearance, if not in fact). I found out about fee-based planning and then fee-only. I knew immediately that was the right direction. That was my first “tipping point”…my second came when I realized that helping people, REALLY helping people required a deep understanding of who they are, their mindset, their money history and building a true intimate relationship of trust. I heard about Financial Life Planning and began my training. I knew immediately that this was exactly what I needed to build the practice that aligned with my values.

The lesson I learned and put between the covers of my first book, “The Business of Life” is that in order to truly make a difference in people’s life, you need systems and processes(thank you Michael Gerber) and a desire to listen deeply to truly hear what people want(thank you Carol Anderson and George Kinder). No one is going to make important changes in their lives with first knowing that it aligns with their values and they have someone guiding them that understands their values.

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?

When I first opened my own solo practice (still selling products, but focused on planning), I was working 6.5 days a week, my weight ballooned, my family life was hurting and I was trying to do everything and not making much money. I was miserable. I heard about a Financial Life Planning training firm, then located in Poulsbo, WA. I heard about, ready? Life balance. I worked with a business coach who talked about systems and processes and working ON the business. I read Stephen Covey’s Seven Habits….

Advice #1: You must focus on your health first. Without it, nothing else matters.

Advice #2: Invest in yourself. Employ coaches and learn how to be more than a purveyor of products and paper.

Advice #3: Learn how to LISTEN and listen deeply to others. If you’re not good at it, practice at every opportunity with everyone. It is the secret to helping people and building a real business.

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. Do your homework before meeting with a planner. Most people will call a firm of a familiar Wall Street firm because they figure they’re big and they’ve been in business a long time. The problem there is, unfortunately, the financial services industry doesn’t hire the brightest bulbs in the chandelier. They hire people who can close the sale. If you’re checking out a specific firm or rep. go on and see if there are complaints. This includes researching through Google for fines, complaints and other misdeeds which should be a red flag.
  2. Financial planning is more than investments. The focal point of planning is different for everyone and is dependent on their specific situation. For example, some are dealing with debt, or children with special needs or divorce or have young families and need direction. You want to work with a firm that has a broad level of experience in planning in Cash Flow, Retirement, College, Medicare, Investments, Risk management, Estate and tax planning, not just some dopey guy who wants to manage your portfolio.
  3. Is the firm/rep independent? How do they get paid? Today, the rage is charging clients based on the assets managed (AUM). What basically happened is Wall Street commission firms discovered that by charging a fee instead of commissions, they have created recurring income. This means the firm became a Registered Investment Advisory firm; but that doesn’t mean they are independent or free of conflicts. Make sure you read their ADV (required disclosure document). Wealth Manager isn’t the same as Financial Planning. I spoke with someone recently who told me they were working with fee-only advisors. I told them that was wonderful and asked who. She told me. One was a major Wall Street name-NOT a fee-only advisor and the other was Fee-based (sells insurance and investments on both commission and fee basis). She had no idea. The problem is, people don’t know the difference and don’t even know the questions to ask.
  4. At your preliminary meeting, notice whether their first questions revolve around the size of your portfolio. Some firms do have minimums, but their websites should alert you to that. Notice the types of questions asked and to what degree your answers are being heard. Do you feel heard? Look for cell phones on the table or if they’re checking their watches or phones during the meeting. If so, say good-bye.
  5. Ask questions: Find out with whom you’d be working. If it’s a team, understand each person’s role and availability. Ask how they get paid and if there are any costs besides their fee. Ask if they have any conflicts of interest (even if you already know). Find out if they’ve been fined or sanctioned by any state or federal authority (SEC) or licensing organization (CFP Board); even if you already know. Notice if their answers are chock full of jargon and industry-speak. If so, you’re either being bullied or talking to someone who is unable to relate to you. Finally, do you feel heard and understood. If not…run like hell.

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?

Speaking personally, my firm charges a flat fee for everything we do, including investment management. Our fees are scaled based on the complexity of the work and the clients’ net worth and income. If their net worth or income is not huge their fee will reflect that. We believe this is the fairest way of helping people without having to have cater only to very wealthy people. We have clients who are struggling with debt and those with extraordinary wealth. Their fees are charged according to their situation.

Because financial education is so terrible in this country, most people grow up with a low level of knowledge about what is appropriate and necessary to meet their goals and values. Not only is the level of information low, but people’s feeling about money is based on what they learn as children observing their parents. If parents use money as reward, this becomes normal. If parents fight about money, then chances are, they will equate money with conflict and avoid making money decisions. If they grow up where money is used as a weapon or money is used to help others, they will feel very differently as adults about money and its role.

In order to live their best life, people should work with planners who can objectively help them first understand their money mindsets and work with them to understand their true values. In other words, answering the “WHY” question and creating a mutually agreed upon road map to get from here to there, accounting for unexpected changes and transitions.

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?

Wow…tough….so many people have helped me along the way. But I would have to point to my friend Art Hodes. He was the person in the insurance business who dragged me kicking and screaming from public accounting just kidding. Art was a fierce believer in helping people and believed strongly in how life insurance helps families when they are at their most distraught. He wasn’t slick or a BS-er…he was straight to the point and had the highest level of integrity. He is one of the very few people who, if he asked me to blindly sign something, would do so without thinking twice. People of his integrity and love for family is rare and without him, I’d probably still be putting big numbers in little boxes…or is it little numbers in big boxes?

Funny story about Art. He invited my wife to his home for a social afternoon. I asked him for the address. He doesn’t have a particularly loud of clear voice and responded what sounded like #2 Oak Drive. He lived about an hour south and I didn’t know the area. We got to his home and rang the bell. No answer.I was so confused. I walked around the house and looked in the windows. No one home (mind you, this was pre-cell phones). I drove to a local hotel to call and asked him where he was, that we were there. He said he was home. We drove back. No one home. Back to the hotel. I told him we were at #2 and no one was home. He said, “Oh no, I am at 2–2 Oak Road.” I didn’t realize, until that moment, that 22 was pronounced two-two in his lexicon. We all had a good laugh and I never let him forget it.

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. 🙂

Redefine your belief about what wealth means. Redefine your understanding between ‘more’ and ‘enough’. Redefine your understanding of what is really important to you and why.

We are so inundated with the media’s portrayal of success as material; as the need to have more than…your neighbor, colleague, family, in order for you to feel successful. There is nothing better than being able to put your head on the pillow at night and feel a sense of comfort that you’re ok….and that you don’t need to chase anyone or anything (Besides peace of mind) to live a meaningful and fulfilling life. Money is a tool and nothing more.

How can our readers follow you on social media?

Twitter: @finlifefocus. @michaelfkay., LinkedIn, Facebook

Thank you so much for joining us. This was very inspirational.

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