Most people assume that financial planning is primarily about money management. But that’s like saying a cross-country family vacation is primarily about learning to read a map. In truth, financial planning involves deciding what kind of life you want for you and your family, and determining what decisions you need to make to get there.
Unfortunately, the financial world is growing increasingly complex, and it’s becoming almost impossible to navigate without a guide. There is little margin for error, and a single mistake can cost you and your family dearly. You have worked hard and sacrificed much to get where you are today — the last thing you want to do is waste all of it by making the wrong financial decisions.
That’s where we can help.
Cutting Edge Financial Planning
Every industry has its stars — those individuals who not only distinguish themselves as experts, but whose thought leadership actually transforms their professions. In the world of financial planning, Michael Kitces, CFP®, MSFS, MTAX, CLU®, ChFC®, RHU®, REBC®, CASL® is one such person.
Financial Planning magazine labeled him the industry’s “Deep Thinker,” and in 2010, the Financial Planning Association honored him with the Heart of Financial Planning Award — the industry’s greatest recognition. While generally given as a life-time achievement award, Michael won it at the age of 33.
A popular speaker, he is also the co-author of The Annuity Advisor and Tools & Techniques of Retirement Income Planning, and appears regularly in The Wall Street Journal, Business Week, Investment News, the Journal of Financial Planning, Financial Planning magazine, Financial Advisor magazine, Kiplinger, Money, SmartMoney.com, and the Financial Post. In May 2012, the prestigious Journal of Financial Planning named him the publication’s first Practitioner Editor.
With Michael as both a partner and Director of Research, Pinnacle clients benefit from his cutting edge financial planning research long before the rest of the industry catches on. Our individual Wealth Managers use his work to guide their own planning, and consult with him directly when a client is facing an unusual financial problem.
This commitment to innovative, research-based financial planning provides our clients with strategies and techniques that may take years for the rest of the industry to adopt.
For example…
Safe Withdrawal Rates
Retired Americans who rely on their portfolios in retirement face an important challenge: How do you know how much money you can withdraw each year without taking so much that you run out of your assets early?
Planners have been researching safe withdrawal rates for years, with most concluding that 4% was a good rule of thumb. Michael’s cutting edge research moved the debate past the old assumptions when he demonstrated that safe withdrawal rates are actually tied to market valuations. If markets are undervalued, then your withdrawal rate can be higher; if they are overvalued, the withdrawal rates have to be lower. Pinnacle’s Wealth Managers use Michael’s groundbreaking research when they determine withdrawal rates for their own clients.
Tax Location
We use specialized portfolio management software that we spent a year helping to design that enables us to manage each client’s portfolio with extreme tax efficiency. We treat each total portfolio as if it were one large account. All of your assets remain exactly where they always have been, of course, but our software gives us the ability to place your most tax efficient assets in your taxable accounts and the most tax inefficient in your tax deferred or tax free accounts. In doing so, we’re able to minimize your taxes and significantly enhance your long term wealth creation.
Tax Sequencing
Simply put, tax sequencing is the art of determining which account to take money from in the withdrawal stage. This varies greatly by individual, and is based on a person’s annual income and personal tax rates. For example, imagine that you’ve just retired and have a chunk of deferred compensation coming to you in the first year, which would put you in a higher tax bracket. We would make sure any additional withdrawals come out of a tax free or after tax account, to keep you from being bumped up into that higher bracket.
Of course, good financial planning is about more than just the strategies and techniques that the planner uses… it’s also about the way the client experiences the process.
A Better Financial Planning Experience
Recently, when an industry opinion researcher asked his focus group how they would describe the financial planning experience, they told him it was “a mix between a dental visit, math class, and marriage therapy.” Unfortunately, when it comes to most planners, they’re right. With its combination of endless document hunting and long, jargon-filled meetings, the standard planning process can be miserable for the client. That’s a shame, and it prevents a lot of people who desperately need a planner from ever enlisting one.
But it doesn’t have to be that way.
At Pinnacle, we take a different approach. Our all-star team of Wealth Managers have streamlined the process, to minimize the difficult parts of planning and improve the overall experience for our clients.
| WITH MOST FINANCIAL PLANNERS… | AT PINNACLE… |
|---|---|
| Clients are required to hunt down reams of financial information on their own, before a planner will even look at their situation. | Your Wealth Manager will walk you through the information collection process, and will tell you exactly what you need (and often, where to find it). We’ve been doing this a long time and have developed shortcuts, tips, and strategies to make the process as painless as possible. |
| Clients are forced to sit through long meetings filled with indecipherable industry jargon. As a result, they leave feeling frustrated and in-the-dark regarding their finances. | Your Wealth Manager will speak to you in plain English. After all, your planner should be someone who helps you get a better idea of what you need to do to reach your financial goals, and not someone who talks to you as if you were a math student. |
| Clients must be on guard as their advisor tries to sell them insurance, annuities, or some other product they don’t really need. | We bear the prestigious CFP® designation, so our Wealth Managers are held to a fiduciary standard. That means they are required to advise and act in the best interests of their clients. We don’t sell or benefit from the sale of any product, so our clients can trust that our financial recommendations are completely objective. |
| Clients feel judged and treated like children because they don’t know all the details of their financial situation. | We understand that most people don’t have the time or interest in becoming experts in finance. That’s why we’re here, after all! Instead of being judged, we believe that those who seek out financial planning should be congratulated for taking a positive step toward financial health. |
| Planners are forced to handle both their clients’ investments and their financial planning, which means they cannot devote their full attention to either. | Because we have an independent Investment Team to handle all our client portfolios, your Pinnacle Wealth Manager can focus completely on serving you and your financial needs. That’s a level of personalized attention few firms can offer. |
No matter how technically competent a financial planner may be, if he or she creates a miserable experience for the client, that planner has failed. That’s why we’ve worked so hard to make sure Pinnacle’s financial planning process is efficient, non-intimidating, and client friendly.
