More Than Money
Issue #25

Working with Financial Professionals

Table of Contents

“Personal Stories - Up Close and Personal”

Satisfied? Delighted? Fed up? How happy are you with your financial professionals? Is it possible to find experts you can trust to serve your financial interests, to understand you on an emotional level, and to honor your values?

The following personal stories reveal some of the challenges and delights that people with wealth experience in cultivating trusting relationships with financial professionals. At different points on the path of taking charge of their finances, our interviewees explore their problems and successes, uncertainty and confidence, and share some of the wisdom they've gained along the way.

Happily Unconventional

Adapted from an interview with Joani Blank.

Joani Blank is the founder of Good Vibrations, a nationally known worker owned and run emporium and catalog featuring products and advice that contribute to healthy sexuality. Her investment and philanthropic habits are as unconventional as her business.

I have what I think is an unusual approach to money. I love having money because of what it enables me to do and I hate having it because I feel guilty about the unfairness of the widening gap between rich and poor. But I'm not self-conscious about having it.

It's important that my financial pros understand my idiosyncrasies so they know how to advise and support me. For example, I loan money to all kinds of people. I currently have about $120,000 outstanding in $1,000 to $10,000 loans and a couple over that, one for $15,000 and one for $20,000. I get such a kick out of doing that! I have money, so why not help my friends? If I get it back (and I usually do), I can keep giving it over and over.

In one case I loaned money to a friend who's a hair stylist so she could buy her own salon. In another I helped a musician friend buy an 18th century string bass. It would normally have cost $80,000 but she had an opportunity to buy it for $13,000. I loaned her $6,000 and she had enough money of her own to make up the difference.

I've never shopped around to find financial professionals I could trust. Friends who know my world view have just steered me to people with similar philosophies. One of my favorite people is the woman who does my taxes. She has served as one of my "money therapists" over the years, and I frequently ask her advice about money stuff. She does my daughter's taxes now, too.

I met my first financial advisor-- an accountant who got fed up with the corporate world--though a small business network I belonged to. He had me fill out one long, comprehensive form that covered everything, my sources of income, how much I spent, what I spent it on, and what I like to give money to. I was impressed with how thorough it was. Then we talked about investing, retirement, saving for the future, how to support my child, saving for her, anticipating her inheritance from me--an overall plan.

My current advisor, David, is informal and friendly and interested in me as a person. I talk about emotional issues pretty easily, so it's important to me that he is willing to relate on that level, to understand my priorities and my excitement about various projects. Also, although he has no children of his own, I'm very impressed that he seems to really understand the complex relationship I have with my daughter, who is now a young adult.

David is one of the financial planners in the First Affirmative Financial Network, an association of financial professionals who work exclusively in socially responsible investments. I've never worked with a financial professional who wasn't committed to socially responsible investments. David's wife is my bookkeeper and we're friends, too. It's important to me that I can call him any time. Sometimes we'll talk about something for ten minutes and he'll forget to bill me.

This kind of relationship may be hard for some financial people to understand if they are accustomed to looking only at increasing wealth or reducing taxes for their clients. It's my impression that some professionals will do whatever is within the letter of the law to help their clients avoid taxes. That may be legal, but it doesn't always feel ethical to me, so I steer clear of advisors like that.

I've invested in two privately held corporations. One sells sustainably harvested wood and the other is developing superconducting materials that can be stored at ambient temperature. This technology could dramatically decrease the amount of electricity that's needed and has hundreds of sustainable applications.

Also, although I don't like the stock market, I recently bought my first stock: 100 shares of a high tech software company. It feels like gambling, and I'm not particularly into gambling. My advisor asked, "Why are you buying this?" I said, "Because I thought it would be fun to play at being a stockholder." He may not share my enthusiasm, but he understands it and supports me.

My advisors know I'm going to do what I want anyway. What I like most about my financial professionals are their flexibility, their willingness to adopt my perspective when advising me, and their understanding and support of my attitudes. I'm something of a control freak, so when I have a little extra money to invest, David will tell me about some new things I might get involved in. Then I'll make the decision. For example, last year I started putting money away for my grandchildren in the form of educational IRAs.

I grew up with a prejudice against people who make money by having money. Now I guess I'm doing it, even though it still doesn't make sense to me. That's one of the reasons why I include philanthropy in my "portfolio" of socially responsible investments. I'm pleased that I'm able to give away fifteen percent or more of my income almost every year.

My advice to others who want to hire a financial advisor is, "Remember that your financial professionals work for you." Make sure they know as much about you as possible and ask them any questions that seem relevant. Base your decision to work with them on their responses. I don't have a problem being open with most people--even relative strangers--about either sexuality or money. So if I can encourage others to open up and relax about money by being relatively open and relaxed myself, then I've done some good.

How do I know if my financial professionals are highly competent? I don't. I guess I won't know until one of them messes up, and so far none of them ever have.

Disempowered Inheritor Turn Financial Pro

Although I grew up in a wealthy neighborhood and was aware of the privileges of wealth, we didn't have the same kind of money ourselves. I didn't know I would someday be wealthy, until my father died.

In the late 60s early 70s, I was working as a botany research clerk to put myself through college. It was a very transformative time. People were considering the political implications of everything. I studied for a degree in resource economics, learned about community organizing and economic theory, and got involved in the women's movement. When a group of women started a credit union, I volunteered to help. It was exciting to put my politics into action to help women gain power over their money and their lives. I joined the credit union board and eventually became president. We offered a lot of seminars and individual counseling to our members to help them understand and gain control of their finances.

Then my father died, and for me, everything changed. During my parents' married life, Dad made all the larger financial decisions and had given Mom an allowance. So my mom was a classic example of a widow who was in the dark about important aspects of her financial affairs. Together, she and I went through their papers and tried to figure out what was what. This opened my eyes even more to the need to help people get control of their money.

Also, suddenly and unexpectedly, I found that with Dad's death, I had been left with a lot of money from a trust, but it seemed tainted, a bad exchange for the loss of my dad. Angry and sad and uncertain, I turned to my first professional helper. I assumed a woman would understand my feelings and needs and values, so I was relieved and hopeful when a member of the credit union referred me to a woman broker. I automatically trusted her. What a mistake!

She helped me develop a stock portfolio, then encouraged me to put part of my inheritance into an annuity with a company her firm recommended. She said, "If you're going to put the rest of your money in stocks, you should have something safe like this."

Then the firm she had recommended went bankrupt. I first heard about it on the news, then through a letter the firm sent. My broker wouldn't even return my calls. When I finally got through to her, she said, "The firm approved the sale. My research people said this investment was a good one." She never said, "I'm sorry." or showed concern for how I felt. I felt betrayed, as though she had turned "company agent" on me. Although my money was restored, this experience raised my awareness of how impersonal this industry can be.

I had heard about a profession called financial planning. It attracted me right away, but I wanted to be a different kind of financial professional than my broker had been. I wanted to help people understand their life picture and empower them to take charge. So I studied for a Masters in accounting and became a CPA and a CFP specializing in personal finance.

I've been very happy with that choice. What I like most is helping people put their values to work in the arena of money management. I advise people looking for a financial advisor to ask that advisor about whatever is important to the prospective client.

From the beginning I found that clients supported my efforts to focus on values but my more traditional colleagues didn't, so I joined First Affirmative, an association of advisors specializing in socially responsible investments, in order to meet like-minded professionals. I also work with attorneys, tax professionals and non-profit development officers. It's very important for clients and professionals to talk with each other. One person can't be an expert at everything. Being part of a team of trusted professionals is empowering for me and for my clients. It has made all the difference.

Inheriting a Financial Advisor

I was 16 when I first met with my mother's financial advisor. I really wasn't that interested in learning about the world of finance. I just wanted to get an idea of how the stock market worked. Marie encouraged me to think about the companies that I saw people talking about or spending money on. I ended up investing in The Gap, which did really well. It was a great exercise to learn how to identify stocks that both had some value in my life and were fruitful investments.

Marie was-and is-a patient teacher. She always lays out for me all the options in any major decisions I have to make, and we discuss them all before she makes her recommendation. Sometimes I just want to cut to the chase and have her give me her advice rather than have an in-depth discussion, but she insists I think for myself. She also encourages me to ask questions, which I really appreciate about her and when I do she says, "That's a great question! I'm so glad you asked me that." I still don't find financial management that interesting, but at least Marie demystifies it so I don't feel intimidated.

One challenge of "inheriting" a financial professional is learning how to assert my own ideas when I feel less experienced than both her and my mother. For instance, my mother is a firm believer in SRI. And most of my investments have social screens that I chose myself. But at one point I wanted to ask Marie if I was making the most money that way, and it was hard to bring it up because socially responsible investments are the focus of what she does. One day I asked her bluntly, "How come everyone's talking about how the stock market is booming and I don't feel like my investments have gone up as exponentially?" I told her I wanted to play around with a small amount of money in non-SRI investments. It was difficult but important to me to assert myself that way. She appreciated me raising the issues with her and encouraged me to invest in a non-SRI stock if I wanted to.

In addition to Marie, I have another financial advisor, Andrew, who also works for my mother. Andrew and I talk bi-monthly about my long term financial planning and taxes. Neither Andrew nor Marie takes for granted that I will be their client just because my mother is. Marie even said, "I want you to realize that it's your choice whether or not to have me for your advisor."

I look forward to my relationship to Marie continuing to evolve as I become more confident as an investor. My lack of interest and initiative was in part due to the young age when I started working with her. I now see how fortunate I am to have inherited a financial advisor who is sympathetic to my world view and is helping me to have confidence in my own ideas about how to manage my money.

The Struggle to Trust

In her early 40s, single and childless, this author feels stuck with advisors with whom she is uncomfortable, and she is terrified of looking for new ones.

I've always been well taken care of. Now that I'm in my '40s, however, I am just starting to think about taking charge of my own finances. There's the matter of my will, for instance. A while ago, when I was getting ready to leave on an extended trip, I had a will drawn up that leaves everything to my siblings and their offspring. That's not the way I want it now, but I am single and childless and I find it terrifying to face what to do with what I have when I'm gone.

My father is my primary financial advisor. He's a lawyer and he says you go to lawyers for everything. He's a force to be reckoned with in the world, people listen to him, and I trust him completely. But he's 78. I don't know what I'll do when he is not around to answer my questions.

I inherited a stock portfolio when I was in my 20s. I also inherited a stockbroker, who I refer to as "Uncle" Bob since he knows more about my financial life than most of my relatives. He's an older man and deals mostly with clients who are like him. He'll say, "I'm invested in these stocks and I wouldn't buy you anything I wasn't invested in myself." He's very patronizing. He once said, for instance, "Hey, how about Tampax? Let's invest in Tampax because you're a woman." I wanted to say, "I don't have a uterus so I don't use them," but I didn't. That pretty much tells you about my relationship with Uncle Bob. I'll stick with him while my father is alive, but eventually I would like to find an advisor who is more simpatico.

My portfolio pretty much rides along unchanged. The only other financial professionals I've seen are a couple of CPAs. The first one I went to looked at my papers and said, "You look like a little old lady coming in with a shoebox full of all these 1099s" and laughed unpleasantly. I felt humiliated and angry but I didn't say so. I just didn't go back.

The woman who prepares my taxes has made a few snide remarks about how little I earn, or how I spend my money. So I've learned to limit the information I give her. It's not a good situation, but I'm uneasy at the thought of confronting her and unsure about how to find someone else. I still believe that God and the bank are the only ones who should know anything about my financial balance.

I was raised to be a rather private person and exposing the nature of my financial assets to someone is really intimidating. I feel like a little kid. How do you go to somebody, raise the issue of what to do with your money, and feel safe about it?

I work at home part-time writing and researching, and I try to do good work beyond that, volunteering, making quilts for cancer patients, etc. And I have well-connected friends who I might get referrals from. But I'm not out there networking.

Trust is a huge issue for me. I'm afraid of being taken advantage of and I'm afraid of failure. I was raised with very high standards, so I came to believe that it's easier to do nothing than to be wrong. The funny thing is, I'm willing to take risks when it doesn't involve money.

I would like a financial professional who could help me clarify my values and teach me to manage money rather than to focus on making more of it. That would be a starting point. I like knowing that because I have money, I can "make a difference."

The Bank of Larry

The first time I walked into the Money Management Services office in the early 1980s, I had just suffered a devastating bankruptcy and divorce. I'd lost my home. My brother and his wife offered to let me live in the converted attic above their house. They suggested I see Larry Cherry, who helps people plan their financial lives.

At first I was traumatized by fear and pain and could not face bills, paychecks, or anything money-related. Larry's office devised my budget, banked my paychecks, and paid my bills. I gratefully allowed Larry to manage every dollar I earned.

Within three years, Larry guided me into a condo purchase and started my retirement savings. He thought I should be thrilled to see $11,000 in my account. I wasn't. "I'm grateful," I told him, "but we both know $11,000 is a drop in the bucket of life. I'm still one step away from being a bag lady."

Several years later, I married for love and got money in the bargain. Nobody was happier for me than Larry. We continued to plan my financial future using my new assets. Soon my needs outgrew Money Management Services.

My husband is really, really rich, and he made me just plain rich. Our personal business requires sophistication and specialization. Our team of financial professionals comes from some of the most venerable institutions in the world. We have God-knows-how-many attorneys (marital lawyers, estate planners, real estate and tax attorneys, and private foundation specialists). We have personal bankers, accountants, and investment professionals who help us with our stocks, bonds, trust accounts, and properties.

But I still work with Larry. I want to "dance with who brung me," even though I'm dancing at the Symphony Ball instead of the Wildhorse Saloon. Now, Larry and I are partners in using my money creatively to help others.

As for the brother who took me in, I bought him a new house. Larry structured the deal so that each of us gets maximum tax benefits and minimum liabilities. I did the same with my sister's house. And my manicurist's car. And a couple of small businesses that could never have qualified for loans from any bank except what we lovingly came to call The Bank of Larry.

A limo driver told me about his dreams, and I told him if he was serious to call The Bank of Larry. My dental hygienist worried about retirement savings, because she has none. I sent her to the Bank of Larry. Recently, I saw a "Letter to the Editor" in our local paper from a woman proudly struggling to make ends meet. I wrote her, offering to pay her fees if she wanted professional help to make the most of what she has. Larry is now helping her collect child support, and he recommended that I loan her what she's owed until the state processes the payments.

Larry's clients include a husband and wife who couldn't bring themselves to tell their daughter that they'd blown her college money until two weeks before she was supposed to start classes. Larry thought if I met this young woman I'd be so impressed that I'd scholarship her through The Bank of Larry. He was right.

A condition of receiving a loan or a major financial gift from me: you must work with Larry and follow his plan for your "financial security". It's all 'strictly business' and I'm not involved. Larry's the one who collects, advises, issues ultimatums. Larry teaches people to fish while I'm treating them to a fish dinner.

The Bank of Larry is a godsend to many, as it was to me when I showed up broke and scared. Last week I told Larry he's not charging me enough for what he does on my behalf. He has to be reminded that I, Rich Woman, am the client, and not the people I send him.

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