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Advisors Practice What They Teach

By Tamika Cody March 28, 2016

Advisors offering their free time to teach financial literacy are using their volunteering techniques to advise clients.

For nearly eight years, Unified Trust’s fiduciary investment advisor Billy Lanter has been teaching financial literacy to school-aged children through the nonprofit organization Junior Achievement.

Lanter, who's based in Lexington, Ky., says educating the youth in his community is a way to encourage them to start thinking about how to have a healthy relationship with money. And he’s found the financial lessons he teaches are also useful tactics for his high net worth clients.

His clients regularly ask the question, "How much money can I leave my children without ruining them?" The answer Lanter provides is simple: “However much you prepared them to receive.”

Once a year, Lanter schedules a special meeting with the parents and children of high net worth clients to teach them how to better retain their wealth.

Lanter says the meetings shouldn’t be so much about facts and figures but instead should start with conversations about money, which is typically an uncomfortable topic for most families.

As a way to ease into a dialogue around money, Lanter has clients answer the following questions: What is our family’s “brand” – What does our family stand for? What are the collective goals of our family? What does our family value most? What issues are important to each of us individually?

“When resources are directed toward family values and individual passions, collective buy-in and trust follow, which is meaningful when discussions about money can occur,” says Lanter.

Lanter notes that it’s important to understand that making generational wealth last isn’t necessarily tied to a family’s investment knowledge or the ability to conduct economic forecasting. It’s more about sustaining family values from generation to generation.

Billy Lanter

High net worth lessons

“The key is to create an environment for a decision-making process about money that involves the whole family,” says Lanter. “You can do this in a variety of ways that doesn’t require disclosing the family balance sheet.”

Lanter suggests having family members engage in charitable gifts. But they should first research the charity to which they would like to donate.

During the family meeting each member can present their charity and then vote on the allocation of funds – maybe all to one charity or equally among the best two or three.

Regardless of the size of wealth of high net worth families, Lanter believes financial literacy is essential to prepare the younger generation, and advisors should make it a priority.

“Start with your own client base by encouraging your clients to have family meetings,” he says. “You have to make the time.”

Educating Millennials

Dedicating time to help younger clients avoid financial woes is exactly what drives Douglas Boneparth, a partner at New York-based Longwave Financial, which manages $180 million.

“Financial literacy is at the heart of my business,” says Boneparth, who focuses on Millennials and young professionals.

Outside of the office, Boneparth volunteers his time at WISE, a nonprofit committed to putting financial literacy programs in high schools throughout New York City public schools.

Boneparth also provides free financial literacy seminars in conjunction with the Financial Planning Association and the New York Public Library.

Boneparth believes his drive to stay on top of financial literacy with Millennials is a value-add for his firm and it provides a sense of credibility.

“The paradigm has shifted from an industry that is primarily focused on investments to one that needs to be more focused on service,” says Boneparth. “Part of that service is making sure that your clients are educated properly before making financial decisions.”

To educate the general public, Boneparth uses infographics, information he spots in the press, whitepapers, his blog, Twitter and other social media platforms.

“Taking advantage of all of these forms of communication allows me to engage the audience with topics within financial literacy,” he says.

Boneparth uses comprehensive financial planning as the main driver to educate his clients.

“If you follow the financial planning process, you will find yourself educating your client,” says Boneparth.

Continuing education

SanJay Das, a partner at Seattle-based Robertson Das, which manages $100 million, devotes his free time teaching financial literacy to young adults at local community colleges.

He also offers his services to Peps, a support group for parents with newborns. The main agenda is to teach new parents how to save for their children’s college tuition.

Das says the synergy between his volunteering efforts and working with his clients is knowledge: “It forces me to stay on top of subject matters.”

In Das’s case, his clients and some of his students want to know more about socially responsible investing and charitable giving.

“The way that I approach my practice with clients is very educational,” says Das. And with his own clients, he finds himself using examples from the classes he teaches.

Das says volunteering helps him to stay grounded and informed: “It really helps you connect with different walks of life, different ages, and people from different socioeconomic backgrounds.”

Make time

Boneparth feels advisors have an obligation to empower clients, peers and the general public with personal finance knowledge.

“Whether you’re inclined to give back or not, it certainly is not a bad thing to do. We’re the ones with the knowledge,” Boneparth explains. “On a macro level, creating a more financially literate public would only have a positive impact on our economy. And on a micro level, it’s not bad to receive positive exposure of this kind if you’re interested in growing your business.”