Understanding Tax-Centric Wealth Management: An Advisor's Perspective

 
David Strother, Financial Services Director of DSF Wealth Management LLC, an affiliate of Darnall, Sikes, Gardes & Frederick, a corporation of CPAs in Lafayette, LA, discusses his history as a financial advisor working with a respected CPA firm.
 
1. What experiences do you feel were the most valuable in shaping your practice as it is now, and why?
About 13 years ago, I elected to move from a primarily commissioned-based model to a more fee-dominated model. Being able to offer (sell, if you will) fee-based advice rather than focus on commissioned-based products really was the path change that made all the difference. This move caused me to dig deep educationally, which had a side effect of broadening my knowledge base. Over time it became like a snowball rolling down a hill. The practice picked up more and more momentum as that snowball kept rolling. Let me stress, becoming independent was my first step, which gave me great opportunities. But investing heavily in myself educationally then gave the client someone to engage in with merit. Independence without competence is just another bad deal for the client.
 
2. What are some of the biggest challenges that you have to overcome as a financial advisor? What challenges do you still face?
The overwhelmingly most important epiphany for me was recognizing and accepting I could not do everything. As I became engrossed with my wealth management partner's Advanced Solutions Summits and a variety of other seminars, I concluded the world of solutions in highly technical areas was not becoming simpler, but rather more complex. My task then migrated from having to always have the solution to seeing where the facts were leading and then to find true subject matter experts in that direction, who then just specialized in that area. This took putting my ego in check and accepting that teams are more likely to have better solutions than one individual. Developing a team of professionals you are comfortable with takes time. But as this team developed, it allowed me to spend more time listening and being with clients, which had the effect of leveraging me and my time.
 
The biggest challenge today is the recognition that some clients took diversification in investment portfolios as a way of reducing volatility. During the financial panic after Lehman failed in September 2008, we recognized the importance of probing deeply enough with regard to clients' understanding of and sensitivity to volatility. We have grown through this recession and we now spend even more time with clients outlining what diversification is and what it is not.
 
3. What advice would you give to your peers, especially considering the current market volatility and anxiety surrounding the economy?
I would encourage others not to be defensive with the truth. Very few people have had such significant success that they can accomplish the goal of having their investments provide them an income they cannot outlive, and leave a legacy for others without a very healthy dose of securities with growth potential. This is just the truth. This is not less true now; it is more true now, more than it has been in years. We all are hard-wired to think that what is happening now will continue. This is true in bull markets and also true in bear markets. Yes, recessions have ended and yes, recoveries begun. All we need to produce 100 percent of the market return is to be in the market 100 percent of the time. This just requires being still when bad and distorted noise surrounds us. The reason few people receive all that return is that they do not remain still (they buy higher and sell lower – and always at the wrong time). This truth remains true regardless of whether we are in a recession or not. Focus on this truth. Our value as advisors is not so much in picking anything or timing anything. It is coaching how to place diversified assets and then being still.
 
4. What advice would you give to newer financial advisors? What would they need to do to one day have this honor? Where does this experience come from – is it just getting out there and working with clients? Attending educational events? Networking with other advisors?
The first thing I would advise a newer financial advisor is to get beyond attempting to be an expert at everything. Our ego and our intelligence tend to drive us to try to achieve this. To the degree you fall victim to this tendency, you will stunt your goal of being a comprehensive advisor and fall prey to becoming a one-solution advisor. Look at your client base and the solutions you have for them. To the degree there is an absence of variety of solutions, you have fallen victim to this limited vision.
 
Being an expert at everything is simply not a realistic goal. Assess where your natural talents are, the areas you actually enjoy working in. For me it is the client meeting and listening deeply and articulating an overall vision. Knowing and understanding this, I am comfortable and at ease with this being the only thing I need to be an expert at. Wherever your natural talents lie, this will be your starting point.
 
The second thing I work hard at is becoming a competent generalist in a variety of planning areas. I strive to find competent subject matter experts in all the planning areas. This then allows me to both leverage my time and to lead the financial services function within the firm. In hindsight, and having followed a variety of other paths, I have concluded that for me, it is the most efficient and rewarding approach. Start a five-year program with the end result in mind. Then do it without regard to short-term results. You will be amazed at who you have become after five years.
 
For more information about offering wealth management services as a CPA firm and how strategic business partnerships with accomplished financial advisors like David Strother can impact your growth plans, contact 1st Global at (800) 959-8461 or LearnMore@1stGlobal.com.
 
This article and its content has been provided by 1st Global. With more than 500 firms affiliated with 1st Global, it is one of the largest wealth management services partners for the tax, accounting and legal professions. 1st Global delivers the required capabilities essential for wealth management excellence including progressive ongoing education, which places the firm in a unique position to offer wealth management knowledge.
 
1st Global was founded by CPAs on the belief that accounting, tax and estate planning firms are uniquely qualified to provide comprehensive wealth management services to their clients. Each affiliated firm is provided with education, technology, business-building framework and client solutions that make these firms leaders in their professions through dedicated professional client relationships built around wealth management.
 
1st Global Capital Corp. is a member of FINRA and SIPC and is headquartered at 8150 N. Central Expressway, Suite 500 in Dallas, Texas,(214) 265-1201. Additional information about 1st Global is available via the Internet at
www.1stGlobal.com
 

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