And welcome everybody to another episode of smart money Circle,
I'm your host Adam sarhan with me today is David Peters, whose
founder and the owner of David Peters Financial Group, David,
welcome to the show. Thanks for so much.
Thanks so much for having me. Adam, I'm looking forward to a
great conversation. It's likewise.
So David before we jump in, I know your background is more of
the CPA side, the accounting and the financial planning side of
the business. And you also do some asset
management work. I'm really interested to hear
all about your story, so much First question is, can you
please tell us how you got to where you are today?
Yeah, well, I don't think that anyone necessarily takes a
straight line in their, in their career and in their working life
and I was certainly no exception to that.
I started off, I actually working as a staff accountant
for a hedge fund in Richmond, Virginia.
And that was kind of my first exposure to asset management.
And so, we did a little bit of everything.
We did some trading mainly in Commodities, but we also did
some My things with REITs and some other real estate deals as
well. And I did that for about three
years and then the financial crisis in 2009, hit.
And I have all of a sudden found myself without a job, and so it.
So I ended up working for a start-up insurance company in
Richmond. Virginia, I didn't have an
insurance background before that.
So I basically was Just looking for something.
And I ended up at Elephant Auto Insurance where I got plugged in
as a technical accountant and started working my way into kind
of more of the Regulatory and compliance side of the insurance
industry. And I really learned a lot in a
very short period of time and I did that for a few years and
then I was asked to help start a new company and insurance
company called compare.com. Which is a price comparison
website, sort of like kayak for auto insurance if you want to
think about it that way. And I was the CFO of that
company, and that was a startup startup Endeavor by Admiral
group in the United Kingdom Admiral group is the third
largest Auto insurer in the UK. And so we were kind of their
United States Venture and so I did that for a while and I swore
Or off of a startups. I said I'm never going to do
another startup ever again. And then I started working for a
friend of mine and Charlotte's on the financial planning side
and really got into kind of working with clients and really
kind of just really got excited about just helping out families
and just kind of using my financial skills and knowledge
to help other people that was, you know, I think probably the
biggest draw their and That for a few years.
And then, after saying I would never do my own startup, I
decided to go out on my own and so, I went out on my own and now
I do a little bit of everything. I'm I have the opportunity to do
tax preparation and tax Consulting, but I do still
broker insurance policies for folks, life insurance small,
business insurance, health insurance.
And I also do a lot of work with a financial planning.
NG and asset management as well. A lot of retirement planning.
I also teach and speak all over the country, so I do a lot of
stuff on the education side as well.
Educating clients, but also educating other practitioners
financial advisors insurance agents and tax preparers as
well. I love it.
So you're you have a unique background here of coming to it.
From the CPA side, the planning side also a little bit Asset
Management. Can you speak to us a little
about the planning side of the business?
Is and the overlap with the asset management side, your
investment strategy, and how you handle risk and all that fun
stuff, please sure yeah, yeah. So I mean, I've always come at
this, is that Asset Management grows out of financial planning.
So it's not really the other way around.
And I know that, you know, some clients that come into my office
and they know exactly what they want in the portfolio but I
typically find at least for my client base that that's a
rarity. I mean a lot of times people
I'll just know that they have gotten to a point in their lives
where they just want some additional help and they want
someone to take control of their of their financial lives.
And so we typically start off with a making a financial plans
and when I say a financial plan, I don't just mean in the area of
where should we put our investments?
I mean, everything, I mean, taking a look at Insurance
taking a look at life, insurance taking a look at tax situations
of the client, taking a An old tax returns.
Looking at the portfolio, looking at retirement assets,
really doing kind of front to back planning.
Then what we do is, you know, in typically a financial plan is if
you do it right. I think it's going to take place
over a series of meetings. It's not a one and done by any
stretch. And even once you give the
deliverable to the client where they have kind of this, you
know, used to be a big binder, I guess these days.
We don't really use binders anymore.
It's a big PDF at this point, but yeah.
You know, but you know but they give once we give the
deliverable to the client we're still tinkering.
We're still working. We're still trying to, you know,
figure out what's best for the client.
And so you know and that's where it kind of the asset management
side happens. We suggest you know putting
money into a Roth IRA or we said you know, we say hey why don't
we consolidate some of these old 401 KS so that we can actually
have them kind of all sort of guided in the right direction
and so that is You know, kind of where that happens.
Yes, about risk as well. I mean, you know, I think it
really depends, especially right now, I think especially in a
bear Market where it's been a tough year.
I mean, I think for a lot of us, you know, when it comes to risk,
it really depends on kind of where people are at in their
lives. I think, you know, for some of
my clients that are kind of young working professionals
entrepreneurs, they're not really caring a whole lot about,
you know, the fact that it's 2022 and yeah, Having a rough
year. But you know, if they got 30
years until retirement, honestly 2022 is kind of a blip on the
map. And so we've been we've talked
to those clients about, you know, the fact that you know, we
don't really necessarily think that things are going to turn
around right away and that's probably going to be next year
before we start seeing any turn in the markets and so you know
so we at least any sustained turn I guess we had a couple of
good days here and there but you know and and I think just
getting them to And that if they're on board with that,
then, you know, and they're okay with it, we have said, okay, you
know, let's let's go for kind of long-term growth and, you know,
do some, maybe some momentum trading along the way.
But for the most part, look for long-term growth for my
retirees, it's been all about controlling volatility,
especially here more recently. Just trying to make sure that
they have the cash that they need to actually survive and get
by. And we talked about, you know,
things like withdrawal rates from the portfolio.
You know, how much can I take without necessarily compromising
how I want to live in retirement and and things like that and for
some of my clients so that has meant a, you know, maybe we take
a little bit less out of the portfolio than we typically have
done in the past for other people.
We say, you know, hey studies the course because, you know,
you could be taking more but if you're happy, then, you know,
pull out what you need. And we'll, we'll just try to
make sure that we're reallocating on a regular This
and that's really about it. So so risk I think is is an
interesting one right now, for sure?
Yeah, I love that. So you're more of a the planning
side is bread and butter. Yeah.
After you plan, then you look at the asset allocation and you
adjust accordingly, depending on the risk model, you know,
modules and all that kind of stuff, depending on the
individuals or the family's needs and objectives so on and
so forth. You mentioned earlier your
before the interview that your long-term value investor and you
look at him TFC mutual funds. Is that a good?
An overview of a description. I think that that's very
accurate. I mean a lot of times my clients
are looking for diversification. If they're younger typically
they don't have large accounts and so you know, so the the you
know, probably the quickest way to get good diversification as
ETFs and mutual funds, we tend to lean more towards ETFs
because ETFs tend to be more tax efficient.
And so you know we do look at the at the tax side which I do
think makes this a little bit different from a lot of other
financial advisors on Of other money managers is we do Focus
heavily because a lot of those plants you know we may be doing
the tax return as well and so trying to make sure that you
know, that we are setting ourselves up well for the
long-term. We also tend to try to try to
especially when folks are younger.
We try to get them to at least look at Roth contributions as
well to try to give them some ability and retirement whole
from a Roth account and get that, get that tax free growth
in that tax-free withdrawal and love it.
So let's go. Deeper if we can about the
financial planning, because there's a lot of question marks
about how to come up with a good financial plan.
What are some mistakes? You see people make with respect
to creating a plan. First question, and the second
one, where some of the good things or, you know, the pros of
the positives that people make with respect to making a plan.
Yeah, I think that's a lot of times when we see folks making a
plan for the first time, I think a lot of times, they really
don't know what to expect and they really don't know what to
get out of it. And they focus very Heavily
typically on either the Investments or the tax return,
you know? I mean, so I think that those
are kind of the spots that I think are kind of the most in
the, in your face. I guess, for lack of a better
term, for a lot of people, they see their tax return every year,
they know what their refund is, every year, their Investments,
they get statements on a regular basis.
And so, I tend to see a lot of people when they first come in.
And they're focusing, very heavily on those things and not
necessarily looking at kind of the entire Financial picture
looking at things like life insurance.
So looking at things like disability insurance, you know,
and those are hard conversations I think to have with clients.
It no one wants to think about their own death.
No one wants to think about, you know what happens if I can't
work anymore? No one wants to think about that
stuff. And so, you know, so what part
of my job is to make sure that they are thinking about it and
so that is You know, typically what I see sometimes within the
portfolio itself, a lot of times we see people coming in
especially if they've been with the same company for a long
time, highly concentrated positions.
So you know, a lot of times in employer stock, you know, that
that's pretty common they come in with the, you know, a heavy
amount of employer stock. Also endowment bias is kind of
the the academic e term that we tend to use.
When somebody wants to hold onto something simply because of you
know, the the in Inherited it, maybe from, you know, their
mother or father, or something like that.
Where it has some sort of, like, special meaning to them and tell
them talking to them about that and kind of what that position
is doing. That is, you know, probably some
mistakes that we see within the portfolio.
So I would say just, you know, kind of overly focused on kind
of one area of the plan to the neglect of others.
And then, you know, also just kind of highly concentrated
positions and also just kind of endowment bias within the
portfolio. The one thing I will say I asked
about the good side. I mean the one thing that I love
about people who ask for a financial plan is they're
usually pretty committed at that point.
I mean because we tell them you know straight out we say this is
not an easy process. This is not a one-and-done, this
is not one phone call, like you're committing to multiple
meetings, multiple phone calls. It's going to be a very
detailed, look at your financial life.
And so most of the time of people are like, yeah, I men and
they start sending stuff right away.
I mean that It means that they're really kind of committed
to the plan and they're open to suggestions that you're able to
make. And so I think that that's
probably the biggest plus is if you get somebody who is who is
open to that idea, I think that, you know, that they're going to
be a client for a long time. It's almost like working out
where your body could do more than but it's mental, right?
The more than yelling the Mind gives up first.
It sounds a lot like that. Yeah I think that's an excellent
way to put it. Thank you.
Okay, beautiful next question. What are some Timeless lessons?
You've learned along the way whether Business investing
family, life balance. However, you want to go and that
you'd like to share with the audience.
Yeah, I think there is a probably, at least a few that
that I could talk through. I mean, I think for me, probably
the biggest lesson that I've learned on the business side is
that is it's not a matter of picking the highest net worth
clients. It's a matter of picking the
right clients, you know, one of the things that I think is kind
of a natural thing to do when you first go out on your own.
In any sort of financial services industry, especially a
few. You know, it's your money that
you're investing and basically, you're funding the company out
of your own pocket. It's a scary situation.
And I think all of us, I think to a point look for just any
Revenue that we can find. And I, it's maybe a little bit
easier to say now that, you know, I'm a little bit more
settled in my career, but I think that the biggest thing
I've learned is that That you know the clients that you have
that you know are really a good match for you.
They're going to naturally gravitate towards you and any
time that I have ever given up a client you know because we just
didn't click, we just their personalities just didn't match.
I've actually never looked back at that and said up that was a
mistake I actually have always looked at it as you know is
that? That is usually better off for
me. It's Also better off for the
client to, you know it especially when you're looking
for a true financial advisor. You need somebody who you can
click with, you need somebody who you can talk to very frankly
very openly and someone who can put things in the way that you
can understand and so letting them go is not necessarily A Bad
Thing. And typically what I've found is
that, you know, if I give up, you know, one client that, you
know, that just didn't match. I usually find, you know, two
more that do. And so I think that that's
something that, you know if I Back.
That would be definitely something.
I would, I would tell my old self is just to be patient and
look for the right clients. It's sort of like that that old.
Like I said, they used to call the 80/20 rule, right.
So, you know, you know, if you kind of reverse that, you know,
20% of your clients, probably cause 80% of your problems.
And and so I'm a big believer in that, I think probably a second
thing too is invest in people and infrastructure sooner rather
than later. I think that You know, again a
lot of a lot of financial advisors I think a lot of times
we're getting paid based off of a, um, and it's typically going
to be a percentage of that. And so, I think what happens a
lot of times is we're so focused on the revenue side that we
forget to build something sustainable, and you need unique
good systems and you need good people.
You can't expand very far without having those two things.
And I think that Many financial advisers have figured that out.
A lot of times the hard way is that you know that your people
and your infrastructure that's really everything.
And that's going to lead to sustained growth and yeah it's
it tends to be a little bit of a financial stretch kind of early
on to hire somebody especially if you're first getting started
and everything. But the fact is that if you're
really going to grow and you're really going to make a go at it,
I think that that's an important piece that you got to get into
place as you got to get people that are Just going to resonate
with you and that believe in the vision that you were trying to
set. Now, that makes great sense.
And some Timeless mistakes, you've seen people make that
you'd like to share with the audience.
In addition to take not too many clients or the wrong time.
That's a no. You know, what else would you
like to share from mistake standpoint and how to end how to
overcome it? Yeah.
So I think that, you know, some of the mistakes that I see with
with people is that just staying with a Plan that a little bit
too long. That's something that's a really
doesn't doesn't work. Staying with something.
A little bit too long staying with something that, you know,
you thought was a good idea in your head, but I think it's, you
know, I think of me the, you know, the financial advising
books in the area of Behavioral Finance.
They tend to call that loss aversion, right?
So kind of a similar idea. They are, you know, it's like
well if I continue on with this idea, oh, it'll eventually work
out, so, it'll eventually come my way.
Way. And that really kind of ignores
what, you know, if what, if it kind of ignores what common
sense is telling you and what kind of the market is telling
you, then you need to let that go and that doesn't mean that
you have failed or that you're not going to be successful, but
I think sometimes I think people are kind of so focused,
especially with a lot of the entrepreneurs that I talked
with. And that, you know, that's are
some of my clients, some of the things I've seen in the past, Is
they're so locked in on an idea that they just that they don't
want to admit it if it's not going their way and they're kind
of shutting out opportunities that might be there and I think
it's good to keep your eyes open.
It's good to keep an open mind and one of the things that I
would say to any entrepreneur that's out there, is that, you
know, keep swinging, you know, the it's not necessarily the
first, you know, the first idea that is necessarily going to be
the one that's going to stick and so so it's a matter of, you
know, kind of realizing when to cut it off.
I think probably more than anything else.
The other thing that I would say to is, you know, as always have
a good sense of where your own burnout level is, I think that
that's important as well. A lot of my clients are startup
clients they've helped start businesses or their starting up
businesses themselves. Sometimes they have investors
sometimes, they don't but You know, starting up a business.
Is hard. It is.
It is hard work. It is not a 40-hour a week job,
most the time it's you know, a lot of times, it's 100 hour a
week job. And, you know, some people are
just not able to do that with some of the things they got
going on with family and friends and, you know, all the other
things, you know, that are just part of living wife.
And so I think, you know, having a good sense of where that
burnout factor is and you know, kind of when you're about To
reach it I think is a good thing to know as well.
I do see a lot of entrepreneurs that just that just kind of
fizzle out, not necessarily because they were necessarily
doing bad things or because they weren't making progress but they
were just trying to grow at all costs and you know usually that
ends up leading to trouble. And again that and I guess that
kind of leads back to kind of my comments about infrastructure
and people you know I mean at some point you got to bring
other people on and you got to got to help kind of grow it in
the right way. Now, I'm very, very makes
perfect sense. Great answer.
How about the best piece of advice, you'd like to share with
the audience? Yeah, that's a.
That's a tough one. I think that probably the best
piece of advice that I ever got. Was from a mentor and a friend
of mine who said that that, if you that the best way to get to
know, somebody is to ask. It's so and what he meant by
that. It I got to give you more
Texting that I think. But what he really meant by that
was, is that, you know, a lot of times, especially in Corporate
America, we tend to have bosses that we don't know.
We tend to have people that we don't that we don't know
anything about them sort of outside of what they look like
and what their title is and I actually think that that's
getting worse right now when a lot of people are not
necessarily going to a physical office, I think a lot of Times.
You know, there's a good bit of the time where we actually don't
see the people that are in charge and so what he used to do
that always used to be amazing to me.
No matter how many hours he was working, he would always just
manage by walking around. I mean, he would, he would walk
around, he would talk to people. He would ask them what was going
on in their lives. What was going on in their, in
their working lives to what problems were they?
Were they having? And how could he help?
And I think that just That small little, you know, touchpoint I
think from one day to the next I think made all the difference in
the world. It's so, you know, especially if
you were in a situation where you have a growing business, I
think it's easy to kind of, you know, try to, you know, try to
let other people kind of handle stuff and, you know, maybe
become a little bit disconnected, the bigger, the,
you know, the company gets that's at the point where it's
even more important for people to kind of know who you are.
You are and you know, again it doesn't take much it's just you
know, a matter of walking around and talking to people and just
asking what's going on. And I think that that that
touchpoint makes a huge difference to a lot of people
beautiful and I guess final question for you today.
David is what's the best piece of advice?
You'd like to give to your self from 20 years ago or ten years
ago or Farmers? Your former self or anyone the
audience? Is it getting so?
You know, that's younger? Yeah, that matter.
Or older for that matter. Yeah.
I think that, you know, if I were to go back and I were to
talk to me, 20 years ago, I would just say be patient and
enjoy the ride a little bit more.
I think, you know, I was always pretty hyper focused on trying
to grow a, you know, grow my career growing, my professional
life and I didn't quite know what all of that meant, but I
think that, you know, a lot of times I would get frustrated,
just because I felt like, you know, I wasn't at the level that
I wanted to be and it made me so that I was impatient and it made
me so that I was probably a little bit more of a barrier to
work around and to be around then you know that I could have
been. And so I think that's what I
would say you know just be patient and also to you know if
you have a if you have something that you want, don't be afraid
to try it. I mean, you know, a lot of
times, you know, a lot of people they walk around and they say
man, you know, I wish that I could do this that or the other
thing, my goodness. I mean, take a swing.
NG. I mean if you're wrong you're
wrong. And but you know I mean at least
take a swing and I think that it's okay to be wrong, it's okay
to change paths, you know, I think if you're if you're going
to make it as an entrepreneur, I mean I think that that's kind of
part of the gig. So so I love.
So that's what I would say. Love it.
Love it, love it. Well David, thank you so much
for coming on the show was an absolute pleasure and hopefully
we'll have you on again soon. Alright.
Thank you so much Adam. I appreciate it.