Fiduciary Standards

Focusing on all that can impact a Client Financially

Even though the Department of Labor’s (DOL) fiduciary rule appears dead since the Department of Justice did not petition the Supreme Court for a hearing by the June 13 deadline, Nick Naseman, founder and president of Iron Mountain Financial, Colorado Springs, Colorado always puts his fiduciary loyalty to clients above all else.

I work for them whether I earn money on a sale or advice, I’m always looking out for their best interest,” he says. “I never turn anyone away, I’ll help anyone to the best of my ability.”
While Iron Mountain Financial doesn’t have a firm minimum, there are certain financial strategies that aren’t available unless a client has at least $5,000.

As a Retirement Income Certified Professional®, Naseman deals primarily with those aged 58 to 64 who are transitioning into retirement and need help with the nest egg they must rely on for the rest of their lives.

Investing since age 18, Naseman had a career in the U.S. Air Force and was a do-it-yourself investor until his retirement. His family’s own experience led him to his second career.
“Dad had health issues, mom had to put him into a nursing home, and I watched them spend down their entire portfolio before he could qualify for Medicaid,” Naseman recalls.

There were eight siblings who could not agree on how their mother should have handled their father’s care, and it tore them apart. His decision to become an advisor was based on preventing other families from going through the same ordeal.

When meeting with clients, Naseman asks many questions, and he dives deep into details. It’s not a question of just looking at how much a client has in assets, but getting to know the person. He examines their goals, where they want to be and when they need their money. His main focus is helping clients do something meaningful with their money.
“I dig down into the emotional factors. I take the label off planning and just become an advisor,” he says.

That means focusing on anything impacting a client financially. For example, he conducts a legal review to make sure a client’s power of attorney will work when they need it.

Long-term care is discussed with every client, whether they want that discussion or not, because in retirement, those costs along with medical costs are the biggest portfolio drains they’ll potentially face.

“We have a conversation and discuss the statistics, their personal situation and likelihood of their need, let them know their options, and make a recommendation,” he says.
Those options include self-insurance, transferring the risk to an insurance company, or waiting until the government tells them what kind of care they will receive.

“I guide them to make an informed decision, but they know the options before they go off the cuff and do something they are later going to regret,” he says.

After his marriage, Naseman and his wife went to a highly regarded financial planner, but the planner took advantage of them, so he knows firsthand the importance of a fiduciary. He finds the whole fiasco of DOL rule changes really bothersome, but notes it comes down to consumer education.

“Most consumers think financial advisors are fiduciaries, when in fact they are not,” he says, adding that people are OK with salesmen, but in many cases don’t understand the difference between someone making a best interest recommendation and someone just trying to sell a product.

Naseman was all for the DOL rule, except for the additional compliance issues requiring documentation, but the death of the rule isn’t a big deal for him because his firm was already acting in accordance.

Financial literacy is one of his passions, and he teaches such classes at his local library where he covers different concepts and strategies, breaking them down so people understand them on their own terms. For clients, his approach differs somewhat.

“They don’t want a lot of knowledge because they can google it. They want me to break the information down, put it in relatable terms, and tell them how it affects their lifestyle,” he explained.
When asked what questions someone should ask a potential financial advisor, Naseman says they should ask if the advisor is a fiduciary, and if the answer is “yes,” have them put it in writing. Another question is whether the advisor is an independent or captive agent, which will tell you if they are a fiduciary or not. Finally, advisors should reveal any conflicts of interest.

Naseman uses Income Solver™ planning software, and by working with its founders and developers, it lets him focus on “the why” people invest, and not having to worry about how one piece of puzzle fits in with something else in the financial world. Clients know he has a powerful software program doing the number crunching for him, so he can focus on the important things. He uses other software programs and retirement planning scenarios with back end information so he’s comfortable with the numbers.

“Clients want to know if I have their back and am I comfortable with their plan,” he says.

Iron Mountain Financial is engaging in more virtual meetings to meet with additional clients on their time, and they can do webinars or go over their information. He helps to protect clients from ID theft by having all data encrypted on the server and never sending sensitive information via email.

There’s one part of the tech financial world he’s not pleased about, and that’s robo-advising. In his opinion, robo-advisors pose risks because they oversimplify the process.

“They base the entire portfolio on a short series of questions, and don’t address the why or the emotional,” he explains. “I don’t see them performing well in a down market. I don’t think robo-advisors have been tested in difficult market times.”

Naseman sees his business moving more toward behavioral finance, with more lifestyle rather than strictly financial advice.

“We’ve got to adapt and make the complex simple so clients can understand it. I’ve joined several networks and am looking at incorporating different services into the practice,” he said, adding that more tax, estate and legacy planning services, and helping clients mitigate risks in retirement are part of his plan.

For more information, visit: ironmountainfinancial.com

 

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