Retirement Planning

The Tenacious Approach to Financial Planning

The silversword is a rare plant found only in Maui’s remote Haleakalā National Park. It thrives in the harsh volcanic soils where no other significant vegetation can. Thick, succulent leaves form the sphere-shaped base that supports a flowering stalk as it grows towards the sun.

When Kahauanu Kai and his wife adopted their son when the child was less than two-years-old and born to a woman addicted to drugs, they named him Pahikaua, a Hawaiian word for “sword” and inspired by the tenacious plant.

Kai is managing member of Silversword Asset Management based in Show Low, Arizona, and the silversword not only inspired the name of his son, but also the name of the independent Registered Investment Advisory firm he founded.

“In desolate places, the silversword grows,” says. “Hope is what our company stands for. We are light at the end of the tunnel.”

Kai was injured in a car crash last October and is slowly recovering. He says that sometimes he doesn’t understand what his doctor is talking about, but the doctor takes the time to explain different issues and show him examples of his situation. That’s the same kind of personal attention Silversword Asset Management gives to clients when they tell them what is and what’s not working in their portfolios.

“We want to make sure everyone coming in feels confident, and that clients understand what their plan is enough so they can explain it to family,” he says.

The firm also focuses on transparency with disclosures, ensuring that clients learn about every fee and other pertinent information discussed in prospectuses.

When it comes to retirement planning and preventing older clients from outliving their money, Kai may incorporate options such as insurance for income and annuities into their account. The firm also provides Social Security planning, and while Kai says that many people aren’t confident in Social Security’s future, anyone retiring now can rely on it for a certain amount.

Regarding other areas of retirement planning, Kai is not a fan of paying for long-term care on an annual or monthly basis, but does like having money set aside for long-term care with a single premium long-term care policy. If the client changes their mind, they can get their money back, and if they don’t use it, heirs don’t lose out.

While the technical meaning of fiduciary is always acting in the best interests of the client, Kai puts another spin on it. He asks if his firm would make certain decisions for themselves, or for their parents. He also wants to ensure that clients understand any negative part of their portfolio, as they must understand the traps before getting into the game.

kai500x400Kai says that people who aren’t working with good financial advisors may buy on euphoria and sell on fear.

“Investors should be more like Spock – keeping the emotion out of investing,” he says. “We’re able to stand away and know if there’s a 20 percent drop, and retirement is six years away, they will still recover.”

The firm puts as many choices as they can before the clients, providing them with all the information and making sure they fully understand.

“We don’t sell products. We help clients find solutions,” he says, adding that clients give him the shopping list and he finds the ingredients.

Kai notes he has a competitor who is on the golf course during the work week. When he asked the man how he has the time to be there, he replied that all of his clients basically get the same portfolio.

“I know his clients. They have portfolios they may not need, but they are easy for him to manage,” said Kai, adding that what needs to change in the industry is for financial advisors to worry less about compensation and more about their clients’ retirement. “When money is involved, greed tends to follow. As an industry, we must figure out a way to be better people for our clients.”

For more information, visit: Silversword Asset Management

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