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Financial Journeys: Navigating Life’s Cross-Points

To achieve their financial goals, investors need to successfully navigate life’s cross-points by making informed, well-considered decisions.

And to make those decisions, investors need an advisor motivated to work with clients to help them reach a decision and not push products that overpromise and underdeliver.

“Just like a doctor who needs to have all of their patient’s history along with current symptoms in order to provide a proper diagnosis, we work to ask the right questions of our clients because they are seeking an environment where they are educated and guided to the correct solution, not just sold the newest product,” said Scott Krase, founder and president of CrossPoint Wealth, LLC.

As a Chicago-area wealth management firm, CrossPoint Wealth provides clients with investment management, tax planning, estate strategies, long-term care planning, and other related services. While a minimum of $250,000 in investable assets from prospective clients is generally required, Krase noted that exceptions can be made for those who align with the firm’s philosophy.

The firm offers a “high-touch, exceptional client service philosophy” that, practically speaking, translates into customized plans and solutions, a focus on financial education to prepare clients to to reach their goals, and several information channels such as Krase’s blog, in which he offers clients a chance to dig deeper into selected wealth management topics.

My own ‘cross-point’
Krase spent 18 years in the financial industry training advisors on how to build portfolios using a diverse range of products – everything from mutual funds to ETFs to annuities. After spending years in the routine of events, trainings, and dinner parties, however, Krase began to feel there was a better way to help investors..

“Eventually I came to my own cross-point in my career, I could either continue my path of working for large firms that did not serve my clients’ best interests, or I could run my own practice and share my knowledge and experience with investors,” Krase told “Advisors Magazine” during a recent interview. “My vision was to help investors navigate the many cross-points we all face in our financial journeys.”

krase200x400Now, Krase works with clients directly through CrossPoint Wealth where he helps guide clients to better, more stable financial futures. He also routinely publishes new articles to “Common Financial Sense,” his blog and a channel that he is passionate about using as it allows him to directly speak to people about the wealth issues they need to consider.

To help clients navigate financial cross-points, Krase provides objective advice. CrossPoint Wealth holds itself to a fiduciary standard, meaning that clients’ interests come before the firm’s bottom-line. Krase said that being a fiduciary means he reveals any potential conflicts of interest to clients and explains clearly how he is compensated for helping them. This is in contrast to non-fiduciary advisors, who follow a more lenient “suitability standard.”

“The [non-fiduciary] broker need only suggest products that are suitable for your objectives, level of income, or your age, even if they can charge more because they’re proprietary,” he said. “And they have no requirement to disclose conflicts of interest.”

Investors, Krase said, should always sign on with a fiduciary advisor who can look out for them. Otherwise, investors risk trusting their hard-earned savings and retirement plans to the products pushing by particular brokers or advisors who lack the know-how, or incentive, to plan for multiple future scenarios. With a fiduciary advisor by their side, clients can feel an added sense of security, knowing that they come first.

Tools of the trade
The financial industry is in constant flux. New technologies appear on the scene frequently, prompting advisors to work harder to understand what’s available to clients. Add to that a wider proliferation of products than decades past and emerging regulations, and it becomes clear that advisors work overtime just to keep up.

Krase sees the changing technology landscape as possibly beneficial for some investors, but not good enough yet to replace the old-school advisor-client model. New platforms – the so-called “robo-advisors” – that can generate asset allocations based on someone’s stated preferences have come into vogue among a certain subset of investors, but they have a long way to go, Krase said.

“The technology of robo-advisors is changing the landscape for many investors, but the technology just often falls short for individuals seeking advice for their individual circumstances,” he said. “There are questions that a robo-advisor simply cannot answer, and for me it’s about helping investors along on their personal financial journey.”

Robo-advisor platforms currently available, for example, fail to take into account unexpected life changes such as the death of the spouse, birth of a child, or a sudden illness. A financial advisor still is needed to help clients prepare for possible financial challenges.
CrossPoint Wealth does use technology extensively, but to augment its staff of advisors and not replace them. The firm uses sophisticated market models to assist in client education, for example. Krase said the technology can improve portfolio design while also allowing for human advisors to live up to CrossPoint Wealth’s high-touch philosophy.

Making money make sense
Krase often shares his thoughts on the market via his “CommonFinancial Sense” blog. Recent articles have explored inflation, 401(k) problems, and how to pay fewer taxes during retirement. Through “CommonFinancial Sense,” Krase is a prolific communicator with the public, helping investors make sense of their financial position. And writing is not just a hobby, it is also a core part of CrossPoint Wealth’s business model.

“Client education is one of the main focuses for our advisory practice,” Krase said.

Krase uses the blog as his “main tool,” for communicating new market information, he said, but added that CrossPoint Wealth also makes extensive use of workshops. Recently, he published an e-book on annuities, which he hands out during workshops to draw attention to concerns investors often do, and should, have regarding purchasing an annuity.

KraseFamily2017CrossPoint Wealth also communicates with clients using more traditional channels such as monthly and quarterly reports. Unlike broker-dealer reports released by the big firms, however, CrossPoint Wealth writes reports in-house, ensuring that the information disseminated makes sense for clients.

Stereotyping clients and giving them cookie-cutter portfolio reports simply doesn’t work for most. Krase has found that customized statements for clients do work and help demystify their current financial picture.. All of this allows CrossPoint Wealth, LLC, to educate clients more efficiently and thoroughly, although financial literacy remains a persistent problem across the industry.

Take 401(k) disclosures, for example. The disclosures could be made more transparent, Krase said, but also the industry’s approach to educating clients about these products often fails to truly help clients make the right choices.

“It’s a major problem within the 401(k) fee disclosures,” Krase said. “Just the lack of education that’s there … I think there could not only be better information and simplified fee disclosures, but also the education that needs to take place in this environment needs to really step up for the investors.”

Breaking stereotypes with tailored solutions
CrossPoint Wealth takes a tailored approach to each client. The days of cookie-cutter portfolios based on generic asset allocations are long gone, Krase said. Now, clients need and expect that their advisor will take stock of their financial goals, retirement needs, and other concerns and develop a customized solution that can carry them into retirement.

The customized approach, however, is often found lacking in some wealth management firms.

“Most of the portfolios I review are over-weighted, either in tax-deferred entities or annuities,” Krase said.

Instead of relying too much on one or two products, CrossPoint Wealth focuses on three financial needs – growth, tax, and income.

“When each leg acts independently and is designed for its specific purpose, the result of all three working together is a complete portfolio designed to handle every aspect of retirement,” Krase said, adding that portfolios designed by the firm assume clients will live to 100, and assess other risks such as long-term care needs. The firm also does not cherry pick products, instead looking for the right fit for each client, with no bias toward particular vendors.

The triad-style portfolio allows investors to feel confident that their retirement goals are in reach if they remain focused, disciplined, and continue learning. But, as always, it is on investors to take charge of their own retirement planning and make the key decisions.

“No matter what profession someone chooses, they will face retirement at some time in the future,” Krase said. “People need to be ready.”

For more information, visit: crosspointwealth.com

Scott Krase of CrossPoint Wealth, is an investment adviser representative of RCM Wealth Advisors. Investment Advisory Services are offered through RCM Wealth Advisors, an SEC Registered Investment Adviser. The views and opinions herein are those of Scott Krase, and RCM Wealth Advisors makes no representations or warranties about the accuracy, reliability, completeness or timeliness of the content. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

 

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