Financial Literacy

It Takes a Village to Plan Someone's Finances

The return to prosperity economics

Many investors take a “get-it-done” approach to financial planning – they talk to a wealth manager, try to educate themselves, and put their money where they think it will work best.

What these investors miss, however, is that relying on a single financial professional for all of their needs might produce subpar results. Instead, a team-oriented approach that brings together financial planning, insurance, and other services could be better.

“We’ve actually developed what’s called an integrated resource network of financial services that follows a family office model,” said Bruce G. Wehner, Cash Flow Strategist at e3 Wealth who is based in St. Louis. “An insurance producer might not want to give up the assets of an individual for an equity product because that’s less money to go into insurance. It takes a special team of people to work together side-by-side and create plans that benefit the individual and their family. It’s about teamwork and that, we believe, is unique in our field right now. Most people work with an individual advisor.”

e3 Wealth, with offices across the country, provides comprehensive wealth management and alternative investment services based on a model that is “counter-intuitive” to what traditional advisors use. They subscribe to an “Advance & Protect” philosophy, which focuses on minimizing risk across four areas: market volatility, inflation, taxes, and longevity risk. The firm currently advises more than $500 million in assets and calls itself part of the prosperity economics movement, which steps outside of the traditional stock and bond investment paradigm and takes a broader view of investing, financial planning, and risk management.

BruceWeh quote 500x400Prosperity economics, started in 1999 by Kim D. H. Butler, returns financial planning and investment management to the pre-401(k) world. The movement focuses on risk management, holistic wealth management, and minimizing consumers’ exposure to big banks, Wall Street, and corporate interests. Proponents of the movement often say that Butler did not discover it, but rather “rediscovered” it.

At e3 Wealth, Wehner works to educate clients on how their money works for them. Investors often struggle with their finances given the numerous pressures they deal with such as work, family, and health; these would-be clients are competent and educated, but their skills lay outside the world of money. A trusted advisor can help bridge the gap for these investors, educating them on the possible moves they can make to reach their financial goals.

“I often tell our clients, I understand why you’re confused, because you’re getting mixed messages from the media every single day,” Wehner told Advisors Magazine in a recent interview. “We explain every financial product we put in front of a person and explain why we’re putting it in front of that person.”

e3 Wealth takes advantage of alternative investments such as real estate or oil and gas to build income streams for clients. These investments can be complicated to access, however, so a capable advisor is key, Wehner said.

“The problem is that with most of these, you need to be an accredited investor. You cannot advertise for these things; you have to go through the private channels. So, people are never exposed to it, they’re never exposed to these investments,” Wehner said. “Hopefully we get our government to realize that there’s some merit to getting people into these alternative investments. It’s not that we’re thinking outside the box, it’s that there’s a bigger box out there and we don’t know what that box contains.”

Wehner uses a four-step model to working with his clients: education, competence, action, and trust. The process starts with education to build investor competence, but the goal is action, Wehner said.

“When investors take action, it makes us feel good that our processes are working properly. And when they don’t take action, then we reframe our education until they understand enough to take an action,” he said, adding that the process starts slow to not overwhelm clients and that actions should be taken in measured steps. “Of course, we don’t want to eat the elephant all at one sitting.”

Action matters inside and outside the financial realm. Even successful investors who retire with enough money can find themselves falling into bad post-retirement habits. Wehner remembered a friend and client of his in the past who retired without a plan for how to spend his time. That friend, a former teacher who Wehner worked alongside in his previous career, was “brilliant,” Wehner said, but lost sight of how important staying active and engaged can be post-retirement. Unfortunately, Wehner’s friend died only seven years into retirement at 69. “I believe it’s because he lost purpose in life and because he wasn’t doing any physical activity,” Wehner said.

Wehner credits his former teaching career with giving him the ability to connect with clients and explain their finances to them. He also is the co-founder of The Money Advantage podcast, which is aimed at helping entrepreneurs live the life they dream of having. The ability to educate clients is key in today’s investing environment where clients are bombarded daily with differing views, products, and alarmist headlines. For these clients, making a decision with confidence can be difficult.

“People want to have confidence that they’re making the right decision,” Wehner said. “Gone are the days of finding a financial advisor and just saying ‘I trust you, here’s my money.’ They have seen many bad things that have happened during their lives. We tell them that we don’t want them to just have faith in us, we want them to understand what they’re getting into.”

For more information on e3 Wealth see e3wealth.com

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