Fulfilling Retirement Dreams

Bringing it all back home

A visit to RVA Wealth Management’s website homepage puts it all in perspective as the firm’s tagline is readily clear: “We help Richmond retire.”

At a time when financial service providers are scrambling for business almost anywhere, RVA Wealth Management’s local focus and community spirit is by design – and it’s worn as a badge of honor.

David Koren, MBA, ChFC®, CLU®, retirement planning specialist and founder of RVA Wealth Management, always wanted it that way. It’s a reminder of both what he wanted to create — and what he wanted to leave behind.

Koren has had a successful career in the financial services sector. He started out as a college agent for Northwestern Mutual Life in 1980 while still at Virginia Tech. He was a wholesaler on the insurance side for many years after that, and then got into management as a vice president in healthcare insurance. Koren became head of sales for Aetna, tasked with building the company’s book of business nationally, and crisscrossing the country along the way.

But more than two decades of corporate life and a heavy business travel schedule can wear on anyone. “I got to the point where I decided that I was too tired of all the travel and living out of a suitcase every week,” Koren told Advisors Magazine in a recent interview. “Just the thought of going to the airport for another flight made me ill.”

David Teaching PictureHe decided to become a financial advisor. “I had called on and worked with advisors for many, many years. I really respected what they did,” Koren said. “I wanted to become more locally focused, and become more involved with the community because when you’re traveling around the country all the time that’s hard to do.”

Initially, in 2010, Koren helped build a company called Capstone Financial Partners. He left to form RVA Wealth Management about two years ago.

“I have a really good team with me here now and we love what we do; we love our clients,” Koren said of his four-person firm. “I don’t even feel like I’m working anymore. I come in and have a great time meeting with people I really care about and enjoy spending time with.”

His passion is teaching and coaching others, and it’s a strength that allowed him to build the business. “One of my historical fortes has always been teaching. I’ve loved hiring people; I’ve loved teaching and mentoring people throughout my career and I felt like those skills would translate over into the personal finance world,” Koren said.

And such skills would also fill a void, since most people are financially illiterate. According to a Northwestern Mutual study, 70 percent of Americans say their financial planning needs a lot of work.

“I saw that people really didn’t know how things worked, what they needed to do to prepare for retirement—all of the estate planning issues they were unaware of,” Koren noted. He decided to offer personal finance educational classes on a regular basis and he still does. It’s how he built and continues to grow the business.

“I do it as a service; I don’t push people to come and meet with me,” Koren said. “But if they need an advisor, I’m here as an option. Sometimes it works out and sometimes it doesn’t. Sometimes there’s a good match. But many people don’t come to meet with me—still, they get a good education and that makes me feel good,” he added.

Generally, RVA Wealth Management looks for a flat, $4,000 per year fee from either assets under management, or just a flat financial planning services fee. That’s equivalent to roughly $400,000 in assets, which effectively represents the minimum investment.

Robust and regular meetings are the firm’s hallmarks, and a source of pride for Koren. “We have a tiered approach,” he explained. “We meet with our top clients anywhere from three to four times a year. Face-to-face if possible, or now with COVID, virtually.”

The review of the client’s financial plan is extremely thorough. “The meetings can run anywhere from an hour to two hours; our record is three hours,” Koren said, “because we do a very, very deep dive into everything financial for the client.”

Clients have told him the time spent, and attention to detail, sets the firm apart from other advisors they’ve dealt with.

“We have a very long, structured agenda that we follow that is unique to each client,” Koren continued. “Kids, net worth, risk scores—everything is in there for each client. The risk scores we always double check at least once a year.”

In fact, RVA Wealth Management recently started its client-by-client risk score review cycle and found that a lot of people are more risk adverse now than at this time last year.
“Remember in late 2019 everything looked great,” Koren recalled. “Then we had the pandemic and all of sudden things are not so great. So, people are a little more cautious.”

Korn quoteBut the deep-dive reviews help take some of the edge off such worries. Koren and his team consider all types of ‘what if’ scenarios to make sure that clients can handle anything. These are all designed to hard test each client’s portfolio and determine how each financial plan will hold up. Considerations might include things such as what happens if a spouse dies next year, or what if a long-term care stay is necessary, and what if there’s a severe bear market that lasts for a couple of years with no recovery.

One of the programs used by RVA Wealth Management for such scenarios is eMoney®. It and other planning tools allow the firm to make longevity assumptions that can push the client’s age out to over 100, and then determine what kind of impact that has on the overall financial plan.

For example, if a client’s plan can handle 10 years in a nursing home with no reduction in current expenses, or selling the primary home – at a 60-70 percent probability of success – that means the plan is in pretty good shape.

“We also always make sure our retired clients are in a cash or short-term liquid position so that for the next five years, they don’t need to sell any equity if they don’t want to,” Koren said. “Because you’re going to be able to withstand any economic downturn if you can weather it for five years without trying to sell anything – and that’s a nice position to be in.”
Koren, however, warns that a lot of people make the mistake of investing everything and not having that short-term cash on hand.

He does prefer that any client has taken his class, and understanding cash flow needs is one of the key lessons in his six-hour session. “Know your net worth, and know what’s coming in and what you are spending,” he said. “If you don’t have a handle on those two things, it’s really hard to be successful financially.”

Meeting Room 8 600
In 2020, the pandemic rendered such classroom work inoperable. But RVA Wealth Management, like other financial advisor firms, answered the challenge virtually with videoconferencing. Zoom, YouTube and were all deployed.

For Koren, the key challenge was maintaining privacy for each client. “We had a password for every meeting,” he said. “Just being able to set that up was a learning process. Most of our client meetings we’d conduct with GoToMeeting, because their encryption is better and it was critical to safeguard passwords and usernames.”

Zoom was used for quarterly market updates, but was logistically challenging with often 70-80 people on a call. YouTube was ultimately favored for large presentations because it could be broadcast with minimal background noise. “YouTube can be watched at the client’s convenience, and then they would send us emails for us to answer directly,” Koren explained. “This has been a whole lot more effective in reaching out to larger groups.”

Meanwhile, Koren has several thoughts to share on changes taking place in the industry. He loves disruptive technology in general (Amazon, Uber, etc.) but believes online trading platforms and so-called robo-advisors fall short as bonafide financial planning tools

“I think banks need to be more concerned than financial advisors,” Koren said. “It’s much easier to automate almost everything on the banking side. On the financial planning side, most tools I’ve seen are just scraping the surface, and are not really robust at all. Full-blown financial planning requires a lot of work.”

Over time, Koren thinks most advisors will become fiduciary-only rather than dual-registered, which is the case for many in the industry now, but it will be a gradual transition.

“As a dual-registered advisor, I can sell a commissioned product, but as a fiduciary, I choose not to sell commissioned products,” Koren said. “The only reason we maintain the dual-registered advisory status is to do what I call annuity rescue—and we do a lot of that. I’m not a big annuity person, but many times clients come here, stuck with annuities and I need to be able to deal with them.”

He added: “There are a lot of dual-registered folks out there that really focus on selling commissioned products. I don’t agree with that. It encourages the advisor to do things that are not in the client’s best interest.”

As far as prospectuses and fee disclosures, Koren maintains that transparency has improved, but once again, it comes down to education.

“In my classes I talk about knowing what the expense ratio is on any kind of fund that you’re using and a lot of people are shocked to find out that there’s an expense ratio on their 401 (k) funds,” he said. “At this firm, we want to have as much money as possible that clients earn on their investments to go back to them,” Koren said. “Our expense ratio (fee average) is about 0.85 overall for our clients. 85 basis points is a very low number.”

But beyond the fees, RVA Wealth Management prides itself on looking at each client holistically and at each client’s family and extended family. “We have a number of clients who are the next generation of previous or existing clients,” Koren said.

Nowadays, while his business travel is far more limited than early in his career, Koren is content helping to pilot others to wherever their retirement dreams may be – exotic destinations, charities close to their hearts, family legacies, or elsewhere.

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