Retirement Planning

Leaving Silicon Valley for Wealth Management

An Entrepreneurial Odessey

There are more than 31 million entrepreneurs in the United States, according to research by the Massachusetts-based Babson College team of the Global Entrepreneurship Monitor.

Most of them, as expected, are motivated by opportunity. They are quick to identify a need and then act to monetize it. Others are naturals.

For example, consider the journey of William (Bill) Pollak, founder of Itineris Financial Advisors based in Walnut Creek, California.

Bill H“I think I was born to be an entrepreneur,” Pollak told Advisors Magazine in a recent interview. Right after college graduation, Pollak began a career working with startup enterprise software companies in the San Francisco Bay area.

He was attracted to the idea of working in the technology industry and especially working for new and innovative companies that would help large enterprises solve difficult business problems. Pollak worked in the business applications software industry for 26 years. His responsibilities spanned various functions—including sales, solutions engineering and systems implementation. Over time, he moved into senior management roles.

“And then, at the tender age of 47, I got really interested in becoming a financial professional and eventually just made the decision to start a wealth management business,” Pollak said.

The driving force: When in the software sector, Pollak recalls being challenged to find a knowledgeable and trustworthy financial advisor for his own family. “I never could find that person who I really loved working with and, frankly, whose knowledge was greater than my own.”

So, over time he began to think that the wealth management field would be a great place for someone to make a difference.

“I’d been one of those under-served clients for a long time, and I had a vision about how I could make a very positive impact, similar to what I’d accomplished in the software industry for about two and a half decades.”

And so it was that about 12 years ago, Itineris Financial Advisors came to be. Since then, Pollak’s practice has grown to appeal to clients who are like-minded and ready for a change.

Bill serving clients
“My current practice is focused on serving clients who are really very much like my myself during those years when I was thinking about going through my own career change,” he said. “Overwhelmingly, I primarily work with mid-life professionals who are about to, or are already experiencing, some sort of career transition.”

Pollak explained that his typical client today is in their 50s or 60s and in between jobs. They are considering a range of options, including finding new work in their current field, pursuing a “working” retirement, or they might simply be ready to leave the workforce entirely.

Understanding each individual is at the core of Pollak’s client-service philosophy. Crunching the numbers is always important, but the financial strategy must ultimately reflect and support the lifestyle that the client wants for themselves as they move into a new life chapter.

“My approach is based on the idea of getting to know my clients very well,” he explained, “at a human level first, because I think that is essential in developing a comprehensive financial plan.”

His process, therefore, is based on initially doing a very thorough review of a client’s or a couple’s total financial picture to assess where they are today and where they see themselves going. “But the numbers shouldn’t necessarily drive all the decision making,” Pollak said. “I really want to understand what my clients want so that they can have joy, happiness, fulfillment, and satisfaction in their lives.”

Not part of Pollak’s process is any emphasis whatsoever on selling products. And this is where, in his opinion, the financial advisory industry needs to change the most.

“The financial industry is absolutely focused on selling product,” he said, “and that’s deeply offensive to me.”

Pollak maintains that whether it’s an investor in individual stocks or mutual funds or exchange-traded funds, or a client that buys an annuity or a life insurance product, or a long-term care insurance product, trust in those in the industry is violated when such products are pushed.

“This needs to change, because the industry violated that trust by conveying that their need to meet some company or individual revenue objective is more important than a client’s needs,” he said.

“In my 15 years of doing this, I’ve never asked a client for anything,” Pollak added. “I’m very enthusiastic about my business and what I do, and my qualifications. And I absolutely convey enthusiasm and positivity, but I never ask a client to give me their business.”

Instead, he explains what he does and how he does it—explaining options and educating clients along the way as needed.

“I give them balanced and comprehensive information so that they can make an informed decision. If they want to work with me, that’s awesome,” Pollak continued. “And if they decide I’m not the right guy to work with, I am 100% fine with that. I don’t say that out of arrogance; rather, they’re making an informed decision and I would not want to have a client who wouldn’t want to be in my club. It wouldn’t be a good fit for either of us.”

Pollak says his business has attained consistent growth by following three core principles. One is caring for clients at a human level, as noted earlier. Another is being proactive in communicating and for a willingness to discuss problems or situations before they can become problems. The third is being on top of one’s game as a financial professional and always seeking ways to enhance and improve the underlying methods used to serve clients.

Inflation is higher, but not new

Changing the game currently is a higher rate of inflation not experienced in four decades, which is causing uncertainty about the future. As a financial professional, Pollak recommends thinking about inflation strategically as part of a long-term financial plan, which reflects the reality that inflation is a persistent phenomenon.

“Even when we had low inflation, we still had inflation and the purchasing power of our money is declining all the time,” he explained. “And one of the important reasons that people want to invest in the financial markets is they’re looking to get a return so that they can try to maintain, or perhaps even enhance, their purchasing power over the long-term.”

To prepare for the longer-term inflation phenomenon, Pollak uses cashflow projections that assume there’s going to be some inflation. “The rate of inflation that I’ve used for my long-term planning has always been at least 2.5%, sometimes 3%,” he said, noting, “It may not sound a lot given what’s going on right now, but when you look at the history of inflation over the last 15 years before the pandemic, inflation rates were between 1.5% and 2%.”

When looking at the capital market assumptions of many large investment companies, 2.5%-3% inflation might likely prove to be on the high side—over the long-term, according to Pollak.

Bill 521“But I just think that being more conservative about inflation, given how low it’s been from a long-term standpoint is very important,” he said. And that’s the kind of strategic perspective he imparts to clients.

A second foundational view of Pollak’s when helping clients is an emphasis on maintaining a cash reserve based upon the client’s circumstances. This can an effective way to respond to short-term surprises, such as dealing with the very high rate of inflation the economy is experiencing this year.

“This is especially important for clients moving toward retirement or already out of the working world. They are typically relying on some degree of portfolio withdrawals to pay for living expenses or one-time expenses,” he said. “I always want to understand what they might be taking out of their portfolio over the next one to two years.”

Pollak thinks client should keep adequate cash reserves to meet such withdrawal needs so they are not forced to liquidate investments when there are periods of market turbulence like now.

“In the current environment, almost all asset classes are declining in value,” he noted. “And you don’t want to be selling investments in such turbulent times because your financial advisor did not plan ahead and failed to understand your cash distribution needs.”

For money not needed for 1–2-year withdrawal needs, Pollak recommends maintaining a long-term focus and not trying to time the market and/or predict which asset classes may do the best.

“Selling investments might feel better in the short term,” Pollak said, “but it could really impair a client’s ability to meet their long-term goals. And I emphasize to my clients that investing is a long-term game.”

He added that there are often investment opportunities to respond to short-term market movements and/or to attempt to sidestep market risks. But such investment changes should be made carefully and with a focus on not sacrificing the client’s investment goals over the longer haul.

For more information, visit: Itineris Financial Advisors

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