Episode 66: Our Ideal Client
Segment 1:
HELLO Lower Alabama! Hello Gulf Coast! Welcome in. Welcome to Coasting in Retirement! That’s. Right. Thanks for joining us today, Josh Null here, joined by the one and only Michelle Lee Melton…Michelle, how are you doing? We’ve got a brand-new show coming your way, we are back once again in Coastal College’s recording studio, beautiful downtown Fairhope, ready to put together another great show for those of you tuning in!
Listeners: Michelle and I are here to discuss financial topics relevant to those of you in or near retirement, living your best life along our part of the gulf coast. Here’s what we’ve got in store for you today: First segment – deep dive on our topic of the day. 2nd segment - at about 30 minutes past the hour - “Michelle with the Headlines of the Week”. Then at roughly 50 minutes past the hour, stick around for our 3rd segment, we call it” Josh’s Crystal Ball and Big Mouth”. So buckle up, we’ve got a lot to get to!
Quick background on me for those new to the show. Again, my name is Josh Null, I am a fee-based financial advisor, I hold my FINRA Series 65 securities license, and I am the owner of Gulf Coast Financial Advisors, that’s a 100% locally owned, 100% independent investment management and financial planning firm with offices in Fairhope, Orange Beach, and Mobile! You can find more information on me and the team at Gulf Coast Financial Advisors by visiting our website gulfcoastfa.com, or feel free to give us a call at 251-327-2124. If you missed that contact info, get a pen and pad ready because we will repeat our contact info several times throughout the show!
Alright, on with the show. Michelle, I believe we’ve done new year’s shows around intentions, which are not exactly resolutions, but a way for someone to be intentional in their actions when starting a new year, correct? (Michelle). So while it’s not a new year just yet, in fact, I would argue it’s “still summer” down here on the Gulf Coast, I decided to put together an episode where we are intentional about a particular message we want to convey, and hopefully it spurs a few of you listening to reach out to us and set an appointment. While we’ve done past episodes where we discussed what we do at Gulf Coast Financial Advisors, what we’ve haven’t done to date is produce a show that spells out the type of client we are looking for, our ideal client so to speak, and that is exactly what we are going to do today.
Michelle, when we were doing show prep, you expressed some reservations that this show topic might exclude some people, in fact I remember you stating that “wouldn’t everybody be an ideal client?”. You’re not totally wrong on that, as we go thru this episode I want to make sure that I make clear our independent firm is pretty flexible with what type of client we work with, BUT, with that said, at my age, and my experience in the business, and my busy life, wife, kids, animals, travel, etc., the short answer is, NO, I don’t want to work with just anyone. In fact, I will sometimes pass up on an opportunity because it’s obvious that I am not a good fit for a potential client. It usually revolves around a prospective client looking for me to ask “how high” when they say “jump”, but we'll add some context to that later so that the chip on my shoulder doesn't appear any larger than it is.
What I want to do is be as clear as possible the type of client we actively pursue, for many reasons, but the fun thing is that I think it will surprise our listeners. It has nothing to do with net worth or size of your bank accounts. Obviously, you need to have some money in order to justify the time and expense of bringing on a financial advisor like me, but we are looking for so much more than just a bunch of big numbers on someone’s statement. Before we dive into describing our ideal client, it probably wouldn’t hurt to rehash what we do, especially for those of you that have never worked with a financial advisor. Or possibly for those of you in our business that are wondering if our business model would be a better alternative than your current situation.
The business model for Gulf Coast Financial Advisors is very simple, especially compared to some of the larger brokerage and wirehouse’s way of providing financial advice. That is by design. My opinion is that your financial advisor should not be selling you products and services outside of the financial planning umbrella, such as a mortgage or a bunch of other consumer product trinkets. I believe this creates too much of a conflict of interest. To be fair, there is NO financial advisor on earth that operates without some type of inherit conflict of interest, even my fee-only brethren, but at my firm we intentionally eliminated as many conflicts of interest as we could when setting up our process.
First, we are fully independent – there’s no mother ship, there’s no middle management, there’s no sales quota, there’s no proprietary products, there’s nothing that stands between me and the client in our business relationship. If you financial advisor has an “upline” you would be very surprised at the amount of stress often placed on advisors to produce, whether or not it benefits the client.
Second, we are fee-for-service, fee-based specifically, meaning that when it comes to investment advice and financial planning, there is going to be a transparent fee charged, whether that is an asset under management fee set as a percentage or a flat financial planning fee. We do not deal in the commissionable securities broker world. And third and final, we are 100% locally owned. There’s no private equity or Daddy Warbucks or some faraway ownership group with their financial teeth into my business, no one that can squeeze me to make a decision simply to boost profits that doesn’t benefit my clients.
So with that said, then who are we looking for? Let’s start with the opening paragraph on our website, gulfcoastfa.com: We help regular people that have done extra-ordinary things. Michelle, how do you interpret that statement? For those of you familiar with our industry, you know that the majority of advisors are chasing the same person: “high net-worth investors”. Or the holy grail, “ultra high net-worth investors”. Oh my lord, did the previous company I worked with constantly pressure me to “move up market”. OK, fine. I have several high-net-worth clients, obviously nothing wrong with that. But you know what the majority of financial advisors are not chasing? Those of you listening that may not meet some artificial definition of a “perfect client” or have some randomly chosen minimum account size. A lot of advisors have developed myopic eyesight where they can only see a dollar sign above your head when they meet with you. A lot of advisors that have account value minimums couldn’t even meet their own standards as a client.
No, what most financial advisors don’t often pay attention to is your unique story. The amount of money in your account is important, obviously. But what matters to me is how important that money is to you. What sacrifices did you make to build your wealth? Where did you start from? The ground floor? Does going back to the ground floor in retirement keep you up at night? I intentionally added “regular people” to that tag line because I believe that far too many people feel judged when they meet with a financial advisor. I was raised blue collar in the Ozarks. I don’t know how “regular” my upbringing was, but I know for sure it wasn’t what one would call pampered, and I am grateful for that. I am a regular person that has occasionally done extra-ordinary things in my life; therefore, it makes sense that we help regular people that have done extra-ordinary things.
Next up, again from the website, to describe our ideal client: “whether it’s building a business from scratch with your own two hands and wanting to maximize the financial impact of those sacrifices, or, growing a great nest egg by being a dedicated and reliable worker for years, or, maybe you’ve chosen to live well within your means in order to accomplish a lifelong dream of retirement, the last thing you want is to go with the wrong financial advisor after you’ve worked so hard accumulate your assets”.
Let’s break that down. First, business owners. For those of you entrepreneurs listening, why did you start your business? Did some people tell you that you were crazy? That it wouldn’t work? That the larger competitors in your industry would crush you? That there was no room for another business like yours? I was told all of these things. So here is my question for you: when you decide to reach out for financial advice, why in the world would you choose an advisor that doesn’t have a similar life experience? There’s nothing wrong with being a W2 advisor-employee at a large company, but sometimes people choose the comfort of the name brand over the actual fit of the advisor to their situation. If I were a small business owner, and I am, I would want someone that has walked the same path as me. That’s why all of our referral partners, CPAs and attorneys, are local business owners themselves. It matters. For the majority of small business owners, the proverbial “buck stops here” with them. Just like the buck stops with me at Gulf Coast Financial Advisors.
Next up – being a dedicated and reliable worker, for years. Living within your means. This also matters. There are a handful of you listeners that have somehow made a relatively modest income turn into a substantial nest egg. That doesn’t happen by accident. It takes sacrifice and dedication. It also takes a high level of skill to focus on developing skills that keeps your employed for decades at a time. Often those skills mean that you don’t have the time or energy to do a deep dive on your investments, you just shovel as much money in your retirement plan as you can and trust it will grow over time. And the last thing you want, the very last thing you want, is to get bad financial advice after you’ve worked so hard to accumulate your nest egg. We get it.
I close this segment with the final paragraph of my website’s opening pitch: “you’ve also probably spent most of your life putting other’s needs ahead of your own. Now, it’s your turn. We can help. That’s right listeners, it is your turn, and we can help. If you would like to start the conversation with us, we encourage you to reach out. You can call us at 251-327-2124, or find us on our website gulfcoastfa.com. One our site, click on the blue button in the upper right-hand corner to set up a meeting on my calendar. We have several meeting choices for your convenience – it can be as simple as a 15-minute introductory phone call, a 30 minute zoom, or my preference, an in-person meeting at any of our 3 office locations: Downtwon Fairhope, Orange Beach just down the road from the Wharf, or in Mobile off Dauphin St and I-65. Reach out to us - we would love to meet you!
Alright folks, coming up next - There’s always a lot going on in the world! Particularly the world of finance, investments and money. Every week we scour the internet for financial articles related to our topic of the day, especially articles that pertain to those in or near retirement. Join us after the break to hear Michelle and I discuss this week’s relevant headlines in our “Michelle with the Headline of the Week” segment. Stay tuned!
1. Alright Josh, our first article of the day comes from NerdWallet, it’s simply titled “How to Choose a Financial Advisor”. The articles mentions paying attention to an advisor’s type of registration, something we’ve discussed before on this show, and deciding if you want to even work with a live human advisor versus trying the robo-advisor route, which is not for me, for sure! I found the section on deciding what you want to pay pretty enlightening, particularly the assets under management piece, or AUM for short. According to this article, AUM fees typically range between .25% and 2% of the investment assets under management, with the average being around 1.05% annually. Is that accurate?
https://www.nerdwallet.com/article/investing/how-to-choose-a-financial-advisor
2. In the opening of this show Josh you detailed why you thought that your entrepreneurial model of investment management was a better fit for small business owners versus an advisor that is an employee of a larger national firm. You even mentioned the word “wirehouse” so I thought I would find an article helps explain your stance a little better. The headline is from SmartAsset and it’s titled “Working for Wirehouse Firms vs Independent RIAs”. For the listeners not familiar with the term wirehouse, which I am assuming is most of you tuning in, it’s an old school term to describe well-known businesses such as Morgan Stanley, Merrill Lynch and Wells Fargo, to name a few. This article gives a peek behind the scenes of the differences in the day-to-day activities of advisors working at large firm versus advisors that own their own firm, and it talks about fiduciary responsibility a lot. It also mentions some type of “complex and often confusing” grid compensation system where wirehouse advisors don’t always know what they’re going to get paid year to year, which sounds unnerving. So, how different is it?
Josh: I’ve never worked at warehouse but I have worked at 2 large firms, describe them. Alos, unless you are a truly salaried W2 financial advisor, which means you probably work out of a bank, none of truly know what we are going to be paid year to year.
https://smartasset.com/advisor-resources/wirehouse-firms
3. Our next article will have a little “inside baseball” feel, but you told me that this is actually bigger news than is being reported yet. It’s from financial industry facing site AdvisorHub, titled “SEC Set to Allow Dimensional to Offer Dual Share Class Funds”. Apparently, the Securities and Exchange Commission is allowing this company to offer exchange traded funds, or ETFs for short, as an additional share class of their mutual funds. Which is don’t understand at all. What I do understand is that this decision meshes with the current history of ETFs vs mutual funds, with reporting in this article stating that mutual funds shed $451 billion in 2024 while ETFs picked up an extra $1.1 trillion in assets, an all time record. There’s some industry jargon about how this is a potential watershed moment for US money managers and may save investors billions in fees, but I’ll let you take it from here
https://www.advisorhub.com/sec-set-to-allow-dimensional-to-offer-dual-share-class-funds/
4. Well, I tried to avoid it as long as possible. Political news. Eww. At the time of this recording, the U.S. Federal government has failed to pass a budget and has been shut down. I don’t particularly want to discuss the fine details of a shut down, and I have zero interest in discussing the political postering of both sides, but this is a financial show and government shutdowns involve money, so let’s focus in on how this affects investor’s money. ABC News had a headline that fit that bill, titled “Would a government shutdown impact your investments?”. This article states that five out of the 10 shutdowns since 1981 have occurred during S&P 500 pullbacks of 5% or more, but that a government shutdown has "never led to a recession or market crash." One analyst quoted stated that a decline would likely prove temporary, therefore creating a buying opportunity for investors on the lookout for shares of high-quality firms at bargain prices, but warned against blindly “buying the dip”. What say you Josh?
https://abcnews.go.com/Business/government-shutdown-impact-investments/story?id=126071977
Listeners, if you’ve liked what you’ve heard and want to discuss your own personal retirement dreams and goals, then us a call at 251-327-2124, or find us through our website gulfcoastfa.com. One our site, click on the blue button in the upper right-hand corner to set up a meeting on my calendar. We have several meeting choices for your convenience – it can be as simple as a 15-minute introductory phone call, all the way to an in-person meeting at any of our 3 office locations: Downtown Fairhope, Orange Beach, or Mobile, near the intersection of Dauphin St and I-65. Reach out to us - we would love to meet you!
Alright folks, coming up next: Josh’s Crystal Ball and Big Mouth. What have been some of my predictions? Have I been right? Was I ever wrong? How wrong? What do I think is going to affect investors in the near future, or maybe the distant future? We talk about all of these things and poke a little fun at my big mouth. Stay tuned!
Segment 3 – Josh’s Crystal Ball and Big Mouth:
Welcome back! Your host Josh Null here, alongside co-host Michelle Lee Melton. So, I am opinionated, I have strong opinions at times, I would say a radio show host that isn’t probably wouldn’t be very interesting to listen to. And I am paid in my profession to offer professional guidance and opinions to my clients, otherwise what use am I? Just replace me with AI. I like making predictions, and while I usually proved right, there are times I swing and I miss. Want to hear me eat a little crow? Then let’s get at with Josh’s Crystal Ball and Big Mouth.
Michelle: Alright Josh, earlier this year you stated that people were missing the bigger point about Electric Vehicles, or EVs for short, especially around Tesla’s battle with Chinese EV manufacturer BYD. No, not the song P.Y.T. by Michael Jackson. You stated that Tesla’s estrangement of their core customer base combined with BYD’s aggressive global growth and low pricing model would potentially smack Tesla hard enough it could lose it’s global EV dominance once and for all. And while things looked pretty dire for Tesla for most of the year, their stock just ended September up over 33% while BYD is facing all kinds of terrible news, including reports that they used shady financial engineering with their debt and more publicly, having famed investor Warren Buffet sell his entire substantial share of ownership in their company. It looks like your crystal ball was off on this one, but I guess more importantly, why should retail investors that will never buy an EV care about Tesla?
Josh: Because Tesla makes up almost 2.5% of the S&P 500, which most people have some type of index fund. Because Tesla is part of the Magnificent 7, which as powered most of the overall market gains the past few years. And because investors are betting big on AI. Expound.
Reference article: https://finance.yahoo.com/news/tesla-soaring-stock-puts-focus-202310011.html
Well, listeners, I hope you enjoyed a little peek into how we form our opinions and make predictions. We invite you one last time, if you would like to have a no-pressure, no-obligation conversation about your investing goals and retirement dreams, you can call us at 251-327-2124, or find us through our website gulfcoastfa.com. One our site, click on the blue button in the upper right-hand corner to set up a meeting on my calendar. We have several meeting choices for your convenience – it can be as simple as a 15-minute introductory phone call, all the way to an in-person meeting at any of our 3 office locations. You can find GCFA offices in downtown Fairhope, or Orange Beach off Canal Road, or in Mobile off Dauphin St and I-65. Reach out to us - we would love to meet you!
That’s our show for this week! I want to give a huge thank you to my lovely co-host, Michelle Lee Melton, thank you to our show sponsor, Providence Partners and Jay Stubbs, thank you to our two awesome radio stations, FM Talk 106.5 out of Mobile and WHEP 92.5 FM & 1310 AM out of Foley, many thanks to the provider of our show music, local band Sloth Racer, huge thank to the show producer, my son Payton Null, and as always my sincere appreciation for all of your out there that have been listening and joining us on this journey. We would love to be a part of your journey as well! Remember – votenappies.com! Until we talk again, have a wonderful and productive week. This has been Coasting in Retirement with Josh Null!
GCFA Disclosure:
Gulf Coast Financial Advisors, LLC ("GCFA”) is a registered investment adviser offering advisory services in the State of Alabama and in such other jurisdictions where it is registered, filed the required notices, or is otherwise excluded or exempted from such registration and/or notice filing requirements. Registration does not indicate or imply that GCFA has attained a particular level of skill or ability, nor does it constitute an endorsement of the firm by the Securities and Exchange Commission (SEC) or any state securities regulator.
The Coasting in Retirement radio program serves mainly to disseminate general information including those pertaining to GCFA’s advisory services, together with access to additional investment-related information, publications, materials and links. The publication of this radio show should not be construed by any client and/or prospective client as GCFA’s solicitation to effect, or attempt to effect transactions in securities, nor should it be interpreted as GCFA providing personalized investment advice, or any type of professional advice, for compensation, wherever this program is broadcast. Any subsequent, direct communication by GCFA with a prospective client will be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.
Certain information, news stories, headlines, data, charts, graphs, figures or statistics presented on this radio program may have been obtained from third-party sources that are believed to be generally reliable but which GCFA may not have independently verified. GCFA does not and cannot guarantee the timeliness, accuracy, or reliability of any such third-party information and undertakes no obligation to update or correct any information that may become obsolete, unreliable, or inaccurate. The radio program also contains the opinions, views, and perspectives expressed by Josh Null and any other GCFA representatives which are solely their own, and do not necessarily reflect the opinions, views, or perspectives of GCFA as a firm. Such personal views and opinions should not be construed as endorsements or professional advice from GCFA. GCFA makes no representation or warranty regarding the accuracy, completeness, or reliability of any information on this radio program, and disclaims any liability for any direct or indirect loss or damage incurred from using or relying on such information.
GCFA, Aptus, Providence Benefits and Providence Partners are not affiliated, nor are any of their respective representatives.