Michael Mason • Bountiful, UT
Summit Capital Services LC • Questar Capital Corporation
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Proactive Advisor Magazine: Michael, talk about your overall philosophy in serving clients.

Two personal stories come to mind when I think of my service philosophy. My grandfather had a successful sales career, and I remember seeing the awards he won for being a top salesperson. He used an acronym and phrase to explain his business philosophy: STP—“see the people.” He said his success was based on building long-term relationships, fueled by constantly staying in touch with his clients’ needs. I took that to heart. Even though we are in very different businesses, I think the principles of taking the long view, serving clients enthusiastically, and staying on top of what is important to their objectives has served my clients well.

My second story relates to my love of horses. I have been involved with raising and training horses for a long time, and I love riding. Raising a horse successfully requires a caring attitude, dedication, and effort, and there are several specific steps that need to be followed. In many ways, those same attributes come into play as I work with clients. A disciplined, detailed, and customized process needs to be followed, tempered by a great deal of personal concern and commitment.

I tell clients that we will work through the process together to help them get where they want to go. But I also tell them they need to be flexible and adaptable. Once we develop a clear picture of their overall desired direction for the future, we will jointly establish a road map for that. But there will be detours, roadblocks, and perhaps a shift in direction as life circumstances change. I am there to help them navigate that road map over the long term and will review their progress with them regularly.

Describe your planning process.

I think an important part of our planning process happens early in the discovery phase, which involves learning about our clients’ financial lives and their attitudes about money and investing. What experiences have they had with investing in the past? What is their attitude about risk? What are their important life goals, individually, as a couple, and as a family? I want to dig deeply into all elements of their financial behavior and relevant data, including household budgeting, their current accounts and retirement savings, and their assets and liabilities. Do they have adequate protection in place? Does educational funding fit into the picture or, potentially, elder care? What do they see themselves ideally doing in retirement? What sort of legacy is important to them, whether it is for family, church, or charity? These are the types of issues we will discuss thoroughly.

I have used many financial-planning approaches and different types of planning software over the years. I like to think I have been able to customize my planning process using the best practices from several resources. I believe that an 80-page planning document that sits on a shelf and is never looked at has very little value for clients. I want our process to be interactive and one that can be distilled down to some important core concepts that clients can firmly grasp.

I spend a lot of time with clients explaining our foundational approach to financial planning, which we then apply to their specific situation and customize as needed. It is essentially a variation on the “bucket planning” approach for retirement-income planning. This comprehensively identifies assets and liabilities, potential income streams, estimated ongoing expenses and tax liabilities, and assumed return assumptions. We can then strategize together to find viable solutions for any potential income gaps that the analysis shows, with consideration of short-term, mid-term, and long-term “buckets.”

 

From there we build the foundation for future asset management, growth, and income distribution, distinguishing between tax-free, taxable, and pretax income sources. Phase two identifies a fundamental income distribution plan that identifies sources of income by four categories: Social Security/pensions, fixed income, dividend income, and growth assets. The final phase involves the specific strategies that are recommended for each of those categories, determined by the relationship of different factors: overall financial-plan objectives, time frames, risk profile, reasonable return assumptions, and the need to solve for potential income gaps.

This process, I believe, is very logical and comprehensive. Clients can work through the data and assumptions with me, seeing how their plan has moved from its initial starting point to very specific implementation strategies. The process is educational, relatively easy to comprehend, and helps facilitate client “ownership” of their financial plan.

Within the investment strategy and implementation phase, what is the role of third-party investment managers?

I began seriously looking at third-party management for some aspects of client portfolios after the 2008–2009 financial crisis. I have carefully evaluated the trade-off of fees versus the value that third-party managers can bring to my clients, coming down on the side of a very positive assessment.

The managers I work with have a specific predetermined protocol for buying and selling for their strategies based on current market conditions. I like that this takes emotion out of the equation, as well as manager bias. We are not expecting to “beat the market” or exit the market at exact tops, but rather to give clients an investment experience that is less volatile and smoother over the long term.

“I believe the actively managed strategies that we can employ on behalf of clients will work toward mitigating portfolio risk.”

I have learned from the last two decades that it is relatively easy for anyone to make money in a bull market—the real challenge is being able to protect a good portion of those gains. While there are no guarantees, I believe the actively managed strategies that we can employ on behalf of clients will work toward mitigating portfolio risk in the next major market downturn. That is especially important for clients of retirement age, who need to keep their financial and investment plan on a steady path.

I use several different resources for their money-management expertise. I am well-versed in their strategy development processes and have confidence in their management, investment teams, and management styles. Their philosophies, especially as they pertain to a focus on risk management, align well with what we are trying to achieve for our clients.

What do you think are some important aspects of your approach that help attract and retain clients?

We primarily rely upon current client referrals for the growth of our practice, so developing a strong relationship with clients is extremely important. Going beyond the experience and knowledge we bring to the table, building relationships with clients is dependent on personal chemistry: Are we comfortable with each other? Do we share common interests? Do we have the ability to have an open and honest dialogue?

I have learned that people usually look to find a financial advisor for a very specific reason that has been on their mind for some time. Yes, many people want to start planning for their retirement in a general sense, but there are usually also concrete issues behind that. It could be a change in their career or loss of a job, it might be a divorce or death in the family, or it could be concerns over funding college education for their children or helping their aging parents.

I work diligently to identify those types of issues and help clients sort out their immediate priorities. We will absolutely go through a holistic financial-planning process, but first, let’s find out what is keeping a client up at night and help him or her address that. People need empathetic and experienced guidance when faced with what they perceive as a serious concern.

Another point I think is important in relationship building is having some shared values. My family is the most important thing in the world to me and what keeps me going every day. My wife and I consider our ultimate responsibility to be raising our children to be happy, productive, and responsible—helping them explore what is personally important in their lives. I think this attitude carries over to my practice, as I work with clients to find out what they value the most in life and how that can inform their financial-planning priorities. I take great pride in the fact that clients place their faith in our firm to help guide them and that they feel comfortable recommending our services to their friends and family.