Advocating effective stewardship for client finances
Advocating effective stewardship for client finances
Proactive Advisor Magazine: Paul, talk about how you see your role and mission in working with clients.
I spent a great deal of my early adult life in the restaurant and catering business and loved working with people, both staff and customers. At that time, it would have been hard to foresee a career in financial services and advisory work, but the people part of the business has come very naturally to me.
I learned the technical side of the industry from the ground up and have been at it for over 25 years, holding several different positions along the way that provided excellent experience. It has been a wonderful career. I have had the great pleasure of providing people with important input to help better their lives. I have helped hundreds of people and families progress toward a much better position for their overall finances and in planning for retirement.
I am absolutely committed to our firm’s mission statement when it comes to working with our clients. We want to create an atmosphere of professionalism and integrity that is conducive to building long-term relationships. We care about people and put our heart and soul into our work. We are straight with clients, whether the discussion is about their financial choices or the realities of any given market environment. I am an optimistic, hard-working person by nature. I believe those qualities, combined with the knowledge and resources we can bring to any given situation, allow us to effectively help clients to better understand their goals and work toward long-term financial success.
What is your planning process and what types of services do you offer?
We have a firmwide planning process in place that begins with looking at planning issues for clients from a macro perspective. Once we have the big-picture issues firmly in hand, we will drill down into each specific area relevant to a client or couple. We look to address areas such as retirement planning and distribution strategies, estate conservation, risk management and insurance coverages, investing principles and strategies, college education funding, and debt management.
“We can build portfolio solutions that are customized to [client] needs and have a higher degree of risk management.”
A key principle to how we approach planning is trying to make sure that all pieces of a financial and investment plan are working together in concert. Another core principle is that it should be an ongoing planning process that can be modified and adjusted as goals or life circumstances change. We also think it is extremely important to work on a collaborative basis with other trusted advisors that a client may have, whether that is an accountant, attorney, insurance agent, or other advisor. Finally, we believe that it is critical when working with married clients to have both members of the couple fully engaged in the planning process.
We are advocates at our firm for the principles outlined by Dave Ramsey, the radio host and money-management expert. Our entire staff has been trained in Mr. Ramsey’s philosophies. We think that our broad services should include helping people to become effective stewards of their finances and to achieve several specific milestones for their financial future. This includes responsible budgeting and debt management, saving and planning for contingencies, building wealth for the future and retirement, specific funding plans for education costs, and, finally, passing wealth efficiently to the next generation.
First and foremost, I want to educate people in a very broad sense about the financial markets, present them with sound and diversified investment recommendations, and make sure they understand the big picture and the core ideas behind the recommendations. Most people do not want to get into the weeds on all of the details of every investment strategy, but it is important that they have that fundamental overview of why we are recommending what we put forward.
I tell people that I cannot change the nature of market cycles and work miracles for their portfolio. That should not be their expectation. The market is going to do what is has always done historically—that is, go up and go down, sometimes reaching extremes in either direction. It is my job as an advisor to help clients construct an overall portfolio strategy that can weather those extremes, build wealth throughout market cycles, and to make sure that sound risk management principles are in place.
Like many other advisors of my generation, I entered the advisory profession when the prevailing investment philosophy was modern portfolio theory. I think there are many elements of that theory that still have great value today in terms of diversification. But after seeing some of the market devastation of the early 2000s, and attending several in-depth presentations around active investment approaches by third-party money managers, I gradually became much more of an advocate of a managed portfolio approach for clients. I saw firsthand during the 2008 credit crisis how important a managed portfolio approach can be compared to an unmanaged mutual fund strategy.
It all starts with working with a client to understand their objectives, their time horizons, and their risk profile. From there, we can build portfolio strategies that are customized to their needs and have a higher degree of risk management. We are not looking to hit home runs with our investment approach, but, rather, to build a smoother glide path for a portfolio over the long run.
We cannot make market volatility go away, but we can help mitigate it. I tend to work with third-party money managers who are expert at building strategies based on quantitative systems and models. It is their job to develop and manage the strategies that can work reasonably well through all kinds of market conditions. Nothing is 100% perfect, but, by and large, they do a very professional job in their area of expertise.
The first thing I look at is experience and expertise. How long have they been doing what they do? Do they have tested methodologies in place? Do they have a consistent and repeatable philosophy? My job is to make sure clients are in an appropriate overall portfolio allocation, and then to monitor the performance of the managers. We want to make sure that a manager’s strategies consistently perform as they were designed to perform. That is extremely important to my evaluation—making sure that the performance attributes of strategies are in line with their stated objectives.
I am also very interested in the level of service my clients and I receive. Is a manager or their representative available to discuss performance or to discuss a specific client’s portfolio? Do they have strong systems and reporting practices in place? And, finally, this is still a people business. I look for managers who take my clients’ portfolios very seriously, who respond to me on a personal level, and who view our needs as importantly as they would their own.
At the end of the day, what message about your personal practice do you want to leave with clients and prospects?
The most critical thing we can do for clients is not to focus on products, but to focus on being flexible in our planning for the future. We can make all of the plans we want, but life is what happens. It is important for clients to work with an advisor who has their best interests at heart and who will help them throughout the evolution of the various stages of their lives.
I am committed to staying focused on the concerns that are most important to my clients, on helping them to build a better financial future, and to maintain timely and open communications. I believe this philosophy has served my practice well over the years, and has helped to establish many meaningful long-term relationships with clients on both a business and personal level.
Paul Leone is a wealth advisor at Providence Wealth Planning, based in Corona, California. Mr. Leone focuses on helping clients with a range of financial and planning services, including wealth accumulation, retirement and income planning, asset preservation, goal planning, and tax mitigation strategies.
With advisory experience dating back to 1990, Mr. Leone worked with MetLife Resources and Trilogy Financial before joining Providence Wealth Planning in 2016. He is also involved with the Dave Ramsey SmartVestor Pro program, along with other members of his firm. From 1992 to 2007, Mr. Leone was the endorsed financial planner with the Moreno Valley Educators Association, where he helped educators to understand the California State Teachers Retirement System and taught them how to save outside of their pensions. He still works with many educators on their financial needs, as well as clients from all walks of life, including sales associates, physicians, accountants, business owners, and police officers.
Mr. Leone was raised in Whittier, California, where his family owned and managed an Italian market and catering business. He took over the business in his 20s and grew the operation for over 10 years. He says he still “loves to cook” and enjoys spending family time with his wife, two sons, and his daughter-in-law and grandson. He is active in his local church, takes part in youth coaching, and tries to “get out on the golf course” whenever he can.
Disclosure: The financial consultants at Providence Wealth Planning are registered representatives with, and securities offered through LPL Financial, member FINRA/SIPC. Investment advice offered through Strategic Wealth Advisors Group, LLC, a registered investment advisor. Strategic Wealth Advisors Group, LLC, and Providence Wealth Planning are separate entities from LPL Financial. Neither Dave Ramsey nor SmartVestor are affiliates of Providence Wealth Planning, Strategic Wealth Advisors Group, or LPL Financial. The opinions voiced are for general information and not intended to provide specific advice or recommendations for any individual. No strategy assures a profit or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a nondiversified portfolio. Diversification does not protect against market risk.
Photography by Ed Carreon