Proactive Advisor Magazine: Mary, talk about your background and how you became a financial advisor.

I grew up in a supportive family that had strong role models and interesting histories. My mother came from an affluent family that made their money in real estate and the oil industry over several generations. They did a good job of preserving and transferring the family’s wealth. My father came from a large family of entrepreneurs who developed businesses in the U.S. and Mexico. My father inherited that drive and founded several of his own businesses. My father eventually entered the financial-services industry, first working for a national insurance firm and then founding his own advisory firm in Dallas, Personal Economics Group. I was exposed to financial planning when I was young and often had dinner conversations with my parents about using wealth as a tool rather than an end goal. I was a good student in high school and had an eclectic array of interests. I attended the University of Texas, where I was accepted into a competitive interdisciplinary liberal arts program and earned degrees both in that program and in journalism. I grew as a person in college, became much more outgoing, and obtained leadership positions in several organizations.

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After college, I accepted a position as a mortgage broker, which sort of surprised everyone. But it was a strong real estate market at the time, and I thought it was a good entry into financial services. As I gained experience, I became more of a mortgage planner and would help people think about their mortgage options in the bigger context of their overall financial situation. Over time I received a lot of referrals from financial advisors and CPAs, and clients informally started asking me for guidance on broader financial-planning questions. I decided I needed to obtain the training to become a financial advisor myself and joined my father’s insurance practice. After a few years, my father started Personal Economics Group, where he applied advanced economic and actuarial principles to financial planning. By this time, I had become fully licensed and had worked closely with senior advisors who had extensive investment experience. The rest of the story is one of continually building my knowledge, cultivating a growing base of clients, and helping my father in the management of the firm. He has since retired, but I am still very involved as a managing director. I have also opened my own branded practice called The Wealth Woman.

How do you see your mission in working with clients?

We help people view their retirement-planning options in a whole new light. The name of our firm says a lot: How can people construct a viable financial plan that can react effectively to a changing economic landscape, and how can they apply sound economic principles to their own financial-planning situation? I believe people work hard throughout their lives to establish a certain lifestyle. When they retire, they should not necessarily view that as a time of retrenchment. Instead, we want to help them have their assets work as hard as possible for them over a long time frame and to seek wealth protection via various strategies—so they may pursue their desired lifestyle. Our ultimate goal is to help clients get to a place where they can do the things they are most passionate about.

Describe your financial-planning process.

I think our industry has had issues in approaching financial planning. The traditional industry model is that financial advisors usually either have heavy insurance backgrounds or are primarily interested in managing a client’s investments. Our process breaks down those distinctions, and we approach planning without bias toward what strategies or combination of strategies can be used to help clients achieve their objectives. Related to this issue, most of the financial planning in the past has been focused on either accumulation or distribution strategies.

We believe financial strategies need to be integrated throughout a client’s life. No financial product can provide a perfect solution, but the probabilities for success can be dramatically improved. Insurance and investments are both important parts of an overall plan—and when our clients understand these tools, they can learn how to use them in ways that most advisors don’t talk about.

 

Another issue relates to how advisors have viewed retirement planning. The key variables that are most often looked at for clients are rates of return and net worth, with the industry sometimes calling this a “magic number.” Those are important, but more often than not, assumed rates of return do not reflect market realities. And absolute net worth is less important than building an efficient accumulation and distribution plan that can weather different economic and market conditions. An individual with an efficient, risk-managed plan and $500,000 in assets could generate more lifetime income and a larger legacy than an individual with $1,000,000 and an inefficient, non-risk-managed plan. By virtue of building strategies to help optimize a client’s income potential, the by-products of the process should be more liquidity and more opportunities to provide a legacy. These are the types of concepts, among many others, that we educate our clients on during our planning process. The process typically takes four or five meetings with the client, with the first being a discovery session. They will hear about what we do, and then we will explore their objectives and what is important in terms of their life goals. I help people think through the problems and the opportunities they will likely face as they approach retirement planning and other important financial issues in their lives. The second meeting is about how they might optimize their income and distribution rate in retirement. We look at various assumptions about retirement age, risk, and income distribution and assess what income their current plan might deliver. We then explore some of the opportunities for enhancing that income using various protection and income-producing strategies. That allows us to examine how different variables could be changed, such as retirement date, current savings, or retirement income levels. We use a methodology and software called Wealth Building Cornerstones during the process, which facilitates analysis of retirement-planning options. At the third meeting, we look at customized recommendations for investment strategies. I focus on dynamic risk management for investment portfolios, educating clients about the sequence of returns and how significant drawdowns and volatility can derail their progress toward objectives. We think actively managed investment strategies that seek to mitigate risk can play an important role in client portfolios. We not only believe in diversification by asset class but also in diversification by strategy type and management style. We use professional third-party money managers who focus on the development of sophisticated strategies and the day-to-day management of portfolio strategies. We spend a good amount of time vetting these managers and understanding the capabilities of both their firms and their various strategies.

“We believe financial strategies need to be integrated throughout a client’s life.”

During the fourth meeting, we pull all of the recommendations together and present an implementation plan. While it is difficult to generalize, our retirement-planning solutions will generally have a blend of guaranteed-income strategies, life-insurance strategies, and growth strategies via investments. We have a variety of ways to combine these elements and tactics to deal with changing economic and market conditions. But the goal remains constant: maximize income and legacy potential while managing risk.

What were your objectives in developing The Wealth Woman brand?

I am firmly committed to Personal Economics Group and plan to remain there in a management role for a long time! But my first love has always been working one-on-one with clients, and I thought this would be an excellent way to build my own personal brand while serving clients directly. I spend a tremendous amount of time in networking activities and supporting charitable and community causes. Among these are several women-focused groups. I thought that The Wealth Woman brand would also work well within that context. My longer-term goals are to use social media, media appearances, videos, and speaking engagements to achieve visibility for the brand. However, in the final analysis, the focus is on our clients and how we can help them achieve their financial objectives—hopefully beyond what they thought was possible. Making a positive impact on people’s lives is what drives my efforts each day.