Getting to Know Dave

An Interview With Dave

How long have you been doing what you do and how did you get to be a Financial Advisor?

Like many people these days, I started on a completely different career path before finding my passion in the field of financial planning.  I studied in college to be a Chemical Engineer and received my degree from Penn State (We Are!) in the early 1990’s.

As I was graduating from college as a newly minted engineer, my Dad was going through some career transition planning.  Like many people, he was concerned that he might outlive his money. He wanted some long-term guidance on how much money he could budget and spend on a monthly basis without burning through all of his savings.

After conducting a short interview with him regarding the types of assets he had, how long he projected he’d live and some other assumptions, I put together a simple planning spreadsheet for him that required him to input updated monthly totals for each of his investments and then calculated how much he could safely spend on a monthly basis and still have money left over by age 90.

I made that first financial planning spreadsheet for my Dad over 25 years ago and he still uses it every month to guide his spending decisions.  Over the years, he has told me how much peace of mind having this planning tool has brought to him because he knows exactly where he stands financially as he contemplates major purchases and spending choices in his life.

Despite this early success with my Dad, I continued to think of financial planning as a hobby.  In the late 1990’s and early 2000’s, I (like many other people) learned some very expensive lessons about what not to do with stocks when the “Tech Bubble” burst.  I was also busy buying a first home, starting a family and really thinking about my financial future for the first time in my life.

As I observed how much my life was impacted by the financial decisions I was making, I realized that I could make a huge and positive impact on people’s lives if I was able to help them make sound financial choices that in turn enabled them to reach their professional and personal goals.  

So, from 2005-2007, while continuing to work full time, I studied for and passed the Certified Financial Planner® examination while interning at a local wealth management firm.   This was followed by an assignment as a part-time advisor for a New Jersey-based wealth management firm from 2008-2010 which led me to found my own company - Rowan Financial LLC - in 2010.  

What are your top 3 beliefs about money?

#1 – Don’t Spend More Than You Make

Early in childhood, I was taught that if I really wanted something, I needed to figure out how to make and save enough money to get it.  I came from a solidly middle-class household, so we were never wanting for much; however, for larger items like buying my first car, months and in some cases years of disciplined savings were required to reach my goals.

I continue to carry this belief forward into adulthood and other than our house and cars, we only buy things that we can pay for with the cash we have on hand.

As a result of this belief, I’ve been diligently putting away at least 10% of our household income since my early 20’s.  Initially this required some difficult spending decisions and choosing among the few, most important purchases we wanted to make.

As a result, my family is grateful to have money set aside for retirement, money set aside for our kids’ education and money left over to create wonderful family memories through shared experiences.

#2 – Investing is a Long-Term Game –Get Rich Quick Investment Schemes Usually Don’t Work

As I mentioned in Money Belief #1 above, I learned some expensive lessons during the bursting of the “Tech Bubble.”  At that time, I thought I could do a little research, buy a few stocks and watch the cash instantly pour in.

When the crash happened, and I had no diversification in other areas, I had a painful year or two watching my account balance evaporate before my eyes.  What seemed like such smart decisions six months ago while the market was surging along turned out to be very bad long term decisions and was a very formative experience for me in terms of the advice I provide to clients.

Over the last 20 years, I have researched and refined my investment philosophy.  It probably isn’t as exciting or sexy as the things the stock pickers are talking about on CNBC, but you will get rich slowly if you:

  • Invest in a well diversified portfolio of stocks, bonds and hard assets like real estate and commodities and regularly rebalance. You’ve probably heard the expression, “Sell high and buy low.” Rebalancing enables you to automatically do this with each portion of your portfolio.
  • Keep your investing costs low. Avoid mutual funds with front end loads, back end loads, high expense ratios and other things that eat up your returns and leave you with less money to enjoy with your family and friends.
  • Extend your time horizon. Your guess about whether the market is going to go up or down over the next 30 days is as good as mine and all the other experts out there. Turn on CNBC for a few hours or read the Wall Street Journal and you’ll see about the same number of people predicting the market will go up as those who are saying it will go down. What we do know is that if history repeats, it’s highly likely that ten years from now, the market will be higher than it is today. If you want your money to grow faster, you need to hang in there through the short-term ups and downs to take advantage of better long-term returns.

#3 – Building and Preserving Wealth is About More Than Your Investment Portfolio

So my last belief was mostly about investing, but the reality is that building wealth is about far more than just your investment portfolio.  It’s about selecting the right kinds of life and disability insurance, it’s about reducing your tax bill to keep more money growing in your accounts and it’s about putting together appropriate estate planning documents should a big bump in the road of life occur to you.  In addition, it’s about putting together a retirement plan early in your financial life so that you know you’re on track with your long-term finances and that you can be comfortable with your spending and saving decisions.

Finally, it’s not just about the money you earn, but how you earn it.  Your career is the lifeblood of your finances and I will often take the time to discuss career decisions and transitions with clients and how these important choices will impact their personal finances.

This type of holistic financial planning is critical for your financial well-being and is the type of service I provide to my clients.

Who are your clients exactly?

I work with many different types of clients coming from all different life and financial circumstances.   Here are the traits that most of my clients typically share:

  • You are experiencing or contemplating a major financial transition (career change, starting or expanding a business, loss of spouse, semi-retirement). You may be worried about how it will work out and want to make sure that you understand and have step-by-step instructions for the most important decisions you can make with your finances to successfully navigate this transition.
  • You are a goal-setter and a planner. When making changes in your life, you like to “look before you leap” and have a plan in place to guide your actions and decision-making.
  • You are a diligent saver, but also spend money to create the life you want to live for yourself and your loved ones. You understand that meeting your financial goals enables you to have more and better choices and gives you the personal freedom to custom-design your life based on what works best for you and your family.

How are you different from other financial advisors?

There are many wonderful advisors out there who are helping people make good progress toward their financial goals.  What separates me from these other advisors is that I understand that financial decisions are one of the most critical means to a much more important end, which is living a fulfilling life with purpose.  

As I mentioned in Money Belief #3 above, this means that in addition to managing clients’ investments, I also help with decisions on insurance, taxes, retirement planning and career transitions.

This enables me to serve my traditional wealth management clients not just as an account balance, but as a whole person with dreams and ideas for the future.  I enable my clients to transform those dreams from ideas into reality!

What type of clients do you work best with?

Typically, the clients that I work best with and who get the most value from my services as a financial advisor are positive, energetic people who are willing to take the decisions and actions that are necessary for them to achieve their wealth accumulation, personal and professional goals.  

My most successful clients also understand that investing is a long-term process characterized mostly by years of steady progress toward their financial goals, but also are periodically punctuated either by outstanding years of above average returns or by disappointing years of negative returns.

Finally, clients that get the most value from our work together utilize the full breadth of services that I offer, not only in terms of managing their investments, but also by helping them with retirement planning, tax planning, risk management and estate planning considerations.  

What types of services do you offer?

Initially when I went into business, my only service offering utilized what is called an “Assets Under Management” (AUM) model.  This meant that my clients needed to have a reasonably large amount of money (my current minimum is $100,000) for me to manage on their behalf and I would charge a fixed percentage to manage that money.  I still offer this service model and most of my current clients still fall into this category.

However, as time went by, I realized that many (particularly younger) people have not accumulated enough wealth to fit into the AUM model, but still need just as much, if not more help with their personal finances.  As a result, I now offer a monthly subscription plan that varies in price based on the complexity of a client’s financial situation. This enables me to help these clients make sound financial choices at a much earlier age that lead to huge benefits going forward for them financially.

I also noticed that there are a set of clients who are looking for help with a small number of specific issues, usually during a life transition such as starting a new business, changing jobs, losing a spouse or moving into semi-retirement.  These clients are ideal for my Focus Financial Package, which is a flat $750 fee to provide them with a plan and step-by-step instructions to follow through a series of face-to-face meetings or phone calls along with unlimited email support along the way.

What is your investment philosophy?

I have been studying investing and financial markets for the last two decades and have reached several firm conclusions that guide the investment decisions that I make on behalf of my clients:

  • Investing is a long-term process. I build portfolios that are designed to offer superior returns over a long-term time horizon even if this means we need to suffer through some years of negative returns to get there.
  • Many providers within the financial services community charge investors too much money for their products which unnecessarily reduces investor returns and, in some cases, prevents them from meeting their long-term financial goals. In the vast majority of cases I recommend low cost, no load ETF’s to clients unless one either is not available within a specific sector or in the rare case when an actively managed product is appropriate. I also use TD Ameritrade as an asset custodian to keep trading costs for my clients to an absolute minimum, which further boosts returns by eliminating unnecessary fees.
  • Portfolio diversification across US Equities, International Equities, Emerging Markets, Domestic and International Bonds, Real Estate and Commodities is critical to maximize long-term returns. I tap into the best long-term thinking to build diversified portfolios for clients.
  • Account rebalancing is also critical to maximize returns for clients. This is because in many cases the best performing sectors in any given year do not remain the best performing sectors in subsequent years. Rebalancing effectively enables me to “sell high” in overperforming sectors on your behalf and “buy low” for you in underperforming areas that typically rebound and offer better returns going forward.
  • Long-term money (think retirement) needs to be managed much differently than short-term money (think cash you might need to expand your business over the next two years). I do not take a cookie-cutter approach to investment portfolios; but instead work with you to build portfolios that match your time horizons, tolerance for year to year variations in returns and will enable you to meet your financial, personal and career goals.

Ok, I’m ready to get started; however, I have a couple of additional questions. Can I call you?

Yes!  Once you have read the contents of this interview, if you still have a few questions, just email me at info@RowanFinancial.com or call me at (484) 601-2776 and we will schedule time for a phone call.  I will be happy to answer any additional questions that you have, to determine how I can help you achieve your financial, personal and career goals.  Let’s get started!! 🙂