My reasons for becoming a personal financial advisor

Annette had very compelling and personal reasons for becoming a financial planner. My story is not as heart-wrenching but personal nonetheless.

I started my career in finance on the institutional side. I have an MBA in finance and am a CFA (Chartered Financial Analyst). I began my investment career on the staff of a large pension fund which had substantial internal asset management. I then worked for a mutual fund company where I managed portfolios for pension funds and other institutions.

I first became interested in personal finance fifteen years ago when my husband and I went through the estate planning process. We used one of the most respected estate attorneys in our area and during the course of the planning the attorney spent a lot of time patiently explaining the estate plan and his recommendations. Even though I had spent many of my working years in finance and investments, and had the academic background, I remember being baffled by his explanations. I had no idea what he was talking about and why he was recommending that we purchase life insurance to fund an irrevocable life insurance trust for our children’s benefit.

When I asked the attorney who we should purchase insurance from, he gave us two referrals. The first agent sold fully loaded policies and the second a relatively new product – low-load whole life insurance. The attorney said he couldn’t make a recommendation on which policy was best for us and said we should go with the agent we felt comfortable with. This response instead of putting me at ease, made me very uncomfortable. I was baffled by the attorney’s reluctance to help us evaluate the relative merits of insurance policies and approaches. After all, he knew all the details of our family and financial situation! I really didn’t want to take the sole word of the insurance salesperson who was offering the policy. I realized that I would have to do the analysis as best as I could myself and dived into the illustrations and other material offered by the agents. I finally concluded that the low-load policy was the best for us and we went with it. At the time, I recall being surprised that we had no one to help us with this planning decision and realized that there was a need and gap to be filled.

My next brush with personal financial advisory was when I left the mutual fund company to join a small money manager who worked with individuals rather than institutions. During that stint I learned two things. First, that most of the clients at the firm were desperate for planning help and that many meetings were filled with questions from the clients on the topic of planning rather than investments. The second thing I learned was that no one at this small shop did serious detailed planning. There was some attempt to answer client questions, but the knowledge and tools available to a professional financial planner were missing. I soon left that firm and went into business for myself working with individuals and families. I was convinced at this juncture that clients needed both planning and asset management in order to best achieve their financial objectives. Although I had some basic planning insight I felt that I wanted to team up with an experienced planner to offer my clients expertise in both investments and planning. I was lucky enough to meet Annette and today in our practice we provide all our clients with planning help.

In finanical planning we say that as soon as the plan is printed it is out of date. And that's certainly true in my case. With the ending of our marriage in sight, all the estate planning we did is back on the table. Wills, medical powers of attorney and many other documents need to be re-thought and redone. The technical part of this is easy for me now. Harder is the emotional and personal arena that need to be probed.

Veena Kutler

Can One Live as Cheaply as Two?

Years ago, as a newlywed I remember learning that because we were married my boyfriend and I would now pay higher taxes than we did before although our incomes were exactly the same. That was my introduction to the marriage penalty inherent in our progressive tax code, where a married couple pays taxes at a higher rate than if they were two singles earning the same wages. I complained to an older married friend that this seemed really unfair. Her view was that married people get other breaks so maybe paying slightly higher taxes was OK. Recently I recalled that long-ago conversation.

Newly single, I realize how expensive it is for two people who used to live as one household to live separately. When I lived with my husband in one household we had to make the mortgage payment monthly, pay utility bills, grocery bills, property taxes, insurance and other such incidental expenses. Now we are in two separate households and the expenses have doubled. Instead of one mortgage payment, our incomes support the same mortgage payment plus an apartment rental. The grocery bills in my single household seem exactly the same as before, utility bills are no different, neither is landscaping, insurance and various other expenses. The only difference is that these expenses are being replicated across town in my ex's household.

Across the gap of 20+years, I recall that half-forgotten conversation; now I get it and can see for myself the breaks that marrieds get and why net income drops for both parties after divorce.

Veena Kutler

Life Happens

When you least expect it!

Just when you think life is stable and will run on even keel forever or at least for the foreseeable future, everything changes. For many women, the biggest life alterations involve children and spouses. When a child is ill, or leaves home the balance in the household shifts. When a spouse departs via death, separation or divorce a similar void is created. As women, we tend to respond to these changes emotionally and our first thoughts tend not be about our finances but rather about how we feel and how we can cope with these changes.

Life happened to me. A few years ago, I thought that my marriage was stable and the day my oldest child started college seemed safely far away. This summer, two things happened close together: my husband and I separated and my daughter left for a college several states away. My very busy life took an abrupt turn and changes both big and small started tumbling in. Luckily, I still had my teen-age son and my dog at home but the departure of half the household within a few weeks was noticeable. Here are some of the differences I noticed – interestingly, not all bad, and listed in random order.

- My girl-fun buddy was gone. My daughter and I were in the habit of going together to the movies, shopping, and getting our nails done. Now I was on my own.
- My son eats on a very different schedule than I do. So family dinners that had occurred almost nightly dwindled and I found myself cooking for my son and then grabbing a bowl of cereal or soup for myself at a different time.
- The house was a lot cleaner and tidier. We went from a household of very messy (2), messy (1) and slightly messy (me) people to one very messy and one much neater person (me again). Cleaning up for 2 is a lot easier than cleaning up after 4.
- I had time on my hands and nervous energy to expend. My gym – 3 blocks away – was seeing more of me and the dog was getting more walks. Soon, people were commenting that both of us – me and the dog – were looking svelte.
- Decision making as a solo pursuit. Financial and decisions about the house and kids had been made in conjunction with my husband. Now, since I am the one remaining in the house and am the main care-giver for my kids I began making decisions on my own and to suit myself.
- My net worth was cut and cut again. The separation mentally reduced my net worth by half and then the subsequent sharp market decline cut into it again. In the course of a few short months, I experienced the double whammy of separation and a major stock bust – not an experience I would wish upon anyone!
- Friends and family popped up with offers of help and support. My evenings and weekends began to fill up with activity.

Stay tuned. Over the weeks and months ahead I will be blogging about the impact on women of major life changes such as the one I am experiencing myself currently.

Veena Kutler