How 9 Financial Planners Handled Tough Client Situations

Taylor Schulte

“It’s important that the financial plan is the ‘diagnosis’ and the investment is the ‘prescription,’” argues Taylor Schulte, founder of Define Financial, specializing in helping reduce retirees’ tax bills, in an interview with ThinkAdvisor. “Consumers need to … make sure that the financial plan is done first and the investment recommended after that.”

You can be certain that the 28 savvy CFPs spotlighted in Schulte’s new book, who discuss a variety of ways they’ve helped clients, never prescribe before diagnosing.

“More Than Money: Real-Life Stories of Financial Planning” (Harriman House, March 2023) was curated by Schulte and Justin Castelli (founder of RLS Wealth); it was edited by Shanna Due (founder of Due Financial). The foreword was written by Christine Benz, director of personal finance and retirement planning at Morningstar.

The CFPs relating specific client situations are well aware that “financial planning is about improving lives in the near term and beyond,” as Schulte, a certified financial planner, puts it.

Schulte, the No. 2 independent advisor in 2022, according to Investopedia, has about $150 million in assets under management. His clients have between $2 million and $10 million in investible assets, with an average age of 50 and older. They are either near retirement or already retired.

Schulte is a big advocate of “oversaving,” enabling clients to cope financially should a sudden life-changing event — like a spouse’s death — occur.

Host of “The Stay Wealthy Retirement Show” podcast, Schulte has been co-host, with Michael Kitces, of Kitces Summits since 2021.

In the interview, Schulte gives insights into the client challenges and solutions related by nine of the CFPs featured in “More Than Money,” and he provides tips used in his own practice concerning changes to financial plans.

These scenarios include taking Social Security early, a woman widowed by her husband’s suicide, what to do before and after clients show cognitive decline, morphing into an entrepreneur after a layoff and how to help high earners who are lax savers.

Schulte was an advisor with Morgan Stanley before opening his own firm in San Diego in 2014.

He and Castelli are co-founders of AGC (Advisors Growing as a Community), a private online network whose member financial advisors share ideas and best practices, and learn about professional and personal development.

ThinkAdvisor recently interviewed Schulte, who was speaking by phone from San Diego. His motto for financial planning is “life is fluid” — and financial plans should be too.

Here he opines on several real-life financial planning stories:

THINKADVISOR: Why is a financial plan critical?

TAYLOR SCHULTE: Financial planning is as much about the now as it is about the future to plan for and play out potential scenarios.

Some of the [negative possibilities] we don’t like to talk about and think might never happen, but if they do, we’re so thankful we went through this planning exercise.

Your book has real-life stories from 28 financial planners. Let’s look at nine of the chapters.

First, Cathy Curtis, CFP, founder and CEO of Curtis Financial Planning. A client’s investment advisor cousin put the woman’s assets in highly risky investments — among them, inverse and leveraged ETFs, and oil and gas partnerships.

The relative had been following the advice of a “doomsday prophet” and basing all his clients’ investments on his personal recommendations. Curtis took over and reinvested the client’s accounts.

When consumers are looking for a financial planner, it’s always a red flag if there’s no diagnosis, that is, no plan. Cathy’s client trusted a family member, who skipped the diagnosis, and the client got caught in a bad situation.

It’s important that the financial plan is “the diagnosis” and the investment is “the prescription.” In this case, there was no diagnosis; there was just a prescription. That’s often where the problem lies.

Consumers need to do their due diligence and make sure that the plan is done first and the prescription recommended after that.

What I absolutely love about Cathy’s chapter is that she showed true empathy for the client: “This isn’t your fault. Let’s see what we can do to fix it.”

Next, a story from Todd Bryant, CFP, founding partner, Signature Wealth Partners: A client couple’s daughter died suddenly, and the responsibility to raise her two young children fell to the grandparents.

This couple were diligent savers. They oversaved to allow for such an unknown event to be covered.

If you’re living paycheck to paycheck or have saved only enough to barely meet your necessary expenses, if there’s any sort of occurrence, like a long-term care event, a death, or in this case, having to raise children, any [lifestyle] plans that you have fall apart quickly.

So it’s important to plan ahead and oversave to take care of such unknowns.

Michael Baker, CFP, is manager and founding member of Vertex Capital Advisors. A client required a whole new financial plan when her husband died: His priorities had been stock selection and special tax provisions; the widow had different priorities in order to achieve a particular, new lifestyle.

A plan needs to provide for scenarios that we don’t think will happen but could happen; in this case, when a husband dies, and all of a sudden, his widow has to take over.

Financial planning is not a one-and-done thing. You don’t put together a plan on Day One, print it out and it’s done.

In this situation, when her spouse died, the plan needed to change to better match the widow’s goals, desires and values. She needed an entirely new blueprint.

Marguerita Cheng, CFP, founder, Blue Ocean Global Wealth, recommended early retirement, at 62, to a client who had survived cancer, though a recurrence was likely. Because he started Social Security early, he was able to live a satisfying life before his death not quite four years later.

There is the textbook answer, and then there is [the advisor’s] answer. Often the textbook answer is to delay receiving Social Security till age 70. But someone might need to take it earlier.

It’s important not to get stuck in the textbook answer and spreadsheets but to have conversations with clients to determine what really makes the most sense for them.