Business Innovators Radio - Interview with Jeff Altman Founder of Altman Advisory Group-Accumulation Phase of Life vs Distribution

Episode Date: July 14, 2024

I have been in the financial services industry for over 50 years. I am a certified financial educator and approved to reach continuing education to CPAs by the state of Nevada. I reside in Nevada with my wife of 30 years. I have two children and two grandchildren. I am a combat veteran of the Vietnam War and devote time to helping other vets in need. I derive great satisfaction from allowing clients to benefit from my experienceLearn More: http://altmanadvisorygroup.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-jeff-altman-founder-of-altman-advisory-group-accumulation-phase-of-life-vs-distribution

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of Influential Entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have with us, Jeff Altman, who's the president of Altman Advisory Group, and we'll be talking about the accumulation phase of life. versus distribution. Jeff, welcome to the program. Thanks, Mike. Good to be here. Hey, so before we dive into accumulation and distribution and all of those kind of fun topics, tell us a little bit about yourself. What's your story? And then how did you get into the

financial services industry? Well, Mike, I've been in financial services for over 50 years. Wow. A long time. I originally got started, believe it or not, knocking on doors. It's got fresh out of the army, right back from Vietnam, had a wife to support, and started selling life insurance. And I didn't have a warm market to talk to or a lot of family and friends just being back from the military. They told me to knock on doors and I did. Well, 50 years later, I've rolled my sleeves up and I have experience in all aspects of financial services, everything from asset accumulation to asset distribution to estate planning, tax preferred income, legacy planning, you name it, I've worked hands on in all areas of it.

That's amazing. And I think that having that vast experience in all areas of financial planning is really helpful because you might be able to draw from some case studies of working with clients in the past. Do you find that you stay up to date on the industry and what are some of the things that you do just to kind of continue your knowledge of staying up with the trends? That's a great question. Well, I, of course, do a lot of reading, but I am in touch of all aspects of the financial world. You know, they say that experience brings wisdom and wisdom hopefully brings success.

fortunately, I'm able to use this 50 years of experience to help my clients. And many times I've saved clients, thousands, hundreds of thousands, even millions of dollars with what I've learned over the years. Our firm has an entirely different approach to how we work with a client. Most advisors are simply talking about financial reward. and financial performance. We feel it's most important to get to know the client, first of all. Find out what the client's needs and goals are. What is my client really all about? And we use a series of very meaningful conversations to do that. We want to penetrate and get into

this man's, a woman's life, find out what motivates them. And we want to put them in a position to where they control their portfolio. The portfolio doesn't control them. After we get to know this client, of course, money ultimately becomes important, their financial well-being, and we then customize a financial plan for this client. And we use a team approach to do it. I call it kind of a cocoon approach. We wrap ourselves around the client, and we use a team approach.

again, I have a tax team, a real estate team, a reverse mortgage team, wealth transfer team, a legal team so that we can hit all aspects and all needs for this client. My function becomes a coach. I'm coaching my team and coaching my client. You know, one thing that you mentioned that's stuck in my mind of being in the business for 50 years. And the fact that you said you stay up to date on the trends reminded me of something that I heard years and years ago. You'll probably appreciate. And the rhetorical question is, do you have 50 years of experience or do you have one year of experience 50 times over? And of course, the difference there is if you've got 50 years of experience, you are reflecting back on wins and losses and mistakes and learning and client successes and

building and learning and delivering that ahead. Or do you just have the first year of experience and you got your designations and now you're just, you know, checked out. Well, you want to have the advisor that has 50 years of solid, vibrant experience. And that's just spectacular how you laid that out. It's a great point, Mike. I've retired three times. You just can't stay out of helping people and learning and the industry is exciting. Well, this is true.

And when I say retired, I've retired well three times. And I really prefer to work. I find it keeps me active. it keeps me feeling youthful. And most importantly, I get tremendous satisfaction out of being able to use this experience to help clients. I love it. Well, let's dive into accumulation phase of life versus distribution first.

What are they? What is the accumulation phase of life versus distribution and how are they different? Great question. You know, we spend most of our lives accumulating assets. My clients primarily are conservative people, and they're just normal folks enjoy the same things we all do, whether it's playing tennis, golfing, traveling, going out to dinner, time with the grandkids, you name it. But they've taken all the risks in their life, and they've been fortunate, and they've accumulated a nest egg. Some of those risks were unnecessary, though they didn't know it. They might have done far better in this accumulation.

and building their asset stage with proper guidance. But now they reach a point in life where it's time to take distributions. This is the time to enjoy it, to start reaping the fruits of all of this effort. And they're very different because there are many aspects to look at. The biggest concern we have for clients is volatility, the volatility of the marketplace. And it's very important to understand history and see what has happened in our economy, in the market. As an example, we take the years 2020 to 2013, there was absolutely no growth, zero growth. 2014 to 2020, zero growth. That means if you started with a million dollars, at the end of the term,

you still only had a million dollars. But if you're taking distributions at that point in time, if you're trying to reap the fruits of your toils and your risk and your success, you are depleting your assets. And you now run the risk of outlawed. living your assets. We don't want to do that. We want to see our assets and our income outlive us. Yeah. And go on probably to the next generation. You know, isn't it kind of like a mindset shift meaning it's from, let's say you start in your 20s and you start, you know, investing and planning for retirement? That's the accumulation phase. You're growing. You're adding. You're wanting great returns. maybe you can take a little bit more risk, but that's when you're accumulating.

But then when you start thinking about the distribution phase, at whatever age that is, like you said, you've retired three times. Well, what if someone just wants to retire once? You know, at what age are they going to start thinking, okay, I'm not accumulating anymore. I need to start really, you know, circling the wagons and keeping it safe and protected and then, you know, pulling money out. So it's, it really, it changes, right, from the certain years of accumulation. to then the years of distribution in what you're doing with your portfolio.

You're absolutely correct. And what stands out is mind shift. It takes real thought process and real conditioning. You know, when we're young, we've always heard the adage, well, it's okay if you make a mistake. The market will come back. You've got time to make more money. Well, we know from history, the market always does come back. but how long does it take to come back?

If we take 2008, if anyone remembers that, that's when the market dropped 38% in value. If you had a 401k, you lost 38%. At one point, it was actually down almost 41%. It didn't come back overnight. It took seven years just to get back to even. Well, what if you're at the stage where you're now taking your required minimum distributions,

have to take them out, no choice. You're now taking them out from this decreasing value of your estate. And once again, you run the risk of cannibalizing your estate now. You know, Warren Buffett, who I'm sure everybody agrees, is probably one of the most brilliant and successful investors we've seen. He has three rules when it comes to invest it. rule one is don't lose principle. Rule two, refer to rule one, rule three is refer to real one.

Okay, so you reach a point in life when we get to this distribution phase where you no longer want to see principle at risk. Because we don't have time to recover. That's huge. Candidly, I'm 77 years old. As I said, I've been in this industry over 50 years. And I've seen a lot of corrections in the marketplace. I've seen a lot of downturns. And in terms of experience, I have to reflect on the feelings and the reactions of various clients

and the panic that sets in when all of a sudden they see their portfolio going down and going down. We don't want to see that happen. Our clients do not risk principle. And as such, we take volatility out of the situation. This is the best thing we can do for our clients. So like you just mentioned in the distribution phase, that's when we need to not have losses and protect your principal. And like you said, the Buffett rules.

That sounds wonderful. But how do you execute on that? So when you think about balancing your portfolio, you know, from the accumulation phase, which could take on a little bit more risk to now the distribution phase where it's like, we can't lose any principle. What does that portfolio diversification and balancing look like? And how do you accomplish that? Because again, I think that a lot of advisors can say you cannot lose principle, but what if

it's in accounts and funds that can? What do you do for that? Well, that's a great question. It's important, first of all, to understand what is a, diversification. Most people really don't understand it. Well, diversification is moving your funds, moving your assets into positions where they are protected from downturns. We use specific financial products. That one will guarantee the principle. Number two, provides the opportunity to generate market gains. So should the market go up 20 percent?

My client's going to make 20%. However, if the market takes a hit, if the market goes down, my client doesn't lose any money. Now, he doesn't make any money that year, but that's okay. Because if everyone's lost 38%, and you've just broken even, you've just won the lottery, haven't you? Yep. Okay? So we use specific products that are designed to meet this need. Now, every client's needs are different.

No two clients are alike as to how much income are they going to need? What level of assets do they have? What is their age? What is their health? What is their life expectancy? It's a little different for everybody. And there are many things that can affect that distribution phase today. Everyone knows we're in a period of inflation, high interest rates.

people are living longer. There are health issues. You know, most of us never thought we'd live as long as we're living. If we look at history and we go back to say 1934, this is when Social Security first came into being. At that time, life expectancy was 64 years old. 64. When people started drawing their Social Security, it was expected that they would only draw it for four. four years. Well, wow, that's all turned us on our tail, hasn't it? And now we're worried about the Social Security Fund running out of money. Now, depending upon your age, Social Security may not even be there for you. So it is important. It's important to plan your portfolio based upon your needs and have an independent plan. On a team approach, we try to look at all aspects

that can affect this client. We try to foresee what the future may bring. Now, we're not mind readers. You know, we can't just look into the looking glass and see what's going to happen. But we're going to provide oversight through a team approach again so that I have specialists on board in every area

And this team goes to work for this client, depending on that client's needs. So, Jeff, you mentioned a couple things I want to go a teeny bit deeper on team and independent. So I feel like a lot of people might not really realize the full benefit of an advisor being independent, meaning, you know, if you worked for XYZ company, like the ones you see on TV, let's say, you can only offer their products. But what if you noticed that a client needed a certain other type of strategy of product and it falls outside of which you can offer? You're stuck. Whereas yourself as an independent, you've got a plethora of opportunities to notice what the client needs and then put them in anything that benefits them and you're not confined. Is that a good point there about independent?

That's an excellent point. We actually represent 80 different companies. Wow. so that we can pick and choose. Along the line of my career, at one point, I was an investment banker. I was a Wall Street kind of guy. And people don't know this, but when you get in these big wirehouses, these big brokerage firms, the Merrill Lynch's and so forth,

there's a sales meeting every morning. And all the brokers are on the phone or in the meeting. And the sales manager will come out and say, okay, folks, here's the stock we're selling today. and here's why we're selling this stock. Now all these brokers get on the phone of their client and start selling this stock. They're selling what the firm offers. Our approach is the client's needs, the client's goals, and that's why we take so much time getting to know our client.

Yeah. We don't change money. That's a huge piece. And you've seen the movies and the horror stories of the here's what we're selling today. And is, you know, who does it benefit the company, not the client many times. But let's transition over to that word team because I think that's another huge piece. Even though you've got 50 years of experience, you cannot stay up to date on all things related to taxes, related to legal, related to investments, related to all the areas. So where does the one stop shop team approach really bring the benefits?

benefit to your clients? We live in a very complex world today. Whether it's medicine or financial planning, financial advice, it's an area of specialization. Yeah. You're absolutely correct. I can't be up on all of the tax laws. I can't be up on all the ins and outs of a reverse mortgage and when is it appropriate for a client.

Therefore, again, getting to know this client, that's most important. We want to know everything about this client. We want to know the names of his children. Is it a first marriage? Is it a second marriage? All of these issues personalizing this experience enable us to dedicate ourselves to what the client's needs are. That's how we incorporate the team. Not everybody needs legal advice.

Not everybody needs real estate advice. But we have specialists available to work with the client. That's really huge. And that keeps everyone focused on what they're an expert in. And when it's a team that you're corraling for your client, that real estate professional is able to talk to you, the financial professional who's able to talk to the legal professional and they all are talking about the same client and you're staying on the same page versus having this, this, you know, scattered approach. Now, I'm sure if you have a client that says,

oh, I've got a guy or a gal, that's fine, but you're able to keep them all in the communication loop, which keeps the client the focus. That's correct. You know, we like to keep everybody playing on the same sheet of music. Yeah. And so they have their own attorney. That's fine. That's great. We're not trying to force somebody on them, but if they don't, it's available. And they may have an attorney who's just a general practitioner who doesn't specialize in what their particular need may be. Our law for our people specialize in financial advice. They're not corporate attorneys and they're not doing PI.

We can work for the needs of the client. satisfy the needs of this client. I'll tell you, Jeff, it's been really eye-opening to hear your 50 years of experience and just kind of some of the strategies that you're suggesting to your clients with the team approach and how you need to shift in that mindset between accumulation phase and distribution phase. And it certainly is not something that you can just go Google and set up on your own. So if someone is listening to this thinking maybe if you could take a look at my situation and see where I'm at to see if there's any opportunities.

What's the best way that they can learn more and also reach out and connect with you? They can simply contact me direct via my email or going to our website, scheduling an appointment with us, or calling you direct. And I'm sure you're posting all of those numbers on here, correct, Mike? Yep, we will have them all in the show notes, and that is the next step is just to kind of see what you can provide to them just as suggestion. So I think that is spectacular. Jeff, thank you so much for coming on today. It's been a real pleasure talking with you.

My pleasure. Thank you for having me. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, visit www. www.com. Thank you.