Influential Entrepreneurs with Mike Saunders, MBA - Interview with Marc Hernandez, Founder of MAH Financial Services -Risk Tolerance in Retirement

Episode Date: March 26, 2026

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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 back with us Mark Hernandez, who's the founder of MAH Financial and we'll be talking about risk tolerance in retirement. Mark, welcome back to the program.

Thank you, Mike. Hey, I think that a lot of times when you hear like, oh, when you hear this word, how does it make you feel? Risk is not a fun word. And I don't even know that risk tolerance is something that should be two words put together because I don't know that many people want to tolerate a lot of risk in retirement. So where do you start the conversation with your clients when you start bringing up the point about risk in retirement? Well, that's pretty much the first question that comes. up when we first meet prospective clients. And usually they're the ones that bring it up. I can't tell you how many times the first conversation, first few minutes, the first thing

that says, I don't want to lose any money. I don't want to lose my money. Okay. And the next thing I say is, well, do you want to make money? Okay? Because, again, it just depends on their situation. A lot of times people come to me. Maybe they've, they're retiring, they've been contributing to their 401K for 30 years. And the risk is reduced there because their dollar costs averaging. They're putting money every pay period. And they think of that sort of as a, you might say, as a tax or a bill a lot of times. You know, they just put the money away.

They, you know, they say, I didn't really think about it that much. Even if there were downturns, you know, I had time. But the thing is, once we get to the point where they're going to be in control of these assets, That's a big question. As an advisor, it's very important for us to know how much risk they're willing to accept. And one of the main questions is I ask them, and I'll ask them on a scale of 1 to 10, you know, one being I couldn't care less, 10 being I lose sleep over, I worry about it, or somewhere in between.

And I'll just, I'll ask the question, you know, in the event, any monies you give us, you know, on a scale of 1 to 10, how is it important that your principle is protected from volatility? And most of the time, they'll say 10. You know, most of the time, they'll say 10. And the thing is that what we have to do as advisors is we have to sit down and take that initial response and break it down to find out exactly, you know, what they mean by that and exactly how much risk to apply to our recommendations. recommendation. Now, one thing is that we have to look at, number one, is income, what their income needs are going to be. Because remember, you know, they're used to earning a certain amount of income working. Now if they stop working, that income is going to be reduced. Well, then

are they eligible to start getting a check from Social Security? How much will that be? How much will that Social Security make up of any deficit from the loss they're going to suffer from stop from a work stoppage. Secondly, how much have they accumulated over the years towards a retirement? Is it all in qualified plans? Is it in a Roth type of plan? Is it in a before tax type of plan? How much have they saved on the side?

There would be non-qualified. There would be after-tax contributions. What type of assets do they have? So all of that has to come in. play and then what happens is to start the discussion about what we can do because the main focus is going to be on the income needs. How much income do you need on a monthly basis to meet your financial needs? And from there, we can start coming up with a plan that will take care of that. Now, whatever plan we might come up with at the beginning, that's probably not the same kind of

plan, they're going to have maybe five years or 10 years or longer down the line because there's going to be changes to their life, obviously, and we need to be able to adapt to those changes. So, again, it's just having conversations and having continual conversations of any changes in their life that could necessitate a change in how we're investing their money. and that's part of the risk appraisal and tolerance process. Yeah. You know, when do you start telling people to be thinking about shifting out of, you know, all my money's in the market into strategies like we better start circling the wagons

and putting some of your money in protected accounts where you can't lose it at all, but maybe still tracks the market to have some upside? When do you start thinking that way and then what percent do you like to see? that that be. Well, sometimes, Mike, that happens right at the very beginning because a lot of times most clients don't put, if they retire, put 100% of their assets in under managed care or in the investment side. Some of them, we like looking at some safe money products as maybe bond alternatives. And so they might start off with, let's say, 70, 80 or 65% in a managed account. and maybe, you know, 20 to 35% in a safe money account.

And that just, again, depends on their risk. Some people might say, Mark, I want to make as much as I can. I need to make as much as I can. And I have the stomach for it and the risk tolerance for it. Well, in that case, of course, then they'll probably have 100% under managed care and we'll be monitoring it, making adjustments. and but, but if down the road there is a situation that pops up where they start saying, you know, I'm getting a little wary of what's going on in the markets,

especially conversations we're having recently with some of the big geopolitical issues out there. At that point, then we'll have a conversation and say, well, why don't we look at this because it does this, you know, and it will satisfy these financial needs you have. So the conversation could happen anytime. A lot said, at the beginning, a lot of times we're, you know, we're determining, starting off with their risk tolerances then. But as time goes on, it could be a year from now. It could be two years. It could be five years.

It could be 10 years. Anywhere down the line, we could have a conversation about making adjustments based on a change of their financial philosophy or maybe their stomach for risk is starts, you know, being reduced. And the closer you get to retirement, the less runway you have to recover. And I know like the old age old response that a lot of people here like, oh, the markets took a dump and they're down, down, down. And just wait it out. It'll come back. Well, that might be valid potentially maybe. And it might be a position to take in your 20s, 30s, 40s.

But at a certain age as you get closer to retirement, you don't have that runway. So I think that that's a valid statement depending. And to your point about the people that go, oh, I've got the summit for it. I want the most returns I can get. That might be the case. But we better keep our finger to the pulse of what's going on. And you better darn will make your annual review. In fact, we might want to be looking at it, you know, quarterly.

Let's get together every quarter and just make sure we're dialed in and doing the things that it needs to be done. Because things can change externally and internally, right? Yes, for sure. and you brought up a point about either annual visits or quarterly visits. We have, we reach out to our clients on a weekly basis. On a weekly basis, they'll receive an email of how their account is doing. And the thing is it's usually sent to them. They get a text message and they will see how the account has done since the previous week.

and it'll also have on there something that as an advisor helped me sleep more at night. It's called asset lock. So our managed clients, they have the asset lock. And with the asset lock, it's a number that is applied to their account based on their risk score. Okay. So someone may, I'll just use 50 example out of 100, zero to 100. I'll use 50. If they're 50, they're probably considered moderate or conservatively moderate, and let's say their account value is a quarter of a million dollars, well, their asset lock value based on that score, maybe like 215 or 218,000.

So that means that if, in fact, they're based on their risk score, if in fact the market drops and they approach that asset lock number, it triggers not only them, but triggers us to, say, we need to have a conversation. And it may be a conversation that dictates moving entirely to cash or reconnecting with them to establish a new risk score that may have us put them in a different type of investment model that's going to fit their needs a little better right now. So they hear from us weekly, and they might even hear from us more than that, because what we've seen up until the last few months, the market was just going almost straight up every day. And they were getting text messages every other day saying, congratulations, you just hit an all-time high. Congratulations, you just hit a new all-time high.

So they're getting constant feedback of how their accounts doing. They don't have to wait until their monthly statements, which they get. They don't have to wait to any kind of review. They're getting feedback on a weekly basis. And if they don't like what they're seeing, which is happening recently, at that point, we can have a conversation about making adjustments very quickly to their accounts. That flies in the face of what many people experience with their, air quote, advisors, which is silence. You know, it's like you don't hear from them. You get your quarterly statement, and then they're confused, and then they don't say anything.

And then when they do call the advisor up or text or email, and then they're. they're like, hey, the markets are doing crazy things. It's like, oh, just stay with the course. Well, what you're describing is full transparency and being proactive, guiding them. And I love that asset lock to be able to say, look, we're going to have predetermined triggers that are going to, we're going to predetermine ahead of time so that if this happens, we know what to do or at least have that hard conversation, not reacting and running for the hills. That is correct.

And I'll tell you one thing. if you call your advisor, and I mean, you know, maybe a day goes by or two, you never know, something could have happened. But if they're not returning your calls, you need to find another advisor. I mean, flat out. I mean, that's crazy. I mean, a priority for us is when somebody reaches out to us, they become our immediate, the most important thing that has to be solved.

Now, when somebody's reaching out to you, they're reaching out to you for a reason. So even though you say, oh, the market's down. They know the market's down. It's going to come back. No, we don't say the market's going to come back because that's not a certainty. So if they, I mean, sure, historic, I mean, when we had COVID, the market went down and it came back up within the year. You know, but then you go back further back. There were times when the market went down and it took several years to recover to where it was.

So you can't, we can't use those assumptions anymore. We have to say, be proactive and say, if a client is calling because they have concerns, we need to satisfy those concerns. And in some cases, it means making adjustments to their account at that time. Well, and like you said, looking backwards, you could say, oh, well, the market was at this level. And then it took this really big dip for this one geopolitical, you know, event that happened. And it was down, you know, many, many percentage points. But then it came back up. And it met where we were.

but the problem is in that down and up, what sectors and where were you positioned? And maybe your sector never came back up, even though the overall market. So you can't just look at one number and go, it went down and came back up because where are you? So having that transparency with your specific portfolio, with what you're describing you're doing with your clients is just huge.

How do you help them when they start seeing those kind of rocky, you know, reports like, it went down. How do you help them stay disciplined through those changes? Well, you have a conversation. And the first thing we would do is at what, would you like to? Would you mean speak words to a human? You mean you actually meet with them? Yeah, yeah, we speak words to a human.

We're not AI. We speak to them. Right. And we say, and we'll say the first thing, would you like us to re-evaluate your risk score? The first thing, do we want to re-evest? Because if you've changed, we need to reevaluate the risk score because we can modify your your portfolio to match your current risk score.

Has anything changed that has changed that score? If I said, no, no, no, I said, well, the first thing I would point out to them is the asset lock. That you know we have the acid lock. This is your asset lock number, you know, the Seattle lock number. Are you okay with that? So let me share this real quick story with you. I have a client. He's been a client of mine for about 15 years.

And he was worked when I first got him, he was working. and he was in sales and he he was very, very scared that he was going to have enough money to retire comfortably on. To make a long story short, he did very well. He retired and he's got a very comfortable retirement. As a matter of fact, we have managed to count on him and he pointed out his account value, I think it was about last year was 167,000 and it got it was up, it got up to like $218,000 and it has dropped it dropped a little bit I think it was about $209,000 and we had the conversation I said do you want me to retest you to see if we need to put you in a different model had that same and he said no and he said but I want and he said I don't want to go down to my asset lock number

if it drops to 190 he put his own number if it drops to 190 I want to move to cash so I said fine But you're watching it. He was going to watch it closer than I can. So if we start getting close to the 190, then you let me know, because then I'm going to put you on a day watch also to see if we need to do that. Well, let's hope it doesn't happen. But the key is he started a year and a half ago. He was at 167. That's quite a big, and he's not contributing to this program.

So it's quite a big gains he had to 218. Sure, it dropped to 209, but still that's way above. where he was a year and a half ago and even 190, that's still locking in gains that he had. But the thing is, we're having these conversations. We listen to the client to see what they want to do. And we do pass along, like I said, has anything major change to change your risk tolerance? If it hasn't, this is your asset lock number. This is your minimum you're willing to go to that would trigger.

we need to do something. Okay, we're not near there yet at this time. So that's the thing, to have these conversations to make sure that they know that, you know, that they do have some support, the program, the model has support for them, but also we hear them and we listen to what they say. You know, I think that is such a huge thing because no matter what someone would say risk tolerance number is, it can change for their, internally they can have their risk tolerance kind of change because of their age, because the closer they get to retirement because of market conditions, whatever the case is.

Maybe they, you know, have got, you know, a new charity they want to support. So their risk tolerance now has gone down. They want to make sure they've got money for that charity that they're supporting. So so many things can change, but it does, nothing happens until you address it. Notice it number one. Number two, address it. And number three, get clarity around that. And so many times you hit the nail on the head when you said,

It's not AI. It's a human conversation. You can't just go Google something. You can't just go to AI and say, what should I do about? That can help you get some clarity around what questions you should bring to your trusted advisor. That's correct. Well, if someone is interested in learning a little bit more and kind of getting clarity around their own risk tolerance and checking out a little bit more about that asset lock, what's the best way that they can reach out and connect with you, Mark? They can reach out to us at M-A-H-financial.biz, B-I-Z, M-A-H-financial.B-I-B-I-S. Be happy to have a conversation and see how we can help them.

Mark, thank you so much for coming back on. It's a real pleasure chatting with you again. Thank you, Mike. 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. Influential EntrepreneursRadio.com.