Holistic financial advisors do a lot more than an occasional rebalance.
David Warshaw, Founder and President of The Wealth Plan LLC, joins Michael to discuss his “four seasons” approach that includes estate planning, tax strategies, and more.
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Episode Highlights
- David’s background and motivation for founding The Wealth Plan.
- The “four seasons” approach to financial planning that David uses.
- How holistic advisors can assist their clients with practical insurance needs.
- The importance of estate planning activities, and innovations in that industry.
- How trying stand-up comedy and a face plant on national TV made David a better advisor.
Today’s Guest: David Warshaw, The Wealth Plan LLC
About The Uncommon Advisor Podcast
The Uncommon Advisor podcast features insights from advisors who are embracing a modern and holistic approach to wealth management. Learn how the most creative minds in the industry are innovating their practices to deliver superior client results, generate new business, and maximize retention.
Transcript
Michael: Welcome to the show. I’m Michael Johnston, joining me today, David Warshaw. David is the president of the Wealth Plan LLC, his own Ria firm based in Great Neck, New York. David, thanks for coming on.
David: It’s a pleasure to be here. Thank you for having me.
Michael: Well I’m excited. Let’s dive right in here. You’ve got a ton of passion about being a financial advisor, about what you do. Maybe just give us a brief background of what lit that passion in you, how you got into what I think is probably the perfect job for you.
David: Thank you. Well I started right out of college. I went to Washington University in Saint Louis, and my senior year, I was pretty stressed out because I had no idea, you know, what my occupation was going to be, and you know. I’ve been a financial planner. Yeah, a financial planner came and spoke, thank goodness. And I was like, oh, you know, this guy seems to be doing well. He’s talking to people, helping them with their money. I think I could do that and that that let the seed in me. And then I started actually at American Express Financial Advisors late 2003, early 2004. And then in 2011 went on my own and founded the Wealth Plan LLC. So doing it now 20 years, which is kind of crazy in hindsight, I wish I was 23 years old again. But I’m not. So here we are. And yeah, have my own firm. And I love the business. I, I genuinely do, I love it, yeah.
Michael: Yeah. It’s always great to see people who get into this business because they’re genuinely passionate about helping people. I think, unfortunately, there’s a lot of people who end up here because they, you know, it wasn’t their first choice, but you have a genuine passion for it. And that like, that absolutely translates. It’s super important to to find an advisor who does have that passion. So that you mentioned The Wealth Plan LLC. I love you have this four C you got your four seasons approach to financial planning. Walk us through that. How did you come up with that concept and and how has it helpful for thinking about financial planning.
David: Sure. You know, so yeah, everything you’re going to get from me today is the is the bitter truth, you know. So I’ve made a lot of mistakes in 20 years. I wish, I wish I knew then what I know now, you know. But what ended up happening was I love investing personally. And I found that that kind of bias would trickle into all my meetings where I always want to talk about, oh, I’m researching this, look at this investment. And some people just don’t really care. Like they’re outsourcing the wealth management, the wealth management job to me, because they don’t care and they’re not interested. And here I am bringing it up. And I’ve always been focused on holistic, comprehensive planning. And it dawned on me a couple of years ago, I’m like, listen, I don’t want to, you know, just speak to clients once every 2 or 3 years. Hey, Dave, how’s my account doing? Okay. Good year, bad year. I was like, I want to deliver a high caliber service where they could text me, zoom with me, meet with me in person. And every season we are going to talk about different topics. So the winter time is, you know, retirement and cash flow. The spring time is taxes and insurance. The summertime is estate planning and assistance to loved ones, and the fall is our investment in account reviews. And I just think that’s a very reasonable request, like, hey, let’s meet quarterly. And sometimes there’s not much to discuss that quarter. We did it last year. There’s been no major changes. Yeah, but some quarters there’s some seasons you might need to meet twice because, you know, they might start working on their estate plan and then stop. And they come back to it six months later, you know. So it’s really just to deliver a high caliber service, really be comprehensive and holistic and cover every base as opposed to just, hey, I’ve rebalanced your account. It’s looking good, right?
Michael: Right. Yeah. I think that’s been one of the great things that’s happened over. You know, you’ve said you’ve been in the industry for about 20 years. You know, I’ve personally seen there have been a lot of improvements, technological improvements over the last 20 years that have enabled the good advisors to kind of become, you use the word more holistic. I love that word. It’s not just simple asset allocation and rebalancing, but you you kind of bring in more services. It’s like the opposite of Shrinkflation, right? Like now your advisor can help with the estate planning and tax optimization and insurance strategies and kind of all these things that, again, the good advisors are kind of finding new ways to to add kind of more comprehensive planning services to their clients.
David: Yeah, I mean, the technology has been incredible. And one of the reasons I went on my own was I was constantly disappointed in the large, you know, bureaucratic entities, tech offering. Okay. And I mean, literally, I’d say every week I probably speak to 1 or 2 tech platforms because that’s ultimately searching for what piece of technology can really enhance the planning experience for for clients. And, you know, you know, you hire some of these vendors and then you fire them and you’re like, okay, well, it wasn’t as much as clients didn’t really stick with that. But it is fascinating how advanced things have gotten. And and it’s almost like a rebirth in a way, of the financial planning practice, because a solopreneur can really do so much that they really needed a larger firm. You know, when I first started.
Michael: Right, right. No, absolutely. I think it’s a fantastic development. It’s good for advisors good for and good for the clients that they serve, I think. So let’s dive into a couple of the, a couple of these areas here that you talked about insurance optimization. I think that’s, you know, insurance feels like a dirty word sometimes. Right? People have a kind of a pretty negative connotations of it. So how do how do you approach that? How do you approach helping clients get the insurance that they actually need? And making sure that they, they have a good experience with, with buying insurance. Right.
David: Yeah. So I actually set up a separate company called Wealth Plan Risk Management to, to, you know, place that business through because you really can’t have commission based products going through the registered investment advisory channel. Yeah. You know, if you’re saying you’re a fiduciary. So. Insurance, right? You got life insurance, you got disability income insurance, you got long tum care insurance, you got health insurance, and you got property and casualty insurance. So when I first started in 2004, American Express was very focused on basically training you to be a glorified insurance salesman. You know, that was the profitable arm in their in their business. And they kind of pivoted to financial planning and wealth management. So I kind of started as the old, you know, insurance producer. And in the end, you know, it’s advice based first, like, hey, you either need insurance, life insurance or disability insurance or you don’t. And if you do, it’s how much? Well, it’s going to be probably predicated on your on your, on your budget. And then it’s educating clients on as to the product. So, you know, hey, if you got sick or hurt, you know, do you want money coming into your family? So, you know, everyone knows what life insurance is. Most advisors that are independent will use what’s called the GA, a general agency or an FMO.
David: And so I use an agency called back nine. They have access to all the products, cutting edge technology, and we can place business you know, really cleanly through their, through their technology, show clients tons of quotes. It’s a very small part of my business. I just, you know, what some Rias will do is outsource that to other firms. And it’s like, so you’re going to do all this work and you’re not now in control of it for service? You’re not getting paid to do that work. It just doesn’t seem to make sense. It’s like, well, what interest do they have? Some of these firms are very, you know, well respected. So maybe I’ll go down that route, but I want to help them with it. I want to service them with it. Yeah. With it. So that’s life insurance disability. You know, funny thing with disability, I was single for many, many years. I got married at 40. You know, wish I got married sooner, but. But better late than never. I always say so with disability. It’s like, well, I was selling disability insurance, so I bought a policy for myself. And then I woke up one day. I was like, you know, I’m pretty good health. You know, I sit in front of clients all day or zoom, you know, and after the pandemic, I was like, I think I’m going to be okay if I get disabled.
David: So I canceled my policy, and then I got I got married, and I had a beautiful daughter named Sophia my beautiful wife Diana. And and then I was speaking to my my GA. And the guy’s like, yeah, you probably should get disability insurance. I’m like, are you selling me disability insurance? And I was like, oh my God, I probably should. So now I have a disability insurance policy. So it’s funny how even as the advisor, you know, the emotions can, can lead you one way or another. But life disability, long Tum care is a big topic and that we can have a whole separate conversation on. I think the industry is very divided on long tum care insurance. I like the solution. There’s newer products that I think make a lot of sense. So those three are kind of my specialties. Yeah, yeah. Health insurance I’m not a health insurance broker. And and health insurance is very complicated. I’m self-employed. So I’m on the New York State Health Exchange and it’s a nightmare. It’s not good. Not happy with my health insurance. I have a health insurance broker to help me. That space is kind of a mess. Thank goodness most of my clients get it from their employer, you know? And and they have limited choices that are pretty, pretty good.
David: And then property and casualty insurance. I’m not I’m not licensed in that. So that’s more Hey, send me your deck pages. And I could refer out to people that I like and trust. Say, hey, do we think we can save the client money? Now, what’s interesting on the PNC side is I use a piece of tax software called Holistic Plan. So what holistic plan is, is you upload the client’s tax return into this software, it reads it and spits out a two page summary to help the clients know what they’re paying in taxes, and then come out with a plan to be proactive versus reactive to minimize their tax liability in future years. Holistic plan just rolled out a property and casualty insurance piece, where you could upload the deck pages into the software to spit out to have the system generate. Some recommendations and ideas there. So I’m, I’m paying for that now and I’m going to start to try to dip my toes in. But ultimately with PNC, it’s like get quotes every couple of years. Don’t you know the the rates can creep up on you before you even realize it. Work with a good broker that you like and trust and and just and just review it. So that’s the insurance module is is covering all these.
Michael: Yeah. I think I always think it’s interesting that this is kind of a huge piece of the value add for a lot of advisors is getting you, you know, counseling you through the insurance. And it’s actually if you think about it, it’s actually kind of like a expected negative net worth, right. Like it’s expected to be a like because insurance companies make money. Right. So like you actually are expected expected to get like slightly negative value out of it, but massively, massively reduce your risk. So anyways, I just think it’s a little bit it’s always been a little bit counterintuitive that one of the maybe one of the best services a good advisor can provide is helping you with something that, again, maybe has like a slightly negative expected return, but that massive, massive reduction in risk and avoiding disasters and it kind of goes into that holistic, holistic view of, of wealth management we talked about.
David: Yeah. The only other thing I’d say on the insurance is super important is just if you have a permanent policy, one with cash value, just every two years, three years, call the insurance company, call the advisor and have them run an in-force illustration just to see the health, because you don’t want to run into a situation where the policy can lapse. And you were never aware, because when, you know the illustration was ran in 1997, interest rates were, you know, very, very different than where they were today. So you should always, you know review those those policies. And, you know, you brought up a good point, but ultimately, insurance creates an estate where none existed before, and savings and investment is building that estate over time. So eventually you may not need that. That large nest egg, right? Yep. Yeah. That’s how I think about it.
Michael: So. So let’s talk about staying in the spring season. I love talking about tax efficient investing. I think it’s I think it’s the free lunch that’s out there that I know we learned in school that that free lunch doesn’t exist. But but I think it does I think it’s it’s being a tax efficient investor and maximizing at the end of the day, what you get to keep. So what is your, you know, in the spring season talking about tax optimization. What does that look like with those conversations you have with your clients? You touched on it a little bit bit that you use this piece of software that kind of spits out how that can be more proactive going forward. But but what are those conversations look like talking about taxes.
David: Yeah. So so so so you know, I have modules you know, built out maybe in a future podcast I could share some of the modules, you know, with you if you want. I could even I could share now. But you know, because I’m, I’m starting to forget things. So you know, I, I write everything down and I check the box with every client meeting, you know. Hey, what did we talk about? These things. Taxes is a lot, right? So first up, yes, I need to see a tax return. I need to run the report through holistic plan. And I need the client to understand this is where you were at last year. Then the question is, well, what can we do different this year? And then I’ll give them advice on what I think they could do different this year. Now the reality is I’m not a CPA. You know, I would love to one day incorporate wealth plan tax into into the business. Finding a great accountant that I like and trust at a reasonable price point has been very, very challenging. That’s just the truth. And and sometimes it’s good to have them separate. But then it’s like, hey, I’m going to give them some recommendations. I want the accountant to give it its blessing because ultimately he or she is signing off on the return, you know, and I don’t want to do anything that then the client’s going to come back and say, hey, you know, my accountant didn’t realize and this isn’t good.
David: So I really think the advisor needs to be the QB and loop in the tax professional and or estate planning professional for the benefit of the client. The problem today is I don’t think the the accountants are getting paid enough, honestly to make it to take the time if you’re doing it. Yeah, three $400 return. How many hours are you going to really give to their the client’s third party advisor? If they’re a business owner there’s more money there. So maybe maybe they will. And I think it’s a big problem and I don’t I haven’t seen anybody that’s that’s fixing it. Right. Delivering high quality proactive tax planning. You know it’s usually a combination of the advisor and then praying the advice gets funneled to the tax preparer to implement it, or at least give it a seal of approval. Now, when it comes to money management, you know, I think a very important conversation to have is tax loss harvesting. Like, hey, we got a brokerage account. Do you want me to tax loss harvest for you? Right. And I’ve read mixed things on tax loss harvesting.
David: You know sometimes I feel it’s a very sales gimmicky just to sell, you know, the value of an advisor, some clients, it’s really, really good. Others it’s not as good. But what about gain harvesting? Yeah. I don’t want to client ever tell me as they’re doing taxes. Dave why did you realize $10,000 of long tum capital gains for me while I was rebalancing your account? So I think there needs to be a discussion on hey, this is my budget. I you know, I’m a big believer the investments you know, should drive. You know, the financial plan should drive everything. And the portfolio serves the plan. But I don’t want the, you know The tax, you know. To rule everything, but it is still a conversation on, hey, I want to make sure that we have the right communication of hey, I want you to rebalance, but don’t realize more than this from a long time gain perspective unless you really think it’s worth it. And I don’t know if those conversations are happening enough. And I’m trying to now in that tax module, have those conversations that you have things like Roth conversions that are very hot. You know, to try to, you know, hedge future tax rate increases. Sure. Yeah. There’s a there’s a lot.
Michael: Yeah. Yeah. Some of those decisions you know the Roth conversion that can be a very high leverage decision for someone if you do it at the at the right time. So you have a a low income year, you’re taking a sabbatical or you’re doing a startup or something where you’re going to have low income. And if you can advise that client to to do the Roth conversion in that low income year, or were they have for whatever reason, they’ve got other offsets to it that can be like that can be pretty high leverage, right, David. Like timing that the right point.
David: Absolutely. If you can catch this when it’s happening. And really, you know, like I said, work with the accountant, work with the CPA, it could be huge. And that’s the beauty of the Four Seasons, is that if I’m meeting with someone once a year, this isn’t happening, right? It’s normally like, hey, I’m locked out of my account, or how are we doing? Or some emergencies coming up, but hey, spring time, we focus on this. We didn’t meet that spring summer. We could always go back or stay on point. But every year when I build out my Monday.com module, I read good articles, I learn something, you know, and I just add it in. So it’s kind of like my repository for knowledge and it just keeps getting bigger and bigger as as time goes on.
Michael: Yeah. I love the analogy you use of the quarter of the advisor being the quarterback. And I, I totally agree with you about the, the short and a couple things. I think there’s a shortage of accountants. There’s a pretty compressed like their time frame is kind of more compressed than a lot of people realize. A lot of times they’re waiting for states to finalize these tax forms until the middle of February, and then they’re trying to get stuff done by March 15th and April 15th. So it’s I would not want to be an accountant right now. It’s a it’s a pretty brutal job. So I agree with your assessment that there’s kind of a shortage there. And I like that analogy of the the advisor needing to be the quarterback of the situation. Let’s let’s shift gears here a little bit and talk about estate planning. This is I think this is another pretty can be potentially overlooked. And I just use the word high leverage. I’m going to use it again here. Like this is a very high leverage in my mind a very high leverage activity. So what is that conversation look like. And in the quarter of the year for estate planning, I guess it’s the summer quarter for you.
David: Yeah. So summer is estate planning and assistance to loved ones, right? So assistance to loved ones is, hey, I want to help my children or my grandchildren, or I need to help my parents or a charity or hey, this is the kind of legacy that I want to, you know, leave, you know, so I’ll say like, hey, have you ever recorded a video of yourself, of your wisdom, you know, so I’m trying to have these interesting conversations and give people, you know, meaningful actions on I want to help this entity or this person. And how do I do that? Estate planning is really educating clients on just what are the core documents, how to assets pass. Right. Probate contain facts you know, beneficiaries, trusts because they have to understand first how assets transfer, right. And then once they get that, it’s like, okay, well what documents do you need? And then it’s okay. Well, Dave, where do I go to get the documents. So late last year I, I, I, I was on like 3 or 4 different platforms for this because I was trying to figure out the best solution. I was on wealth comm estate guru. Vanilla. That was even before 2023. That was during the pandemic.
David: And trust and will and I think there’s one other one that I’m that I’m blanking on. Oh, you know, a state guru and trust and will all of these platforms are awesome. The companies got very smart and they said, listen, clients are not updating their wills. They’re not updating their trust. They’re not creating them. You know, and in some cases, I’ve had clients, you know, literally be retirement age and not have this. And it’s like it’s like super important. Yeah. And because it’s kind of like, I’d much rather talk to you about giving me more money to manage, right, than talking about your, your demise and what happens to your money when you’re in here. But that’s not comprehensive planning. So once people understand how assets transfer, what documents they need, now we need to implement. So for me two choices. You’re either going to work with an attorney that you like and trust, right. Or you’re going to work with some digital platform. So I’ve loved trust and will. That may be different three years from now, but I’ve been very impressed. I’m actually doing it personally myself because I relocated from Florida to New York. They have an attorney you could speak to for $300 for the year.
David: For the year? Which is insane. And if you can’t tell them my enthusiasm and You know, you could literally build your estate plan in the comfort of your home in like an hour. They’ll ship you the documents, you get them signed, witnessed and notarized. Right? And if you want to update them, it costs like 30, 40 bucks. And you can loop in an attorney. So yeah, I think that’s the future of estate planning. Now, granted, when someone has more complex situations, more complex family situations, they need an irrevocable trust. These platforms cannot handle that today. And that’s when you might need more, more expert legal advice. But listen look, I’m not I’m not knocking anybody. There’s some advisors out there that aren’t great. There’s some estate attorneys that I don’t think are that great. That charge, you know, someone gave me was like the most simplest cases, and they charged them ten grand. This client had, you know, a very small net worth. So there’s there’s some people that aren’t really as forthcoming. So here you could build an entire estate plan with a revocable trust for, like, less than, you know, a thousand bucks. Yeah.
Michael: That’s that’s great disruption. I mean, that’s an industry that was was ripe for it still is ripe for it. I mean, it’s an industry that’s still full of dinosaurs being disrupted relatively quickly. And it’s it’s a great thing for investors and again, for advisors to have that be a streamlined process a lot easier allows you to kind of focus on other things and provide additional value there. So I think overwhelmingly positive development there. I’ve had I was kind of chuckling internally here, as you were talking about, that, I’ve had that not so great experience with a price tag that kind of made my eyes pop out of my head and wondered, what exactly am I paying for here? So I made that mistake. I’ll admit it. You talked about making mistakes and owning them. And what do they say? That good judgment comes from experience, and experience comes from bad judgment. So there you go.
David: Absolutely, I love that. I love that you got to send me that. Very, very true.
Michael: Yeah. I want to throw you a kind of a curveball here. You you’ve done some stand up comedy. You’ve been on you’ve been on national TV. I think you’re part of a competition on on national TV. It’s pretty unique for a financial adviser. How does that have you taken anything from those experiences that you think have made you a better advisor? Kind of helped you in your client interactions or made you better able to to relate and serve your clients?
David: I don’t know. I don’t probably not. I mean, I I’ve done stand up comedy a handful of times in front of very friendly audiences. You know, I’m Jewish from Long Island, so some friends said, do the stand up bit for this Jewish charity. And I just went up and made fun of myself for ten minutes. And, you know, definitely I was very scared you know, to do it you know, and but, you know, it grows, makes you grow as a person. You get up there in front of a room and try to make people laugh. You can actually watch them there on YouTube. Just David Warshaw comedy routine, parts one, two and three. They’re not really appropriate. You know, if you’re thinking about becoming a client, you maybe don’t want to watch them, but yeah, you probably should. Who cares? So that was stand up, and I. I like making people laugh. You know, when you know, when I was When I’m. When I was living in the city, you know, you’d have, like, these Shabbat dinners, these Sabbath dinners with, like, all your friends. He had like, 20 people at a table. You could just try out material because that’s kind of like a small crowd. And when you tell the same story ten times and you see people laughing, you’re like, okay, I might have something here. When I was actually 2004, right when I, I was studying for my series seven license for at American Express I auditioned for So You Think You Could Dance? It was like the American Idol for dancing.
David: It’s still going strong. The show. The show is fantastic. I’ve always loved dancing because I used to break dance in college. I’m not bad for a white Jewish kid from Long Island. Now I’m pushing 43. I’m £50 overweight. I could barely move. So, you know, I’m. I have a long way to go to get back into it. But I was at my peak and I heard about this show, and I went and I auditioned. And it was really sad because I actually was pretty good when I was in my late teens and 20s. But then I bashed my face. I was very nervous. It’s a whole other story. But I bashed my face on national television, so I was recognized for like a decade later. So when clients find out they’re awesome, they’ve been really cool about it. It’s 20 years removed since then. So I don’t really lead with it now, but listen, if it brings joy to people as I fall and bash my face, if people laugh and then they send it around their office, you know, hey, I think that’s going to help me in the afterlife, you know, give me a better score.
Michael: Absolutely. Well, I would say, too, in all seriousness, I think the ability to get up in front of a crowd and make fun of yourself or the way that you handled that, that situation, bashing your face, I think that requires a certain amount of humility to, to be able to do that. And I think that’s a pretty important characteristic for, for someone who’s going to be who’s going to be working with clients and managing folks money. I think it’s an important characteristic for anyone, regardless of what you do. And it’s kind of in short supply nowadays, and that’s a conversation for another day. But I do think that that, you know, humility that is shown by by that is, is important and probably does make you does make you a better advisor, even if you’re too humble to admit it.
David: So thank you, buddy. Thank you, thank you.
Michael: So, David, my my last. We could talk all day here, but my my last question for you. Where can where can folks go. They want to find out more about you. Where can they find you?
David: Sure. You know the wealth plan comm? The wealth plan comm is my website. My office is 516 407 111. You can call whenever you want. You can text. There’s a calendar on my website. You could book a meeting for a consult and you know, just reach out. I’m. I’m really here to answer any questions. I really want to be a resource and be help, even if now’s not the right time to work with an advisor. But I guess you know, Mike, when we meet next, we’ll tackle the retirement and cash flow module. And the investment. We didn’t even get to talk about crypto and digital assets and alternatives. All exciting things. But we’ll we’ll pivot that to next time. Yeah.
Michael: No. Absolutely. David I’m going to have you back on for sure. This was a great conversation. I want to thank you for sharing your passion, your knowledge your font of knowledge. So appreciate you opening that up and sharing it with the audience here. We’ll make sure all those links David mentioned are in the show notes for this episode. David Warshaw, thanks for coming on. I really enjoyed this.
David: Over and out. Thank you.
