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Ep 18B: How to pick a Financial Advisor, and Empower Women on their financial journey -Alice Finn

Updated: Jul 17, 2023





EPISODE SUMMARY


Hello, This is Sirisha, welcome to my podcast!


Alice Finn is on a mission to enable and empower women to learn more about investments and in enabling their financial journey. In part two, join Alice, as we talk about how to pick a financial advisor and the best ways to engage your family, friends, and the women around you to talk about money. What can we do to enable a whole generation of young girls to feel financially empowered and get a head start on the investing journey and remove the stigma that appears to be around money and growing it?


Alice Finn is a wealth advisor, wealth manager, and expert who's featured on CNBC and many other organizations.


Her book, 'Smart Women Love Money' has been in US news, among the top nine finance books she's been featured in Romper as one of the 23 books. It's number five on the list that adult women should read. So let's get started and listen to this conversation with Alice on how we get to bridge the gender investment gap, live out our values, find a seat at the table and help others pull up a chair to enter the conversation.


Each podcast has a few takeaways and resources at the end. Check them out and leave me your feedback!!


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Below is a transcript of the episode, slightly modified for reading.



PODCAST TRANSCRIPT OVERVIEW


[02:17] -How to pick a Financial Advisor [Jump to section]

[06:43] -Powerhouse meeting- Let's discuss money [Jump to section]

[08:59] - Kids, Money, Gender disparity [Jump to section]

[14:03] - How to get Girls EARLY on the road to Investing [Jump to section]

[15:57] - Note to 21-year-old self [Jump to section]

[17:29] - Spread the word... Start investing "early" [Jump to section]

Food for thought. Episode takeaways [Jump to section]


PODCAST DETAILED TRANSCRIPT



Alice Finn is on a mission to enable and empower women to learn more about investments in enabling their financial journey. In part join Alice, as we talk about how to pick a financial advisor and the best ways to engage your family, friends, and the women around you to talk about money. What can we do to enable a whole generation of young girls to feel financially empowered and get a head start on the investing journey and remove the stigma that appears to be around money and growing it?


We discussed the pay gap, but there's a huge gender investment gap that can leave a significant difference in the quality of life and the choices you can make. And the limits and constraints that you may put yourselves in. How do we get to live out our values and find a seat at the table and help others pull up a chair to enter the conversation? We have the ability to impact a whole generation of girls and women to grow financially empowered and have a seat at the table and feel freedom so let's get started and listen to this conversation with Alice on how we can move forward


Sirisha: Alice Finn, is a wealth advisor, wealth manager, and expert who's featured on CNBC her book, smart women love money has been in the US news, and top finance books she's been featured in Romper as one of the 23 books. It's number five on the list that adult women should drink. Alice, thank you for being here.


I am really excited about your mission statement to empower women and enable their financial journey. So thanks for being on the podcast.



Alice: I'm delighted to be here and thank you for doing what you're doing, which is a broader mission, and I'm happy to be part of the money.



[02:17] How to Pick a Financial Advisor


Sirisha: When you reach a certain stage in your journey, you may choose to go with a financial advisor. What questions do I need to ask and how do I know that financial advisor is the right type of financial advisor if they're a fiduciary or not?


Alice: So as you just mentioned, you should make sure that whoever you work with is a fiduciary. A fiduciary is someone that has to put your interests first. So for example, fee-only financial advisors must be fiduciary. And by the way, don't go with someone that says they're fee-based, that's trying to sound like the only, but they're not. The only is, so we only get paid by our clients. We're not getting paid a commission to sell products. So that's one of the main differences between registered investment advisors or fee-only advisors are fiduciaries, which are all the same thing.


Brokerage firms have a much lower standard. They have a standard that. It's good enough for the client. It's not a fiduciary standard. It's like, it won't be bad for the client in effect. And so that's not them putting themselves in your shoes and making sure that they're investing as if this were their money. And then the problem with a lot of brokerage firms is that they get paid a commission to sell you products and many of those products are very high. And people tend to think, if it's complicated, it has a high fee, it must be good, right?


No, the opposite and that's why I wrote five simple life-changing rules for investing. You don't need to be having a complicated investment portfolio. In fact, just the opposite should be simple. You should understand it and then the fees will be lower because you're not paying for people to cook up all these complicated products that honestly, a lot of people don't even understand.


So if I don't understand something, I'm not investing in it for me or my clients, I want it to be simple, and straightforward.


Sirisha: The financial journey, It's really about simplifying. It's not as complicated as we think or how people can make it sound.


I can understand what you're saying when you're explaining it to me. The advisor should be able to answer questions. I am the client and in that relationship, I come first and feel comfortable with the advisor. I think most management fees from a fiduciary financial advisor are plus, or minus 1%.


Alice: Usually they start at 1% and then go down if people have a lot more money, so it can get much cheaper if you have a lot more money.

Sirisha: So something for the listeners to think about when you're looking for a financial advisor, that is the ballpark range, you're looking at anything more than that.


You'll have to see what are the hidden fees that you're considering as you're trying to simplify your asset allocation.


If you're moving companies and rolling over IRAs, you have money spread all over the place. You have a lot of different investments. It's hard to see what the asset allocation is because there are bits and pieces of it. Just consolidating everything together so that you have a bigger picture. As it gets more complicated it may be a good idea to look at a financial advisor.


Alice: Absolutely. On that front, that's why you want to put it all together and make an overall plan. You don't want to have parts with different managers in that case then, one person might be selling apple., Another person might be buying out or the same index fund and you really needed all working together. When you asked about how do you decide whether to hire a financial advisor and who to hire?


My book has a list of the questions to ask someone that you're considering to be your financial advisor. And I'm happy to send that to people just separately as an email. If they email me at alice@alicefinn.com I'm happy to just send them that list. People found that helpful in trying to decide whether it was a good fit.


Sirisha: Thanks Alice, that would be really good because I think it puts to rest. A lot of the knowledge gaps we might have when you're looking for financial advisors and for us to feel safe about making that decision. Say you have a hundred thousand in cash and you want to invest it, when you're giving it to someone, you just want to make sure it's managed properly and that you feel comfortable in this relationship because with the financial advisors, not a short-term relationship. It can be many years long and that's how you want to think about it can be decades long in some cases as well.


Alice: I've been asked in the past to give a talk on how to manage your wealth manager. And so one of the things, in addition, to trust, you also want to make sure that philosophically your investment approaches are aligned because if you've got a different investment of philosophy than the person that's managing your money, eventually you're going to need to sell and switch and that's really expensive from a tax perspective.


And for example, I believe in using index funds, I believe in coming up with an asset allocation using index funds. so I try to make sure that anybody that I work with that we're on the same page, that we're not trying to find active managers to beat the market cause I think that's a loser's game.


We're not trying to time the market It's not that I ignore what's going on in the market, but in general, I don't think you should get in and out of the market in big ways.


So you want to make sure that philosophically, whoever you're working with you believe in what they're doing.


Sirisha: That's something to keep in mind because it is a relationship of trust.


[06:43] Powerhouse meeting- let's discuss money


Sirisha: We are talking, about the gender investment gap and women and money and how they are as investors. I know you have powerhouse meetings that you conduct so what do you find as the main conversation pieces? What do you all talk about and how as an individual can I enable that conversation within my own circles and even beyond?


Alice: This is my mission to get women, to talk with the women in their life about getting their money, working for them. So actually we do hold what we call powerhouses, where we get women together with their peers, their friends, whoever they want and we go through the five rules of investing. I start every meeting by saying, there's no question that's too basic or too stupid because unfortunately, we're all most likely learning this as adults.


I wish that they had personal financial planning courses in high school even, and certainly in college and I wish women would take them if they're offered I want to get the conversation going because it should be something that we are learning together and don't feel stupid for not knowing.


And so in our powerhouses, we set that stage and people do ask questions and so the five rules create a really good foundation to how to think about investing and then for the rest of your life. If someone's saying to you, I'm going to pick stocks for you versus index funds you're going to say no that doesn't comport with the five rules, so that's not how I want to invest. Or if the fees are really high, Nope, that doesn't comport with the five rules and that's not how I'm going to invest.


So just the book will provide a foundation, sort of a touchstone to think about when you're evaluating how to invest for the rest of your life. And hopefully, if you know about investing and you talk about it, women will seek you out and say, how are you doing this? How did you roll over your 401k, your old employer, into your IRA?


So now you can control it. And that'll just be part of what we talk about in our lives. It's really important to get it working for you while you're doing other things, it shouldn't be time-consuming. To set it up might require some attention, but once it's set up, you just let it keep going. Don't fool around with it too much.


Sirisha: I couldn't agree more. I think it's very important to have a conversation with friends, with family, with others you meet, because. That is the system that teaches you this. So this is the only way to get the conversation started unless you think to go pick up a book and want to read a book. So it's a starting point to have that.


[08:59] Kid's, Money, Gender disparity


Sirisha: Do you have kids, do you talk to them about money?


Alice: Yes. I have a daughter who's 25 and a son who's 22. And I've been talking to them about money, for a long time, obviously, because this is my business.


And when they were relatively young, around 13, I gave him some money to manage and I tell them that they could then half of what they earned on things that I normally wouldn't pay for. I still needed to prove, that it was things that they normally wouldn't pay for. It was really interesting in that it's anecdotal, but the gender difference, even with my two children was remarkable.


My daughter was like, can you just manage it for me? And I'm saying no you're going to manage it. She eventually went to work in this thing called the Huntsman program we're in so she studied business and international relations and she still for a while wasn't paying as much attention as my son where my son would beg me for stock lessons all the time.


Can you give me another stock lesson? Can you tell me how social security works? Can you? It was just really interesting because I brought them up the same in my mind. So then when my son was in high school, he joined the investing. And there were, I think like 16 students that showed up and all, but two were boys. There were only two girls that showed up and I said, "why what happened?" and the two girls dropped out because they felt uncomfortable. And I said to my son, whose name is Michael? I said, Michael, why do you think that is? He said I think the boys think it's cool to be in an investment club and whereas for girls, it's this sort of cultural psychology that somehow it feels greedy to care about. It was just so interesting that in my own family, I saw this difference and then my son experienced it in high school.


And actually, he's in college now and he's studying engineering and he's a senior and they offered a course on wealth management to engineers. So he just told me that recently at the beginning of the semester, when he looked at the roster of who signed up, it was all men. No women signed up for the class. I said, oh Michael, you're going to change that. You're going to come get some of your female classmates to sign up and so he said he was going to, I haven't talked to him since, but that's just crazy.


So these are not women that are intimidated by numbers, they're engineers and somehow they didn't want to take a wealth management or personal finance course. Whereas the young men did. So we definitely still have a lot of work to do. There's still a gender difference and so I'm trying to address that.


Sirisha: That's a very fascinating story and that's the reason I asked you the question because I came across a comment you'd made before. I find that even in school the similar example is math and stem because when my kids do it in middle school, when I looked at that picture of their stem stepped on them and they went to, and maybe 40 kids, there were five girls and 35 boys.


So you could start to see gender gap, sometimes show up, then it's not clearly understood why that is a gap. There's no reason like you said, your daughter sees you managing wealth for other people and yourself so she has a role model there.


Alice: Honestly, when it came to math when she was in kindergarten, I said your great-grandmother was good at math, your grandmother good at math, your mother's good at math, you're going to be good at math. and she likes math. I was able to address that. And I thought we were making in our country more progress on the STEM front than maybe we are. When I decided to focus on this as an issue, I felt like it was a final frontier of feminism for women to focus on investing, in getting the money working for them.


People focus a lot on the wage gap and that's certainly significant that women in the same jobs will make less than men in those jobs. But if you, then don't invest the money, the gap gets exponentially bigger. So I really felt like this was something that I wanted to do at this stage in my career, trying to have an impact.


Sirisha: I think that you called it the gender investment gap. It's 82 cents to a dollar. But when you do compound interest, that gap just widens to normally that the makeup in time.


Alice: Exactly the numbers are pretty amazing. Just the compounding effect of getting your money working for you is amazing.


And then if you're not doing that, the gap between you and people that are is going to be huge, and it really makes it. In your life to me, it's not about whether you go buy a Porsche or, spend money on luxuries. It's more about the choices and opportunities you have later in life.


If you have more resources, you can choose to start a company or fund a non-profit you can have a lot of choices and how you spend your time. Whereas if you're having to work for money later in life, you're constrained in what you do.


Sirisha: It's the financial freedom that you're talking about, not just the literacy or the investment portion model, it's the freedom that it gives you for choices to make.


Alice: Exactly. Once you have that freedom, what do you want to do with it? And if you have resources to put to work for things you care about, whether it's funding someone's education or helping someone with a down payment on a home.


You have those opportunities to have an impact and make a difference in other people's lives.


Sirisha: So in some ways, you can get to live your values that you are doing, but the more have a seat at the table to make that


Alice: Exactly. It's powerful to have resources.


[14:03] How to get Girls EARLY on the road to Investing


Sirisha: And we talked about kids and money, and you talked about your son and daughter's journey through this you're talking about women and money and actually he had this conversation. I'm thinking you need to start as teenagers with young women and young girls as well, really starting investment clubs. I know schools have the, as you said, in your son's investment club, the girls ended up leaving the club maybe because they didn't find it comfortable or whatever that setting was. So how can we build, we have STEM workshops and stuff for women to enable that growth. Maybe we need to start thinking of a movement where we have young women looking at investment and finance clubs starting young, so they can spread the word as well. Doing this and paying it forward.


Alice: And actually my daughter's already graduated from college so she's out in the world working. And whenever she's asked me to come talk to groups of her friends, I've been happy to show up and talk because that's the way that they're going to seem.


First of all, I'm a woman manager and this is my business it's actually, I love what I do and it's a great lifestyle. I get to know my clients really well, It's really a good profession. In addition to getting your money working for you, if anybody's interested in this profession, I can't recommend it enough.


I love what I do and, it's something that women should consider. So I show up, I talk about this and then it doesn't sound so scary anymore and they get their money working for them. Actually, in my company, someone asked us to talk to a woman that's in business school now because she had money to put to work and she'd never made a trade in her life. Even though she was in a top business school and it just felt so powerful for her to actually open an account and make a trade. And it's not that hard. It just isn't that hard and once you do it, you realize it's not some big mystery, it's pretty easy, but you have to actually go do it to feel that way.


Sirisha: It's taken those first steps to feel confident and empowered.


Alice: And by the way, what you're doing is contributing to having this discussion, getting the word out, what you're doing is really helping. So I really again appreciate your having this discussion about money. It's part of what I'm hoping many people will do, but you're doing it in such a great way.


[15:57] Note to 21-year-old self


Sirisha: Thank you so much. So this is a question I ask every guest, what advice would you give your 21-year-old self for their future in career and finance in this case because you're talking about money as well? So what advice would you give?


Alice: I was talking to my chief investment officer and she always says she wishes at 21 years old that she'd taken a personal finance course.


Her name is Ivana and that's what she would say and I echo that, I wish that everybody would. At 21 years old to have taken a personal finance course, so to got this perspective of, if you get your money working for you early, and you don't have to save that much every year, but it just grows exponentially.


And as part of that, I'd say, read the book, 'Smart Women Love Money' because it'll demystify it. I want to motivate women and make them realize it's not that hard to do, so I'd say those two.


Sirisha: I think everyone needs to do a finance course. I have teenage boys and we talk about money. They do get to handle some of it. I hope when they go off to college, one of the life lessons they learn is how to handle more and just make those decisions themselves and start investing. Not putting your money in a Roth IRA. When you start working, that's the first thing you can.


Alice: My daughter worked at the local dairy joy where I live, that was her first job. I can't remember how much she made. It was less than a thousand dollars and we put that in a Roth IRA because basically, she paid no taxes on it. Putting it in, it would grow tax-free for her life and she can take it out tax-free, so it's a fantastic investment vehicle.


Sirisha: And it would be interesting to see in 30 years where that number looks like compounding.


[17:29] Spread the word... Start investing "early"


Sirisha: What would be the one word you would use to describe yourself?


Alice: In this context, probably powerhouse, just because there are so many meanings to it.


I came up with the name of the company, by the way, my kids helped me come up with it. We were over dinner and we were brainstorming and it has a lot of double entendres to it because the way I started was I wanted to get women together in their wealth. Talking about investing to make it feel much more comfortable.


So power has assets that have a lot of that meaning to it. so, women, tend to pay a lot of attention to their families and their homes, as well as their careers, but just the idea that you can be a powerhouse by getting your money working for you. It was the message.


Sirisha: I really liked it because when you talk about being powerful, we talk about negotiating and asking for raises in a job, which is one piece of the puzzle.


But really if you were to invest, I think that going back to the first way we started this conversation just compounding that changes that whole financial picture, and how you're set up for the future and what decisions you can make based on what abilities you have. So it's a whole different outlook that.


Envision yourself from where you are today. And I hope to hear this conversation, more women are thinking about their own financial future and how they're investing and see themselves as investors. I like the fact that you want to do an 'I am an investor' campaign and that also they're having this conversation with their friends, family, that niece, their daughters, their cousins, just everyone, even their aunts and grandmothers and whoever else because it's never too late.


Alice: No, it's never too late. People do come to me and they'll say, I'm in my sixties. I'm going to retire. It's too late and I would always say no, actually you've got decades ahead of you to invest. So let's get your money working for you because I assume all my clients males or females live to a hundred, at least.


Your money needs to be working for you.


Sirisha: Yes. And that's the last point I want to end with. When I had this conversation recently with a friend who came up with this number saying, Hey, I think I need this much, to retire. I was like, actually, you don't need as much.


Retirement doesn't mean you take all your money out and it's going to sit in a bank account. That money is continuing to compound and grow and you take out a portion of it. So it's never too late because to your point if you look at it at a hundred, that's 40 more years of growth at 60.


Alice: That would be a huge mistake to take all your money out in your sixties when you hopefully have decades ahead of you to live. But what I'm trying to figure out is how much can people spend on the money they have and make sure their money will last for their lifetime, but that requires them to get it in.


So, I think one thing we didn't talk about was that I think there's a woman named Liz Pearl that I quote in my book and she said, women think of money like a lake and that if they spend it, it's going to dry out. Whereas men think of money, like a river that keeps flowing cause they'll invest it and make more money.


The point is we need to get our money flowing so that we can take some money out and it will keep being replenished by the more.


Sirisha: Yes, and great visual to have, and you're thinking about money and to motivate yourself, to get into this, any last words, anything that you else wanted to cover in addition to what you just talked about?


Alice: I would just say actually, if people are interested and they want to participate in what we call a PowerHouse and to go through the five rules of investing more than I've done here, just send me an email at alice@alicefinn.com and we'll put you on the list. We don't charge for it, and we're happy to include you in one of the upcoming sessions.


Sirisha: Excellent. Alice, thank you.


This was great fun talking about it. It's an important topic and it can be intimidating and sometimes uncomfortable to talk about, but I really enjoyed reading you. And kudos to you do want to do this and empower more women and I'm so happy to see you, act on that mission statement.


Alice: Thank you.


I like what you're doing. As I said, yours is a broader mission and but all of it's important and I'm glad you're focused part of it on the money part, so thank you for doing this.


Sirisha:

I hope you enjoyed today's episode tune in every other Wednesday to catch the next episode. Please like subscribe and leave us a review on your favourite podcast platform. All the resources we talked about are also available on my website, women carrier in Life.com


I would love to hear from you about your stories. You can reach me on my blog, Twitter, Instagram, or Gmail at women carrier in life until next time, this is Sirisha signing off. Remember there are infinite possibilities to drive, change and carrier in life, which will you choose to make a reality today?


Food for thought. Episode takeaways


  • Your money needs to be working for you. It's never too late, actually, you've got decades ahead of you to invest. So let's get your money working for you because I assume all my clients live to a hundred, at least.

  • Women think of money like a lake and that if they spend it, it's going to dry out. Whereas men think of money, like a river that keeps flowing cause they'll invest it and make more money.

  • If people are interested and they want to participate in what we call a PowerHouse and go through the five rules of investing more than I've done here, just send me an email at alice@alicefinn.com and we'll put you on the list. We don't charge for it, and we're happy to include you in one of the upcoming sessions.

  • I hope to hear this conversation, you are thinking about your own financial future and how you are investing and see yourselves as an investor. I hope you are having this conversation with your friends, family, your nieces, your daughters, your cousins, even your aunts and grandmothers, just everyone because it's never too late.

  • I hope you enjoyed the episode and are able to implement some of these actions on your own portfolio.


Resources Mentioned:

  • Website | "Smart Women Love Money" by Alice Finn

  • Powerhouse Meetings @ no charge: email alice@alicefinn.com to be included

Guest: Alice Finn

  • Website | Alice Finn

  • Email Address | alice@alicefinn.com

Host: Sirisha

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