Certified Financial Planner™ professionals help clients align their finances with life goals. I prefer fee-based planners that have earned a CFPⓇ certification, and recommend you consider them if you’re selecting an advisor to help you with your financial plans.
If you’re like me, you probably wonder about the lessons these financial gurus have learned from years of serving clients. Is there secret perspective that they have gained from those experiences? What patterns and pitfalls do they see in their clients?
I had the opportunity to interview Mark Newfield, a Richmond-based financial advisor who started his financial planning career after a successful first career in consulting. Mark and his team shared their perspective on personal finance with me, reflecting decades of collective experience. Here’s a summary of our conversation.
The question you should always ask a planner. I started our discussion with the basics, “Why did you get involved in financial planning?” In Mark’s view, this is the first question any prospective client should ask before engaging a planner. He noted that very few people ever ask him this, and his team always proactively shares why they are in this business.
Mark and Angela Lessor, Director of Investment Operations, both cited the personal satisfaction they get from helping others. During Mark’s first career as a consultant, he was always the person eager to talk about money and often shared personal financial advice and perspective. When he decided it was time to move on from consulting, but wasn’t ready to quit working, he, “...put two and two together,” and shifted into a second career focused on helping people with their money. Mark proudly shared, “I have a stack of notes on my bookcase from clients saying thank you for our efforts.”
Angela shared a similar sentiment. She noted that it is incredibly satisfying to help people, many of whom come in disorganized or overwhelmed with their financial situation. Developing a plan that clients can follow, helping them get their financial footing, and partnering with clients to see that their goals are achievable are some of her favorite things about the role.
This passion for helping others is a common thread among quality CFPⓇ professionals. I follow several CFPⓇ gurus on Twitter, and can feel their excitement in empowering and enabling clients to succeed. When you are working with a planner, I believe you should feel the same from them. If they talk only about beating the market, making money, and growing wealth (but with no reflection on their passion for your success, or appreciation for your goals), that’s a red flag to me.
In general, what differences do you see between men and women in how they manage their money? While every individual is different, Mark and Angela noted that they have observed general trends across genders. In general, they observe women making many of the financial decisions in the daily running of the household. Mark noted, “It seems like people are finally starting to become aware of that, but that hasn’t changed in decades.”
Women tend to prefer more advice and consultation, and men generally like to see the numbers. Women often want to deeply understand where their money is going and what they’re about to invest in. Like many planners, Mark and Angela engage their clients in an initial assessment, which can identify where partners (same-sex or heterosexual) differ; these distinctions may or may not be gender-based, and every couple tends to differ in a few personal finance areas.
Taking a fact-based approach enables CFPⓇ professionals to help partners navigate tricky financial decisions. While the general observations Mark and Angela shared line up with much of the gender-based research on money and investing, I recommend looking for a planner that has a defined process to engage with you. This may include an assessment, detailed questionnaires about your spending and income, and a clear long-term plan to support you. This illustrates their commitment to your overall financial health and their desire to build a plan suited for you, versus a one-size-fits-all approach.
Many people struggle to talk openly about money. Why do you think that is and what advice do you have to start a money-related discussion with a friend or family member? I was curious to understand how a professional team that constantly discusses money can help us improve our comfort with the topic.
Mark and Angela shared that getting the emotion out on the table is a good first step. For example, if you’re struggling with credit card debt, you could say to your partner: “I’m worried about debt, and I think we ought to have a conversation about it. How do you feel?”
They acknowledged that most clients know intuitively whether they are in good financial shape (or not) and most aren’t as “disciplined” as they believe they need to be. This discomfort or shame can hinder communications. Mark shared, “We see people with high incomes, say an average of $300,000 annually, and yet the number of people who come in and feel wealthy are few.”
Further, Mark mentioned the relief that many clients feel when they start to discuss money openly and candidly. I can relate to this personally; when I had massive credit card debt I felt incredibly ashamed. Once I started addressing it openly with my partner, it was like a massive weight had been lifted off my shoulders.
I found these observations from Mark and Angela illuminating on several fronts. We often compare ourselves to others, assuming they are making smarter decisions with money, know something financially we don’t, or don’t have debt. The reality is, we all make money mistakes (I’ve shared several of mine), and many in the United States struggle with financial literacy. If we are brave enough to be vulnerable and share our concerns and emotions about money with others, we can engage in a more authentic dialogue.
Further, there is a perception that more money immediately equates to fewer money-related stresses. I’ll always have more empathy for those at the lowest ends of the income spectrum, even those with means struggle to consistently make the “right” decisions with their money. Removing the assumptions that some of us have, that money can solve all problems, can give those that earn more the opportunity to engage in financial improvement.
What are the top three "money mistakes" you see women make? I was very interested to see what patterns had emerged across their client base, since we all have room to improve with how we manage our money.
Budget - no one has one. Mark and Angela noted that they rarely see clients that have set up a budget, and many women spend first and try to save the reminder. They noted that this approach is often a “complete failure, except in the most disciplined people.”
They have found that they help women get serious about their budget once they illustrate the net available cash flow after required expenses (like mortgage payments and utilities). Usually, this cash flow is two or three times the amount their clients think they can save.
Ladies, this first one is good news - it means that most of us have an opportunity to save a lot more than we do today, simply by starting to track our expenses and save first, then spend (which I call “Scarcity Budgeting,” and use diligently.)
Having too many financial accounts. I wasn’t expecting this insight, but it makes a lot of sense. Mark regularly counsels clients to consolidate accounts, because “...the more stuff you have, the harder it is to manage.” He notes that many clients don’t even know their rates of return on their investments, because they have so many accounts and can’t easily keep on top of their money.
If your employer has a 401(k) or other retirement program, you are likely tied to that financial provider. Beyond that, you may have one other brokerage accounts for other investment purposes. I believe more than two financial institutions gets difficult for the average person to manage on a regular basis. If you have not done a financial inventory, it may be a wise first step to identify where your accounts are, and how you can consolidate and simplify your financial life.
If you’re partnered - be open and transparent about money. Mark and Angela noted that many women in significant relationships struggle to be open with their finances. This is related to the question above, as talking about money when you’re struggling with certain aspects of your financial life can be truly challenging.
However, surprises and secrets can be damaging and hurtful to a relationship. Both Mark and Angela advised an open discussion, and acknowledged that working with a CFPⓇ certificant can help partners be more open about money. Mark shared, “More often than not, we do counseling on our clients spending habits. We’ve had to help with where they want to live and other significant topics in a relationship.”
I agree that a professional can help guide these conversations, and believe partners should work towards becoming financially intimate.
What additional financial advice do you have for women? Before we closed our discussion, I wanted to understand what our financial experts would recommend to women looking to grow their wealth.
Mark jumped on this question, and shared; “You’re never going to figure out what you need until you figure out what you want. Financial independence - whatever that means for each client - is a set of behaviors. How do you want to live? Answer that first.”
I couldn’t agree more! We all have unique goals for the life we want to live; these goals may include travel, passion projects, ambitions for our family, career objectives. Getting crystal clear on those objectives will help us direct our money to serve (and not detract from) those objectives.
I hope you enjoyed this perspective from Mark Newfield and Angela Lessor! I’m always intrigued to learn from those that are lucky enough to help others with their money, day in and day out. Are there any tidbits from this discussion that surprised you? What other questions might you have for a CFPⓇ expert? Or, if you are a CFPⓇ professional, what would you add to this dialogue?
xoxo, Ms. Financier