And welcome everybody to another episode of smart money Circle, I'm your host Adam sarhan with me today is David Peters, whose founder and the owner of David Peters Financial Group, David, welcome to the show. Thanks for so much. Thanks so much for having me. Adam, I'm looking forward to a great conversation. It's likewise. So David before we jump in, I know your background is more of the CPA side, the accounting and the financial planning side of the business. And you also do some asset
management work. I'm really interested to hear all about your story, so much First question is, can you please tell us how you got to where you are today? Yeah, well, I don't think that anyone necessarily takes a straight line in their, in their career and in their working life and I was certainly no exception to that. I started off, I actually working as a staff accountant for a hedge fund in Richmond, Virginia. And that was kind of my first exposure to asset management.
And so, we did a little bit of everything. We did some trading mainly in Commodities, but we also did some My things with REITs and some other real estate deals as well. And I did that for about three years and then the financial crisis in 2009, hit. And I have all of a sudden found myself without a job, and so it. So I ended up working for a start-up insurance company in Richmond. Virginia, I didn't have an insurance background before that.
So I basically was Just looking for something. And I ended up at Elephant Auto Insurance where I got plugged in as a technical accountant and started working my way into kind of more of the Regulatory and compliance side of the insurance industry. And I really learned a lot in a very short period of time and I did that for a few years and then I was asked to help start a new company and insurance
company called compare.com. Which is a price comparison website, sort of like kayak for auto insurance if you want to think about it that way. And I was the CFO of that company, and that was a startup startup Endeavor by Admiral group in the United Kingdom Admiral group is the third largest Auto insurer in the UK. And so we were kind of their United States Venture and so I did that for a while and I swore Or off of a startups. I said I'm never going to do
another startup ever again. And then I started working for a friend of mine and Charlotte's on the financial planning side and really got into kind of working with clients and really kind of just really got excited about just helping out families and just kind of using my financial skills and knowledge to help other people that was, you know, I think probably the biggest draw their and That for a few years.
And then, after saying I would never do my own startup, I decided to go out on my own and so, I went out on my own and now I do a little bit of everything. I'm I have the opportunity to do tax preparation and tax Consulting, but I do still broker insurance policies for folks, life insurance small, business insurance, health insurance. And I also do a lot of work with a financial planning. NG and asset management as well. A lot of retirement planning.
I also teach and speak all over the country, so I do a lot of stuff on the education side as well. Educating clients, but also educating other practitioners financial advisors insurance agents and tax preparers as well. I love it. So you're you have a unique background here of coming to it. From the CPA side, the planning side also a little bit Asset Management. Can you speak to us a little about the planning side of the business?
Is and the overlap with the asset management side, your investment strategy, and how you handle risk and all that fun stuff, please sure yeah, yeah. So I mean, I've always come at this, is that Asset Management grows out of financial planning. So it's not really the other way around. And I know that, you know, some clients that come into my office and they know exactly what they want in the portfolio but I typically find at least for my client base that that's a
rarity. I mean a lot of times people I'll just know that they have gotten to a point in their lives where they just want some additional help and they want someone to take control of their of their financial lives. And so we typically start off with a making a financial plans and when I say a financial plan, I don't just mean in the area of where should we put our investments?
I mean, everything, I mean, taking a look at Insurance taking a look at life, insurance taking a look at tax situations of the client, taking a An old tax returns. Looking at the portfolio, looking at retirement assets, really doing kind of front to back planning. Then what we do is, you know, in typically a financial plan is if you do it right. I think it's going to take place over a series of meetings. It's not a one and done by any
stretch. And even once you give the deliverable to the client where they have kind of this, you know, used to be a big binder, I guess these days. We don't really use binders anymore. It's a big PDF at this point, but yeah. You know, but you know but they give once we give the deliverable to the client we're still tinkering. We're still working. We're still trying to, you know, figure out what's best for the client. And so you know and that's where it kind of the asset management
side happens. We suggest you know putting money into a Roth IRA or we said you know, we say hey why don't we consolidate some of these old 401 KS so that we can actually have them kind of all sort of guided in the right direction and so that is You know, kind of where that happens. Yes, about risk as well. I mean, you know, I think it really depends, especially right now, I think especially in a bear Market where it's been a tough year.
I mean, I think for a lot of us, you know, when it comes to risk, it really depends on kind of where people are at in their lives. I think, you know, for some of my clients that are kind of young working professionals entrepreneurs, they're not really caring a whole lot about, you know, the fact that it's 2022 and yeah, Having a rough year. But you know, if they got 30 years until retirement, honestly 2022 is kind of a blip on the
map. And so we've been we've talked to those clients about, you know, the fact that you know, we don't really necessarily think that things are going to turn around right away and that's probably going to be next year before we start seeing any turn in the markets and so you know so we at least any sustained turn I guess we had a couple of good days here and there but you know and and I think just getting them to And that if they're on board with that,
then, you know, and they're okay with it, we have said, okay, you know, let's let's go for kind of long-term growth and, you know, do some, maybe some momentum trading along the way. But for the most part, look for long-term growth for my retirees, it's been all about controlling volatility,
especially here more recently. Just trying to make sure that they have the cash that they need to actually survive and get by. And we talked about, you know, things like withdrawal rates from the portfolio.
You know, how much can I take without necessarily compromising how I want to live in retirement and and things like that and for some of my clients so that has meant a, you know, maybe we take a little bit less out of the portfolio than we typically have done in the past for other people. We say, you know, hey studies the course because, you know, you could be taking more but if you're happy, then, you know,
pull out what you need. And we'll, we'll just try to make sure that we're reallocating on a regular This and that's really about it. So so risk I think is is an interesting one right now, for sure? Yeah, I love that. So you're more of a the planning side is bread and butter. Yeah.
After you plan, then you look at the asset allocation and you adjust accordingly, depending on the risk model, you know, modules and all that kind of stuff, depending on the individuals or the family's needs and objectives so on and so forth. You mentioned earlier your before the interview that your long-term value investor and you look at him TFC mutual funds. Is that a good? An overview of a description. I think that that's very accurate. I mean a lot of times my clients
are looking for diversification. If they're younger typically they don't have large accounts and so you know, so the the you know, probably the quickest way to get good diversification as ETFs and mutual funds, we tend to lean more towards ETFs because ETFs tend to be more tax efficient.
And so you know we do look at the at the tax side which I do think makes this a little bit different from a lot of other financial advisors on Of other money managers is we do Focus heavily because a lot of those plants you know we may be doing the tax return as well and so trying to make sure that you know, that we are setting ourselves up well for the long-term. We also tend to try to try to especially when folks are younger.
We try to get them to at least look at Roth contributions as well to try to give them some ability and retirement whole from a Roth account and get that, get that tax free growth in that tax-free withdrawal and love it. So let's go. Deeper if we can about the financial planning, because there's a lot of question marks about how to come up with a good financial plan. What are some mistakes? You see people make with respect
to creating a plan. First question, and the second one, where some of the good things or, you know, the pros of the positives that people make with respect to making a plan. Yeah, I think that's a lot of times when we see folks making a plan for the first time, I think a lot of times, they really don't know what to expect and they really don't know what to get out of it. And they focus very Heavily typically on either the Investments or the tax return,
you know? I mean, so I think that those are kind of the spots that I think are kind of the most in the, in your face. I guess, for lack of a better term, for a lot of people, they see their tax return every year, they know what their refund is, every year, their Investments, they get statements on a regular basis. And so, I tend to see a lot of people when they first come in.
And they're focusing, very heavily on those things and not necessarily looking at kind of the entire Financial picture looking at things like life insurance. So looking at things like disability insurance, you know, and those are hard conversations I think to have with clients. It no one wants to think about their own death. No one wants to think about, you know what happens if I can't work anymore? No one wants to think about that
stuff. And so, you know, so what part of my job is to make sure that they are thinking about it and so that is You know, typically what I see sometimes within the portfolio itself, a lot of times we see people coming in especially if they've been with the same company for a long time, highly concentrated positions. So you know, a lot of times in employer stock, you know, that that's pretty common they come in with the, you know, a heavy
amount of employer stock. Also endowment bias is kind of the the academic e term that we tend to use. When somebody wants to hold onto something simply because of you know, the the in Inherited it, maybe from, you know, their mother or father, or something like that. Where it has some sort of, like, special meaning to them and tell them talking to them about that and kind of what that position is doing. That is, you know, probably some mistakes that we see within the portfolio.
So I would say just, you know, kind of overly focused on kind of one area of the plan to the neglect of others. And then, you know, also just kind of highly concentrated positions and also just kind of endowment bias within the portfolio. The one thing I will say I asked about the good side. I mean the one thing that I love about people who ask for a financial plan is they're usually pretty committed at that point. I mean because we tell them you know straight out we say this is
not an easy process. This is not a one-and-done, this is not one phone call, like you're committing to multiple meetings, multiple phone calls. It's going to be a very detailed, look at your financial life. And so most of the time of people are like, yeah, I men and they start sending stuff right away. I mean that It means that they're really kind of committed to the plan and they're open to suggestions that you're able to
make. And so I think that that's probably the biggest plus is if you get somebody who is who is open to that idea, I think that, you know, that they're going to be a client for a long time. It's almost like working out where your body could do more than but it's mental, right? The more than yelling the Mind gives up first. It sounds a lot like that. Yeah I think that's an excellent way to put it. Thank you. Okay, beautiful next question. What are some Timeless lessons?
You've learned along the way whether Business investing family, life balance. However, you want to go and that you'd like to share with the audience. Yeah, I think there is a probably, at least a few that that I could talk through. I mean, I think for me, probably the biggest lesson that I've learned on the business side is that is it's not a matter of picking the highest net worth
clients. It's a matter of picking the right clients, you know, one of the things that I think is kind of a natural thing to do when you first go out on your own. In any sort of financial services industry, especially a few. You know, it's your money that you're investing and basically, you're funding the company out of your own pocket. It's a scary situation. And I think all of us, I think to a point look for just any
Revenue that we can find. And I, it's maybe a little bit easier to say now that, you know, I'm a little bit more settled in my career, but I think that the biggest thing I've learned is that That you know the clients that you have that you know are really a good match for you. They're going to naturally gravitate towards you and any time that I have ever given up a client you know because we just didn't click, we just their personalities just didn't match.
I've actually never looked back at that and said up that was a mistake I actually have always looked at it as you know is that? That is usually better off for me. It's Also better off for the client to, you know it especially when you're looking
for a true financial advisor. You need somebody who you can click with, you need somebody who you can talk to very frankly very openly and someone who can put things in the way that you can understand and so letting them go is not necessarily A Bad Thing. And typically what I've found is that, you know, if I give up, you know, one client that, you know, that just didn't match. I usually find, you know, two more that do. And so I think that that's something that, you know if I Back.
That would be definitely something. I would, I would tell my old self is just to be patient and look for the right clients. It's sort of like that that old. Like I said, they used to call the 80/20 rule, right. So, you know, you know, if you kind of reverse that, you know, 20% of your clients, probably cause 80% of your problems. And and so I'm a big believer in that, I think probably a second thing too is invest in people and infrastructure sooner rather
than later. I think that You know, again a lot of a lot of financial advisors I think a lot of times we're getting paid based off of a, um, and it's typically going to be a percentage of that. And so, I think what happens a lot of times is we're so focused on the revenue side that we forget to build something sustainable, and you need unique good systems and you need good people. You can't expand very far without having those two things.
And I think that Many financial advisers have figured that out. A lot of times the hard way is that you know that your people and your infrastructure that's really everything. And that's going to lead to sustained growth and yeah it's it tends to be a little bit of a financial stretch kind of early on to hire somebody especially if you're first getting started
and everything. But the fact is that if you're really going to grow and you're really going to make a go at it, I think that that's an important piece that you got to get into place as you got to get people that are Just going to resonate with you and that believe in the vision that you were trying to set. Now, that makes great sense. And some Timeless mistakes, you've seen people make that you'd like to share with the audience. In addition to take not too many clients or the wrong time.
That's a no. You know, what else would you like to share from mistake standpoint and how to end how to overcome it? Yeah. So I think that, you know, some of the mistakes that I see with with people is that just staying with a Plan that a little bit too long. That's something that's a really doesn't doesn't work. Staying with something.
A little bit too long staying with something that, you know, you thought was a good idea in your head, but I think it's, you know, I think of me the, you know, the financial advising books in the area of Behavioral Finance. They tend to call that loss aversion, right? So kind of a similar idea. They are, you know, it's like well if I continue on with this idea, oh, it'll eventually work out, so, it'll eventually come my way.
Way. And that really kind of ignores what, you know, if what, if it kind of ignores what common sense is telling you and what kind of the market is telling you, then you need to let that go and that doesn't mean that you have failed or that you're not going to be successful, but I think sometimes I think people are kind of so focused, especially with a lot of the entrepreneurs that I talked
with. And that, you know, that's are some of my clients, some of the things I've seen in the past, Is they're so locked in on an idea that they just that they don't want to admit it if it's not going their way and they're kind of shutting out opportunities that might be there and I think it's good to keep your eyes open.
It's good to keep an open mind and one of the things that I would say to any entrepreneur that's out there, is that, you know, keep swinging, you know, the it's not necessarily the first, you know, the first idea that is necessarily going to be the one that's going to stick and so so it's a matter of, you know, kind of realizing when to cut it off. I think probably more than anything else.
The other thing that I would say to is, you know, as always have a good sense of where your own burnout level is, I think that that's important as well. A lot of my clients are startup clients they've helped start businesses or their starting up businesses themselves. Sometimes they have investors sometimes, they don't but You know, starting up a business. Is hard. It is. It is hard work. It is not a 40-hour a week job, most the time it's you know, a lot of times, it's 100 hour a
week job. And, you know, some people are just not able to do that with some of the things they got going on with family and friends and, you know, all the other things, you know, that are just part of living wife. And so I think, you know, having a good sense of where that burnout factor is and you know, kind of when you're about To reach it I think is a good thing to know as well.
I do see a lot of entrepreneurs that just that just kind of fizzle out, not necessarily because they were necessarily doing bad things or because they weren't making progress but they were just trying to grow at all costs and you know usually that ends up leading to trouble. And again that and I guess that kind of leads back to kind of my comments about infrastructure and people you know I mean at some point you got to bring other people on and you got to got to help kind of grow it in
the right way. Now, I'm very, very makes perfect sense. Great answer. How about the best piece of advice, you'd like to share with the audience? Yeah, that's a. That's a tough one. I think that probably the best piece of advice that I ever got. Was from a mentor and a friend of mine who said that that, if you that the best way to get to know, somebody is to ask. It's so and what he meant by that. It I got to give you more
Texting that I think. But what he really meant by that was, is that, you know, a lot of times, especially in Corporate America, we tend to have bosses that we don't know. We tend to have people that we don't that we don't know anything about them sort of outside of what they look like and what their title is and I actually think that that's getting worse right now when a lot of people are not necessarily going to a physical office, I think a lot of Times.
You know, there's a good bit of the time where we actually don't see the people that are in charge and so what he used to do that always used to be amazing to me. No matter how many hours he was working, he would always just manage by walking around. I mean, he would, he would walk around, he would talk to people. He would ask them what was going on in their lives. What was going on in their, in their working lives to what problems were they? Were they having? And how could he help?
And I think that just That small little, you know, touchpoint I think from one day to the next I think made all the difference in
the world. It's so, you know, especially if you were in a situation where you have a growing business, I think it's easy to kind of, you know, try to, you know, try to let other people kind of handle stuff and, you know, maybe become a little bit disconnected, the bigger, the, you know, the company gets that's at the point where it's even more important for people to kind of know who you are.
You are and you know, again it doesn't take much it's just you know, a matter of walking around and talking to people and just asking what's going on. And I think that that that touchpoint makes a huge difference to a lot of people beautiful and I guess final question for you today. David is what's the best piece of advice? You'd like to give to your self from 20 years ago or ten years ago or Farmers? Your former self or anyone the audience? Is it getting so?
You know, that's younger? Yeah, that matter. Or older for that matter. Yeah. I think that, you know, if I were to go back and I were to talk to me, 20 years ago, I would just say be patient and enjoy the ride a little bit more.
I think, you know, I was always pretty hyper focused on trying to grow a, you know, grow my career growing, my professional life and I didn't quite know what all of that meant, but I think that, you know, a lot of times I would get frustrated, just because I felt like, you know, I wasn't at the level that I wanted to be and it made me so that I was impatient and it made me so that I was probably a little bit more of a barrier to work around and to be around then you know that I could have
been. And so I think that's what I would say you know just be patient and also to you know if you have a if you have something that you want, don't be afraid to try it. I mean, you know, a lot of times, you know, a lot of people they walk around and they say man, you know, I wish that I could do this that or the other thing, my goodness. I mean, take a swing. NG. I mean if you're wrong you're
wrong. And but you know I mean at least take a swing and I think that it's okay to be wrong, it's okay to change paths, you know, I think if you're if you're going to make it as an entrepreneur, I mean I think that that's kind of part of the gig. So so I love. So that's what I would say. Love it. Love it, love it. Well David, thank you so much for coming on the show was an absolute pleasure and hopefully we'll have you on again soon. Alright. Thank you so much Adam. I appreciate it.