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Podcast Episode #4: Creating an Inclusive Financial Planning Practice with Jake Nuno

Sasha Grabenstetter June 28, 2024

Heart of Advice Podcast

EPISODE SUMMARY

Have you ever thought about what it would take to make your financial planning practice more inclusive? LGBTQ+ people are diverse, and their goals reflect a need for individualized solutions. Nearly 63 percent of people in the LGBTQ+ community feel most advisors don’t understand their financial challenges, and 48 percent of LGBTQ+ Americans have experienced discrimination by someone in the financial services industry.1,2

In episode 4 of the Heart of Advice Podcast, my co-host Connor Sung and I chat with LGBTQ+ financial planner Jake Nuno, MS, CFP®, EA, about what makes LGBTQ financial planning different, what planners need to know to serve clients better, and what resources are available to make financial planning more inclusive.

Here’s What You’ll Learn in This Episode:

Resources Mentioned in This Episode:

i•financial

Candid Conversations: LGBTQ+ Planning

IRS Enrolled Agent

Texas Tech School of Financial Planning

Jake Of All Trades

Happy Scribe

Accredited Financial Counselor®

Kitces MasterClass on Finding Planning Opportunities When Reviewing a Client’s Tax Return

Quotes:

  • “All of the content just made the concept of financial planning not so taboo, which was different from how I had been brought up. It was such a taboo subject that I was like, ‘Oh, no. Once you know what you’re doing, you need to share it with everybody because this is not a taboo subject. This is what everybody should be talking about and being informed about.’ That was where my passion came from.”
  • “When I give advice to my clients, I try to find the happy medium between saving for the long term and also appreciating and taking advantage of what you have today.”
  • “I think one thing planners need to keep in mind if you’re working with someone in the LGBTQ community is that their trauma is probably different than yours. And it’s important to recognize that because trauma obviously impedes decision-making throughout our entire lifetime. And in particular, for gay people, we might have similar upbringing traumas of being poor or having disconnection to money because your family wasn’t connected to it. But then layer on top of that added levels of discrimination in those formative years of development, right? When you add that on top of it, it can make decision-making about finance really challenging. As gay people, we feel like our money is our security, because sometimes we don’t have a lot of other security around us like family or support system.”
  • “I think one of the coolest things that I’m doing right now is I have a client who went through surrogacy. And we’re trying to get an unreimbursed medical expense deduction for the costs of surrogacy because she can’t have a baby on her own. So it seems to be that those expensive costs of going through that process should really receive the same level of acknowledgment in the tax code as somebody who does it themselves biologically.”
  • “I think to me, the heart of advice is providing the client with individualized advice, never taking a situation and applying a formula, and like I said earlier, always listening to them and respecting them as a person first before a plan.”

Full Transcript:

Connor: Welcome to the Heart of Advice podcast presented by eMoney. I’m Connor Sung.

Sasha: And I’m Sasha Grabenstetter, and we’re your eMoney experts. Today on the podcast, we have Jake Nuno.

Jake Nuno is a CFP® at i•financial in San Antonio, Texas. He’s also an enrolled agent, having earned the privilege of representing taxpayers before the IRS. He also created the Jake Of All Trades podcast, which was listed among the top 10 personal finance podcasts by Forbes Magazine and was a 2022 finalist for the Advisor Podcast Awards. Jake’s face might be familiar. He’s been on a webinar with me before, and he’s actually a former classmate of mine from Texas Tech. So, there you go. Jake, happy to have you on today.

Jake: Thank you, Sasha. I’m happy to be here.

Sasha: Yes. So, Jake, to kind of kick things off, would you mind giving us a snapshot of how you were introduced to the profession and how your professional journey has evolved?

Jake: Sure. So, I did an undergraduate degree in business finance from West Texas A&M. During my course, I attended a personal financial planning class, and I was just enamored by the content. It seemed so relevant, so applicable. I graduated from my undergrad, went to work for a bank. It was a horrible environment, didn’t like it, wanted to work with people, and I remembered that class, that personal finance class.

So, I did some research and discovered that Texas Tech had a program where you could actually study this and create a career out of it. I just jumped on that opportunity, enrolled in the master’s program, started learning as much as I could. Then all of the content just made the concept of financial planning not so taboo, which was different from how I had been brought up. It was such a taboo subject that I was like, “Oh, no. Once you know what you’re doing, you need to share it with everybody because this is not a taboo subject. This is what everybody should be talking about and being informed about.” That was where my passion came from.

Sasha: Oh, I love it. Plus, being a classmate of yours, I always admired you because I know just how intelligent you are and articulate as well. Just being in class with you, you’d answer questions, I’d be like, “Oh, Jake is so smart!” And I say that honestly. Like, I just remember being in class with you. Yeah. Especially in our capstone class. They always call on you to answer questions.

Jake: Thank you. Thank you.

Connor: She does name drop you pretty consistently, so I’m surprised that we made it two and a half minutes into the podcast before she mentioned that you guys were classmates.

Jake: I love it.

Sasha: Thanks, Connor. Wow.

Jake: I feel like a celebrity.

Sasha: You should be. You are. At least to me, you’re one of my classmates I’ve known and still keep in touch with. So, it’s really nice that a lot of our classmates are professionals, and it’s cool to kind of reconnect with them this way.

Jake: Agreed.

Connor: Well, I know that you’ve been called the financial advisor to millennials on your podcast, so you’re known as that, which ran up until very recently. Number one, I guess, any advice about podcasting I would definitely be all ears for, but, probably more pertinent to everybody else’s listening. Any experience that you have from running the podcast as an advisor, kind of what some of the takeaways were for your practice, applications, client impacts. If you can kind of just give us a little bit about it and a little bit about what you took away from it, that’d be great.

Podcasting to Build Credibility

Jake: Sure. Yeah. So, the podcast was called Jake Of All Trades. Catchy name just so that people would not forget. Didn’t really have much to do with the content. And I really started it because when I entered this profession, I had a lot of anxiety about the concept of prospecting and talking to strangers about their money. It really gave me a lot of anxiety. It didn’t suit my personality, and I thought it was going to be the biggest obstacle for me being successful in this profession. The podcast provided a forum for me to talk to people without it having to have the pressure of sales or some other agenda.

The podcast started really like Jake on the street. I had this microphone, and I would walk around downtown San Antonio and go up to people and ask if they would be comfortable talking about their money. Some people were super excited about it, and some people were like, get out of here. But it really helped to kind of break down that barrier for me to realize, like, hey, this really isn’t the most terrifying thing. And so I started it really for me personally. I used it as a tool for personal and professional development. It evolved out of the on-the-streets interview into, like, a cohost situation with a friend of mine. His name was Kirk, and he had no financial background. He doesn’t work in finance. What was interesting about the way the show developed was that he started to learn from the conversations that we had.

And so, if you look at the arc of the show, there’s a ton of episodes out there, but you’ll kind of see there are episodes that pop up where Kirk learned something, and then he accomplished a financial goal. So, like, he bought his own house, and he paid off his student loans. And he just started to take action based on the discussions that we were having. And so that was a cool kind of unintended consequence of what we were doing.

So the show never really was, like, a huge driver of new client or prospect opportunities. It provided a degree of credibility because I was new to San Antonio when I moved here, so I didn’t have a network. Nobody knew who I was. And I was new to the profession. So I was very young and it provided some credibility for me, helped with online SEO stuff.

And I really think as an advisor running a podcast, if you’re not an RIA, and you’re with a broker-dealer like I am, the biggest challenge is compliance. It’s just one of those hassles. And it’s not that my compliance department was absolutely fabulous because I recognize this is a challenging thing to let an advisor do. And so they were absolutely wonderful in the way in which they approved content and let me kind of have a little bit of free rein. But that just is an obstacle. So if you’re thinking about starting one, be prepared to have some type of support to help with that piece of the process of getting your podcast out there. Right? Because you have to get approvals before you can even share any content. So it’s really important that you have that support ready. Otherwise, it’s just going to become onerous, and you’re not going to enjoy it anymore.

Sasha: That’s some good advice.

Connor: That is really cool that you were using it more for professional development than you were for marketing or brand recognition or anything like that. Did you implement any specific practices or a way that you were asking questions based off of what you were doing on the streets?

Asking the Right Questions

Jake: That’s a good question. So I think what I got from the discussions on the street was that people have questions that they’re afraid to ask. And so when I’m now in a client situation, and I’m getting a sense that the client I’m talking to is hesitant about something or they’re not being fully forthright. I try to dig a little deeper into some fundamentals of what we’re discussing. Like maybe if it’s even the technicalities of “What exactly is an annuity?” before we even get to the point of talking about how the annuity strategy helps with planning, because they may be embarrassed or afraid to ask because they feel like they should know that.

And so I think those on the street questions helped me recognize that people have lots of questions. And so in that informal setting, they were very comfortable asking those things and even being recorded for them. But when you get into like a formal meeting setting, it changes a bit. And so I think that gave me a little bit of firsthand experience to know I might need to ask slightly different questions if I’m working with somebody that’s not being quite upfront.

Connor: That’s great.

Sasha: Would you say that the questions have helped you over the years of being a planner?

Jake: Definitely. Definitely helped me a lot. Yep. It made me not afraid to ask questions, and it made me learn how to listen. Because when I first started, and I think a lot of people can empathize with this, we get caught in our heads because we’re ready to ask the next question that I haven’t even listened to your response to the question. And when I’m doing the interviews, or when I was doing the interviews, I had to listen to the question because that continued the episode. So if I didn’t listen to the question, I never respond correctly, the conversation dies, and then it’s really awkward. So that really helped me a lot. So now when I’m in a client meeting, I’m listening way more than I’m asking, and questions just come up as somebody stops. They say their statement, we pause for a moment, and then a question just comes up rather than me already having a question in my head before they started talking.

Sasha: That’s good advice. It’s really good advice. So I don’t know if you know this, but I actually was inspired by you to create our podcast for my previous job. I think you’re one of the first people I called, and I was like, hey, Jake. How do you do this?

Jake: That’s right.

Sasha: But I want to know from Jake Of All Trades, what’s your favorite episode or your most memorable episode that you ever recorded?

Jake: Yeah. That’s a hard one because there there’s a handful that are some of my favorites, and as we shut down the podcast this year, Kirk and I did kind of a session where we just sat in my living room and went through the entire transcript. Through all 200 episodes, not listened to them, but just kind of looked at them and picked out the ones that we remembered talking about. And then we ran them through this Happy Scribe, which gives you a transcript of the episode. And then we got to go back and read, and we found little tidbits of stuff that came to us in our conversations that were so valuable, we take it away and implement it elsewhere.

But I think one of my favorites was the episode called The Millionaire Hermit. And we did look up this story. We found this story about this older gentleman that lived basically in poverty his entire life, very lonely and isolated. When he passed away, he had no material belongings, but he had millions of dollars, just dollars in bank accounts. No family. So what ended up happening was, the state took over. They found people who were in the line of familial gene pool. Right? They were very far extended, but they’re the ones that are going to benefit. And so they ended up getting all that money. And it just was an interesting perspective.

When I give advice to my clients, I try to find the happy medium between saving for the long term and also appreciating and taking advantage of what you have today. And so this was like the perfect example of the extreme nature of how some people think about saving and investing for the future and sacrificing what they’re doing right now. And so I just like to refer back to that one occasionally to be like, hey, you’re giving me millionaire hermit vibes a little bit because you’re trying to max out everything that you can’t touch until you’re 60. So, let’s take a step back. And let’s think about what could be one thing you could accomplish today that would give you some meaning while also still saving for the future.

Connor: Well, one of the episodes that stood out to me when we were cruising through some of them is what keeps some LGBTQ+ people from attaining their financial goals. I know it’s a topic you’ve researched quite a bit and are passionate about, but what do planners need to know about the difference or the spectrum of life experiences for that community?

Financial Planning for the LGBTQ+ Community

Jake: So, I think one thing planners need to keep in mind if you’re working with someone in the LGBTQ community is that their trauma is probably different than yours. And it’s important to recognize that because trauma obviously impedes decision-making throughout our entire lifetime. And in particular, for gay people, we might have similar upbringing traumas of being poor or having disconnection to money because your family wasn’t connected to it. But then layer on top of that added levels of discrimination in those formative years of development, right? When you add that on top of it, it can make decision-making about finance really challenging. As gay people, we feel like our money is our security, because sometimes we don’t have a lot of other security around us like family or a support system. And so money can replace that for some people.

One example of a client I’ve been working with who’s in the community. We started working together. He would really like to buy a house. He’s on paper perfectly qualified to buy a house. He’s ready to buy his first house. He could do it today. But there just was some barrier to him executing that. So every meeting we would have was, like, we still discussed, look how good you look on paper. Like, you’re perfect. You’re ready. You’re ready for this. You have the cash flow. Your debt level’s low, everything. Once we discovered that, oh, his family had sort of a negative connotation growing up to money, because they were a little bitter about wealthy people. And so in his mind, in his subconscious, buying a house means taking a step into a new sort of community of wealth building that he hasn’t been exposed to before. So we change the narrative of how we’ve been meeting. And instead of having financial planning meetings, we call them financial therapy sessions. And so he just comes in for an hour every couple weeks or so. And we don’t have a set agenda. We just kind of talk through how you’re feeling, did any new memories come up as you’re thinking about all of these new financial developments. And we’ve had some really good conversations about why it’s difficult for him to take this next step. And so I think once we resolve those mental blocks, then he’ll be even better prepared to do that. So that’s kind of how I see relating to people in the community a bit better is to take nontraditional approaches to how they think before we assess their financial profile.

Sasha: I think that’s extremely powerful, Jake. So thank you for sharing the client’s story with us.

One of the wonderful things about working with you, Jake, actually, was that we got to work together on a Candid Conversations eBook, our LGBTQ+ planning eBook. And we have a quote from you, and I’m going to read it to you. It says, “The LGBTQ community lives by its own rules and objectives. Sometimes traditional financial planning objectives and assumptions do these clients a disservice.”

So, after listening to that story, can you give us some other examples of when assumptions lead planning astray? We’d love to hear those stories from you.

Jake: If you meet a prospect and you don’t know that they are in the community, you should never assume they have a wife and say it out loud because that can be a huge turnoff to who you are as the professional in the relationship because that’s happened to me before. And it’s just a slip of the tongue kind of thing and follow up with an “I apologize.” “I wasn’t thinking” or “It’s habit.” But just recognizing that the world is a different place and the people you engage with every day live very different lives than how we were taught that the environment might be. So that would be one thing.

I think the other thing too, is I have some clients who retired really young. And their objective was, number one, they were very, very secure in the fact that they don’t think they’re going to have longevity in their family because everyone in their family dies when they’re in their late 70s or early 80s. Pretty consistent. They don’t have any beneficiaries. So they worked really, really hard from their 30s to 50 and accumulated a little nest egg. And they decided we’re not going to work anymore. And their goal and the objective of the plan that we worked on is we’re going to spend all these dollars. And so that’s a totally different approach than when you think about some people planning and they’re like, well, I want to leave this for my kids, and I want to accumulate this legacy, and I want to do this for this charity. Those are all valuable things to pursue, but also with an LGBT couple, they have completely different objectives. They’re living for the now. And so being able to be moldable as the advisor to sit in a meeting with somebody who has the objective of leaving a legacy, and then turning around and having a meeting with somebody who’s trying to spend every dollar they have, very different conversations, very different investment techniques, very different products, everything is changed. And so you have to have that approach so that you’re not applying a formula to every single person that you’re working with.

Sasha: I think it involves a lot of introspection as the advisor not to throw their own biases onto them.

Connor: Right.

Sasha: I’ve heard that and seen that a lot.

Jake: I have witnessed before where advisors, if the client came in and said, like, this is my objective. I want to retire at this age, and I’m going to make it happen. And the advisor’s like, no, you’re not. This is not going to work. Your Monte Carlo scenario is terrible. There’s nothing we can do about this. This is going to be a failure. Absolutely not. Whereas, OK, how about we approach it year by year? Right? So like, for these clients, it’s a pretty tight Monte Carlo, like it is, we’re pushing the limits there. But what we’re doing is we’re evaluating it every single year so that every year we can pivot. Right? If that time frame, due to markets correcting or life’s changing, moves up and you need to cut your expenses this year, I’m here to have those conversations with you, but at least we’re still on the track that you initially wanted to go down.

Connor: I think that’s super helpful too. And I just want to reiterate something that you’ve been touching on, is that there’s no single right answer. Basically, you’re taking some of the responsibility on behalf of the household or the individual client to say that I’m keeping in mind this longer picture view, whether you’re drastically a saver, drastically a spender, we need to find some amount of being in the middle ground and that you’re asking the questions to uncover how people are feeling about their day to day or year to year and continuing to help them maybe make small pivots to ensure long term health and wealth.

Jake: Exactly right. Yeah. And that’s part of our professional responsibility too. I think when advisors take it too far is when they refuse to try to accomplish what the client wants to do because they absolutely disagree with it. Right? And so that’s where it’s like, OK, You can find a middle ground. It may not be the ultimate advice that you want to deliver, and you may not think it’s the best approach. But if it meets their needs, doesn’t put them in a bad position, and you’re respecting and listening to them, it’s still quality advice.

Sasha: I have a follow-up question. I do know that you work with the LGBTQ+ community, I really just want to go down this path of, like, have you had clients come to you because they feel more comfortable with you and maybe they have been turned down over their objectives that they want? Like, I just want to explore that real quickly. I don’t know if you’ve had clients who prefer you because you’re listening to them and not pushing your own agenda.

Jake: Yeah. So I think they tell me. Right? Well, I’m so glad you listened. And, typically, my initial engagement meeting is different from how they’ve experienced it previously. That’s the most amount of feedback I get. It’s just these are not the questions that I was asked when I interviewed with Joe Schmo advisor. Right? “He gave me this printout that talked about asset allocation and model portfolios. And I was like, but I’m trying to go on vacation. I don’t know what that has to do with me.” I get that feedback a lot. I’ve never had someone directly say, we feel more comfortable with you because this person didn’t respect us as gay people. Thankfully, San Antonio is a wonderfully progressive little niche in the greater state of Texas. So there’s a lot of support for this community. So it’s not like it’s a unique niche for me or anything. But I think the difference is just that. And I think it’s also the way that we learned, you and I, Sasha, in school about taking that humanitarian sort of empathetic approach to conversations at the beginning because you want to establish a different level of rapport with the client than just numbers and data and returns and technicalities.

Sasha: But I remember even when we were in grad school, that empathy versus sympathy lesson that Dr. Durbin put us through, that sticks with me even now. I still teach about empathy probably more than I should. But that’s something that’s always stuck with me, is that real human connection that we’re always trying to find. And I feel like some of those financial counseling pieces have been really helpful for advisors.

Jake: And you have that designation too. Right? The certified financial therapist or what is it?

Sasha: I’m an Accredited Financial Counselor®.

Jake: Yeah. I mean, it’s that quote. I don’t remember who said it, but no one cares what you know until they know that you care. And that’s so true. That’s just exactly how the clients that I have now, that’s what they have grown to expect is that they know that I care first before any of the knowledge or certifications or whatever I have. That doesn’t really matter.

Connor: As you mentioned, I do want to pivot us a little bit and something that I was very curious about, so I did a little bit of research beforehand. But you are an enrolled agent with the IRS, and I know it’s a tough designation to achieve, number one. To maintain, number two. Can you just explain to the listeners a little bit about what it is exactly, why you headed in that direction, and ultimately how it helps you and your clients?

The Power of Understanding Tax Planning

Jake: Yeah. So in 2019, I think, was when I started to look into furthering my knowledge base on tax, tax planning, and understanding the tax laws. And I thought about going the CPA route, but that is a huge beast. And there’s a big aspect of the curriculum that doesn’t apply to individuals like personal finance, a lot of corporate accounting and stuff that I am not interested in.

So I stumbled upon the enrolled agent license. So it’s a license issued by the IRS, which allows you to represent people before the IRS. So if they have tax disputes, you can represent them. And then you can also file tax returns with the IRS on behalf of clients. The cool thing about the designation, though, was that it’s kind of like CPA lite, so it really just dives into tax law and income tax law in particular. And so I really found that wildly beneficial in the complements of that with my financial planning knowledge because I am a firm believer that any recommendation that I’m making, if there are tax consequences, I need to be the one that’s spearheading that conversation. They may have a CPA that they work with, but CPAs aren’t always aware of the investment side of the planning and what those tax consequences are. So I think it’s allowed me to give better holistic advice.

The other thing that it’s done, is I work with a lot of sweet little old ladies. I love them dearly. A lot of widows. And they would have their CPA, and when it was tax time, they would have this huge packet that they needed to fill out, and they’d have to put all their capital gains, interest, and dividends on there. And it was really overwhelming for them. And so being able to take that burden away and prepare their taxes for them since we already had those tax documents for their investments has really helped them relax a bit more in retirement. And now it’s kind of consolidated a lot of their financial issues and things that need to be addressed into one spot. So that has been a real benefit as well.

And then the third thing. I’ve gotten some really quality clients from the tax side of the business. So they started with me because they found me through a tax registrar and needed me to prepare their return. And through conversations, we end up doing investing and financial planning together because there’s a huge overlap there.

There’s a webinar that really got me turned on to this that I have to give a shout out to. So it’s a Michael Kitces master class, and it’s called how to find financial planning opportunities when reviewing a tax return. And it is such a good course. You don’t need to have an EA or anything. You can just watch that course, and he’ll give you, like I don’t even remember. I think there were 15 or 20 different ways you can identify and create someone’s balance sheet just by looking at their tax return and the numbers you’re pulling out of there. So it was a huge eye-opening to say, oh, OK. If I can get this knowledge intact, then when I’m doing onboarding with a client, one of the documents I always gather is the tax return. Now I know how to read it. Right? Like, I really know how to read it. And so that’s provided opportunities to say, “Look at your Schedule D. You have so many unrealized losses. Why did you take those losses? You needed to realize some gains to offset that.” And they’re like, “I don’t even know what that is.” So that’s just one little tidbit that they give you in that webinar. So it’s super, super cool. I highly recommend that.

Connor: That is cool. And it sounds very differentiating for probably all of your existing clients that you probably weren’t going to that level of depth with, and then it sounds like you found some other business opportunities through the additional knowledge. It sounds like the thickest light reading of all time just going through the tax code.

Jake: Yeah. That is the one thing. Like, you do have to recognize if you go this route, you’re dipping your toe into tax land, which is IRS world, which is a totally different beast. So, just be prepared. And especially if you’re in a small firm. So nobody else does taxes except for me. So not only was it getting the designation, it was then training myself on how to use software and then coming across a situation where “How do I report this home sale for this client?” So lots of additional independent research.

Find someone too. If you can find a mentor. Thankfully, I’m part of Commonwealth, and there are a few other advisors that offer taxes in our EAs. So I got to pick their brain at conferences about “How do you do this? How do you manage this?” So it’s definitely possible. But it takes some time, for sure. And it can be really frustrating. There were a couple years in there, where just filing simple returns, because I didn’t have the support from my office, it would take forever. And I was like, this is so not worth all of this work. But as you get better at it, as you get more comfortable with the language that the tax law uses, it’s just really kind of a cool experience.

I think one of the coolest things that I’m doing right now is I have a client who went through surrogacy. And we’re trying to get an unreimbursed medical expense deduction for the costs of surrogacy because she can’t have a baby on her own. So it seems to be that those expensive costs of going through that process should really receive the same level of acknowledgment in the tax code as somebody who does it themselves biologically. So we’re actually we’ve petitioned the IRS through a determination letter, and that’s a huge process that I never thought I’d go through. And it’s kind of real interesting just to see. I don’t know what the outcome will be. But to know that you’re a part of trying to establish precedent is really kind of a cool thing.

Connor: That is so cool. And you’re changing lives.

Jake: Yeah.

Connor: I do want to circle back. You mentioned as part of becoming the tax person that you have to learn the code, number one, how to interpret the code, how to use the software associated with it. I’m sure you get leaned on in order to help people because of additional expertise as well. But you are an eMoney user. So number one, thank you for that.

Jake: Yes.

Connor: Number two, do you have any tips related to tax planning in the platform or any client stories you can share?

Jake: Oh, yeah. So I am a big eMoney user. We’ve used eMoney for, I don’t even know eight years now. I love eMoney. So one of the techniques I’ve found from a tax planning perspective that’s been really beneficial is the discussion of Roth conversions. So not only do I use the Roth conversion tool, modeling it in an advanced scenario. Where I found it most effective is when I create an advanced plan where I make the Roth conversion happen, and then I run the income tax report, and I do the side-by-side comparison of with and without the Roth conversion. And I scroll through the income tax report to the years in which the client is now of RMD age. And you can see the dramatic decrease in tax liability with and without the Roth conversion, and then giving them that narrative to picture themselves being 75 and having a $5,000 tax bill every year instead of $25,000. That’s a huge benefit. And it’s like, uh, now I see the benefits of having to pay these taxes right now to get this Roth conversion done. So that report has been very helpful from that perspective. And I do that a lot with any advanced plan that’s going to affect taxes in the future. I use that side-by-side comparison and just kind of look at those key years because there’s a lot of data on those reports.

And so sometimes if you just put that report in front of the client, they may feel overwhelmed. They’re like, what? There’s a chart here, and there’s dollars forever. So if I can just focus on this one section of years, and then they can associate an age with dollars and taxes, they’re set, they get it, they understand, and we can proceed with a Roth conversion.

The other thing that I found helpful is in the assumptions, you can adjust tax rates for future years. And so one of the advanced plans that we put together for people sometimes is we will model what might happen if tax rates go up in the future because we do have a ton of government debt that needs to be repaid. So that could be a possibility on the table of your marginal tax rates going up in the future. So they may not like it, but we’re able to illustrate it through changing assumptions and then using that tax report again and saying, Hey, look, now combine that with the Roth conversion. Now we’re saving thousands of dollars potentially in taxes. They’re going to do the Roth conversion. There’s no question at that point.

Connor: Short-term pain for the long-term gain.

Jake: Yeah.

Connor: Exactly. I love the side-by-side story. I will throw out trying to use the Decision Center to have the similar conversation, but it’s the same spiel.

Jake: Absolutely. Yeah. The Decision Center is great too. It’s just that sometimes if I need to look at those tax numbers side by side, that report has been really helpful.

Sasha: That’s good to know. I know that when the Roth conversion tool first came out, it was a big splash, so I’m glad to hear that it’s being used.

Jake: Oh, yeah.

Sasha: Well, Jake, we’re kind of toward the end of the podcast. We have a question we ask of all of our guests. We want to know, how would you define the heart of advice when it comes to financial planning?

Jake: That is a very good question because I was intrigued even by the name of the podcast. Heart of advice. I had never even put it in that context. I think to me, the heart of advice is providing the client with individualized advice, never taking a situation and applying a formula, and like I said earlier, always listening to them and respecting them as a person first before a plan. Right? Because, unlike other industries where we’re dealing with a product that we’re selling or a service that we’re selling, this is really a relationship that we’re selling. And I think to hit on the heart of advice is to provide individualized planning that’s going to ultimately change their life. And if you’re not doing that, then you’re not satisfying your obligation as an advisor.

Sasha: That’s powerful. Well, Jake, it’s wonderful to see you. I hope I get to see you soon. I know that San Antonio and Dallas aren’t so far apart anymore.

Jake: Oh, I forgot you moved back.

Sasha: Yeah. Yeah. I did. I did move back. Yes. So hopefully, we can maybe get together and have a good time. That’d be wonderful.

Jake: Yes. Definitely. Thank you both so much for having me on the show. I loved it.

Sasha: Of course.

Connor: Thank you.

Sources:

1 Nationwide Retirement Institute. “LGBTQ Finances Flash Poll,” June 1, 2022.

2 The Motley Fool. “LGBTQ+ Finances: A Survey of 2,005 Americans,” July 14, 2022.

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About the Author

Sasha Grabenstetter, AFC®, BFA™ is a Financial Planning Education Consultant at eMoney Advisor. She is an integral part of the internal and external financial planning education programs, as well as financial planning content development. Sasha won the 2020 Outstanding Symposium Practitioners' Forum Award from the Association for Financial Counseling and Planning Education. She previously co-authored “Apple Seed: A Student Guide to Pro Bono Financial Planning” and “All My Money: Change for the Better.” With close to 10 years in financial education, Sasha received her AFC® designation in 2015 and graduated with her master’s degree from Texas Tech University in 2012.

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