The WCA is pleased to welcome new partner, Jack Standa and KOM Financial Planning!
“Ride as much or as little, or as long or as short as you feel. But ride.” ~ Eddy Merckx
I founded KOM Financial Planning because I believe everyone has the ability to take control of their financial future, and I use the Eddy Merckx quote as an analogy. It doesn’t matter how much or how little you have to start with, the most important thing is to start saving now. My role as a Financial Advisor is to coach and teach my clients how to create a financial plan that meets their goals and matches their risk appetite.
Unlike traditional investment firms that are product focused, KOM Financial Planning is a client focused, fee only advisory that believes peak performance is best achieved with the help of a coach. In much the same way world class athletes continue to use coaches to improve performance, KOM provides financial coaching to help individuals achieve their savings and retirement goals.
At KOM Financial Planning, we believe the attributes that make great climbers also make great investors. That is, the ability to think long term, having a strategic plan that suits your abilities, and not panicking if you struggle in certain segments. I also believe that having a good coach, especially in difficult times, is critical to long term success.
My love affair with the bike came at an early age. I am a natural introvert, so my normal routine in elementary school was to come home and read JRR Tolkien, Isaac Asimov, Ray Bradbury, and Arthur C Clarke novels. After an hour or so I would go out and hop on my bike, riding around my neighborhood like an idiot pretending to be Aragorn riding his horse and battling orcs. I also have a clear memory of taking my birthday money and buying some bmx style handlebars. I put them on my hand–me-down Huffy replacing the ape hanger handle bars it came with. I remember the sense of accomplishment of working on the bike by myself plus was pretty stoked to be able to pretend I was now Evel Knievel.
As I grew older my interest changed as I started playing team sports in high school and drifted away from cycling. That all changed in 1987 when I tore a ligament in my knee and my doctor advised that cycling was a great way to rehab after surgery. So in the spring of 1988 I bought my first mountain bike. It was an “MTN Glacier”. You’ve never heard of this brand because it was made by a local Missoula Montana sporting goods store call Bob Ward and Sons. They bought the minimum frame order from a Taiwan manufacturer and assembled their own bikes. Mine had Shimano SIS shifters and Biopace sprockets. Remember those? I rode this bike faithfully in my post college years, riding up Mt. Diablo in the East Bay, the slick rock trail in Moab, and in the temperate rain forest of Vancouver Island. My only regret is that somewhere along the way I got rid of it and wish I still had it. The bike was a way for me to see new places and make new friends. I liked the way you can cover a lot ground and quickly get to remote places much faster than by walking.
After many years of mountain biking I decided to buy a road bike as I thought it would help me increase my fitness and thus my ability to ride my mountain bike farther and farther. I joined a local club in Farmington New Mexico and immediately fell in love with the speed and acceleration of road cycling. The local club, Velo de Animas, was mostly mountain bikers like myself that did weekday road rides to increase their fitness level. With them I started joining local mountain bike races and quickly learned that I was a mere mortal, and that world class cyclists are incredible athletes. Being close to Durango, I have fond memories of being passed on the trail by Bob Roll (in his massive mutton chop days) and John Tomac. My Tomac experience came on a training ride of the “Big Loop” out of Durango, riding up La Plata canyon towards Kennebec Pass. I was panting and heaving up the road when I heard someone coming up behind me at a pretty high rate of speed. When he passed me I recognized it was Tomac and he was barely working hard and passed me like I was standing still. It was humbling, but a great experience and I have not lost my sense of awe as I watch world class cyclists perform.
Over the past twenty years I have been investing on my own and studying various investing strategies. I completed an MBA from the University of Chicago in 2008 and during this time galvanized my approach to long term investing. In a nutshell, I believe that markets work and an evidence based approach to investing is the best way for individuals to build their wealth.
What is the role of a financial advisor? You may think they have advantageous knowledge of market direction giving them the ability to pick the ‘winners’ from ‘losers’. Of the many roles of an advisor, expert crystal ball reader is not one of them. The truth is that no one can reliably predict future market movements.
Some people may think the role of an advisor is to deliver market beating returns year after year. If the future direction of the markets cannot be predicted reliably from year to year, then it is also unrealistic to expect an advisor to deliver market beating returns year after year.
In reality, the value of a professional advisor is not dependent on the movement of the markets. Indeed, they may be most valuable when market volatility and emotions are running high.
An advisor will actually play multiple roles with their clients, none of which are to predict future market movements. Here are some of the key roles an advisor provides to their client:
1. Expert: Investors need client focused advisors to assess their particular needs and assist them with advice consistent with their unique risk profile and financial goals.
2. Independent Voice: The current world of 24 hour news, social media and market volatility demonstrate the value of having an independent and objective voice when clients are surrounded by self-serving marketing campaigns and ‘expert’ commentary that is more focused on pushing emotional buttons and increasing ratings or subscriptions rather than helping people.
3. Listener: A good advisor will listen to clients to understand their needs and fears, determine the underlying issues, and provide practical, long-term solutions.
4. Teacher: Getting beyond the fear and greed cycles that hamper individual investors is often a matter of teaching clients about risk and return, diversification, asset allocation, and the virtue of discipline.
5. Architect: After the advisor understands their clients’ situation, needs, and goals, they become an architect, building a long-term wealth management strategy that matches each person’s risk appetite and lifetime goals.
6. Coach: Even the best strategy often does not go as planned. This is when the advisor becomes a coach, reinforcing first principles and keeping the client on track.
7. Guardian: There is a long-term role for the advisor to assist the client as their life situation changes. They will scan the horizon for issues that may affect the client, keep them informed, and help them adjust their plans as their life progresses.
Knowing the advisor is independent, and not plugging products for an employer, will build trust in the advisor as a listener. From this point, the listener can become the teacher, architect, coach, and ultimately the guardian. Just as people’s needs and circumstances change over time, the nature of the advice evolves.
Good financial advice ultimately is defined by the patient building of long-term relationships founded on the values of trust and independence and knowledge of each unique individual’s circumstances.