0:00

With record levels of dry

0:02

powder available for investment, find

0:04

out what's in store for

0:06

private markets in 2025 and

0:08

beyond. Listen to Kraft in

0:10

Capital, in partnership with UBS,

0:12

at partners .wsj .com/UBS, Spotify and

0:14

Apple Podcast. Hello, and welcome

0:16

to Barron's The Way Forward. I'm Greg

0:18

Bartalis, and my special guest is

0:20

Kevin Meyerhoff, Principal and Senior

0:22

Strategic Advisor of Sequoia Financial

0:24

Group and a Barron's Ranked

0:26

Independent Advisor. Today, we're going

0:28

to be talking about client questions

0:31

and how advisors

0:33

can really stand

0:35

out from advisors and reframe things in

0:37

a way that's meaningful and helpful

0:39

to the business and their clients. So

0:41

welcome aboard, Kevin. Thanks, Greg. Good

0:43

be here. Tell us why this is

0:45

important and what advisors usually do

0:48

and where there's opportunity for them and

0:50

how they can help clients. Right.

0:52

You know, advisors are trying to figure

0:54

out how they could

0:56

maximize their value to clients. One,

0:59

to justify the fee that we

1:01

charge, and two, to be ahead

1:03

of the other people, to pick

1:05

up market share, to be more likely

1:08

to get a referral. And so

1:10

the more information that a client's willing

1:12

to give you, the better you

1:14

could serve them. I mean, to be

1:16

if somebody walked into a car dealership and

1:18

said, I'm looking for a car and you're

1:20

a salesperson, you're like, can you

1:22

tell me more? How many

1:24

kids do you have? Six. Well,

1:26

that eliminates a number of cards,

1:29

doesn't it? Watch your budget, et

1:31

cetera. Yeah. So what's the state

1:33

of play now? What are advisors

1:35

generally doing and what should they

1:37

not be doing? You know, generally,

1:39

most advisors are sticking with the

1:41

playbook that was created 20 years

1:43

ago. And they, you

1:46

know, they use terms like

1:48

goals, objectives, risk tolerance, which are

1:50

all financial business terms. And

1:52

clients don't give you what I've

1:54

learned is clients don't give

1:56

you everything they want to say

1:58

because they're trying to. more limited

2:00

than you want them to go to

2:03

really hear how they feel inside so

2:05

you could respond better to them and

2:07

help them meet their life objectives. So

2:09

what would instead of that how could you

2:11

kind of get a better answer while more

2:13

or less asking the same thing? Right

2:15

so so instead of let's talk about

2:18

goals and objectives you know how about

2:20

saying I'm here to help you live

2:22

your best life Greg what does that

2:24

look like to you? And you're way

2:26

more excited to talk about that

2:28

than something that's boring like goals

2:31

and objectives. Right. So generic and

2:33

nebulous, yeah. Yeah, I mean, it

2:35

refrains the advisor relationship from financial

2:37

to holistic. Let's go through some

2:40

other examples. What else do you

2:42

have? Sure. You know, instead of, Greg, what

2:44

are your long-term goals? Let's try. Tell

2:46

me about your future dreams, Greg.

2:49

What does life look for you? What does

2:51

it look like after you retire? What does

2:53

it look like when your kids are gone

2:55

and you're an empty nester? because

2:58

the answers to those questions will

3:00

really help me understand what your

3:02

inspirations are and what excites you.

3:04

And I'll be able to guide you

3:06

better along our path as we go

3:08

down it. Hopefully these answers are more

3:11

specific and more expansive in nature. Do

3:13

you kind of have these, and it's

3:15

going to be overlapped, or are these

3:17

kind of in discrete buckets? So do

3:19

you have these answers, provide natural segues,

3:21

if you will, and to other. Ancillary

3:23

topics and whatnot. Exactly. We let the

3:25

conversation flow and if answers come up

3:27

and it's really great to ask and

3:29

you're an expert at this Greg asking

3:31

the same question in different ways to

3:33

really get to the bottom of something

3:35

you're trying to achieve. I've seen you

3:37

do it many times. They've been over

3:39

here when you've done it. Let's go

3:41

through talking about like risk tolerance. I've

3:43

seen you know everyone's familiar with these

3:45

questionnaires like you know how much risk

3:48

can you tolerate that that just seems

3:50

so generic and a lot of people

3:52

don't really know and reality can present

3:54

an investor to be different than he or

3:56

she purports to be. How do you discuss

3:58

risk in a way that be more enlightened.

4:00

Right and keep in mind what

4:03

I've learned of doing this for

4:05

almost 40 years now is that people

4:07

look at risk as the more risk

4:09

you're willing to take the cooler you

4:12

are, you know, the better person that

4:14

you are. And so people almost always

4:16

overstate. the risk tolerance, especially when their

4:19

spouse is sitting there, is like, oh

4:21

yeah, we could handle a 20% loss.

4:23

I wouldn't even bother me for a

4:26

second. Meanwhile, they'll be curled up in

4:28

a fetal position somewhere if that would

4:30

happen. So what I go to is,

4:32

what are your biggest fears about money? And

4:35

I want to hear, you know, is it losing

4:37

it? Is it how I'm going to get it

4:39

to the children? Is it about...

4:41

volatility. Is it not hitting a

4:43

number, falling short? Yeah. Exactly. And

4:45

so that leads to just much

4:47

better answers. So when I'm creating

4:49

portfolios, I could use the information they

4:51

gave me. And when I talk about

4:54

the portfolios, I'll talk about how it

4:56

ties in to those dreams. What about

4:58

life expectancy, terms of planning? I

5:00

mean, it's a double-edged sword. People

5:02

are living longer than ever before,

5:05

but it makes planning all the

5:07

trickier. Right. And so we're still back

5:09

to a mathematical number, right. And so,

5:11

you know, some people today are a

5:13

little bit ahead of it. They just

5:15

don't say, our financial planning software says

5:17

we use a 90-year life expectancy,

5:20

because that's what the charts show. You

5:22

know, they'll say, like, you know, how old was

5:24

your mom or dad when they died? You know,

5:26

the history of certain diseases. Right. Yeah. And so,

5:28

you know, I tried to make it even more

5:31

holistic and say, let's talk about

5:33

your health, not just your wealth. And

5:36

so what kind of things can you

5:38

tell me about your health, family health,

5:40

children's health that may influence how I

5:42

set up your assets? How we do

5:44

a state planning? How long I have

5:47

to assume this money is going to

5:49

last? And then somebody may say,

5:51

well, geez, I have a child with

5:53

special needs. And they're going to need

5:55

money forever. And so can you help

5:58

me with that? And so, yeah, we should. can

6:00

help you with that. Right, right. I mean just

6:02

like a life insurance, I mean they kick the

6:04

tires on many different inputs right to calculate your

6:06

your perspective risk and whatnot and yeah it would

6:09

behoove a planner to dig deep here because sometimes

6:11

people are so close to a problem they don't

6:13

they almost forget about it and then you share

6:15

a nugget of information your eyes blast open and

6:18

you go what? And then they're like oh I

6:20

forgot to tell you that so definitely or they

6:22

assume it's not in your lane. Yeah, yeah. And

6:24

for financial advisors today, there's all sorts of special

6:26

tools and special needs. Right. So to that point

6:29

of being in your lane, would it be helpful

6:31

your typical advisor to the, you know, initial discussion

6:33

or early on to just be very clear about

6:35

the guardrails, if you will, like, look, this is

6:38

holistic and holistic advice encompasses A, B, C, D,

6:40

E, you know, etc. Just to set the groundwork

6:42

for the no surprises. Yeah, I think that's very

6:44

disarming to somebody where they're more likely to be

6:46

relaxed and right answer those questions I feel surprised

6:49

or caught off guard or whatever. Yeah, yeah. I

6:51

will tell you to this day people are surprised

6:53

when your first question is and how much money

6:55

do you have? What accounts are they in? What

6:57

type of assets are they in? And that creates

7:00

a defensive response. Good point. Because it shows you're

7:02

looking you're just after their money like bottom line

7:04

oriented. Yeah, yeah, yeah. And so they're they really

7:06

like relax when you like relax when you say

7:09

like relaxed when you say. Tell me about your

7:11

children. How old are they? What's sports do they?

7:13

So what about the sequencing then, to your point?

7:15

Like you talked about earlier, you know, future dreams,

7:17

right? Fears of money, etc. Is there generally a

7:20

sequence, you know, disarming with the low-hanging fruit, if

7:22

you will, of like kids, family, etc. than seguing,

7:24

or is it kind of not so important to

7:26

sequence, just more important to hit all these points?

7:29

As you go through because you could get all

7:31

over the place and go what if I missed

7:33

here, right? We haven't talked about health yet. Yeah,

7:35

and and let it And a

7:37

lot will determine the direction

7:40

is because you have

7:42

that first five minutes of

7:44

hey, how are you?

7:46

You know how especially if

7:49

it's a prospect. It's

7:51

like, you know, how did

7:53

you find us? Where

7:55

do we meet and you

7:57

know your doctor said

8:00

and you know, then then

8:02

you get into The

8:04

questions in whichever way is

8:06

most comfortable for them.

8:09

What does it take to

8:11

make you feel having

8:13

your rich life? I say

8:15

rich in quotes, but

8:17

I don't mean as a

8:20

cliche at the same

8:22

time that you feel fulfilled,

8:24

right? You're fine financially,

8:26

but you're otherwise, you know happy right So

8:28

it's the term I grew up with,

8:30

you know lifestyles more important than money Right,

8:33

you know, you could I've had

8:35

clients that at $10 million that were poor

8:37

because their lifestyles are ridiculous And I've had

8:39

clients with the $500 ,000 that were really

8:41

wealthy base But when you talk about

8:43

that today people start to think budgets, you

8:45

know, if he's framing this in a

8:47

way of budgets So what we'd like to

8:49

say now is you don't need to

8:51

be rich to be wealthy And

8:54

we could help you get there and then

8:56

people are just like Thank God. Yeah, right

8:58

now in the end we're gonna talk

9:00

about budgets and what are you

9:02

spending and everything else? But in the

9:04

beginning it just gets them to

9:06

feel more comfortable and talk and not

9:08

be defensive I want to ask

9:10

you this, you know, it goes back

9:12

a little bit to risk tolerance

9:14

But more about volatility and the reality

9:16

of how people experience it. Tell

9:18

me about that Yeah, and I'm gonna

9:20

take it a little broader Anytime

9:22

a client's upset not necessarily at you,

9:24

but the way things are going, you

9:26

know, the the markets are down

9:28

6 % and you're down 10 I

9:31

feel like you've not been proactive

9:33

enough Do you

9:36

realize this is all the money

9:38

that I have and you know,

9:40

they're expecting a recession Two

9:43

years ago that hasn't come yet And

9:46

you can't say well, I made you 15

9:48

% in the last two years That's what

9:50

you have to do in any one

9:52

of these is they won't listen to one

9:54

word you say Until you acknowledge

9:56

what their problem is

9:58

you literally have to say

10:00

to them and let's say they're

10:03

talking about returns, you have

10:05

to say, I hear you, I understand

10:07

you're nervous about what

10:09

the results have been so far,

10:11

and I know this is all the

10:13

money you have, you have none anywhere

10:16

else. So it's life altering money,

10:18

and now they're like, okay, he

10:20

gets it. And then you could talk

10:23

about, if I talk about volatility,

10:25

what people forget, and we learn

10:27

this during some of the huge

10:29

market drops, is that if the

10:31

market falls a thousand points, your

10:33

body takes a physiological response to

10:35

that, a flight to fight, you

10:38

know, the fight-to-flight response.

10:40

And your brain's smart enough to

10:42

know that when you're watching CNBC

10:44

to see what's going on, or

10:46

listening to barons, or reading

10:48

barons, and... You read it again or

10:51

you see it again, your brain says, yeah,

10:53

I know that I read it a while

10:55

ago, but your body has

10:57

the same physical physiological response.

11:00

And so I literally have

11:02

told hundreds of clients, turn

11:04

off your TV. The news doesn't change

11:07

all that much during the day,

11:09

especially financial news. So once a

11:11

day, turn it on for half

11:13

an hour and move on, and

11:15

I've had hugs and thank you

11:17

for giving that advice. Excellent advice.

11:19

I mean, in addition to avoiding

11:22

the physiological stress that

11:24

you alluded to, you're going to

11:26

get better returns. I mean, it's

11:29

interesting because if you look at, let's

11:31

say returns, let's use the S&P 500,

11:33

you know, if it's up 20% in

11:35

a given year, your average investor will

11:37

have done worse because people tend to

11:40

sell more when things are higher. I'm

11:42

sorry, buy more when they're high and

11:44

sell more when they're down. Individual returns

11:46

almost always lag official returns. Yeah, right

11:48

buying high and selling low you don't

11:51

make money You can't make it up

11:53

on volume anything else that you want to

11:55

add that we didn't really touch on or just give

11:57

a little more shape to this or you think yeah,

11:59

you know, I I think these are fun

12:01

things. They're uncomfortable at first. You may

12:03

feel funny trying to talk this way.

12:05

So fine a peer, somebody else in

12:07

your office, your wife, your brother, people

12:09

are to practice this with. If you

12:11

just practice it two or three times

12:14

and talk to somebody that you'd really

12:16

like to know these answers from. You

12:18

know, tell me how you feel. You

12:20

know, don't let the other person, like,

12:22

role play. Have them answer it honestly,

12:24

how they feel. And I think you'll

12:26

get real comfortable with it really quick.

12:28

It makes for a great conversation. We

12:31

get way more information, which allows

12:33

us to give back more value.

12:35

Excellent. Well, that was all extremely

12:37

helpful, and thank you very much

12:39

for joining us. My pleasure. Thank

12:41

you. My guest has been Kevin

12:43

Myeroff for more podcast and the

12:45

latest wealth management news. Visit barons.com/advisor.

12:48

For the way

12:50

forward, I'm Greg

12:52

Bartellis. Hi, I'm Philip Layton

12:55

Jones, host of crafting capital,

12:57

a podcast series in partnership

12:59

with custom content from WSJ

13:01

and UBS. On a recent

13:03

episode, I spoke to Simona

13:05

Myalare, about how investment banks

13:07

are adapting in the rapidly

13:10

evolving world of private markets.

13:12

It has changed for sure.

13:14

If we continue on the

13:16

deployment side from the private

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capital and on the private

13:20

credit. It has helped us

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in a lot of situation

13:24

in the sense that there

13:26

were times in the last

13:28

18 months where there was

13:30

no syndicated loan market available.

13:32

And as deal practitioners, we

13:34

needed private capital to make

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deal happens. So in that

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case, there was no competition.

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It was actually us bringing

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all this private capital provider

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to be able to enable

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us to sign deals to

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do acquisitions. Find crafting capital

13:51

at Partners. and Apple podcasts.