In this episode of Agent of Wealth Podcast, you will meet Victoria Finlay, a financial advisor at Bautis Financial. Victoria studied financial planning at Virginia Tech University and has been working at Bautis Financial for about a year.
In this episode, you will learn:
- What the first year of work at a financial advising office looks like
- How Victoria has transitioned from student to advisor
- Victoria’s recommendations for saving for university for multiple children in your family
- How Victoria has worked with clients at Bautis Financial to help them reach their financial goals
- What goes into getting the CFP® designation
- And more!
Tune in to this episode of the Agent of Wealth Podcast to get to know Bautis Financial’s Victoria Finlay!
Hello and welcome to the Agent of Wealth with Marc Bautis of Bautis Financial. Today Marc has brought in a special guest. That’s Victoria Finlay.
Aric: Marc why did you bring Victoria today?
Marc: Victoria’s been a part of Bautis Financial for almost a year and we wanted to introduce her on the podcast as well as talk a little bit about some of the financial planning things she’s been doing.
Getting to Know Victoria
Marc: Why don’t you start off with a little background on where you went to school and what you studied.
Victoria: About one year ago in May 2018 I graduated from Virginia Tech and I studied financial planning. While I was at Virginia Tech I took a bunch of different classes that were tied into financial planning:
- Retirement Planning
- Insurance and Risk
- Investment Planning
- Income Tax
- Estate Planning
My capstone integrated all of those classes together and we had to complete a comprehensive financial plan for a fictional family. It was a really beneficial and hands on project. I had a wonderful time at Virginia Tech and now I’m here at Bautis Financial, which has been a great experience so far.
Marc: How did you get into studying financial planning? Was it at some point in high school? Something you always wanted to do? Or did you go to college and find it at school?
Victoria: I definitely came across it in school at Virginia Tech. It was actually by accident. I was trying to take a different class but ended up stumbling across a financial planning course. I decided to sign up for the class and I pretty much fell in love with it. I thought it was really interesting. At the time I didn’t know much about this industry so it was something new to explore. I thought it was a really great fit for what my strengths are and what I am interested in.
Marc: I seems as though financial planning as a degree in college is gaining popularity. When I went to school you really didn’t hear much about it. I know Virginia Tech has a Top 5 program and I’m guessing they’re promoting on the campus and trying to get people to study it.
Victoria: Yes, it’s definitely grown a lot and there were two main advisors involved who were super hands on. They taught a lot of the classes themselves and I thought it was a really great track to pursue. Financial planning is definitely on the rise. I believe right now there’s only about 50 schools that actually offer a financial planning degree. It’s great that Virginia Tech offers this and I do see a growth within. I was trying to encourage my friends who were interested in finance to take a look at financial planning because I thought it was a great mix of being hands on with clients while also using analytical skills that a lot of people in finance have.
Marc: You’ve been at Bautis Financial for about a year. How has the year been and has it been what you expected? How does being at a financial advising firm compare to what you might have thought financial planning would be like, based off of school or educational background?
Victoria: I think it’s been pretty similar to what I expected. It’s definitely different when you’re actually in the role rather than working with a fictional family on a project, but I think it’s been a really good transition for me.
Getting to meet your clients you had prior to me working at Bautis Financial and also getting to know new clients has been one of the biggest enjoyments for myself. I love hearing about everyone’s situation and figuring out what we can do to make it better or how we can help them out. It’s been a really fun experience and somewhat similar to what I was expecting, but obviously there’s always going to be unexpected turns.
Marc: I think a lot of times it’s hard for someone that we work with or someone that we initially talk with to comprehend what financial planning. If you’ve never seen it before or if you’ve never talked to a financial planner it’s hard to visualize what a financial plan is. At the highest level we promote financial planning as taking a look at where you’re trying to go. We paint a roadmap or put a roadmap together to get that person there.
Let’s go over a couple of examples of how we’ve helped someone tackle a specific problem, question, or challenge that they had related to financial planning. Do you have any good examples that you’ve encountered over this year that we could we can look at?
Education Planning Scenario
Victoria: Yes definitely, I have a few examples we can go over. The first example I can start off with is a family we were working with about running an education scenario and report for them. This was to figure out what they could afford and what they needed to put away into their 529 accounts to support where their children might want to attend college.
For this scenario particularly they have three children who are in middle school. They’ve got a few more years left to save up for college, but they don’t have all 18 years to save. This was something that we had to keep in mind while we analyzed their situation.
We wanted to model what it looked like after three different schools. We went ahead and looked at Rutgers, Syracuse and NYU.
- This family is based in New Jersey so Rutgers was a good school to look at because of in-state tuition.
- Syracuse made the list for this client because one of the parents is an alumnus
- NYU is the most expensive school to attend so we wanted to show them the peak of college expenses
We wanted to model it after those three schools to give them an idea of what it would take and how much they would need to put away into those 529s for each child.
Marc: When you say it’s modeled after a particular school, in this case Rutgers, Syracuse and NYU, what is it that takes what the actual cost of those schools currently is and projects out what it will cost in the future? Is it our software?
Victoria: Yes, that’s what’s great about our software is that it takes the cost of education and the inflation rate into consideration. Our software projects what Rutgers will cost in about ten years, which is when the child is expected to go to school. For example, our software is able to project that the cost of Rutgers might be closer to $45,000 rather than $35,000. This is important because you don’t want to save for what the tuition is right now, instead you want to project what it will be in the future.
Marc: Yes, especially when you’re projecting out education expenses for newborns who have about 18 years until they attend college. When it comes to the advice we give or the recommendations we give on saving for college do you see more people wanting to automate a monthly contribution to a college savings account or do people ever say okay let’s save an annual lump sum.
Victoria: It really depends on the client and their situation. In this situation they were looking at contributing a lump sum to the 529s because of a year end bonus, so it’s up to the client how they want to handle it. What’s also really common is to contribute a fixed amount per month so it stays on a schedule and becomes a routine, similar to if you were paying a bill. You want to regulate it and if possible you want it to be automated.
Another great feature that our software provides is telling us how much a client is underfunding their goal. If the client is ever falling short of funding 100%, our software allows us to tell the client how much more they might need to contribute either on a monthly basis or as a lump sum. The report allows you to see if saving a $50,000 lump sum into a 529 could cover the cost of NYU tuition ten years down the road. Or are they going to need to contribute a larger lump sum?
Marc: I know one of the other misconceptions about financial planning is that once you create a plan you’re done with it and you can check back in with it in maybe five or ten years from now. But in this case about college planning and educational funding how do we use an annual education progress report to provide the client with data or information to see whether they’re still on track to cover the percentage of their child’s education they wish to cover?
Victoria: At Bautis Financial we send out an annual education report to any client that has a 529 or is looking to cover part of or all of their children’s future education costs. It gives our clients a good idea of if they’re on track with their goal. This helps give them an idea of whether or not they’re on the right path. It also allows them to see those different options of what they can do to make sure they reach their education goals.
Insurance Needs Analysis
Marc: What about other examples? Anything else over the past year that you’ve seen us add value to for a specific question or problem that someone’s had?
Victoria: For another client of ours we looked at a gap analysis for his life insurance needs. Specifically with this client him and his wife just had another child so they went from one child to two children and they wanted to make sure that in case anything were to happen to him their children and his spouse would be covered. We went ahead and ran a life insurance gap analysis and it’s a great report because it shows you that they currently have $1 million dollars in coverage but now that they’re adding another child and increasing their living expenses they might need $1.5 million. This gap analysis gives them an idea of if they’re properly protected or not.
Marc: So this also falls underneath the same idea that financial planning is not a one time plan. This client initially did have life insurance, however they were adding to the family and increasing expenses and wanted to see if they should purchase additional life insurance or not.
Victoria: Exactly, any life changing situation can impact life insurance coverage, it doesn’t have to be that a child is added to the family. There are different life changes to consider such as any new dependent a family may have, or if you’re getting married and one spouse is going to step down from their job, or an increase in income or expenses can completely change what your situation looks like. Any time there is some form of a life change it’s important to go back and take a look at what you might need to update, which in this example life insurance. It is always really important when you have people depending on you to cover living expenses.
Marc: Does the analysis actually report a specific number that says you are under insured or over insured by a certain amount? Or if you have enough insurance?
Victoria: Yes it does, if the client has enough insurance the analysis will say you’re sufficiently covered, but if you are underinsured it will tell you that you need to increase your coverage by X amount. For example, if they’re short of $1 million in coverage the analysis will say you currently have $1 million worth of life insurance coverage, but you need to increase that by $1 million so that you have a total of $2 million.
Marc: That’s great that it provides you with those specifics. Victoria, do you have another example we can go over?
Victoria: Yes, there’s another example we can talk about, which is how a client’s change in living expenses can affect the client’s retirement. There are so many different things can affect retirement, but in this situation we had a client come to us and ask us what her retirement would look like after she wanted to gift $13,000 to each of her two grandchildren to help cover their college education expenses.
This means that she is planning on gifting each of them $13,000 for four years. This particular client is already retired so this could have drastically changed her retirement situation. It was really important to see if she could afford this and be able to gift as much as she was hoping to for each of her grandchildren.
Marc: This actually has a couple of financial planning topics because first off we have the grandkids’ education and how this $13,000 a year helps cover their costs. Second, it’s our client and we want to make sure she will not run out of money by gifting her grandkids money. And then the third is the estate planning aspect of making sure she optimizes the best estate planning tactics of gifting. It hits a few different areas of financial planning.
Victoria: Yes it goes to show how all of this is intertwined whether or not you think this might be affecting only her retirement. In reality it goes back to the grandchildren’s’ education and also estate planning. Luckily for this client the gifting of $13,000 didn’t impact her retirement too much and she was still going to be able to make sure all of her savings and investments would last her for the rest of her life.
Now for example, let’s say we realized she was going to run out of money by the time she turned 85, that would have a big impact on her retirement. What would she do when she reaches 85? That’s why financial planning is so important because she might think she can easily afford an extra expense of $13,000 a year when realistically she would be out of money at 85. We would then take a look at this and reevaluate how to reach her goal. Instead of gifting $13,000 maybe she could only afford $10,000.
Marc: Let’s say we have her in front of us, using the software can we show her on the fly what the impact would be if she changed the value she wanted to gift? Is the software sophisticated enough to compare the differences between making an annual gift of $13,000, or $10,000, or $5,000, or $20,000?
Victoria: Yes we can do it immediately and we can easily modify or replicate what we originally entered and change that $13,000 to $10,000 or maybe $7,000, or $5,000. We can change the value to whatever she wanted to see. We can do the same if she wished to increase the value as well from $13,000 to $15,000 or more and see if she could afford to do so.
For example, let’s say that making the $13,000 gift to her grandchildren was her main goal and it was a top priority. Let’s also pretend that she wasn’t going to be able to afford this $13,000 a year gift. We can analyze her living expenses and see if there’s anything that she could reduce to help her afford the $13,000 gift. There are various different approaches to help her reach her goal.
Marc: I think one of my favorite ones that we did recently was help someone look at relocation costs. This family was thinking of moving from New Jersey to Colorado and they wanted to see what the impact was because their incomes were going to change as well as their expenses. They had to look at what type of house they could afford and we really helped them piece all of that together and helped them make a decision on whether or not they could financially afford to make this move.
Obviously aside from the financial aspect, there’s a lot that comes into relocating across the country, but financial planning is definitely a way to at least help someone visualize or help someone make that decision.
These were a few examples of specific situations and when we start an engagement we like to do what we call a, “holistic financial plan.” We go through everything that someone is doing, but a lot of times these specific scenarios will come up during an engagement or it could be years after we generate this financial plan. It really just comes back to the fact that there is always some type of financial planning decision that needs to be made. We’re always trying to help someone get the right data in front of them to make that decision.
So what’s next for you Victoria?
Victoria: I’m going to be sitting for the CFP exam in November, which is only a few months from now. It’s exciting but also nerve racking at the same time. Fingers crossed I pass the CFP exam. It’s a long exam and requires a lot of time and effort but it’s something really important to me and I think that it’s really beneficial to have the CFP designation behind my name.
Marc: Is there anything else besides the exam that goes into getting the CFP designation? Or any other requirements?
Victoria: One of the main requirements is the education requirement. You are required to have a bachelor’s degree and fulfill proper financial planning courses. Luckily for me I studied financial planning at Virginia Tech and it covered all of the core classes that I listed earlier that you need to take. The education requirement must be met before you sit for the CFP exam.
There is also a work requirement, which means you need to have experience working for a financial planning firm for approximately 2 years. The experience requirement does not have to be met before the exam is taken.
Marc: It sounds like it will be a fun, exciting and challenging next couple of months studying for the exam. Thank you Victoria for being here.
Marc: For those of you listening, our upcoming podcasts will be on small business financial planning. We have different guests coming in to talk about topics like how to value your business and succession planning.
We have an episode that we’re going to focus on a growth strategy using a popular tactic called profit first. Then we’ll go through different types of operational human resource topics such as hiring, what type of insurance is necessary, benefits to offer your employees, and then finally we’ll also have a CPA on to talk about some of the new tax changes and how they impact specifically small businesses.
One question that I continually get is, “What type of entity should I form for my small business?” or, “Should I change the entity that I have for my small business?” These questions are targeting if a business should be an LLC, an S corp, or a C corp and determining what makes the most sense for the business. We’ll have a CPA on to discuss and address how to answer these questions.
Aric: Marc that sounds fantastic. I’m excited about the small business series coming up. How many podcasts do you think that’s going to be?
Marc: We’re going to do 4-5.
Aric: Alright 4-5 on small business, so if you are a small business owner or thinking about it definitely tune in for those. Victoria, thank you so much for being here you are a great guest. Marc grilled you, he was asking about everything and I’m not going to let up either. I have a couple questions if that’s okay or at least one. It’s my favorite question to ask guests. Tell the audience one thing that most people don’t know about you. Marc talked all about business. I just want to give the audience a personal glimpse of who Victoria is at her core or something that’s just diabolical secret.
Victoria: Can this just be a fun fact?
Aric: Yes. A fun fact I said about myself was that I’ve eaten cat. Not just a stray or my neighbor’s cat. It was done in Paraguay.
Victoria: Since we’re on the topic of food I really enjoy cooking but you’re not going to catch me on Chopped or anything crazy along the lines of that. Believe it or not it’s a stress reliever for me. You can find me in the kitchen almost everyday after work cooking up a meal for my family.
Aric: Nice! What’s your favorite thing to cook?
Victoria: Probably any type of pasta. I’m obsessed with pasta. I’ll make any pasta dish with any type of sauce. I think it’s fun to get creative with it.
Aric: I love spaghetti, that’s my go to. My wife is an amazing cook. She cooks almost everything for us. I’m allowed to use the barbecue and then I am also in charge of spaghetti because that’s that’s my baby. I’ll take about six hours to cook a good pot of spaghetti. Marc thank you so much for bringing Victoria in. Everybody can meet Victoria if you go to Marc’s office. Marc how do they get a hold of you if they want to ask Victoria more personal questions or business related questions?
Marc: Our phone number is 862-205-5800. Also if you go to our website bautisfinancial.com there is a link where anyone can schedule a free consultation with us.
Aric: Nice! Alright thank you guys for your time and thank you all for listening to the Agent of Wealth podcast with Marc Bautis. If you have not subscribed to the podcast yet please click the Subscribe now button below. This way when Marc comes out with a new podcast, especially this business series he is doing, it’ll show up directly on your listening device. This makes it much easier to share these podcasts with your friends and family. Again, thank you for listening today and for everyone at Bautis Financial this is Aric Johnson reminding you to live your best day everyday. And we’ll see you next time.