211: Financial Planning Through a Pandemic With Kathryn Brown

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What's next? This is a question we're all having to ask and answer more frequently. I'm Jenny Blake, your host of the Pivot Podcast and author of the Only Move that Matters is your next one.

For show notes from this episode, visit pivotmethod.com podcast. If change is the only constant, then let's get better at it. Here we go.

Hello everybody. Welcome back. I'm so excited to be here today with Katie Brown, who is celebrating her two year anniversary of launching the wealth management firm Morton Brown Family Wealth. What I love about Katie, when she and her team first reached out was that her whole mission is turning the traditional model of financial planning on its head. She has spent 15 years climbing the ladder at a regional financial firm and then pivoted now to create our own business with a more community oriented vision and really helping people navigate not just the crazy times that we're in, but things like charitable giving, family planning, setting goals. And her whole approach is so collaborative and it radiates. She has these videos on her website, Coffee with Katie that just got me. She has the.

I don't know, the approach that really resonates with me of helping people build confident financial futures and which I think is so crucial right now. So in a way I'm just, we're thirsty here on the Pivot podcast to have a financial expert on the show and I did not realize until I was preparing for this interview that we have a mutual friend in common who is the one and only Dr. Michael J. Consuelos. With that. Katie, welcome to the show.

Hi Jenny. Thank you so much. I am thrilled to be here. That was such a nice introduction. I'm not really sure what to jump on first there.

It's a JB riff. Always from the heart. One thing I loved from your bio is that it says turned off by Wall street jargon and the daily drama of the markets. Katie works to foster a healthy relationship between money and life for the families she serves. And it's so. I just love that you said that because I've been finding the markets very Interesting right now because it's so unprecedented of what's going on. And I subscribe to one particular financial podcast, and I realized I just got suckered because every day they're just talking about the ups and downs. And I've always tried to stay out of that as well. And it's almost like just creating drama where they're. Of course, it's very dramatic right now, on the one hand, but on the other, it creates so much drama where there doesn't really need to be even. The whole notion of quarterly results from companies, I think, is so ridiculous, of, oh, they outperformed expectations or they underperformed, and then the stock jumps wildly, all to create shareholder value. And there's just an entire game and rigmarole around the whole thing that drives me nuts. So I love that you put that front and center on your bio and in your firm's values. Can you maybe speak to that to kick us off?

Yeah. And I love that you mentioned that, too, because it drives me nuts as well, which is kind of funny. I don't think people necessarily expect a financial advisor to say that, but I think what it does is it removes the personal connection. And I think that it's so important to bring it back to the individual, to the family, not to talk about its stock performance, because that doesn't mean anything. I mean, it's all about how does it impact your personal plan?

And so when we see market ups and downs, we always like to bring the conversation back to the client to say, okay, your exposure, if you want to call it that, is this little piece because really, your financial stability is based on your income streams, your expenses, things that you've done to prepare yourself for movements like this. And we don't know when they're going to come, but we know they're going to come. And so as much as we can.

Just kind of take the right steps in advance and keep things in context of what it means for the individual family that we're serving. That's our ultimate goal. Because it does come down to the confidence of the family and not necessarily the headlines you might be seeing on television.

I really appreciated in the Coronavirus video that you did, you talked about the Serenity Prayer. You invoked the Serenity Prayer and said, it's important that we recognize what we can and cannot control. How have you been counseling people during this time, even if they know intellectually what you just said? Okay, my exposure is relatively limited. We are going to be able to navigate this one way or another. There still must be so many emotions and ups and downs that the families and clients you serve are experiencing. What have you been, what kind of guidance have you been giving during this time?

Yeah, you're right. There's, there's always the, and I often say to clients, there's a number path and then there's the feeling path. You know, the numbers on paper might say one thing, but if that's not going to put your mind at ease and give you the confidence that you need, then maybe we need to adjust it. And so it's, I think it, there is a reframing and I think part of the conversation is going, going back to, okay, where are your real concerns here and how can we.

How can we address them? So whether it's bringing them back to the long term view and say, okay, let's stress test this, let's look at what if ABC happens? Where are your levers? And I think that's really important too for families to understand, like you said, where they have control or don't have control. You know, whenever we, and we really are a financial planning focused firm, we manage portfolio assets as well, but it's in support of the plan. And when it comes to the planning work that we do, so much of it is around liquidity and flexibility. We never want to lock anybody into any particular strategy or any particular product. We are not product salespeople. We're actually on the fiduciary side of the business. So we sell advice, we advise clients and continually building that context around to say, where are those levers, where are your flex points, what can you withstand and what do we need to change? But making it very personalized and always tying it back to the family is the first step.

When you mentioned what your firm focuses on for so many listeners, they may be at varying points. Some have a financial planner, some, some don't. Some feel that they don't have a large enough portfolio to even necessitate that. And then for me, I've always gone through this journey of skepticism to, even if I like accepting and respecting what people like you do, always not sure if I need it. So I'm wondering if you could share for you, even from your perspective as a financial planner and being in this industry and there's so many good, bad and the ugly, you know, what differentiates you and what, how do you see yourself kind of standing out in this space? And I would love to know how you add value to clients.

And how people can think about whether they do want to partner with an outside financial planner, which I'M sure someone like you, I don't want to put words in your mouth, but would say yes, everybody can benefit, just like everyone could benefit from having a therapist or a coach, for example.

You know, I think it's a combination of few different things that make us stand out in our different from many of our other competitors out there. So the number one thing is we do sit on the fiduciary side of the business, which is only about 40%. Actually, I think it's even less than that. I should have the exact statistic, but it's a minority percentage of the financial advisors out there. And so that means that we're held to the standard of putting our clients best interest first, which in my mind all financial advisors should be held to that standard. But that is not the case in our industry. There's kind of two groups of advisors out there and I'm going to use the term advisor kind of loosely. There's actually a lot of, there's a lot of legislation around that right now. Some changes that are going to be coming in June for who can say they're an advisor and who can't. But there's two sides. There's the product sales side and there's the advice side. As I mentioned, we're on the advice side to always put our clients best interest first. And that is actually the minority side. So that's the first thing. I think the second thing is really it is our focus on the planning and the clients.

And really maintaining a balance of what we can do and what we can't do. So first at the kind of top level of that as our name says, Morton Brown Family wealth we only work with families. So we don't manage institutional money. We're not managing large retirement plans like corporate 401ks, things of that nature. We enjoy the family conversations we want to sit across from when we can, when we return to more normal environment, maybe be across the zoom screen right now from families. But we like those connections.

And you can't do that for 1,000 families. So we're very cognizant of how many families we work with and making sure that we can provide that one to one consultation when needed or have the team have a team assigned to the families. And I have to tell you, I'm so amazed we have been proactively reaching out to families that we work with through this market turmoil both up and down and what is the impact mean to them individually. And you know, we pick up the phone and we call our clients very consistently and for some that may have multiple advisors, I can't tell you how many times I've been told I haven't heard from my other advisor in last six months. If that, like, they just, They're. They're so many advisors have too many clients that they're servicing that they can't get in front of all of them. And they can't. They can't spend the time needed to really figure out what's going to be impactful for. For the individual.

And then in that scenario, you're responding to the loudest clients, the ones that are kind of like putting out fires with the ones that are most proactive about reaching out. And then, yes, you do have those families that maybe are thinking, like, even for me, reaching out to my accountant, I'm also almost apologetic, like adding to his pile during such a crazy time, you know. So I love your focus on more intimate portfolio. One interesting part of your story. I don't. Interesting is not really the right word. But you shared that you had a shocking breast cancer diagnosis just six months prior to launching this firm. I can't imagine what that was like for you. And I'm just so curious. This crazy life event. I'm so glad you're through the other side. But happening right, like as you were leaving the 15 years of climbing the ladder and just about to start your own thing. Can you take us back to that time and how you found resilience within that?

Yeah, that was definitely scary. Eye opening.

And really, really in my mind and in my family's mind, reinforced the work that we do and why we do it. And I think, if anything, it motivated me even more so to continue moving forward with the launch of our firm on schedule.

My partner, Dennis Morton.

My husband, was amazing in supporting my husband Deke throughout the entire process. But Dennis was very supportive too. To say, hey, we can pump the brakes. We can shelve this for now. Whatever you need to do really was. Did not provide any pressure. But like I said, it was. It really reinforced. I mean, it. You know, my husband and I, we sat back and we said, okay, what are all the scary things that could happen and how well prepared are we for them? And on the financial front, we were extremely fortunate that we said, okay, we have proper insurances in place. We have great healthcare coverage. We have emergency funds. We know if we need to access other funds, we know the steps we need to take to do it. You know, disability insurance was in place. All, all the things that, that start to. Through your mind when a life event like that happens. We were fortunate enough to say, okay, we've thought about that. And that's our goal for clients, too. They may or may not be thinking about it themselves. Part of our job is to look back with fresh eyes and say, okay, we see a gap here. Let's make sure that we're addressing that, because we don't know what's going to be around the corner.

Tomorrow, in a way, is a kind of a fire drill to get all that in place. And I'd imagine that those same steps that you took or the gaps that you uncovered are supporting you and your family even now.

Yeah, yeah, absolutely.

Yeah. It just, like I said, it really kind of reinforced the work. But also, it also, you know, in launching the firm, too, it gave me something else to focus on and to look forward to and to kind of, you know, not allow my mind to go into dark places for too long and to motivate me to do what I need to do to get healthy and get back on my feet and everything else. Yeah.

Well, I'm so happy to hear you're on the other side of that. And I know how active you are. I know how much you love sports. And just like your health, I just can tell that your health and wellness is something that's really a priority and a big value for you.

Yeah.

It'S funny. So I do. I run quite a bit. I run a lot of half marathons, and I've done half a dozen marathons or so. And just prior to my breast cancer diagnosis, I had qualified for the Boston Marathon, which was a dream of mine to run. And it's just funny how life works out because within 10 days of each other, we launched our firm. I ran the Boston Marathon, and then I had my final reconstruction surgery right afterwards. Just that colliding of life events that you just, you know, you don't know how it's going to happen. So I got through that one. And then I actually recently, well, somewhat recently re qualified to run Boston. I was supposed to run Boston last week, a couple of weeks ago, April 20, but they postponed it, of course, because of the virus.

So it's just funny how big events are occurring around that marathon. This might be my last go around.

We'll see, right? Maybe I'm going to switch cities, for which.

Wow, what a crazy confluence of events is. Right. I've been getting asked a lot lately of how people can set career goals right now and whether they should, whether it's a good time to change careers. I'm curious to turn the tables over to you on financial planning during this time. Can people do it? How can they do it? How do you help your clients plan for and through such an uncertain financial future?

Yeah, so, yes and yes.

I think actually going back to that first question in the beginning there, just asking if people should be switching careers and how to think about that. I actually think this is an incredible opportunity to think critically about what you do and how you can invest in yourself during this time. And I'm not necessarily talking with dollars and cents. It could be low cost. But how can you figure out ways to grow intellectually and build your skill set to either.

Come back.

In the case if you're furloughed or if you have concerns about that? How can you come back stronger, either in your current profession or potentially switch to a new one? I think this forced kind of additional time at home is. That's a great activity to take on. I also think financial planning is a great activity to take on right now and go through your financial files, figure out. Organize what's there, figure out where all the pieces are. I think so many times people look up and they realize, oh, I've changed careers a couple of times or changed jobs a couple of times. There's a 401k there and a 401k there and maybe an IRA there. Figuring out where all of those pieces are.

You know, this is just an opportune time for that and to have those deep conversations with your spouse or loved ones to figure out, what are the important things here.

Where.

Where do we want to go in our lives and how do we start to build that path forward.

Really, really good, you know, reflective questions, I think can be, you know, brought up right now.

I love what you said about how can you invest in yourself during this time. That's so good. And in your Setting financial Goals video, I loved the four questions you encourage people to ask. What did I learn last year? What am I proud of? What would I have done differently? And what adjustments can I make?

Mm.

I'm curious to know after 20 years in this business, and I would imagine that the families that hire you clearly have money to manage, so they're. They're savvy to a large extent. But I wonder what the biggest blind spots are that you still see among your client base.

You know what? And it's really interesting.

You're right.

We do work with a number of very savvy clients. We also work with a number of clients that I think it's expected or assumed that they maybe understand Investments and their financial picture perhaps better than they do, and they're comfortable saying, hey, I don't understand what you just said, or I, you know, feeling like. And people will come to us. Some clients come to us because they feel as if other advisors have talked over their head without putting the energy into finding out where they are and meeting them where they're at.

So.

I think that's an important step in building a relationship with a client, is trying to understand kind of where they are.

And I'm going to apologize because I forget now the second part of your question.

Oh, it was really just around blind spots and sounds like one is just being willing to admit what you don't know. And I can imagine that for some, yeah, it's intimidating. They want to just say aha, especially with finances. Talk about another pet peeve in the industry is, like, all these sliced and diced derivatives and.

Like, the whole 2008 crisis and just seeing what a frigging house of cards so much of it is. Just like, I just can't believe that the stock market, at least in the US Is comprised of so much rigmarole of, like, invisible sliced and diced assets that aren't even tied to the dollar. Like, it just seems like this giant game that a lot of the industry is playing. And then I can imagine on the client perspective, there's this. Of course, you want to imagine that you understand it all or indicate that you understand what's going on. And yet there's so much unnecessary bloat and complexity of financial products that are out there or what people are doing for their these day jobs. I don't know. There's a rant. But I can understand why clients would. Why anybody would be confused. Because it's confusing.

Yes, yes. And we feel very strongly, if we don't understand it, we're never going to. We're never going to recommend it. I mean, it's not something that we will put out there if we don't have the understanding. But also even to say to our clients, if you don't understand something, let's, you know, let's walk through it and not necessarily say it in that way, but just kind of, you know, throughout the conversation, see if we can gauge the understanding, make sure they're comfortable where we're going. But you're right, I think that investing. Investing can be very simple, but it's not necessarily easy.

And there are unnecessary complexities, I think, that can be brought into the picture that don't necessarily further you in where you're trying to go. At least that's our personal belief.

Going back to the blind spot question, I think the part two that you mentioned that I was getting at is what do you see among let's say new clients, starting with your firm, that most people are missing or that most people haven't yet given thought to or some gap in action or understanding that you're most often needing to either educate or guide clients toward that they're not already doing.

Yeah, I do think that there is on the investing side a couple of themes that we pick up on especially coming off of the past decade. Just.

The thought of or the affinity to only investing in large cap US Stocks. Just saying, well if I just buy large cap US stocks then I'm fine and that's all I need to do. So kind of under appreciating the benefits being diversified and and how those play roles during different market cycles.

Looking at the 2000s, the first 10 years of this century, international stocks led the charge. But I think that gets forgotten sometimes really understanding that there's more beyond US large cap stocks then I think the other piece of it once again on the investing front is recognizing that sometimes the best thing to do is not do anything at all. To not be reactive, to.

Have the patience to let a strategy work. And once again kind of going back to diversification. Recognizing that if you truly are diversified that means that something's underperforming, something's performing very well, but something is underperforming and that's okay because we're not going to time it, we're not going to get it perfect. And I think sometimes people are either coached through.

I'm going to say stock picking advisors but that's not necessarily the best path forward or they may have been managing their own funds and so they invest in what's familiar to them. And that's typically US companies. So I think that's those are sometimes blind spots that that potential clients walk in with.

You couldn't see me over here, but I had bells of excitement ringing in my mind when I was listening. This is so good. If you are truly diversified that means something is underperforming. That is so epic. I mean I've heard about and I started my very first personal development books that I read in my early 20s were on personal finance. It's something I've always been interested in. I always saved my birthday money as a child. Like how weird is that? I didn't buy things, I just put it in a bank account.

That is awesome. I love that yeah, it was a really weird.

I didn't know about the marshmallow test at the time, but I would do that essentially with my money. I wouldn't. And maybe that speaks to some weird child psychology issue, who knows? But I would put it in the bank and I saved it and was really proud every year of that savings. But. So I've heard about diversified portfolios and I even talk about having a diversified pivot portfolio, whether you work for a company or you have your own business. Diverse and multiple streams of income. But I've never heard it put so clearly that if you are truly diversified and doing that right, it means that something, whether it's in your financial portfolio or your pivot career portfolio, something is underperforming and that's actually a sign of success. What a cool thing to realize.

Yes. I think coupled with that is so something's underperforming in the short term. And I mean that's looking at it through the lens of a long term investor. So a long term investor, that diversification is going to pay off, but in the short term, yes, something's not going to be performing the same as everything else or the same as others perhaps in the portfolio. But that's okay.

And I would extrapolate that in a career sense, like right now with the Pandemic. I've recently did a webinar 10 scalable streams of solopreneur income. Clearly some of those 10 are frozen, they're not working. And that's in the short term, but it doesn't speak to my long term enjoyment, energy, traction, et cetera. And then on the flip side, sometimes we, in a career sense, we are going to look at what's underperforming and say, am I in this for the long haul? Do I know for sure that this is something that I love? Or is this underperforming and that is actually a sign to shift that piece or let go of something.

Right. Right.

I also really appreciated your framework for charitable giving. See, this is why I really resonated with all your coffee videos. Coffee with Katie. But I love yours. These very simple frameworks. And the videos were short, they were easy to watch, easy to listen to your framework for charitable giving. And I want to just have this on the Pivot podcast record, if you will, because maybe people are, some are really struggling during the Pandemic, but maybe others are wondering how can I help? And if you're wondering about that in a giving sense, Katie shared. There's really three categories at least. And I'm you can speak to this more than me, but impulse giving, maybe you loan money or give a gift to a friend or community member, annual giving, the organizations that you support. And I've heard a lot of organizations say if you can just give a monthly subscription, like you're almost signing up for a monthly subscription of donation, so that it's not always a decision, it's more automatic to the ones you care about. And then the third category is impact giving. So we'd be bigger one off gifts. Is there anything you would add, Katie, and anything that might be specific during. For the times that we're experiencing?

Yeah, and thank you for bringing that up. I actually, I love talking about charitable giving and I do think that that is a framework that works well for a number of clients that we work with. And in my own personal family as well, I think, you know, going to the impact giving for just a minute. So not to get too far into the weeds, but one of the things that we've.

Help our clients with too is, you know, different strategies, different charitable strategies that you can utilize. So we have, and actually our firm does as well. We have a donor advised fund at our community foundation, our local community foundation. And what that is essentially is it's an investment account that you make charitable contributions to. And when you make, when you contribute to a donor advised fund, you can create a donor advised fund, you know, at your local community foundation, as we have, or with your custodian. We have a couple of clients that have them, you know, through our custodian, Charles Schwab.

You could, you know, have it at Vanguard, wherever. But when you contribute to it, you get a charitable deduction when you contribute, but you don't have to that money you can accumulate, that you can grow, that you can, you know, send out smaller grants or you can make large gifts from it. And I love that it's kind of a holding bucket until you reach those impact gifting levels where you say, okay, now's the time. Now's the time that I really want to support this organization. Now's the time that, you know, something is really needed or whatever the case may be. So that's, that's an area that right now in this pandemic.

We'Re seeing a lot of distributions from those donor advised funds because that's something that was prepared for and planned kind of in advance, not knowing that this would happen. But it allows people to be very charitable right now. So that's just an example of one. Or there's, you know, there are other strategies that qualified Charitable distributions from retirement accounts. If you're fortunate enough to be in a position where you don't. Where you maybe have excess funds inside of your retirement account and you want to gift those to charity, there are huge benefits to gifting directly from your IRA to a charity, and that doesn't show up as income to you. Otherwise you'd be taxed as ordinary income. But taking advantage of some of those things during this time, if you're in a position to do so, I think you can truly make an impact.

Wonderful. Thank you so much. Katie, is there anything that I didn't ask you that you think would be important for listeners to know or take action on when they're finished listening to this episode?

Thank you so much for listening to some of the videos or pulling up some of the Coffee with Katie videos. I am very excited about, about that initiative. We launched that toward the end of last year. And a lot of the thought process behind it was to help connect well and actually, let me just explain. So there's two parts to my coffee with Katie. There's a coffee hour gathering where I typically invite a handful of women and we get together for coffee or now virtually, and then we have a financial conversation. But it's very casual. I mean, it's like this. It's an opportunity for us to share stories and to learn from one another.

And then I take some things that I learned throughout the conversation and I create a little video to share it back out. So it's kind of access to financial planning through the videos. But.

I appreciate that you listen to those. That is something that we're definitely excited about. And I think throughout this process, my partner Dennis, and you kind of touched on this earlier, too. He's recently launched a podcast, Leading With Purpose. And as you said, our mutual friend Dr. Mike Consuelos, he was one of the guests on Dennis's podcast. He's definitely a friend of the firm and somebody that we think very highly of. And he just has such a wealth of knowledge as you've shared with your listeners through your many podcasts with him, too. I just love that you're doing that.

But we're trying to help bring another help bring some leadership knowledge and share it with. We work with a lot of small business owners and a lot of businesses and just once again, kind of building that community. So trying to bring some resources forward. So really excited about that as well.

Wonderful. Thank you so much. Congrats on these pilots that you're running in your business. I love seeing how you're making all of this accessible for people, whether they work with your firm or not. Where can people find you if they wanna learn more and watch some of your coffees with Katie?

Sure.

So our website, mortonbrownfw.com they can visit us or on LinkedIn or on Facebook or if anybody wanted to reach out to me directly, I would welcome that as well. My email is kaybrownortonbrownfw.com amazing.

Thank you so much Katie and listeners. I'll put all of these links in the show notes as always@pivotmethod.com podcast. Thanks so much Katie. Thanks everybody.

Thank you Jenny. I really appreciate what you're doing. Really loved being a guest. Thank you. Thank you.

Thanks so much for listening to this episode of the Pivot Podcast. Make sure you don't miss an episode or my insider tips and templates by signing up for Pivot List, a curated twice monthly newsletter where I share the inside scoop on what I'm reading, watching, listening to and the latest tools I'm geeking out on. Sign up@pivotmethod.com pivotlist get show notes from this episode@pivotmethod.com podcast and connect with me on Twitter @jennyblake.

Remember, build first, then your courage will follow. Hasn't it always.