How to Pick The Right Financial Advisor For You, An Interview with Stephanie McCullough
Stephanie McCullough is a financial advisor and the Founder of Sofia Financial, a holistic financial planning and investment management firm based in Pennsylvania. Stephanie works with clients in all 50 states and she has committed her practice to creating a safe, non-judgmental space where women feel comfortable talking about personal subjects. Stephanie is committed to listening to her clients and creatively strategizing with them to come up with financial plans that put the client’s priorities, preferences and values at the forefront. In this article, Stephanie shares advice on the importance of taking an educational and holistic approach to financial planning.
Stephanie McCullough was interviewed by Divorceify Co-founder, Sonia Queralt.
Sonia: Please tell me a little bit about your role as a financial advisor in the divorce process?
Stephanie: I have been a financial advisor for 21 years, 9 years in my own business, with a particular focus on working with professional women who are coming out of divorce.
It’s very common for couples to have a division of labor, where the wife takes care of certain responsibilities for the household, and the husband deals with other things. Very often the woman has not been in the role of having to make the big picture money choices. Then after a divorce they have so many financial decisions to make, it can feel very overwhelming.
There are a lot of traps we can fall into. Some women get one big lump sum settlement. It feels like a lot of money at the time, but how on earth does she turn that into income to support her standard of living for the rest of her life? Many women receive alimony and maybe child support for a certain number of years, but then it goes away. How does she plan for that? Will she have to go back to work? If so, how much will she need to earn, and by when? Does she reduce expenses after the kids go to college by leaving the high-cost area with good public schools? All those kinds of questions really are challenging for individuals to think through.
I work with clients, either on a project basis to get their arms around their stuff, or on an ongoing basis to implement the plan and help with accountability and overseeing their finances and investments.
Sonia: There is a lack of understanding in terms of how important it is to shop for the right professional, so what should people be thinking when they know they need a financial advisor and yet there’s so many different types of financial advisors, what do they need to be looking for? How can people shop for the right financial advisor for them?
Stephanie: There’s a lot of different flavors of advisors and different services that someone in the financial world can provide for clients. Whether they call themselves a financial planner, financial advisor, investment advisor, or wealth manager – any of those titles could mean the same or different things. What someone calls themselves is not the key piece of information to look at.
The first thing I ask anybody who I talk to is, what do you want to get out of working with an advisor? What are you hoping I can help you with? Where do you want to be after working with me? That helps me figure out what questions are they struggling with and what I need to help with. I always say I can never tell a client what to do with their money until I know what it’s for. Money is just a tool. It’s serving a purpose in the client’s life, so unless I know what that purpose is, I don’t know what to suggest. Clients should look for an advisor who doesn’t judge them, but objectively looks at their situation and gives the client the best advice for their unique situation and priorities. That is more important than what company that advisor is with or the title they call themselves.
Sonia: What are some of the most common financial mistakes that you see clients make?
Stephanie: Postponing making a decision. This I feel women fall prey to this more than men. They’re worried they’re going to make an error, so they’ll just put it off for another day. Whether that’s, “Okay, I have a divorce settlement and it’s going to sit in the bank, because I don’t know what to do with it,” or “I got these stocks that came from my spouse, and I don’t know what I should do with them, so I just leave them in stocks,” that’s not always the right answer, right? I believe the trouble can stem from fear of outside judgment as well as self-judgment. Looking at this stuff can get really vulnerable, really personal, really emotional, it’s kind of like going in and drawing up your Will, right? You’ve got to face all that stuff and it’s so much easier to postpone it. It’s a human thing.
But being able to face the facts, face your current situation without judgment, is a hugely important first step. And sometimes that takes a helping hand, both to help translate the financial language, and to remind you not to be so rough on yourself. No self-bashing allowed. I think we beat ourselves up for beating ourselves up. We get in these cycles like, “Oh, I’m so terrible, because I haven’t looked at that in three years, so therefore, I don’t want to look at it anymore.”
Sonia: When clients initially come to you, what are some things that clients do not think about regarding their financial future that they should be thinking about?
Stephanie: The first thing that jumps to my mind is doing the mental math around cost of living and inflation. So for example, if a client needs $50,000.00 a year to live today, in 10 years they need a lot more than $50,000.00 because of inflation. Computers are really good at doing that math, and it’s just a few clicks of my programs to help people with that.
The other big one is to realize and put a value on all the things mothers do for their children. If the mother wasn’t around, it would take money to replace what they do, so that means there needs to be some life insurance. Many couples tend not to have insurance on the “non-working” spouse, which is most frequently the mom. Clients need to think about not only if it all goes right, but also need to spend a few moments on what if something goes wrong.
Sonia: What is the one piece of advice that you give to all of your clients?
Stephanie: I emphasize to everyone that in the area of money, finances and investing, you don’t have to know all the answers. You have to know the questions to ask – and have the guts to ask them. Because no one teaches us about money, we didn’t learn it in school, and most of our families didn’t talk about it openly, so how on earth are we supposed to know?