Jeff Mattonelli is a financial advisor at Van Leeuwen & Company serving clients and members of the firm’s Rembrandt Society℠ helping them plan their Life Visions and investment needs.
Russ Alan Prince: As a Millennial yourself, why do you feel that it is important for millennials and GenZ to work with a financial advisor?
Jeff Mattonelli: I feel very strongly about working toward your financial freedom as early as possible. Financial literacy is an under-prioritized part of the United States education system. It is not surprising that many young professionals enter the workforce without all the necessary tools to fully take advantage of the financial opportunities that are available to them. The path to long-term financial success is a marathon, not a sprint, and just like a world-class marathon runner, the journey starts with a single step. You will experience challenges and failures along the way, and the earlier that you begin planning for your financial future, the more time and experience you will have to adjust and continue on a path to success.
This is where a financial advisor is invaluable to millennials and Generation Z. A trusted financial consultant plays a vital role, especially for a younger clientele, in educating, goal planning, and implementing financial strategies. Let’s start with education.
At its core, financial planning is all about understanding what financial goals you have—both short and long-term—and making conscious, disciplined decisions to achieve them. Simply setting financial goals may be a foreign concept to someone at the beginning stages of their financial planning journey, so a trusted financial advisor can act as a sounding board to help work through identifying specific goals.
Once goals are evident, education continues and evolves into the planning phase. An advisor can help you understand what you need to do to achieve your financial goals and bring to light the myriad financial strategies that can be utilized. Whether it is utilizing employer-sponsored retirement plans for retirement savings, protecting yourself and your family through various insurance coverages, or saving for a child’s education through 529 plans, a financial advisor can define all the options available, along with each of their benefits and shortfalls.
Implementation is another critical role for an advisor. Life is hectic and distractions exist around every corner. When relying solely on yourself to implement financial strategies, it is completely reasonable to understand why decisions may not get made when life gets in the way. This is where a financial advisor can significantly impact one’s financial success.
An advisor’s role is to keep their clients accountable for following through and executing agreed-upon financial decisions which may have otherwise fallen through the cracks. As more strategies are implemented, the progress made can be tracked and reported to the client, and changes can be made as necessary.
Prince: What about young corporate executives, what are their biggest obstacles, and as an advisor what are the advantages of working with them?
Mattonelli: One area that Van Leeuwen & Company is focused on within these generations is young corporate executives at public companies. The challenges and opportunities this group experiences are unique, even amongst the general members of the millennial and Gen Z age demographic.
We find that young corporate executives tend to be an underserved demographic in the financial planning industry. Many of our corporate executive clients receive stock compensation as part of their overall compensation structure. Whether through incentive stock options, restricted stock units, or performance shares this structure presents a unique opportunity for these young executives to build wealth as they grow within their company, and as their company’s stock grows alongside them. On the other hand, we often find that corporate executives have a good portion of their liquid net worth tied to the companies they work for.
Some advisors may see this as more of a challenge than an opportunity because much of their investable assets are tied up in company stock. Van Leeuwen & Company views this as a unique planning opportunity. Through our many years of experience, we have seen how public company stock can be one of the greatest wealth generators that a person can have. This is an opportunity for advisors to invest in these young corporate executives and help them to make crucial financial decisions early on.
Prince: Are there any particular strategies you use to help young corporate executives build wealth?
Mattonelli: Being that much of their compensation and wealth is tied to their company, we educate our corporate executive clients on their concentration risk and develop strategies for them to take advantage of the growth in their stock, while opportunistically selling shares when appropriate. We are very mindful of their cash flow needs and understand the liquidity challenges they face with their company stock. Their stock is often subject to blackout periods where they are only able to sell shares during designated timeframes, a critical aspect of our work with them.
We help our corporate executives take full advantage of their benefits packages outside of their company stock compensation. Utilizing opportunities such as non-qualified deferred compensation can be another great way for them to grow their retirement savings above their 401k plan and take advantage of tax savings in the years in which they contribute.
Aside from the vast planning opportunities that are present in this group, we thoroughly enjoy our work with young corporate executives based on personal fit. We find largely that this group recognizes delegating financial strategy and decision-making to their team of professionals helps them focus on their demanding careers and blossoming personal lives.
RUSS ALAN PRINCE is the Executive Director of Private Wealth magazine (pw-mag.com) and Chief Content Officer for High-Net-Worth Genius (hnwgenius.com). He consults with family offices, the wealthy, fast-tracking entrepreneurs, and select professionals.