Dean Vagnozzi: “Here Are 5 Things To Look For When Hiring a Financial Planner or Financial Adviser”
Know what kind of financial shape that person is in. I always want my loved ones to deal with someone who’s successful — simply because it takes the pressure off the sale if the financial professional isn’t counting on their money to ensure that their bills are paid.
As part of our series about what one should look for when hiring a financial planner or adviser, I had the pleasure of interviewing Dean Vagnozzi. Dean is a 50-year-old financial entrepreneur and President of A Better Financial Plan, LLC who believes in making your money work hard for you, now. Unlike typical financial planners, Vagnozzi will suggest you avoid a 401K and IRA and will tell you not to pay off your mortgage ahead of time. If it’s locked up in retirement accounts or paid ahead into your mortgage, it can’t be accessed until much later in life and waiting is simply not Vagnozzi’s style. Upon graduating from Albright College in 1990, Vagnozzi began his career in accounting. Three months later, he knew the repetitive, solitary profession was not for him and found himself in a successful sales career at SAP, Deloitte Consulting and Anderson. The career allowed him to explore creative investment strategies and begin studying wealth management in earnest. After enrolling in seminars, reading literature, researching and successfully testing his unorthodox money management tactics with his own money, Vagnozzi took the leap and formed his own financial planning firm: A Better Financial Plan in 2004. Since then, he has amassed a significant client-base made up of smart investors who, like himself, see a better way to enjoy retirement outside of the typical 401K and IRA plans. A Better Financial Plan highlights his thought process behind his successful, non-traditional strategies. Vagnozzi resides in Collegeville, PA with his wife, Christa. They have four children: two girls and two boys between the ages of 16 and 23. Though four children leave little room for extracurricular activities (he wouldn’t have it any other way), Vagnozzi can be found on the golf course or laying poolside when he does have a few spare moments.
Thank you so much for doing this with us! Our readers would love to ‘get to know you’ a bit more. Can you tell us a story about what brought you to this specific career path?
After graduating from Albright College in 1990, I spent three whole months as an accountant before I realized that crunching numbers for other people would be too repetitive and solitary for me to enjoy doing for the rest of my life. I wanted to work directly with people instead, which then led me to a successful sales career at SAP, Deloitte Consulting and Anderson. There, I was able to save money and really dive head-first into exploring more creative investment strategies. I began studying wealth management in earnest by enrolling in seminars, reading and researching unorthodox money management tactics and testing those ideas with my own money.
When those tests proved to be successful for myself, I got excited about the opportunity to help others achieve the same results and quit Corporate America to form my financial planning firm in 2004.
Can you share a story about the most humorous mistake you made when you were first starting in the industry? Can you tell us what lesson or takeaway you learned from that?
When I started out, the first application I took was a life insurance application for a couple. As soon as they finished filling it out, I had knocked over a tall glass of water and spilled it all over their paperwork, forcing them start the process over. From that experience, I not only learned to put the water away for next time, but I also was reminded that, at the end of the day, we are all human. Mistakes like this can — and will — happen, and they shouldn’t be taken too personally.
Are you working on any exciting new projects now? How do you think that will help people?
I am currently working on forming a registered investment advisory firm (RIA), which will allow my clients to optimize their traditional stock market investments in addition to their alternative investments, giving them more opportunities to diversify their portfolios.
Are you able to identify a “tipping point” in your career when you started to see success? Did you start doing anything different? Is there a takeaway or lesson that others can learn from that?
There were two pivotal moments that lead me to where I am today. The first was when I put the cash value of my life insurance to use by investing in real estate. I read a book called Rich Dad’s Guide to Investing and realized that the money I had tied up in the stock market was not accessible. Many people think that life insurance is a bad investment because it typically yields such conservative returns; but the key fact they are forgetting is that money is liquid and can be put to use.
The second tipping point was when I learned to scale my investments by pooling money with other smart investors. When I started investing in real estate with my liquid assets from my life insurance policy, I was buying and flipping single family homes. Once I was able to bring in additional resources from investors, we were able to replicate the process and fund the development of entire shopping centers.
What three pieces of advice would you give to your colleagues in the finance field to thrive and avoid burnout? Can you give a story or example?
1. In order to be really successful, you have to work a lot of hours. In order to work a lot of hours, you have to be passionate about what you do. I look forward to coming to work every single day and it is that passion that inspires my work ethic and success.
2. People in this business need to find creative ways to stand apart from the rest. For this reason, it is important to find your niche and focus on the alternative solutions first.
3. The only way to help people is to get them to come to you in the first place. For that reason, I say financial planners should put a top priority on their branding and not be afraid to invest in themselves and their business. I have tried and failed with a ton of different marketing ideas, from billboards and radio ads all the way to putting up posters above the urinals at the Philadelphia Spectrum!
Ok. Thank you for all of that. Let’s now move to the core focus of our interview. As an “finance insider”, you know much more about the finance industry than most consumers. If your loved one wanted to hire a financial advisor (not you :-)), which 5 things would you advise them to find out about before committing? Can you give an example or story for each?
1. Know what kind of financial shape that person is in. I always want my loved ones to deal with someone who’s successful — simply because it takes the pressure off the sale if the financial professional isn’t counting on their money to ensure that their bills are paid.
2. Know if they have the same investments that they are recommending to you. I have shown my own investments and bank statements to clients, showing that I stand by the strategies I am recommending enough to use them with my own money.
3. Make sure they have a team of people around them. Your financial firm of choice doesn’t have to be a large one, but I always recommend going with one that offers a team of support.
4. Go for the Independent Firms. Independently owned firms are more likely to offer a wide range of investment products to their clients and are more likely to act in the best interests of their clients because they aren’t being forced to push products associated with a large company.
5. Make sure they have a positive track record. If you are working with a veteran financial planner, it should be incredibly easy for them to prove their success over the past decade and clearly show you the kinds of results they have achieved for other clients.
I think most people think that financial advisors are for very wealthy people. This is likely not actually true. Can you explain who would most benefit from hiring a financial advisor and why? Can you give an example?
Honestly, anyone and everyone can benefit from hiring a financial planner because there isn’t a single person in the field with a monopoly on all of the good ideas. The demographic I enjoy working with most is middle income families because they are the most underserved. These families are generally more eager and receptive to new ideas, allowing me to help them to the best of my ability.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
I would absolutely not be here today without the love and support of my wife, Christa. When I decided to make a career change at 35 and leave behind the security of the software sales business, she was the one who kept the normalcy at home and never allowed me to give up my ambitions and settle for mediocrity.
As I was editing this interview, I came across an article in the Philadelphia Inquirer about your settlement with the State Securities Agency. We’d like to address this here. What is your statement about the settlement?
We would like to take this opportunity to set the record straight. The Philadelphia Inquirer’s business columnist Joseph N. DiStefano has written a misleading and inaccurate story about our business.
Mr. DiStefano’s article concerned a dispute that was settled with the Pennsylvania Department of Banking and Securities. In short, Pennsylvania regulators alleged that I acted as a securities broker when I introduced the Complete Business Solutions Group, Inc. (Par Funding) Merchant Cash Advance Investment to 120 investors between August 2016 and December 2017. They claimed I needed to have a securities broker license to sell the investment, which I did not have at the time.
The Philadelphia Inquirer article focused exclusively on this legal technicality, but completely omitted that the state regulators who investigated the Merchant Cash Advance (MCA) investment did not find any problems. In fact, the state maintained that none of the Par Funding investors lost any money and confirmed that the rates of return for the investor notes were between 14%-20.5% per annum. In addition, the settlement agreement with state regulators was reached with no admission of liability.
Although our lawyers could have defended the case and taken the matter to trial, we would have risked fines of $50,000 for each of the 120 people who invested in MCA during the time period in question. Fines could have exceeded $6.3 million dollars, in a worst case scenario. So, rather than risk an outcome that would impact our investors, we settled the case for a relatively modest $490,000.
In addition, the Philadelphia Inquirer article failed to report the following:
● The alleged violation happened more than two years ago.
● Not one client has complained about the investment or lost a single penny.
● The allegations made by the Bureau were technical in nature and did not involve any claims of fraud, dishonesty or the like.
As a result of this case, we have amended our products to ensure every investor invests through a private placement fund. These private placement documents are 100% compliant with state and federal securities laws.
Thank you for sharing that with us.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
I would love to continue educating clients in their 50s about financial stability and the art of strategic sacrifice. This demographic has worked for so many years — only to have nothing saved because they have always put the needs of their children before their own. But the truth is, by not looking out for their own financial futures, they are putting unnecessary financial stress on the very people for whom they made sacrifices.
How can our readers follow you on social media?
Thank you so much for joining us. This was very inspirational.