TMS #3 First Draft

Gavin Parker shares his journey from studying psychology and religious studies to joining his father's tax and accounting firm and eventually becoming a financial advisor. He faced challenges and self-doubt in the early years but persevered and found success. He also realized that conventional financial advice often had negative tax consequences and decided to educate himself and his team to provide comprehensive and tax-intelligent solutions. The firm has experienced significant growth, with a team of four financial advisors, two administrative personnel, and seven full-time tax advisors. So first of all, thank you for coming on the show. This is the first time I'm having, and I'm really excited. I just wanted to get a little bit of a background for the audience that's listening to us on who Gavin Parker is and who Parker Advisors is. All right, thank you, Ismail. Glad to be here. I'm excited to be on your show and excited to have you really get rockin' and rollin' here with the podcast. Yeah, so I think for that, we need to go way back. So to start the story here, I'm the son of a CPA. My dad has been in public accounting since the late 1970s. This is the roots of Parker Advisors, of our firm. Started as a tax and accounting firm, preparing taxes, doing accounting, bookkeeping, and other payroll services for his local clients here in southwestern Idaho and eastern Oregon. I saw how hard my dad worked, the long hours, the late nights during tax season, trading hours for dollars, really, and decided that I didn't want that career. And so what did I do? Well, I went to a small liberal arts college that didn't offer an accounting degree to ensure that I wouldn't follow in his same footsteps. But all joking aside, I graduated from college with degrees in psychology and religious studies. Studying the religions of the world solidified my Christian beliefs, while studying psychology gave me a deep understanding and appreciation for how people think and act. I gotta say, I use my psychology every day in this profession, as I know that you've learned as well. So I was planning on going to graduate school to become a therapist, but balked at the steep price tag of graduate school and decided I'd better reset and rethink my plans. So this was 2002, and just about a month before graduating from college, I married my high school sweetheart, Annie, and we were expecting our first child that year. So if that's not motivation to go out and start making some money to provide for my new wife and unborn baby daughter, I don't know what is. I was a little scared and knew it was time to grow up and start adulting. And so actually, I kind of circled back to my dad. We hatched a plan, and I joined his tax and accounting firm to start a new division and implement wealth management for our clients. He and his partners had had some bad experiences referring their tax and accounting clients to other financial advisors in the area who just didn't have the client's best interest at heart. And really, to put it mildly, about that time, state laws had changed to allow for CPAs to begin working for or earning commissions to sell investment products. And they decided to bring these wealth management capabilities in-house, and I was the guy to figure out how to do it. So although my background was in psychology and religion, I always enjoyed numbers, was pretty good at math, and was interested in investing. So I started studying for my licenses to become a financial advisor, while also learning to prepare taxes and understand that side of the business. And after passing my exams, it was time to start being a financial advisor, which, yeah, was easier said than done. So talk about being thrown into the deep end without any swimming strokes. Although the exams gave me the basic knowledge to get me started, and I was getting pretty good at preparing income taxes, I had no experience and no mentor to show me the ropes. So at that time, our broker-dealer was known as HDVest. They didn't have the resources and training capabilities that our current broker-dealer, Vantax, does today. I was trying to figure it all out as I went along. You can say that I wasn't a very confident advisor in the early years. I remember those first clients. I was just a 22-year-old kid, not a penny to my name, hungry just to pay the bills, trying to give good, sound financial advice to these prospective clients. And all the while, I was thinking to myself that I'm a fraud and they're gonna figure me out. You know, just no confidence. They could definitely sense my fear and apprehension. And needless to say, I wasn't a very good salesman in the beginning. I'm sure you've had a time, you know, for our listeners out there and all of us in our lives when we've felt this way. It's not fun to be in a place where you don't have confidence in yourself or your abilities. The saying, fake it till you make it, that was definitely me in the beginning. It was my mantra, really. Didn't want this feeling to last and willing to do anything to move past it. So thankfully, I have a passion for helping people. That's why I was considering therapy and the psychology profession in the first place. So I made a commitment to learn and grow and succeed. And so I started reading everything I could get my hands on about becoming successful in this industry of financial services. I kept meeting with potential clients and doing my best to help them on their path to their financial goals, you know, implementing what I was learning. And this period early in my career, Seth Godin, a famous author, calls it the dip. And it's this period of time that's really a grind. You know, you're working hard, you're learning, you're continuing to push forward, push through, and grow until you can start to see some results and some light at the end of the tunnel. But it's a dark time, it's an uncertain time. Most people are not willing to endure the dip in whatever it is that they're endeavoring to do. And they quit and switch gears and try something new before they push through to the other side. And, you know, I'm sure most people listening can relate. But it's so rewarding to persevere through those dark days and come through into the sunshine, so to speak. So thankfully, I made it through the dip. It probably took three or four years, really, to get the wealth management business off the ground and running. And that's when I knew I was gonna succeed in this business. So the more I learned, the more experience I gained, though, you know, the more people we were able to help. But still, in these early years, you know, maybe four and five years in, it still, it didn't feel perfect. It didn't feel like it was complete help. I started to see some emerging patterns in our industry. And among, you know, experts out there that just wasn't sitting well with me, following conventional wisdom seemed to have some unintended consequences, especially in the realm of taxes. So since my expertise was at the intersection of wealth management and income taxes, I felt I had a unique and comprehensive perspective and really had become tax intelligent through this journey and began to realize that a lot of the conventional wisdom was not tax intelligent, far from it, in fact. So, you know, really found that, it was kind of my aha moment, that conventional financial services advice often causes bigger tax problems or is a drag or a detriment to the tax side of the equation and often did more harm than good. So maybe we can talk about this a little bit later in the conversation, but that was kind of the initial journey and to the career that we're in. For those that listened to the first episode, I talked a little bit about my growth, but it's been really exciting being here for almost five years now with you, Gavin, the growth that I've seen in just these five years. But maybe before we move on to our next point, talk about the growth that we have had as a firm, because it all ties back to the rest of our points and it's just that education point that you're excited about. And I talk about how, when I first got started, I was watching Dave Ramsey and watching you, and the thing that I saw that both of you guys had in common was just a passion towards educating others. Yeah, it's kind of an internal thing, but I have a mantra in it. It ties back to the children's book, Old MacDonald. It's the E-I-E-I-O kind of chorus there in the book, but I've got an acronym for that, and it's to educate, illuminate, empower, and inspire others and that's really at the heart of what we do. And really, you could argue any profession that you're passionate about and you wanna share your knowledge and your experience with others, it starts there with that why, as Simon Sinek would say, but that desire to help others to learn, to grow, to develop. And so, at Parker Advisors, we've definitely adopted the mindset of lifelong learners, and if you're not growing, you're dying. So, you've gotta continue to push yourself and it's about that journey, too. That's the fun part, is who you can become along the way as a person in continuing to push yourself. And so, we pivoted, I mean, there's always been a tax and accounting team. After those first few years, I've always had at least a wealth management assistant helping me, but probably about five years ago, about the time that you joined the firm, Ishmael, I pivoted to, and kind of changed my mindset to one of, I'm gonna just be this solo ninja financial advisor just doing everything myself with the helping of an assistant to trying to grow and leverage a team. And in doing that, what, you know, it's been so rewarding for me to share my knowledge, my experience as an advisor, and not just help our clients, but to be able to empower others on the team to grow and develop and start their own journey. And so, that's been really, our accelerated growth has been leveraging others on the team to help us grow, and we really have been moving forward exponentially these last four or five years. Maybe mention how many advisors and accountants we have to really show the growth. Yeah, so today we have a team of four financial advisors and two administrative personnel, and so kind of, you know, one administrative person for every two advisors. That seems to be a pretty good ratio. And then on the tax and accounting side, we have a team of seven full-time tax advisors and professionals, and then some seasonal help as well during tax season when things are extra busy around here. So, the team's really grown a lot over the years, and it's been fun to be a part of it all. What is unique about Parker Advisors, and what is the importance of a tax-intelligent financial advisor, as you mentioned? So, since those early days as a tax and accounting firm, we, as I said, we've continued to grow and evolve. We've got this diverse team of both tax advisors and financial advisors. Although we're two divisions, we work very closely together as we integrate the advice and solutions we provide to our clients. To this day, we continue to lead with taxes, as we call it. Everything that we do starts with our clients, or prospective clients, tax return. This really must be the starting point to be tax-intelligent, because taxes not only impact, but also really permeate all aspects of our financial lives and planning. So, of course, there are other firms out there that have included tax planning in their process and their approach, to some degree, but at Parker Advisors, taxes are really foundational. They're part of our DNA. We are tax professionals first. We are also financial professionals. We never have to say, use the disclaimer, please consult your CPA for tax advice. We definitely provide this advice, and we don't have to disclaim that. So, right here, in-house, we can give that tax advice with our team of CPAs and tax advisors. So, I have a little equation that kind of sums it up, and it's TA plus WM equals PA. And what that means is, TA, tax and accounting, plus wealth management, WM, equals Parker Advisors. It's those two components together that make up the whole, and this is really what makes us unique in our approach. Having a tax-intelligent focus, and looking through that lens of the tax intelligence, what would you say are the components that go into that? Yeah, this is, again, where it's not like, hey, we do all of these wealth management services, and then we also do tax planning and income tax preparation, right, and these other accounting services. It really comes back to that idea that taxes impact and permeate everything that we do as financial advisors. And so, we have a tax-intelligent planning kind of framework that we use, and why our process is really distinct and unique from other advisors. So, I'll kind of walk you through them a little bit. There's several definitions here that I wanna go over. The first one is tax-focused investment strategies. So, obviously, navigating financial markets require having an investment portfolio that serves as a reflection of your risk tolerance, time horizon, liquidity needs, all of these issues, but we cannot forget about the tax impact there. So, certainly taxes can erode and impact your net returns. Having an investment strategy that meets your financial goals and minimizes your tax liability is paramount to a successful plan overall. So, that's the first one, tax-focused investment strategies. The next one is retirement planning and withdrawal strategies. Obviously, retirement planning and then distribution on the back end for withdrawals later in life are a big part of what we do as financial advisors, but the earlier retirement needs are identified and addressed the more likely you will realize those dreams and those goals. Planning for both accumulation and withdrawal of retirement requires consistency, discipline, and accounting for the tax implications of saving and spending in retirement, and asset location is such a big part of this. It really can impact the taxes. So, we look very closely at that as we are doing retirement planning with our clients. The next one is family risk management. That's just a fancy way of saying insurance or protection. So, life insurance is certainly important as a part of a plan or making sure that a plan gets fulfilled even in the death of one of the family members. So, we are life insurance licensed as well. So, certainly this is a topic of conversation, and life insurance has some pretty good tax benefits. So, that is another asset that we utilize as part of our planning process. And then next one is business planning. You know, a lot of our clients are business owners or very involved in local businesses and small businesses. Most businesses are small businesses. They're not these major publicly traded corporations. So, family businesses, privately held businesses, the more complex the client situation when they are business owners, the more excited we get because the more potential value that we can add in helping them really goes hand in hand with financial planning and the tax planning when you're doing that business planning. So, we're evaluating stocks and investments just like we can help step in and analyze our client's business interests and giving them sound advice there too. So, next one, there's three more, legacy planning. This one is, you know, obviously life insurance and gifting and things like that impact this one, but this one to me is a little softer, and this is my psychology background, but just much more about values and what you want to be remembered for and those things that you really want to pass on and teach others and have them remember you by. So, often it's just a matter of asking good open-ended questions and getting the client discussing those things that they're passionate about and really weaving those values into the planning, and that's a pretty exciting one. Of course, again, education, charitable giving, trust planning, we are not attorneys, we don't give legal advice, but we're very involved in that planning and that process for our clients, and that's a pretty rewarding topic as well. So, the next one's education planning. Obviously with increasing tuition costs and education planning can be a difficult one, but education is so important and we can help our clients plan for their children and grandchildren's education, however they want to be involved in that process and in that funding, and there are certainly tax implications and benefits for some of the different solutions out there that we can help with around education planning. And then the last one is cash flow management. Building wealth is not that difficult if you boil it down to its essence, right? So, it's living on less than you make, right? Having a surplus that you can then save and invest wisely and repeat that over many, many years and let the wealth compound. So, there's the dreaded B-word, budget. Most people don't like to track every penny of their spending, and so we often think about it a little bit differently. Let's pay yourself first, let's automate and create discipline in our planning process to where then you don't have to track every single dollar. You can spend what's left over for the rest of the month because you've already set aside what you need to to be on track for your long-term goals. So, that's the way we look at cash flow planning. And again, there's the whole component of after-tax dollars and will be a topic of future conversation, but that cash flow management is a big part of it. So, those are the various kind of definitions around our intelligent planning topics and our process. You know, one of the lessons that you instilled in me from the beginning, Gavin, and I think I've been really lucky to have good guidance just from the start where I didn't have to learn one way and then go to another firm and learn a different way. I just got taught the right way from the beginning. So, that's been really exciting. And one of those first few things was looking at every client at their specific situation rather than just giving them a cookie-cutter approach. Where did that desire come from in looking at that individual client and their specific situation rather than giving them the typical cookie-cutter? Yeah, that's good. I would say it probably starts with just kind of my hardwiring as a high-fact finder. I'm very detail-oriented and, you know, I like to dive into a client or perspective client situation and get all the details, all the information. You know, not just the facts and figures, but then some of those softer, you know, values-based questions and ideas out there in the open too because that all impacts the planning. But what we found, and this is obvious, but no two people or no two households are the same. Everyone is unique. Everyone's situation is different. Everyone has different goals and desires. Everyone thinks about money a little bit differently. And so, getting that information all out there into the open and in this discovery process really then leads us down this path of, well, if everyone's different, then no two plan is gonna be the same. They're all gonna be different as well. So the solutions and the approach to solve a client's problem is gonna be unique as their situation. And so, I really embraced this from the early days and, you know, the fact that nothing is gonna be clean, nothing is gonna fit into this nice little planning box that, you know, if you really wanna solve the client's issues and give them a path to their goals, then the solutions are gonna be unique as their differing situation. So that's really something that we pride ourselves on. I mean, you know, in the investing world, financial planning in general, taxes are, there's so many moving parts and it's such a broad and complex intertwined, you know, system of rules and regulations and you layer that on top of every client being unique, I don't know, that might overwhelm some people, but for me, it just means that it's opportunity to put together really an unlimited potential array of solutions for the client. So we pride ourselves on being customized in our solutions. There's no cookie cutter plans or portfolios and that's really been our approach at Parker Advisors. Now, Gavin, you've said that most conventional advice from CPAs is wrong. Now, I think it'd be really exciting for them to hear why that is. Yeah, this would definitely be a topic of a future podcast. We don't have time to dive into this too much, but I will own up to that. Just this idea that conventional wisdom, conventional tax wisdom is always to defer tax, right? CPAs want to be a current year hero for their clients and reduce their current tax liability, but this isn't necessarily the best approach. First of all, no secret, there's a huge tax sale going on right now. We're at 2023, moving into 2024, preparing 2023 income taxes right now. There is a tax sale going on. Tax rates are some of the lowest that they've been in history. Income taxes, capital gains taxes, this sale will not last, right? Tax rates are going up in the future. The writing is on the wall. I'm a proud American, but out of control government spending and debt levels must result in higher taxes in the future. To help pay for all this spending, taxes must go up. And I would rather pay tax now on my income at a known rate and not defer that tax, and then shift as much of the net income as possible into tax-free and tax-efficient investments in order to build wealth that has less of a tax drag on it in the future. So cut the cord now, pay your tax, and then move on to tax-free and much more tax-efficient vehicles in the future. Again, we'll get into more of this on future episodes, maybe just a bit of a teaser there, but you can see that this is a fundamentally different approach. I want to focus on our client's lifetime tax liability, on their lifetime tax savings, not just narrowly focused on the current year at hand and trying to reduce that tax liability in the current year. Again, it's just that idea that we're tax intelligent in our approach, we're looking at lifetime tax savings, not just simply current year tax savings. Everything we do here at Parker Advisors on our wealth management team starts with taxes, leads with taxes, and it really permeates everything that we do. Great. Well, thank you so much for coming on the podcast, Gavin. I think our listeners can stay tuned for more episodes, especially entrepreneurs. There's so much that they can learn from you and from our firm. Where can the listeners reach you at? Yeah, absolutely. Our website is probably the best place. It's parker-advisors.com, and you can find us there and reach out. I appreciate you doing this, Ishmael. I'm excited to join you in the future, and I think this is a great resource for our listeners.