Nicole Peterkin, CFP®, CLU
“The only difference between you and someone you envy is you settled for less.” – Dr. Phil
Nicole Peterkin has been in practice since 2011 and has worked with over 500 clients. As an advisor, she emphasizes using money as a tool to get the lifestyle you want instead of viewing it as the obstacle to that lifestyle. She is also a speaker and a published author. Her book, “If You Love Your Family, Save Like It” can be purchased on Amazon and in select bookstores.
Owning a financial planning practice was never on my radar growing up. My family is made up of doctors, lawyers, nurses, engineers, and a computer programmer so naturally I enrolled at Boston University Pre-Med with dreams of becoming a surgeon. Then, my Junior year of college, my dad passed away suddenly.
My dad was a chemical engineer. He was the oldest of his siblings, and well respected in his field and at his company where he’d worked for over 25 years. My dad was the guy with all the answers. He handled the finances in our family and we all just assumed we were in good hands- my mom included. It was the classic case of separation of household roles and responsibilities, and because of that- no one but my dad knew what his plan was for our family finances. Financial decisions had been made by him, and we didn’t know why or whether we were financially okay or not without him there to explain the logic. It was also 2008- in the middle of the market crash.
The three biggest things that struck me during all of the aftermath were:
- How sad it was that my dad was always so stressed working so hard to provide for us and keep all the balls in the air (thinking that there was plenty of time to make up for it later), but that there really wasn’t.
- If my parents, a chemical engineer and a computer programmer with six figure incomes and the degrees and experience to match didn’t have a written plan for their money- I bet no one did
- We should have had so much more to show for how hard both of my parents worked
I knew immediately that I didn’t want a repeat of juggling work and family time with someone else dictating my schedule so I decided then and there that I needed to somehow start a business. I left Pre-Med, started working part time for a corporate bank doing mutual fund administration, and got a degree in business management with a focus on corporate finance and management information systems graduating summa cum laude near the top of my class.
Working at the corporate bank solidified my desire to be an entrepreneur. My colleagues had the same struggles and complaints I imagine my dad did. Missed soccer games and track meets, unforgiving hours, etc. In 2011, I started looking at my opportunities for independence and after taking dozens of interviews and evaluating dozens of opportunities I found myself at an insurance company. There was no salary- it was commission only- and I was responsible for paying my own business expenses.
Knowing I wanted to help people with overall planning and not just insurance, I immediately got my investment licenses. I managed to build a referral based business and worked with over 500 clients in my first three years of business. Around the two year mark, I started to get burned out, and by year three I knew there had to be a better way. The traditional model of financial planning is product-focused and not planning focused. Advisors are compensated based on the insurance and investment products they sell. This meant that I only got paid to advise my clients if they bought a product. If I was making suggestions about consolidating debt, choosing different options in their 401(k) plan, or making changes to their mortgage, I was working for free. This was fine in the beginning when I first got started because I gave everyone the same level of service and the clients who generated bigger commissions and fees offset my work with clients who didn’t have much, but as I got busier I became more and more frustrated.
Many of the clients I was meeting were like my parents. They were smart, professionally successful, busy people who loved their families and had solid incomes. They should have been able to afford the lifestyles they wanted with enough money to spare to help their kids with college and save for retirement. The problem was that like my parents, most of my clients were making financial decisions reactively instead of proactively. They were doing the best they could with conventional wisdom around money, but they didn’t have any professional help and it was costing them money big time in the form of interest, premiums for the wrong kinds of insurance, overpayment of taxes, and fees. Their money was slipping through their fingertips in many areas and making tweaks would have meant the difference between trying to staying above water and financial security.
I started realizing that my clients were more like customers. I was trying to do comprehensive planning, but I was getting paid to sell products and manage investments. There was a conflict of interest.
Many advisors I’d networked with talked about focusing on wealth management as an alternative model that would seek to minimize conflicts of interest. Instead of receiving commissions that varied based on products, I’d receive a percentage of a client’s investments. Doing a mental run-through of my favorite clients, I quickly realized this wasn’t a good fit for me. In order for me to be profitable and stay in business on that model, I’d have to make sure I only took on clients with $250,000 or more to invest with me. Many of my clients didn’t have that kind of money outside of their 401(k)s if at all and would likely never get there without some strategic financial guidance.
I developed my fee-based model of charging a flat fee for advice based on employment status rather than income and assets as a way to level the playing field. I enjoy working with clients on a comprehensive plan for their money that looks at cash flow, risk management, investments, tax planning, retirement planning, and estate planning in addition to other specialized areas of business and personal planning; while also integrating other advisors for help with making changes to an existing plan. As a CFP, I act with a fiduciary standard of care which means I’m obligated to make recommendations that are in each client’s best interest.
Within this framework, the planning comes first and any products used to implement the plan comes second. That way, whether or not products and investment management are needed in order to carry out the plan, the advice has been paid for, the fees were transparent, and every client is on equal footing in terms of service and attention. This creates a collaborative relationship and ultimately helps clients more effectively make financial progress on their terms.