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Riley Saunders: At the end of the day, you need to understand your own thoughts, feelings, and emotions around money, and why and how you got there, before you can even begin providing an experience or journey with your client.
Alyson Tucci: Welcome to Barron’s Advisor: The Way Forward: next generation, a special series spotlighting the emerging leaders shaping the future of financial advice. Twice a month, we’ll be digging in to the strategies, insights, and game-changing moves that will help you take your practice to the next level. I’m your host Alyson Tucci. Today with me is Riley Saunders, a financial advisor at Cassaday & Company. Today we’re going to be talking about that intersection between perseverance, psychology, and purpose.
Let’s start with your journey, Riley. You’ve received a Master’s in personal financial planning, is that correct?
Riley Saunders: That is correct, from Kansas State University.
Alyson Tucci: That’s fantastic. I don’t think a lot of financial advisors have had that experience. Can you tell me a little bit about what drew you to receiving your Master’s?
Riley Saunders: I had just finished getting my CFP. The COVID-19 pandemic had hit, so I had some more time on my hands since I wasn’t going outside. Really, I wanted to find a niche within the financial planning space, particularly within that psychology of financial planning. I did some research across different schools and organizations that offered some sort of higher level education program and I came across Kansas State’s program. They really are, in my opinion, pioneers because the psychology of financial planning is such a newly-recognized space within the financial planning industry.
Alyson Tucci: Why is it important for a financial advisor to understand the deeper insights of the psychology of money and the behaviors behind it?
Riley Saunders: I would say the psychology of financial planning does not provide at all a quantifiable return. You can’t say, “We did this deduction and because of that, you saved $10,000.” However, I would say that the alpha, if you’re truly emotionally intelligent and in tune with your clients, is almost infinite. Because it’s not about providing a quantifiable dollar amount of value. It’s about creating a sticky relationship and having them remaining as a client.
Alyson Tucci: Money Scripts. Can you explain really what Money Scripts are, how can a financial advisor leverage them to really help have a conversation with their clients?
Riley Saunders: If we take a step back, before we get into Money Scripts, I want to talk about financial flashpoints. Financial flashpoints are effectively an event, typically in childhood, that are so emotionally powerful that it leaves a lasting imprint into your adult life. I think a very common example is a mother and a father fighting over money, having an argument about money.
Alyson Tucci: That makes sense.
Riley Saunders: Arguments around money tend to be more intense and actually last longer than arguments around any other subject. Because of that high stress, high energy subject, that effectively can create events that are passed down to your next generation. A family member losing a job could be one. Financial infidelity could be another one. For example, your parent buys a present off Amazon, but instead of having it shipped to their house, they have it shipped to the neighbor’s house so that when the other parent comes home, they don’t see the box at the door.
Alyson Tucci: Gotcha. Financial infidelity is more like you’re buying something without your spouse or your partner really being in the loop about it.
Riley Saunders: Right.
Alyson Tucci: I’m assuming then the larger purchases are probably a little bit more catastrophic to those conversations.
Riley Saunders: Right, right. These two researchers, Gudmunson and Danes, they basically came up with a definition, it’s called family financial socialization. Effectively, the core of the message there is that so much of what we learn about money, our lessons, our thoughts, feelings, emotions around money are directly related to your family and your parents.
Alyson Tucci: Yeah.
Riley Saunders: What I did at Kansas State that I thought was really helpful for my personally and would encourage other financial planners to do, and if they want do it with their clients, is actually make a genogram.
Alyson Tucci: What’s that?
Riley Saunders: A genogram is effectively, imagine on a piece of paper, just a family tree.
Alyson Tucci: Okay.
Riley Saunders: Okay. You can use a genogram to understand a whole plethora of information. It could be these are common illnesses in my family, so what are the likelihood that I’ll have XYZ illness.
Alyson Tucci: Oh, wow. Okay.
Riley Saunders: For example, my grandmother had XYZ mental health issue. How does that flow down to me? What we did is sort of all that, but also we peppered in the Money Scripts, which I promise I’m going to get to. Basically, if your parent or grandparent, or aunt, uncle is money avoidant, money worship, money vigilant, you see the ripple effects of how that was passed down generation to generation.
Alyson Tucci: And that corresponds to their financial health probably in each of those situations and how they dealt with the money during that time.
Riley Saunders: Sure.
Alyson Tucci: Okay.
Riley Saunders: Yes, exactly. Money Scripts are basically, they’re unconscious beliefs that you have around money that typically stem from those financial flashpoints that I alluded to earlier. It was established by Brad Klontz, and effectively there’s four Money Scripts.
Alyson Tucci: Okay.
Riley Saunders: It’s money avoidance, money vigilance, money status, and money worship. Let’s start with money avoidance. Typically, these types of people, I know it’s in the title, but they don’t really want to face the reality of what money is in society today. That could be as simple as not looking at bank statements. I think a very common one many people can relate to is maybe you have a night out on the town, you wake up the next day, and you don’t want to see the credit card bill of what you bought the night before.
Alyson Tucci: Yeah, exactly. Especially if you’re going out in New York.
Riley Saunders: Right, exactly. Exactly. I’m realizing that quickly, too. The next one, I’ll talk about money vigilance. Money vigilance is commonly seen, in my opinion, as the good script.
Alyson Tucci: Okay.
Riley Saunders: I don’t agree with that, and I can get to that later. But effectively, money vigilance is having an understanding of how money operates and works and using that to your advantage. Typically, that involves a lot of accumulation of money. Not wanting to spend top dollar on the best brand when the next brand down does the job just the same and it’s half the price. Simple things like that. Being very cognizant of how you’re spending and how you’re living your life because you understand that money is a tool to live the life that you want to live.
Alyson Tucci: Because you were the one that accumulated it, it sounds like, during that time.
Riley Saunders: Right, right.
Alyson Tucci: Okay.
Riley Saunders: But the reason why I think it’s not as black and white, good or bad is because the biggest issue I have as a financial advisor quite frankly is convincing our clients that they can live above the means that they’re currently living in.
Alyson Tucci: Oh, interesting.
Riley Saunders: Right. If you think about it, it actually makes sense. I like to equate it to going to the gym. If you go to the gym for 10, 20, 30 years every week, you start to build those muscles up. You start to get stronger, and stronger, and stronger. That’s effectively what people are doing when they’re saving, when they’re being money vigilant. They’re saving, and saving, and saving for decades of their, the majority of their life. One day out of nowhere, the switch just arbitrarily flips and you go from a working person to a retired person, so from the accumulation to the decumulation phase. It’s really hard when you’ve been effectively working out for so long and doing things so routinely to effectively give yourself the permission to spend the money that you worked so hard for.
Alyson Tucci: That makes sense. It’s that accumulation to now spending transition that you have to make.
Riley Saunders: Right, right. Exactly.
Alyson Tucci: Okay. What are the other two Money Scripts?
Riley Saunders: The other two that I didn’t mention are money status and money worship, which actually sound could be very similar. There’s certainly overlap. The key difference in my mind is effectively money status is the belief that your self-worth is equal to your net worth.
Alyson Tucci: Oh, interesting. I feel like there’s a lot of that actually today, especially with people being on social media and seeing going to Europe on the yachts in the summer, and various different things. They often times equate money with status or self-worth.
Riley Saunders: Right, right. Exactly. Then money worship, while similar, is more of the belief that not necessarily my self-worth is equal to how much money I have or that. It’s more of, “Oh, man, if I just had a little bit more money, my issues would be gone.” It’s the idea that really, it’s never going to be enough. You basically just try to get as much money as possible to solve the current problem. But what we often find is that as soon as you solve one problem, another one comes with it.
Ultimately, at the end of the day, our job as financial planners is to help clients achieve the goals that they’re aspiring for. Quite frankly, I don’t believe that you can truly understand what they’re trying to do at a fundamental level without understanding who they are and how they arrived to their thoughts, feelings, and emotions around money. It’s all about connection. The deeper connection you have with a client, the more likely the client’s going to stay on and still be your client. The more likely you’re going to have success in getting what they truly want. It can be awkward, it can be uncomfortable at time to talk about emotions, or trauma, or just stories that shaped how they feel today around money. The quicker we’re able to go past that barrier and push through that, the quicker you’re going to have a connection with a client that is much deeper than just financial planner to client.
Alyson Tucci: You’re listening to Barron’s Advisor: The Way Forward: next generation. We’re going to take a short break. Stay with us.
Welcome back to Barron’s Advisor: The Way Forward: next generation. Let’s get back into the conversation. What’s hard to talk about, money or feelings?
Riley Saunders: Ooh. That’s a tough one. I think it depends on the client, I think it depends on the person, too. I think there’s stigmas with both, talking about your emotions and talking about money. But in my opinion, I actually think despite what my job is, I think it’s harder for me to talk about money. At least, personally with my social circle, than it is to talk about my feelings.
I wear my heart on my sleeve. If I’m upset or if I feel a certain way that a person made me feel, they’re going to know. I’m not rash or brash, but I’m just really straightforward and honest. I’m happy to be the person that wore his heart on the sleeve and told the truth about how he’s feeling than hold resentment. There’s not enough energy in the world to hold grudges or resentment, so I try to nip it in the bud and then march to the next day. Definitely money, to me, is hard to talk about mostly because I’m a little money avoidant.
Some people that are money avoidant, when people ask how much they make, a money avoidant person is going to undercut themselves.
Alyson Tucci: Interesting.
Riley Saunders: They could make $100,000 a year, and they’ll say $75,000 a year or $80,000 a year. Because they almost feel a sense of shame or guilt over the fruits of their labor, and others not having the same opportunities or resources as them. That’s, for better or worse, where I lie on that issue.
Alyson Tucci: What was that moment that you looked back and go, “Yeah, I want to do this?”
Riley Saunders: I think the moment where I said, “Okay, I think I’m doing the right thing,” is when actually I started volunteering. When I started volunteering for organizations that are financial planning oriented, and basically giving my time back, and mentoring people that are truly the next generation of financial planners. Obviously, I was a part of that and I’m still a part of that, but I’m starting to get phased out of the next generation. It’s really wonderful for me to look back and see any young aspiring planner and being able to help him or her in any way, shape, or form. Really, that’s what gets me up in the morning. That’s what makes me feel good. That’s what energizes me is really knowing that the next generation of planners are going to be strong. I can’t wait to see what they become.
Alyson Tucci: When we prepped, we talked about the CFP.
Riley Saunders: Right.
Alyson Tucci: In terms of the CFP, I know you’re comfortable with me sharing this, you didn’t pass the first time.
Riley Saunders: Right.
Alyson Tucci: Can you talk a little bit about your perseverance, what it felt like to not pass the first time, what you had to do to get yourself up the next time and go take it the second time?
Riley Saunders: It was a bummer. I’m a second-generation CFP. I don’t work with my dad, but he basically taught me everything that I know about money from a very young age. I almost feel like money to me is familial.
Having not passed the first time, it was necessary. I was, let’s see here, probably 23-years-old when I took it the first time. My priorities were not straight. That’s not to say I didn’t prep or study, I studied so much. But I was also doing a bunch of different things. I was just starting a new job. I didn’t even have a place to live, I was living with my friend’s parents. Effectively, I was always in some way, shape, or form distracted. Not necessarily socially from the standpoint of going out to bars, but it was more like, “Okay, I have this CFP exam in three weeks, and I have to move in two weeks.”
Alyson Tucci: Oh, yeah. That’s not setting yourself up for success.
Riley Saunders: No. No, not at all. Not at all. It was good because it taught me something I already knew, but it just really cemented it. You have to be passionate about this industry. You have to have the perseverance and grit to take one on the chin, and just brush your shoulders off and get back up.
Another thing that I really lean into is that I’m really thankful for people that may not have full faith in me. I always say I’m thankful for my haters. I’m honestly truthful about that it’s the doubt that drives me to prove them wrong. Maybe that’s just my arrogance, but I’m just using the arrogance as a steam to power my dream. When I didn’t pass the CFP, I actually had a coworker come up to me. He goes, “I don’t know if you should study for this round of the CFP. I think you should get to understanding concepts a little bit more, in greater detail.” That was a tough blow to my own ego, but I’ll tell you what, it really drove me to get in the books, get in the library and study hard because I wanted to make my dad proud, I wanted to make my company proud. But being who I am, I just wanted to prove that coworker wrong.
Alyson Tucci: I always like to ask guests if there’s just one thing, or a piece of advice, or item that you can really provide that next generation on learning about the different things that you mentioned today? What would be that advice that you’d give that next gen?
Riley Saunders: Be comfortable being uncomfortable. I know that’s a cliché. Whether it’s sharing your feelings, or sharing your thoughts, or views, or emotions around money, I’ve always found in my life that the more open and honest I am, albeit uncomfortable, it’s opened up avenues for people to understand me at a deeper level as a human. Be comfortable with uncomfortable.
My other piece of advice would most certainly be don’t be afraid to get back up. You’re going to get knocked down. You’re not going to be 100% every day, you’re not going to hit home runs every single game. But don’t be afraid, when you fall down, to get right back up because everyone falls down. No one knows what they’re doing, absolutely no one. They’re all flying by the seat of their pants. Some people are just really good at showing composure, and coolness, and being calm, cool, and collected. Just know that they were once in your shoes. No one knows what they’re doing until, really until it’s almost done. They’re building the plane as it’s flying, too. The quicker you realize that, the quicker you realize that you do belong.
Alyson Tucci: Well, Riley, thank you so much for sharing your story, your insights. I very much appreciate you being here today.
Riley Saunders: I appreciate you having me on, Alyson.
Alyson Tucci: The production team for Barron’s Advisor: The Way Forward: next generation is Ellie Ismailidou, Rebecca Bisdale, Paul LeBlanc, Kinga Rajzak, Joseph Lusby, and Alexis Moore. Melissa Haggerty is the executive producer. Jenna Mathis is the director of programming for Barron’s Advisor Programs. Greg Bartalos is the editor-in-chief of Barron’s Wealth and Asset Management Group. We’ll be back soon with another episode. Thanks for listening.
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