Fluent in Finance no Other Firm in The Country Offers Their Approach

Mitch Kramer, founder and CEO of Dallas-based Fluent Financial, LLC, says his company’s name came about via a graphic artist who designed the firm’s first website and sat in on client meetings. After a week, she told him she could understand the subject and he was “really fluent in financial matters.” Kramer prides himself on not using lexicon language. “It doesn’t impress people. They want to know if they’re going to be OK, and taken care of,” he says.

Kramer started out 22 years ago as a loan officer, later working in the legal industry for seven years in administration and accounting. “When I got out of school, I wanted to be a financial advisor,” recalls Kramer. “I applied to a big insurance company and was told on the first day of training to go home and get the names of 200 people I know whom I could sell life insurance – that ended that part of my career very quickly.” Post-MBA, he sought advice on where to get training for financial planning, and all recommended American Express Financial Advisors. He was with them for nine years and was later affiliated with Philadelphia Financial before launching out on his own.

Truly Comprehensive Planning

Kramer says too many financial planners gravitate toward asset management, commissions and product sales and don’t spend as much time on actual advising. His firm is fee-based, and his clients typically have a net worth between $2-5 million. Those with less money can work with other team members.

The firm’s approach includes investing in stocks, bonds, ETFs and options. This allows clients to stay more heavily weighted in equities using options to mitigate the risk usually found with bonds. “No other firm in the country offers what we do,” he says. “If you want to mitigate risk, you want 25 to 50 percent of a portfolio in an asset class with very nominal growth as interest rates rise.”

While the Department of Labor’s new fiduciary rule is currently suspended, Kramer finds the needs for it “a sad commentary on the industry.” He says some of the estate attorneys and wholesalers he’s known for years say 80 percent of the industry is corrupt – more interested in pushing products than pursuing the client’s best interest. While shocking, Kramer finds no reason for these individuals to lie. “The DOL rule causes the sales aspect of the industry to be minimized and the competency/advice component must act as fiduciary. That’s good for the customer,” he says. “Do I blame advisors? Not necessarily.” Many advisors were taught by their companies, whether mutual funds or insurance entities, and they didn’t know what they didn’t know - except when they did. “When you become a CFP or other designation where you’re forced to become a fiduciary, it really opens your eyes,” he says.  

Interviewing a Potential Financial Advisor

What to ask when scouting out a financial advisor? In Kramer’s view, the basic question is “Why are you doing this?” He warns not to let the person give a politically correct answer. “Do you just want to make money, or do you really want to help me? Ask if they are a fiduciary and their definition of comprehensive financial advisors. Ask to see examples of their work,” he advises. “Do you have a selling philosophy, and what is it? How often do you communicate with clients and how are you paid?” Potential clients should check out complaints on BrokerCheck. If there is a complaint, he recommends asking the advisor to explain it, as sometimes things happen. Always keep in mind this is the person who could prove responsible for your quality of life.

Apps vs. Emotions

Kramer recognizes gamification as a very big deal, noting more money is earned on games than producing movies. “Gamification experts say the average child under 18 spends eight hours a day gaming,” according to Kramer. “Educators use it as a learning tool. I think the industry is going that way – we need games on phones or iPad for millennials. That’s just how they learn.”

While Kramer thinks robo-advisors are tools that financial advisors can use to help clients with a portion of their financial planning needs, it’s not a panacea. He points out robo-advisors aren’t useful for taxes and life planning issues. “With these issues, you get to know the client at a core level,” he says. “AI is the way of the future in the industry, but when you’re dealing with emotions it’s difficult to take an algorithm that uses 1 and 0s to quantify that.” The downside of gamification is that human beings crave interaction. “Robo-advisors are forgetting that having a rich conversation with another human being is very fulfilling. It’s being missed in our society by a lot of millennials,” he says. Kramer adds humans aren’t wired differently than 10,000 years ago when running from wooly mammoths. People make decisions based on emotions rather than facts. “We act as a circuit-breaker so someone won’t make decisions based on emotions that can devastate their portfolio,” he says.

Wealth and Health

For 2018, Fluent Financial’s main goal is becoming one of five top financial firms in the Dallas marketplace. There is also a program called Wealth and Health they will roll out taking into account health and life needs of aging clients and targeted toward baby boomers and retirees. “We have a network of people we can refer you to,” said Kramer. “I think it will be a big growth area in financial services.”

For more information visit: fluentfinancial.com

SECURITIES OFFERED THROUGH LPL FINANCIAL, MEMBER FINRA / SIPC. Fluent Financial, LLC is a Registered Investment Advisor. Advisory services are only offered to clients or prospective clients where Fluent Financial, LLC and its representatives are properly licensed or exempt from licensure.