← The Investor With Joel Palathinkal
The Investor With Joel Palathinkal
Jamie Hopkins: CEO of Bryn Mawr Trust Advisors and Chief Wealth Officer at WSFS
00:20:06
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- [00:03]
A
Welcome to the Investor, a podcast where I, Joel Palo Thinkle, your host, dives deep into the minds of the world's most influential institutional investors. In each episode, we sit down with an investor to hear about their journeys and how global markets are driving capital allocation. So join us on this journey as we explore these insights. All right, super excited for our guest today. We've got Jamie Hopkins. He's a Chief Executive Officer of Bryn Mawr Trust Advisors and Chief Wealth Officer at wsfs. Jamie's a graduate of Temple. He's from Temple University School of Law where he received his LLM and Villanova University School of Law where he earned his juris Doctorate and his mba. He's a Wall Street Journal best selling author, educator, executive speaker. Jamie serves on numerous advisory boards around financial services industry and formerly as a national Trustee member at NA Naifa. Jamie is also the founder and president of the 501c3 nonprofit Finser foundation and was named a top 10 Investopedia 100 top financial advisor for 2023. And he's the author of the best selling, you know, retirement co author for your Time, your retirement sketchbook alongside Bonnie Trichel. And I've got his book right here. So we're going to go through some of those topics here. But really excited to have you on. Jamie, maybe you can tell me a little bit about your background in your career and maybe we can start with your background in high school and, you know, just kind of what you thought you would do and kind of where that evolved over time.
- [01:50]
B
Yeah, well, thanks, Joel. And yeah, my background, I do have a starting point. It goes just a tad bit earlier than that, but I think it was seventh grade I wrote down on like, what do you want to be when you grow up? That I want to be a private equity attorney. I don't, I don't know one. Right. My parents were in construction, didn't graduate college, but that's what I thought I wanted to be. And yeah, in high school I kind of took that pathway that and it felt very linear to me. It was always my explanation looking back that the steps to being an attorney was like, do well enough in high school to make it to college and in college do well enough to make it to law school. Then in law school, like do well enough to graduate and pass this bar exam and then you go be an attorney. Like it's this very like step by step pathway to this profession. Whereas when I heard other people are like, oh, like go be a business. Like, go be in business. You're like well, like, how do you do that? Like, some people go to school, some don't, some go to college, some don't, some go get an mba, some don't. And you don't just like get hired into business when you graduate. So for me that felt very like amorphous and not clear. So I kind of, I did follow that legal pathway and you know, in my bio, I have two legal degrees that I got and started off very briefly in private equity and then didn't really feel like a connection to it, so ended up pivoting after that. But, you know, I did try to follow that pathway at the start.
- [03:19]
A
Yeah, no, absolutely. Well, you know, tell me what kind of was a pivotal moment that made you want to kind of pursue the career that you went through in high school and kind of how that evolved over time.
- [03:30]
B
Yeah, so there's really two pivotal moments. One actually is when I'm eight years old. So I was eight years old, my dad and my mom ran a construction company together. He did all the work up on the ladders, up on the roofing gutters, all of that stuff. And he passed away on a job site accident when I was 8 years old. And you don't know it when you're 8. But that said a lot of my relationship with money, that scarcity mentality and you know, the loss of your dad and the person bringing in money and 8 year olds myself, like, don't understand a lot about the business world, but I know enough that like dad hangs gutters and that's where the money comes from. And sure. So for an eight year old, it's, it's a lot of loss at one time and it's really hard. But fast forward, we kind of hit the other part. It went through this legal pathway and went and clerked in the appellate division. And one of the cases I got to work on during that time period was actually one of Bernie Madoff's cases. And I saw this like, total abuse of trust in the financial services world. Whereas we want people like my mom who had to pick up and give me all these opportunities, run the business, but she doesn't trust the financial services world. It was never there for her. We don't specialize for trade workers and things like that. We just don't. It's never been the area that we focused on as a profession. So I would see all those ads and things on tv. Come do your retirement planning here and come work with us. And I just kept asking myself that, like, very simple question, like, where do people like My mom go for this type of advice and the reality is that they don't get it. And so I kind of made this pivot and it became my why is I wanted to make retirement planning secure, more secure for millions of Americans like my mom, and get this type of advice that is out there down a level to where, you know, people who really need it can get financial advice and wellness and basic planning and an understanding of what they need to do to have a more secure financial picture.
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A
Sure. And what are some of the things that people go through as they're kind of building that financial picture and their goals as they're kind of thinking through retirement? And how early should people start thinking about retirement in their career?
- [05:43]
B
Yeah, I mean, retirement's just kind of a term around this relatively new design of when people don't work anymore.
- [05:50]
A
Yeah.
- [05:51]
B
So I use it a lot. I'm a fan of retirement planning, but at the same time it's like good to recognize that it's just one life. And these are different phases and it's a term we loosely use to describe it. But you know, your whole financial picture, like, you always need to be working on it. Sure. What I see is, you know, often earlier on, people don't need full planning, they don't need to fully think about retirement yet. But decisions you make at that point and habits and behaviors you create set you up on these pathways. So yeah, a lot of times for young people, it's like managing debt and creating good relationships with money, both saving and spending. You kind of understand how you react to this. These types of, you know, kind of interesting things out there in the world, like investing, like, are you fearful of it? And if you develop a fear of investing in your 20s, like it just lives with you for 40 years and sets this retirement or later stage wealth accumulation up for failure. Same thing. If you see people just misuse debt and don't pay it back, well, and it snowballs and it sets them behind for 10 years and it's hard to get over that. So those are some of the early things. A true retirement to me is usually about 15 years out from when you want to. When you really start envisioning what does it look like, how much money am I going to need in retirement? What do I need to do between now and then outside of 15 years, it's kind of hard to even imagine what life is going to look like. I mean, if you're a 40 year old with like three kids that are eight years old, like, I don't know that Retirement's a real thing that your mind's going to be able to like adhere to. It's, you know, how do I get them to soccer practice is all you're worried about.
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A
Sure.
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B
But as you move a little bit later, you can start spending time on those topics.
- [07:38]
A
Yeah, absolutely. And then tell me a little more about kind of like the, the impetus for, you know, writing the book and, and, and kind of what, what kind of drove you to kind of put that together and put together this guide. I think what's really great about the Sketchbook is there's a bunch of different tips. You know, on the left side there's something that talks about like, you know, part time work in retirement, you know, obviously life insurance and retirement and then obviously adaptive spending. You know, I'd assume adaptive spending is just kind of based on your income and, and how you're, you know, thinking about spending in different parts of your life, but maybe walk through some of the highlights of kind of the book and the background and, and you know, who, who can kind of utilize a book and, and you know, how they can, how they can kind of go through the sketchbook.
- [08:26]
B
Yeah, we use that name, Sketchbook, very purposely. As you'll see, every single One of the 125 topics has a little sketch with it. So people ask me, oh, you know, I'm not really into this. I'm more of a picture person. And I'm like, well, funny enough, there's full of pictures and they kind of pause for a second to see if you're just making a joke back to them too. And I'm like, no, I'm serious. Like we put pictures throughout the whole book. Most people are visual learners and very little of our education in the financial service space, retirement space, has anything to do with pictures or visualization. People just learn better this way. So part of the challenge of the book was let's take complex topics, make them simple and turn them into a visual so people can understand better. The reception's been great from people. They're like, I've never liked books like this. I didn't think I would like it. And it's really fun to engage with. I actually got one guy's like, you know, I, it was actually his wife that bought the book. He just happened to pick it up and he's like, he actually is the first one that said this, but he called him snackable. He's like, these are little snackable things. And he wrote me a letter and mailed it to my house to thank me. Which was really cool. And so the reception's good. The highlights of the book, I think there's three or four. I do love one of the ones you mentioned though. Adaptable spending is one of my favorite topics. If you go back about 20 years ago, there was really no real research on adaptable retirement income spending. It was all Monte Carlo. 4% was the saying, hey, use 4% and spend it. Or there was flooring strategies. They were all what we would call in the academic world like static models. They didn't readjust based off of how life or as you said, your income is adjusting. But that's more how people live their lives. Now fast Forward the last 20 years. Research methodology technology has gotten cheaper, faster, better. We can do research around this more adaptable or dynamic based approaches. And that's really what advisors are doing. Every time a client comes in, we're rerunning these and you can constantly be updating it. But that's how we live our lives. If inflation skyrockets, guess what we're going to do? We're going to spend less. We're going to cut back in certain areas. But investment models used to just show people with this constant inflation adjusted spending, which is not based on reality.
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A
Sure.
- [10:48]
B
The important part about adaptive spending is figuring out what you're willing to change in your spending before you get forced into it. So you understand that if an event occurs, markets drop, inflation goes up. What are you willing to cut back on? Where are you willing to shave off the corners of spending to kind of make life the same amount of enjoyable but with small adjustments? And I think preparing for that ahead of time is a great thing. So we're not feeling forced into it that we have a plan and we know when and how to adjust.
- [11:22]
A
That's really helpful when you think about decumulation. Right. Family office that are looking to kind of slowly decumulate their wealth. What are, what are your thoughts around that?
- [11:33]
B
Yeah, whatever that decumulation or spend down strategy is, it's got to go back to the goals. None of this stuff works in silos. Without understanding what are the outcomes you want to achieve. Time horizon. Right. Family offices, often it might be 100 year time frames. And you're using legacy trusts in Delaware and Nevada to spend down these assets over multiple generations. So the dynamics and structure you have to put in place place for a hundred year time frame is vastly different than an 85 year old who thinks they might live 15 years at the longest. And how do they make that last? Very two, you know, separate things. On how much you can spend, what you're going to invest in, the liquidity you're going to need and when you get back to the individual level, I think there are rule like best thumb practices out there on decumulation strategies, but it still comes back to like how much do you want to spend? You want to leave things to your heirs. All of those individual aspirations and goals in retirement like set, they should set the framework for how we spend down money. Yeah, I think some level of diversification and some level of secure income are good for everyone. It doesn't matter how much money you have. You see people are happier when those are in place. So sure do think that that is a good rule that follows that thread kind of pulls throughout.
- [12:54]
A
Yeah, no, that's helpful. What about like, you know, topics around just private equity when people are actually allocating to deals and they come into liquidity, we get a lot of people in the community that kind of ask about that. So what are some thoughts around that? When people are kind of coming into liquidity, how they should manage that?
- [13:14]
B
Yeah, it's always, it's a big question and I'll give one perspective.
- [13:19]
A
Sure.
- [13:19]
B
And people might listen and be like, I totally disagree with that. And that's good too. There's a couple dynamics that are occurring out there in the private equity world versus like the, the public markets. And one of the things that's been about a 25 year shift is we're seeing a move away from the public markets to the private markets. I don't think anything near term is going to change that dynamic. I expect that to continue. We've got fewer publicly traded companies than really at any time before, especially going back to the late 90s. And I just see that thematic continuing. So the important part about that is I think it's a huge disservice not to be investing in and or looking at the private equity or private credit worlds. Today you have to be looking at the private side of businesses. It's just too important. Important in our economy and investing cycle. I still view all of it as diversification. I really do. I think generally speaking that private market diversification has helped for portfolios for a long time. Although probably similar to your questions, most of the questions I get are not about better risk adjusted returns. It's about how do I get a better return. I just want to, to get more money. That part's a little bit more debatable on where that will land. Yeah, you know, especially you, you did have people who hit I think good time Periods in, in private equity. If though we get a kind of return to, or I shouldn't say return, but if we get kind of a movement where most companies that used to go public then go private and are just held within variations of different fund vehicles, the returns in theory should be about the same. It's just kind of like an interesting dynamic that there's nothing necessarily about like public markets versus a private market. If it's still a broad industry, they move up and down as the general economy and sectors move. You just might not see the daily volatility because of the way it's traded, but it's still there long term. That probably creates about the same return structure. It shouldn't be vastly up or down. So then the question becomes kind of manager selection and can you find private equity managers who are doing better over, you know, in particular sectors or over, you know, a global versus a geolocated market? There's a bit of evidence that in the private markets there has been some outperformance there that you can find in manager selection. So I think that's there. Then the other question was like, how do you deal with whether it's calls for new equity or distributions? And that's super complex. It's a beautiful part of the world today and Everybody getting their K1s and delaying their taxes, figuring out where to come up with the next raise. So I think that long term tax and liquidity planning there is really important. We do see at a bank side, we see a lot of people go and set up lines of credit on their equity positions, whether publicly traded or private equity hedge funds, and so that they have a liquidity draw so they don't have to sell off another asset if they have to put more money in. Yeah, that's kind of really grown a lot, I'd say in the last five years. And then, you know, are there tax mitigation strategies, especially early on for small business stock to help out, which has been a, you know, if you land in one of those deals can be a super great way to, you know, legally minimize tax payments and accumulate more wealth.
- [17:06]
A
Sure, yeah, that's really helpful. Full well, I think we covered a lot of really hot topics and I think, you know, when you think about like wealth management, it's not one size fits all. Everybody has different goals. Right. So trying to build that approach, you know, separately for each person I think is super important. So, you know, I usually kind of wrap up most of these podcasts with just one piece of advice, you know, so if you were to kind of leave us with one piece of advice. It could be from a family member, could be from a past coworker, maybe one of your clients. What would you share with us? And it could be about anything. It could be about career, it could be about wealth management, private equity, whatever you think works best.
- [17:43]
B
Yeah, so I'll do this one today. I've actually got two. So we'll do the first one more about business leadership and the second one about personal life. I think that's important. So I think the first one is just the, you know, the best leaders out there, they do what they say they're going to do and it's as simple as that. I think a lot of people over complicate good leadership and you know, whether it's in your family, with your kids, your spouse, your community. But as soon as you stop doing what you say you're going to do, trust breaks down across the board. So don't over promise, don't under deliver, just do what you say you're going to do. And what you'll see is people trust you. And, and when trust is eroded, as you know, it's almost impossible to bring it back. So that's always been an important one to me. And the second one is a piece that's in the book, but it's find your purposeful communities. It might seem like an odd one for a retirement book, but most of our life we fall into what I call accidental communities. You go to school, you get put on a dorm floor, and those become your best friends. You go to work, you get put in a team and those become your people. You have kids, you go to school, whatever class they're in, those are now your new friends. Those were not purp. Purposeful communities. You know, those were accidental. And you see people get into life and all of a sudden have all these people around them, but feel as isolated as we ever have in the history of our country. We have the fewest amount of people that say they have three close friends today than at any other part in the history of the United States. And that's a scary thing. And I think people need to take a step and just pause and look around and say, am I investing in the communities? Am I spending time with the people that I really want to? Or is my whole life filled with accidental communities? And they're not bad, but they might just not be filling you up.
- [19:29]
A
Yeah, absolutely. Well, hey Jamie, thank you so much for your time. And everybody check out your retirement sketchbook. I think it's a great playbook for just really thinking through all the pillars of wealth management and really thinking about saving, investing, planning, spending and legacy.
- [19:47]
B
Well, thank you, Joel.
- [19:48]
A
All right, take care. Bye,
- [19:52]
B
Sam.