Interview with Tommy Oliphint and Christina Lecholop of Captrust

What are your backgrounds?

Tommy: I have been in the financial world for 35 years. I grew up in Taylor, Texas and attended Baylor University. I work with individuals, families and businesses. I also worked directly with various individuals going through a divorce. We understand what the issues are and come up with solutions.

Christina: I have been a wealth management advisor for almost 20 years. I attended University of Texas at Austin and was named in the SABJ 40 under 40. We work primarily with families and individuals, and we serve as a thought partners for clients to help them make big decisions.

What steps do you provide or recommend to those going through a divorce?

Our biggest piece of advice: Do not make any big decisions right away. Let the emotions settle down before making big decisions. Once the emotions have settled, we help the spouse identify what their expenses may be moving forward and compare it to their income and assets. Finally, we put together a cashflow to ensure the client can maintain their lifestyle. We always recommend this analysis before the final divorce so they can verify what assets are needed to keep their lifestyle.

Can you help couples sort through assets during a divorce?

Absolutely! We work with the attorney to work through considerations like which assets are taxable versus tax advantage, properties, prenuptial agreements, which assets are liquid versus illiquid, is there a business involved, debt, etc. This turns into a complex conversation, so we like to be a thought partner and work closely with the attorney to make decisions and provide helpful information to the client.

How do you work with CPAs and accountants during the divorce process?

We work very collaboratively with everyone involved, including the attorneys, CPAs and forensic accountants to best serve the client. We work with forensic accountants when people have a business involved or a corporation or complex asset that needs to be researched more. We can help provide information that our client provides to forensic accountants to assist during their discovery process.

How can an investment portfolio be split during a divorce?

First, we decide which assets are liquid versus illiquid and consider when the client would need to access the assets and whether that is sooner rather than later. We also consider the tax advantaged assets versus assets that are already after tax, as well as which assets are income producing and which ones are not, all of which is very important when thinking about the division.

Another asset that comes into play is a QDRO (Qualified Domestic Relations Order), which is when a retirement account is split, and is another time we work closely with attorneys and ensure there’s equitable distribution of retirement accounts. The QDRO also protects that tax-deferred nature of those retirement assets and gives confidence to the lower income earning spouse that there are retirement reserves available. It also has the feature of a no early withdrawal penalty, incase a spouse needs to access those funds early from the QDRO.

Overall, it can be done, but there are a lot of considerations and we love to be part of that conversation.

What role does a financial advisor play when a family is going through a divorce?

We partner with the clients attorney and CPA to be assistants in putting together a financial plan. If the client is thinking of investments, we want to invest towards the goals that are identified in the financial plan. We recommend that clients meet with their attorneys to update their wills, power of attorney, and any special needs they may have.

We also recommend clients review all items like ownership of an account to ensure they are titled correctly and have the proper beneficiary. Lastly, we take health insurance into consideration and help plan how to bridge the gap of losing coverage. We have specialists that deal in that area that we work closely with.

Do you have any general advice around investing?

Absolutely! We believe wholeheartedly that is important to have a plan in place first, similarly to having a blueprint to build a house, we believe the same is true in creating an investment plan. It’s vital to be purposeful in investing.

An investment plan is very powerful tool in helping investors accomplish their goals. Some items we look for in determining an investment plan are:

What are their income needs?
What comfort do they have in taking risk?
What are their growth objectives?

Aside from investing advice, do you have general budgeting advice?

Great question! Our first step is always putting together the expenses, itemizing and being thoughtful on what is a need versus a want. We then tailor the budget to the client. We also recommend putting “one time expenses” as an annual expense in the budget so the client can be prepared if any future emergencies arise.

Are financial advisors for short-term goals or long-term goals?

Both, and everywhere in between! As we look back at the financial plan and see if there is a sale of a business or anything similar, that would be considered short-term. Long-term would be revisiting their lifestyle and ensuring the client can meet their needs. We also see if there are major life events to save for, like their children’s college or leaving a legacy for their heirs and how to do it in a tax efficient way.

How often should I update or review my portfolio with my financial advisor?

Each client is different, but we always meet regularly in the beginning to stay on the same page. After that, it is up to the client to decide on frequency. We normally meet twice a year with clients, but always recommend adding extra meetings around life events such as remarriage, retirement, large expenses, etc. Once the long-term plan is in place, we recommend not tinkering with it and let the plan run its course. We use the plan to measure against any storms.

Do you have a fiduciary responsibility?

We do, and we take it very seriously! We recommend that anyone who is looking for investment advice should be exclusively working with a fiduciary. This means that they are putting their clients interest first, which may sound reasonable, but there are a lot of other factors that go into that decision making and fiduciaries have a legal obligation to put their clients first when making investment recommendations.

Captrust is an organization that goes through great lengths to avoid even just the appearance of impropriety, so we take our responsibility of providing investment advice very seriously and provide transparency with a lot of conversation up front since we think it is critical.

To young adults starting their careers, what advice do you have to help them get started?

Create a Will – We always recommend having a will even if there are not a lot of assets involved. It’s vital to have a power of attorney or a durable in case of an event.
Increase Savings – We recommend saving more every year as you earn more and to continue to live within your means. It is best to have the mindset “Pay yourself first,” which could potentially allow you to retire early or have more money once you do retire.
Create a Roth IRA – A Roth IRA or Roth 401K is really powerful to be able to save for retirement tax free. We also encourage young adults to look at all the options that may be available through their employers. We always advise young adults to start building good credit slowly to help prepare for buying a house or making other large purchases.
The Power of Compounding – We love sharing about the power of compounding (also known as the eighth wonder of the world) and recommend starting as early as possible. We love to share the saying, “The sooner you get started, the slower you can go.”

To learn more about Tommy Oliphint and Christina Lecholop, visit Captrust’s website here: https://www.captrust.com/