EWA’s Strategic Moves: Time-Saving, Tax-Forward, Multi-Generational Planning

Speaker 1 – 00:00
Welcome to EWA’s FinLit podcast. EWA is a fee only RIA based out of Pittsburgh, Pennsylvania. We hope all listeners
of this podcast will beneft as we deep dive into complex fnancial topics that we will make simplifed for you. And
we hope that this really serves as a catalyst so that you can make the best fnancial planning decisions for your
family and also save time foreign welcome everybody. Today joined by Ben Rutenberg, number one sports picker on
ewa’s team. But today we’re talking about the new services that we’re going to be offering at ewa. So very exciting
stuff. We’re going to break it down. We’ve expanded the services for all clients and also implementing some new
stuff for high net worth clients. We’re really excited. But before we get into it, Ben, what do you think? NBA Finals,
who’s going to be.
Speaker 1 – 01:00
You picked the Celtics and Thunder. With the Thunder winning?
Speaker 2 – 01:02
That’s correct.
Speaker 1 – 01:04
You still going with this?
Speaker 2 – 01:05
Yeah, I’ll still hang with the Thunder. Coming out of the west in the East. I don’t know, I mean, pretty surprising that
the Pacers beat the Cavs. We’re flming this in early May here, so I don’t know when the, when this will be released,
but Pacers beating the Cavs, big upset. And then the Knicks are up on the Celtics right now. Which was my pick to
come out of the east was Boston. So I’ll stick with.
Speaker 1 – 01:27
Do you think, do you think Celtics are going to come back?
Speaker 2 – 01:29
No, I think the Knicks will take one of these last two, especially because they’re going back to MSG for game six. But
I’ll still keep the Thunder as my overall champ. But I have no idea who’s coming out of the east right now. All right.
Speaker 1 – 01:43
My pick was the Lakers. What they got whacked the frst round, but now I’m switching it up or I’m going Knicks and
Timberwolves with the Timberwolves ultimately winning.
Speaker 2 – 01:54
They’re looking really good right now.
Speaker 1 – 01:55
Ant man getting his frst championship.
Speaker 2 – 01:57
They’re looking really good. The Wolves, they took care of the warriors pretty. I understand Steph was hurt, but they.
Speaker 1 – 02:02
I don’t think they look very good.
Speaker 2 – 02:03
No, probably not.
Speaker 1 – 02:06
Okay. Should we talk about what we’re actually here to talk about then? You want to talk about sports all day? I’m
just kidding. Oh, well, pga, it’s coming up starting the day. I got to get your pick real quick.
Speaker 2 – 02:17
Starting today. I would say two picks. One. You know, Scotty of like the favorites. I think this course sets up well for
him and you know, he’s only had two majors right now and at his talent, it’s time for him to get his third. So I’ll say
Scotty would be of the favorites and then maybe more of a dark horse pick would be Tommy Fleetwood. Big fan of
his game. The way he’s trending, he’s playing really well right now. And all right, cool, hollow a lot of long irons and
that’s a skill set of his game. So I would say maybe off the beaten path, Tommy Fleetwood would be a pick for me.
Speaker 1 – 02:49
You know, my pick, right?
Speaker 2 – 02:50
Bryson.
Speaker 1 – 02:51
Yeah, that’s right.
Speaker 2 – 02:52
Big Bryson guy over here.
Speaker 1 – 02:53
I would say big Bryson guy. I think he’s just gonna win, that’s all. Okay, sweet. So back to the program here. So at
ewa, you know, frst of all, we’re an REA and one of the ways we differentiate ourselves is we’ve completely dropped
our brokerage licenses. So we’re a fee only frm, meaning we don’t charge commissions. There’s no fees to get out,
there’s no fees to get in. No fees to get in, no fees to get out. We, in fact, we offer a, a wrap program for all of our
clients. That means any transactional costs that do exist inadvertently we cover. Right.
Speaker 2 – 03:30
So our advisor fee is the true fee that you’re paid.
Speaker 1 – 03:32
That’s it. All in extreme transparency, which we believe in. But under that, we have started to trend in offering as
many services as possible because I believe the biggest beneft we can do for our clients is I think a lot of advisors
meet to meet. A lot of wasted time. A lot of clients have different meetings. They have an insurance person,
investment person, a, you know, cpa, an estate plan. And they have to. All these meetings, they come back, they try
to communicate, everything gets convoluted, everyone disagrees. And then the client, you know, what should have
taken a couple hours takes months. And there’s stress and confusion. So we’re solving for that by trying to get
everything in house, everything quarterbacked, making sure the client’s goals are extremely well understood, their
philosophy, their values, what they want for their kids.
Speaker 1 – 04:18
And it’s actually executed fawlessly, but all with the premise behind it that we’re here to save your only non
renewable resource. Money can be, you know, lost or gained easily, but time cannot, you know, time. We only have
that fnite amount and so we try to protect that at all cost. We take that very seriously. So with that being said, we
operate as a cfo, you know, we want to meet, to report to you so you can live your life. Make sure that your money is
supporting your life by design, not the vice versa or you’re stressing based upon what your money does or doesn’t
do. That’s why we brought taxes in house. That’s why our estate planning we’ve got extremely involved with.
Speaker 1 – 04:52
We have a couple, you know, partners that will get it to the two yard line and get that executed because we have all
the information here and that’s something we plan on trying to bring in house in the near future. An estate planning
attorney. So one of the recent offerings we’ve had is be able to manage people’s outside 401k through a technology
platform. But a lot of what we do for our clients that have 401ks is we’ll go in, we’ll do the trading, the rebalancing,
coordinate it with the rest of their investment plan. But right now we’re still required to schedule zoom calls to do
what’s referred to as mega backdoor offs. So a lot of our clients are doing after tax contributions, convert it to Roth.
A lot of our clients are just doing Roth conversions inside their 401k plan.
Speaker 1 – 05:37
If we saw a 15% drop like we did earlier this year with the tariffs, that’s a perfect time to convert money from, you
know, pre tax to Roth. Pay the taxes on a lower suppressed value than all the appreciation is tax free. So those still
require those zoom calls. We still need to get on with the client. That technology just allows us trade, doesn’t allow
us to execute. So what we’ve decided, one thing that.
Speaker 2 – 05:59
Too is just even changing contributions every year contribution limits go up or if we need to back everything down,
that’s another kind of touch point that we’d have with clients to make those changes that would ultimately take. Take
their time.
Speaker 1 – 06:11
Yeah. So with this being said, we have a solution to this now and a lot of our clients, which I believe is probably the
greatest compliment EWA companies ever receives. A lot of clients have asked us to be trustee. You know, they’re
doing these estate planning documents and say who do you want a trustee? I wouldn’t want a big bank or fnancial
institution. We don’t know necessarily if the kids are ready yet or uncle wants to deal with this. Will you be the
trustee? And we’ve had to say no because that would deem us as taking what’s referred to as custody. Right. So if
you take custody, which right now all of our money is at Fidelity or Swap. That’s not going to change to very well
known institutions. You know, clients feel comfortable the custody would mean, you know, control of that money.
Speaker 1 – 06:51
So we found out a, a solution is available to accomplish where we can fully handle the 401ks and we can also be
trustee. And this is something that’s referred to as taking fduciary custody. So fduciary custody means we have a
higher level of access than normally an RIA does. But this will allow us to become trustee for clients that are
interested. So we’re now able to serve, you know, our mission to become a multi generational frm that can see your
fnancial plan, your legacy go through from you to your kids. You know, family governance, making sure, you know,
the money doesn’t get wasted like it typically does immediately between generations or within three generations, like
3% of money statistically is gone. We want to solve that epidemic that’s out there.
Speaker 1 – 07:36
So becoming a trustee will allow us to become involved with all family members and quarterback that
communication. That’s huge. While we take on this fduciary custody arrangement, there are, you know, several
things that we’ll have to do as a frm I think are benefts to clients because it makes us, the amount of protection we
have to put in place specifcally around cyber security is going to go up a lot. And the amount of, you know, systems
and protection we have to do internally as we get, you know, looked at by the SEC is going to go up as well. And I, I
view those things, a lot of frms will shy away from those things. I feel that’s going to be a pain. That’s going to be, I
view it as good pain, like hard decision.
Speaker 1 – 08:18
But it’s going to make our life easy because we defne our life as serving clients. And the more we can serve clients, I
think the more, you know, we have already have a very high retention, but the more retention, the more new clients
will get in, the more we to hire the frm. So it’s a win. The biggest thing is just saving time for clients and being able
to serve the actual needs that clients have, which I think the energy generational piece is missing in general with
most advisors out there. And so the fduciary custody from a 401k standpoint, we’ll be able to go in and have a
password management system for clients that want us to and this is, you know, only for clients that want to opt in.
We’ll be able to go in and do everything.
Speaker 1 – 08:54
We’ll be able to update the active Deferrals. We’ll be able to go decide how Roth balances are allocated, you know,
more aggressively than pre tax balances. We’ll be able to process the Roth conversion right when the market
downturn. We don’t need a, you’re a neurosurgeon. We don’t need a quarterback. Hey, let’s schedule 15 minutes. Well
they don’t have time while the market’s down 15. We can just go in and execute it. So for clients that want to fully us
take over that part of their fnancial lives because you know, we’re already handling typically the rest of their fnancial
life, we’ll be able to do that. This will allow us to do that. This will also in the same thing allow us to be named as
trustee right now.
Speaker 1 – 09:28
Like if someone has an irrevocable trust, wants us to be a trustee, we to do that as well. So we view those as huge
wins. What that means for us and why, you know, I think this is a beneft for clients. We have to do two things. So we
have to do one thing. You know, the SEC has come out with new publications. You, it’s called penetration testing. So
when did it basically get a cybersecurity test every year that a outside party is going to come in and essentially audit
how good our cybersecurity systems are in place and you know, point out any gaps that exist. I believe that is the
number one risk for a frm like ours for any fnancial institution. The bigger, the more the risk it is and also for clients
individually. So make that’ll force.
Speaker 1 – 10:12
We already have extremely high protocol for cybersecurity. I’d say the highest out of any RAs that exist. But this will
actually put that to the test and in a good way. It’s not, you know, someone that’s testing it to make sure it’s strong,
not an actual bad person trying to, so we can, you know, see what gaps exist before it’s too late, which is great. Then
the other thing we have to do is we have to get a third party audit by a PCAOB CPA frm. So now this is, I came from
Audit World, but the, this type of frm is overseen by the pcaob. So they, when they audit us, they’re again going to
look at all of our systems, all of our control mechanisms and give us, you know, feedback and basically a, a stamp of
approval every year.
Speaker 1 – 10:58
The SEC still comes in the RAA and gives us the audits. We’ve been through two, those have both gone great, but
they still come in and do their job. Now we have extra, basically three layers of accountability. We have the PCAOB
audit, we have the cybersecurity penetration test, and we still have the sec. So if I’m a client, I’m just putting myself in
the client shoes and saying, wow, this frm has really exposed ourselves. Like they’re getting really tested on all these
levels. And as we grow, those control mechanisms are going to be extremely important for the protection of clients.
And by the way, all of our clients will still have the backing of Fidelity or Charles Schwab as the actual custodian.
Speaker 1 – 11:34
But what we’re not doing is we’re not becoming a bank, we’re not becoming our own custody, we’re not taking over
the physical custody of money. This fduciary custody just allows us to do those two roles, the trust and the 401k
management.
Speaker 2 – 11:46
Important distinction there between just custody and fduciary custody. So I’m glad you done that.
Speaker 1 – 11:50
No question. Yeah. So Ben, anything else to add? I know we want to talk about some of the other higher net worth
offerings that we do and obviously I think we, I would say labels in the top 1% as far as like what we do for clients
with investment management, fnancial planning, estate planning, the taxes now actually in house. But anything
before we go into that, some new services there. Do you have anything to add or from personal experience on the
fduciary custody decision?
Speaker 2 – 12:18
Yeah, you hit on a lot of it just from an advisor side. Anything we can do to save our clients time is in our opinion the
right avenue to go down. You mentioned working with physicians or business owners that are just too Busy to fnd
30 minutes, you know, to get something done during the day when it needs to get done.
Speaker 2 – 12:39
And having that sort of fduciary capacity to go in and do it for our clients behalf not only lets us do it at the
moment’s notice, you know, if there’s, if we see a market drop suddenly, you know, we’re able to do these kind of
things, but just anything we can do to save their time, we don’t want them to just get on a zoom and you know, do it
with us just to do it like if we’re able to do it ourselves.
Speaker 1 – 13:02
Yeah, Ben, you’re exactly right. So our job is like to report, you know, obviously our clients still are the CEO of their
lives or fnance. They make the fnal stamp of approval and decisions. But now we’re able to just report and say, hey,
we got all of this Stuff done on your behalf. And I would liken it to like, if you’ve done a house project and you have to
manage like fve different people, like an electrician and a plumber and like versus just having a contract that’s
managing all that, it’s going to be a completely different experience. What if you had a contract that like knew you so
well that they were also like said, hey, you need to pick out cabinets.
Speaker 1 – 13:33
Well, hey, I know this is, these are my two suggestions and narrowing down that decision fatigue, I would say that’s
like, there’s different levels and steps and we’re going to provide that highest level now as we always have, but even
higher of just giving that concierge experience.
Speaker 2 – 13:48
Yeah, and just being proactive too. I mean it’s almost doing things without even, you realize it needs to get done
without even needing to schedule it. That’s, those are the type of things our clients appreciate.
Speaker 1 – 13:57
No question. No question. Okay, perfect. So the other thing we are doing is we’ve noticed in the marketplace, in our,
on our portfolio, we’re, you know, making changes as market conditions change. For example, the way we’ve
addressed emerging markets in the past, we didn’t include in China, now we include China that we included gold in
the portfolio about a year ago. All of those decisions staying very proactive. But now for higher net worth clients, we
found that there’s a lot of IPOs. So initial public offerings, for example, have essentially become like almost pump
and dump schemes where like all these people have private access to companies before they go private, they go
public, everyone takes their money off the table in these huge gains. Then you know, lower net worth, people buy it
and then the stock just plummets.
Speaker 1 – 14:52
So it’s basically a transfer of wealth from the lower net worth, the higher net worth. And that’s happened in America
in many examples. I think it’s very unfortunate. But with that being said, you know, high net. So for any client, that
portfolio want to make sure it’s best in class. For high net worth clients, I would defne right now as like over 10
million. We’re going to have the opportunity to do, to get into private markets, so private credit and private equity.
And so this is a portfolio we’re currently developing. It’s gonna require a little bit more upfront work with like
subscription agreements. But the downside of this is the reason we’re recommending it for high net worth clients
only is some of these investments don’t have liquidity like a typical investment.
Speaker 1 – 15:35
If you’re an etf, you need it, you can sell it that day, get the money back that day. In a private investment, the money’s
not available right away. You know, typically it takes several years to get. So this would only be appropriate for
someone that’s already fnancially secure with extra money, you know, looking for excess returns or for
diversifcation purposes. And then same thing for private credit would be the same thing. And this would be letting
private companies borrow your money instead of letting public companies borrow your money. So this portfolio is
going to still, by and large be the same as our regular portfolio, but it’s going to lower some exposures and include
the private equity and private credit for the right investors that can sustain longer periods of time for their
investments without, you know, the uncertainty of the liquidity needs.
Speaker 1 – 16:21
So we’ll walk through that on a case by case basis, but very excited to expand the offerings to as we grow as well.
But any other further thoughts on that, Ben?
Speaker 2 – 16:30
No, that’s. And we’ll have more on that as that develops. But exciting offering and particularly for the kind of ultra
high net worth clients because I feel like they are approached often for private investments and we’re trying to get in
the space of reviewing those and kind of giving pros and cons to all of these pitches almost that people are getting.
So having a regulated portfolio that is incorporating this I think is going to be a huge value add to a lot of those
clients that are in that space or you know, things like that.
Speaker 1 – 17:04
No question, no question. Having it quarterbacked as part of an overall strategic plan. I would say there’s a huge
difference in private equity and private investments. Private investments are typically like a friend or family member,
like, hey, I have this idea. Some of those can work, right? Most of the time those are not going to work great. And
you’re going to, it’s like if it hits great. If it doesn’t hit, not only do you lose your money, you probably have to pitch in a
couple more times as the company suffers and needs more cash. Say that all the time. Private equity, I mean we’re
talking typically only billionaires have access to. So we’re talking about sports team ownership. So we’re talking
about, you look at what private equity owns. I’m trying to think of an example. Jersey Mics.
Speaker 1 – 17:42
Like you go in a Jersey Mics, it’s like an assembly line of efciency, right? Private equity owned Jersey Mics now. So
you can kind of tell with how smooth the business operates and how proftable is a private equity. So there’s a lot of
opportunities but a normal investor can’t get in because they’re looking for a huge amount of capital. So that’s why
this is exciting because it’s going to be the high quality private equity are actually going to be available for clients
that typically wouldn’t have access to those.
Speaker 2 – 18:11
Sure.
Speaker 1 – 18:11
So perfect. Well, that’s it. We look forward to answering any questions and more to come as we unroll this and do all
the due diligence behind the scenes. But want to get head of the ball here and make the announcement and we’re
excited to have these individual conversations with all our clients. Thanks for joining. Catch you next week. Thanks
for tuning in to our podcast. Hopefully you found this helpful. Really hope this is as benefcial and impactful to as
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