Jane Wollman Rusoff
November 14, 2022

Here’s a crisp and clear message to financial advisors from Jamie Hopkins, managing partner of wealth solutions at Carson Group:

“If you don’t really care about what you’re doing, you’re in the wrong business,” he tells ThinkAdvisor in an interview. “Define your ‘Why.’ Your ‘Why’ should make you cry.”

In his newest book, “Find Your Freedom: Financial Planning for a Life on Purpose” (Harriman House – Nov. 22, 2022), co-written with Ron Carson, founder and CEO of Carson Group, readers have the freedom, of course, to hop among the 26 chapters. But chances are they’ll want to take in this comprehensive, conversational tome from cover to cover.

It provides a trove of financial planning insights as well as the likely repercussions of failing to have a good financial plan.

In the interview, however, Hopkins maintains that there’s typically little need for an all-inclusive plan if, for example, you’re only in your 20s. Estate planning can come later.

Finance professor of practice at Creighton University’s Heider College of Business, Hopkins co-created the Retirement Income Certified Professional designation and developed additional educational materials for the American College of Financial Services’ Certified Financial Planner and Chartered Financial Consultant programs, among others.

In 2017, seven years after Hopkins earned a Juris Doctor degree from Villanova School of Law, The American Bar Association named him one of the top 40 young lawyers in the U.S.

In our conversation, he explores a number of financial planning concepts, including the use of debt as a powerful tool. He also talks about why he thinks annuities are “oversold and underutilized” and why the 4% rule isn’t a rule but “a withdrawal finding.”

ThinkAdvisor recently held a phone interview with Hopkins, who was candid in a brief assessment of financial advisors.

He would hire only “5% of the financial advisors out there,” he declares, and then offers reasons.

Here are highlights of our interview:

THINKADVIVSOR: How do you define “financial freedom”?

JAMIE HOPKINS: People need to define that for themselves. You have to start with understanding your relationship with money, where you want to go with it and who you want to be. Then work backwards toward what financial freedom means to you.

How can advisors take their own personal financial freedom to the next level?

Define your “Why.” I always say, “Your ‘Why’ should make you cry.” If you don’t really care about what you’re doing, you’re in the wrong business — whatever you’re doing in life.

I think most advisors should put their “Why” on their website. Do a video about your “Why.”

Figure out what you actually want to do as an advisor. Make sure you’re only focusing on doing the things that you want to do, whether that means partnering, finding the right tech tools or leaving the firm you’re with and going out on your own or joining someone else’s firm.

You don’t have to feel like you’re stuck in life by default.

What is the Carson “Find Your Freedom Planning Promise”?

It’s following a proven financial planning process that will get you to where you want to go.

Advisors need to help people understand the basics first — saving, income [and so on] — and then get more strategic about the decisions they ultimately have to make, like layering in legacy and more complex planning topics.

What keeps people from wanting to do a financial plan?

Everybody has parts of a financial plan. You might not put it all together [now] — and that’s OK. Not everything has to be wrapped up [at once].

You can be in a part of life where only pieces of a plan are in place because that’s what you need at that [particular] phase.

If you’re 26 years old, for instance, you don’t need to know what your legacy, estate planning and charitable [strategies] are yet.

But you have to align your planning with your objectives and goals. No one plan fits everybody.

To what extent are millennials and Gen Zs involved in financial planning?

It all depends on what phase of life you’re in and where you are at that stage, not how old you are.

The oldest millennials are in their 40s. They might even be thinking about retirement strategies. Some millennials in their 20s are millionaires.

However, most younger people are thinking about housing, managing debt and understanding their relationship with money.

[The last point] is a core part of what [advisors] used to skip over: The behavioral aspect of understanding your relationship with money is incredibly recent. It’s only been two years since that’s been added into CFP education.

And one thing we have to get a better understanding of is whether you’re a debt-averse person or a more risk-tolerant person.

How can “debt be a powerful planning tool that helps us open up possibilities in life that you wouldn’t have expected without it,” as you write?

Take a lesson from the best companies in the world: They almost all leverage debt to grow. Debt is a very powerful growth vehicle.

So you should always look at what [rates] you can borrow at and what you can leverage elsewhere. That should be an annual decision.

For Americans, the two biggest debt decisions are college education and buying a house. Also, you might have debt that comes in on your business side.

Any time you’re borrowing, you’re also making a decision as to how much to borrow vs. how much to invest.

Even if you’ve paid off your mortgage and you’re 62, you’re making an annual decision as to whether, for example, you should pay all taxes [with cash], refinance your mortgage or do a reverse mortgage.

Insurance is very important to a financial plan, you write: “Being without insurance is like having a steering wheel but no car.” But why do you need insurance if you’re investing in the market?

Insurance is often a risk-mitigation or transfer technique. Tax-free death benefits from life insurance can be a more efficient way to transfer wealth.

There are certain things that market returns can’t solve. For instance, no return can [provide] lifetime income.

Read more: https://www.thinkadvisor.com/2022/11/14/jamie-hopkins-how-to-help-clients-find-financial-freedom/

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The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.