LIVINGSTON, NJ – Financial Focus, LLC is a financial services and life planning firm based in Livingston, New Jersey. They take a long-term approach in order to prepare their clients for the countless transitions that life presents. Their holistic approach aims to give clients choices, empowerment and personal attention. Financial Focus doesn’t just sell products or services, but makes sure clients understand the consequences of their self-driven choices with the trusted advice of professionals known for their integrity. The Alternative Press recently sat down with Michael Kay, President, Certified Financial Planner (CFP) and CPA, to discuss Financial Focus, how they’ve dealt with the downturn in the economy and what they have planned for the future.

Franco Libunao (FL): What is the history of Financial Focus, LLC?

Michael Kay (MK): Financial Focus was actually born about 8 years ago, right after 9/11. It was a collaboration between myself and Metro Duda, Jr. Initially we created this firm with the main objective of offering traditional financial planning and wealth management using a fee-based approach, rather than using the commission approach common among brokerages. Today we’ve expanded our mandate. We’ve evolved from serving as traditional financial planners to being financial life planners. By financial life planners, I mean that we go beyond traditional financial planning to help clients rethink their relationship with money. We refocus them on using money and investments to realize life aspirations, rather than using their lives to make money. Our approach reflects the desire for work-life balance that so many people are seeking today.

FL: Your headquarters is in Livingston, NJ. What has being a NJ based company meant to your firm?

MK: I was born and raised in Essex County and have lived in West Orange essentially all my life. So, this is home, which has made it personally very rewarding as a business owner to stay connected with the community I know and am familiar with. For our firm, being in New Jersey means we’re centrally located and very accessible for clients within the Jersey-New York metro area. We’re also accessible enough to our clients located in other parts of the country, because of the major airports surrounding us.

FL: When people think "financial services", they don’t know what to think because that term can be too broad. What products and services does your firm actually offer?

MK: We provide comprehensive financial life planning services. This includes wealth management, retirement planning, estate planning, tax planning and college planning. But before all this, we start with a fundamental mission of helping people create their financial life plan. That means helping people identify what their long-term dreams and goals are for their life, and then building a step-by-step plan in order to understand what needs to happen for them to achieve that success. The cornerstone of our practice is this creation of the financial life plan, or roadmap, to help people improve their life trajectory and manage the many life transitions that we all face, whether it is starting a family, launching their own business or buying a new home.

FL: Especially with regard to what has happened recently with financial services, a lot of people are not aware of the dangers of stock picking and market timing. Can you elaborate further on that?

MK: Sure. Research from a number of major universities has found that more than 90% of all market returns is attributable to asset class selection and asset allocation. This means only a small percentage comes from timing and stock picking. The problem with stock picking and market timing is that you essentially have to be right constantly. There’s little to no margin for error, and since you are dealing with human judgment, you can expect that there will be errors. We believe investors are better off investing according to their personal financial plan, in which assets are allocated in order to grow and preserve wealth, rather than trying to chase returns through market timing and stock picking.

FL: Due to the recent economic downturn, there was an especially big effect on financial services firms. How has Financial Focus handled these tough times?

MK: We’ve found that the best way to handle tough times is to be prepared. Key to our approach is setting expectations. We honestly prepare clients for the ups and downs of investing. We believe clients should be positioned for, and expect, varying levels of investment portfolio performance. We don’t make performance promises and don’t take credit for bull markets. If a clients comes in for one quarterly meeting and is overjoyed by their latest performance, as a rule we always tell them, "Next quarter might not be this good." This has built a certain amount of trust between us and clients, which has enabled us to have frank conversations with clients in down markets. There was a great line I heard from a Behavioral Finance professor named Meir Statman from Santa Clara University and he said, and I will paraphrase, "The markets are normal but investors are irrational and their behavior goes against what they should do because it is emotional." We understand that money can be an emotional issue for many clients, especially in difficult times. So we’ve spent a great deal of time during the downturns communicating with clients, updating them on what is going on, what to expect and looking long-term rather than short-term. It has worked out very well for the most part because as long as you can talk people off the financial ledge, so to speak, you have the chance of helping them not make big mistakes.

FL: How has Financial Focus handled the negative sentiments that arose after the collapse of several financial services firms and other issues (i.e. Bernie Madoff)?

MK: We use a safe, established third-party custodian for our clients’ assets, and we make a point of letting them know that their money is safe because we don’t touch it. A large part of our job is actually helping clients be informed, so they understand the difference between hiring us as their financial advisors versus entrusting their money to someone who claims to be a genius investor that can bring them great riches. Secondly, we view our job as advisors is to make sure that clients aren’t taking unnecessary risk but are instead creating portfolios that are in alignment with their dreams and their goals. We don’t try to convince them to put their money into a hot or magic hedge fund. That isn’t our style.

FL: Earlier you mentioned how you are anti-Wall St. and fee based instead of commission based. Are those active choices with regard to dealing with negative sentiment or is that a foundation upon which your company is built on?

MK: It is really foundational. We don’t want our clients in any way to believe that we have any incentive, other than working in their best interest, to make changes in their portfolio. We only get compensated for managing their money, not through making trades. Even if an advisor is acting in good faith, there can be the appearance of a conflict of interest in commission-based relationships. This is why we made the foundational decision to be a purely fee-based advisory firm rather than as a transactional firm. This way, our business is based on providing a service, not on our clients buying and selling securities.

FL: A big reason business is as tough as ever is the continuously growing amount of competition. What is the Financial Focus approach to competition?

MK: We believe you can’t be all things to all people. We’ve carved out our own unique niche that, we believe, is so differentiated and tied to our core values as a firm, that we don’t really have competition. As financial life planners, we work with clients in such a different way than traditional financial planners, making our approach to building and maintaining relationships very unique. So when it comes to competition, we focus on building spectacular relationships with our clients, with our deep understanding of who our clients are and what they care most about.

FL: What separates Financial Focus from other similar firms?

MK: One of the main things that separate us is our personal attention to life transitions. For instance, retirement is a life transition. While many traditional planners ask if you have enough savings for retirement, we ask what does retirement look like to you? What are the aspects of their life that makes it joyful and interesting? We recognize that life in the next stage needs to have meaning for our clients. For us, understanding a client goes beyond crunching numbers in their portfolio accounts. It is about understanding their values. We do this by exploring a client’s money history; this helps us understand the lessons and behaviors we’ve learned about money through the years and how they influence our decisions today. For example, I have a client that grew up in the Great Depression, so he was incredibly afraid to spend money. I’ve had other clients who grew up hearing that money is the root of all evil. We believe as financial life planners that it is important to understand the personal values and beliefs of our clients so that we can best serve their unique goals and needs. It’s a very different approach from traditional financial planning.

FL: What community outreach does Financial Focus engage in?

MK: We’re each engaged in various activities at our firm. One of our team members volunteers with the United Way. Another team member works at a camp for children with special needs. Some of us do pro bono work for people who don’t have the ability to pay for financial services help and guidance. I personally I have spent time on several community and non-profit Boards, in addition to doing pro bono work.

FL: So you let everyone do their own thing but there is no firm initiative?

MK: There has not been a firm initiative. One of the cornerstones of financial life planning is living a life that is balanced, and we believe that needs to be self-determined based on each person’s life situation and passions. So, if I were to dictate what we were going to do as a firm, I would be encroaching a bit on the ability of our team members to use their own creativity and personal desires toward a cause they’re passionate about.

FL: Going "green" is something that has become popular during the economic downturn. Does Financial Focus have any green initiatives and what are they?

MK: Yes, we have several green initiatives. We make a point of recycling and devote support staff to this task for us. We also recently made it a goal to get as many of our clients to be as paperless as possible. One of the firms that we work with on asset management provides a paperless system and offers to plant a tree for every client that signs up for the program. We’ve also gone to paperless prospectuses.

FL: What should clients or potential clients look forward to from Financial Focus in the future?

MK: We are looking to grow and expand our financial life planning approach. One way we hope to do this is by bringing more advisors into the financial life planning fold. As a part of this I’m in the process of writing a book on how to transition a traditional financial planning business into a financial life planning model. So looking ahead, we are excited about continuing as a growing firm that is leading the way in putting clients’ lives at the center of practices. We plan to keep broadening the conversation on financial planning to encompass more than money and keep it on what matters most to clients.

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Financial Focus is committed to helping clients transition through the many stages life has to offer. For more information on their team, their services and how they can help you, please visit http://www.financial-focus.net/.  Financial Focus is located at 70 South Orange Ave. Suite 245, Livingston, NJ 07039, Voice: (973) 533-0666.