Episode Transcript

Greg Farber:
Welcome to the Building Interest Podcast presented by Leader Bank, a series of free flowing conversations on a wide range of banking and money related subjects. We are here to discuss all the issues that impact your financial future. Do you want to buy a home, start a small business or secure your financial future? Or maybe you want to maximize your savings ability, get your budget in order, we can help. Our talks with experts and influencers across the world of banking, we’ll set you in the right direction. I’m your host, Greg Farber. Let’s jump right in. We are back with the Building Interest Podcast and today we’ll be talking about taking control of your financial future. I’m your host, Greg Farber. And I’m here with a few financial experts, our very own Savy Ouk-Fernandez, Vice President, Retail Bank Trainer and Elevate Relations Manager here at Leader Bank. And Chris DeCilio, owner of the DeCilio Financial. Savy and Chris, thank you both for joining me here today.

Savy Ouk-Fernandes:
Well, thank you for having me. It’s great. Thank you. I’m happy to be here.

Greg Farber:
Awesome. Well, Savy, I want to start with you. You’ve been with leader for a number of years now. We were just talking before how we both feel like we’ve been here for a long time. Yes. And I’m curious to know what drew you here to Leader? Were you in banking at your prior job as well? Or and what made you decide that Leader was the place for you?

Savy Ouk-Fernandes:
I was in banking. I’ve been in banking for over 20 years now. I started out at a local bank. What I love about banking is definitely the client service aspect of it, as well as mentoring, personal bankers, but most importantly, is definitely the client, servicing the clients needs. What got me here to Leader Bank, it’s the community the sense of caring. It’s definitely a family environment,

Greg Farber:
A local brand as opposed to a big bank.

Savy Ouk-Fernandes:
Correct, Exactly. Everybody knows everybody. At the end of the day, we all look out for each other. And especially when it comes to clients referral base is very important. And I think all of our clients are very happy, very satisfied with the service level that we provide. And I really love that aspect of it about Leader Bank.

Greg Farber:
Absolutely. I couldn’t agree more. So Chris, and again, Welcome, and thanks for being here.

Chris DeCilio:
Thank you.

Greg Farber:
When you first met Savy was she already here at Leader?

Chris DeCilio:
I believe. So. My recollection is about 10 years ago, I was looking to refinance my mortgage, I got a tip on Leader Bank. And after that process was done, my mortgage officer introduced me to Savy who was working on creating your business collaboration type efforts

Savy Ouk-Fernandes:
Networking group.

Chris DeCilio:
Yes, yes. And that’s how our professional relationships started.

Greg Farber:
So let’s back up a second here and lay the foundation. Chris, can you explain for our listeners, what is a financial planner? And what is your role to the client?

Chris DeCilio:
Well, let me answer that a couple of different ways. First, I want to paint a picture for you imagine a Venn diagram. So imagine a circle in front of you now imagine a series of circles around the perimeter overlapping with that circle, and maybe a little bit with one another. So each of those circles represents a different component of financial planning. One might be investment planning, another one might be taxation. Another one might be risk management, insurance, and budgeting and cashflow, and so on, and so forth. So those are all very important aspects of financial planning. The circle in the middle, is me, I am central to a process where I utilize my expertise and experience and knowledge and bring those different aspects of financial planning together to build financial plans for clients and manage their wealth.

Greg Farber:
So I really liked that idea of that picture. And so now, you may have a customer that has one or two of those financial needs, or maybe even three, and it’s your role to bring those together and get the client on a path that achieves those different goals that they have. Am I getting that right?

Chris DeCilio:
A couple of those might be more stressed for certain clients. Most clients actually have a need for all of them to some degree, they just don’t know it.

Greg Farber:
Taxation sounds like it would be a stressful one for clients, right?

Chris DeCilio:
Yes, yes, it certainly is. And that’s a that isn’t one of over the course of a lifetime of an individual, usually their biggest cost. So it’s a very important ask, they’re all very important. But that answer is kind of a Investopedia, sort of a textbook kind of answer. The other way I approach my job is from the perspective of psychology. So there’s a discipline called behavioral finance. And I’ve always been very intrigued by it. It basically seeks to understand observes, and and tries to understand why people act the way that they do with their money

Greg Farber:
Spending patterns, the things they save for, don’t save for, that thing?

Chris DeCilio:
Yes, fear, greed, fear of missing out fear of losses, herd mentality, procrastination, all that sort of stuff. And so, sometimes my job is very simple. It’s just trying to get people to do things that they sort of already know how to do. And they could probably do themselves, but for whatever reason, they don’t do it.

Greg Farber:
They don’t have the impetus or they haven’t formalized it written it down something along those lines?

Chris DeCilio:
Along that lines. Yeah. So let me give you an example. You you probably have access to a 401 K plan.

Savy Ouk-Fernandes:
Yeah.

Chris DeCilio:
So imagine somebody is an employee becomes eligible for a to participate in 401k plan, the company says, Hey, congratulations, you’re now eligible to enroll in our 401 K plan. And we’re even going to match some of our, your contributions. All you have to do to sign up is just these few little steps over here. And you’d be surprised how many people don’t do it, even if they know that they should they just for one reason or another, they just don’t

Savy Ouk-Fernandes:
Exactly.

Chris DeCilio:
So along comes something called automatic enrollment. And this was designed to fix this problem. And it works, participation rates went up. Because what happens is that same employee might get a notification for the company that says, hey, congratulations, you are now eligible and enrolled in our 401k plan. And by the way, we’re going to offer a matching contribution. For right now we’re going to put you an age based target fund, but you can change it if you want to. And if you want to opt out of this, all you have to do is take these, you know the few simple steps to opt out of the program if you want to. And people won’t do that either. So

Greg Farber:
Inherently you’ve increased the engagement. With that one simple step,

Chris DeCilio:
Yeah, people will very often not take proactive steps and do what’s in their best interest, they will also not take proactive steps to do to undo something that is in their best interest. And so that is one example of a way that I try to help people remain accountable to themselves and guide them along. So a lot of my practice, you know, there’s the expertise and knowledge part of it, but much of it is just me acting as a motivator and encourager, sometimes a disciplinarian, sometimes a little bit of a therapist. And because so many of our goals are intertwined with money, for better or for worse, you know, I’m often acting as a life coach as well. Right? And it’s all good. I love what I do. And it’s part of the reason I do it.

Greg Farber:
It’s all very different from traditional banking. And would you say, well, it’s all about money, and so is banking. And yet, when most people think of banking, it’s about having something traditional a checking account to pay your bills, right, a savings account, maybe for those vacations or rainy days, not even as in depth as a 401 K plan, right? Maybe they want to get a mortgage to buy or refi their home, that sort of thing. So I’m curious now and from you to Savy to how you your relationship has has enabled you to kind of bring your clients maybe together to enhance that banking experience where your traditional banking customers might not be looking for financial advice, but you can, you know, provide that and vice versa. You may have some folks, Chris, that came to you for advice. And they may need that banking foundation before they can they can really move forward with it. Can you talk to me a little bit about that experience?

Savy Ouk-Fernandes:
Yeah, absolutely. So I feel like you know, banking, again, we’re all intertwined, right? We’re all we’re that, that circle that you that that you alluded to, we’re all connected in that way a client comes to us for the investment and stuff, you need the account, the bank is kind of like that liaison between the client and the financial advisor, because they need to set up the account, if like you said earlier, if they’re looking to save funds to purchase a home, they need to put a certain funds away. And that goes back to Chris referencing in regards to savings, you know, which we’ll go a little bit deeper into that in a bit. But you need to be able to have a game plan by planning accordingly as well, strategically. So I think this is where the bank comes in, in regards to what kind of vehicle we’re going to put these products in, is it going to be a savings is going to be a checking a money market term account, such as certificate of deposit

Greg Farber:
Or some combination of all of those things.

Savy Ouk-Fernandes:
Exactly, exactly

Greg Farber:
Now, I’ve heard of this thing called the 50/20/30 rule. Yeah, which is this rule of thumb that you know, you put 50% of your budget towards essentials, and you know, another 20%, maybe towards savings or financial goals, which as we mentioned before, Chris, not everyone does on their own, and then you keep that 30% leftovers kind of your fun money. Now that pretty neatly separates needs from wants, is that really just an open oversimplification? Or is that is that a real thing? Is that how you approach you know, savings plans with your clients within sort of that framework of those needs and wants?

Chris DeCilio:
Well I think you described it well, as a rule of thumb, and there are many others out there like it, it basically just tries to help people prioritize between spending and saving the the 20 that you see in that equation that’s been around for a long time. And on occasion, I will mention it to a client if they’re below that 20 And I feel like they can get to that 20 But for a lot of people, it’s just not a very realistic number. The US Bureau of Labor Statistics recently came out with our national savings rate which has dropped to a dismal 4.4% And a lot of that has to do with what’s going on right now with inflation. It’s really tough on people, but it’s been a chronic condition for the United States for many, many years. The savings rate so people who are just struggling to get by 20% feels almost impossible. 50% on needs is probably a little bit low. On the other hand, there are high net income earners, income earners, and net worth individuals who have the means to save more than 20% and need to if they’re going to maintain that lifestyle right later in life. So what I encourage people to do really is to develop their own equation. And that really starts with establishing some goals, maybe doing a budget, figure out where their money goes, and making a determination of well, how much money do I need to set aside in order to make that financial goal happen. And that helps people prioritize between how much they save and how much they spend, I tend to break it down into needs versus just discretionary income, okay, and the discretionary income can be parlayed into things you want to do, and things that you probably have to do to save for your future.

Greg Farber:
So the needs includes a little bit of future saving for retirement, things like that. But then some savings is also in that discretionary as far as vacations or things like that. So it kind of encompasses both of those.

Chris DeCilio:
Yes, it begs the question, what is a need? And what is want? Is a vacation a need? Is it a is it a want, but you had mentioned, you know, saving for retirement, maybe as a need, I actually encourage people to look at it that way to pay themselves first almost look at themselves as their own creditor, if they can, because that’s I think one of the best ways to save the future, just put yourself in an automatic savings plan and make that part of something that you adhere to.

Greg Farber:
So not necessarily always 50/20/30. But like you said, as a rule of thumb, kind of a starting point to see what are your goals? What are your needs? And then how to fit those into 100%?

Chris DeCilio:
Yes.

Savy Ouk-Fernandes:
Yeah, yeah, exactly. The other thing I want to add to is that with direct deposit, you know, it’s one of those platform that definitely can help clients, but a lot of client don’t it like you said earlier, we have to simplify things for clients, right? If the process is more involved, people get discouraged. So I think with my role and Chris role, it’s all about simplifying, you know, helping a client to simplify their banking experience, as well as simplifying the financial process. But direct deposit is one of those things you set it you forget it?

Greg Farber:
Yep.

Savy Ouk-Fernandes:
Right. So it before you know it, that funds accumulate to it now you’re over exceeding your, your budgeted amount. So we talked that, you know, I think that direct deposit is one of the component that people don’t really take advantage of.

Greg Farber:
That is a great point. And I you know, actually do that myself. When, when we first started a family, we decided that some of our paycheck would just automatically go into a house fund for repairs. And then activity funds, pay for things like summer camps I’ve started right now and things. So where I don’t have to think about and the take home pay, I get already has that carved out, isn’t it? Like you say it’s simplified? It’s automatic. And that savings tool is actually happening?

Savy Ouk-Fernandes:
Right, Right.

Chris DeCilio:
I’m very much a favor, in favor of simplification as well, an audit, automating as much as you can of the process. Exactly,

Savy Ouk-Fernandes:
Exactly.

Greg Farber:
Now Savy. So if a client approaches you with a bigger goal in mind, they might be a new client, they might be an existing client of the banks or whatever. But now they’ve decided they want to start saving for a down payment on a house.

Savy Ouk-Fernandes:
Right, right.

Greg Farber:
That’s a much bigger goal, that’s probably not going to happen if you set $200 a month aside in from your paycheck or something. Is this something where then your professional relationship with Chris…

Savy Ouk-Fernandes:
Right, it’s of course, it’s it’s about exploring that exploratory phase to understand what the client’s needs and wants are,

Greg Farber:
Right.

Savy Ouk-Fernandes:
We need to and number two, we need to be able to part of that exploring phase is how much can they budget for, right. And I think that’s when Chris comes in. If they want us maybe a basic savings account, we can absolutely do that, or even a money market account. But if they’re looking for something that is more, that will take maybe a couple years or so and stuff, that’s when Chris comes in.

Greg Farber:
So I just want to come back to something that I mentioned early on when we got started in this episode. And we talked about you’ve been here for a long time, you talked about how much you love the clients and kind of what keeps you coming back? What is it that keeps you coming back to work everyday Chris, and being being part of this, this money engagement for clients?

Chris DeCilio:
Well, I think I fell in love with the concept of financial planning my early 20s I didn’t really get much out of my college experience. I learned what I wanted to after I paid all that money.

Greg Farber:
I know how that feels.

Chris DeCilio:
I actually don’t really look at my work as a job. I look at more of as it more of a calling in life perhaps. And so when I wake up in the morning, I’m working for me, but I’m working with some great people and I enjoy that an awful lot. I enjoy forging long term relationships with them. And when you’re very delighted with what you do, it doesn’t really

Savy Ouk-Fernandes:
it’s not work, its not work, exactly. The day goes by so fast.

Chris DeCilio:
Yes, yes. Well its also function of us getting older too. But yes, when you like what you do it does make the day go faster.

Savy Ouk-Fernandes:
Exactly, and I think that you know, when you love what you do, definitely shine through to your client its so genuine and so sincere. And I feel that in the line of work that we do that that sincerity translates into trust. And we know that when it comes to client finances, people are hesitant. You know, there’s a lot of hesitation, a lot of concern. So trust plays a huge, huge component with the decision making. Because when it comes to decision, it’s all emotional,

Greg Farber:
Right, but you have to be comfortable, you have to feel that connection with the person working with and both ways.

Savy Ouk-Fernandes:
Exactly.

Greg Farber:
You have to feel it, that client has to feel it.

Chris DeCilio:
Yes, it does need to be mutual.

Savy Ouk-Fernandes:
Yeah, exactly. Exactly.

Greg Farber:
So as a parting thought, and not necessarily specifically for either one of you. I want to touch on you mentioned the economy, and how much things seem to be changing every day in our world. I mean, is there any advice that you want to offer for our listeners today, to stay on top of their finances at a time when everything seems to be getting more expensive? I’m looking at the gas pumps here. And you know, what are some folks, things folks should keep in mind when making money decisions, specifically in today’s market?

Chris DeCilio:
Well, I would say the first thing is that it’s okay not to feel great about what’s going on, it’s a very normal feeling never feels good to watch account balances shrink and to have to pay more to fill up your car or to buy groceries or what have you. I think if you’re somebody who’s constantly looking at your account balances, that’s probably not healthy. On the other hand, I do think times like this give you an opportunity to do what we might call a gut check. And just to figure out, okay, am I being too aggressive with my portfolio, it’s one thing to hypothetically think about, say, a 10, or 15, or 20% loss on your assets, it’s another thing to actually go through it. So I think this is a good time to reevaluate where you are. And if it turns out that, you know, your your goals haven’t changed. And you had positioned yourself where you are for the right reasons, and you have a good emergency reserve, which is probably important nowadays, because we go into recession, you’re gonna need it, maybe if all things check out, then I would say, not to stress too much. Just, you know, stay on the train, and keep plugging away your goals.

Savy Ouk-Fernandes:
Exactly, yeah. Yeah, I want to add that my my advice was, say, again, don’t panic, I mean, changes come and go, right. We all live through it, right. And we all we all overcome that. And if anything, we prepare us to be even more prepare in the future. So it’s definitely it’s short. I don’t want to say short term, but it’s change is not permanent. Right? Right. So we just need to be flexible and like Chris said, don’t panic, don’t stress out. Because we’re all going to overcome that.

Greg Farber:
Take stock of where we are, make sure that we have the means to take care of what we need to right now. Except don’t panic and go liquidate those other assets that you’ve been saving and freak out or something. Stay stay the course with with kind of keeping a level head like you said, it’s not healthy. I remember checking my 401 K balance earlier this year. And I decided not to check it again. And I haven’t since. And I don’t even want to know because it’s not for today. It’s for tomorrow.

Savy Ouk-Fernandes:
That’s what Chris said to me, don’t log into your 401 K, no point in looking at it now. You’ll be fine.

Chris DeCilio:
Yes, it’s just losses on paper currently.

Greg Farber:
No, that’s That’s great advice. I hope that helps the folks listening and I just want to say thank you both for being here today. I had a great time. I hope the listeners enjoyed it. And you have any other closing thoughts or anything by all means, and thank you again.

Savy Ouk-Fernandes:
Well, thank you. Thank you for having us.

Chris DeCilio:
I just need to read a quick disclaimer again. I’m am Christopher DeCilio principal of DeCilio Financial of Arlington, Mass. Securities and investment advisory services are offered through FSC Securities Corporation, Member FINRA, SIPC, FSC, a separately owned and other entities and or marketing names, products or services referenced here are independent of FSC

Greg Farber:
DeCilio Financial Inc is not affiliated with or owned by Leader Bank N.A., and all opinions expressed by Christopher DeCilio are his own and not the opinions of Leader Bank. For more information on today’s subject, visit leaderbank.com. In addition to past episodes, you can also find our corresponding blog entries for more insights. This podcast is a production of Leader Bank N.A equal housing lender. Member FDIC. NMLS number 449250.