Ep #159 - Simplifying Financial Complexity: Consolidation, Coordination, and Peace of Mind

In this episode, Ben and Adam discuss how life and finances can feel overwhelming as accounts, policies, passwords, and paperwork accumulate over time, often from job changes or intentional “safety net” complexity that eventually stops serving people. They describe how too many accounts create burdens around beneficiary designations, estate settlement, withdrawals, taxes, required minimum distributions, and major purchase decisions, and how complexity can shift work onto executors and beneficiaries because each institution requires its own claims process. 

The hosts emphasize the value of coordination—having someone “playing point guard”—to help clients see everything, consolidate where appropriate, and follow through on implementation. They recommend proactively assessing and organizing finances before major transitions like illness, dementia, or death, using moving and unpacking as an analogy for making clear instructions and reducing stress for heirs and for personal peace of mind. Listen in as they break down how to declutter your financial life.

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Transcript

[00:00:04] Adam Werner: Hi everyone, and welcome to AB Conversations, where we will help you CFP your way out of it. A podcast where you get into the minds of a couple certified financial planners on how we think and feel about everyday financial planning questions, and what should really matter most to you. A healthier financial life starts now.

[00:00:27] Ben Haas: So Adam, today let's talk about just complexity. I think life can often just feel daunting. Thinking about my own situation. Desiree going through some health stuff, like it's just-- there's so many different pieces of the pie. There's so many different people that, you know, aren't talking to each other.

You just accumulate all this stuff, and sometimes you don't know how to just digest it or make it feel simpler so that life just doesn't feel so heavy. Your thoughts?

[00:00:54] Adam Werner: Oh, yeah, for sure. Now turning it to, okay, what does this mean for clients? Why are we recording a podcast about life feeling chaotic? It is the accumulation of things, right? We are looking to move at some point in the not too distant future.

We're looking to get another house and the stuff that has just accumulated over the years in our house, we're now having to h- It's the reckoning, right? Now we have to deal with it. But we are also experiencing this with clients too, where they accumulate numbers of accounts, retirement accounts from different employers, life insurance policies that they bought long ago or that were bought for them when they were born.

You know, we have-- we've seen some insurance policies, you know, pre nineteen sixty that still exist

[00:01:37] Ben Haas: Wow. Yeah.

[00:01:39] Adam Werner: just the idea is how can we help people or what can clients do to try to simplify? Because it does get to the point where you have-- if you have too many moving pieces, it can feel daunting and it can just feel paralyzing to know, "I don't even know where to start.

I have all of these different accounts." They may all have had different purposes. Just how do I even go about starting this process? And oftentimes people come to us and it's, "All right, then h-here's how we're going to help consolidate and simplify." And there's many different reasons which I know we'll get into, but financially, people also accumulate stuff over time.

[00:02:19] Ben Haas: Yeah, and I think you said that very well. Some of that's by accident, right? It's just the living. You know, people don't, like, stick at one job anymore. I don't know-- I don't remember what the stat was. I feel like we looked at it recently. The average number of jobs a person has is, like, approaching double digits now, you know, in their career.

So th-there's like the natural accumulation of stuff, but there's also some of that used to be on purpose. Like, I'll keep these different accounts because it feels like a safety net. It's a form of diversification. You know, I have different bank accounts that are earmarked for different purposes.

You know, well, this is to pay the taxes, but then this is for Christmas or vacation money. Like there sometimes is complexity on purpose, but I think you're bringing up the part that we wanna talk about. At some point, that just stops serving you. And I'm not even talking just, "Okay, now I gotta start withdrawing money in retirement," or, "Hey, I'm looking to work out my estate plan, and this just looks like s- a lot for somebody to handle."

It could be that it's just- I've got so many different passwords. I've got so many different logins. I get so much paperwork. Like it-- at some point the complexity may just feel like overwhelming and unnecessary.

[00:03:23] Adam Werner: Yeah and, and when you start to kind of unravel some of the smaller details that get associated with each, I'll say, financial account. I mean, you kind of alluded to it. Something as simple as beneficiary designations.

[00:03:34] Ben Haas: Yeah. 

[00:03:36] Adam Werner: We've had this experience recently, or at least we're going down this road where a client is naming many people and many organizations on the various accounts that this person owns.

And there was the misconception that, well, when I pass away, everything is listed in my will. The executor is just gonna handle all this and just disperse money to beneficiaries. Not understanding that each beneficiary is going to have to go through a paperwork and claims process on each account with each institution. It can be very daunting, not just for the living, right? In this scenario, but now you pass, it now becomes a burden or at least a really big exercise, not just for your executor, but for all of the beneficiaries in this instance. It's a separate process with each institution, and it can just lead to some of these unintended consequences just by having a lot of complexity kind of built in with many different accounts that could be serving the same purpose.

[00:04:34] Ben Haas: Yeah, and I'm glad you started there on the financial side, because I do think this whole idea of things are just too complex, don't they-- shouldn't they be simpler? We are talking to people more frequently now that are kind of recognizing that as they're just kind of planning estates or they're in that retirement phase.

So yeah, beneficiary designation is one of them. Just I think we, we are called upon you know, certainly with on the investment side of things to kind of make sure we're managing things in an appropriate way, managing withdrawals, managing required minimum distributions. There's a whole service side to this that if you just have things in a lot of different places, it becomes more complex than it needs to be.

And just to be clear, it's not saying that everyone we work with has to only work with us. I get it. But there definitely has to be somebody that's kind of like playing point guard here and kind of understands it all and can coach you through, "Well, look, these are like titled accounts." If they didn't really recognize that they could be consolidated, then let's just have that conversation because to your point on beneficiaries, withdrawals, taxes, all of it, it kind of just makes things simpler.

[00:05:39] Adam Werner: Yeah. And I would hope for any clients that are listening to us right now, that they understand and appreciate our neuroses when it comes to... it's great to talk about these things, but if we have a meeting with a client, and these are the action steps that, that we collectively determine need to happen we accept that as our responsibility.

Even if it's a task on their to-do list, we take that very seriously because we understand just how important the implementation actually is. We can talk about all these great things and let's consolidate, and we have this 401out there. Did you take your RMD this year? We took it from here.

Like we're-- it, it-- This is also, I'll say so-somewhat, this is also for us to feel like we're in the right spot to help clients get done what they say they wanna get done. So being able to kind of see everything. The less moving pieces usually means it's a little bit easier to kind of manage, make changes when necessary.

But something as simple as just the decision-making, whatever that may be, right? If some, if a client is facing a decision, and there are 12 different investment accounts at different institution, it becomes very difficult to have that be a concise decision-making process. It just adds to the complexity.

[00:06:53] Ben Haas: Yeah, I'm so glad you went there because that's what I was thinking of just talking about next. There, there just, there needs to be this coordination. And I think like anything in life, when there just feels like there's too much information, it just makes it harder to kind of decide to move forward.

And there is, I don't want to jump around here, but we know there is kind of an em- an emotional side to some of this too, because here we are talking about the financial things. We know there's like possessions and houses and, you know, things that we talk about in estate settlement too that are gonna be a little bit more emotional, right?

What if I need this? Or what if somebody's gonna want this after I pass away? There is the reality on how adult children kind of handle these things. And more than likely they're not keeping everything that mom and dad had. But I think anytime you're just, you know, there's so much information out there, and even if it's all your own information, if you have to sift through too much of it, there is just a fatigue that goes with that.

And that's where we see a lot of people, they just stop, then they don't make a decision, then they don't move themselves forward. And we certainly don't want that either. So, you know, as you get to that phase of life, we're meeting somebody here in two weeks. You know, her f- the first thing she said was, "I'm ready to retire and I've got 14 different accounts."

Like, "I don't know what to do with this." Just work with somebody that is at least able, if not to consolidate all of it, to see all of it, to work through all of it with you so that you feel like, all right, somebody's got their fingers on the pulse of this and can guide me on how to handle these things.

[00:08:18] Adam Werner: Yeah, and this is one of those instances where there's, not a right or wrong answer to how many accounts should I have? What's the right number? It really is-- 'cause we-- And again, if people are listening to this, they know we are big proponents of mental accounting and earmarking certain accounts for certain goals, whatever that may look like.

So it's not that we want everybody to consolidate to get down to the lowest number of accounts possible, no. But when it does feel like it's becoming a burden or it's becoming difficult to maneuver for people to make decisions on... we get asked this question all the time. "I want to go buy XYZ," call it a car, an RV, just a bigger purchase.

We often get the-- asked the question, "How should I pay for this? Where should I pull the money from?" And that becomes a much harder conversation or decision to make if we're having to sift through a lot of different accounts with a lot of different tax impacts. It just, it makes the process harder.

A-and I'm not saying that for our own sake. That's what we do. That's what we do. It's our job. But I think on the client side it just becomes a lot harder to feel good about a decision when you're just-- you're weighing a lot of different moving pieces. 

[00:09:34] Ben Haas: On this topic of like things feel like they are all over the place, you know, I realize I should maybe start trying to organize this. When do you think the right time is for somebody to kind of make this assessment on are things more complex than they need to be for me?

[00:09:49] Adam Werner: When should they make that decision or when should they think about it? Today? Yesterday? 

[00:09:56] Ben Haas: I didn't mean for it to be that much of a softball, but...

[00:10:00] Adam Werner: It's-- No, generally speaking odds are this applies to many things. Being proactive with these things is the key, right? It's before there is a major illness that could occur that could remove your decision-making process, right? We've certainly seen that Alzheimer's or dementia diagnosis, where now it gets to the point where however it is, there's not gonna be a, clean or super efficient and quick way to now streamline that situation. Just the death of a family member or a spouse. Just all of the things that lead to some bigger transitions around not just the emotional side, but the financial side too.

Being able to work ahead usually puts the client here in this situation in a much better spot where they can control what's kinda going in on the front end to that consolidation or that simplification process. 

[00:10:58] Ben Haas: I have to agree with that. I really love the fact that you're willing to share the whole, like, process of moving, because that's... It's almost like a, the best analogy I think there is for estate settlement. That when you have all this stuff that's all over the place, you know, it's kind of unknown what is where, how to access things, what it means.

That's putting the next in a really tough spot, where the sooner that you can get through the process of kind of assessing, "Okay, here's what I own, here's why, here's access to things," and sharing that information, the easier it's gonna be on the back end. And again, the point of this is you're gonna feel better about it too.

I'm glad you shared the whole moving experience or what you're starting to go through now, because I do think it's one of the best analogies that we can make for like what estate settlement is going to almost feel like. You know, just thinking about your own situation, all the things that you've accumulated, and now that passing or somebody having to now handle that when you pass away, not just the possessions, but the financials, like we've said.

So you kind of, I think out of kindness you want that to be kind of clean or you want there to be clear instructions. You know, if you're hiring a moving company, it's, "This box needs to go into this room." Like, let's make it clear so it's not all jumbled when somebody has to unpack it. You know, that, that is what we're looking to do, and that's not just to say you're doing this for whoever's gonna handle that on the back end, you know, your heirs.

I hope there's something that just feels good about organization and cleanliness. There's something like a fresh start of, " I've got a clean desk right now, you know, as I get into next week."

[00:12:31] Adam Werner: And that could just be our brains, right? We-- that's just maybe the way that 

[00:12:36] Ben Haas: we, 

[00:12:37] Adam Werner: we feel and the way that works for us. And we understand that there are certainly clients that are in that same mindset, but there are certainly some that aren't. But anything that we can do to just beyond managing the investments and beyond helping with some of the actual planning decisions, being able to help prioritize, being able to help organize some of this information, just reducing that complexity not-- again, not just for who may be left to have to pick these things up but hopefully it is-- there is hopefully some peace of mind that comes along with just it's a simpler process.

I have less moving pieces. I feel more confident because I can see, you know, my entire financial life in a, on a post, on a postcard and not a stack of legal papers, right? Like, I'm thinking like a legal, yellow legal pad, and it's just filled with information. Like, I think there is a lot of positivity that comes with just being able to kind of understand my situation.

And when curveballs come, I can now look at this information or work with my advisor with a much more simplified approach to just tackle a problem if it arises.

[00:13:49] Ben Haas: Yeah. I think it's well said. Way to wrap it up. As always, appreciate you.

[00:13:54] Adam Werner: See you next time.

[00:13:56] Ben Haas: Bye.

[00:13:57] Adam Werner: Bye. Hey everyone, Adam and I really appreciate you tuning in. Please note that the opinions we voiced in the show are for general information only and are not intended to provide specific recommendations for any individual. To determine which strategies or investments may be most appropriate for you, consult with your attorney, your accountant, and financial advisor or tax advisor prior to making any decisions or investing. Thanks for listening.