Get To Know Your Advisor...

We sat down with one of our most esteemed Financial Advisors, Phillip Christenson to ask him a few questions, to get to know him and his financial philosophy a little bit better.

What credentials, education, and experience do you have?

Since my earlier high school days I knew I wanted to be involved with stocks, the markets, and investing. There were no high school finance classes but I read everything about Warren Buffet, Benjamin Graham, and investing I could get my hands on. I started trading stocks with the little money I had saved, which was a real life lesson as to how the markets worked.  I continued this informal education into college where it finally became a formal education, majoring in Finance and Accounting. After college, I worked in various roles before starting Phillip James Financial, working for a private equity company, a hedge fund, a bank, and a private wealth management firm. It was my stint at the private wealth management firm where I discovered it was far more rewarding using my skills, knowledge, and experience to help people rather than large companies.
Along the way I received my CFA Charter.  I spent the first 3 years right out of college studying in coffee shops every evening after work. 

Why did you choose finance?

I was always the kid trying to make money with some sort of business venture, an entrepreneur by heart. In my early childhood years I sold sticks of gum to my friends at school.  When I discovered I could invest and be an owner in the world's largest corporations and share in their profits I was immediately hooked! 

What is your investment philosophy?

My investment philosophy has changed over the years, I have basically tried it all. I have used fundamental analysis, technical analysis, options, day-trading, and many other investment strategies; most of which could barely be called “investment strategies” given my philosophy today.  What I found through trial and error, is that speculation and stock-picking does not work consistently over any meaningful length of time. If you want to invest in the stock market you have to be in it for the long-term and have a plan you stick to.
Now, I use index funds and similar funds to gain broad global market exposure. I control what I can - costs, taxes, and my behavior.  I use academic research to tilt the portfolio to different market factors that have shown consistent increased performance over time - all done in a diversified manner.  My focus is building efficient portfolio's for clients based on their goals. That’s my investment philosophy in a nutshell.

Can you explain your client advisor relationship goals?

My goal with every client is to help them achieve their goals. Money by itself isn’t important. It’s what money can do for us that makes it so useful and important. My job is to help layout client's goals in life and through comprehensive planning show them how they can best accomplishing those goals.
The other part of my job is to educate.  Clients need to have a good understanding of how the stock market works. In doing so, they are less likely to make costly mistakes when the market does what it always does, which is fluctuate up and down. Investing is emotional. My job is to make it less stressful and help clients feel confident about their finances.

How would you invest yourself?

I invest the same way I invest client money. I use low cost, tax efficient ETFs and mutual funds. I invest based on my goals which right now, for my wife and I, is simply to grow our wealth. We do this through consistent savings and sticking with a long-term investment plan.

Do you think everyone should use a financial planner?

Surprisingly, no. I believe everyone needs a financial plan and needs to be investing but not everyone needs a financial planner. This means that you are either doing it yourself or you are paying someone to do it for you. But in order to successfully do it yourself you need to have three things; the knowledge, time, and desire to create and manage your financial plan and investments. It’s like hiring a plumber to fix a leak, I could probably do it myself but I’d rather pay someone to do it for me.  

What do you think are the biggest mistakes or most common mistakes people make when it comes to financial planning?

One of the biggest mistakes people make when it comes to investing is not knowing why they’re investing. Is it just for retirement? Is it for your kids? It’s probably many things. By first understanding your “why”, you can then create the right portfolio that will provide the best chance of achieving those goals. This is why our motto at Phillip James is “Investing with Purpose.”

Another big mistake I see all the time is not understanding the total cost of working with an advisor. I’ve even heard some advisors say that they work for free but in reality the client is paying thousands in expenses indirectly to the advisor through the investment company.  It’s really a big problem in our industry. Clients have to watch out for salesmen masquerading as financial advisors. Don’t ever buy a loaded mutual fund, be careful about purchasing whole life insurance, and stay away from non-traded REITs. Always ask any potential advisor, “What are the total costs of working with you?” 

What is the smartest thing individuals can do to improve their personal finances?

The smartest thing people can do is actually very simple. Spend less than you make. Obviously, saving, investing, staying disciplined, being smart about taxes, and having a long-term perspective are all important too but it really all comes back to spending less than you make.

When you were little, what did you want to be when you grew up?

Around the time the original Jurassic Park movie came out I was certain I wanted to be a paleontologist. I’m glad I didn’t chase that dream for too long.

When you’re not spending your time with investments and finances what do you enjoy doing?

Well, that has changed a lot in the last six months as I now have a daughter.  Now, my idea of fun is staying in for a movie night! My wife and I also like to splurge on going out to eat, so when we can we get a babysitter we try to go out for a night.