Kevin Ross, CLU, ChFC of Rubin Goldman and Associates shares the knowledge that has helped him protect and grow wealth for his clients.
photography by Alison Dunlap
Kevin Ross, CLU, ChFC is a principal of Rubin Goldman & Associates and has received plenty of recognition as a leading member of the field during his 25 years as a practicing financial advisor. He has been twice voted a “Five Star Wealth Manager” and featured in Philadelphia Magazine. He’s been on the cover of Suburban Life and featured in Money Magazine and Forbes. With a thorough knowledge and extensive experience that have earned him an impressive number of affluent clients, Ross prides himself on being among the best. We sat down with Ross in an exclusive interview, to ask the questions that many individual investors want to know.
Suburban Life: You’ve received a lot of recognition as a leading financial advisor. So, are you the best financial advisor in Philadelphia?
Kevin Ross: (Laughs.) Thank you. I'm very comfortable with my knowledge and experience and pride myself on being a darned good advisor. In order to know who was the best, one would need to know the capabilities of all other advisors out there, which I don't, so I can't answer that one. But I'm flattered by the question.
SL: What are some of the most common financial mistakes that people make?
KR: Some of the obvious ones that come to mind are paying unnecessary taxes on investments; having the illusion of diversification but not really being diversified and having too much correlation between investments; chasing returns; listening to “hot stock tips”; paying off one’s mortgage the wrong way; paying for major purchases like cars or weddings the wrong way; harboring dead equity in their home; not titling assets correctly; not sheltering enough assets from creditors (critical for doctors, attorneys, CPAs, and business owners who all tend to have a heightened risk of litigation), etc. Those are common pitfalls I see all the time that I routinely help new clients to correct. Very wealthy people typically have knowledgeable advisors design plans to address these potential pitfalls. However, on occasion I do come across new clients who are very wealthy but have poorly designed plans. This sometimes happens when a family member or friend is handling their planning and the relationship is driven more out of a sense of obligation than on competency. Even the very wealthy should get a financial second opinion if they are not 100 percent sure their present advisor is doing everything possible to protect and grow their assets.
SL: You’ve been very outspoken about taxes. Why?
KR: I love my country and I’m proud to be an American. But let’s face it: This country has gotten itself into a real financial pickle. The Social Security obligations are huge, the Medicare obligations are enormous, our national debt is ridiculous, and there seems to be no viable way out of this hole that does not involve raising income taxes substantially. One of my responsibilities as a financial advisor is to help my clients position themselves for the future as intelligently as possible. I have no doubt that taxes will be higher in the future and helping my clients have enough tax-advantaged income down the road is an important part of our overall planning.
SL: So are you recommending more municipal bonds?
KR: No. Interest rates are too low and there are other attractive ways to generate tax-advantaged income without the interest rate risk that muni bonds present. Furthermore, more and more municipalities are revealing their poor financial condition. Heck, look at Harrisburg.
SL: What do you see as one of the biggest hidden risks that many people don’t know about today?
KR: Definitely traditional bonds, which includes muni bonds. Bonds are commonly perceived as being far safer than they actually are. People are often surprised to hear me say this because many people don’t fully understand how bonds work. There are two components to a bond when it comes to making money. The first component most people understand very well and that’s the coupon or interest rate. The other component of a bond that many people don’t understand is the net asset value or the market value you could get if you wanted to cash in that bond. The net asset value of bonds is negatively correlated to interest rates, meaning that when interest rates fall, traditional bond values go up, which is a good thing. When interest rates rise, traditional bond values go down—sometimes very sharply—which is obviously bad. Interest rates are now at historic lows. It seems obvious that there is nowhere for interest rates to go but up. Should interest rates rise, as I believe they inevitably will, many people holding traditional bonds will see the value of the bonds they thought were so safe get crushed.
I’ve been very busy helping my clients to reposition themselves for rising interest rates and utilize alternative-fixed-income instruments that can actually benefit from rising interest rates instead of traditional bonds and traditional bond funds that will be hurt by rising interest rates. So many people out there own bonds and have a false sense of security that their bonds are safer than they actually are. If we were living during the Carter administration, when interest rates were 18 percent, traditional bonds would be a wonderful place to be. Today it’s just the opposite. The pendulum has swung completely the other way, and in this super-low-interest-rate environment, investors need to intelligently address these realties or risk being bitten by them. Very wealthy people typically do not have stagnant financial plans. They are dynamic and their advisors are constantly making changes to address the challenges and opportunities presented by an ever-changing financial landscape.
SL:What can individual investors who are not yet in the “very wealthy” category learn from all this?
KR: There’s a reason that these characteristics are common among very wealthy people. A significant part of the reason they are wealthy is because they do these things religiously. These are some of the “best practices” people can incorporate into their financial planning. You don’t have to be wealthy to put these concepts to work for you, and for many doing so will help them pursue their goals more safely and effectively.
Kevin Ross is a registered representative who offers securities and investment advisory services through AXA Advisors, LLC (NY, NY 212-314-4600)
The information provided in this article is for general knowledge purposes only. It does not constitute any investment advice or recommendations. Consult with your professional advisors about your particular circumstances before taking any action. Kevin Ross, CA Insurance Lic # 0B19022, offers securities through AXA Advisors, LLC (NY, NY 212-314-4600), member FINRA, SIPC. Investment advisory products and services offered through AXA Advisors, LLC, an investment advisor registered with the SEC. Annuity and Insurance products offered through AXA Network, LLC, which conducts business in CA as AXA Network Insurance Agency of California, LLC, in UT as AXA Network Insurance Agency of Utah, LLC, in PR as AXA Network of Puerto Rico, Inc. RubinGoldman and Associates, AXA Advisor and AXA Network do not provide tax or legal advice. RubinGoldman and Associates is not a registered investment advisor and is not owned or operated by AXA Advisors or AXA Network. PPG 125317 (5/17) (Exp 5/19)
Kevin Ross, CLU, ChFC is a principal of Rubin Goldman and Associates, headquartered in the Philadelphia suburbs. He sees clients and prospective new clients by appointment only. Appointment requests can be made by calling (800) 366-0064 or by contacting him directly at firstname.lastname@example.org
Published (and copyrighted) in Suburban Life Magazine, June, 2017.
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