You could almost call Curt Knotick a detective, an income detective. What's he's "solving" is an income mystery: How much money will his clients need to last throughout retirement?
It was that singular focus on "solving" for income — which happens to be his company's investment mantra — among other factors, that led Senior Market Advisor to choose Knotick, founder and CEO of Accurate Solutions Group, LLC in Butler, Pa., as this year's Advisor of the Year.
SMA caught up with Knotick to discuss the process he takes his clients through; the benefit of being dually licensed; why he's booming with the boomers; and the family tragedy that ultimately led him to a career in financial services.
A four-step process
Knotick sums up his financial planning template in one phrase: "solve for income." And it begins during the first stage of a four-step process with each prospect.
- The process kicks off with a vision meeting to ascertain what the prospect's basic goals are in retirement and what could threaten or derail their golden years.
- Next is the assessment meeting, which, as the name implies, uncovers basic information about a prospect's financial status: What are his assets? Does she have a pension? How much can they expect to draw from Social Security when they retire at age 62 or 66? Are there any potential hazards on the horizon? It's also at that meeting that a prospective client is given a written snapshot of their current status.
- After the assessment meeting, the client must agree to move onto the strategy session, where, based on what was gathered during the previous two sit-downs, Knotick formally lays out his recommendations.
- At the assessment meeting, client and advisor mutually confirm their commitment to the ongoing process and set up the fourth and final step: the action meeting when the blueprint both client and advisor have approved is implemented.
Knotick stresses that at no time is a prospect pressured into making a decision. What's more, he's found that consumers like having a written plan placed before them. "It's amazing, so many financial advisory firms today, you go in and you show them your stocks and they immediately tell you what you need to do. They don't have a process," he says. "Clients like seeing that we have a four-step process, that we provide a document of that four-step process in our first vision meeting. We make sure they are comfortable with that process before we go to that second meeting."
See our exclusive video interview: Q&A with Curt Knotick
Bridging the income gap
At the crux of all those meetings and strategy sessions is a drill down to the client's monthly expenditures, and whether their current and projected income can meet those expenses in retirement. If there is a gap between the two benchmarks, Knotick, ever the good detective, solves for that income disparity.
To bridge the gap, Knotick often utilizes guaranteed income products, like annuities.
"In my opinion, that income cannot be invested," he declares. "That income has to be guaranteed, be secure. Typically, we utilize annuities whether it's a structured income annuity system, where we ladder the accounts, or one particular account. We will solve for income, and carve out the assets necessary from their portfolio to provide that income."
Once that foundation has been established — Knotick likens it to building the foundation of a house — then a client can assume a bit more risk in their investment portfolio.
"Clients really appreciate that," he says. "We're not saying annuities are right for 100 percent of your money or investments are right for 100 percent of your money. We are basically saying if you need income from assets for retirement, we are going to carve those out, separate those from your investments and we are going to guarantee those through annuities, through the income riders provided. Then we can begin to take a look at building the house from there. But we first have to build that foundation, and we build that by solving for income."
A family tragedy
Knotick began to build his career in the financial services industry after a horrific family tragedy. In 1986, his older brother was murdered when he came to the aid of a woman being assaulted by her former boyfriend. The man pulled a knife, stabbing his brother, Eric, then 21, to death.
The loss and subsequent controversial trial devastated his family. However, since his parents had a small life insurance policy on his brother, they didn't have to worry about where the money was coming from to pay for the funeral during that difficult time.
"It allowed us to focus on what was important, which was my brother, and not be concerned with finances to pay for final expenses," Knotick recalls. It was also that terrible incident that made him realize the value of life insurance.
So a few years after that tragic event, Knotick decided to purchase a whole life insurance policy on his life. The friend who sold him that contract later recruited him as a captive agent for MetLife. With that, he entered the insurance profession in 1989 after a stint in the quality control department of American Eagle Outfitters in Pittsburgh.
Yet the longer he worked as a captive agent, the more he came to realize that one firm, no matter the breath and quality of their products, could not satisfy the financial needs of every individual. So in 1994, he went independent, founding Accurate Solutions Group in Butler, a town about 20 miles north of Pittsburgh.
Managed growth
Today, Knotick advises about 300 clients. Since he is the only advisor in the office (he has a support staff of three), he wants to maintain a manageable client base so he can preserve the deep relationships he has with his clients. He adds new clients on occasion, if it's a referral from an existing client, but for now he intends to grow at a measured pace.
"Because I'm the sole practitioner we can't bring 100 or 200 new relationships into the firm each year, or else I wouldn't have that opportunity to spend that time with annual reviews, semi-annual reviews, client appreciation and client education events," Knotick says. "We try to bring that value. I think that is what people are looking for today, they are looking for a trust- and relationship-based commitment from their advisors."
Nevertheless, Knotick has a five- and 10-year growth plan sketched out. Again, those plans don't envision bringing in more clients in huge numbers, but rather increasing assets under management (AUM) by 15 percent to 20 percent over the next five years. At the end of that time frame, Knotick intends to hire an associate advisor and an administrative staffer. Then, over the next 10 years, the blueprint is to remain on that upward path with the same strategy of harvesting more AUM.
Workin' with the boomers
