Don’t call Nicholas Yrizarry a value investor searching for high-dividend or low-priced bargain stocks. This behavioral financial advisor’s primary objectives are to ensure his clients’ investments align with their heartfelt values and work to serve them, not the other way around.
Consider it a matter of semantics in the wonky world of investing terminology.
“Value investing is about looking within yourself to understand why this money is important to you,” says Yrizarry, chief executive and founder of Align Wealth Advisors in Laguna Hills, California.
Behavioral finance, the formal term, stems from research done by renowned psychologist and Nobel Prize Winner in Economic Sciences, Daniel Kahneman. Dr. Kahneman postulates that the brain is comprised of different thinking patterns, one intuitive and one rational; and financial decision-making should be based on rational thinking versus emotional. This is the basis for his application of psychology and neuroscience to financial services and is best explained in his Financial Survivor Handbook: The 4 Steps to Financial Survival, available at BarnesandNoble.com.
“Most people need help in identifying what their true values are and how to apply those values to their financial decision-making process,” Yrizarry says.
Harvard researchers brought this idea to the forefront through an index card exercise a few decades ago, assigning various values to them: love, adventure, security and freedom.
When he first meets clients, Yrizarry has them choose their top five values from a deck of 52 cards, each with a different value set. The exercise is an example of neuro-linguistic programming, a psychological approach that analyzes strategies used by successful individuals and applies them to reach personal goals.
“The propensity to live one’s values is enhanced once you declare them,” Yrizarry says.
So, what does this have to do with money?
Everything, he contends.
“Money should serve – and reinforce – those values those values,” he says. “If you don’t know what those values are, how are you going to accomplish them?”
Further to this approach, Yrizarry considers psychological therapeutics such as acceptance and commitment therapy, which fuse acceptance, mindfulness, commitment, and behavioral change strategies to increase “psychological flexibility,” or being in the present moment consciously, based on the situation with the ability to change or persist behavior through chosen values.
“We’ve taken that and spun it off to help our clients rise above traditional quantitative financial planning,” Yrizarry says. “Most financial advisors focus only on quantitative planning – the money. We work with clients to hone in on the why of their planning. How is their money going to serve their lifestyle?”
That connection led Yrizarry to rebrand his firm more than a year ago after hiring a New York consultant, who shadowed Yrizarry for 10 days, analyzing key services for clients. The word ‘align’ kept coming up in discussions, with an overarching tenet of clients’ money best serving them.
“Most of the people we meet are not being best served by their money,” Yrizarry says. Moreover, their money causes stress and anguish, driven by the constant monitoring of the stock market in an incredibly volatile time.
It goes even further.
“They’re worried about running out of money,” Yrizarry says.
A disquieting concern, considering his clientele is comprised of high-net-worth individuals, a mix of retirees and C-suite executives eagerly engaged in conserving, passing down and donating their wealth, and a younger cohort more interested in accumulating wealth.
“For those high-net-worth folks who have accumulated it, there’s a huge shift now of starting to live off it,” Yrizarry says.
The name change to Align Wealth Advisors ushered in a new era for the business to boost the brand and signal a larger market presence through acquisitions.
“We’re starting to purchase outside firms,” he says. “By doing that we want to have more of a brand statement.”
Yrizarry’s career start near Washington, D.C. introduced him to a secure and stable base of retirees from the FBI, CIA and other government types, such as economists and Ph.Ds. He started building his business at 28 years old, attracting a roster of clients with net worth in the low six figures to about $1 million, with the primary goal of passing that down to their children and other heirs.
As a result, today, he deals with a much more complex client, with a much higher net worth like the board of director class and chief executives. All in, Align Wealth Advisors serves about 165 families nationwide. In affluent South Orange County, where his firm is based, his clientele’s net worth is in the low to mid millions, a group he has long considered underserved in the marketplace.
“They’re small potatoes to the large firms,” says Yrizarry, an alumni of Princeton University. “They really don’t get the services they need.”
Align Wealth Advisors is filling that gap, creating a road map for high net-worth clients, who aim to keep their lifestyle intact, while protecting their future income and legacy.
“Most people don’t have a fully comprehensive plan,” Yrizarry says. “We help them organize, consolidate and truly diversify a portfolio.”
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