Financial planner Sarah Carlson Rieger talks of trust, relationships

The Dow Jones index hit a then-all-time high in October 2007.

During the next 18 months, it shed more than 50 percent of its value.

Financial planner Sarah Carlson Rieger recalls those months as some of the most difficult of her career – and some of the most rewarding.

“I never thought I would see well-educated people considering withdrawing all their money from the bank and putting it under a mattress,” she recalled.

“Having to talk clients off the ledge and remind them of their long-term goals was emotionally challenging,” Rieger said. “But I loved it, too. That was some of the most important work I’ve done.”

Rieger’s levelheadedness paid off. Since 2008, her business – Fulcrum Financial Group at 1403 S. Grand Ave. – has seen a 500 percent jump in people seeking advice.

During a recent interview, she explained the role of a financial planner and offered her outlook for stocks.

S-R: Tell me about your childhood.

Rieger: I grew up in Aspen, Colo., which back then was more like Sandpoint is today. My father was a dentist who started investing at a very young age, and he taught me about the stock market and money. I had my first checking account by third grade. We didn’t get TV reception, so I relied heavily on the Wall Street Journal, magazines and encyclopedias for information.

S-R: What were your interests in high school?

Rieger: I was an athlete – I ski raced and did volleyball, basketball and track. But I decided early on that I had to escape my little town, so I studied hard and got my golden ticket when I was accepted to Yale.

S-R: What did you study there?

Rieger: I started out as a biology major. But then I took a class from Robert Shiller, who recently won the Nobel Prize for economics. He and David Swensen, who runs Yale’s endowment, were both big influences on me. They’re macroeconomists and behaviorists, so I switched my major to economics and my minor to psychology. I still find that stuff fascinating. If I want to relax, I’d rather read an article about the Chinese economy than a love novel.

S-R: Which of their ideas have proved helpful to you?

Rieger: Certainly Shiller is really big on real estate as shelter. He called the (2006) housing bubble. Over the long term, real estate is not a good investment compared with other opportunities.

S-R: What did you do after college?

Rieger: I was an actuarial analyst for a pension company. Then I went through the MassMutual (Financial Group) training program, and worked in Seattle and Washington, D.C. I came here a little over 20 years ago. I started my own company 16 years ago.

S-R: How did you come up with the name, Fulcrum Financial Group?

Rieger: Fulcrum is a physics term – it’s the balancing point. And so much about financial independence is about balance.

S-R: What’s the difference between a financial planner and a financial adviser?

Rieger: It’s about whether you represent the client or your employer. To be called a financial planner, you have to have a certified financial planning degree and be able to act as a fiduciary for your client.

S-R: You were 34 when you launched the company. Was your age an issue with older clients?

Rieger: It was a lot easier at 34 than at 24, when I started out in the industry. But age and sexual discrimination were alive and well then, and still are. I didn’t think of myself as a pioneer back then, but I’d go to a conference and there’d be only 5 percent women. And the numbers haven’t changed much. But the industry is trying to attract more women, because our multitasking skills are so well suited to financial planning.

S-R: How did you attract clients when you were starting out?

Rieger: I’d read about interesting people and call them. Since then, we’ve grown mostly through referrals from existing clients.

S-R: How many clients do you have?

Rieger: We have about 125 relationships, and a single relationship may include a business owner and 100 employees.

S-R: Is there a typical client?

Rieger: Most are in their 50s and 60s, with about $500,000 in savings. But we have younger clients, too, and many with less than $500,000. People like secretaries access our services through their employer.

S-R: What if someone isn’t sure whether working with a financial planner is right for them?

Rieger: We offer a complimentary session to review their needs and make sure we’re a good fit.

S-R: How has your job evolved?

Rieger: Financial planning is needed more now than ever before, mainly because of the Internet. There’s good information and bad information out there, and people don’t know how to drink from the fire hose. What we do is put together systematic, simplified action plans tailored to meet each client’s needs and goals.

S-R: Do things like the Madoff scandal hurt your image?

Rieger: Yes, and it’s so discouraging. I just saw “The Wolf of Wall Street,” which seemed over-the-top crazy. That’s not how the financial industry works. The bulk of the people in the industry want to make a meaningful difference in people’s lives.

S-R: What do you tell clients when the stock market tanks?

Rieger: I personally love it when there’s a pullback in the market, because my clients have cash set aside so we can harvest the winners.

S-R: The market has been on a tear the past two years. Do you anticipate a pullback this year?

Rieger: Yeah, I do. A pullback of about 10 percent would be healthy. But I was expecting the same thing in 2013, and it never happened.

S-R: What are some questions new clients ask?

Rieger: Usually they ask, “Can I retire?” Even very wealthy clients sometimes walk in and ask that.

S-R: What mistakes do clients make?

Rieger: The biggest mistake is supporting their adult children at their own financial risk. The best gift you can give your children is to be financially independent yourself in retirement. By supporting an adult child, you’re depriving them of the opportunity to learn skills for coping with lean times. There are good lessons in trying to find the right job while living on rice and beans.

S-R: What else?

Rieger: People tend to underestimate their cash flow. Sometimes I suggest they practice being retired. If they’re anticipating so much money from a pension and investments, we set aside that much for them to spend, and put any extra money in reserve, so they can see how that budget feels.

S-R: Any other advice?

Rieger: I encourage people who have trouble saving to set up automatic deposits – either into a savings account or 401(k). I can’t recall one time someone did that and then stopped because they couldn’t handle it.

S-R: What’s the career outlook for financial planners?

Rieger: There are huge opportunities, both because of baby boomers entering retirement and younger employees investing in 401(k)s. The industry isn’t keeping up with growing demand.

S-R: Who’s best suited for this career?

Rieger: Someone with a strong ethical compass, good analytical skills, and who is caring. You wouldn’t want to be a planner if you didn’t like people.