Michael Berkhahn With Graham Capital Wealth Management

Intro: Broadcasting live from the Business RadioX studios in Tampa, Florida. It’s time for Tampa Business Radio. Now, here are your business. Radio X hosts.

Lee Kantor: Lee Kantor here another episode of Tampa Business Radio, and this is going to be a good one. Today on the show we have Michael Berkhahn with Graham Capital Wealth. Welcome.

Michael Berkhahn: Thank you for having me, Lee.

Lee Kantor: I am so excited to learn what you’re up to. Tell us about Graham Capital. How are you serving folks?

Michael Berkhahn: Yeah. You know, so here, Graham Capital Wealth Management, we are an independent registered investment advisory firm that really focuses on retirement planning. You know, as our clients, you know, fiduciary, we try to make prudent investment decisions on their behalf. I think the one thing that really makes us unique here in the Tampa area is just more of our active management approach. You know what I what I would want listeners to not think of when, when when I say active is that we’re not day traders, but we really, you know, try to, you know, personalize each of our clients portfolios by, you know, you know, individually, individually purchasing stocks or bonds rather than, you know, utilizing, you know, predetermined models or funds just because, you know, there’s added cost to that, you know, handing it off to a third party money manager or, you know, purchasing ETFs and mutual funds. You know, we believe that cost should be, you know, in in our in our client’s pockets versus, you know, paying those additional expense ratios and things like that.

Lee Kantor: Now are your clients typically, you know, coming from corporate background or are they entrepreneurs or are they athletes or are they celebrities? Like, what is that ideal client look like for you guys?

Michael Berkhahn: Yeah, no. For us, I mean, I think we have a pretty wide breadth of clients and we we have, you know, former CEOs of publicly traded pharmaceutical companies as a client. We have, you know, former board members of energy companies, you know, and we have, you know, clients that are just kind of starting out the first Roth IRA. So, you know, I think we have a pretty wide breadth of clients that we’ve been able to, you know, assist with, you know, with their financial plans.

Lee Kantor: So there is there a minimum to get started, a minimum amount of wealth, or is it because a lot of, um, people in your space, they prefer going after wealthier people, but it sounds like you’re you’re kind of casting a wider net.

Michael Berkhahn: Yeah. You know, you know, we really try not to market to saying that we have a minimum. I do think that our investment approach, uh, really, you know, I think it for us, you know, for us to really take our, you know, to utilize our investment approach. I think, you know, I would say probably between 50 to at least $100,000 would really allow us to, you know, really start implementing our investment strategies. But we really do not market a minimum because, you know, if you start working with someone that’s 25 or 30 and you know, they’re just getting out of, you know, just finishing up, you know, their law degree or, you know, becoming a doctor. You know, it’s more about that long term play with them. And, you know, that’s really why I try not to market a minimum with, with as a firm.

Lee Kantor: Well, I’ll tell you that’s pretty refreshing because a lot of wealth management firms, they don’t want to even pay attention to people at that stage because, you know, you know, frankly, there’s not a lot of money in it for the wealth management. But to make that kind of investment in your clients for that period of time is pretty different, I would think.

Michael Berkhahn: No. Yeah. You’re right. I mean, I do think we are unique in that aspect because I see it all the time. Um, you know, there’s a lot of advisors here right here in, uh, in downtown Tampa that, you know, yeah, they have a minimum of 500,000 or $1 million. And I actually found over time that I think it puts off a lot of people, honestly. You know, I have people come to us and say, oh, do you have a minimum? And I’ll say, no. And they’re like, oh, well, I was going to go talk with, with with with so and so. But they told me that they had a 500,000 minimum and I didn’t feel that I had those assets. But then lo and behold, they had, you know, you know, 2 to 3 times that amount of investable assets. So, you know, again, you never know, you know, people’s experience. And again, I think, you know, some people just don’t like, you know, hearing that they have to invest X amount of dollars to be able to, you know, even talk with that person.

Lee Kantor: Yeah. I think, uh, I really applaud you doing what you’re doing because I find it’s a missed opportunity for a lot of wealth management firms because, uh, a lot of people who have wealth would want, like, their kid who may not have wealth today, um, have access to your expertise, but it’s not even on their radar to, um, to make that kind of connection. And I think it’s a mistake for a lot of these firms. They’re missing out on a generation of people that could be using their services if they would just invest some energy into them, 100%.

Michael Berkhahn: You know, I think it keeps our clients stickier. Uh, you know, from the fact that, unfortunately, the one thing that we know that that happens in life is, is death and taxes, right? Uh, so, um, you know, sadly, you know, I think of it as an opportunity that we can actually build a relationship, um, with their kids. So, you know, if something does when something does happen to the, to the parents that we’ve already built, that, that relationship that, you know, we don’t just see assets leaving, you know, the firm just because, you know, um, you know, their parents um, or passed away sadly.

Lee Kantor: Yeah. And I think the stats back that up. I think that the vast majority of people don’t their kids don’t move to the parent’s wealth management advisor. They find their own.

Michael Berkhahn: Correct. Yeah. No. Absolutely. And again, you know, I think, you know, for for us, You know, we are, um, a much younger, you know, uh, registered investment advisory firm. So, again, I think for, for us, it’s, it’s taking that opportunity that, you know, we don’t we’re not sitting here and saying, hey, we have a 5 or 10 year exit plan or our hopes is, you know, this business is going to be, you know, 30, 40 years in the making. And, um, you know, I think we can take that long term, you know, plan, even though. Yes, if someone’s just opening up a 20,000 or $50,000 account, you know, I think it’s it’s the idea that this could be a very good client for us 10 or 15 years down the road. And yes, it’s not it’s not as lucrative as, you know, someone that brings in, you know, millions of dollars of assets right away. But I think you need to also plan for the future as well.

Lee Kantor: So now, um, can you share a little bit about the scope of your services? Is it just, uh, kind of wealth management? Does it, uh, kind of go into taxes? Does it, you know, like, are you the kind of the quarterback, the CFO of somebody’s financial life?

Michael Berkhahn: Yeah. You know, so here at Graham Capital Wealth Management, you know, I think we really try to bring in a number of different services. So, you know, we don’t just, you know, do you know, financial planning or investing for our clients. You know, we have, you know, accountants in-house. We have attorneys that are in-house. So, you know, we can do everything from, you know, planning, investing, you know, uh, their taxes, whether it’s individual or business taxes. Uh, and also, you know, really put together a true estate plan, uh, you know, so really, I think, you know, we can kind of, as you mentioned, you know, be me kind of being facilitating as the quarterback of saying, okay, how do we create a holistic financial plan for this estate and make sure that we’re making, you know, all the right, um, decisions when it comes to the holistic financial plans, whether it’s just individual taxes, business taxes, investing retirement assets, creating that estate plan. And I think that that that is something that a number of our clients really appreciate. You know, that they’re not having to work with a number of different, you know, companies. And having everyone in house really allows me to, you know, specifically with the accountant, it really allows me to work in unison with them so we can reach not only their short and long term financial goals, but really try to make that and to reach those goals in the most tax efficient manner.

Lee Kantor: Yeah, I think that’s better for the client to have that kind of Mayo Clinic or the Cleveland Clinic kind of, um, opportunity where everybody’s working together, everybody’s seeing all the data together, and they can work together to come up with the optimal plan rather than have siloed specialists that you’re hoping are going to connect at some point so they can get on the same page.

Michael Berkhahn: No. Yeah. I mean, a couple years back, we didn’t have an accountant in house. And, you know, I would I would meet with, um, you know, our clients, accountants, you know, at at their, at their office or their accountants would come into our office and, you know, we just thought it was it was time for us. I think we got to a size where we said, you know, listen, you know, we have a number of clients that would appreciate us, you know, bringing someone in-house just so that we’re all working in unison. Because I don’t even think the client sometimes even realize how much, you know, the accountant and I throughout the year. It’s not just when, you know, you know, tax season comes around that I can provide them their consolidated 1099 or their 1099 R tax document. It’s really a thoughtful, you know, thought out plan throughout the year saying, hey, uh, for for client so-and-so, how do we um, is this is this, uh, is this going to how is this how is this investment going to affect their overall, you know, uh, you know, tax strategy for, for 2024?

Lee Kantor: Yeah. And a lot of times obviously the your client isn’t up to date with all the ever changing rules when it comes to taxes. Like is there any advice you can share when it comes to maybe. Let’s talk about the expiration of the Tax Cuts and Jobs Act. Is there anything you can share that people can do today that maybe can save them some time and money tomorrow?

Michael Berkhahn: Yeah. You know, I think, you know, with the Tax Cuts and Jobs Act, you know, for so just kind of even taking a step back for the listeners if they’re not, you know, aware, but the Tax Cuts and Jobs Act was initially implemented, you know, going back to 2017. And you know, that is those those that legislation’s actually, you know, set to expire here. Uh, you know, next year at the end of 2025. So, um, you know, and this could, you know, depending on what happens with Congress and, um, and what happens with this upcoming Coming election if, if, if they expire and we do not see, you know, uh, any sort of modification or extension on the Tax Cuts and Jobs Act, you could you will see, um, you know, tax rates revert back to, you know, uh, 2016 levels. Um, and, you know, I think for, for, for our listeners on this, um, you know, I think I don’t know how much they realize how that could impact, you know, their upcoming tax season when it comes to, you know, 2026 and beyond. Because, you know, just for instance, the Tax Cuts and Jobs Act, um, uh, when it comes to individuals, is that one, uh, you know, it decreased, you know, the individual tax rates, uh, for, for people and two, uh, it also affected, you know, the standard deduction, um, for, for, for people married and filing single. Uh, and those, those standard deductions are actually going to move lower or back to the previous levels, uh, which, you know, right off the bat is going to impact their, their overall taxes.

Lee Kantor: Yeah. And and this is something that if you have this information ahead of time, you can be proactive. But if you’re going to wait and then all of a sudden it’s sprung on you, you might be in for a surprise.

Michael Berkhahn: Yeah. I mean, I think that that’s that unfortunately, I don’t think enough people are keeping as close of an eye on, you know, the Tax cuts and Jobs Act as as they probably should be. Um, you know, especially with this election, I think both of, you know, both of the candidates kind of have different views on, on what their plans would be, you know, with, with, with the Tax Cuts and Jobs Act sunsetting next year. Um, and you know how how they plan to, you know, change one from, you know, for, for, for not only individuals but also for businesses and how that will, you know, for small businesses, how that would affect them.

Lee Kantor: Now, is there a story you can share? Don’t name the name, obviously, but maybe explain the challenge that someone had before they started working with you and how you were able to help them either get peace of mind or get to a new level?

Michael Berkhahn: Yeah, I mean, I think for, you know, a story that really always comes back, you know, to me that when people ask that question, um, is, is one that, you know, unfortunately, it was a very sad event that, you know, um, I had recently met with a couple down in our Sarasota office. So we have an office in Tampa and in Sarasota, and I met with a couple and we were just, you know, starting off, you know, building out that relationship. And they were they were both retired. So we were really, you know, trying to develop, you know, their overall retirement plan and, and really trying to position them for the next ten, 15 years to be able to kind of live off of their live off of their assets and continue to maintain, you know, their current life, you know, lifestyle. And then obviously we we move forward with them as a client. And you know, prior to, you know, leaving the meeting, you know, the client had mentioned, oh, yeah, I have to go back into, you know, I’m having back surgery in a week. And it was supposed to be a very minor surgery. But lo and behold, unfortunately, um, the the individual ended up passing away. And, you know, the wife, you know, when, when when we heard the news, you know, just the, you know, the first thing, it’s wanting to be there for that person. Um, even though we, you know, she they barely knew us. We probably met one or once or twice before that, maybe an hour or an hour and a half at each meeting. But, you know, that’s where we have, you know, as, as your fiduciary, you know, is really we need to kind of step up and say, hey, this is what, what changes need to be made.

Michael Berkhahn: Because I go back to Lee talking about, you know, estate planning, you know, we, we, we we had already created a trust for them, right. So, you know, again, I think that’s where we were able to, you know, the the attorney and I were able to sit down with the wife and really, you know, walk her through all the necessary steps. And, you know, by the time we were done meeting with this client after 3 or 4 hours, because it was it was a sad it was a very grieving event. You know, a lot of tears were shed during this meeting, you know, so after 3 or 4 hours, you know, at, you know, when we were, you know, kind of leaving the meeting, you know, she comes up and just kind of hugs us both and just says, you know, I really don’t know. You know, I think the the last thing, um, you know, the last thing, the, the last final decision that my husband made was to move forward with you guys. And if we didn’t make that decision, I really don’t know what I would be doing right now. So, you know, again, I think that’s always a story that that always reminds myself of the importance of, of not just, you know, making clients monies, but just trying to be there for them. Um, and just trying to kind of be a resource when when these sort of events happen.

Lee Kantor: Now, is there a piece of advice you could share for someone listening right now? Um, maybe it’s a way, because I don’t want to get obviously into any financial advice, but is there a way that maybe you can tell that the current financial advisor, the the way you’re getting financial advice? Because I would imagine there’s a bunch of people that are doing it themselves. What’s kind of a signal that, hey, maybe it’s time that either you got to switch or maybe have a conversation with, you know, an expert.

Michael Berkhahn: Yeah. I mean, I think, you know, going back to, you know, what we were just talking about briefly with the Tax Cuts and Jobs Act. I think it’s, you know, I think a lot of people, you know, do try to, you know, take the onus on themselves to, you know, to make their own investments, you know, their, their own investment decisions. And, you know, frankly, a lot of people, I think, do a very good job, you know, at the investing part. But, you know, from a tax, you know, strategy, um, you know, standpoint, you know, unfortunately, I think that’s where a lot of people, you know, don’t do as good of a job, right. Um, you know, so, for instance, you know, for our high income earners, you know, they’ll say, well, I can’t, I can’t make I can’t make Roth contributions. And that’s true. But there are ways, right? There are ways that, you know, actually, you could still make contributions to a Roth even if you’re above the income threshold. There’s something called the backdoor Roth conversion, where basically you put pretax money or you sorry, you put after tax money into an IRA, and then the very next day you convert that after tax money into a Roth. Uh, and that’s a way for you to get money into a Roth and continue to make contributions every single year, even though you’re above the income, you know, even though you’re above the income threshold. So again, I think there are loopholes in our tax legislation that, um, that I think, you know, could benefit people long term when it comes to their overall financial plan.

Lee Kantor: And then regarding that, it’s it’s that knowing about any changes in, you know, where the tax levels are would be good to know because you may want to make a move sooner than later when it comes to a conversion.

Michael Berkhahn: No. Yeah. I mean, I, uh, especially with this expiration of the Tax Cuts and Jobs Act at the end of, at the end of next year. Um, you know, I think there’s just that big question mark out there is saying, okay, what’s going to happen with with tax rates? I know, you know, you know, a lot with the, you know, corporations, they talk about, you know, uh, possibly increasing that from 21% up to 28%. But, you know, if if individual taxes are going to go up from, you know, 37% up to 39.6% on the on the top tax rate. You know, it might be it might behoove certain individuals of saying, hey, you know, individual tax rates are going to be increasing, uh, in the future. Maybe we take advantage of these low, uh, the historically low tax rates right now and start converting or putting in a Roth conversion, you know, strategy for a multi year strategy to try to mitigate taxes. Because I think the one thing, Lee, you know, uh, whether whether or not taxes go up at the end of next year or five years or ten years from now, you know, we’re we’re at a point with our national debt, you know, sitting right around, you know, $35 trillion. You know, maybe, maybe the next president doesn’t change the tax codes all that much. But I feel pretty strongly that in the next ten years, I mean, we’re going to have to do something with taxes, and most likely it’s going to be increasing them to obviously, you know, start paying down some of our national debt.

Lee Kantor: Well, if somebody wants to learn more, have a more substantive conversation with you or somebody on the team, is there a website? Is there a way to connect?

Michael Berkhahn: Yeah, I think the best way the website that we have is, is Graham Capital Wealth.com. Or you can call one of our local offices our our Tampa or Sarasota office number. You can just call us at (813) 645-1233.

Lee Kantor: And Graham Capital wealth is g r a h a m capital Wealth.com. Michael, thank you so much for sharing your story today. You’re doing such important work and we appreciate you.

Michael Berkhahn: Thank you. Lee. Thank you for having me on today.

Lee Kantor: All right. This is Lee Kantor. We’ll see you all next time on Tampa Business Radio.