Kristy, owner of On Route Financial, and I break down the difference between types of professional.
CPAs, accountants, and bookkeepers look at the present and past.
CFPs and CFOs look at the present and future
Hello and welcome to episode seven of the unfuck your biz podcast. As always, I am your host Brayden in today I am joined by my good friend Christie [inaudible] who is the owner of on route financial. She's a certified financial planner or a CFP. Don't worry. We're going to actually explain what that means and on today's episode what Christie and I are going to attempt to do for all of you is break down the different types of money professionals that can help you with your life and your business. My goal for this podcast is to actually have some really stellar kick ass guess and bring them back on the podcast on a regular basis. So in about 10 episodes, Christie's going to come back on and talk about how to actually get started with financial planning and then it will do deeper dives into more specific topics, you know, every 10 20 episodes. But on each of those episodes, I'm going to send people back to this one to listen and understand how Christie's business is different than mine and how that differs from some other businesses as well. Christie, are you hearing those things from my computer on your end? I am not. Okay. Well then I will just pretend like they're not happening. That's my email going off. Great segue. Um, well welcome to the show, Christie. How's it going?
It's great. Thanks so much for having me, Braden. I'm super excited for this conversation today.
Yeah, likewise. And I almost like totally forgot to mention that this podcast episode is releasing on Halloween. So happy Halloween, everyone, and I hope you're excited for this ooky spooky topic of financial planning. All right. That was my like poor attempted to joke. But let's, let's kind of dive in and have you explain kind of what your background is and how you got into this area of business.
Yeah. I started as a financial planner right out of college. Didn't really know what I was getting into or what I was doing, but I was graduating with a finance degree, loved business, wanted to have kind of that freedom and flexibility of entrepreneur life. So I started a practice and was working at a firm kind of doing that traditional financial planning that you might think of, you know, working with pre-retirees who had money to invest, helping them manage wealth, selling insurance, doing financial planning. And one day just kind of recognize that I wasn't showing up for work anymore. I was bingeing on Netflix for days and weeks on end and something had to change. So when I was reflecting, I realized it's not financial planning that wasn't making me happy. I love financial planning, but it was who I was serving and how I was working in showing up. So I left the firm, started my own company, and I'm now focusing on working with entrepreneurs, helping people who are in that growth phase who are getting started on their journey. And I am loving it.
Nice. I love that. I think that makes a lot of sense. Especially to me. My husband is a district attorney, he's a prosecutor. And whenever I have dinner with all of feminist friends, they ask what I do and I tell them tax contracts and legal entities and they say, Oh that's so sounds so boring. I was like, well not really cause I do like pretty simple stuff. So for an attorney it's not super complicated, but for me it's more about who I work with. I don't want to be in court arguing with like 60 year old guys and suspenders about legal issues. I get to talk to like badass entrepreneurs every day. So it sounds like you came to the same realization that I did
a hundred percent I just get to show up, have fun. And I love your, one of your core values about not being that attorney who's in the corporate office on the 30th floor mansplaining. It's totally not that vibe. It's total. And at the other end of the spectrum,
love it. I, you're like reading up on my core values. So Christie and I are actually in the same business mastermind, you guys. So we talk, I mean I'll probably almost on a daily basis, but definitely a few times a week. Okay. So we're going to save all of like the really juicy details about like IRAs and 401ks for a later episode. Get pumped guys. But on, so on this episode we will talk about the differences between, like I mentioned what I do and what Christi does. So Christie, you are a CFP. Can you explain to everyone what that means exactly?
Yeah. So CFP, it's a designation that financial planners and financial advisors can get and essentially it qualifies you to offer comprehensive financial planning services for personal finances. So taking a look at investments, retirement, paying off debt saving and investing, all the different financial goals that you might have, all of the different moving pieces of your current finances and helping to create a plan and a strategy to get there. CFPs focus on that comprehensive aspect as opposed to being kind of that life insurance salesperson that you might've come across when you thought you were going to get some financial advice. Um, and we also are fiduciaries, so we have that ethical standard to act in the best interest of our clients.
Okay. So I love this differentiator. I'm going to explain to everyone what fiduciaries are but that, so you did mention one thing that I was not aware of. So I have friends who work for a lot of companies and they do sell a lot of quote unquote products. I think that's a silly term, but they are, are they not CFPs? Like can you be a CFP and work in that role or no? No.
You can be a CFP
and sell products, which is where it gets tricky. If you want somebody who's not selling products, you have to look for what's called fee only. Meaning that you receive compensation from fees as opposed to a commission based or a fee. And commission based is a third option. So it can get a little bit tricky. But uh, there's CFPs that do sell products but they still have to lead with looking at your goals, having an analysis of your current finances, what is the plan, what is the strategy? And then they can offer products to help implement. Got it. So they can still work in a commission based role. The third governed by that designation, which requires that they still act as a fiduciary. Exactly. Okay. That makes sense. By second question before I really dive into the fiduciary thing is how well did your degree in finance prepare you for the CFP exam? Because when I went into college, I actually started out as a business major and I thought I was going to love finance and I learned very quickly that what I was personally interested in was personal finance, which is different from most college curriculum.
What nailed it? Uh, you, I just learned corporate finance and things that you might learn if you're going into investment banking. So it was funny jumping into a personal finance role and having no knowledge. I had to learn on the job and through the training that I was receiving.
Yeah. This is the, I find this stuff super fascinating because you go to college for finance and you realize really early on that you're, they're preparing you to work for Ernst and young and Maryland, which is where most of my friends ended up. And then I went, when I went to get my master's in tax law, it was the same thing. I had a slog through these corporate tax classes and advanced partnership tax classes and I was like, all of this shit is irrelevant to me. All I want to do is help small business owners with their income taxes. So long story short, like we have fancy degrees, but yeah, we ended up having to teach like most of the stuff we actually do for our clients to ourself. [inaudible] it's weird. Okay, so Christy mentioned the fiduciary thing earlier and I really like to harp on this because since I'm not a financial planner, I feel like I'm allowed to be a lot more aggressive about it than you can because it comes off as less need.
But the way a fiduciary works is essentially when someone is a fiduciary, they are legally required to work for your best interests. And at first that sounds really bizarre because you would think, well anyone I hire as legally required to work for my best interest, well no that's not the case. Nope. You work for a large company. You are required to operate in their best interests for their shareholders. That's how a private company works. But if you hold a designation like a admittance to a state bar or a CF certified financial planner, what do you call it? Designation certificate, whatever. Yeah, designation. Yeah. Then that, then whoever oversees that process is going to require that you operate as a fiduciary so you cannot work in your own self interest. So this is why like as an attorney, it would be a violation of our code of conduct for me to recommend that you enter a contract with a company that I have an interest in.
So maybe my sister owns this large company. I'm going to tell you to sign a contract with them and then I help you draft the contract. Well, turns out that I have an ownership interest in that company. That's a conflict of interest and I'm breaching my fiduciary obligations. So when you go to work with a financial planner, I always tell people that you want to start by working with a fiduciary who can work in your best interest to give you a full scope of what you need. And then if you already know for certain what you need, then you can go to someone who sells products to get what it is that you need. So for example, I reached out to a company that sells life insurance because I don't really need Kristi to tell me that I need life insurance. It's $30 a month.
That's kind of a no brainer. I know that they're going to try to sell me life insurance. I already know that I need it. It's not a big deal, but I'm not going to talk to that same person about how to come up with a comprehensive way to plan my financial future because frankly, they don't give a shit. They just want to sell me more insurance. Um, that I did. I get that. Does that all make sense? Christina? And I explained that says, yeah, sorry. So long story short, I'm telling you all but you need to talk to Christie if you want actual advice, uh, or someone like Christie. So now we know what a certified financial planner is. What is the difference between that and a CFO? Can you explain that?
Yeah. So a CFO is going to work in your business, whereas the financial planner will work in your personal finances and they are going to help you with the more strategic aspects of your business. So not, and we'll get into accountants and bookkeepers, not who will help you look backward and to categorize and to track. CFOs are more about planning and forecasting. What's happening in the future with your finances and how can we be strategic with what you're doing today to help you to get to your goals with your business.
Okay. And you call yourself both the CFO and a CFP, right?
Yes. So I, because of my experience as an entrepreneur and working with so many entrepreneurs just naturally started getting my hands in people's businesses because they're so connected. Business finances, personal finances tend to merge under one a lot of the times. And so I started really playing that as a strategic partner, not only for their personal but further business as well and and how the two of those really come together and leveraging your business and your personal to maximize the results that you're getting in both.
Okay. I love that because there are a lot of financial planners who don't really know shit about running a small business and then there were a lot of people who are experts at the financial aspects of running a business, but they couldn't really tell you what to do, like with your retirement savings. So you're tackling both of those prongs. One distinction I do want to make for everyone listening is that they both sound like very similar. I'm going to keep calling them dicey designation. So whenever we're talking about these acronyms, but it's important to note that a CFP certified financial planner, it has certified in the title. So you know that that is a credential. Whereas CFO is just an acronym for chief financial officer. So most large companies have a CFO as CFO is a so self-impose title. So if you work in a company, someone's going to give you that title.
But if you do it in a consulting basis like Kristi does, then you're going to give yourself that title, which is fine. We all need labels for what we do. But my cautionary tale to you is anyone can call themselves the CFO. So look at what their actual experiences, because no offense to people out there, but I know people who call themselves CFOs when really all they do is bookkeeping. And those are very distinct roles. So with that, with that out of the way, I guess that's a good segue. What is your take on exactly what the role of a bookkeeper is?
Yeah. So the way I see bookkeepers is they help you to track everything that's coming in and going out of your business. So on the income side, it could be different revenue streams or just revenue as a total. On the outgoing side it's everything that you spend money on, all your software, your coaches so that you know exactly how money is flowing throughout your business. And then they can also provide reports for you, which is my favorite feature as the strategy person is looking at the reports. So for example, a profit and loss report which shows this is how much you made, this is how much you spent and this is the profit that you have left over to give you that really clear picture of exactly what's happening in your business finances or what's already happened. Right. It's looking backward.
Yes. So I actually, I kind of invented this analogy yesterday and I were going to run with it and see if it works. Hopefully [inaudible] yeah, this is the example. I go through these wild like daydreamy scenarios of how I would explain these topics if I were teaching and like in front of a class of college students. So I would ask like Christy, do you watch any sports? Not really. Okay, well then all like all, I'll use my sports analogy because I, I love tennis and I love volleyball. So we'll go with tennis. I'm a big Serena Williams fan. So Christie, if I told you Serena lost in the U S open a six one, six, three and two sets to a woman named Bianca Andre sq. You know what the outcome of that matches, right? Yup. So now you could go tell people like what the score line was if you remember it.
Right? Okay. If I remember it keyword [inaudible] you're calling, right? So in this example, the point that I'm getting at is the score line is your profit and loss statement more or less. And then that's kind of, I mean it's not a perfect example, but it's, that's kinda like your bar. The score line is like the bottom line number of the profit and loss statement. And then once you get more of the financial documents together, that's more of like the statistics of the match, right? So then the, the job of the bookkeeper is to track the stats of the company, just like a statistician would in sports and then to give you all of that information. So an experienced bookkeeper might actually evolve into a certify or into a CFO role because they have a lot of experience looking at numbers. But someone who's not really looking at at all of the details isn't going to be able to look at those stats and then give you a game plan for Serena to go win the next match.
That's like my example. Whereas some of the intimate, yeah, Christie doesn't do bookkeeping but she can look at the numbers and then coach you to success in the future and that's what a CFO does. How did it happen? My analogy work into it. I love it. Okay, perfect. So it's like a basketball coach can look at all the numbers and then plan on how you're going to win the championship game. But they're not like they are taking all the stats either. And the important thing is to know is that people can wear multiple hats with all these things that we're talking about, but you really, really want to know if they're just giving themselves the hats because it's good marketing or they can actually do it. Right. Yep. Great advice. All right, so we're talking about CFPs, CFOs and bookkeepers. Now let's talk about accountants and CPAs. What's kind of your take on those two things? How are they different? How are they the same? What do they do?
Yeah, so accountants and CPAs, in my mind, they're kind of similar, but I kind of an S a CPA has the credential and has that formal lettering and you might be able to speak to this better than me, but my understanding of them is their tax preparation professionals. So they're the person you go to at the end of the year and they say, Hey, I need to see your profit and loss statement from your bookkeeper. I need to know X, Y, and Z in order to prepare your taxes and tell you how much you owe or maybe you've been paying quarterly and how much you're getting back there. They're really the one filing your taxes for you, getting that tax return prepared. And that's again a backward looking thing, right? Based on everything that happened over the last year, they're telling you how much you would owe and putting you in good standing with the IRS.
Exactly. This is where it gets super confusing I think for most people because there are accountants who do bookkeeping like that technically is an accounting tasks, but accounting is a pretty broad field. So there's financial accounting if you work in a company, managerial accounting, if you work in a company. But then there's also tax accounting. So when you study accounting in college, those are all different areas. So for most of us small business owners, the only thing that's relevant is really tax accounting. And then as CPA is a designation like the CFP. So you have to take a test for that certified PO, a certified public accountant. Yes. And another. So my other top tip is taking the CPA exam is a bitch in and of itself. It's very difficult. So if someone passes that, they're going to know a lot, but at the same time about 75% of what's on that exam is really irrelevant to small business. So don't think that someone who doesn't have a CPA designation can't help you. That's basically my take home. This is also a little self serving you guys because I made it clear on the podcast before that. I'm not a CPA, but I do a lot of CPA type work, but I have a master's degree on tax law. So it's kind of a different, like a whole different thing.
Okay. I think talked about all the major categories. Um, any other final notes that you have?
I definitely know that it can be confusing and so if you are still sitting there wondering, okay, I think I get it, but I'm not 100% sure. Don't be afraid to ask for help now reach out to Breda and reach out to myself and you know, we can help you to figure out who could be the right professionals for you and what tasks they would be doing for you. Um, that's kind of the tricky part is like, okay, now how do I apply this to to me,
right? Yes, exactly. The other, I feel like the last thing I really wanted to share is the reason why I feel like Christie's the perfect guest for our podcast is because between the two of us, we basically fill all of the roles we talked about today. So in my law firm I offer one-on-one bookkeeping services and tax accounting, so tax returns, all of that good stuff. And then Christie does all of the personal and business financial planning. So I have a hard time looking at numbers and really telling people like the strategic decisions that they need to bake and their business moving forward. I can do it kind of just like as a business to business owner, like you would ask any other friend, but that's not really what my wheelhouse is. And then Christy does not do bookkeeping or taxes and her done. So the long story short is if you want some help, hire both of us, but we also, um, both have a lot of freebies and blogs, so you can check all of that out to get started for free. Okay. Christie watcher, I is your Instagram on route financial? Yep. So it's O. N R. O. U. T. E. financial. Okay, perfect. I will link that in the show notes as always. To get to the show notes, go to unfuck your biz.com forward slash episode four slash zero zero seven. Um, shoot Christy a message on Instagram. She probably loves to DM just as much as I do. And as always, don't forget to subscribe, leave a review and tell all of your friends about this bitch and podcast. And I will be back in your earbuds on Tuesday. Have a good one.
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