Volume 6, Number 3, 1997

A worthwhile adviser

If your parents needed a financial adviser to help them plan for their retirement, who would you recommend? That was the question Worth magazine posed in an October article that named the top 200 financial advisers in the country. From an estimated 100,000 to 250,000 self-described financial advisers and planners in the United States, Vincent A. Schiavi, BE '75, a certified public accountant, personal financial specialist and certified financial planner, made the final cut.

Schiavi, a Wilmington, Del., native, established his sole proprietorship in financial planning and investment counseling in 1982. Following his graduation from Delaware, he worked in the Baltimore offices of Arthur Young & Co., now Ernst & Young, an international accounting firm, and then spent several years in the finance department of Hewlett Packard in Avondale, Pa.

During those years, Schiavi remembers, changes were taking place in the way many corporations handled employee retirement plans, forcing employees to make more investment decisions on their own. His perception that people needed and desired professional financial counseling was reinforced by the number of friends and colleagues who came to him for advice. He now shares modest offices with an accounting firm in Wilmington, and, in 15 years, his client base has grown to about 40 families with more than $50 million in financial assets.

The 1996 listing of top financial advisers wasn't the first time Schiavi had been tapped by Worth. The magazine first compiled such a list in 1994, selecting 60 top advisers-including Schiavi-from 300 nominees. The list proved to be one of the most requested articles Worth had ever published, prompting the editors to pull together an even more comprehensive listing last fall.

In narrowing the 1996 field of 615 nominees (named by a group of about 250 industry leaders), the magazine's editors demanded high standards of honesty and excellence that went far beyond regulatory requirements. They also conducted independent credit and background checks to verify the information provided by the nominees.

Schiavi, like 70 percent of the advisers eventually selected, works on a Fee-Only® basis-that is, he is paid only by his clients and does not receive commission for the sale of specific financial products, such as mutual funds or insurance policies. He charges a set fee for developing a comprehensive financial plan or charges by the hour as a consultant. Unlike some financial planners, Schiavi does not require a minimum level of assets from new clients.

According to Schiavi, the key to successful financial planning is balancing the client's resources and objectives. "I believe you can have financial peace of mind at almost any income level," he says. "Many people show the trappings of wealth- new cars and big houses-but don't have peace of mind because they are living beyond their means."

Schiavi says he derives great satisfaction from working one-on-one with clients in a variety of circumstances, from those who have just received an inheritance or a substantial settlement in a court case to those embarking on retirement. "It's very rewarding to help people who are flushed with the excitement of receiving a large sum of money but don't know what to do with it," he says. "They need help from someone they can trust."

Schiavi recalls one client, for example, a middle-aged man with asbestosis, who had received a $250,000 settlement from the manufacturers of the asbestos-containing products he had worked with for years. With Schiavi's help, the client was able to invest the money and increase its value to about $700,000 in just eight years.

The financial and emotional lessons Schiavi learned growing up in a large family are largely responsible for his current success. As the oldest of 10 children (seven of whom graduated from the University of Delaware: William F., BE '79; Guy, PE '80; Anthony, EG '82; Michael, EG '83; Claire, HR '86; and Edward, AS '96), Schiavi says nothing was ever handed to him. As a teenager, he worked to pay for his education at Salesianum High School. The summer before he entered the University of Delaware, he worked two full-time jobs to help pay for college, and later he served as a resident assistant in the dormitories. "I'm lucky that Delaware was my state school and had a good program in my field," he says. Schiavi graduated with honors in accounting.

His family's financial resources may have been limited, but its spiritual resources were not. Schiavi credits his grandfather with showing him how to develop a vision for the future and pursue it with determination. As a young man, his grandfather had been severely burned in an explosion, and despite lasting disabilities, he went on to establish a highly successful Delaware construction company and to receive seven patents for innovative road-building techniques.

Schiavi also remembers his father studying late at night as he worked to earn his MBA at Delaware in 1961. Outside the office, Schiavi now focuses much of his attention on education. He serves in the equivalent of a school board position at St. Mary Magdalen School, which two of his three sons attend. He puts his financial skills to use as co-chair of the school's development committee and as treasurer of his sons' Cub Scout pack. Schiavi also coaches his sons' baseball and basketball teams-four teams altogether.

While the responsibility that comes with looking after other people's money can be heavy at times, Schiavi says he is thankful that his career has allowed him to be a positive influence in people's lives.

"I have an aptitude and a desire to find the best money solutions for people," he says. "There's always a lot to do, but I look forward to Mondays just as much as Fridays."

- Elizabeth A. Chajes

Schiavi's 11 essentials for financial health

  1. Recognize that financial peace of mind can be reached at almost any income level. The key is spending less than you make, regardless of your income. Balance your current spending needs with financial resources and future needs.

  2. Pay yourself first. This is the easiest way to budget. Set aside at least 10 percent of your grosspay for long-term savings needs like retirement security and college funding. Set aside more to accumulate funds for your first home down-payment. Do not dip into the funds for any reason other than a dire financial emergency. After a savings program has been implemented, it really doesn't matter how you spend the rest.

  3. Do not charge anything on a credit card that you won't be able to pay off when the card payment comes due. You would be better off saving for such large expenditures first and then paying cash.

  4. Always participate in employer savings programs to the fullest extent the employer will match. Additional contributions also may be recommended to help you meet retirement savings goals. Saving in a tax-deferred environment helps your money grow faster.

  5. For most of the country, the home-buying market has changed. Appreciation is expected to be limited, which stretches out the number of years needed to make up for the significant costs of buying and selling homes. Instead of buying a starter home, young persons should save their money and buy a home they can raise a family in or stay in at least 10 years.

  6. If you are unhappy with the lifestyle your present income brings, channel your energy into training for a career with higher financial rewards.

  7. Develop skills that will make you marketable for other high-paying jobs. Work on career security, not job security.

  8. If you are a two-earner family, coordinate saving and spending levels. Most couples working outside the home over-spend and under-save.

  9. Buy lots of term insurance when you are young with small children. Do not waste premium dollars on insuring the lives of small children. That money is better spent on increasing the insurance on breadwinners.

  10. Teach your children financial responsibility at an early age. Regardless of the family's financial position, students should make a financial contribution to their college educations.

  11. Have an open discussion about money matters with aging parents. Families that are able to coordinate estate planning pass on financial benefits for generations to come.