A Conversation With: Robert Hackenberg of Northeast Financial Group Inc.

Robert Hackenberg is the founder and co-principal of Northeast Financial Group Inc. with his business partner Josh Laychock. They serve clientele nationwide from three offices in Pennsylvania including South Whitehall and Wyomissing with their main office located in Tannersville.

NEFG, Inc. is a SEC Registered Investment Advisory Firm providing advice and management to high net worth clientele.  The Firm specializes in private wealth management and conservation, along with retirement plan services.

As Accredited Investment Fiduciaries they provide clients with investment management guidance that is grounded in industry best practices to support fiduciary standards of care for their clients. Under their direction, Northeast Financial Group Inc. has been named by the Financial Times as one of the Top 300 Registered Investment Adviser firms nationally for both 2018 and 2019.

LVB: What are some of the things people need to understand about wealth and asset management?

Hackenberg: All of the basic clichés apply – from starting a savings program early, to managing debt.

Individuals need to realize that there is no one item that will create financial success.  It is a multitude of items that need to be implemented and continually practiced.  Starting with accumulating adequate cash, and working your cash positions to maximize returns no matter how little they may seem.  When referencing “cash”, we refer to cash and cash equivalents, such as checking, savings, money markets, CD’s, and Treasury Bills.

Investors need to utilize their advisors for more than asset management.

The primary job of a good advisor is to provide financial guidance, with the main objective to prevent their clients from making poor or uninformed financial decisions that can be costly or devastating to their financial success.

LVB: How do you work out what investments and plans are best for each family or individual?

Hackenberg: It starts with the details:

Know your client

• Personal demographics: As detailed as possible – Age, health, family, etc.
• Goals and objectives: Includes their needs, wants, wishes, and the time frame for each
• Tolerance for Risk: Identify their downside threshold. How far they will allow their investments to decline in value, and for how long?

The details regarding all of the aforementioned information identify the opportunities that may be appropriate to develop a portfolio of investments to assist them in achieving their goals and objectives, working within the timeframes identified, meeting their liquidity needs, and remaining within their personal range of acceptance in regards to risk that they may incur.

LVB: With talk of a downturn, do you have any advice to people about protecting their wealth?

Hackenberg: The current volatility has brought us back to more of a norm based on history.  Prior to the last recession, and until the tax reform measures were implemented, we had an economy experiencing a very slow growth rate with minimal fluctuations in our markets. The recent concerns and uncertainties in our economy has exacerbated the volatility in our markets.  That volatility has also created opportunities in various investment categories and industries.

We have to understand that whatever one does to work to protect themselves in one way, can be financially detrimental in another.  For example, I could buy all fixed investments, with the belief that I am “safe.”  Then interest rates rise, and my “safe” fixed investments go down in value.  What happens if I need to liquidate capital while the individual investments have declined in value?  That loss can never be recouped.

There are no categories of investments that have always performed well.  Our economy and investments have all experienced both positive times, and negative times.  By maintaining the proper amount of cash within a portfolio, an investor can initially utilize the cash to meet any liquidity needs, and then review other positions to determine what may be appropriate to liquidate to replenish the cash positions.

LVB: If you could give one piece basic piece of financial advice to people, what would it be?

Hackenberg: There is no one piece of advice for all investors.  Each level of our financial development has its specific investment rules to live by.

In our working and accumulating years: Save all you can! The old saying – “pay yourself first” still applies today.  I have never seen anyone get hurt by saving.  As a matter of fact, only those that have saved enough to take care of themselves in the future, can also take care of others.

Diversify not just within investment categories, but build a mix of retirement accounts utilizing your IRA or company sponsored retirement plans, and non-qualified investments (all accounts outside of your retirement accounts).  This gives you control of the taxation of your future retirement income.

In our retirement and distribution years: We need to maximize the net income we will live off of.  By having funds accumulated in both retirement plan assets and our individual savings and investments, the retiree can plan their income distributions efficiently and effectively. If possible, distribute the maximum amount of retirement account funds within your current federal tax bracket. By controlling the taxation of your retirement account assets, your retirement account savings will effectively provide for more years of retirement income.

If you do not need the funds to meet your income needs, reinvest them along with your other savings and investments outside of your retirement accounts.

-By Stacy Wescoe