Banking on KC – Chuck Maggiorotto of Country Club Trust Company
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Kelly Scanlon:
Welcome to Banking on KC. I'm your host, Kelly Scanlon, thank you for joining us. For the last four years, Banking on KC has featured Kansas City's innovators, entrepreneurs, and nonprofit and civic leaders who are making our community a better place to live, work, and play. Country Club Bank, which brings you this podcast each week, provides our city's residents, businesses, and leaders with a broad range of solutions to help them reach their financial goals. No matter what you want to achieve, Country Club Bank is here to help. Moving forward, we'll occasionally be introducing you to resources and thought leaders to share tips when it comes to managing your professional and personal finances. With us in the studio today is Chuck Maggiorotto, the Chief Wealth Officer at Country Club Trust Company, a division of Country Club Bank. Welcome, Chuck.
Chuck Maggiorotto:
Hi, Kelly. Thanks for having me.
Kelly Scanlon:
Absolutely. Let's talk about wealth management. That's a pretty broad term and it's one that probably means different things to different people. So just so we can all get on the same page for this conversation, why don't you give us a brief overview of what wealth management is?
Chuck Maggiorotto:
It is a broad term, and I would say individuals and even institutions, organizations, define it differently. I have to admit, it amuses me when I hear certain people trying to define their elevator message and I'm thinking comprehensive wealth management is so broad, so deep, and in some cases so complicated. I'm not sure that you could encapsulize it in two or three sentences.
Kelly Scanlon:
If you were to define it for us, what would you say are the key components?
Chuck Maggiorotto:
Well, I think it starts really with a relationship. And Country Club is an organization that is so relationship oriented that I think it fits well in our culture anyway, but based on the relationship, it's sitting down with people and listening and understanding and trying to get as best an empathetic position as you possibly can. And then identifying what someone's goals are, different aspirations that they have, and then analyzing the situation and coming up with different avenues for them to meet their goals. Subsequent to that, presenting them, deciding which ones to take, and then implementing those that are appropriate at the time and circling back on those because you want to make sure you're achieving what you anticipated. So the monitoring process is an ongoing situation so that you have a touch base to see where you are, where you need to make some adjustments and then move forward.
Kelly Scanlon:
Life doesn't always go in the direction you think it's going to-
Chuck Maggiorotto:
It seldom does, Kelly.
Kelly Scanlon:
Exactly. Okay. So you create the relationship, you assess their goals, you get a sense of what their risk tolerance is, and so you put together a financial plan based on that. Is that what I'm hearing you say?
Chuck Maggiorotto:
Pretty much. Right, you put together as best you can a roadmap going forward. Some of them end up being pretty straightforward, but some end up having like a tree, multiple branches to them but yes, you definitely want to roadmap, otherwise you kind of get lost in the woods trying to figure out where you're potentially trying to go.
Kelly Scanlon:
Walk us through some of the other components of wealth management. Once you have the financial plan in place, I know that there's also some investment management that could come into play, and your retirement would, I suppose, factor into that, what you want to do with that tax planning, estate planning, and you have a trust department as well. So break those down for us and tell us about how you handle those.
Chuck Maggiorotto:
Sure. And you've done a good job of mentioning several of the key components but investment planning is certainly a foundational piece. It could be like you alluded to, focused on retirement. It could be focused on education planning either for your children or your grandchildren. You may have a particular goal aside from retirement or education planning that you're gravitating toward. I've worked with people personally over the years that their main goal was to have as much of a nest egg at the end of their lives as possible to give to charity. That was their purpose. They felt comfortable in their retirement planning. They may or may not have had children to provide for at some point, so their whole goal was they may have a charity or two they wanted to focus on and they wanted those charities to have as big of a benefit at the end of their lifetimes as possible.
So every person, every family has a different goal in mind and some of them are typical and some of them are pretty unique. And so that's your goal too in that process to figure those out. And certainly the estate planning piece is part of that as well in that you want to set things up not only for your lifetime but also subsequent to that, so whether it's for your family or another entity that's important. Risk management is part of the equation too. It could be life insurance at different stages of our lives or it could be something we don't tend to look at, and that's homeowners policies and other risk oriented property and casualty policies that we have. So I think it's important to take that into consideration as well. There's always this other category in my mind in the bank, so to speak, environment that we're in, deposits and loans and other things are part of the comprehensive situation.
I just had a situation yesterday where a client of ours is having some difficulty with some health issues. She and her husband. And she is unfortunately having to take over some of the financial aspects of their lives, which she hasn't been accustomed to previously, plus some of the healthcare issues. And so I met with a private banker and we called the client together. So this is a situation that you don't necessarily have in your financial plan, but when somebody calls you and is very nervous about what's going on and is drinking from the proverbial fire hose and their lives are, in their minds at least, spinning out of control, it's good to be able to grab somebody and call and put somebody at ease.
Kelly Scanlon:
And I would imagine that if any of your clients who are business owners, that introduces a whole nother variable into the equation.
Chuck Maggiorotto:
That's correct, because in the bank, which is unusual for a lot of institutions of our size, we have a couple of merger and acquisition groups, and so not only do they execute transactions in different types of industrial and financial areas, but also they're a good advice point to utilize and leverage for our clients who are in business. And as I mentioned as well, businesses are certainly apt to need banking services including lending. And so lending can be a strategic part and tactical part of the equation for growing a business or potentially exiting a business at some point when that occurs.
Kelly Scanlon:
Right. And in so many small businesses anyway, their retirement is often tied up with that business-
Chuck Maggiorotto:
For sure.
Kelly Scanlon:
... so to have an expert that can guide you through that exit process is all the more important.
Chuck Maggiorotto:
No doubt. And the part people don't always realize is there's a financial component to that, but also there's typically an emotional component to that. The business is like a child, if you've inherited it or initiated it, you've grown it, you've nurtured it, you've cared for it. There've been ups and downs. And when you get to the point of exiting it, whether it's to a successor who's a family member or somebody who's not a family member, there are a lot of emotions attached to that, and addition to that, very important financial ones as well.
Kelly Scanlon:
Country Club Bank has so many services for a community bank, you have many or most of the services that a full size bank would. Tell us a little bit about your trust department and how that works.
Chuck Maggiorotto:
Sure. So we have approximately 45 people in the trust department. We are stewarding close to $3 billion in assets. And in line with what I said earlier, the relationship piece is the ultimate part of our situation. And when I think about our business and really a lot of businesses, I think it boils down to empathy. The financial planning or the understanding process with somebody is trying to know them as best you can and be as empathetic as you can so you can make the best decisions for them, but also dovetailing expertise. Within the trust company, there are, I would say three primary functions. There's the trust administrative function that deals with administrating, as it does say, trust documents and trust accounts.
But there's much more than that and it ends up being a relationship with a client that is very close. The administrator does a lot of things in the other category in regard to emotional ties. Sometimes I've been in a situation honestly where a client wanted help in picking out the dress that she would be buried in. When you go to college, that's not one of the classes that you take and believe me, you get close to a client in that circumstance. We also have financial planners that specifically deal with the financial planning aspect that we talked about earlier and are dedicated in that field. And last but certainly not least, are the investment folks that put together investment portfolios to drive the outcomes that we want financially for our clients.
Kelly Scanlon:
You are the Chief Wealth Officer here at the bank. How did you get into this area to begin with? You're obviously passionate about it. What drew you to it?
Chuck Maggiorotto:
Well, I would say two things. When I got out of college, I had two goals. The first one was to get a job. I graduated a long time ago in an economic environment that wasn't good and I needed to pay the electricity bill. And somebody fortunately offered me a job in this area and somebody I guess was looking over me and pushed me serendipitously into the financial world. And so 40 years later, here I am. And from a non-boring standpoint, that was my second goal, was to do something that was not boring. I lived in a household where my father unfortunately did something he felt was boring and he encouraged me to do not make that mistake, so to speak. And so I will say this, at times I wish things were less not boring, but I am very appreciative of the fact that my days go quickly. I enjoy my work. It is exhilarating to me to help people and for them to recognize the impact that we in the bank trust company, Wealth Solutions Group, are having on them.
Kelly Scanlon:
So, 40 years strong in this area of banking, you've seen a lot of things. What are some of the most common financial planning myths and mistakes that you've seen?
Chuck Maggiorotto:
There's some mistakes, I would say, and there's some misconceptions. The first thing I would say is that people feel that you don't need to go down this road until you're a certain age. And the one thing we can't control in our lives is time. So I would say the earlier you can engage in a process of planning and really diligent financial welfare, the better. And you need to get on the right track as early as possible because if you start at 25 or 30 versus somebody who starts at 50, that 50-year-old can't get his or her clock turned back to 30. And then like I said, it's a wasted opportunity, but it's an opportunity cost that you just can't get back.
Kelly Scanlon:
Yeah. And for the average person, say that 20 something year old coming out of college who thinks, oh my gosh, as you said, I'm doing well just to keep the lights on, what's just one simple thing they could do to work towards that financial goal for when they retire?
Chuck Maggiorotto:
Just because you don't have a pile of wealth doesn't mean you can't be helped. And I know with a lot of young people, at least in previous years, maybe they don't do it as much now, but accumulating debt, I mean, that is a difficult hole to dig yourself out of. For a younger person, I would encourage them, A, to save, have a savings plan of some sort, whether it's a 401(k), hopefully that they have at their business or just calling out a part of their weekly or biweekly or monthly paychecks to set aside for rainy day, which I know is not always easy to do. But I think the biggest thing is just to avoid the trap of getting into debt that is very difficult to overcome. And certainly a lot of people have student debt that is difficult to get past as well.
Kelly Scanlon:
What are some of the other things?
Chuck Maggiorotto:
I think one of the misperceived things is that everything we do is generic. It's a cookie cutter. And if you do it right, it shouldn't be a cookie cutter at all. You're listening to people, as we discussed earlier, you're putting yourself in their shoes and everybody's different. Everybody has different needs and aspirations and fears, et cetera. And so thinking that one size fits all is just a mistake. So I would encourage you to dive into that pool earlier rather than later. And also in that regard as well, it's not a one-time event, it's an ongoing evolving situation and your needs are different at 25 than they're at 35 and 45 and et cetera, I guess I would say. And so it's definitely an ongoing process versus a one and done. I think the analogy I would use is going to the doctor, you should have at least an annual checkup.
It's not, I go to the doctor once and then don't go back for 30 years. It's an annual process, and if you need to touch base with that person with a particular need, then you do so. But it's an ongoing relationship and process versus a check the box, I did that and I don't have to revisit that for decades. Other thing I would say is in regard to size of firm. I think there is a perception out there that larger firms have secrets that smaller firms do not. And as I mentioned, I've been doing this for a long time and earlier in my career that probably was not inaccurate. The breadth of availability of information wasn't what it is today, and the financial solutions weren't as readily available as they are today, but over the last few decades, that has totally changed where the information flow is much more plentiful and available and the solution type is significantly more available.
So a smaller firm of I would say decent size, but we get access to the same information and the same products that our larger brethren get. I would say the one difference is that being smaller, I think we're able to get closer to our clients, have more one-on-one type of relationships and be a little bit more nimble. Yesterday I had a situation with a client. I spoke with a client, I literally went down a flight of stairs, grabbed my partner, and we called her. By the time she was off the phone, she had gone from probably a 10 on a scale of being nervous and upset about the train that was coming at her, to... I wouldn't say it was a zero, but maybe it was a one or two. She felt a lot more comfortable.
Kelly Scanlon:
She had options.
Chuck Maggiorotto:
She had options. And we told her, "You're fine. We just need to get a couple of logistical things tweaked here." With a bigger organization, that may not be as easily done. Honestly, you might not know where your partner is. He or she might be in another part of the country. When we call a 1-800 number at times it's not the most pleasant experience and in our organization we just say, "Call me. We'll get it done."
Kelly Scanlon:
The local aspect of it, you have everybody right here in Kansas City for the most part. And you mentioned running down the steps. You have your insurance group, you have your lenders, you have everybody that might need to be a part of the equation right here at your fingertips, making local decisions, having local meetings and like you say, 1-800 numbers not knowing really who you're going to going to get.
Chuck Maggiorotto:
Yep, no doubt. 100% right.
Kelly Scanlon:
So here we are. We have Thanksgiving already behind us.
Chuck Maggiorotto:
I can't believe it.
Kelly Scanlon:
Yeah, if you can believe that. And so as we conclude here, can you give us some tips on some of the things our listeners might consider reviewing or doing before year ends so that they can shore up their financial positions?
Chuck Maggiorotto:
Sure. And I would say the majority tend to be in that tax planning bucket. For those folks out there that are at a stage in life where a required minimum distribution is available to them via their IRAs, charitable gifting with those is really a great opportunity. And in addition to that, certainly gifting of appreciated assets in our worlds, particularly stocks, that people have owned for some time and have a lower cost basis. So by gifting it, you avoid having to pay capital gains. You still are able to help your charity of choice, and the charity doesn't have to pay tax on the sale of that asset. So they're very happy to receive those. The one thing I would say is don't wait. The funnel kind of gets full as we get closer and closer to year-end. And the misconception is that all you have to do is push a button to get an asset from point A to point B. It's not incredibly difficult, but it could take a few days depending upon the institutions that you're dealing with. So please don't wait, I would say until the last week in December.
Kelly Scanlon:
When you talk about being proactive, I imagine too, it's a good time to take a look at the year ahead and if you have someone, a family change, perhaps you're anticipating a marriage or perhaps you're about to have a baby or to take a look at how those things are going to impact you in the next year, and if there's anything now you can start doing to make those transitions smoother.
Chuck Maggiorotto:
Yeah, that's a great idea. And sometimes on the estate planning front in regard to family members and planning, it takes a little bit of time as well. I mean, there are a lot of great estate planning attorneys in our town. For them to do the type of things that we're talking about and being diligent and empathetic, that's a process as well. And it's not cookie cutter and it doesn't just get turned around in a day, especially if you know something's coming forward and you need to address, the earlier you could contact him or her to get on their schedule and to get things rolling, the better. A lot of times there's not a 12/31 deadline for an estate planning change. Now, there might be in 2025 because there's some tax items that are going to sunset at the end of 2025, but at least for the rest of this year and into 2024, there's not a particular hair on fire sort of deadline. But the sooner you get that process rolling, the quicker you could get it accomplished, and it's nice to get it accomplished before that family event potentially happens.
Kelly Scanlon:
You've covered a lot of material here, Chuck, and I know there's a lot more to say about any one of these things, but at the end of the day, what is it that you want to leave as a takeaway for our listeners?
Chuck Maggiorotto:
That's a great question, Kelly, because there are a lot of facets to what we're talking about. But at the end of the day, I think it all boils down to maybe what we should all think of in our lives. We are here to help people. So within the walls of our organization, I think our culture is we are here to help and it could take a lot of different shapes and forms, but we all wake up in the morning knowing that we're here to help our teammates and help our clients, help in any way we can within our community. And I hope we think about that not only within our jobs, but also in our lives in general as well.
Kelly Scanlon:
Chuck, if anyone would like to get in touch with you to learn more about what you do, what your team does, what's the best way to do that?
Chuck Maggiorotto:
Thank you, Kelly. I appreciate you asking that. So, Country Club Trust Company has a website, so you could just search for Country Club Trust Company online. Certainly if you're more apt to get on the Country Club Bank website, there's access to Wealth Solutions and Trust Company websites there as well.
Kelly Scanlon:
There's a link that takes you directly to them?
Chuck Maggiorotto:
Correct.
Kelly Scanlon:
Well, Chuck, thank you so much for spending your time with us today. I know like you said, you don't have a boring moment and you're always busy. So to take a half an hour and talk with us today about this very important aspect, I really appreciate it.
Chuck Maggiorotto:
Thank you, Kelly.
Joe Close:
This is Joe Close, President of Country Club Bank. Thank you to our Chief Wealth Officer, Chuck Maggiorotto, for being our guest on this episode of Banking on KC. As Chuck said, "At the end of the day, all of us here at Country Club Bank are here to help people." From the professionals within our trust department, to our lenders, to our private bankers and our tellers, client support associates, financial center managers, and many others, our culture here at Country Club Bank is to help. Give us a call to find out how we can help you achieve your goals. Thanks for tuning in this week. We're banking on you, Kansas City. Country Club Bank, member FDIC.
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