20 Episode results for "Fiduciary"
"Spelled F. I. D. U. C. I A. R. Y. Fiduciary is an adjective that means of relating to or involving a confidence or trust Merriam Webster's word of the day four October twenty second. Today's word is fiduciary such as held or founded in trust or confidence holding in trust or depending on public confidence for value or currency the key element of insider trading is not the information it is the fiduciary relationship breached when an insider uses that information fiducia very relationships often concern money but the word fiduciary does not in and of itself suggest financial matters rather fiduciary applies to any situation in which one person justifiably places confidence and trust in someone else and seeks that person's help or advice and some matter you are in need of an adverb the words are all faithful to their origin the Latin word feeder which means to trust with your word of the day Peter Sokolow Ski Visit Merriam Webster Dot Com today for definitions wordplay and trending word look the attorney client relationship is a fiduciary one for example because the client trusts the attorney to act in the best interest of the client at all times. Here's the word used in a sentence from the street dot com by Eric read this is an essential piece of insider trading that many people get wrong. I do Sherry can also be used as a noun for the person who acts and do -ciary capacity and fiduciary early and fiduciary can be called upon.
Episode 14 What Can a Fiduciary Do for Me?
"Welcome to the retirement guy. Fudd cash with Gary older from the king or investment group in this podcast, we educate people in or near retirement. So they can make informed decisions and bridge, the confidence gap we're in how to mitigate risk and retirement. So you don't want out of money before you run out of new join Gary Oldman and explore strategies on how to live a stress free retire. Hello and welcome to the retirement guy with Gary Alden from kingwood investment group today. We're going to be talking about fiduciaries. And I think is gonna take us through the basic of what do -ciary really is. Good morning, Gary. How are you just fine? How're you doing today, sir? Doing fantastic. All right. We are talking about fiduciaries. But before we get started the trivia question for me. Yes. I do this actually came up conversation. I'm not really sure why can't remember the context? But the question is how many bones or in your body? And there's actually two answers. Well, I'm going to guess part of it. I think bone your body the two answers would be like when you're younger, and when you're older because the changes in the body, and I'm just going to throw out a number two hundred and forty okay does issue. Don't. So that's my guess that's two hundred forty ish. We'll go with that. All right. So I'm sure we'll get the answer later. So let's let's talk about fiduciaries. What do we learn to Gary? Well, we're kinda cover eight bullet points today. Eric, I is what is do Sherry? Why should I or a why should someone work with one a background on the fiduciary rule? What is the in ACF? That's a national association of certified financial fiduciaries. What is a certified financial fiduciary? What is the code of conduct? What are the qualifications to have a CF designation? Number seven. What's the future of the best interest rule and number eight or to me the three key questions that everyone when they're looking for a potential financial advisers to me three key questions? They should always be asking. All right. A lot of information where we starting. Well, we're starting is what is the do. And why would I want to work with all right in this kind of goes back to federal law, and it encompasses the federal pension and tax laws, and they are set up to protect you and me and all investors by imposing fundamental standards on their investment advisors and individual and firms that are held to these standards or call to-do shears into apartment of labor state set fiduciaries or required to act him harshly provide advice that is in their clients best interests and not in the best interest of the adviser of the words, you put your client. I. And the department of labor states have fiduciary to act impartially like I said and additionally fiduciaries are not permitted to receive payments that could cause a conflict of interest in the less they comply with certain conditions, for the exception. And also disclosed that to the client if there is a potential conflict of interest. So that's basically what a producer is kind of bottom line someone it's going to act in your best interest. Eric to give you a little bit of background in this years and years ago when I four one K plan for setup back in the nineteen eighties. The department of labor has jurisdiction on four one K plans in other words, employer plans and one of the rules on player plans is that employers and the providers up those four when K plans act in the client's best interest while several years ago, the -partment of labor decided to. To extend past four one K plans into IRA accounts, and they announced in advanced several years events that I Ray providers. We're going to have to start acting in the best interest of clients. The kinda give you some background when I became a financial adviser back in nineteen ninety four the standard in and it still is true today that if I get a new client, let's say, Rick, your my new client is I need to get to know you understand how much risk you wanna take when you wanna retire. Everything about you know, the words no your client, and then make a suitable recommendation that was the standard actually still is the standard to this day, whether department of labor came out, and they said for retirement accounts that financial adviser should be held a higher standard initial be acting in the client's best interest, which is a higher standard than acting are giving you a. Suitable recommendation the part of labor roses rule several years ago, lots of comet back and forth, virtually every form on Wall Street redid their platforms came new programs to comply with the new rule. And then guess what happened last year in twenty Eric? I have no idea. Well, what happened last year was this law or this rule that the department of labor was trying to impose was not down by the federal courts really in. Basically what the federal court said is the department of labor had over stepped their boundaries. And they did not really have a thority to impose his rule on the financial services industry really should have been up to the securities and exchange the DOL rule, if you read anything about it on the internet, if you've been reading anything paper, it's been not down by the courts. But now the securities and Exchange Commission, they are working on a best interest standard that will be put in place sometime down the road. Now one thing complicating this since the department of labor rule was not down several individuals states have come. With their own best interest rule for residents of that state. In fact, I was just a couple of days ago in the Wall Street Journal, Maryland state of Maryland now has a best interest rule for their particular state and several other states now have censorship rules in that really could create a little quagmire at there because you've got fifty states with fifty different sets of rules, just create a minefield that there. So we really need to federal government to step in security and Exchange Commission and establish one standard this going to be level across all fifty states. We've got to sit back and see what happens on that Gary. When somebody is a fiduciary what happens if they don't follow through on those rules. What what kind of consequences are there for an adviser who doesn't follow the rules? Well, one of the things is if you hold yourself out to be a juicer. Now the words I say, hey, Gary, all I'm a fiduciary. I've now open myself up to litigating if I don't follow through on that. Now, if you just keep your mouth shut, and you don't say your fiduciary, and you just say, hey, I'm going to act then give you suitable recommendations, you're not held to that standard. But one of these days all financial advisers if the SEC comes through with the rule, and again, we have not seen rule yet. Every financial visor in the country were presuming it's if the SEC comes up somewhere to whatever the deal was going to propose we will all s financial buys IRS. We will all be held to a higher stain. And I think that's a good thing. I don't think there's any profession out there. I don't think anybody would argue that each professions should be working in the best interest of their client. You'd certainly want your doctor to work in your best interest. And not there's you want your mechanic to work in your best interest. And not there's just kind of a no brainer to me. Yep. Yep. You're absolutely right. So because of really the deal. Coming down with this rule and saying, hey, financial advisers, you're going to have to start acting as the do Sherry and act in the client's best interests versus doing suitable interest. An organization was formed called the national association of certified financial fiduciaries. And it's an organization set up created to help provide financial professionals such as myself with information tools resources needed to make sure I am complying with the department of labor Orissa fiduciary rules guidelines, and they've taken that a step further by providing a extremely comprehensive fiduciary training program, and then a certification process. So last year, I went through that program flew to Chicago spent a couple of days up. There you go through a class, and they send you home. And there's a lot of home study to do. And then you have a one hundred question test. Have to score seventy five or better, and then agreed to the follow the standards set forth by that organization. We are set up to do that. And I just want to kind of a click off some of the code of conduct in some of this is really kinda neat. When I go through this code of conduct. Gary, you really kinda hope your financial advisor has been doing this all along absolately some I'm sure there are some financial visors who've done this. But I'll betcha there's a lot who have. But. The three key components of the code of conduct to be a certified financial fiduciary. Number one is practice. The duty of loyalty. Should be Jing first and foremost to always put my clients best interest. First number two, the practice the duty of good faith, and that is my fundamental obligation to treat all clients fairly and in number three practice the duty of good care, and that is my fundamental obligation to exercise the skill of an expert in the only advise my clients in those areas were I really have the expert skill level to do. So let's just say I didn't know much about alternative investments. Well, if I really don't know much about I'll turn investments, I need to tell my client that up front in don't try to wing it. And just say, I don't really know about that. I should not be advising you'll net. If you're considering an alternative invest having said that I'm up to speed, turn even vestments. I was using that as an example in addition to the. The three bullet points that we just went through. Also, it's my obligation to educate my clients, I need to provide. And I do think I provide comprehensive and unbiased education clients ensuring they have a firm grasp of the subject matter prior to them making a specific investment based on my advice. Also, we do a holistic approach we consider all aspects and factors that affect a plan prior to making what are the investment decisions are and then give advice about any part of the client's financial plan or circumstance. In other words, we really drilled down the really get to know the client. I'll give you an example here few years ago. A guy came one of my workshops, and he called me up. He said, Gary relax your workshop. He said, I've got one hundred thousand just laying around what would you recommend a do with that money? And I had the Tele gossip I don't know you from bug. I don't know risk tolerance. What you wanna do? And I. Basically totally I couldn't make a recommendation and he shot back. Don't you have a hot stock ideal? Hot enough. I had to come back and telling we have some ideas. But again, I'm not about so recommend something to you. Because I don't know you though, we take a holistic approach we get to know the client. Yeah. The only recommendation there is don't leave Atlanta around. The next point is full disclosure. We always divulge all fees or forking on a commission. We always divulged that as well as close any potential conflicts of interest. Another thing that we are required to do as certified financial new Sherry is to provide. Comparisons of all suggested products with the tail explanation of why we are say recommending this product over another product. Then of course, couple of things you would kind of just expect one is confidentiality. Protect and keep all clients information, confidential and securely stored and in the last point is professional practice management as a CF designate. I must agree to run my practice with the utmost professionalism, using documentation and procedures set forth by all relevant government bodies, including the securities and Exchange Commission and department of life. That's kind of we went through a whole bunch of stuff there. But those are the key points on the code of conduct that I am sworn to uphold on now. The next point. I wanted to cover is qualifications to even get a CF designation. And of course, one is the pass that test, but also to even be able to walk into door and go through the training. The candidate must have at least ten years of relevant work experience or five years experience and a relevant bashers degree or higher. Gotcha. That's good. Most exemplify high standards of morals ethics and fiduciary standards of service. Again, we must successfully complete training and certification process and pass at one hundred question test with a score of seventy five percent or better. And then we have of course, go through a full background check and be in good standing with all state and federal licensing requirements. Are there any is there any additional education that you need to attend or or do in order to keep that designating? Yes, every year we have there are continuing education requirements. Just like you have an, you know, most fields of expertise good just after do for my securities licensing every I think it's actually every other year same way if you have an insure. Licensor continuing education the same way with the national association of certified financial do Sheri's. There will be continue education required. The stay in good standing, I think that that's so important for people to hear because I don't know that a lot of the audience would know that that there's now you're always studying, and you're always learning about new opportunities. New investments new strategies things like that. Just because you want to be the best visor, you can know that about you, Gary. But I don't think a lot of the audience knows that there's actually organizations that require you to take specific courses specific continuing education. So that you can remain certified that you can remain and you can continue to have those designations. That's just something that I don't think the general public knows that you you actually go to school every year. That's just like right now, I've got a go online and take a four hour class on Medicare. Oh, well, things we advise clients on his Medicare. And they're always changing the rules. And there's new stuff coming out. I've got a log online and take up for our course, I know on to do it. It's just finding that four hours out of my life to go do it. But I'm literally got to do that with the next couple of days. All right. How fun so. And then also has nothing to do with what we're talking about today. But I'm running a social security class year shortly, and I've got an eight and a half hour course, I've got a complete within the next ten days because the eight and a half hour. Online course covers the change. Just the changes to social security back in twenty fifty. No, I wanna be up to speed wanna do the social security class. Oh, somebody raises their hand. And ask me a question. I want to make sure I'm giving them the correct answer based on the current rules and regs on social security not the rules rags back in twenty twelve twenty thirteen twenty four and just to be clear. Your the one attending that eight and a half hour class your social security class for your for your clients is not enough hours. No, no, an hour and ten minutes. Perfect. I don't look stupid in that class. I need to get up to speed on social security perfect. And again really about I won't say every year. But bet every other year, I'll go to a class hell by lane Floyd on social security. She lives in the Seattle area. And she is probably the best expert on so security outside the United States government Duran's nice. So Eric the last point I want to cover today in this is the three key questions. I think every potential. Client should ask their potential financial advisor. I'm meet literally probably one hundred hundred fifty people per year that come in. They've come to one of my workshops, and they've asked for a complimentary consultation, my office and easier the three questions, I think they should be asking if a client Doug Nessie SRI questions, I bring them up because sometimes I think people may be afraid maybe they're afraid to kinda ask some questions. And hey, ask me a question. I'm an angel do Sherry, and you know, I wanna act in your best interest. Everything is open and above board. But to me, these are the three key questions. I want to ask somebody number one. What's your background? What certifications you have? How long have you been in the business, you know, etc? Set are you wanna get the know this person that they're not the client's not going to be my clients? I climb. So what what's the background of financial advisor? What designations they hold? What is their level expertise? So number two, Eric the second question that I would ask if I were client interviewing a potential financial advisor is higher. They paid higher. They often cited. Yep. Most financial advisers these days probably were if they hold themselves out to be the do, Sherry and acting in the client's best interest. They don't charge commissions. They work on a flat fee. Oh, that's pretty well how we work with most of our clients is let's say I charge a one percent the to manage somebody's account. So I've vis interest in account doing well because at the account does. Well, I do well if the account doesn't do well, I don't do that will. Because again, I'm working on a percent of the value of the account. So the bay account goes down my compensation coast out goes up. My compensation goes up and dollars percents stays the same. But the dollars goes up. And then the third thing I would ask a potential financial visor is will you act and my best interest in even know it's not law of the land yet. It probably soon will be I still would like to know even though it's not the law. Are you going to be acting in my best interest in? Are you holding yourself out to be a financial fiduciary? Yeah. And I think that that's so important because we've had this conversation before you I've talked about this. And you've you've mentioned on other podcasts as well. If you ask that question, you say will you act in my best interest? There's really one or two ways that answer is going to go. It's either going to be. Yeah. Yeah. Yeah. Yeah. Yeah. I got you. Sure. Not a problem. That's probably not someone you want to continue to work with. But if they answer the question, No, absolutely definitely will act in your best interest. I'm a fiduciary, and I am held by a standard, and I have to act in your best interest. There's your answer. That's that's what you're looking for. If if it's just kind of a head on awaken. Yeah. Yeah. I got you. Yeah. That's that's not a good. Not a good answer in my opinion. Now, good answer. And I would get it in writing. Like, we have a real nice brochure that explains what if the do she is in really covers really the bullet points and things we covered in today's podcast at it written out black and white hand clients. So they know exactly where we're coming from. And what we're going to be doing for them. And really again, what a real financial fiduciary is pave. Somebody's listening to this podcast right now. Gary, and they want to share that information with their spouse. How did they get that? Besides sharing the podcast with them. How do they get that brochure that document from you? Oh, just give us a call. We got I've got literally several hundred these here in the office. We can just we can drop one in the mail to you in a minute perfect. All right. It's a quick easy read. Then of course, you always people go on the internet and find stuff, and we will know, Eric if it's on the internet. It has to be. Yeah. That's not a rule of thumb. I wanna live by any more. So I think we pretty well covered. What a fiduciary supposed to be doing to me the code of conduct. And in the bullet points went through. Here's what if someone is holding cells to be a financial fiduciary. Here's what they're going to be doing for. You are should be doing behind the scenes to make sure they really live up to that standard. Absolutely. No. I think it's great information. Gary, thank you so much. We you got to you got to answer the trivia question. Now when my even close. Yeah. And you're pretty good because I did I actually always I look around on the internet actually every once while a friend who who's a big trivia buff. And he'll give me a piece of trivia. And I'll use it on our podcast. But I went out and looked and you really had the correct answer when we're born. Yeah. Everage baby. And of course, it's going to vary from child Challe has roughly around give or take around three hundred bones in your body. That's when you're born, but time, they reach adulthood. That numbers drop to around two hundred six ish because a law the bones that were born with a fused together as Grosso, you actually have less bones as you get older. So the answer the question round three hundred or so when you're born and again, when you reach adulthood give or take around two hundred six because as my doctor was telling me one day, he says some people have twelve ribs on each side. He says sometimes somebody's got fourteen ribs on each. Wow. Wow. That's a lot of rips all exact up. Yeah. Yeah. Because I mean, here's the thing. If if babies didn't have multiple bones in their skull. They wouldn't be squishy enough to you know, make the journey out. So I know that the skull itself has a lot of bones when you're first born, and then obviously wanted to solidify into one, you know, basic basic skull, so yeah, yeah. That's very interesting. But I didn't know that drastic though, three hundred two hundred six that's that's quite a quite a difference. Yeah. It is. All right. Well, thank you for your time. And thank you for all the great information about fiduciaries. And if anybody has those questions, and they wanna get a brochure. They just want to talk to you can you give us the number real quick to eight one three five nine seven nine zero zero two eight one three five nine seventy nine hundred perfect. Thank you so much for your time again. And thank you for listening to the retirement guy podcast with Gary Alden. If you've not subscribe to the podcast yet. Please click the subscribe now button below this way. When Gary comes out with a new podcast, it'll show up directly on you're listening to vice this makes it much easier to share these podcasts with your friends and family. Again. Thank you for listening today for everyone at kingwood investment group. This is Eric Johnson reminding you to leave your best day every day, and we'll see next time. Thank you. For listening to the retirement guy podcast. Click the subscription button below to be notified when new episodes become available. The inflammation covered posted represents the views and opinions of the guest and does not necessarily represent the views or Figgins of kingwood investment group. The content has been made available for information and education purposes, only the content is not intended to be a substitute for professional. Investing advice, always seek the advice of your financial advisor or other qualified financial service provider with any questions that you may have regarding your investment, planning kingwood investment group is independent of exponential grouping securities and investment advisory services offered through next financial group Inc. Member if I n RA slashes IPC.
03/18/20 Episode 40 Putting Your Trust in a Private Fiduciary During a Transition with Barry W. Finkelstein
"Welcome to the women and Welt podcast with Esther Szabo. Esther is a respected leader in the field of personal financial advice with over twenty five years of experience after going through her own significant and challenging life changing events she overcame fear and self doubt to launch her own successful advisory firm now. Esther is ready to share her practical and personal experiences to help other women. Clear there hurdles and brave. Life's transitions in this way. She inspires women to lead. Fulfilling and confident lives. Hello and welcome to women and wealth. Esther Saba from gates pass advisers. Today Esther has a special guest in studio and that is very Finkelstein Berry is the owner of the law office of Barry Finkelstein which is a full service Estate Planning Law Office Providing Estate Planning Administration and fiduciary services to clients throughout the San Francisco. Bay Area Barry Specializes in comprehensive collaborative estate planning a State Administration and professional fiduciary services which include virtual family offices for high net worth estates. Good Morning Esther and Berry how are you well? I will go first We are doing well today. It's it's a time where currently and maybe all resolved by the time this comes out. That would be lovely but the markets are in a lot of downfall because of the corona virus. And there's been more concerned nationally about it but right now everyone is doing great. And I'm so excited to talk about this topic and why we're here regardless of whatever is going on in the market in the world and Berry how're you doing. Good thank you. You're welcome. I'm excited to have you here. Thanks for being here and you said you're excited about the topic. But I'm kind of in the dark hair Ester. Why did you bring Barry on well? Berry is as you mentioned. Berry is an estate planning attorney and he creates the documents that are all important for us to have about not just where we want our assets to go when we pass but what about when we possibly reach a point where we're not able to make our own financial decisions our own healthcare decisions and these are difficult things to consider in think about and for women transition what they often find even if they're not in a period of transition maybe they're adult parents are in a period of transition where as family members we start to notice You know mom or dad or both are not quite as sharp as able as they used to be in these times most of the women that I work with regardless of whether or not they have children or not of course if people have children that creates another layer of you know wonder and also responsibility. Most people don't have time to stop and ensure for that. Their parents are getting all the services that they need and. Berry is an excellent. He's very informed experienced and a wonderful resource in this area of well. Then what do you do in? So that is what we're talking to Barry about today. We're not talking about estate planning per se but we're talking about his services of being a public fiduciary and what that means all right. Well I'm here to learn Okay Berry Actually I. I'm going to ask you to define. What are you as public fiduciary? Tell us about that. So a fiduciary is someone who acts in the best interest of others as it relates to estate. Planning the basic estate planning documents are the trust the power of attorney the advanced directive so the successor trustees of the trust and the agents. The power of attorney are fiduciaries and as you alluded to not. Everybody has people that are appropriate to put in those positions so as a as a fiduciary is a private fiduciary I will step in and serve as a trustee of trust I will serve as agent on a power of attorney and the agent on the advance health care directive and. I must have been a spoke. You're not a public fiduciary your private fiduciary. Tell us the difference. It's just a term of art so when it comes to who you have as a possible. Successor Trustees either corporate trustees. There's individual friends and family and then there's a category of individuals who are licensed by the State of California to serve in that capacity and we're just referred to as private professional fiduciaries. So I imagined this position requires an awful lot of clarity and understanding and is also extremely critical because I and I know you have examples to share with us of when you might step in when there's abuse and when you might step in when there's not abuse there's just not ability for whoever is named to take on those responsibilities. Can you share some of those examples with us? Certain and you know to be clear. Being someone's trustee or being someone's agent underpowered attorney. It's not an honor not a privilege. It's a job. It's a hard job that most people are just not qualified to do well. Statistically the burden of caring for Mom and dad tends to fall to the adult daughters so there are other options out there. Some of the downside I have seen one case in particular whereas we're mom was an alcoholic and daughter was agent on the power of attorney and it was a power of attorney that was effective immediately. Didn't become effective when mom became incapacitated effective when mom's signed it well the daughter assumed that. Momma drink yourself to death so the daughter started spending mom's money. The problem is mom's sobered up and discovered what the had been doing and it wasn't as though the daughter was taking the money and investing in courant's she was paying bills and spending the money so that was one situation where a trusted daughter abused moms. Trust another situation that I'm dealing with currently is dealing with the family of the ongoing family dynamic. One of my tagline is that I protect rich widows from children and this is an example of bad children who relying on mom and dad for care and support and then when dad passed away the sun got more aggressive and more users with the money with the family business with writing personal checks with paying personal checks out of the company credit card and when mob has backup information his his line was. What's a matter? Mom Don't you trust me? I imagine that must be an issue that comes up so much that sensitive area that that one can put that manipulative statement to a parent and then it creates just this. Gosh you're right and I feel terrible and then there's also this feeling of lack of power about what my options are. So how did you become involved in that situation? You know like most of my cases it was referred to me by a trusted advisor in this case it was referred by their CPA. Who had been seen this ongoing behavior and hearing her client complain about the situation but really not knowing what to do about it. So I was brought in. I was able to support mom who has capacity. That was not an issue but what she needed for. Lack of a better term was a backbone. She needed someone to backstop her. And say you know what no you're right you're fears and suspicions are correct and this is how I will address it. We Will Confront. The situation will discover the depth of the bad behavior and take actions to correct it. Because this wasn't something happened overnight. Like an employee that was embezzling since her son and this is an ongoing behavior that escalated so in a normal situation we would have. Someone may be arrested or other legal issues. But there's also a family here so as the do sheer. I'm able to come in and go. Okay how can we keep the family? How can we change the behavior? Stop the abuse. Make amends over time but still keep the family dynamic from breaking down because in the long run. They're still family here right. And that's what I appreciate so much about who you are as an individual and not just about the service. The service is critical. But you're very respectful of all parties. Tell us more about this particular situation. How did you do that with the sun? I'm sure the son wasn't really pleased to see you. how did you and also. How did you win the trust of the mom at the end of the day? It's all relationship based you know anybody can sell you a car. Anybody can sell your refrigerator but when you have these interpersonal dynamics it really is about. Is this person. The right fit so I tend not to sugarcoat. I tell things the way I see them and for most people that's what they want. They want to hear the truth so talking with mom and her. Cpa We're all onboard. We all agreed you know at the situation has gone on too long. It needs to change it. Just mom didn't have the strength to do it on her own so we had a family meeting and we just told The Sun. What was so that you know? This is what we have found that this behavior is not appropriate and it is going to change mom. Having capacity made me six co-trustees. She made me the agent on the power of attorney and it was nothing that the sun could do about it so when faced with the with the truth of you know we're taking the credit cards away. This behavior is going to stop and it was very interesting because several times. He was told me that you know. He's not happy with me but he knows he has to work with me. So oftentimes when you confront the situation. The person's confronted gets it. They know they've been getting away with wrong. So just a matter of shining the light on it and being consistent in the application of behavior going forward and tell us a bit more to about those situations where somebody is losing capacity. I had a perspective client. Refer to me in this past several actually before performs about three months ago and as. I have been talking with her and meeting with her. We're the we're the same way. I know you'll talk about this a bit later but we do a fair amount of complementary meeting and reviewing with the perspective client before we move forward into anything where we're charging because we WANNA make sure we have a very clear understanding of who we are what we do and how will work together. And as I was speaking with this gentleman I realized that although he came in the first time and seemed pretty together and an on top of things it actually is. We went through and went deeper into more technical discussions strategic discussion. It really he was unable to track into follow and the biggest issue really was that he's primary caregiver for his wife and that he's in his seventy no he's in his eighties and his wife is in her nineties and that was really all he could handle and I couldn't say it was a dementia issue. I don't have those skills or knowledge but I know you've come across issues of dementia. I know you're not an expert on dementia but you brought some information about dementia. Can you share a bit of of how often dementia could strike and a family? Statistically about one out of Hen Individuals over the age of sixty five is going to experience. Some form of dementia about seventy percent of is Alzheimer's. Which is as everybody knows the scariest of all diseases it's One of the ten causes of death of people. And it's the only one that's not preventable or curable Thirty percent of dementia is some type of vascular dementia. Some kind of trauma or something. That can be Treated or cured or recovered from the opportunity. Here is if someone is losing capacity if they're aware of it they have the opportunity of stepping aside of really transferring their authority before we have to have them declared incompetent and I've had a couple cases in my state planning career One in particular where the husband knew. He was having a loss of mental cognitive ability and he just chose to resign as trustee. He had the worth to you. Know What my wife's GonNa take over and then our children are gonNA take over. I don't need to be here. And it was such a blessing for the family because if someone has incapacity in order for the successor trustee takeover or the agents on the power of attorney to take over. We typically have to have. That person declared incompetent. And how is that done Typically it's done by two physicians not related by blood or marriage Because Alzheimer's has come to such prominence over the last couple decades. There are very specific test for mental capacity so we know the difference between eccentricity versus a true lack of capacity but being declared incompetent. It's the scarlet letter. It's a branding and it has a negative effect so if we have the ability to talk to someone so you know it's time for you to step away. They maintain their dignity. They haven't been declared incompetent. They've just chosen to let them take over. Which is always the better approach if we can go there otherwise we will use the heavy hand in have them declared and take the checkbook away and the car keys and those things but yeah you work in such a sensitive area With this just it's I keep trying to get my i. I know how I work with clients and we have had family meetings here and talking about the issues of dead does not appear to be as healthy as he was but dad fights it and says No. I'm just fine. And this is an obviously. It's a very difficult thing for any of us in our best minds to admit. Gosh you know. I'm just not a superstar at this and to let go. How tell us more? I just think gosh. How does someone go ahead and make this transition? It is challenging to bringing you in. It's never easy and especially with men because if you've ever known an older man retired and then had a deterioration men in particular not to exclude him. But I will stereotype a little bit men in particular we identify with what we do. You ask them what they do. They don't say well. I like to Gardner like to ski. It's like I'm a CPA. I'm an engineer. So our identity is tied up with our activities with our control with being able to drive so it really is understanding that when we're approaching this topic we're talking about a core issue of the individual their competency their ability to interact and be powerful. There is no easy way to have this conversation. You just have to have the conversation you have to broach the subject. There's never a good time for it sooner rather than later let it be uncomfortable. Let it be messy. Let the emotions come out. And you have to work through it and you. Hopefully the person will voluntarily cede their control but they're actually doing harm to themselves to their finances to their wellbeing. Then we have to be able to take the next step and have them declared and go through the process of removing all control and that can also mean changing the mail because if they get a credit card application even if they've been declared incompetent the credit card companies don't know that so they can still apply for credit cards. They can still do damage. Isn't that amazing? You would just think that okay. Those will stop but of course they don't stop we get tons all sent to us all the time so changing the mail. What would just sticking that for a moment? So changing it to changing it to be address of the person who is now the trustee in the agent It's not a simple fix. It really is like with children. It's taking complete control over the important aspects of their life and they may not be happy about it. You know chances are they won't be but again. That's where the fiduciary comes in at acting in the best interest of others even if at the time they're not in agreement what that that is. And that's probably the hardest heartbreaking part I can imagine I mean I can completely understand that it would be with obviously again. We'll circle back to this issue of trust because trust of you or whomever they may choose is in is incredibly paramount. How how does someone validate that you are or someone else? Serving in the private fiduciary is actually skilled competent and able to be trustworthy in this way. a couple of things one obviously at its first impression. That's why my consultations or complementary until I got to put pen to paper so that we build report we build a relationship also and I think most importantly everything we do is transparent. Trustees provide an accounting and especially in today's Day and age with the electronic paper trail. I can't even buy an extra cup of coffee at starbucks on a client's account with outage showing up so it's the level of transparency that we have it's the check and balance you know either the sole trustee we can also be a CO trustee. So now there's another person. Maybe it's the family member WHO's acting as check and balance on the activities of the trustee and again at the end of the day everything is accounted for and I imagine also even beyond that you are an estate planning attorney. You are a member of the Bar. You do have a obligations there as well. So you're not just someone who put out a shingle so to speak and says I can do this exactly. I've got a lot at risk being a fiduciary and early on you my ethics just say no client has anything that I want. That's worth me risking My Bar ticket And for some of those cases as well I can also be bonded. And if you're not familiar with that you know if you have a contractor work on your house they're typically licensed and bonded and a bond is an insurance policy in case they break anything well. Fiduciaries can be bonded and quite often. We are in our higher net worth states. Just in case we do do something untoward toward. There's an insurance policy to back up any losses that we may intentionally create. So there's always some checks and balances always security for the client. And I know in times I have certainly have had a client who because of his dementia. When his wife passed away he became very aggressive and he focused that aggression unfortunately on his two adult children who only wanted to do what was best for him only had their his best intentions at heart so a fiduciary was brought on and I know I was engaged with this person with the fiduciaries. Well which was fine. Showing an reviewing with the family with the fiduciary what was happening in the investment portfolio what we were navigating in terms of cash flow out to the client how that was working etc so often someone in my position works with someone in your position. So there's a whole team available for the client. Yes and part of the fiduciaries opportunity obligation. It's not just working with decline. It's working with the Family. So in that case the kids are going through hell because this man who was there loving father is now this angry aggressive person. Who's saying things at them and it's not the same person but it looks the same so it has a deep impact. So as a counselor outlaw. I can talk with the children as well and help them be with the situation and that might involve outside therapists because there are issues coming up. This is not a non emotional situations very emotional situation and as I like to say you know. Mom and dad are the glue that holds family together and when mom and dad are gone. What's keeping the siblings together? So everything we can do to maintain that from an emotional point of view is on the table needs to be addressed and opportunities that are there to keep the health of the family going. And I appreciate what you've talked about that. There's no easy way to discuss. If somebody is waiting I'm just going to wait for the right time to bring this up to mom or dad or my children. How would you respond? You know again. If if they're talking to me than they've already taken the first step they've already said you know what? There's an issue here that we need to address. We don't know how to address it but we acknowledge that there's something here then let me be the bad guy. That's the other reason for making a third party of the trustee or the agent. Let's leave the children in that child parent relationship with mom and dad because once the children become the trustees had become the agent it changes the dynamic and especially if they have to be trustees over their siblings. Let's make a third party that trustee. Let's keep the sibling relationship together. So let me be the one to come in. Let me break the bad news. Let me be the focus of all the anger because then the children get to come in as you know what we love you Mom Dad. We're trying to support you. This is the issue we're thinking about. It's easy for me to deal with it. I've got the resources I've got the experience I've got the vocabulary to be able to explain it in a way that might be more impactful than the children who are coming from a place of love but just don't have the vocabulary to express it as powerful as it needs to be and I think in both of the work that we do. It's very common when we're talking about Basically life planning life goals. There's a number of steps to take and have you encountered this also that that people can get overwhelmed into paralysis because they're thinking. Oh my Gosh I. Was this going to change that going to change and I can't deal with all of this. How how I appreciate that. You're there to say okay. If your mom or dad or child is upset I will be the focus of that. How do you in Help them move forward. I think we do it in a similar way but tell tell us about how you do it throughout my career. I realized that I'm also an end of life counselor and I'm a certified death Dula and what that gives me is three hundred sixty degree view the entire process. And I think that's what's important here is keeping what's happening now in context with the bigger picture so I think more to your question we have to look at. What is the next step? What's the next thing to do? Let's not worry about ten steps down the road. We'll get to step ten after we've gone through step nine eight seven and six right now. We're at step two. Let's get step to taken care of. And that really does create the opening for step three and now we can shine a light on four and five so it's moving methodically. Clearly one step at a time and not trying to solve the entire problem in one meeting right not trying to eat the elephant all at once but one bite at a time so berry. That's been so wonderful to speak with you. It's just so enlightening if somebody wanted to connect with you How would they do that unless with having a very unique names if you Google Berry Finkelstein I show up on Google? My website is W. F. E. S. Q. DOT COM and I provide complementary consultations? I do house calls. I do evening and weekend appointments. So I've never felt it was fair to charge someone to find out if they had a matter that I could charge them for so pleased. There's a lot of information that everybody needs. And if at the end of the day spent an hour with someone and they choose to go somewhere else. I've done my good deed for the day so I'm happy to talk with people. I do document reviews and just I counsel people because that's really what's important so that when they move forward they're doing it powerfully so reach out to me. I'm not that hard to find and I've got a blessed life. I get to give back to people that I know that I'm doing well wonderful. Thank you so much berry and if anybody is interested in your we focus on as we know women in transition so if those one to reach out to me here at Gates Pass advisers the easiest ways through the website gates pass advisors dot com. I can help create a meeting where it's burying me meeting with you together and just talking about your situation. Happy to do that. And the main thing is regardless of what's happening in the market if the Dow drops and other thousand points another thousand points serious but for many many families there are so many issues going on that we help navigate in this broad picture and bring on the good resources to help support so that we navigate your lives volatility as well as the market. So you can live a confident and fulfilled life so please don't hesitate to reach out and let us know how we can be helpful to you. That is fantastic. Berry Esther both of you are so generous as far as you know meeting with people and just really getting to the heart of what's going on in their life and so I i WanNa say thank you for that and I learned today I. This is near and dear to my heart because a family members that have been through Much of what? You're talking about as far as dementia and Alzheimer's in the cognitive issues in the states and it is so it's a minefield it really is a minefield and to have people on side that can help you navigate. That is so vital importance of thank you both for your time and I just berry. I wish you the best. I hope you a comeback as a guest some time and kind of give us some updates on the work that you're doing thank you. Erica was a pleasure. You Bet Esther thank you for bringing Barry on what a great connection very good. Thank you so much you bet and to the audience. Thank you all for listening to the women wealth podcast with Essar Szabo. If you've not subscribe to the podcast please. Click the subscribe now button below. This esther comes out with a new podcast. It'll show up directly on. You're listening device. This makes it much easier to share this podcast with your friends and family again. Thanks for listening today for everyone at Gates Pass Advisors. This is Eric Johnson. Reminding you to live your best day every day and we'll see you next time. Thank you for listening to the women and wealth. Podcast be short. Subscribe to the podcast so you receive notifications of new podcasts. As they become available check out the website at www dot gates pass advisors dot Com for more information. This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed a material provided for general information and should not be considered a solicitation for the purchase or sale of any security.
#B175 (blind date to blink)
"Hello Word nerds welcome to this episode of the podcast called the dictionary I think I need to turn my volume down a little bit. Check one two. Okay, so the first word is blind date two words. Noun from nineteen twenty, five one a date between two persons who have not yet or who have not previously met number to either participant in a blind date I've got a blind date the blind date. Now we have the word blinder. It is a noun from eighteen nine one. Either of two flaps on a horses bridle to keep it from seen objects at its sides number two is plural, so blinders, a limitation or obstruction to sight or discernment. Sometimes If I'm maybe walking through the aisle of the grocery store that has maybe not so healthy things like chips and stuff like that I should probably have some blinders on. All right now. We have blind fish, one word Noun from eighteen forty three. Any of several small fishes with vestigial functionless is found usually in the waters of caves. Why don't there is functioned? Oh, maybe it's because it's too dark in the caves, and so they can't see anyway, but they probably have some other senses to help them. figure out what's going on. Now we have blindfold one word. I FORM VERB A. transitive from fifteen, thirty, three, one to cover the eyes of with or as if with a bandage. I don't know if I would call that a bandage, but okay number two to hinder from seen especially to keep from comprehension blindfold is also an adjective. This is an alternative of Middle English. Blind Felon or blind Feldon, which means to strike blind or blindfold from blind plus felon, which means to fell now we have the second form of blindfold. It is a noun from seventeen, fifteen one a bandage for covering the is. Number two something that obscures mental or physical vision. Next is blind gut, two words Noun, from the Fifteenth Century, a digestive cavity open at only. One end especially this seek them of the large intestine. They call it the blind gut I don't think heard this. Next is blind man's bluff. No not bluffed buff. Blind man's buff. Two words Noun from fifteen, Ninety nine, a group game in which they blindfolded player tries to catch and identify another player called also blind man's bluff, so I wasn't crazy to call it blind man's bluff. I feel like I probably played this game but I don't remember it. Next is blind pig. Two words Noun from eighteen, eighty six, and we just have a synonym, which is not a synonym that I would have expected to see here but we will be seen it at the later in this episode it is blind tiger, blind pig, blind tiger. Those don't comprehend in my brain. Next is blindside one word of verb from nineteen, Sixty, eight, one to hit unexpectedly from or as if from the blindside as in blindside the quarterback. Number two to surprise unpleasantly. We have blindside two words Noun from sixteen O six. One? This side away from which one is looking number to the side on which one that is blind in one I cannot see. In one I cannot see. That doesn't seem like a correct sentence. The side on which one that is blind in one I. CanNot see there. We go now. We have blind spot. Two words Noun from eighteen, seventy, two, one, a the small circular area at the back of the retina, where the optic nerve enters the eyeball, and which is devoid of rods and cones, and is not sensitive to light, called also optic disc, and then it says to see the I. Illustration. Now we have one be a portion of a field that cannot be seen or inspected with a available equipment. And number two an area in which one fails to exercise judgment or discrimination. When I think of blindspot I automatically think of the blind spot when you're driving because depending on how you've got your mirrors situated. There's a blind spot you can't. There's a part next year car a little bit behind where you are where you can't see so you absolutely always have to check blind spot before you change lanes. Please please please and thank you also. On the opposite side if you're driving in somebody's blind, which is basically like? Right behind the driver, like in the back half or the right behind a car, but you know in the other lane. Get Out of their blind spot. Don't be an idiot. This is not the know. It takes two to tango. It's not always one person's fault. All, right next we have this word, blind tiger, which is a synonym for blind pig. It is a noun from eight fifty-seven place that sells intoxicants illegally I have never heard this before, but it can be called a blind tiger or a blind pig. Okay, well I guess I've never bought intoxicants illegally. So why would I know this? Next is blind trust. Two words Noun from nineteen, sixty nine, an arrangement in which the financial holdings of a person in an influential position are paste in the key placed in the control of a fiduciary in order to to avoid a possible conflict of interest. Next is blind worm one word This is the last of the blind words. Noun from the Fifteenth Century, and we have the synonym slow worm well. That's not very nice to the blind worms. They're not necessarily slow, maybe they are. Next is bling bling. Yes, it is the word bullying twice with a hyphen. Also it could just be bling. It is a noun from nineteen, ninety, nine, one of the newest words in here flashy jewelery worn, especially as an indication of wealth, broadly expensive and ostentatious possessions. What was that movie that just came out with Adam Sandler, oh, boy, I cannot think of the name. Anyway, that was a it was a good movie. Good acting, but it made me very uncomfortable. Which I think was the point right high energy, high stress, weird shooting like hand-held. Yes, made me very uncomfortable. Next is the word blink? It is the I form, and it is the last word we will do the second form in this episode, though this is a verb from the fourteenth century starting with transitive one, a is obsolete to look glancing. Lee Synonym is peep. One be to look with half shot is one see to close and open the eyes involuntarily? Number two to shine dimly or intermittently. Three A to look with two little concern. Three be to look with surprise or dismay. Four synonyms are yield and give in as in each side waiting for the other to blink. Now, we have the transitive definitions one A. Yep there, we go to cause to blink. One be to remove as tears from the I by blinking. And number two to deny recognition to. And now we have the second form of blink. This is definitely the last word of the episode. It is a noun from fifteen seventy eight number one is chiefly. Scottish synonyms are glimpse and glance. Number. Two synonyms are glimmer and sparkle. Number three a usually involuntary, shutting and opening of the I. Number Four. Synonym is ice blink. not familiar with ice blink. We have a phrase in the blink of an eye, and that means in an instant, and we have another phrase on the blink and that means. In or into a disabled useless condition, as in the TV is on the blink. So many words I am kind of tempted to pick blind pig or blind tiger as the word of the episode Let me just scan through I. think that's the thing Yep I will pick blind pig as the word of the episode, because that was funny and interesting to me all right that is it for this episode? Thank you very much for listening. This has been spencer. Dispensing Information Goodbye.
5.27.20 Staying safe in hotels this Summer; Fiduciary disclosure coming to your mailbox
"Support for this podcast and the following message come from Stanford small if you're a small business owner head to stand for small dot. Com for resources offers tools from a growing group of companies. That want to help your business get back to business. Visit STANFORD SMALL DOT COM to get started. I'm so glad you're with us here on the Clark Howard. Show where it's all about you learning ways to save more and spend last whenever rip you off? Our websites are Clark Dot Com and Clark deals dot com and this memorial day week is usually the unofficial kickoff of summer. I know summer actually doesn't officially start 'til right around my birthday in late June but the reality is for a lot of people. This is the kick off to summer and I've talked about how different summer vacations are going to be this year with people doing driving trips usually within five hundred miles of home. The number of people flying on airplanes has reached lows. I think last seen in the nineteen thirties. Maybe I mean it's really unreal. How few people are traveling by airplane? People don't feel comfortable with that so we're going to be on road trips and the idea when you're on the road of stopping at a hotel is one that people feel like they're they're really unequipped to know how safe that is or not now in reality. You are overwhelmingly safe staying in a hotel as long as you keep distance from other people in a hotel room. That's where you can have some risks. The handles you touch and the bathroom things like that. And this is actually easier than you might think for you to be safe. When you're on the road you don't want to congregate in the lobby of the hotel where you'd be in close proximity to a lot of people when you get to the room you want to think about you. Open that door to go into the room. Who's touched that door handle? We don't know yet. How much true danger? There is from touching a surface. Someone else's touched who may be infected with corona virus. But you know you're touching a handle other people have touched when you turn on the sink when you flush the toilet when you touch any handle in your room. The important thing is washing your hands. I mean it's no different than anywhere else. You might be the washing. Your hands is corn key to you protecting yourself as far as Surfaces within a hotel room being infected again when you look at what the CDC has said that the real danger is person to person transmission and the odds are that any surfaces or going to be. Okay but again having disinfectant wipes if you've been able to find them in order to be able to clean a surface the you're going to be. Touching is a great way for you to have peace of mind but the answer to everything in a hotel room or anywhere else is the handwashing. And as long as you do that you're going to be in a position. You should be absolutely a okay and safe to stay in. That hotel and hotels have been running occupancies. That are unbelievably low. So odds are you're going to find very very good deals on hotel. Rooms have been looking around and hotel. Prices are the lowest I've seen since two thousand eight in most places two thousand eight right at the height of Effects OF THE BANKING SCANDALS. And so it sapped all the demand. And I think you're gonNA find that you're going to get these really good deals and be safe at the same time and go enjoy yourself. Go see some part of America. It's time for your questions. And I ask you to post your questions for me at Clark Dot com slash ask producers. Cam and. Joel. Alternate asking your questions for you and Kim. What do you have I? This is from Brian in Florida. He wants to know what's the best way to save? Money for my grandchild. I'm not that much interested in an education account. He's to and who knows what education will look like in eighteen years from now. I'm thinking something like cash or gold or silver or government bonds. What do you suggest well I would say? Actually to open a custodial account at as an example at fidelity investments fidelity which has normally retail offices. You can walk into all over the country. The easiest right now is go to fidelity dot COM fidelity has an account. You can open. You don't have to reopen an account for a kid. You could open an account for yourself. Anybody can do this where you open a no minimum dollar amount account and for that two year old grandchild of yours put the money in the total stock market index fine at Fidelity the fidelity zero find it has no commissions to go into or out of and has no ongoing management expenses over twenty year period even in spite of the uncertainty of today the greatest return you can have that will be heavily tax advantaged this money for your grandchild in an index fund. Where you own little pieces of thousands of companies across the US economy? And that's what I do now. If your grandchild eventually decided to go to college then you have a bit of a problem because it affects your grandchild's eligibility for financial aid having money in in the grandchild's name there would be the case with a custodial account but it's the smartest move and most efficient move. I know when you want to put money aside for a child's future but specifically not for College Joe Clark Jerry says how do I find the best price and value on a fifty inch smart TV so fifty inch? Tv's are a real inexpensive part of the television market. And what I would do is I would start at Walmart. Dot Com Walmart offers very very low prices on off brand. Tv's which is what I'd like you to being looking at instead of a brand name and fifty inch TV's during sale periods will be cheaper than but right now fifty inch. Tv's are starting at around two hundred dollars know black Friday a fifty inch TV. This black Friday may be as little as one hundred dollars but right now around two hundred. The reason TV prices are up some because people are spending a lot more time at home and they've been buying more. Tv's and I'm looking a lot of TV's are actually out of stock right now because people have been buying so many but figure the two hundred dollar price point is about what you look for for a fifty inch and remember. The brand name does not matter. The data shows that these. Tv's are so reliable and the pictures so good one to another save your money. Kim Victoria in North Carolina. Says Hi Clark. My husband and I have had a rental property since two thousand and eight and now because my husband is close to retirement or deciding to sell it we have no idea what kind of taxes GONNA pay. Is it going to be added to our joint incomes? And do they count anything for depreciation for all these years? Yes so if you've been depreciating the property over the years you probably had money that has been Held back because you're limited. How much of the depreciation you can claim each year. That depreciation will ultimately offset Some of the game that you have since you have carry-forwards and this is something that you report the gain on the property where you take what you paid for it. Originally you have the depreciation than what you sell it for net of selling expenses and when you sell an investment property is my belief that this is a time that you don't do your own tax return that when you're selling a property it's when it's all tra- valuable for us either an enrolled agent that someone who is registered as a tax expert with the irs or that you use a CPA udeze tax to do your return for you so that you properly report that rental property I had at one time I had five rental properties now down to one and as I've sold each of those over the last few years I can tell you. The tax computations have been amazingly complicated. And that's why using a tax expert this time if not others would be very valuable to you. Joel Clark Robert says we hear a lot of ads on the radio about fraudsters stealing our home title or and then home equity do you recommend getting tidal monitoring service and then. How can we prevent this from happening? In general so great question. It's one of those things that the marketplace says put in people's minds the reality is and we surveyed five real estate moyer's independently of each other on whether or not they recommended that people buy this kind of Title Protection Coverage and it was unanimous non recommended now the good news. This is a very rare crime and now more and more counties around the country have a procedure where you can register your property for notification of any action against the title and these are free services and counties around the country because they don't want to stand idly by while title fraud might take place so it's possible something goofy could happen. Was somebody trying to steal equity in your property but it is very very rare and One thing that was pointed out by two of the real estate lawyers is even if you had some kind of monitoring service. The reality is that many times they would only be telling you about something that already happened rather than preventing crime from taking place. Kim Sam in Massachusetts says what is the best strategy for a husband and wife to do wills so that they don't conflict with each other in the event that we were both die at the same time who's wishes would be honored for care of the children if there's inconsistencies or conflicts in each other's wills that is a phenomenal question and it is really important that the two of you talk to the through depending on state law in many states if a couple dies thirty one days apart what. The instructions are in the second person's will for the children becomes the superior document however it becomes really a messy situation if a couple dies simultaneously and in each will has different instructions for who you'd like to have raising the children so what I recommend is if it's at all possible to have a meeting of the minds on who would be raising the children and it seems like that's a conversation that needs to involve compromise potentially on the part of both of you and the compromise we'd be is that you really talk through who would be first in line and who would be second line and see if you can come up with an agreement on that it. The good news is it's a very rare occurrence that both people in a couple would die simultaneously that is a very unusual circumstance usually involving a tragic accident and it is thank goodness a rare thing. The alternative is if it's something you can't come to an agreement on go sit down with a lawyer who does wills estates and trusts and see if you can come up to a procedure. The lawyer develops that will see that as best as possible. Both of your wishes are met in some way that you can both be comfortable with. Today's Clark Rave fits the theme of what we've been talking about day after day with our Clark Ravens where individuals around the country of any age or stepping forward to fill needs to protect our fellow Americans as we face corona virus. And today I want to talk about Teenager who's a senior in high school named Jona and he goes to Georgetown Day school which is the prep school somewhat related to or directly related to Georgetown University. Depending on how you look at that school's history but Jona is a kid who loves three D. Printers and there are a lot of people who tinker with them who create products with them or hobbyist with them and he knew that there was such a shortage protective masks for first responders and other people involved in medicine that he had an idea. Why not use three D. printers to make a safe yelled for people involved in providing care and so he found online open source design for it. Looks like a welder's mask. That's a space. It's a face shield that's protective and it has mushroomed around the country. All from this teenagers idea and three D. printers are now doing some is known as print to protect and they're making thousands of shields that are being distributed around the country. I love this teenagers. Adults all joining together to make a difference. A lot of the first orders for these went to firefighters and ambulance crews people that are out there helping you and me stay safe gray tabby here on the Clark Howard show where it's all about you learning ways to save more and spend less and don't let anyone ever rip you off our websites are Clark Dot Com and Clark deals dot com. And I wanNA tell you that. Speaking of rip-offs There's one. That's mysteriously likely to happen in the month of June when we're hopefully turning our brains off taking some time off and all the rest. There's been an inside the beltway fight going on for years that is going to affect you so you may if you have any kind of investment account. Get a notice in the next few weeks. That is one where you'll get legally gobbly gook from a stockbroker financial planning firm investment firm. Whatever that will be a disclosure. That's more like a nondisclosure of weather. They're really working for you or not. So it's a new form that supposed to in theory in a very orwellian kind of way to tell you whether or not the person who is helping you with investing for your future is actually working for you or not so the story is. We've had this fight going on for eight years now over weather when you get investment advice from somebody if they have to put you. I was known. As a fiduciary standard the industry of brokers and also insurance companies are so powerful in Washington. They have been able to destroy the requirement that they work in your for your interest. Only what's known as being a fiduciary so they came up with this Ma'am Be Pam? Be Alternative called best interest which is a bunch of garbage. And you're GonNa get this notice that less than more is going to disclose to you that that individual is not really there serving you now. Here's the thing what you WANNA see. Clear as day is that somebody discloses to you that they are fiduciary if they are not a fiduciary all the rest of this is just a bunch of hogwash. So fiduciary is legally required to put you first when somebody's not a fiduciary they can put you in stuff that benefits the firm. They work for or benefits them rather than you and this is something you gotTa know when you get the form you are investing with any organization and the form starts talking in terms like really. Don't make it clear to you. The only thing you need to know is are they acting as a fiduciary and if it doesn't say so they're not which means that they may put you in something because it gets more commissions they may put you in something because the brokerage firm told them to UN. It they may be putting you in things that have massive commissions which will often be true with anything from any insurance company person. Who's handling things for you? You may even be stuck with things called surrender charges. Where if you get into something and then you later WanNa get out. You have to pay huge fees to get out of it the right way to invest and. I see no gray here is if you want. Somebody's advice needs to be from somebody who puts your interest. I always and only you likely will have to pay for that advice. Typically you pay a fee or you pay percent of what you have to invest that fee will range anywhere from a tiny fraction of one percent usually capped it about one percent and the more you understand about the games that are being played particularly by full commission stockbrokers any bank related Investment Organization in any insurance company. The more you know about the games the more money you're gonNA end up with later on the best thing to do. Avoid any investing with any organization. That's GonNa play games with you and do things that put you in second place or worse now here on the Clark Howard show where alternating asking questions that you posted for me at Clark Dot com slash. Ask and I want to tell you. I'm grateful to you for taking the time to post thousands and thousands of questions for me and it gives us a great sense of what collectively is going on in people's minds right now what concerns people have and what problems are facing an producers can joel taking a an alternating crack. It asking your questions for you. Kim What do you have I I? This is from a line. All he says when refinancing. What's the range of closing costs that I should be looking at to let me know that I'm getting a good deal? What a wonderful question and closing costs can range from zero dollars to a big percentage of the amount of money you're borrowing and so there is no right number if you do zero dollar close. What's knows no closing costs? Refi you take a higher than market interest rate in return for paying. No closing costs. What I like you to do is many people only get quotes from a single lender and that puts you in a weakened position you want quotes from multiple lenders especially on a refi really easy to do with online lenders credit unions mortgage brokers and bankers. And so you're able to lay out three things one the interest rate to if you're going to have to pay any points. Each four point is one percent of the amount of money your borrowing and third the stated closing costs. The lenders have to provide you that information. When you get a quote so you can compare from lender to lender what they're quoting you on rate points closing costs what I'd like you to do you figure out what's the best one based on the cost for each offer over the first thirty months that seems to be the window. That is the best comparison shopping. So if you take what you pay and monthly payments the first two and a half years the point you'd have to pay the closing costs. Add those together for each quote you have. You'll be able to figure out which overall loan is the lowest cost for you and this. What I just said is easier to compute than it. Sounds like and the more you do that kind of homework. The better off you're going to be and the more shopping. You do definitely the more money you'll say then example. Let's say you get multiple quotes but you also have an individual. You've been getting a quote from. Let's say a mortgage broker or loan officer at a Credit Union. And you really liked that individual you like how honest they seem to be How good they are responding to you. But they're quote is not the lowest after you ran the math you go back to them having gotten multiple quotes you can say this is what I found out there. Can You Do this offer. Also and once they're in a competitive environment they very well might be able to Joe Clark. Andrew in Washington says I'm looking to take a job that offers a health insurance stipend instead of traditional health insurance. I don't know yet what the amount of the stipend will be. But I'm wondering if you like stipends as a way of receiving health insurance I have an HSA from a previous job and to which I would deposit the stipend and this job is in a state with a high cost of living. So you can only do that. Hsa deposit if you then by a high deductible health insurance plan on your own in. And I'm following this right Joel. That that the poster would be responsible for buying their own health insurance right. Yeah they're getting the sniping and then they're buying it on their own right so if you're buying on your own you typically would go on the exchange at Healthcare Dot. Gov and you see what essay eligible plans are available when you select one of those that triggers your eligibility to do that deposit into the. Hsa You have up to the limits here allowed to the typically change every year. So you gotTa have the if then you have to have the qualifying. Hsa account and this was this idea you brought to. The table was one that was talked about a what mid last decade you know. Twenty Fourteen fifteen sixteen. There was a lot of talk about people being given health. Stipends that you then use to buy coverage and it really hasn't caught on. There was another idea that employers we give you like a voucher and then you would pick from a number of insurance providers that they made available to you and that really hasn't caught on much either so you're kind of off on your own with an employer offering. This is a way for you to get Health Coverage Kim. Jae In Georgia wants no if you have any recommendations for WIFI booster or an enhancer of sorts. So there's a lot going on with Wi fi and a lot of people who are in that group that have either school kids that were home doing school or you are now. Doing work from home have found the weaknesses the Wi fi and your house pretty glaring. So I'm not into extenders amend you actually if you can afford to rolling out money there will cost you now from about one hundred thirty dollars on up to a guy. She can spend several hundred on this. For what does a Wi Fi mesh system? Why Fi meshes or for more sophisticated than having a router and an range extender and they give you the identifical. Wi Fi signal designed to reach every corner of your home depending on the size of your home. That's what can multiply out. But the basic systems tend to have three Mesh devices and instead of having a signal then extends with a range extender. You have these Mesh devices that work in concert. Typically Bell Cover. A home of three of them will cover a home three thousand square feet or so and give the identical Internet experience everywhere in the home and it is a far superior thing to the old router idea if you just go to any of the technology blogs like seen net or anything. Like that. And you put in Wireless Mesh. You'll see reviews of which ones they like best. My favorite is the or be system. Omar be I which is a neck year product seems to be the most robust and sophisticated but typically is the most expensive of them. You really need reliable internet in your home or be is where it's at Joel Clark. Carroll says I don't usually buy service contracts or extended warranties but there are so many electronics in new cars. So would it be wise suspending close to two thousand dollars for one of these extended warranties on one of my brand new car that I bought. That is a great question. Don't buy it when you buy your car if you're going to decide to keep that vehicle long-term is you get close to the end of the mileage cap on the manufacturer's original warranty or the years cap on manufacturers original warranty let's say baseline most manufacturers three years thirty six thousand mile. Some are significantly longer than that. That's when you WANNA buy the manufacturer's own extended warranty if that's something you would choose to. Do you know the math on an extended service contractor extended warranty on an automobile is no more favorable to you than it is on other things. You might buy one in other words. It's not favorable to you but the expense you can face as an unexpected expense can be quite large. And that's why it's the one form of extended warranty or service contract. I'm neutral on is for vehicle. But the only kind by is from the manufacturer itself maybe through one of their franchise dealers. But make sure you're getting the actual branded warranty for your vehicle not some Ufo when that the dealership is pushing on you and never by when you get the vehicle because remember you have that manufacturers coverage at first and who knows if you'll end up keeping that vehicle for the entire period of the manufacturer's warranty when you have a question for me posted at Clark Dot com slash ask and then producers chem. Joel alternate asking your questions. Kim Europe I. This is from Bob in Connecticut. He wants to know your opinion of the wild computer he here is. It is particularly made for seniors. The computer is looking at a very specialized market kind of like the jitterbug phone is for cellphones that overcomes the complexity of computers. But it's a lot of money. It does not seem to me to be priced right for the marketplace at all it is over a thousand dollars for very basic and the functions that it designs to make it easy to use or these very simple click buttons that are on the left hand side of the screen for you to web serve or to check email that kind of thing but it is a market that although. I think it's very thoughtful to look for something to make easier to use. I think it's a market that is far better served by a chromebook chromebook instead of paying well over a thousand dollars. Chromebooks historically started about ninety nine dollars right now because of the shortage chromebooks you have to about double that but no matter what you will spend a great deal less money and I don't think the supposed- Isa ease of use of the wild computer can even approach the extreme ease of use and the much better cost points. Price points of a chromebook and chromebooks are simple web serving machines ideal for a senior to us. This is the Clark Howard show. Thanks for joining us today. The Clark Howard show is produced by Kim droves. Joel Ours Guard. Debra Reese and Jim Airs and Remember Twenty four hours a day where there to serve you at Clark Dot Com and Clark deals dot com.
#ItzOnWealthTech Ep. 48: The Triumph of the Fiduciary Model with Ben Harrison
"The fiduciary model is winning and we want to ensure that we're serving advisory firms crossed that continuum from our clearing business. We absolutely have an option for emerging or as in emerging advisers in that space. When Ben Harrison started pershing advisor solutions? Back in the mid. Two thousand he was impressed by certain industry consultant who is providing him with some great business leads little. Did He know that this consultant mock version was soon to become their CEO? And that thirteen years later Ben would be taking his place. I spoke to Ben about his vision for the custody business. They're doubling down on the are a market segment and a whole lot more on this episode of Wealth Management. Today thank you everyone. The world of Wealth Tech for joining me today. This is the stay at home version of the wolf management today. Podcast and I'm your host Craig quits on a run. A Technology Consulting Company called Ezra Group and we helped wealth management firms. Make Better Tech business decisions through our research and advice and on this podcast. I speak with some of the smartest people in the industry who are on the leading edge of technology and innovation. And please remember to subscribe and leave us. A five star review on items as sharing this podcast. And every podcast we've post on social media networks thanks again. I was really excited to get this next interview with Ben Harrison from pershing Because pershing's been one of my clients for quite some time and it was very interested in this change management from mocked version to Ben so happy that they met him available To me for this podcast. And he was gracious enough to spend some time. We covered a lot of ground. from pershing's response to the COVID nineteen crisis to some of the data. They're seeing You know from their many broker dealers and many are as on the platform Trading volumes Some comments from Ben on marked versions retirement. Which is big news the industry and some of the things that he's seeing and were some of the things that they're doing differently in the market. I thought that was interesting. talking to you about technology Some of the things are doing pushing the envelope with tech which Purchase always been a pretty good job on Especially with net ex and they're other tools we touched on their new pricing strategy and embiid about the competitive landscape so quite a full podcast episode for you Looking fo to hearing your your feedback on this so please take a listen. And I'm happy to introduce my next guest on the podcast. Is Ben Harrison the head of business development and relationship management at being Mellon pershing? It then he craig great to be with. You have a happy to have you on the program. it's great to meet you under. These circumstances is great to me everyone. We're all doing our work from home deal and how many weeks to just say we're into this now. I Lost Count Week. Six on work from home regimen here conflicts A My companies virtual. So we we all work from home but I get the hell. It's completely different for for people who are used to go to office mix for one days. That's for sure you. All kinds of drugs drags together emerges together. And you forget when you're you'll have to to make some boundaries when your work time is absolutely absolutely so I wanted to be or not the first to congratulate you as taking over as head of the ouray business at pershing as of June. I thank you thank you. I'm excited. I'm excited for the opportunity. I'm excited as well. Love of been working pershing for a while. Beloved some stuff you guys are doing. I was at the Conference last year. Hopefully we'll get act. The conferences again. of his backing out in Arizona A lot of good stuff But once ago over a couple of things and we were chatting bit before we started and I'm really interested in pershing's response to the COVID. Nineteen Navarre's crisis. So what are some of the things you guys are doing? And how How do you see any new programs? Benefits frigging employees. And how you work from home when with well with the way your businesses run. You've never run away before. So what are some of the things that have changed? Sure crack You know maybe I'll take this from a couple of angles. The first being the response around moving to a remote environment resiliency and From a client perspective and then maybe shift to the employees perspective so as you mentioned the days of kind of all started to blend together but if we rewind the clock and think about you know kind of a late February timeframe late February. We had our elite advisor summit on the horizon for early March. I remember specifically getting called into Jim. Crowley's office our CEO in sitting down and talk to him about that and we decided that we were going to cancel the conference and got a little bit of pushback from the industry. Thought you know we might have been being a little bit too Conservative but as we kind of look at the look with in back in in what happened it was actually very opportunistic for us to take those conservative measures. And and that's really what we did early. We we We started planning for resiliency. And you know the The ability to move start moving people to work from home environment on a rotating basis and that went from planning to execution in a matter of days so By six weeks ago we were We moved everybody that we could to a work from home type of environment and globally. We have ninety. Eight percent of our workforce ninety nine percent of our workforce is was work from home and we really focused on keeping our employees safe getting them in an environment where they could you know remote work in into our systems and then take care of our clients and the good news is We were really able to do so Missing a be was very smooth. It was done in a period of historic volatility and volume so the team was You know adjusting to this new normal of their kids at home and working from home but with extraordinarily significant volumes. And what we've gotten in terms of feedback from our clients is our clients. Could hardly that we were in a remote environment. The service team was very responsive. The technology has been very resilient in working as designed in. That's all kind of part of our planning exercise and the way that we can consistently test our business continuity and resiliency so knock on wood. It's gone really well and we've learned a lot from it and we're able to move to a work from home remote environment Very quickly so shifting gears to the Employees Front obviously You know we're we're a company with roughly about fifty thousand employees being melon and this is a significant time And Point in our in our existence so the company's been very supportive of employees so most recently todd gibbons our CEO announced that there's not going to be any layoffs in the current year. It's really about keeping our employees the forefront So that they can really support our clients and it's just the right thing to do So the firm Has stepped up with that commitment of no layoffs firms also supporting our communities like many other big companies have committed resources to the local healthcare environment as well as supporting a variety of philanthropic efforts. There's a company match up to ten thousand dollars for qualified charities so for employees. Give up ten thousand dollars. The company will match it Cetera. There's been a number of work from home employee resources. We've got a very robust employee. Assistance Program focusing on everything from mental wellbeing too manager resources to help managers cope with working with employees in a remote working environment And then finally just tools and resources so even the concept of you know we've all got laptops can easily get Up Online at home but certain Employees Traders Cer- customer service folks. They need multiple screens and multiple monitors. The firm has stepped up with an expense. Reimbursement burst program to be able to support some of that for For our employees so in total I mean bringing both those things together client side and the employee side you know. We're just tremendously proud of our of our team Stepping up and serving our clients and proud of our company and in leadership team in the way that they have supported employees. That's great to hear you know. We're we're hearing a lot of great companies that are said stepping up and doing the right thing and looking to make it easy easiest possible for their employees to be productive in somebody's difficult environments and people have little kids at home and it's hard to they don't have a Home Office so it's hard to about that time or that space where it's quiet. I seen some people going into their kids closets. Walk-in closets to the calls and find a quiet space in the house. Yeah occasionally a they're a visitor will appear on a video conference or you may hear a dog bark but people seem to be Rolling with it pretty well. Oh Yeah it's definitely People also learning that a lot of jobs that they said you can't work from home you really kind of work from home and in some cases be as best productive or more productive. Yeah I would. I would anticipate that our when you hear this. A lot of forums but You know our our reality has changed and I think that This has allowed companies to really not only test business resiliency. But but Put It in enacted enforce and I think that we're GONNA see the changes in the industry and in the way that Advisors work with their clients and in for firms like ours. And you'd mentioned conferences earlier. I think that we're GONNA see a difference in the amount of in person conferences That we see I mean people want to spend time with individuals but I do think we're forever changed Italy interesting. I kinda feel that people have short memory and that eventually it'll go back to some kind of normal but then also people get used to the new normal so they'll just be used to doing more virtual more webinars and and less travel the like it. You'll see lots of traveling so much. My businesses. Doing just as well without going to conferences so I think that's yeah you're right that it will. It will change. Have you seen any surprising data so far? I'm sure you see higher trading on about anything around the area you can share so in terms of. I mentioned that we were dealing a highly volatile market when we were kind of moving to work from home and across the board pershing We hit daily records. You Know Kinda Day After Day. Two three x the amount of daily trading volume than than we've ever seen you know historic levels and like I said our our technology Really supported that. Well I would say in terms of you know anything surprising from that data. I don't know if it's surprising but I but I think it is good to see which is in the or a custody. Business forgot about seven hundred Clients on our platform and we looked at the February twenty eighth to March thirty one asset allocation change. We saw very little overall change. We saw tremendous volumes so a significant amount of rebalancing and maybe tax lost harvesting. And you know some of those other strategic moves but in terms of overall Allah asset allocation slight raise and cash slight draw down inequities but on the margins Everything else almost remained exactly the same in terms of market exposure which which in to us that are or as our longtime long-term Investors. They're not it's not a trading business and there You know keeping investors you know engaged in their long longer term financial plan And not making knee-jerk reactions to the market panic. All those good exactly. What should have been happening? Exactly the only worked and it's good to see that it's working that way right. 'cause you probably be surprised if there were major swings. That's really not the way the business is supposed to be supposed to be functioning as right moon from that. Then thanks for sharing that I WanNa talk more about your your new role taking for the the great mark diversion. How do you think your vision of the I? Business will change once you take over sure. So I had the great opportunity to work alongside mark for his entire career here. I started at pershing year before mark joined in actually even got the benefit of working with him in advance of that when he was a consultant that Moss Adams and I was a business development officer in Metro New York City and he would be calling on clients and then he would send the leads to me and I thought man I've got A. I've created this great center of influence in ability for this top notch consultant to give me all of his best client leads and then fast forward a month later and they we hire him as a CEO. And I I understand now why he was. He was giving me the leads but of had a great opportunity to work with him. And you know we really shaped the business under his leadership over the last decade around Being very focused on an optimal client specific optimal client profile that was growth minded professionally managed firm that serves clients with complex financial lives and that served us really really well so when mark came in he really helped us. Define that and separate what we did here at pershing versus the major retail Providers all of those businesses looked very similar. They were direct to retail. They were very focused on massive fluent Investors and we had a different set of capabilities. We had a vast and deep set of capabilities Brought forward by pershing and being y Mellon that we could bring to the marketplace In really serve this segment that needed a more robust and business to business oriented type of platform and we. We've done that really well. And we've grown it significantly from fifty billion up over eight hundred billion under marks leadership so to get back to your question. You know what we might do a little bit differently. I think The first thing is we're going to keep doing what we're doing extraordinarily well which is serving that segment of the marketplace of growth minded professionally managed firms. And we've become known for it and We're absolutely going to continue to do that. And we're doubling down on our investment in the or a business in order to support that From there you're going to see US expand our addressable market slightly so now that we have scale now that we've got a strong foundation and those seven hundred firms on our platform with you know over eight hundred billion dollars in assets that allows us to really build upon that success that we've had and expand So you're going to see US. Come down Market a little bit. You obviously a significant amount of disruption in the marketplace. You know pre Kovic around 'em in a happening at variety. At the variety of the custodial providers in the past you might have Heard me say that are was two hundred and fifty million dollars of assets under management? Well now it's We've moved down one hundred million dollars so if you're an SEC registered investment advisor in your growing and you are an enduring business you you meet the OPTIMA client profile of Our advisor solutions business here at pershing. So that's an important shift other than that. We're really continuing to invest in all of the capabilities. That got us to here. Which is high touch? Client Service The ability to offer our insulting and practice management resources the technology platform we're investing significantly in continued. Api connectivity and Ability to deeply integrate. Within Tech's you know not not a tremendous shift. Just kinda shifting on on the areas where we see opportunity. Let me take a break from the interview. Talk about one of my sponsors and the Invest in others charitable foundation the Invest in others has an awards program that recognizes charitable work of financial advisers in communities across the country and around the world. Here's awards are presented at their signature event. Which is an annual invest in of his gala over six hundred advisers and fench services seconds tennis premier event the celebrate those individuals have actively give back to their communities. There are five categories of awards that recognize the distinct ways. That advisors have made a difference. That's going to read one or two of them. So there's the catalyst award presented to an adviser who has been inactive stimulus for positive change and displayed Entrepreneurial Vision Leadership to nonprofit organizations for at least the past three years There's also the community service award the global impact war there Self explanatory and. I'm on the judging committee for some of these awards. Tell you the the advisers who are nominated have done some incredible work again locally in local communities in the US and around the world. I would advise everyone to go to the website. Invest in others duck board to read more and to donate indeed so. Let me Pick this up a little bit if I can sure so big news dropping your minimums from two fifty to one hundred. That's putting a lot of thousands of additional firms into play that weren't available weren't available to in the past there. They weren't available. You want available to them in the past that's correct when you measure that in the thousands. Yes Yup I don't have data in front of me but it's yeah it's it's it's thousands. The so what what spurred the decision to move down market was it that you felt you had grow your market share grown enough in the over to fifty part or do you see I guess you imagine you see some revenue opportunity in that one hundred two fifty space. Yeah Craig couple reasons The first of which is mentioned we do have scale in our business and that was really important for us to be able to operate in a highly profitable you know type of environment in order to continue to build out our custody business so we we have that scale and we're able to capitalize on it. Now there's as we know there's disruption in the marketplace with that disruption we see opportunity the fiduciary model is winning and As a firm. We want to ensure that we're serving advisory firms and practices across that continuum so from our clearing business that focuses on inch Ibd's and independent contracting type firms. We absolutely have an option for a emerging or as in emerging advisers in that space once once they cross over a hundred billion dollars and become an SEC registered RIA. We really felt that the hundred million three hundred was an area in which we consistently. We're seeing opportunity. We knew that these types of entities really wanted choice. We knew that choice was was diminishing in the marketplace and we have a really robust platform that is for new Sherry oriented and able to serve them in a way that doesn't compete with their business and it's really just about you know democratizing that and getting that out for that segment of the marketplace to to begin to utilize and then finally it's it's to encourage the fact that we know that those businesses are going to eventually be billion dollar shops. So we've gotTA get We've got to align with them when they are that size so that we're their partner now so we can help them grow and We know that many of them are going to thrive and and You know be those larger firms of the future. Only get him early. Get them all their minnows. Before they become Wales absolutely the now one of the things you mentioned this is actually a dichotomy that your your business can scale now which is fantastic. Always want to you. Don't want to to get out ahead of your skis and start grabbing. Try to grab market share when you don't have the capability to support it so Great move there but you mentioned some of your strengths are high touch client service so if you're expanding and scaling it's the by definition the amount of touch. This should go down. Shouldn't or do you have a way to mitigate that. Yes so we're really focused on that it's a great point And we absolutely see our competitors moving in more of a retail minded call center type of infrastructure. We hear You know many cases The the concept that the service experience is being reimagined in it seems as though it's moving towards more of a self service Lower touch environment and less high touch. One thing that we absolutely no is that or I as absolutely want access to dedicated high touch client service. So that's a big part of our service infrastructure and a differentiator for us now. We are investing significantly in digital tools. in this environment that we're in right now is only increasing that investment. So we're seeing as a result of The covert environment our training class for Opening accounts via e signature and and The ability to interface with US digitally from a handful of firms on a weekly basis to upwards of even one hundred individuals. You know logging into those trainings to learn about digital tools. So that's great to see we want everybody to utilize those digital tools. But we do also believe that. There's this careful. Balance between a curated high touch experience versus a call center type of approach and pershing as a firm that has historically we've been a dominant provider of a firm that serves financial intermediaries. We are architect in our environment is designed extraordinarily well to interface with Financial Services Organization. So that's what we're leveraging and It's careful balance but absolutely On the side of still a smaller ratio of our client service individuals to to clients on our platform is one thing. I wanted to go off script a second here. I had an idea. Something you just mentioned With technology something I saw at the conference last year was a chat. Bot where advisers could ask questions and it would take them right to the point in the system that we needed to go. They would pay. I've got a client. Lost their debit card and boom up would come the right form on the right page scene if to go search through next three sixty to find what you wanted is with cut technology available coming out soon enough. It was in the proof of concept phase last year. You know we're looking at That's just one example of the type of investment that we're doing in terms of really digitizing custody moving from an environment instead of just Electronically signing forms getting rid of forms altogether absolutely utilizing robotics in our business to in many ways behind the scenes so you know investors and advisors don't notice it that that type of investment and we've actually reprioritised our investment in technology this year based on the existing environment that we're in in terms of the pandemic to ensure that top of the list are the digital tools and resources so that firms can operate more efficiently with us and and in turn we operate more efficiently. I would agree with that. One of the things you mentioned was integrations. Api's do you have any anything you can talk about specifically around that for other vendors at our apartment with you to integrate your custody another solutions into other FINTECH firms. That would be interesting to people. yes sure so. The strategy in our philosophy is to be intelligently open so by that What I mean is we. We don't aspire to just have integrations with every fintech firm in in the universe We want to go deeper with a smaller subset of the firms that are more readily used a across our client base. So That's how we prioritize our API development in there are a number of those firms that we meet with on a very regular basis. We've got a technology advisory board and we've also got a technology Partner Council that we work with these firms In order to ensure that we are at any given point engaging with the firms that have the resources on their side and we have aspirational goals on our roadmap that we want to get to in terms of by directional data file sharing and and API connectivity with a variety of these of these vendors so intelligently open is our strategy and We also see the opportunity to create in the future a more of a an open you know sandbox for development in testing so that we can be known as a one of the Firms that has the most innovative lean towards fintech texts in the marketplace. That's something that we're working on behind the scenes but we're we're going to be careful. We're going to put the resources stacked against the the most viable firms and Because we think that it's better to have a deeper and broader connectivity and use cases back and forth rather than just a very Thin surface layer on top. You don't WanNa be a Ma a mile wide and an instant. That's right interesting the Last month I Looking at your press release from last month we talk a bit about Your change in pricing sure. So Interested in monthly subscription price. That's been big in. The industry are a lot of news and a lot of talk about how monthly subscription pricing is is going to become the next big thing. Do you see a lot of your existing. Ira clients taking you up on that or is it just being wanted to have that. We have it and you don't really expect a lot of a lot of firms to be Estenoz waters. We've actually seen a fair amount of interest in it and I think I think that that comes from the fact that we we saw that the Existing custodial kind of economic model environment for pricing was ripe for disruption. So if you think about it the way that this business has been priced was really driven off of retail discount brokerage type of bottle. Because that's really had this segment of the marketplace was born and again we've got tremendous respect for our competitors and and Many of which were pioneers launching the or a custody movement but it really came from a direct to retail. Pricing schematic Where investors bore the economic weight of the custodial market and. We thought that it wasn't necessarily in alignment with the way that the investor of the future was going to be consuming products and services. So that's what prompted us to move towards more of a subscription based model if we think about zero transaction fee model on equities. Et apps that was very product specific and it was eliminating one fee Which was equity ticket and moving that fee into more of an opaque economic model of of capturing that fee in the cash Or or Money Market Fund Or Single Bank sweep environment so we saw that and we thought. Jeez that doesn't seem like it's as aligned with the fiduciary model is is the future would suggest that investors want so that prompted us to say let's create an environment where an investor can pay a flat dollar amount A monthly fee as low as twenty five dollars and have access To whole of market in terms of the products and solutions so equities. Etf's fixed income mutual funds Including the lowest fee or no fee type of products which we know is Continues to grow and there's investor demand for it and the existing environment With you know product fees Really subsidizing the Custodian provide a platform. We just don't see that lasting. There's not long jetty in that in the marketplace so that took us to subscription which you know does allow for this access to a variety of different products including a hybrid cash Offering which allows for a greater yield once. The investor has more cash balances on the platform. Many advisors have been missing the opportunity to manage cash as a part of the over allocation because no custodian has gotten innovative around it because it was going to cannibalize their their revenue stream. So this is Something that's new we're starting to get Quite an interest in it. It's actually starting with the types of advisers that utilize you know some of the lower fee product in the marketplace the dimensional funds and vanguard funds etc where they have Historically not been as a coveted in terms of their profitability to custodians because of those That product usage which just doesn't make sense but we think that there's applicable -bility For many use cases. And we're starting to see a pretty good interest in in coming inbound inquiry on it. I think giving more options to is only going to be a good thing because you don't know which ones are going to be accessing these different pricing models and you you don't want to be limiting them to what how the Canon can't run their business and I see. I see subscription pressings becoming as being becoming a huge part of advisors pricing because people used to it with Netflix Netflix or spotify whatever tools whatever it software or services. They're used to that subscription pricing. And eventually they're going to realize that they're paying the same paying more but not necessarily getting more service and that a subscription model makes more sense right and look look at the existing environment I mean the advisers are working pretty hard right now. They're working harder than they ever have. In terms of communicating to their clients navigating these markets in these uncertain times and and their fee their fees are going to be done because their assets under management are going to be down. So they're they have that inherent conflict as well so what could really align wells if they went to a subscription model and the custodian was on a subscription model in advisers. Could wrap that It could be. It could be really interesting for fiduciary advisors to be aligned with clients. And you think that's what more would want. They want to be aligned with their clients yet. you don't you don't want the opposite so shifting gears But staying in the same area what What's your thoughts on an a in space? So there isn't has not been a lot because after of course meal huge one last year with Trou- buying a td any comments on that and then Morgan Stanley buying a trade DC. This continuing other GonNa be more of an a well. I would say that. All of the emanate that we've seen both in the existing in the on you know or aid are a- as well as On the platforms custodial platform side has been very much oriented around the wealth Man Schmidt. Space not the custodial space. So what's happening is the one fee that has been very steady over. The last ten years has been the investment advisers sphere the wealth management fee has maintained Seventy five to eighty basis points Type of Type of a model and That's very coveted so we saw Goldman Sachs by united capital. And you know. That's the forming a national footprint or A. We've seen obviously the discount. Providers be very disrupted And you know. In one case you know to discount providers coming together that was really driven by the retail investor. It wasn't okay we're going to align our RA custody units that came after the fact and even the same is true by a wirehouse you know kind of buying a discount broker it was for retail clients or the ability to leverage ten be five one resources etc so I think that What that implies to us is that that the fee pool that is coveted is Is the direct to client fee pool and many of those discount providers wannabe wealth management providers? In this is their entree into it. And we're GONNA continue to see even though I I would. I would expect there to be a slowdown just due to the current environment. I think there'll be a slowdown. Depressed valuations for a bit in terms of what we're seeing in the environment. But I think it's GonNa come back pretty significantly In terms of additional Industry consolidation in the space. I I really don't see it slowing down. There's more new providers coming into this space. There's a lot of Influx of new providers is not easy to start a custodian very challenging very challenging to sorta custodian. And you can't you can't just get seventy five percent of the way there This is a highly detail. Minutia oriented business. And you know in days you could. You could operate you know well for ten years without a glitch in then on the most volatile day in the market the market seen since the thirties. If you can't do what you have to be able to do as a custodian which is transact and Meet your client needs and Hold assets safely and securely then then you're out of business so it's it's it's a tough market to enter the the most recent firm I know of. That's even got in was all truest started last year. But besides that there really. Aren't that many new custodians coming in agreed. Are there are firms trying to change trying to move the different spaces like there are large custodians? That may be serve broker-dealer Sean the space in our studying. Trying to get the broker dealer space. They are moving into each other's areas. There's no question about that so I think we've got everything covered. I really appreciate your time. Here Bannon A. You've got a lot of things going on so thanks for for carving out some time in your schedule to To Talk to me and sharing with our audience great Craig. Well I really appreciate it. And there's a tremendous amount of optimism right now at being. Why Mellon pershing as we think about the future and there's disruption in the marketplace but with disruption Gopro and we look forward to continuing to invest in the or a custody business and We see coming out of this very strongly on the other side. Thanks for having me. You're welcome all all good stuff. Thanks so much man. Hey It's greg again. Hope you enjoyed this episode Covered a lot of ground. A rifle Ben was being very open And and forthcoming with his thoughts on the industry and where he's going to be taking pershing advisor solutions so really good stuff Before we go remember to subscribe like US everywhere us into podcast member that five star review and I tunes will be really helpful for us. We're moving up the ranks I think we're almost with the top hundred Fintech News. I think we're like one number one eighteen so help us get over the hump. I WanNa make the breakfast top hundred in Fintech news for the wealth management. Say podcast look forward to seeing you all again next week.
401(k) plans and Retirement. Being Financially Secure Enough to Live Out Your Dream
"Okay. We are podcast number one seven, and I got Margie, wig up in the studio, and we are ready to go today today. We're going to be talking about, fiduciary responsibilities once again, and we're going to be talking about four oh one K's, and so Margie. Let's you know, one of the biggest parts of our American dream is building wealth. Right. What is retirement towards retirement? Right. Right. And so let's start with that. What is retirement? When do we get there? Some people put an age on it. I'd say it could be as young as forty today. Yeah. Could be little so little young knocking. What are you gonna do with the rest of your life kinda thing? That's the question. I sometimes he started a second career. Well, there you go. But they're not truly retired. Just started just Regan. Yeah. Change a life change. Right. Right. But when we think about the American dream, one of those things to be financially. Well off enough that we don't have to go to work. We might choose to work. We may choose to do things in our lives that should be our choice. And we have the chess, I guess, -actly that's the whole purpose. You know. So it's not an age. It's not age sixty two or sixty five or seventy or fifty five or whatever you know, it's not some arbitrary number. It's whenever you've accumulated enough wealth that you can now, sustain your lifestyle without the need to go and punch a clock would show up for somebody else's benefit. Yeah. Yeah. It's called freedom. Isn't that beautiful and one of the things is that the tools that people use the most Jim is a 4._0._1._K? Yeah. I think that's when we talk investments today is not just about where everybody's mindset starts heading to is that for a one K. Well, it is one of the most. Used or, and it might not be an actual 4._0._1._K. I mean there are some similar kind of company. Retirement plans might be a sap four zero three b it might be a simple IRA might be a traditional IRA. It could be real estate to maybe. Is that factor into a portfolio? Well, it factors into your overall. Well, yeah, but real estate is not generally, it could be held in an Irish it's. Yeah. But it's whenever you can accumulate, you know, wealth that investments so that you can now start to take revenue from matter. So to sustain your lifestyle. So instead of a paycheck, you're paying yourself, and hopefully, you can be taking what's built up in there as return investment, not the principal? We've exact. Now are talking strategy that sounds great. But one of the biggest issues is, how do you trust it? Number one, too many people pass up this opportunity when they're working, and they need to know that these plans exist, and they need to know what does my company offer. What's the match oftentimes if you're not participating in your four one K you're leaving money on the table. Because if there's a company match that's could be thrive. Prisoner done that Margie. So I know very well with that. And I know the downside of what? Yeah. Well, there's a gentleman, I want to bring up, this whole idea of, what does that mean the fiduciary responsibility? Whether big fat word fiduciary, the F word in the financial industry when you talk f-bomb in this industry, you're talking, we're talking about the do Sherry, and what the word means is that I must do if I'm acting as a fiduciary. I am acting in the best interest of the other right. Whoever I'm being fiduciary up. Yeah. So if you're an owner of a company or an stock owner in a small company or an family owned business or part of a committee that makes these decisions about a plan about a 4._0._1._K or four three beach, you are required to act as a fiduciary and that means you must. Act in the best interest of the employees, not the best interest of the company. And not the best interest of the advisor or the brokerage firm. But in the best interest of the employee, what's, this is one of Fred reshow bring up a gentleman is name is Fred reshi is known as the Orissa law expert. I mean he is the guy recognized throughout the industry. The industry throughout whenever there's a lawsuit in this area. He is called in on both sides often, you know, one side or the other thing. Yes. Chessel give his opinion. So you really wanna fall on the right side of Mr. Fred. I, I mean that big time. Yeah. Because to fall on the wrong side of him as to, to have heaven or hell to pay. Right. But here's a statement he makes in 4._0._1._K specialist magazine. Okay. This is an industry magazine. This is quoting Mr. Fred region. My biggest frustration with the plan sponsors. Is that they truly don't understand what it means to be a fiduciary. They don't understand in committee meetings that their duty of loyalty is to employees, ease not the company. Wow. What a big statement. Now, he's saying this in a broad statement, he runs into this really regular basis like this is what the man does and for that statement. I mean if anybody out there is either Ana committee of four one K committee in their company, an owner of a company that offers a 4._0._1._K simplysafe Ray or any kind of retirement plan someone in a family owned business, they might want to heed and make sure because the cost of not following this can be huge. What can be the cost? Well, for example, one of our favorite action. I say that tongue in cheek providers of such plans is fidelity. Fidelity had a lawsuit brought up by its own employees against fidelity really. Isn't that surprising you don't want because they were using funds that had higher expenses. They had the same fund, but with a different expense structure. So the employees were actually paying more in fees and expenses for their investments than they needed to. So you're going to be careful. What are you paying on those internal fees? What are you really getting from that brokerage firm? Right. This can be very costly. Because what now that lawsuit, what they can do is they can go back and look at from this point to this point, you would have made on this make X. Let's say you would've made a thousand dollars more on your 4._0._1._K number. Fly that times a thousand employees two thousand employees. Now you've got some big bucks are being paid to the employees to the plan. Participants so really has to be thought about in a lot of these brokerage firms. Do not even qualify. The company knew. This was happening. Well, I don't know. You would think they'd no I mean, after all fidelity runs in this case, the watchdogs happened to be the employee's. Okay. Employees should be wear. So there's lots of reasons if you're a company owner you cannot divest yourself fully of your fiduciary responsibility. And in the risk the laws are two levels of one is not even a true fiduciary it falls under section twenty eight and that is just they go by what is called an acceptability. Level of in other words, it's acceptable to be sold suitability. It's called. So that's a suitability criteria previous podcast. We talk about two level for Doshi area responsibility. And that lower level is what brokerage Roy's are generally at this time being held to now there's movement in the industry to get them to be held to a higher level. Okay. Which the highest level of is under section thirty eight which simply states, that you must do. What is in the best interest of the employees, which means lower fees? Here's an understatement from Mr. riche Frederick. Good investment advice is one thing. So that's one thing you want to watch sure reasonable expenses on those investments is another, not having bad effects, or conflicts of interest is the third. In other words, this. Whole issue a revenue sharing in the conflict of interest at that can bring up when you're dealing with a brokerage firm. Okay. We'll talk about that a little bit more in future podcasts and help with appropriate withdrawal rates in the future. So that's the fourth thing. So you lists four things that are really important to the employees. Yeah. Good investments. Good investment advice, reasonable expenses. Nobody's gonna work for nothing. Right. And of course, we don't expect to pay zero. We do want people to stay in business, of course. Yeah. I mean what my investment advisor to stay in business because I want that you want the mutual fund money company to make money. The thing is reasonable is reasonable, what's unreasonable is churning your portfolio for no particular reason. That's just an aside number three. Is that the effects of conflicts of interest? And then appropriate withdrawal rates is the fourth see if you have a properly designed portfolio, what we're finding when we do the analysis of various 4._0._1._K's, people are missing out on fifty percent of their growth, no matter what they have it's really sad. If you're retiring right now with a five hundred thousand dollar rollover, that sounds like a nice little nest egg, doesn't it? Yeah, sure it should probably be a million dollars startling hearing that news. What do you think you can take in terms of income off of million dollar for a one K? Let's say now you're going to supplement your income so dollar amount. You mean what do you think is why I would guesstimate reasonable could be somewhere between thirty to forty thousand dollars a year? And I know that's right ballpark, right on, on that kind of surprised that you, you know, maybe maybe you've been listening to me hop. GM. You've been listening, I can't believe we go through these. I'm getting as much as the other listeners great four percent. And that would be you'd be really stretching it at four thousand a month. You're getting close to that five percent level and got to be hard to keep up with inflation and keep up with the market and keep things not to all of the time. If I got twenty five years to work, yet that might not be very much money at all a quarter of a century later. Exactly. Well, the idea is that at the time that you retire, you might set what your income levels are, but your portfolio should actually continue to grow out, your retirement, and we should talk about that keeping up with inflation, and depending on how long of a retirement period. If you tire at age fifty five or people put that out there for some reason, I was just beginning in fifty five. Come on. Of people are just getting started. Right, right. There was a second, another career for me at that put it's nice to know that somebody could just sit back and still be young enough to enjoy a lot of life. Fifty five is that kind of age? That's true. Most when I say the word most you can just take it with a grain of salt. But as I listened to people, they think that until they get there, and then it's they want to do something else, and maybe they do want to do something that you don't have to make a paycheck at, or if it is, they don't care what the paycheck, has maybe they wanna go back and teach kids, right or etc. Or something, you know, do some charitable work, and that's good. But they again going back shit early. They don't wanna have to do it. Yeah, yeah, that's the difference. But then you really have to have those dollars to stretch over a longer period of time. Right. Right. That's a big fear too, is when people think they're going to outlive, the income or there, that's a huge retirement. One of the biggest fears whenever we do our Merican dream experience. We ask a question. What are you three big, fears write them down? We do a little exercise there and invariably health concerns, come up, and then, of course, not having enough money, my money, not lasting as long as I do kinda thing and. Yeah, that's a very real fear. Okay. We'll listen. I think we've covered some ground today, and I'm really excited about this. I think next week we've got what just pick up again and kind of keep on this trajectory because I think we're getting a lot of meat out in each one of these kids. So hopefully folks, have a question you're encouraged to go ahead and submit those questions to Margie, and we'll get to those, and I think you can look forward to learning a lot of these podcasts. That's it for today.
Friday Flight - Rates for Savers Sink Lower, Housing is Hot, and Saving Halloween #258
"Fractional shares trading is now available for all fidelity customers on the fidelity mobile APP by US stocks. An ETF commission free based on how much you want to spend. Instead of by the share fractional share quantities can be entered out to three decimal places as long as the value of the order is at least a penny dollar trades can be out to two decimal places. Sell orders are subject to an activity assessment fee from one to three cents per one thousand dollars of principal fidelity brokerage services, member, NYSE SIPC Zai-qing, what's going on? I know it's been awhile since you may have been out of the house living life like you used to, but you know what? There is the open road. That still is out there and you should probably reintroduce yourself to it in a Mazda I was lucky enough to drive around in nine the last couple of months and I have to say the V lineup by Mazda is pretty wonderful. These vehicles are masterfully crafted. They have elevated design that's reflected in every detail from the controller knobs to the steering wheel. It's all there. So if you want more information on the MAZDAS UV lineup including the first ever see X. Thirty Goethe Mazda USA dot com slash iheart and don't forget to explore their strongest finance options. Welcome to how the money I'm Joel Into I. Am Matt's Today we're discussing rates for sabres sinking lower housing is hot and saving Halloween. Joey have a lot of stories to get to you on this Friday flight episode where we cover some different news stories that we've seen in the headlines, how they pertain to our personal finances. But I mean I've got frugal cheap for you. Bring it five, twenty, nine plans we've talked about them. Before on our show, they are accounts that allow you to invest money in the markets That's going go towards higher education right A. Lot of times folks will set them up for their kids, but anybody can use them. But my question for you is frugal or cheap to ask family members to donate to a five twenty, nine plan that you might set up for a child Oh that's a good question, and so the reason I wanted to ask you this is because we've had some birthdays recently and we have either been getting cash for the kids or even toys. This is problematic for a couple of reasons right? You know we have plenty of toys. We don't necessarily need more of pieces of plastic or games or books around the house necessarily like we go to the library. So that's problematic but secondly, cash. Little cash dollar bills, and that's kind of an issue these days because a lot of places aren't actually taken cash when it comes to actually spending the money and we don't have a local bank anymore we're online only. So I also can't just deposit in kind of siphon that money over into one of the kids accounts where we kind of save up their money for them personally, and so we're stuck with toys or cash sitting around, and we're not really sure what to do. Yeah. That is the one downside of online banks is like when you need to deposit cash when you get some cash and you're like, I can't take it somewhere. Most done is not an issue because he can. You know it's pretty easy to spend it. But these days we have found it's a little bit tougher. We're doing some accounting where we're like, okay. Well, let's budget less maybe one hundred dollars less for groceries this month, and we'll put that hundred dollar bill towards groceries but even that is not necessarily ideal. Yeah. True I think it's it's okay to ask parents grandparents loved ones to donate to a five twenty nine plan may be in lieu of gifts but I. Think. It can be a touchy thing as well because oftentimes grandparents just get so much joy from from giving their grandkids tangible physical gift that they can play with, and so I don't know maybe it's kind of a split the baby here where where you say, Hey, listen maybe take half of the money that you're going to spend on birthday or Christmas gifts and put that towards a five twenty, nine plan please and then the other half if you could maybe get you know toys or maybe one bigger toy because I. Completely, agree with you were inundated with toys and things in our house. We don't need more of them, but I know how much joy it brings to my parents to give them something special in particular we love outdoor toys because they don't clutter the House as much like a scooter or something bike related whatever is great. But yeah, we're starting to get into board games a little more to those are those are good. We could use more games I guess but I I love the idea of asking people to do that. But maybe a little bit of both is the way to go. Nice man. Yeah that's a good thought. It's a good way of doing it. We haven't covered this yet with any of our parents you know, but it's something that was on our minds recently, we're like you know what? Like instead of doing this like maybe they could do this. But sure we don't want to deprive our parents of them having joy being able to give some of those gifts to the grandkids as well. Yeah for sure. All right. Well, it's. Friday flight. Now that we've I, think answered that question and I don't think it's cheap it's frugal but you had to do it the right way because you don't want her any feelings when you're when you're making that request that's the right way to do it I. Agree. All right. Let's get to the stories. We found interesting this week matt a couple of weeks ago we talked about civic duty and while voting we did. We did and it's obviously it's incredibly important with the passing of John Lewis who was our congressman here in Atlanta. You know he he has a quote about about voting and how it's essentially the most powerful non-violent tool that we have, and we agree we think voting is just an incredibly important thing for for everybody who lives in a democracy to do. Well, we wanted to mention that many companies are being more understanding when. It comes to the time it takes to vote more than eight hundred corporations have signed onto the time to vote pledge. So not only are employees getting paid time off to vote some companies are even offering that Pto if employees volunteer to work the polls, which I think is so cool older volunteers are staying home to Kobe of course, this is a pretty timely benefit though that's worth considering alongside other benefits like healthcare coverage and Retirement offerings like a company match like does your employer care enough about you to give you time off in order to vote. So yeah, it's great to see companies prioritizing not just pay and benefits, but also saying, Hey, you know what you should have and you deserve the time to be able to participate in our democratic system. Yeah and you know if your company isn't offering this if this isn't necessarily something that they have. Sought to introduce I think that's something that you could even advocate for as an employee is something you can ask for it. All kind of depends on just your company, the culture of your company because really we work, it makes all the difference you know like not only in the benefits that they offer but also to when it comes to pay we saw recently that hobby lobby. They just raised their minimum wage to seven dollars. An hour target is now at fifteen dollars an hour minimum as of July and now Walmart man they are doing a great job raising pay for a lot of workers beginning in October, and they're not just raising pay across the board. You know they're doing it by introducing some of these different roles, some of these like new team leadership roles. This should give a lot of employees more room for career growth for pay growth, and so if you are looking for work, make sure to know what the pay structure is like is that could have a big impact on your career and your earning potential. Yes. Great to see some of these companies institute a minimum wage. That's that's even higher than what you know some politicians in Washington proposing there's another interesting story Matt about Oetzi and how essentially some people have done incredibly well, making masks and selling them on. NC. April June this year shoppers purchase more than three hundred and forty, six, million dollars worth of facemask justin facemasks, Justin facemask. That's these. Stores so much money. It's incredible and as many individuals found themselves in a precarious financial position spring, more than a hundred thousand sellers started selling masks and position themselves to grow their business by providing for for the massive demand that was out there four facemasks. It's this really cool story of resiliency that shows that there is opportunity. If you're out there looking for it, right if you're willing to pivot and you have a needle and thread and maybe some fabric, you can start making some asks and start making real money building a business on not as cool to see how a bunch of different sellers have done that slow as you're not making like crocheted mask. Big Gaps in exactly doesn't work now doesn't work at all have you bought any of that CD favorite facemask that you always go to well, I got one that my mom gave me anywhere in that like the whole time I just wash it from time to time. That's so funny like that. Now US also my mom gave us really. Okay. Thanks mom. Yeah. There's some local artists that released massive I've thought about getting one of those but I time pulled the trigger yet but. Some point brewery mask would be good to right yeah. It'd be pretty sweet. Our local bike shop they actually they make like those different bags that you can put on your bike for like by camping and you know for holding different things like I forget what they're called necessarily but they can strap on your bike, but they have been making some some different mass than they actually look really cool because they're really handy with the sewing machine and look pretty dope. So. Let's get to our Halloween story man her she's. Trying to save Halloween. They created a website that is dedicated to trying to help you make a smart decision as to whether or not. You should trigger treat this year Halloween twenty, twenty dot org. But makers in general are. Nervous about how code is going to affect Halloween plans as well as their sales. Of course, some cities have outright ban Halloween festivities and health officials in other cities have issued just strong warnings about staying safe and so you know I'll different folks are gonNA take varying approaches. This Halloween I think that site might be helpful as individuals out their families are going to make their decision I was also interested to see that Halloween. It only makes one tenth of her she's annual sales. I was expecting it to be more like thirty percent. Yeah. 'cause like for me like ninety percent or ninety, five percent of the candy that I buy all year is because of Halloween right. But I guess other folks out there they're kind of snacking all year long. I think for me personally because Halloween is such a big deal on our street and it's on a Saturday night there's just no way it's going to get shot to I. Remember looking at last year looking ahead and be like, Oh, next year is going to be. It's GonNa be on a Saturday twice as many kids as usual. Yeah. So I don't think there's any way to actually shut it down. So I'm just going to get one of those long arms and reach into the candy bowl with it and drop and kids bags or something like that I. Think. I. Saw something about some neighbors creating this pipe where you can drop candy into pipe you. Kinda. Like feed it down towards I guess if your houses slightly elevated, what's yours is by the that's brilliant that would be a good way to deliver the candy I might have to. Make that happen still kind of feels a little early to start having these. Halloween conversations. But yeah, we love Halloween around here never too early. Let's talk about to me of the housing market There is a shrinking supply of homes. These days as fewer Americans are listening their homes for sale an top with interest rates hovering at all time lows home prices are continuing to rise. So while the housing market typically it. Cools off with the weather. We might not see that this year the demand is there, but there's just not enough supply I is. This is natural. Right? Folks are hesitant to open their house and allow strangers to walk through their house winters virus that you know folks are afraid of catching, and so you know it looks like we'll see a supercharged housing market continue to drive up prices for the time being at least. Ya took just twenty two days to sell a home in August and that's the fastest on record. If you're a buyer, you gotta be really careful right now though not to bite off more than you can chew, it's great to score a low interest rate but a bidding war and there are lots of those right now could easily wipe out any savings that you might realize from these historically low rates true and if. You do end up buying. It's so much more important now than even normally as to plan to stay in that home for a minimum of seven years, there's certainly no guarantee that prices continue to rise like this and in all likelihood at some point, right things have to to chill out. So if you're buying a home, make sure it's a long term decision, not a short term fix and if you're selling a home congrats. Because you're probably going to do all right, enjoy reading those awards and maybe go rent something for a while why not let's talk to you a little bit about and. This is something that I think a lot of folks here about, but they're not totally sure like what does it mean to invest into an IPO? It's in the headlines A lot. You know there are a lot of them. Lately an initial public offering is when a company when they go public and the issue stock for the first time typically allows them. To to raise a lot of money, we don't invest in individual stocks you know IPO or not. But because of the press attention that mini IPO's get, it's I think it's even more important to avoid them and I. It's at least a talk about them you know and if you are really interested maybe in investing in an IPO to invest with caution. IPO's do garner a lot of headlines. It's. It's something that that financial writers can write about get some eyeballs people get excited about a company that has been around for a while and has been successful finally can invest in that company. Sweet. There's typically a Lotta hype, right? Yeah. Surrounding and you take a historical example of Facebook, for instance and IPO time for Facebook and May Twenty twelve, the stock sold for thirty dollars a share. But by fall, it was down to eighteen dollars a share and it took over a year for that stock to hit the price again historically, that's on par that's average for an IPO. They don't typically do well in the short term since then of course, facebook's been a great stone but make sure that you're investing in a company for the long term when you buy that stock because quick payday is unlikely an investing with short term hope is just a bad investing strategy individual stock investing I don't think is something that most people should participate in and investing in an IPO is something that even fewer people should consider armoured got more to get to including just how bad savings rates have gotten for people that have money stashed away and we'll get to that in some other stories right after this break. Fractional shares trading is now available for all fidelity customers on the FIDELITY MOBILE APP by US stocks ATF's commission free based on how much you WANNA spend instead of by the share fractional share quantities can be entered out to three decimal places as long as the value of the order is at least a penny dollar-based trades can be in and out to two decimal places. Sell orders are subject to inactivity assessment e from once to three cents per one thousand. Dollars of principal fidelity brokerage services member in my se SIPC. When you need your bank capital, one is right in the palm of your hand. So you can check your balance deposit checks, pay bills, and transfer money from your phone with a top rated APP and when you're done banking, put it back in your pocket, a banking experience built around you and your life. This is banking reimagined get started online anytime. What's in your Wallet Capital One NA member FDIC. We're back from the break this flight episode where we talk through a bunch of different stories here in a little bit we're GonNa talk about student loans, as well as a fiduciary rule that didn't quite happen, but we'll get to those in a second first though let's talk about savings interest rates man they totally suck right now if you've got some money stashed away in a savings account, you are likely earning very little money but here's the thing low rates are there are a little Yin and a little Yang for folks who own a home you know the opportunity to refinance has been incredible. You're able to to lock in a thirty year mortgage right now. At a rates at or below three percent like that is virtually unheard of you know even though as we mentioned home prices, Arthur, the roof that was a pun for your fun. but at the same time, anyone who has been a decent saver is feeling the crunch of these lower rates earning close to nothing. In their savings accounts. All right. So why the low rates? Why is this happening? Well, the reason that rates are so low is because the Federal Reserve announced last week that they would keep their benchmark interest rate near zero until twenty, twenty three or as long as it takes to help the economy bounced back from the impacts of Covid by keeping rates low. The idea is that the Fed can help to encourage borrowing. So think low mortgages, more affordable student loans, even lower credit. Card rates maybe although credit card rates seem to stay pretty high unfortunately but this increase borrowing stimulates the economy. But at the same time, it hurts money listeners the most probably because they're the ones who are most focused on building up meaningful savings. Yeah and even though borrowing rates are low like we're, we're definitely not going to encourage you to go and get a loan to help the economy. We're not asking you stimulate the economy for us by taking on more data right now. We still want you to save your money even if savings interest rates are terrible one of the best ways you can make is to find a bank that is paying a great rates and then also to definitely make sure you aren't paying a monthly fee in order to have an account with them you know, and so that means gravitating away from the big banks even though you will lose the ability to deposit cash locally going planning about earlier. It's still worth it, and instead that probably means moving to a credit union where you can deposit locally or an online bank were big fans of online banks check out discover ally cit or yeah. One of the other banks that pays a reasonable rate without charging necessary fees, and if you're looking for the best rate out there right now, well, it's hard to find right because anybody who has signed up. For an online bank in recent months, they've noticed the rates of drop precipitously and so what looks like a decent rate now looks pitiful but access is a bank that talked about before their rate is incredibly strong. It's it's much better right now than than even some of the banks, we typically talk about all mine free business checking account with them for years for Photography Company Yeah and now they're offering. Interest. Rates out there up to one point five percent, which is like double. What most of the actually sounds pretty good compared to what a lot of the other banks are offering. Under normal circumstances that's terrible. Rate Savings but right now it's great. Their mobile APP and user interface aren't incredible. But if you're just looking for some place to park in the fund well check them out will link to that account in the show notes and the national average rate being paid to sabres right now is point zero, five percent. So I, it's essentially miniscule almost nonexistent credibly small. So we know that that access rate isn't anything to to write home about it. Is By far better than the average and it's better than than some of the best rates out there to being offered by these other banks that we also like. Yes or rates are low for savers there also for borrowers on the note of taking out loans right on borrowing an interesting impact of the coronavirus is the number of new federal student loans declined forty-two percent during the recent summer months. Obviously, this is due to the uncertainty of higher education was going to look like for colleges. To students and their parents are hesitant to borrow a ton of money to pay maybe for face your schools in particular with so many classes going online right now or or a lot of colleges implementing online only like after Thanksgiving you know when when so much of the semester doesn't include the things that you are paying for those non tangible elements. It's tough to forecast a ton of money for. That yeah for sure and it'll be interesting to see the longer term effects of pandemic on higher education. There's a big shift this year, but will it last when the cost of college has easily outpaced the rate of inflation since the eighties by nearly four hundred percent it's possible that this could be a turning point or at least we might see a slowing the insane increase of the cost of tuition and Books if you know a high school senior now more than ever, it seems like a great time to consider a local community college for a couple years to get those core classes out of the way without taking on almost any debt and hopefully, either your state offers free access to community college or you're able to pay for it in cash because the cost is so inexpensive and you can always transfer. After two years and finish up at a different school, just make sure you read the fine print and he know what classes transfer, right? Yeah. There was a interesting facebook kerfuffle about whether community college credits transfer, and and certainly important to do your due diligence beforehand to know which classes you're taking are going to transfer. But for the most part, that's not an issue in on the note student loans Beyond just interesting. Some great student Loan News. I saw that Mike Bloomberg is He's donating one hundred million dollars to four historically black medical schools, Charles drew medical, school, Howard. Harry and Morehouse School of Medicine here in Atlanta they are all receiving that donation which is pretty awesome man. Yeah. So probably just a drop in the bucket low for Bloomberg net worth. I'm guessing that's true. That's true. But I will say when when rich people donate vassal money I feel like there's always the headlines that are like but that's not much of what they actually own and I'm like, who cares man? Amazing Generous. It's generous and it's great and I don't WanNa diminish his gift that's huge and mad props to Bloomberg for for making that happen and also to typically sometimes donations like that will spur on other wealthier folks who might be expected to make a similar donation. It kind of encourages them to do something similar. There's different pledges folks sign up where they'll agree to to donate a certain amount of their net worth. You know when they die that kind of thing, it's like setting a good example basically. Yeah. Let's get to our last story of the day. This one was about the fiduciary rule that was proposed a long time ago when Barack Obama was still president and it's interesting that rule was basically never implemented because of a change in administration, and basically what that role attempted to do was it would have required all registered investment advisers to make investment decisions that were in the best interests of their clients, which sounds like a novel concept right should be that way anyway, right. Exactly. It's not always the case right? Like we said that rule was implemented, but it's interesting to see. There was a new study that found that because firms were forced to prepare and make changes anyway while they thought that rule is going to be implemented many of those firms who does the fiduciary standard and stopped selling bad products to their customers have actually continued to do so and so that means that even though there isn't a legal obligation for these investment companies many of the giant advisory firms adopted the standard anyway in essence even though they didn't have to. Just. The threat of that fiduciary rule being implemented was enough to kind of like Zap these investing firms into good behavior. Exactly. Yeah and so for example, the worst kinds of annuities out there right they have super high fees which are terrible. Almost all people they saw a dramatic decline in sales a few years back as the fiduciary rule was was moving towards implementation, right. But even now that we are moving towards a fiduciary standard, those awful products aren't being offered at nearly the same rate and so let's let's hope that trend continues because yeah. Hi Fi complex products like variable annuities they are not in the best interest of almost anyone. So we recommend for you to stay away from those annuities maybe stay away from single stock investing as well unless you are really into it and you're doing all. Your research instead go with just simple widely diversified low cost index funds, and if you do feel the need to talk to a financial adviser about your investments and about your financial future, we'll make sure they are a fiduciary make sure they're willing to sign a pledge that says that they are going to what's in your best interest not what's in their best interest not selling you products that benefit them yeah. That's where the problem comes in because with the newest, like some of the fees on those things were around ten percents. Yeah. Ten percent of the cost of the actual product was dedicated to commissions. That's mind-blowing times those costs casket a little bearing the paperwork to so. You don't notice them but that was encouraging to see that even though the rule wasn't implemented like we would have liked to see that it's still had a really important impact on the industry. Trend Yeah all right that's going to do it for this episode provokes that want the show Naughton links to some of the sites we mentioned in this episode just go to our website at how to money dot com. Yeah. We'll be sure to link to that Halloween website as well as that access site as well where you can find that one percent interest rate being paid savers so we. Hope that you are having a Good Friday that you've got a good weekend plans maybe at some point during the weekend. If you hadn't left US review, you can head over to apple podcasts because if you like our show if you find it helpful, we would love for you to leave us a positive solid review over there. Those reviews always really help us out perfect Sunday afternoon activists. Riding a review podcast. All right now that's going to do it for this episode. Then until next time best friends out best friends out. It has been awhile since we have been out on the road, but it's all still out there say hello again with a Mazda man, I love the feeling of hitting the road and exploring somewhere new with my family and MAZDAS CV's they have interiors that are crafted with an essential EST approach that allow the journey to be just as fun as the destination yen Mazda is known for making reliable vehicles are family his own demise data for years and one of the leading independent testing companies recently gave Mazda top marks for being incredibly reliable car manufacturer. 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Preparing For Negative Interest rates: Fiduciary CIO
"Welcome to the bloomberg p._n._l. Podcast i'm paul sweeney along with my co-host this abramowicz each day we bring you the most noteworthy in useful interviews is for you and your money whether at the grocery store or the trading floor find the bloomberg pl podcast on apple podcasts or wherever you listen to podcasts as well as at bloomberg dot com. Here's multiple choice question for you on this monday. Do you wanna buy a u._s. Stebner gold u._s. equities or a we work. If you get it pre okay i pio. Luckily we're gonna have a man who's gonna answer that question. That's hans olsson chief. Investment officer of fiduciary trust with seventy eight billion dollars in assets under management so cross. That's that that was your multiple choice question. Which would you buy in ranking order. You work gold steep steep inner gold or u._s. Equities <hes> well. I'd have to probably can i get paid by the assets under management. He has the buy out there. So why like i it's my way of trying to see like where's their actual value right now. It's hard hard to find a lot of value anyplace right now. Perhaps the the areas that we find it mostly would be in places like europe even u._k. Which is really a non on consensus trade for sure but in the u._s. <hes> yeah the earnings growth is there. The multiples are expanding. It's been pretty tough. We're overweight u._s. Equities for sure. We've tried to rotate more into the low volatility types of names <hes> as a way to to to do it responsibly but i have sale the environment right. Now is is not great eight for people putting money to work. We're speaking with hans olsson chief investment officer fiduciary trust hans. Just let's start. Maybe just with your economic outlook. I mean the u._s. Seems is pretty solid but we see some weird news. Alexander talk about earlier out of germany earlier today. So how do you view the kind of the u._s. Economy so the u._s. company if if i were to color code the u._s. us economy with green being growth yellow warning danger and recession. I think we're probably going from green light green at the moment so whether it's the hard data the soft data we see a collection of surveys that all point to continued growth in the u._s. Slower than what it's been but continuing to grow is your call on so you can equities and european equities. Is that based on a brexit thing or is that literally evalu- trait well. I think in in the u._k. And europe immune put politics aside for a moment if you look at things like <hes> valuation and earnings growth they're better. They're more compelling than they are here here. In the united states it just happened to be wrapped in the difficult rapper of the politics that perhaps brexit won't be anywhere near as bad as people people think when you look at the statistics since the end of <hes> since the since the vote back in two thousand sixteen the one economy that has really defied expectations and the popular narrative has been the u._k. Economy both in terms of growth inflation and the like and i'm not so sure but what we couldn't see that continue to happen even post brexit. It'll be some hiccups or but. I'm not sure it will be as devastating. People are are postulating so as you think about that. You're global portfolio where you kind of in the allocation. How much risk are you taking these days with the portfolio so that's a good question because it's really an and exercising nuance increasingly <hes> so when the u._s. equity market as i've said we've we've been rotating exposures and where we have added exposures into more of the low volatility names right trying to stay away from any value by sees but but those companies with dividends and have less of an attachment to the overall market so the betas is lower to that of the market on the credit side we have for some time been shorter undulation where lengthening out the duration because i think there is a real possibility ability that in the next part of the cycle amazingly enough the u._s. will see negative interest rates and the other thing that we've been doing. We've been <hes> pivoting up into a higher quality credits to in an attempt to get some sort of carry so it's kind of a belt suspenders type of exercise so what i would say to that is that you're not alone and name but i mean by that is that low volatility stocks have now inherently become more volatile because there's so much matt now money into it for the reasons that you said you can make the same argument for going up the safety curve when it comes to investment grade and many argue that we're way over but when it comes to the long end so how do you deal with that when you say yeah i think it all depends depends upon what your benchmark duration as right so. We're not going out thirty years or twenty years. We're really trying to stay right on the benchmark for us has probably going to be around four years five life years whereas we were two three years before so we've we've langton out and you're right. There's a lot of money in movement. Money's is trying to find a home especially when we're back to the tino principle where right where there is no alternative equities so it's not a perfect trade but i think it's a trade and certainly over the the the agit that we've seen over the last week or so those low vol names that <hes> we've invested in have held up quite well relatively in they've outperformed by about three hundred basis points. It's not bad in an environment like that. So what are you. What do you expect to hear out of jackson hole at the end of this week. A lot of market participants think it's very very important time for chairman pow to articulate how he views the fed over the next <hes> several quarters yeah yeah i think i think the tel is going to be actually what <hes> there was a white paper that the i._m._f. Released and it reads something like a guy to <hes> deeply negative interest rates fight recession eighty dr page white paper that is the that lays out the fund the foundations in the fundamentals of about how to position the concept of negative interest rates. It's i think particularly in the united states and you're already seeing some of the fed governors talk about <hes> that it's not so unusual and that zero bound is really just a number. I think we'll start to see more of that. Conversation tumble out of a jackson hole without a doubt and sort of setting ourselves up for the next cycle all four. I think higher probability negative negative interest rates which when you think about the u._s. in the u._s. when you think about it turns never but but a reserve currency the swiss franc they have negative interest rates the entire german sovereign curve is below zero and you know we and what sixteen seventeen trillion dollars worth of negative yielding debt of both the sovereign and corporate variety in europe but does that bring up mt and i say that because i've been talking about this black rock paper all morning and probably boring paul at this point which is basically they talked about just that helicopter money you're going to have to have coordinated monetary and fiscal policy in order to get stuff done in the an extra session i mean is that basically what you think. We're headed for two sailing observations number one. I think we've come to the limits of monetary policy and and that's why i think we're hearing about the ideas of another tax cut being floated this morning and the other thing is that <hes> <hes> you know when you were a running trillion dollar plus deficits which is what we're doing especially at this point in the cycle when we're talking about more tax cuts and we are talking about negative interest rates even considering them that is actually you know modern monetary theory. Perhaps dressed up a little bit differently but that's effectively it so i think we're kind of their in many respects and that's a really uncomfortable thought to ponder interesting hansson. Thank you so much for joining. Yes hans is chief. Investment officer for fiduciary trust joining us here on bloomberg interactive brokers studio. Take turn our attention now to gold the commodity commodity is up about twenty five percent year to date so is that just a move by investors for a safe haven an asthma asset or is there something else driving the commodity to get those answers. We welcome joe cover. Tony managing director of world gold council u._s. joins us here in our bloomberg interactive brokers worker studio so joe thanks so much for being here gives a sense of what is driving gold here so far in two thousand nineteen. It's great to be here. What's driving gold in two thousand eighteen and into nineteen has been pretty much risk and uncertainty market risk and uncertainty a client or investors inability to understand where really elite the direction of the markets is gonna go and hearing regular and ongoing updates of large systemic issues that give them caution and concern even if it is talks about implementation of potential tariffs. There's concerns around negotiations with china whether there's a hard or soft exit in brexit all all of these factors are all playing now added as of late has been an increased concern particularly in the u._s. Market over negative real rates or is that even feasible or possible double so the rate moves the dovish stance of the fed all factoring in gold as an asset is a global asset so while we're seeing big risk factors that are taking place in developed markets around the world. Maybe even an emerging markets. You're also seeing a shift as well globally around de-dollarisation and monetary policy policy. That's leading central banks to buy so we're seeing investors taking risk positions that are careful and we're also seeing central banks shifting their monetary policy to address it so i i was covering gold back in the olden days two thousand nine for a few years <hes> so i was part of all that conversation of what we see gold two thousand and if i have thought we'd hit negative rates in many many countries that we could see it in the u._s. I would expect it easy goal to be twenty five hundred. What does it tell you that we're not. What does it tell us that. We're not what i think we need to understand is that the demand cycle for gold is driven and importantly needs to be understood and driven by strategic factors so what i think we need to be careful and cautious of is momentum and short term opportunity costs move the price fast fast and actually in large percentage amounts on any given day. We're almost down one percent today. Let's not get caught up in that. What i'd say is going back to your two thousand nine timeline and actually goes even further back some five thousand years type of reference there what i what i think is important for people to understand and is that in this wave of demand increasing that we're seeing this looks to investors taking a strategic position overweight and their commodity bucket and positioning positioning for longer term systemic issue so the financial risk the longer term. It's going to be a slow methodical continual increase in demand potentially so we'll get to two thousand five hundred. I'm not entirely sure but what we're seeing today are signals telling us that gold as relevant asset is gonna continue to remain very high our conversations again with institutional investors in particular are about how much gold should i have in mind portfolio not this question of do. I have a need for it in my portfolio. Roya is being found more and more prevalent in the conversations with institutional investors. What are the <hes> a._t._f.'s doing with golden. How are they impacting the gold market the are proving to be exactly what we know them to be an exce exceptional vehicle for investors to make a decision to invest in in the precious metal itself they can own the gold through the exchange traded fund not only in the u._s. market which we all know a lot about but what we're seeing our u._k. Okay investors german investors in particular driving enormous amounts of demand so year to date about nine percent of net new assets have flown into a._t._s. with price appreciation appreciation. That pool is up to nearly one hundred and thirty billion in overall holdings in e._t._f. So we're seeing investor saying. I need to make a strategic decision. I want to own gold as a commodity or as a precious metal or in a particular investment bucket divorcing themselves from concerning whether it's a commodity it's not simply saying it's a core allocation in my portfolio so the enabling people to get it done volumes are transparent which is helpful and actually significant significant so if you need to buy as an institution large percentages of gold over a course of a day you're going to be able to get done now. One last point that i'll make is is that in the us while we know that there are institutional flows going into the exchange traded funds. Don't overlook the amount of retail investment that goes into the as well if you're looking at the big wires or you're looking at the large platforms in the u._s. They all have available on them. Some mechanism to exchange traded funds to get access to gold. There's plenty of choices today to what happens if the dollar doesn't depreciate. I think that you need to understand that. The dollar is one. Only one factor actor remember gold has a global asset is impacted by demand in china and india which makes up nearly fifty percent. It's driven by european geopolitical nicole risk or or or economic concerns in those markets so it's an important factor but it's not the only factor to take into consideration so the dollar's been in kind of flat lining right where we going with gold. We're seeing a noticeable appreciation and the price why because the other factors are kicking again stepping away from tactical short term concerning issues which are important understand but understanding that financial market and the risks that come along with that we'll be driving long-term so just real real quick joe he mentioned central bank buying gifts a sense of how that works and how it plays out <hes> basically they're buying the billion outright and the boy and market okay they go into to the o._t._c. markets or the dealer market in the european arena for example and ultimately their their continuing. I think it's now in one thousand nine hundred trend that we've seen in terms of increased recent levels of of gold being added to the portfolio for monetary policy so they're buying the real stuff. They're buying the real stuff joe cava tony. Thanks so much for joining us joe managing aging director for the world council u._s. talking to us all things about getting getting us updated on golden. That's a nice chart for the year within that boy the one part of the economy that the remains very strongest the consumer <hes> and let's see how the consumer is doing particularly millennials and younger demos in terms of buying homes and getting mortgages and all that fun stuff with that we welcome vishal. Garg is a founder and c._e._o. Better dot dot com. He joins us here in our bloomberg interactive brokers studio rochelle. Thanks so much for joining us. Wonder if you could just give us just a brief description. What better dot com is. What are you guys doing doing. Thanks so much for having me. <hes> better dot com is revolutionizing access to homeownership for millennials and we're doing it by making the entire process better faster cheaper so you can get better mortgage and by doing that. You can get a better house. You can save up to three thousand dollars or more on a typical three hundred thousand dollar house in just upfront fees because we don't charge any commissions and we don't charge any origination fees and on top of that you can save some money on your rate so an average consumer save as much as fifteen hundred dollars a year on three hundred thousand dollar mortgage compared to traditional channel mortgage banks or mortgage brokers <hes> because we take the commission's out of the process. We've automated a huge chunk of the process. We made everything much much much better. How do you make money we make money mostly by packaging loans and having investors who we have thirty two investors on our platform with about seven hundred billion dollars of demand a lot of the largest financial institutions in the country who actually want to have mortgages that are not originated by commission loan officer or mortgage broker because those typically tend to perform much much better and so they pass premium for their mortgages and that's how we pay the bills you know today we just announced that we raised one hundred sixty million dollars from some great investors american express citibank ally bank <hes> the health plan of ontario pine brook investors and a lot of that you know when it comes down to is all of those banks and major investors are investing us for the reason that i started the company thirty five years ago so five years ago. My wife was pregnant with our second child. We were shopping for houses. Just people do and it. It was just a really tough process to get a mortgage. My wife worked at a big bank and even there it took over sixty days to get a mortgage <hes> approval and we lost the house that we're we're gonna buy to an all cash. Buyer <unk> even paid less than we did and i thought that was fundamentally. Unfair like branch visits fax machines. He's going to kinkos and like literally sending my social security number and all these documents over unsecure email had cost us the home that we we wanna buy so. It's like we're gonna make better seventy. Eight percent of americans need a mortgage to buy a home and how is this thing that everywhere everyone uses houses industry. That's fifteen trillion dollars in size exists if the internet was never invented right doom millennials dell's bhai homes they do their homeownership rate is half of that of traditional <hes> generations before the baby movers and like so on on average seventy percent of that those earlier generations were able to buy a home right now millennials of about thirty five percent of them own a home so there's this massive demand for coming up. Why is that do you think a lot of it has to do with challenges with student loans okay. They have a ton of student loan. So instead of spending being the first fifteen years of their working lives saving up money to get a down payment to buy a home. They're paying off the loans for college but they're all these products that are out there that your your traditional mortgage broker doesn't know products by fannie mae that enable first time homebuyers to put as little as three percent down to buy a home and over half half of our customer base particularly for those buying a home is millennials and the average age thirty eight and a lot of them are just the they want. They're they're getting married right. They're having kids. They're putting down roots. They wanna have a play room that they can actually paint the way the color they want and so we see not a lot of millennials entering. They're actually the largest group of homebuyers this year so as rates fall. What kind of activity have you noticed. We have seen demand go through the roof our businesses up over three hundred percent from the year before we're on track to do over five billion mortgages this year and almost fifteen billion leaner so next year and it's an amazing time to buy because rates being as low as they are lower than they've ever been in the past means low rates. Hi affordability higher affordability means you can buy a better house for the same amount of money. Remember a lot of people are renting but when you're renting you're just paying your landlords mortgage exactly homeownership homeowners. Should that's kind of been. It's the issue about the millennials kind of being underrepresented in home ownership potentially upside there for the housing market vishal. I shall guard founder and c._e._o. Better dot com joining us here in our bloomberg interactive brokers to you. Thank you so much better rhetoric coming out of the white house about trails where the action is with small stocks return to bloomberg stocks editor dave wilson david looking at this morning. I'm looking at the smaller companies company's doing a bit better than larger ones at least for the moment the russell two thousand index up one point three percent and the s. and p. five hundred up one point two percents now one of the russel's biggest gains belongs to empire resorts whose ticker is n._y. And why the casino owner is climbed fifteen percent after its malaysian majority owner offered to buy the shares it doesn't already hold son us ticker s._o._l. No is at a twelve and a a half percent. The maker of audio would raise the raymond james to the firm's top ratings strong by and tanker stocks are higher after dry ships chairman chairman and c._e._o. Georgia kanu agreed to buy the shares of his company that he doesn't already own nordic american tankers ticker and a t is risen nate percent antique tankers ticker t. n. K. has advanced six and a half percent. One of the russell's steepest drop belongs to revlon ticker r. e. v. the cosmetics maker is falling about four and a half percent after gaining more than fifteen percent on thursday and friday the earlier advanced unsponsored our report that revlon higher goldman sachs to look at strategic alternatives bloomberg stocks editor dave wilson. Thank you so much well. The tech companies are back down in washington this time they're they're testifying in support of a trump administration effort to potentially punish france for enacting a three percent tax on global tech companies to get the latest. We welcome lard davison lars congressional tax reporter for bloomberg news joining us on the phone from washington d._c. Laura thanks for joining joining us so again. We got the big tech companies in front of abortion but a little bit different tack today. What are they trying to get across. Yes so they're really concerned about this. <hes> this tax tax that france france france has passed that would target largely large u._s. companies google amazon facebook <hes> and and the trump administration has said yes we are concerned about this then you really see a kind of for the first time <hes> tech companies and the trump administration really being in lockstep on an issue <hes> what could happen from this <hes>. The administration is looking ping at some sort of retaliatory measure against france to sort of set a precedent of look. Don't go after our tech companies to raise revenue for your country. <hes> tech companies concerned during that they could be taxed. Not only from france with other countries could follow suit things zealand for example and they could be suddenly hit from little taxes from from countries all over the world. It's an i'm calling tech versus tenants because one of the things is with wine that trump is threatened tax one hundred percent of all wine coming from france and europe but in all reality like what could we actually do to retaliate so there's a couple of different things one would be tariffs and it could be on french wine or other sorts of french products. Now the one hundred your percent tariff on wind would be <hes>. You know that would be a bold measure <hes> but there's lots of <hes> smaller tariffs are targeting broad base of french exports. The other thing is there is they section in the tax code that actually would allow the u._s. Government to basically double <hes> the the the tax on <hes> french citizens and french companies operating breeding in the u._s. So there's several different things that are legal within the scope of the possible that <hes> that the u._s. could do to try to get france to back down from this so laura how how important or how much of a financial risk or is this tax to some of these big tech companies. We haven't heard any sort of specific numbers yet. They're they're single cost millions to comply <hes> representative from amazon said that <hes> their profit margins are usually less than three percent so this three percent tax from fans would wipe out some some of their profit margins on those transactions so at least <hes> kind of on a anecdotally it would be both expensive to to be able to track all this to comply with the tax as well as it could wipe out <hes> profitability or result in higher prices for consumers so play this out for me so tech goes to the we hate this. This is bad. Everyone in the u._s. is like totally. We don't want france attach attacks. This is terrible then what happens what the u._s. is trying to do is to get france to back away from this tax and focus focus more on this big global conversation that's happening with one hundred thirty companies led <hes> by g seven g twenty to come up with some way to tax <hes> these companies no longer you know make things earn profits in one country with the digital economy things cross borders all the time and it's really hard to to say which which country can tax which profit so they're trying to have this big multilateral discussion <hes> to come up with some rules that everyone in the world basically can agree on that's the u._s. Wants a not for they're trying to urge france and others who want to go off on their own to do so learn what just give us a sense a little bit of back story here. What was france really thinking here with this tax was. It's simply a money grab for them. Well partially that and there's a lot of <hes> anger in europe at american american tech companies who they feel are art paying taxes that they are using <hes> tax havens to to avoid paying what they should be oh and said look you know if the you you know u._s. Government isn't gonna address this. If there isn't some sort of global consensus we just wanna move quickly and make sure that we're getting a portion you know and being a first mover on this or able to grab a bigger agree piece of the pie than they would have if they did this in coordination with all the other countries so what's the counter to that. I mean that sounds somewhat reasonable. It does though i mean it then the then the answer. Is you know especially for france where u._s. is a close ally. You know what are the negotiations like. If there are extreme tariffs you know. How long can they can they. Hey we're standards or you know if i if every other country has agreed to this other set of principles you know could that be something that the that france <hes> signed onto this is really <hes> france kind of took a bold step kind of i think with the other countries assuming that they would be willing to maybe back down this if there was a larger consensus on something that would be agreeable lord davidson. Thank you so much for joining us. Lars congressional tax reporter for bloomberg news joining us on the phone from washington d._c. Thanks for listening to the bloomberg. Pl podcast. You can subscribe scribe listen to interviews at apple podcasts or whatever podcast platform you prefer on paul sweeney. I'm on twitter at p._t. Sweeney and lisa abramowicz on twitter at lisa abramowicz one before the podcast. You can always catch us worldwide on bloomberg radio.
Get more out of Life than the Mundane
"The. Okay. We're doing podcasts. Number one eight I'm Jim Rosetti here with Margaret wit Cup of Veritas financial services. And we are talking about the American dream and today. Margaret good day to you. Good to hear Jim, let's talk about the experience today. Kind of go into what do you mean by experience? When we say American dream experience, talk about the American dream experience. We're talking amount of event, an actual setting aside. Dave, or maybe two days and really delving into what is your American dream? I mean, a lot of people just kind of float through life. If you're not one of those people who thinks they're going to get anywhere by just floating through and dealing with you're probably not listening to this week to week paycheck to paycheck might be living paycheck to paycheck, but we can help you get out of that. But exist mindset, there's a mindset of. People who want life to be more than just the mundane, and I would imagine that people listening to our podcasts are people who want to discover and live life fully. So when we talk about the American dream experience, we're talking about experiencing something and abundant life. Yeah. Absolutely. A life of freedom. Not a life, a life that is belabored and burden down. You know, one of the things that oftentimes people feel terribly burned about our taxes and political systems, or political parties or just all sorts of things can get into your brain, and cause you to lose sight of that freedom who need? We're living in a Dan age. I think everybody's so politically charged. Oh my gosh. So easily offended today. I mean it's really I can't remember time like this, and there's no freedom in that. So. Accepting people as they are, that might be part of it, but living your freedom and that freedom leads to opportunity. And that's what is uniquely or was uniquely American at the time that this was talked about early on back in the nineteen twenties, or actually, at the duck colouration of independence, which really turned the world upside down, you know, and then there's this other element, it's called wellbeing. And in the well-being we, we need health, but we also need our wealth. You're there are studies that show that we like to say the money can't buy happiness, but then you show me a person who can't eat or doesn't have enough to take care of themselves of their family doesn't buy. I don't need Margaret money does not buy happiness in its totality. But it certainly goes a long way to providing for that wellbeing if we're living under severe debt and no means to pay those bills at puts a lot of stress on people. Yeah, it's a heavy weight to cure. It's heavyweight and that's called, then you have bad health, and you have all kinds of things that just lead to that to just this. Exactly. So this whole thing about the American dream experiences to create an environment. I just got back from Arizona. I went through the American dream experience with Mark Mattson sure of Matson money with the two women who I had invited in, and we had a wonderful time. I mean they were just awesome. You know, they thought it was an awesome experience, and it is an awesome experience. So the first part of it is delving into your own psyche. What do you think what do you believe? What are your values deep down inside of you, and are you living them out, and are you able to enact your life in a way that is meaningful? It isn't about a big pile of money. You know, then, then the second day we talk about the sort of the underlying principles that will support your American dream or your values. So once you've kind of discovered, you know what those values are you can. Now live a life powerfully. And with abundance, no matter where you're at let's say you don't have the ideal. Let's say you're not at your peak earning potential. That's okay, we'll know. But we can be headed that direction. Exactly right. Let's is driving the car. You want to steer it in the right direction. Exactly. Exactly. So what an experience we have one coming up in June. And we have these periodically and the opportunity to attend. I'm putting this out there on our podcast now for people to tell us what they think they're American dream is what does that mean to you? So if you'd like to, I'd love the people that are listening to this to just jot me a note. Yeah. Just some kind of communication, let let's what they're thinking about, when we use that phrase, American dream, and then to let them know that we do have these opportunities for the American dream experience to develop that to create the pundits mindset and the. Practical tools. You know this is not just pie in the sky. This is practical tools to achieve those things. So people can get a clearer picture destination wise. It's hard to imagine unless you can see that destination. It's foggy or not clear. I hear that a lot from business people. Yeah. I see where do you want to be in five years, the C a foggy picture? But the ones that succeed quickly are the ones that are very clear picture. That's right. Once you clarify it, then you can take steps and move in that direction. And it'll ULA chief it now I got a question for you. Who do you think has more trouble with their American dream or fulfillment in their life, people who have ten million dollars or one hundred million dollars, people who have very little? Maybe no savings are living Patek paycheck to paycheck. I would say the bottom rung of that letter. The people that have very little. And they're just getting by usually it's can I can I get through tomorrow? And you know what? There's a whole lot of people in between in the grays owns between those two your extremes, right? Kind of we call the middle class. Maybe upper middle class. I don't like labeling people. I really don't. I hate that. Yeah. I I've never liked putting labels on people people are important all in themselves. But I'd say people in the lower level with their what having more trudges struggling, I'm gonna say, both sides have troubles. Sometimes people with lots of money have more trouble. They have more fear fear of losing fear of looking bad admitting even that they might not know. Oh, they have a lot of problems. They can. I'm not saying everyone again I don't want wash anybody people on the other end of the extreme sometimes need to give themselves credit for what they are doing. And then start take steps to build their sense of wellbeing and see where there and then move towards a goal get things moving in that direction people that are have a lot of money, maybe need to kind of get off their high horse. Sometimes sure I've seen a lot of fortunes lost. Sometimes. Never enough and it and it's always could disappear or overnight, or somebody's gonna sweet talk them out of it. And there are target for that they're a target for. But they're also target for just the eagle boost, they get from working with people who schmooze them. Is that a great word schmooze? You know, they like that sense that eagle. Lottery winners. Never want their names revealed. If. That could be. I have no idea. I'm never been a lottery winner. I've had to work from my, I haven't either, but I heard somebody just one that huge recorders of several hundred I pray that it doesn't ruin their lives in, too many times, you hear it does a mini when people get a big influx of wealth, like that immediately. It's a whole different mindset and to go from one thing to another is not an easy transition. So you're seeing the top tier probably is more. They have as many problems doing it. Yeah, it could be fear of losing it, it could be that they think they've got it made and they don't watch out for all the stuff that goes on associated with money and wealth. They could be that just maybe it's not them the next generation that has not earned it, but just inherited that could fall apart, right? It is amazing. What money does to our mindset and I'm not against money. I'm all for it. I'm all for helping people build wealth and do the good things that money can do for us. And help us you know, with college educations paying off a mortgage, having a nice vacation with family and having family. And, you know, all of that costs money, does his some extent or another. I don't care if you're going to have a picnic in a park, it's still take some money, and some doing to get everyone together and do it as we think about being totally without and we talk how much more happiness you know, the songs sometimes make it. But you're absolutely right. Without the funds to be able to just, you know, to do simple, things like that it does cost something to do it. I understand so. Absolutely. So I'd like people that are listening to this podcast. We have to know that number one. There are these events, we call them American dream experiences because you actually get an experiential. Experience. It's just a phenomenon that I can't really describe because it's so personal and every person comes into it and comes out of it with their own take is really deepens in helps a person if you want if you really want to contact us, let us know you got our Email. You got our website, you can get in touch with us in multiple different ways, and we will give you the dates for some American dream experiences. Some will be in Arizona. We've got one coming up in a symposium. They'll be two thousand people or more there to do the American dream experience in. I can tell you one of those, how much information is how much you can learn from that. Yeah, you learn fifteen or twenty percent of what's presented. You walk away with a bushel basket of knowledge before you came, and one of the things that we teach these, I should say, teach which we expose are the kinds of things you need to think about and keep yourself safe from what, what did you? Call them scams. Schemes and cons. Yeah. That's going to be the subject for our next podcast. Are we gonna talk about how you can safeguard your life, your well, being your family, and what are the telltale size? What are the things to watch out for what are the questions to ask? Right. So that, you know, for sure that whoever you're working with or dealing with is not gonna steal you arrive line. Right. Right. Yeah. I think that's another stressful is the worry about that is pretending goodness. Yes. And then everybody's got money deal that they're gonna let you in and you get another question for you real quick. And one of my observations. And that is this who do you think is more susceptible to the big scheme are being taken by someone who is rather skilled, at being a con usually a person doesn't have much doesn't get approached very much? But it's the ones with a lot of money that Charlie has got a he's got a great idea that. Can make us both rich and big end? So you're kind of getting inundated with maybe friends family relatives acquaintances people that know you, I'd say the people with a lot of money or well that could be that could be I I've seen people pick on. There was a woman up here in our neck of the woods in the middle of Wisconsin, who actually tapped into elderly people, and she sold them annuities that didn't exist and they just she just gave them. They gave the check to her. And she had developed a reputation in by working for a particular company and I won't name the company, but her kon the con artist in her. She scammed a lot of people. And then there was another one just south of us. They're all over. They can prey upon all kinds of you might think it would be people who are very trusting and very unknowledgeable, but that's not necessarily. I just discovered, we had a radio interview I interviewed somebody that trains people how to spot people that you may be running a business somebody that comes to buy from you that may have early signs of dementia a jewelry store. For example of the person was showing up every day spending thousands of dollars a week. Now, the jewelry store should have picked up on this, that something wasn't right. But there you got another case of how people in reverse. That's interesting. This person was going through the early signs of dementia is another category. And I don't think we often think about it. But again, it goes back to that eagle. Yeah. The con- the true con knows how to a massage that eagle. And so it's people who think they're really, you know, real defensive. And they put up a big shield, but it really their weakness is they're eagle. Yeah. And if you can break and get into that, either. I have seen that many times where you can use a person's ego against them cars, and it works like a charm. Yeah. Let's, let's go back to this American dream experience. We don't want people to lose their American dream. Right. And one of the ways is to know the signs of Akon or a scheme, or even more mildly. How does the investment industry trick you into losing some of a good deal of your money yet to them out in one of the things I've learned on the podcast from our last one is the fee structures and home much can be coming out of that is cutting your return on investment down to just three or four percent? Yeah. It's getting the market. I was just flabbergasted, the two levels of fiduciary that you pointed out last time, quick question on that. How would you know if you're dealing with a company that claims to be a fiduciary, when they're working with you, how you really know the are I mean? Is there some certification there? There can be a statement if they won't sign a statement of fiduciary responsibility than that tells you how hot is that a statement, I would present to you. If I was going to you can ask them, you can ask them. They have won another way to know is whether or not you're dealing with someone in the brokerage industry, almost all brokerage firms, and I mean, everybody, you know, I don't even want to name names. So, you know, all brokerage firms basic mutual fund companies, actively managed mutual fund companies. They're none of them are true fiduciaries. They are of the lesser type, which means the products have to be sellable. In other words, they're, they live up to a standard is just suitability. Sanders is what it's be the but it's not the best thing for you. Whereas a fiduciary true fiduciary has to do what is in your best interest for your objectives at seven, and you may have multiple different? Objectives. So you man multiple different kinds of accounts. But every one of those accounts has to fit your criteria or your needs are like that. Now, does who polices that I mean, if you find the SEC is supposed to. Yes. And you can take, you know, if you're a registered investment advisory firm, you are required by law to live up to that. And if you don't you can be sued if you phone, the growth was going allow less than you and -ticipant it, and it was because the company that was managing your money wasn't putting you in the very what was in your best interest. There might be a legal issue, there, I would be interesting. Yeah, interesting. Yeah. There's so much like, little tidbits of that, that I learned at the only event that I would never thought about, you know, it just really gonna got my me. And so I'm encouraging our people listening to this podcast to think about take the time, take a couple of days and go through an American dream experience to develop your plan, your, you know how you're going to approach it once again, I might remind folks listening is to go ahead and submit questions to Margaret, she will answer those in future pod. Casts and once again, we're kind of coming down the stretch. So next one, we're gonna talk about scams, schemes and cons. Okay, you betcha. That's it for today. Thanks margie. And we'll be back another week.
Retirement Plan COVID Certification
"Hi this is Bob. Toth curator and creator of the business of Benefits. Trying something new. We're going to attempt to try a podcast to go alongside the written word. Perhaps to give it a bit more color. And besides it gets me a chance to sit by my glass of troublemaker. While sheltering in pretending. I'm doing some work what I'd like to discuss. Today is one of the more difficult and intractable issues. Were finding a rising out of the Cares Act. And that has to do with the certification by the participant of Co vid status have actually titled This blog the fiduciary angle to the participant Kovic certification because of spousal employment loss. We know that all parties involved planet administration are struggling with the question of whether the employer or the participant have the cures act right to number one and extension of those loan maximum amounts. I think it's the employer shows to the right to suspend loan repayments. I think it's the participants right. Not The employers. Can you imagine the ramifications of an employer choosing a taxable default in ten percents penalty even if by default number three the right to take a non restricted crd distribution that is coke rotavirus related distribution again? I think it's the participants choice and four the right to non R. and D. Treatment. Again this participants choice I see and the tax impact is actually automatic. But beyond those difficult questions. Yes I'm getting my two cents in on each one of these points is the application of Orissa's fiduciary rules to the determination of the status of a participant as being eligible for the cares act relief. And let's call these people the covert participant under the Statute. You are eligible to be a covert participant. Take advantage of all these things. I've spoken if number one. You are diagnosed with the virus number. Two your spouse or dependent is diagnosed with such a virus or number three. And this is the exact we're to the statute itself so bear with me. You are an individual who experiences adverse financial consequences as a result of being quarantined being furloughed or laid off or having work hours reduced due to such virus disease being unable to work due to lack of childcare due to such virus disease closing or reducing hours of a business owned or twenty five percent operated by the individual due to such virus or disease or other factors as determined by the secretary of the Treasury ores designation. So I think we all agree that the determination of whether or not an individual qualifies as a cold participant would usually be a determination that requires the exercise discretion by fiduciary under Orissa section. Twenty one three twenty one. And that's the general fiduciary status section. But as you also know however the cares. Participants for certification rule adds an odd twist into the mix what the certification rule says is that the administrator of an eligible retirement plan may rely on an employee's certification that the employees satisfies the condition of the above rules in determining whether any distribution is a corona virus related distribution abso. Please I can say that word properly so area. Here's where the problem seems to come in. There's a bit of ambiguity in the third condition of eligibility nowhere. Does it specifically mention the impact of the loss of employment or reduction in hours of the spouse of the participant in the calculation of what are the causes of the participants adverse financial circumstances? Which trigger covert status. So this describe it this way. Consider the following circumstances case number one a participant is still employed but has a reduction in hours which reduces her pay so. She can't make the rent. This clearly is an adverse financial consequence and as long as she certifies to this she will get a corona virus related distribution our CRTV along with the three years spreading of tax the right to repay and a waiver of the ten percent tax penalty. Compare this to case number two that same participant is still fully employed is working at home due to a state order but her husband has lost his job. They now cannot afford the rent and she suffered an financial consequence indeed. She'll have no place to work. If they lose their apartment she certifies that she has an adverse financial circumstance from being quarantined. Does the plan pay as a CRTV? There is a bit of contention on this point ended up if you read the material see. There's no widespread agreement so I offer a few things to think about when you're answering this question. Who sure doesn't need to make that. Determination of covert status. It is entitled to rely upon that participant certification and note that the statute does not impose even a reasonable basis or any other such standard in making the certification yet directing payments. Out of a plan is still a fiduciary act even with the certification only fiduciaries authorize the payments of these funds. But the do L. has long held that the fiduciary has the obligation to override a participants decision. If it's imprudent so isn't the real question then whether or not the fiduciary should reject the participants are vacation. So here's where Orissa may be useful absent guidance from the Treasurer Gio out says that the fiduciary missed act with care skill prudence and diligence under the circumstances then prevailing that a prudent man acting like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims wouldn't it produce. Sherry who relies upon the certification of the participant. Be judged by the standard. So when you apply the under the circumstances then prevailing standard would not a fiduciary hard pressed to challenge the certification especially given the pandemic in the remedial nature of the statute and the other handy fiduciary challenged certification based upon the lack of specific spousal language in the statute will be faced with some hurdles denying benefit and would need to defend that decision through the era claims and appeals process which they would need to make formerly available to the tonight participant then the severe consequences challenging the certification and nine certification should also give Hoodoo Sherry pause denying it means that the participant may now than even be able to access the funds to prevent eviction or even if that person is lucky enough to qualify for a typical hardship still being employed. There's a mandatory tax withholding of twenty percent on the withdrawal so more funds will need to be withdrawn to make the rent payment. The withdrawal will be fully tax next April at a time when there's still may be financial struggles and recovering from this mass. It is subject to the ten percents penalty and the losses are permanent as there is no right to repay those withdrawals from the plan. It would seem that given the high stakes and the exacerbation of participants adverse circumstances which would be caused by any denial of the certification if producer would be hard pressed to reject that certification. A reasonable case could be made that the food do Sherry Nat rejects such certification. But this decision is not. Without some risk the IRS could claim if treasury fails to clarify the position fails to exercise the authority to fill in the missing spousal language under its authority granted under the statute the C. R. D. Under these circumstances. Y- either a plan document or an operational error that error would then need to be fixed under F. kaffirs including VP. And that is the risk of the night. Then benefit of granting that benefit I apologised. Somehow it is difficult to accept that the IRS would dictate a correction under Edgar's which would force the return of the or the treatment of the crd as a standard hardship. Draw under these circumstances so this is just one type of factual circumstances with which we must you. None of this is easy. All of this is heartbreaking. And all very real thank you let me know what you think.
How Transparency Propelled Growth from $1 to $4 Billion in 8 Years
"Welcome to the fifty fourth episode of Our podcast series for advisors considering the independent space. Today's episode is how transparency propelled growth from one to four billion in eight years. A conversation with with Paul Pag. CEO and founder of PAG motto Carpe. I'm mindy diamond. And this is mindy diamond on independence. This podcast is available on our website. Diamond Dash Consultants Dot com breath and on adviser hub dot com as well as apple podcasts. And other podcast resources. If you're new to the series I encourage you to visit diamond. Dash consultants dot com slash independence. One Oh one for the top five episodes that will help you get up to speed on the basics of the independent space plus links to other episodes. You may have missed. And if you're listening to the series on the apple podcast APP be surely star rating in review as it serves. Herbs is a guide for us as well as your colleagues in the wealth management industry may be searching for valuable content to tune into the Forbes top wealth advisors list represents what many advisors hoped with spire too because to be included means. You're part of an exclusive. This group that has achieved exceptional heights in the wealth management industry. A group that in total manages nearly a trillion dollars in client assets but the qualifications off occasions to be recognized as a Forbes top adviser is not just about revenue in assets under management a large part of the process that Forbes and shook research go through with advisor candidates is based on identifying those who best represent the highest quality amongst their peers. So in this episode. I'm honored to welcome one such adviser who Forbes recently ranked number one in Virginia and number twenty nine in the nation and this is not the first time he's made the list it's actually the fourth consecutive year. He's done so it takes something very special to build a career and firm that continues used to grow and achieve such honors. And that's why I'm excited to welcome Paul Bag Nado. CEO and founder of PAG motto Carpe to share his story. And it's an interesting story indeed before becoming an advisor at Merrill Lynch. He was a microbiologist with NASA and McDonnell Douglas Paul all in his partner David Karp left Maryland. Two thousand eleven to become one of the first teams to join hightower advisors. A firm which they would leave in two thousand thousand sixteen to form their own feet only. Ria Pack Nado Carp. This employee owned firm was founded on a set of principles based on what they they call true. Fiduciary standards and rooted in transparency. Paul is passionate about the topic of transparency so much so he's authored at a book on the topic called the transparency wave which will release in early twenty twenty. Paul is a frequent media contributor to CNBC. The Wall Street Street Journal Fox Business Bloomberg Reuters. CNN and the street and also the founder of the True Fiduciary Institute a nonprofit with the purpose to positively impact a million students. It's an incredible journey of passion driving growth. So I'm excited to talk with Paul about PAG Nado auto carbs unique value proposition and how it's impacted the firm success. Propelling it to over four billion in assets. Let's get to it. Paul thank you so very much for joining me watch leisure lots of talk about. Let's jump in first of all. I want to congratulate you for making the Forbes list. It's an incredible honor and I want to delve more into that later in the conversation but I I would love it for perspective if you tell us a little bit about your professional background and history you bet be delighted to live. Professional background started as a scientist so I'm degree microbiology. And it worked on a project for NASA and the project was to detect life in outer space while after five five years. Guess what we never found it. I think they're still looking so completely changed careers and started my career in the financial industry. With Merrill Lynch spent nineteen fabulous years. There had amazing. Mentors was one of the best learning experiences of my life and then from there Decided to be more entrepreneur and Was a partner with hightower. Three years after that Set Opera Company. Yeah and we'll get more into each unpack more of those pieces. But how do you go from being a scientist to a financial slide vice on what was the poll to Merrill Lynch at that time. Well my next door neighbor was manager for Merrill Lynch and I was just at a point meantime life were. I was searching to switch careers and do something differently and he was explained to me. Being a visor your coaching coaching counseling helping people with one of the most important aspects of their life their financial wellbeing and also was explained to me that it's like running your own business. You have your own clients you work with you. Have to create your own marketing initiatives and strategies do your own financial planning and it just really really got me excited to be more of an entrepreneur. So that's how all that happened. Clearly you owe that man debt of gratitude. Because you've had an extraordinary career since then tell us a little bit about Pag Nado Corp so how many on staff how many partners. How many advisors? How many support staff? What does it look like? Yeah so there's two partners myself and David Car we've been partners now for over twenty years the support staff we really. We're all teamed numbers everyone's referred to team number and that's very important the from a cultural standpoint but there's a about thirty five team members and mostly mostly individuals are advisers so we have seven relationship managers individuals that are the main point of contact for clients but then we have CPA's Day's attorneys a lot of peas planners Dr Orlando so it's really very advisory basic the family office. And how does the makeup of the firm different today from when you first started the business whether it be the makeup of the team team under hightower or the makeup of when you first launched by Clark says and so when I started the business I was a sole proprietor. And one of my coaches coaches early on. I was Dan Sullivan and he told me this concept of unique ability and that everybody on the planet has a God given talent there's seven billion billion people on the planet and there are things that you can do on never be able to do as well enter things I can do. You'll never be able to do as well. And so what I've done over the last twenty seven years with Maryland hightower and independent is really Continuously year after year strip way things are aligned with my unique ability and bring on people a players top top channel. Pay Them very very well and people that have unique abilities in areas that are going to create unbelievable experiences for our clients. And who are those clients. Would they look like so our clients our it's CEO founders of businesses. Ninety Ninety five percent are privately held companies and we help them with the life. Recycle generally are they're referred to US twelve twenty four months before an event and we we get them ready before they go through liquidity event. Our minimum mm-hmm is ten million dollars in investable assets so they tend to have ten million dollars to three four hundred million dollars thus assets but the CEO founders and Dan CEO founders entrepreneurs. They have a really specific. DNA In our organization is structured in geared to add value due to them extraordinary. How much were you managing just out of curiosity when you left Merrill in two thousand ten great question so we had had about nine hundred billion in assets under management and then about two hundred million in liabilities so between acids alive goes a little over a billion dollars extrordinary so you've grown to X. and no wonder Forbes acknowledged it? We'll we'll get to that in a little bit in terms of how you got there and what you think is most attributable to that but with a billion dollar business at Merrill and a long runway meaning you know a long career ahead of you you were relatively young. What made did you and David Karp become interested in independence especially because nine years ago or a decade ago? Independence wasn't nearly as mainstream as it as today. There was a couple of things. One of the major triggers was the financial crisis that was a life changing experience for me as it was for a lot of people. I'll go. I never wanted to be faced with the situation where could look a client in the I give them complete confidence that their assets are completely safe during the financial crisis we know are very very levered at the time. There's ten thousand banks. Today we have six thousand banks four thousand banks of of closed shop. You had the automobile manufacturer. General Motors went bankrupt. Government had to step in and take them over to the biggest mortgage company in the world to the largest brokers firm in the world and our clients assets. Were no longer safe. In these are individuals that are trusted me for their her financial dependence their children and their children's children and I never wanted to put our clients situation again. I never wanted to be not situation. Everyone put my team in that situation so so we vowed to fix that and the second thing is value creation we've found that the independent space serving CEO founders. We were table to unleash more value for our clients. So I'd love for you to talk a little bit. About what sort of value do you think you were able to unleash the independent space and why wasn't necessarily value that you couldn't unleash as an employee at Merrill Lynch or elsewhere. Yeah so can I did have. What an amazing one thousand nine years? My prior firm and wouldn't be where we are today with without that company and all the fabulous networks but the differences. Were you know when you're an entrepreneur and you're fully independence you have access to the entire world not just the firm that you're employed by also also by being a true fiduciary and pulling away from having an affiliation with a broker dealer from a compliance and regulatory standpoint. They were freed up to do and take on more family office type functions than we were permitted before so our concierge and lifestyle services it just is offering now compared to where walls before being able to not just do tax planning now actually offered tax advice. Detects compliance appliance tax returns for individuals to able to help clients not just perform their state plan. But to have all under one roof. where it seamless us for their Steve playing documents wills and trust to be created? So it's just a whole plethora of new value creation items to private investments is that we didn't have access to before boutiques smaller private investments to the reporting capabilities. It's really spectacular. And what about the sort of midway stop to hightower just for perspective for listening audience. HIGHTOWER has certainly changed its stripes in the last decade when hightower was first launched it was a partnership model and that is what you joined where their whole focus was on recruiting Corner Office wirehouse teams. That were going to be in what we call quasi-independent they were going to be employees but have the look and feel of independence with the ability to really shop. The street as you call it the world and is there and get paid. A percentage of trailing twelve months production in cash and equity and hightower. We just had Bob Ross on the new leader of hightower your and our last episode and he talked a lot about hightower two point. Oh but in the hightower one point. Oh it oration. What was it about that model of quasi-independence quasi-independence that appeal to you? Yep at by the way I'm a huge fan of Bob or else he's one of my best friends and I applaud hightower. They're very very fortunate to have Baden his team all board. So I know he's already doing great things and best calm. So the High Tower One dot O.. With at the Elliott Weiss Blues and drew founders of hightower. Really did something very special and very unique created a roadmap back a path for advisors that were employed by broker dealer or a bank to be able to unleash your unique ability into the entrepreneurs and they did it fabulously so when my partner David Carbonite had the NATO decision do we just take the leap and create our own or a the independent on her own or have a firm like hightower help us. It was a no-brainer because we did not want to learn because there's so many nuances and setting up your own firm arm watching her own. Ra we did not want to learn our clients so hightower was invaluable in helping us get from point. A. TO POINT B. Yeah and I think that's a similar move that a lot of people are similar calculus at a lot of folks went through for a couple of reasons. One the cottage industry born to support the breakaway movement wasn't nearly what it was today. Ten years ago and ten years ago if you had gone fully independent the learning curve and and the amount of time and energy would have taken to pull together the support infrastructure. You would've needed would have been far greater than today. Secondly I think whether people love or hate hightower and I happen to be a big fan but we absolutely must credit hightower for being a maverick and really paving the way for this breakaway movement because it normalized it had validated. It was really the first time. And whether that be driven by the financial crisis or otherwise that affirm really began to choose that even though it had an unknown name and unrecognizable name that if advisers could access everything everything that they could in the wirehouse world but do it in an environment with more freedom and control they would move and hence highest towers tremendous success in in hightower onepointoh agreed credibly. Innovative took a lot of courage a lot of leadership to get that off the ground that they really were. uh-huh were the first man caught Elliott and company for that. Yep So fast forward then to the time you decided to leave hightower and I know you left on incredibly good terms as you say you still have tremendous respect for the firm and its leaders so what went into that decision. And what was the independent landscape escape looking like at the time that you laughed in terms of pulling together the support to build not oh carp as an RA. Now so the landscape in that five of your period that we're with hightower changed dramatically. You know we're on this exponential period as a society and the technological advances that that took place in our AA space from reporting from custody from access to all the things that we do on the Family Office side Louisville's exponential ten times difference. That made it easier for us to set up own. Ria but more important than that. It was really a strong desire desire of my partner and I to own our own firm. I grew up the son of an entrepreneur and it was just always a dream that I had was to to own our own business so it was multiple reasons that we really set a different path to create around firm. And when you left left Merrill to go to hightower just back step a second. Did you know that you wanted something more. Entrepreneurial where you looking to get closer to being an entrepreneur or a business owner at that time or were you also exploring traditional models like maybe Morgan Stanley or UBS or Raymond. James or something like that super questions Russian. So we explored the entire landscape at the end of the day. I'm scientists and you tons of experiments and tons of due diligence so me we met with all the large banks all the large brokers firms as wells at independence space. There was very clear that provide complete transparency to our clients to be able to via true fiduciary and to unleash more value. We had to go on independent states coupled lift the passion of unleashing are unique abilities and being. You Got Entrepreneur. A No brainer frost go on independent states but we did a thorough assessment on both sides. So let me just focus focus on that for a second because I think a lot of advisors in your shoes I will not everyone has as much entrepreneurial genetic DNA as you might but there were plenty of people that sort of our at that threshold feeling the pain and limitations of being an employee to major firm wanting wanting more freedom flexibility. Control some of the things that independence or quasi-independence offers but finding it really hard to emotionally finally and financially give up the safety and security of a large transition deal up front transition economics upfront and the safety and security and scaffolding of being an employee of the big brand name firm. So how did you reconcile that it's passion. It's belief chief and wanting to make an impact. I believe to put purpose over prophets. You need to be that way. So whether it's your your point time in your life or just part of who you are and and it's awesome to be prophets based as well. We live in a capitalist system in society diety here and it rewards those that are actually respect that but the reality is to be a true fiduciary to forego many many revenue news sources that exists on the bank broker dealer side. You take a pay cut so my partner and I. We took a fifty percent pay cut. We made that that transition to the sure true fiduciary so it you know it took time to get back to where we were when we left off so I believe for an individual to do that and to take take cod. I mean we word. Extreme going complete truth reducing coal Turkey but even to take twenty five percent doc. Caught is very very substantial and it has to be purpose based yes purpose based but confident but a certain amount of of risk tolerance a sort of visionary kind of mentality the ability to sort of see. What's possible trusting right? I mean in all of those things have to be true as well and a certain amount entrepreneurials well totally in addition to Wanted to make the difference in the impact. You do have to be good with yourself. You do have to have confidence that it's GonNa work out. You have to have faith. It's not linear her. We're linear creatures as those two exponential creatures. So it's not a linear live point. Eight point beat so. There's a lot of uncertainty on the uncertainty at breeds fear. But you have to have confidence purpose has to be there. And it's journey as humans we love to explore. You're and we love to discover and this is one of the best discoveries I've ever made You know I think what's interesting is what as sort of an industry consultant one of the observations. I've made is that. It's been a re education education for advisors so when I started this business as a recruiter for wealth advisers twenty one years ago the only way in advisor moved in the biggest motivation for doing doing so was because he was going to get a big transition checker signing bonus going from one major firm to another but the re education has come in into the teaching advisors that are helping them to see that an adviser has the ability can really decide what's most important to them. Some are really really excited about building something big picture building equity building a legacy etc and are willing to forgo the short-term upside for something much bigger and many others are much more comfortable with taking de risking the move as much as they possibly can in the short term and the big picture. A long-term is less important. The re education comes in the fact that today there's options that didn't really exist twenty one years ago and actually listed existed much less ten years ago when you were nine years ago when you left Merrill Lynch because independence was much less mainstream then than it is now and I believe this is is becoming more mainstream for society and the economy. Which is the fastest growing? Part of the Economy Stanford is completing a study. He called map of life and the reality is individuals. Today are going to school. They have a career and they go back to school. They have another career career. And there's many many iterations of this and the beautiful thing of the wealth management spaces. You're able to continue to do that within the same ecosystem ecosystem so going from a broker dealer a bank to independent and then there's so many integrations of independence you're able to continually reinvent yourself. Continuously learning continuously grow and. It's just an awesome career path for somebody today for the right person of course so when you think back to the break from hightower and decision to establish peg Netto carp is a standalone Ria. I'd love to hear a little bit about your process for getting getting there from getting from hightower to fully independent. Because it meant unplugging from all of the vendor relationships or the omnibus plug in that you had to hide tower you had to source capital you had to be guided by expertise and council you needed operational support and tech support in the lake. So where did all that come from. Well it starts with transparency transparency. Changes everything so we were are completely open and transparent with our partner hightower what are dreams and aspirations were and it took time but right after Transparently having these dialogues. We amicably a determined path for us to be able to do that. It was important to awesome unclearly. The other partners hightower for us to make them completely whole for for everything and all the work and the guy the created for us so it started with complete transparency and then once we have that transparency and we were all aligned. Then it was. It was made much much easier to work with our other partners. So whether it's The custodian whether it's on the reporting side whether it's a firms that we have Capital with on the asset management side. That it just it all came together rather efficiently and quickly. But it's also a big change going from being employed somewhere like hightower our being a partner to having your own firm so now you're responsible for your own human resources you're responsible for one hundred percent employee owned so your sponsor for figuring out your own equity distribution among Sir your company you're responsible for payroll taxes you're responsible for your own benefits. There's so much your your facility. You're leash your property so there's a lot that goes into having out of your own. Rita that was a transition in that was another learning experience which we just thrive so we love learning all that and discovering all data. Ah figuring all that out but hightower was phenomenal partner. Frost Gift From Point Eight Point did where did the start up. Capital come from free to build. Yeah so it was two sources personal savings for myself and David car and then we also established a line of credit with a bank. And in hindsight do you think that you could have gone fully independent become a standalone fee. Only the ARA having left Merrill or do you feel like the interim stop at hightower taught you or gave you certain skills or education that you needed in order to get here today. So could we have. We could have those individuals that do it and like the luminous capital folks that that did it marks year good good friends with and Safran David hold but they did it mazing we successfully. So could we have. We could have but not desire to do that and and it would have been too challenging to figure all that out right out of the gate had two big elite big of a leap for us especially in those days so just to be clear for listening audience. The luminous capital marks here. And David Ho that Paul. Just reference is a group of Merrill Lynch advisers. There's that themselves were mavericks. They left Merrill Lynch to go full-on. Ria they hired a COO. By the name of Matt Sonnen. WHO's now a consultant to the industry? But he really built the firm for them and they built an extraordinary firm that they later sold to first republic for more than one hundred million dollars. There's and then actually. Recently the team split apart broke away from first republic and went fully independent again. So they've really come full circle but in those was days. It was a specially unusual. There was no validation. No well worn path for billion dollar teams to leave the confines of the wirehouse house world and go independent so in the last decade. Not only have you learned a lot whether it be because of your time at hightower. But it's also the industry landscape landscape has sort of had proof of concept and the support system has really evolved to support it for sure. It's completely different again. It's an exponential difference five years ten years ago versus today. It's just going to get better and better and more efficient because of technology. How did your clients respond Paul when you left Merrill and not just about the move to hide tower but explaining what independence was explaining meaning? Who hightower was which was a firm nobody had ever heard of? How did they respond? And what was the picture you painted for them. Hebrew questions number one. We explain. Explain to them that it was all about them that we were doing this for them. We're doing it to be able to provide more transparency for them to be able to be the true fiduciary into able to add more value. So once we were able to articulate why we were making the transition transition and the clients realize it was really about them and also be able to add more value to them. It became an easy conversation. And we're very fortunate. We had ninety percent sat our clients move with us to To independent to hightower so very very high success rate there. But it's all about the client and you always need to put what clients I if you do transition. And the transition is focused on the client in the additional value GONNA create for the client. The rest of the things take occur solves. Yeah so you use the word fiduciary a lot and I want to just unpack it first second. So many wirehouse advisors is irs. Think of themselves as fiduciaries they would never dream of taking action or making a decision that didn't put their clients best interests first even even though the the brokerage model says they're only held to the suitability standard. So in your mind or in your view how is your version. Asian of being a fiduciary different then the fiduciary mindset of being a wirehouse adviser. It's completely different now. When I was At broker dealer I felt I was being a fiduciary at felt like I was always putting my clients interests first and until it's like until you get up on a bike and ride a you don't really know what it's like. So now being a true fiduciary we know what it's like and it's impossible for somebody who works works at a bank a broker dealer to be true a truth fiduciary. You simply don't have access to everything to always put your client's interest i. It could be something simple as where you place your clients cash. You may be beholden to the firms money market account versus exploring flooring even even worthy assets. Custody it may not be in the client's best interest to be custody at the firm you're employed by because there may be another custodian that is a better fit for your client so we define trooper do Sherry. It's impossible to be a true fiduciary. Now so my my best friends are some of the top advisors in the contrary at banks broker dealers. And I personally trust them implicitly would entrust them with with my capital so they are looking out for their clients and they're always doing everything they can to put their clients best interests first but it's not always possible. Yeah one of the things I think is true. Is that once you see. You can't unsee so. In a lot of cases when wirehouse are House advisers begin to explore independence in they begin to see and realize that there is access to things in another world that aren't possible to be accessed or offered as an employee of a brokerage firm. It's not that these folks are knowingly. unle not acting in a fiduciary capacity. They just don't know any better but for those that get educated once you know. It's impossible to anno- gots. That's beautifully said my business partner and I will let through this learning experience and exploring during a financial crisis exploring what was available global once. We knew that there was a better way. There's no going back and hell about the decision. In your case to to jettison the broker dealer licenses altogether and become fee only which is wet Carp is today so it was quite an experience because that's not the norm. We had some capital with mutual funds and annuities we had a capital with insurance audits and literally. We had to call them and explain to them that we can no longer receive any trails trails and his things that that are just standard in the industry and when we reached out to them they were dumbfounded. They're like what do we do. They didn't even know how to handle that. It was quite an experience because the industry just isn't setup for that. We figured it out. Because following are true Fisher Standards Sanders were prohibited from receiving those things so it was quite a learning experience and it was hard to unwind those things because you're working with me. Institutions major financial companies firms that have their systems and processes structures and set up in a certain way. And we're telling telling them no you can't pay US outweigh. You can't send us that money. I mean they were just stayed ever even heard that before so we figured it out. I'll tell you. What was the driver for you and David to give up brokerage business altogether and become feeling the financial crisis? We spent three years doing duty. Diligence met with all the SEC commissioners close personal. Asian fills. Boise sometimes really overseeing the deal all the all the retirement plans spent time with John Back Seals were standing at the time Todd Thompson. CFO City thank and after three years of deep deep work deep due diligence we crafted ten transparency standards. Ten standards do everything that we could in our power to remove conflicts of interest. And these were some of the conflicts of interest so we he did not want to receive any soft all arrangements. We did not want any revenue share because then we would be conflicted and placing clients capital role there so that was the root of it as we create these ten transparency standards call tree fiduciary standards and we live and breathe by it and it's the DNA ingrained into the culture of our company. And that is one of our with two major breakthrough value propositions one of them is the trooper. Do Shirt standards in the second second. Is Our family office. So would you mind sharing with us a little. What some of those ten principles are and what they actually mean to clients? You Bet the root of what they need is always placed in their interest. I number one and then number two. It's safety of assets so as we dissect the financial crisis one of the things that it was startling oss was the Bernie madoff situation and I know there's been key studies done on that. But if you think about the Bernie madoff situation Bernie madoff miss ties mini right a lot of truth to destroy standards that we've created if you know Bernie madoff situation. Bree made off never got caught by the SEC. Literally ABS counted and people lost over sixty billion dollars and you ask yourself. How is that possible? How did the SEC never catch in held a very very very sophisticated investors you know former CEO of Merrill Lynch capital with them Jeep Comanche Eliot Spitzer New York Nick Attorney General had capital with them to the owners of the New York? Mets like how in the world did this happen. While I'll tell you Alan happen. It happened because because Bernie madoff was allowed and permitted to generate client statements and be the adviser Bernie madoff was permitted to be the custodian and the adviser for the client assets. That people wrote checks to Bernie Madoff Bernie. Madoff was able to calculate late. His own client performance returns in numbers Bernie Madoff was allowed to have revenue share Bernie Madoff was allowed go to accept commissions in a whole host of other things and all those things that he did are still allowed today but this the route as to why he got away with this for twenty years never got caught by the regulators and turned himself in and he got yet to turn himself Alphen because of the financial crisis because the capital that was lost so this standards that we have don't allow for those things to occur so we're not allowed to be extorting except dollars. We feel conflict of interest. Why not allowed to generate client statements? We believe if you're the adviser in January client statement. You're potentially putting yourself in a precarious situation. We're not allowed to calculate client performance numbers. Maybe there's a whole host the ways to calculate performance numbers for clients time weighted dollar weighted. When you're starting point is wonder ending point is and you know as an advisor you you WanNa look good in front of your Klatch so we take that off the table and we remove that so? These are some examples of these ten standards words that we put in place. And why we've put those in place and I'm really passionate that one day. These will become standards for the industry because because people will demand it because they don't want to have someone that could potentially be a Bernie madoff. You're in the process. I know of releasing book called the transparency wave. So I assume that will be a piece of the impetus to move the industry in that direction it will be a part of it. I share but what I've learned is these principles apply to all businesses in all industries. It's not just the industry that you and I work in that. Ads Struggle with this all industries. Do so I've actually created Six steps I call sixteen. Transparency Edifice firm follows Aziz sixteen of transparency they will be exponentially transparent and when you're exponentially transparent you have the ultimate trust. That's the end of the day. What any company any advisor wants to have with our clients? Now I think for most advisers coming to the notion of being only is an evolution and it sounds like it was like that for you as well. You give up being a scientist you go to work for Merrill Lynch. You're working for a brokerage firm at the time and then what became bank owned hightower was a broker dealer. Ria and it sounds like there was a real evolution evolution in your thinking whether it be driven by the financial crisis or watching events. Unfold around Birdie made off on the leg that sort of brought you to this. This impassioned belief about being true fiduciary and feel only you got it and just as I have had a fortunate to make this evolution over almost three decades now twenty seven years people not just our industry but society is doing the same. The this is part of you know started back to the book again but this is part of the bulk. Transparency wave. So what's happening. is you go back hundreds of years ago zero really. The first thing that occurred was the communication period you have the printing press combustion engine airplane and that enabled human beings to provide dialogue and transparency at a new level and that brought us to the digital era all living in today and now the digital era era is getting so advanced with machine learning artificial intelligence. There's nowhere to hide. And so this is kicking us into the transparency wave and it's GONNA be very very prevalent to wealth management space financial industry but all industries so just as I personally than fortunate to experience the transition into the able to evolve in change so all the other industries and the rest of our peers and it is paramount to be ahead of the curve it is paramount how to take advantage of the opportunities and that that technology is serving. Talk to us. You WanNa ride that way. You don't want to be in the middle or the bottom of that way you want to ride that wave because things are changing very very fast pace and you had mentioned. They are so different today than they were five years ago than they were ten years ago and the reality is the speed of that change is accelerating. It's not slowing down. So it's really really important for us to continually reinvent ourselves as advisors as wealth managers as Nanjing our our clients Book Okay Business and embrace the technology and embrace these changes are taking place. That's a good segue from my next question. So clearly you and David and pack motto. Carpe is a firm have been at the forefront of this wave have embraced change have used it to your advantage. So what role do you think that that one your value proposition of being true fiduciary and fully independent has played in that growth. And what's really most responsible for that extraordinary growth breath so number one. It's it's our team and our brand that has led to it so the team are all owners of the business business. Everybody is equity if you came aboard company day. One you're GONNA receive units. Were partnership in the business. You feel like a team number from day. One the transparency standards. Just you feel good every day. You feel so proud like you you just job getting out of bed to make a difference and to go help people because you know you're always doing the right thing in all those conflicts our our import aside and then you put on top of that. Our insatiable learning as a company so we have effect. Today is a learning day for our company every month we we have learning day and Learning Day. The team determines what they want to learn. We've had top neurosciences. Come in top nutritionists. We've had people Dale Carnegie. Come in so today. Someone's teaching White Glove Service. Not that we don't know what it's like the White Glove Service but we put her ego aside right and we want to learn more and we want to grow more so it's having a culture that embraces learning enchaine ingrowing our company. Everyone's expected to experiment every quarter Eight nine different areas in the company. Each area has three three to four experiments so every quarter we have thirty four experiments only on reality is the majority of those experiments are GonNa fail by have thirty forty experiments experiments. All we're looking for is one or two or three to work and the nats new value creation for clients and we do this quarter-on-quarter order out urine. You're out so it's a never ending process of our ability to continually add more value or clients so it's the culture and I'm sensitive sensitive to use that word culture because it's so overused as fortunate to have dinner with Howard Schultz the CEO founder of starbucks. And and that was a big deal out of dinner which had so. I thought I did all the research I do and really planned. You know what questions I was going to ask him. I was thinking you know I wanNa know what keeps Howard Schultz off at night now. Is it like getting coffee. Beans from what is it. And how was my first question to him and when I asked him he didn't skip a beat and we spent an hour talking about culture. That's what keeps them up at night. It's the people a business is the people it's only worth the people that that comprise it and then if you have the right people have the right. Culture have have the right standards that are in place then you get the brand the brand recognition. Many people every month that are contacting us they find us on the Internet through SEO searches. They're contacting us because they wanNA work with usury. They want to work with an Uber Uber. Transparent Organization won a family office. And that's that's our brainard. That's our brand out in the marketplace. So that song still missile passionate about those items you talked about concierge level services and these ten points of transparency but what are some tangible examples bulls of how that culture within the firm translates to a better experience for clients which ultimately translates to more growth breath sure on the concierge lifestyle piece. We were very the norm in the travel. Industry is a revenue share. That's how a lot of travel agents make their money. Their their compensation were forbidden from doing that at Standard so our travel experts. They're planning a trip for someone they're stripping out all the costs so so there is a Delta there when you're not gonNA receive any benefits then it could be that the hotel they stay at. Now's copping them a a free breakfast or three or free dinner. So we're able to reduce the costs and simplify their lives on the lifestyle that's one example and experiments that are private bankers. Who Take Care of all the banking and all the Admin for clients that is it's very cumbersome dealing dealing with all the paperwork that exists industry and so an experiment was to completely go to Docu sign e-signature for for people people work and after a quarter piloting? It were there so our clients now can have everything seamlessly through Electronic signature feature on the tax side with tax compliance. We now utilize new technology completely streamlines the tax efficiency for clients so they spent half Clinton half the amount of time they use bad in working with our CPA and getting ready the tax season so all areas of the business are relentlessly experimenting and pursuing these things. And when you strip out the conflicts when you strip out the ability to think about or potentially receive any kind of revenue share all that drops the bottom line over client. Yeah and I suppose that clients sense that prospects sense that even if you don't give them tangible examples of it people really know when you're all about what's in their best interest versus having to meet the needs or deliver the to the needs of a corporate parent. It's exactly right. People are smart. People's brains are processing Seoul. Oh fast right. There is not a computer today. That's ever been built that can process that human brain here so they're taking a n no foulland's of pieces of information every second. That's how we form Mar Kenyans involves views and sometimes we'll call it our guts our gut reaction the action so individuals are very sharp. They're very intuitive and they know it does. It does make a difference and I agree with the word. Culture is an overrated overused term. But I think that what a client or prospect response to is culture more than anything else they respond to a certain feeling of. This is what it's going to feel like to work for this firm as opposed to this is what it's going to feel like to work with this other firm or to work with this other advisor. Yeah when someone is referred you or someone contacts you and they come in and you're able to communicate to them that the only source of revenue the pharmacies are the advisory Fees Uk. We had no agenda no agenda but to do the right thing. She knew we have nothing to sell. You provide you are advice that really knocks down barriers and walls really align very very quickly with the quiet yeah so on the subject of growth. What is growth? Look like in the future for car. What are some of the growth goals in the short term termine long-term so we very ambitious the whole because we have an MVP and massive transformational purpose of positively impacting? A million lives lives through financial wellbeing. So we are just getting started and we have a tremendous amount of work to do on all fronts so our growth has been accelerating traditionally. We've grown twenty percent a year. That's been in our DNA but now that our brand awareness is becoming. Tell me more prevalent were taken up above the twenty percent growth. So we're super super excited about that. We've also only grown organically. I'm very very proud of that. So we don't have any plans to grow in organically which would be acquiring other other practices. This point Loyd time we still plan on growing organically and putting our our capital human capital and our financial capital deployment back in the business as investments to further push out our value proposition through transparency. And the truth t-shirt standards and through our offering offering with our family office and so what are your succession plans. Look like you're continuity plans for you and David and the next generation as I it look back ten years ago Dave and I were the only relationship managers for our clients today. We have seven so as we continue to grow organically the transition will be from gave it an eye to the other team members. This has already taken place at one point in time I was is relationship manager like David on. It's been three or four years since I've made his relationship. So I have successfully transitioned relationships. I had two other the relationship managers David Five years ago. He had twice the relationships that he was managing living manages today so he has also successfully transition Russian the relationships to other relationship managers so this is the cycle of businesses is the cycle of life. You know seeking the flourishing of all those and helping other so our succession plan is continue doing what we've done really well and bring other like minded intact based individuals and and help them grow help them learn Netra coach them and continued to seek their flourishing which benefits everybody and do you imagine that if you or they. This next generation of relationship managers wanted to either bring in more capital or sell a portion of the business or sell the whole business. Do you imagine that the right buyer would exist. So should we a question so number one our traditional standards would need to the upheld. ELT before we consider that whoever that buyer would be whatever they look like they would need to fulfil and allow the company to continue. Can you to abide by these eastern standard. First and foremost I have majority ownership of the business. And I'll never let go that unless those standards we're GONNA be withheld but if there's someone out there that embraces these standards and has a platform that would enable us to accelerate AH getting to the impacting million lives. We'd be more than open to having a dialogue. It's all it's all about seeking a flourishing of others and making a bigger bigger difference so if that opportunity existed walkabout dialogue in a life is a journey and things change every day every week every a remote every year. So we'll see where it takes us but they'd have to be in line with the ten standards which is really really super difficult. You need to have congruent gruen values. That's your most important threshold to meet and then then beyond that it has to meet all the same service models and everything else so not. It's so easy but just curious asking you to predict the future a couple of last ask questions and again. I could do this all day because I think your story is such an interesting one the evolution of your career the evolution of Your Business the growth of Your Business and the successive excessive at all. But you mentioned that you've given up all client management responsibilities at this point. So what is it typical day. Look like for you. How do you spend spend most of your time? Well I like admitted acknowledge. I suffer from pm a positive mental attitude so I hi Literally the glasses not just hassle for me. It's all the way for the bad so every day I wake up. I'm jumping open out of bed. And it's positively positively the second is I have the transparency plague so mujber transparent all the time about everything sometimes live can make people uncomfortable but for me. It's about making a huge huge impact in getting us to our MT key so a standard the time. It's been two years in writing the book for those listeners. That have written a book. You know what that's like fulltime job in and of itself so it will will be a lot of speaking engagements next year. Is the book walls out. Secondly launched two years ago. True Fiduciary Institutes nonprofit. Five Oh one C.. Three and we now. I've partnered with ten major universities or institutions like ten State University Georgia at four Atlantic University. UVA William and Mary and we are doing a couple of things but we're teaching financial literacy through wealth national programs rams after school so spending a lot of time and energy on that continually recruiting a players. Just top top talent for our organization and and I'm a mentor and a coach to the existing team members to when they hit a ceiling of complexity when they have barriers in front of them. I do everything I can the help them pierce through. That's only complexity pierce through. This was barriers. It's sounds like your life is anything but boring. You are an interesting guy that is for sure all right one last question so you inspired me with the question you said you asked Howard Schultz of starbucks. LemMe ask Paul Pag Nauta. What keeps Paul tag up at night? It's impact how am I going to reach a million lives. How are we going to do that? How are we going to get from point? Eight point be so that a million people have financial wellbeing through standards that we've created as keeps me up at night a noble bold gesture because it sounds like your goals are far more than just continuing to grow Carpet to truly make an impact on the industry three at large in the world as a whole and that is inspiring. This has been incredibly delightful. I'm grateful for your time for your perspective your wisdom and and I think that you've done a whole lot to really advance the industry and make it a better experience for clients and advisors the lake so we thank you my pleasure. Thank you for all this time and enabling me to be on your amazing platform of all your listeners. To be able to hopefully get this message out. Thanks for. Here's I think you'll agree agree. It's not hard to imagine why Forbes recently recognised Pol is one of their top advisors. His unique journey from NASA scientists to Wealth Adviser to entrepreneur led him down extraordinary path of evolution and growth. Not every advisor need make such a major professional leap but more and more. We're a recognized the benefits of independence and its impact on the ability to serve clients free of conflict and with complete transparency as Paul has shared in our next episode that Oxley of the renowned coaching and consulting firm. The Oxley Institute joins me to discuss what we call the billion in dollar mindset. We'll talk about the unique traits of those who achieve the highest level of success. And how you can adapt those very same habits as part of your own business. His practices not is smart and interesting. And I know it'd be a conversation worth tuning into. I hope you'll join us until then I ryan courage you to visit our website. Diamond DASH CONSULTANTS DOT COM and click on the tools and resources link for more valuable content. You'll also find a link to subscribed for regular updates to this series and if you're not a recipient of our weekly email perspectives for advisors click on the blog link to browse house recent articles. Feel free to email or call me. If you have specific questions I can be reached at nine. O Eight eight seven nine. One Zero rose zero two or m diamond at diamond DASH CONSULTANTS DOT COM. Please note that all requests are handled with complete discretion should and confidentiality. Thank you for listening. I also want to thank advisor hub for sharing this podcast with their viewers and subscribers. This is mindy diamond on independence.
Helping Employers Add Predictability and Control to their Healthcare Spend with Allison De Paoli, Founder of De Paoli Professional Services
"Welcome to the outcomes rocket podcast where we inspire collaborative thinking improved outcomes and business success with today's most successful end, inspiring healthcare leaders and influencers and now your host so Marquez. And welcome back to the podcast saw here. And I have a special guest for you. Her name is Allison Polly. She's the founder of Polly professional services where they help employers add control and predictability to their employee benefits. Spend we know this is probably one of the single largest line items outside of labor in employer. Spend. So it's important. She's one of the few who knows how to manage your benefits budget to reduce health care costs, which will drive Ebba to your bottom line, successfully challenging the benefits and healthcare status quo is what she does she's a contributing author of a new book called breaking through the status quo. How innovative companies are changing the benefits game to help their employees and boosting their bottom line? She's a veteran of the insurance and benefits industry, and she's going to cover all the things healthcare and benefits that you're gonna wanna hear as an employer, but also as a provider. So without further ado, Alison, welcome thanks for having. Me pleasure to be with you today. And it's a pleasure to have you on now that I leave anything out in your intro that you wanna cover with the listeners. Now, I think you've got it. All awesome. Well, how about this? Why did you decide to get into the healthcare sector? So I've been in the benefits world for way longer than I like to admit, my family owned ABC cheek benefits firm, and we did a lot of we helped middle market, which is sort of as an industry is of a group of employers about one hundred to five thousand lives, and we did a lot to help them control their costs and that kind of provide good benefits control their costs us a benefits plan. How it should be used as a recruiting retention tool to drive employee engagement morale and to help employees, and I moved to Texas about twenty years ago when into another part of the industry, and as as the years went on I started seeing things happening. And I just thought we'll know that shouldn't be that way. And why are we doing it this way, and we can do this? Thing now. And generally just decided that I had to do something about it. The increase in health care costs is killing businesses. It's killing the middle class employers offer benefits as a benefit, and there are so many employees that are effectively uninsured because they can't afford their own. They're part of the cost. It's not working for anybody. And I have to fix it. And I think that needs to happen. Now, I think you are touching on something that's very important for a lot of people listening so within this realm of of benefits from the employees as well as the employer perspective. What do you think a hot topic that needs to be on every leader's agenda? Today. What is that hot topic? And how are you and your organization approaching it? I think the number one problem in health insurance today is misaligned incentives. I think there's an incredible distance between the pair of care in the user of care. And if you can shorten that distance, you generally eliminate some of the middleman costs and you ensure a better user experience for your employees and a lower cost for yourself. Excellent. So so let's dive a little bit deeper into that. Right. You know, a misaligned incentives. Give us an example of how your company and the work that you guys are doing has created results by shortening this distance. Sure. So there are couple of ways that you can shorten the distance one is by reviewing contracts and making sure that all of as the employer that all of your providers have fiduciary responsibility to you. Meaning that they will you. They're obligated to you to provide the lowest cost and the best quality at the same time. And let me give you an example. And I'm gonna pick on everybody's favorite within boy right now, which is pharmacy benefit manager. Yeah. We had an experience not too long ago where and the TPA brought it to our attention where an employee was taking a generic medication that cost fifty cents a pill. It was a fifty milligram medication. And that's fine. And all of a sudden the price just went out of control, and it took a little digging to figure out what had happened, and what had happened is that the employees needed to increase the dosage and the dosage for the fifty milligram pill was fifty cents and the dose the cost for the hundred milligram dose with ten dollars. Why? Now, and why can't the employees just take two and there's a couple of things at play here. So one almost never is a physician aware that that the difference in dosage is going to cause that kind of price increase, right? How is it that they're going to be aware of that the employee is not aware of that? Because their co pay has. Not changed their co pay for generic medication is the same. So they're not aware of it either. But when you pointed out both parties kinda go, oh, we'll just take two fifty milligram. That's fine. Yeah. Which would be the smart thing to do. Exactly. But unless that come through your claims, you don't know to be looking at that or asking why. And I think that's the biggest thing why why is this this way? Why can't it be that way? What happened? And then you kind of go back and peel back the layers of the onion and figure out what happened and find a better solution. So fiduciary contracts will help you do that. And that is your pharmacy benefit manager, your cheap PA your ASO provider. If you've got one and any other services that you have attached. And I am a huge believer in care management. It does cost a little bit. Generally, it will save you a significant amount of money in two ways. It will provide better care to your employees or make sure that they have access to better care and that they're following their protocols, and generally better care is not the most expensive care. I'm thinking, that's such a great thing to point out Allison, and some very great ideas. Here, you know, tip. Typically, I think of a fiduciary contract and my mind goes to to finance, right? Like a fiduciary adviser. I think a lot of people minds go there. But to think about fiduciary contracts within healthcare, I think, hey, let's just face it. It's kind of like a novel concept that shouldn't be a novel concept. You know, so tell us a little bit more about this educate us on fiduciary contracts, and how these can be drafted. Sure. So I think one of the biggest one of the ways to get the most ahead of that is to use independent providers. I work with a number of third party administrators or TPA's that are independently owned and have written already into their contracts that they are transparent in their pricing men transparent in the information that they pass back to the employer. And I think that's so important you get full claims detail almost on demand basis and as an employer. If you are funding your claims, and really, even if you're fully insured, your funding your claims and everybody else's. You wanna see that? You wanna have a handle on? What's coming? You know with the advent of big data you can start to track. What's happening in your plan? And compare it to what's happening with you with your locality, and perhaps on a state nationwide level, and you can start to tailor initiatives to help educate employees about diabetes. I live in south, Texas, diabetes and metabolic disease are one of the biggest problems we have here you can start educating employees in helping them maintain their medication regimens and start eating better. And understanding the role that exercise plays in that without a lot of expense. And without a lot of drama. And if your pharmacy benefit manager has a fiduciary responsibility to you as the employer not to insurance company, not to the TPA not to any other party. Then you know, that you. You are paying one the best cost and you're paying that over time. And that the medication is correct on. I've read some contracts not too long ago, where the pharmacy benefit managers responsibility was to the TPA not to the employer paying the Bill. Gotcha. And I'm a little challenged by that totally. And there there in lies the missing misaligned incentive. Absolutely apple as some great examples here in and as you've been working through this. You guys have obviously a great amount of experience year family business was into this from a different angle. Now, you're taking a different spin on it with the time. When you had a setback a big lesson that you learned that now you apply over and over again as a result of what happened. So I think that you have to meet people where they are. You know, I can talk to an employer and say, well, we can do this and we can do this. And we can do this. You can do this. And I'm a little bit of a nerd, so. Oh, that's very appealing and exciting to me. And really all an employer may want to know is that, you know, what can you just take care of my employees and make sure that this cost is an increase at all. Yeah. And I've had many conversation where I have literally bold somebody over with enthusiasm for this subject and not met them where they are. And totally unnerved them. Yeah. And I think many of us have had that experience before. That's a great call out. And so how do you meet them where they are? I ask a few more questions. Now. I don't assume that I know what their challenge is. They're challenged maybe something different entirely. I mean, you know, healthcare is a pretty health insurance is a pretty broad and diverse subjects make sure to get to the root of the problem and just take a minute and listen to people, and it has helped tremendously, and I've I've helped more employers that way starting that way than by just bowling them over which I think is with somebody who's engaged in her subject and in the sales arena, a pretty common problem buffet. What a great example. And yeah, you know, we tend to get excited for our ideas. And the things that we are sort of me deepen doesn't mean that our customers are going to be as excited about it. I've been a great call out there. Alison, what would you say? One of your proudest. Medical leadership experiences has been to date. I've been asked to lead in my past. Life. As an owning an enrollment firm, some pretty large enrollments, and I've been pretty fortunate to be able to pry people away from other opportunities to come work in my enrollments. And that means that I'm providing good work for my enrolling. And it also means that I'm providing a quality enrollment experience for both employers, and employees, and I think that one thing that employers forget is that employees have budgets to. And if you teach them how to use a health plan to their best advantage almost all of them will do it. And that is your first line of defense, a greenfield some pretty significant savings. That's a great call out. And and today with rising deductible costs. I think it's that more doable. When degree absolutely it is much more important today than it was, you know, even five years ago when you had a two hundred and fifty dollars. One thousand dollar out of pocket max that was not as scary as having a fifteen hundred or twenty five hundred or five thousand dollar deductible and a sixty three hundred sixty five hundred or thirteen thousand dollar out of pocket. Maximum when eighty percent of employees have less than a thousand dollars to cover an unexpected expense, let alone and unexpected medical expense and the fallout from that is not just that they don't seek care. They're often non compliant with their medication and that will lead to bigger claims down the road. So the sort of oxymoronic thing is that the way to control your cost is actually to deliver care and make sure your employees are getting and using care. So you avoid the unexpected spikes, so true. And you know, I was I was doing an interview Allison with a gentleman from Denmark, and you know, we got into a conversation about taxation bid their tax rate is pretty high but unit. Versity in healthcare is included. And we got an on this conversation. Like, hey, you know, what I mean, what is our net tax here in this country when sixty six percent of bankruptcies are happening because of healthcare related issues. You said eighty percent of people don't have more than a thousand bucks to pay for out of pocket stuff. I mean, that's scary. That is scary, particularly if you're the employees, right? And then as the as the employer, you know, what are you doing to because when people get into the situation, I it becomes stressful, and you could lose talent. So definitely a very important topic. That Allison is is is approaching with us here today. Alison, what about your book? Tell us a little bit about your book. What gems can people find in their obviously, we only have thirty minutes today. But what kind of a preview could you give them? The book is a collaborative effort of a group of advisers that want to remain relevant and useful to their clients. And we're all independent we all do things a little bit differently. But we all have. A common theme. And that is we want to help employers offer the best benefits that they can at the best possible price and there's a ton of ways to do that. So my take is in there, and there's twenty eight other takes in there. And there are how to manage yourself funded plan. How to move along the healthcare glide path into further control of your plan and all the strategies to do that there are ways to manage short-term disability programs. So that your employees are getting the best benefit with the least possible tax consequence in the least possible premium there are ways in their chew use enhanced or voluntary benefits to help pad packages and not overburden the employees because that's a real problem. Sometimes there's tools in there or discussion about how to enter a captive or a coalition when you should be self funded. What things you can do as? Fully insured employer to help control your costs. How to manage an enrollment effectively how that is really a year long effort and not a two day effort. And if you make it a year long effort, the two days will not be nearly as stressful as they typically are all kinds of statistics about how employees is used benefit. How important care management is and helping direct people to the best places for care and best does not necessarily mean the least expensive it does mean the highest quality. And that is normally not the most expensive awesome. Folks. This is like a desk reference that you can have and bottom line is this you, you know, you hire an accountant to do your books you hire an attorney to do your contracts today's age, if you're not investing in a professional to help you with your healthcare benefits, you're leaving money on the table and MS the bottom line. So the book is breaking through the status. Quo will leave a link to that on the show notes. So that you could take a look and buy it for best reference for you or whoever's helping you with these benefits and fear provider something to think about too, right? You gotta be understanding how to work with employers today. Tell us about an exciting project that you're working on today. Alison, well, we're doing a couple of exciting things. But one thing I do want to talk about is direct contracting, and how helpful that can be to both of a provider a hospital facility or a large physician group as it can be to an employer, and we have a couple of systems in San Antonio that have direct contracts with some of the larger employers, and what that looks like is let's say that a large employer contracts with a particular facility to handle all of their knee surgeries. And that's just a a small specific example. Yeah, what that means. Is that the facility and the provide and the? The employer have agreed on a protocol and a cost and the facility has to meet the requirements of the employer and when an employee needs a knee surgery. The price is agreed upon a head of time. The employee goes to the facility has the knee surgery gets all their follow up care physical therapy. Whatever it is that is part of the protocol. The provider is paid quickly usually just on an invoice without providing any notes or having any sort of negotiation about what was done. What wasn't done the employer pays a lower cost for that? And may pass some of those savings and often passes those savings onto the employees. So the employee may pay nothing or a much smaller copay rather than their full deductible. So it's a win for the employees. It's a win for the employer. And it's a win for the local facility, which is probably delivering good care anyway to go direct and receive quick payment and a regular stream of patients being a great. Great to consider these these types of contracts in you know, what is the sweet spot Alison gives you know. I I hear that the numbers twenty five hundred three thousand employees type companies are can smaller companies do this with their providers. It depends on the TPA. And I think that's where a well-qualified advisor can be so important those contracts with the larger employers are managed direct, but with mid-size employers those contracts can be managed through the third party administrator. So that a smaller employer one hundred eighty two hundred five hundred even down to fifty lives sometimes can have access to those sorts of benefits. And there's a big difference. If you're gonna pay thirty six thousand dollars for surgery or seventy five that's a lot of money huge. So it's kind of like a pooling type of mechanism through the TPA. So TPA is third party administrator. And they administer your plant. So they act sort of like your insurance company. They follow the rules that you've established. And there some pretty standardized sets of rules, would you can cost Mayes and to make sure that claims are being paid appropriately and in a timely fashion. And that the diagnoses are correct. And that the service was actually delivered. So all that fiduciary kind of stuff, and then they provide if they have direct contracts with that they have other cost containment solutions that all happens in the third party administrators office, not the employer because most employers have enough to do. And then when you're self insured that claims run just goes to the employer, the employer will review it. They generally review it in a diagnosis and cost containment cost way. Only not necessarily identifying who the employee is. And they then they release the funds. So a TPA can do a lot of things for an employer. Whereas when you're fully insured, you pay your premium, and you hope for the best. I got it makes a lot of sense definitely valuable review here wish we had more time to dive in Allison, maybe we'll do a part to we're going to head into a part of the podcast where we do a lightning round with you. It's the syllabus on Allison's Polly being amazing at your health care plan. And so I've got four questions for you lightening around style. Alison, followed by a book that you recommend listeners ready. Sure, what is the best way to improve your healthcare outcomes with your insurance? Eliminate the misaligned incentives in your plan. What's the biggest mistake or pitfall to avoid thinking that you are controlling your risk by remaining, fully insured? All you are doing is managing the financing of the risk. You're not managing the risk itself. Which is riskier so good. How do you stay relevant as an organization despite constant change. Always be learning. What is one area of focus that drives everything in your organization employees have budgets chew? To love that and besides breaking through the status quo. What book would you recommend the listeners? I think anything by Malcolm glad well outliers is one of my favorites. Blink. I think is particularly useful in our conversation today following your gut and practice practice practice low that I am big fan of Gladwin as well. Check those out folks if you want to access the show notes, go to outcomes, rocket dot health slash paulie, at P A O L I P A O L I outcomes rocket dot health slash Polly. And you're gonna find all that bear Alison this has been a ton of fun. I love a time today if you can just share a closing thought, and then the best place with the listeners could get in touch with her interact with you sure, it has been a lot of fun today. Thank you. So as a closing thought, I would say don't be afraid of taking on your health plan, and you managing it and not. Got it managing you. Amen. Love. And to get a hold of me. You can go to my website Alison to Polly dot com. A L L. I S O N D E P A O L I dot com forward slash rocket. I've got an e book there that people can download if they wish all the steps the five steps that I use to help employers gain control and predictability, and there's some video on there that talks about that as well. Sometimes that's a little bit easier. And I'm happy to answer any questions that anytime outstanding. And hey, we appreciate your time. And folks take Allison up on that he book go to her website and will provide a link on our show notes as well outcomes, rocket dot health slash, paulie. And that's P A O L I, you're gonna find that. So check out any book Allison is has been a true, pleasure preciado. You're spending time with us. Thanks for having me. Thanks for listening to the outcomes rocket podcast, be shoot. A visit us on the web at WWW dot outcomes walking dot com for the show notes resources inspiration and so much more.
Episode 9 Stability Planning Part 4: Know Thyself
"Welcome to the return on lifestyle podcast with Ray discount, though from Pravada wealth management in this podcast. We help you overcome financial worries and make sense of planning investing insurance and banking. Join us for this journey as Ray draws from his expertise and interviews brilliant minds to help you enjoy life. The best is yet to come. Hello and welcome to return on lifestyle with Brady skull. So from Pravada wealth management today, we are covering part four of a four part series about stability, planning, and the title is know thyself. Good morning Ray. How're you doing well, sir? Thanks for asking. I always strive to know myself. Right. I mean, that's that's a very philosophical approach today's podcast. What does know thyself mean to you Ray, very very deep. Yeah. Yes. So the fourth installment, you know on this a call knowing yourself. Let's take a look here where we've been I we talked about the four factors. And that's really a way of analyzing what you own a way of understanding how it works. Then we talked about rules based investing which is essentially investing. Like you drive when it's terrible weather outside pullover when the weather's great. Hey, just don't get a speeding ticket. And then our last installment Mermoz reason installment on stability planning was income targeting. Which really is we're. Reverse engineering, you're investing. So that you can create the income you need based upon the different levels of what you need, and we discuss a bit about risk premium and risk pooling, and we can go into that a little bit more in future podcasts about more of the mechanics of what happens. But the reason the fourth insight of the fourth installment of stability planning is no thyself is because we think that finance and retirement planning and investing is all about what's out there. It's all about numbers and definitions and markets and tax laws and news events, but you know, what? The majority of your financial success is based upon your personal behavior. What you can control in your behavior is based on. I believe two things in that is your knowledge in your personality. Well, we're going to work on your knowledge as with this podcast about it's about, you know, understanding those first three top. Fix our investment knowledge. And I try to look at it from a new angle if you will make it interesting and put everything into a different paradigm. But the second thing about your behavior is to understand and to know your own personal personality, your who you are in your personal story. And a lot of people don't know that there's a book by guy Daniel, Goldman was his name GO L E M A N. It was called emotional intelligence, and they did a study. And I don't know about you, Eric, but I really love cookie, you know, use carbohydrates in general donuts cookies. And so they did this study. We're who's really kinda struck me in that is that they took a kid who is in kindergarten. We'll say second kindergarten and second grade young and unite before we started the podcast we're talking about you got a grandchild almost four right three or four years old. I've got a daughter five years old and she's going to be going into kindergarten soon. She's in the pre K thing right now. And so what they did was they took kids young kids. And they said, okay, listen kid. You can have this cookie. Now that we're sitting right here in front of you. But if you can sit here and look at that cookie for twenty-five, thirty minutes. I can't remember exact amount of time if you can wait and not eat it. We'll give you two cookies. So the question is, can you defer, can you delay gratification? And what they found was is that the kids who were able to delay or deferred that gratification that had that self control in a follow there. Life path ended up having a higher level of emotional intelligence and emotional intelligence the base of the book is that is what's leading to your success. And so that's what I talk to you about today is knowing yourself is emotional intelligence and knowing your own financial behaviors your financial personality in your own financial story. Really really well. And I love that study. I've talked about that a little bit before. But let's face it. This is a it's a cookie and it's twenty minutes, thirty minutes. Whatever the timeframe is. But when you're talking about your financial future, you're not talking about waiting twenty or thirty minutes, you're talking, you know, results are going to be ten twenty thirty forty years down the road. So it it sounds really good. But practically how do you do it on this level? Great question. You're right. You're right. That is the biggest issue is that the decisions were making now kind of don't bear much fruit at all much like staring at a cookie for twenty. Minutes. Compounding takes time market volatility. You know, you put your money into whatever you're investing in it goes up ago's down. And you're like, well, I'm back where I started twelve months later. And that's the story often times of a lot of folks in your right? There is a long time horizon. Oftentimes, practically the way we're able to do that. There's really three things I'd recommend in the first one. And this is really kind of key is to hire a fiduciary in. So the word fiduciary gets bandied about it seemed to be a hot topic very in vogue. But a fiduciary what it means is someone who is required to put your needs in front of their own. And the best way to understand. You know, what a fiduciary is perhaps it's to tell you what a fiduciary is. And what if ado -ciary isn't when you go to your doctor, your doctor has taken on a Hippocratic oath to do. No harm. Their job is to do. What's best for you? They're not pill sales people, you know. They're not. Pushing the latest fad or the most popular medical testing because that's how they're paid. That is someone who has put your best interest, and they hold themselves as an industry to very high standard Nella mask. It. Are they perfect in every way, shape and form the medical profession? You're not so much not so much. You know, there is there's definitely always going to be need for in the medical profession for there to be policing in for there to be organizations within without that make sure that we are getting the very best healthcare. We can because they're going to be some bad apples, and it's true in the financial world. So hiring a fiduciary is important and there's two functions especially specifically to talk about knowing yourself. There's two functions that I see that a fiduciary needs to be able to do for you. Number one. Eric, you're married. Correct. Yes, sir. Okay. Good. Well, so with me will end up happening is we'll have an event we're going to go out to dinner. Inner with friends. Right. And so what ends up happening is. I'm hanging out. It's you know, an hour before we have to leave him. My wife starts getting ready, and I like to give her a space while she gets ready because you know, it's it's a, you know, takes a long time. There's a process let's say that. Let's yes. Very well said it's a process. So what happens is we have to leave in. Let's say ten minutes, and she's finally she looks fantastic. And so now, I've got ten minutes to get dressed. And quite frankly, I only need four, you know, because there's not a process with me. It's pretty much. Hey, I look great. In fact, oftentimes I'll think we'll do I have to get more dress up than I am now. Of course, she tells me. Yes. So we go in you know, I go in. I take my five minutes take my time because I want to make it look I tried I walk out. And I'm sure this is never happened to you, Eric, you're very stylish, individual, handsome, and so forth. You know, that's pretty much a given. But will end up happening is a little walk out of the bedroom. And my wife look at me and she'll say. No, no. That's not good go back in there. And oftentimes should go back in. And we'll look in the closet, and she'll find something that can solve a whatever. Prominent it. Typically is socks don't match your shoes. That are don't match the belt. You know, how it is fashion. Not my strongest suit appreciate it. I just it's not what I do. Well, the reason my wife is able to do that is because she's going to be sitting next to me at dinner. We share the same last name. She's got some skin in the game. And so that accountability that honest talk, you know, hashtag real talk. When someone's able to say, hey, listen, Eric, that's not working. And having a fiduciary someone to say, no, no, we're not doing that. And this can really save you from heartbreak because perhaps the biggest thing that if ado -ciary does for you is talk you out of really bad decisions is not what they tell you to do is the exclusion of all of those different mistakes that people make financially I don't want to go through a long laundry list. But one of my favorite things to do is when I can convince a client to not do something. And I beg them. Give me a ring. You know? So the will ring it's Dr so-and-so, and he says, hey, I've got this up at his opportunity to find gold off the coast of Alaska through sunken ships and so forth, and your you kind of like stop for a second. Like is this a joke, but you tell them because you're putting their needs first. And you're able tell them this is what you need to do the second thing. So that married couple that accountability that honest, real talk is important than secondarily is a teacher. We have to realize that when you hire a financial professional really they have to have the heart of a teacher, and that someone who can inform you educate you. But also contest you in measure your success. In other words, help you understand what you know. And help you understand what you don't know. One of the things that's great with the interwebs. Is that podcast like these Facebook, pages blogs? Able to put a lot of content out and one of the things that is interesting is that people in my business in the financial planning world. We've got continuing education and probably if you're listening to podcasts. Whatever profession you're in you constantly have to get recertified. Learn something new proved that you knew what you are new. And that's because we realized that knowledge leaks and information leaks, and we've got to fill it back up. Well, when it comes to your own financial life. We really don't have anybody who's telling us. Hey, we need some continuing education. And that's what a fiduciaries for in also to we need to have somebody who can fill in the gaps because you don't know what you don't know to quote, Don Rumsfeld. You know, there's just unknown unknowns. And that's what a fiduciary is for one of the things that were that combines is, you know, the count ability in the education something called logical fallacies, and that's where we have biases and those biases are there really difficult to in yourself a very easy to see in another person. And just having that fiduciary says, hey, you know, why you're using something that we call recency bias in in. Here's what that is. And I'd like to do a series of podcasts of my favorite biases that plague us because it's it's important to know. Yeah. Great. Yeah. Hiring a fiduciary step one higher fiducia for those reasons that I just mentioned is super important to knowing yourself, it painful at times liberating at times. And, but when what happens is you walk away with a sense of Clare like, oh, I get it. I get it. And that's very very important just going back to the the whole married thing. I mean, I think that was a great example you, and I've talked about this before our wives are fantastic and amazing. I've got some colorblind issues. So I have no problem with her pulling certain shirts out, you know, and saying no, this is a better option. And I kind of was picturing that when you said, those aren't the greatest shoes or they don't match that belt. It kind of goes back to what you're doing with when somebody brings you an idea like hunting for golden sunken ships off Alaska how. How does this fit in with the rest of your outfit? Right. How does this fit in with the rest of your plan? Okay. This part of your plan says you wanna have enough money to last through the age of one hundred and five years old if you now take a large chunk of that and go for buried treasure in sunken ships in Alaska, how does that fit with that plan in which one do you like better, right? I mean, it's yeah. They're not fitting together something's going to break or something's gotta give and being able to talk through those things with somebody who has no emotion involved in it but invested interest in your success. I think that's what we're really talking about here with a fiduciary. Yeah. And you said the word emotions, and the funny thing is is in I mentioned emotional intelligence, it really it's all about emotions, and it's all about understanding the fact that we are an I'll say this because this is key. We like to think of ourselves as intelligent rational beings, sentient free will so forth. So on the reality of it is that we make emotional decisions. And then we rationalize them with logic. You know? So I mean that when we talked about consumerism some of our earlier podcasts, we see this amazing new car that we wanna purchase and it just so cool looking. And then what do you do you make a list of why I need a corvette instead of a minivan, and how corvettes save me gas because I drive so fast. Right. Time money while there we go. So you know, that's that's how we are. And because of that we find ourselves in these loops where emotions take over. And so are introduce -ciary is awesome. And they can act like a true accountability partner with your best interest in mind teacher and instructor that can say, hey, this is where your gaps in your knowledge are the other thing you need to know. And this is a little bit basic almost, but I think it's actually missing too much in people's lives. And that is knowing your risk tolerance. And you mentioned the word emotions let me just start there. I remember where I was when the S and P five hundred hit six six six in two thousand nine it was a very emotional time. Especially in my business. I wouldn't expect everybody on this podcast to remember. But for me, I'm like, wow, this is a really bad day. And I was on vacation. I'm just kind of like in a fog because I'm like what in the world's happening to the world turns out that was the bottom. We didn't know it at the time. We never do and looking back. Now, it's easy for me to forget, the deep dark feelings you've got when you're trying to have fun in the sun at the beach. And it is a it is just a bad event. The reason I bring that up is because it's important to go to your adviser. And to look at that wrist of that risk tolerance score if you will. But I really want advise everyone to consider going beyond the monikers the words the word salad if you will of conservative moderate, moderately, conservative, moderately, aggressive aggressive. Those words have almost no meaning anymore. And so what we do here is we use a quantitative software program takes about ten minutes to complete in it produces a risk number, and that risk number is something that you can say, okay. This wrist number signifies that you willing to suffer through this percentage of dip for. For the benefit of potentially reaching this reward, if you will, and then we can have a conversation, and we can actually analyze your portfolio based off that number fits you. And when people can see on paper the statistical risk in return swings of their portfolio over the next six months. It helps them to kind of guard themselves and say, okay. This is the conversation. We're having now and because it takes ten minutes and because it's quantitative and there's a real number. We can continually have that conversation because you know, what happens is you change your risk tolerance changes depending on a lot of different factors. Whether it's how much money you've got the Bank. Currently what's going on in your life. How pessimistic or optimistic the news out there is and some of its core some of its things just your conservative personality or you're an aggressive personality. But having that conversation talking about it is a huge thing. Just putting out there on the table helps you to say, okay? Here's the plan in here are. The bandwidth if you will evolve Tilleke and it helps put emotions looking forward not looking backwards. But looking forward saying, this is what I'm kind of galvanizing myself for and and it's okay. It's okay. If you find that the market is not up as high as the other people could possibly be up more aggressive portfolio. It's okay to come back and say, hey, you know, what markets up I'm feeling more risk tolerant. And that's when we have conversation. Isn't that interesting? You know, when the market's up your more risk tolerant markets down. You're not there in lies the crux of it. So not only getting the fiduciary, but also testing your own risk tolerance. And checking in with it and really quantifying it helps you to kind of get those emotions under check to know yourself. And then finally, and I was finally because really none of this matters until you've done the first two until you've got a partner in crime through a fiduciary, so to speak an accountability partner in a an instructor. Then what you end getting your risk tolerance down, Pat. Then you need to take a look and you need to figure out where. Everything is and why you have it before we were talking on the recording. Ironically, you talked about the fact that you've got quite a bit of stuff some we'll call junk in your garage. Totally absolutely tons of stuff you're handy. Right. Like, you can build things and fixing. Yep. But yet Alon goods what ends up happening is over the years. I'm not by the way. So what happens with me is there's something to fix almost. Always don't have what I need. So I run to Lowe's, Home Depot, the hardware store and get it. And I tend to get a three pack and I use one well sometimes too because I don't know how to use the first one on a break. So used to of whatever that isn't. I've got one just kind of sitting there. I needed again a year later forget where I put it. So I run and so pretty soon I've got five of of whatever it is. Let's say zip ties. Yes, zip ties are always good duct tapes. Good assortment of screws and so forth. Well, what ends up happening with a guy. Like me is when you're younger in life you start out life. You've got a junk drawer, right? And then that junk drawer turns into your junk claw your junk garage. You know, you get stuff in your garage. You don't know what it is? And then finally as you get older in life more successfully by more property of a shed or barn. Exactly storage right now storage storage unit. Yeah. Or you pay one hundred fifty bucks store all this junk. Well, what ends up happening is is it can get kind of overwhelming. What happens also to in people's lives? Is it gets overwhelming when it comes to their finances because you start of crewing and snowballing money assets liabilities, but also to benefits things like HSA's and things like FSA's, these are health savings accounts, you know, and things like that 4._0._1._K's foreign Casey left behind a different employer pensions that were not really quite worth much because you only work there for ten years. So when I sit down with clients one of the things that brings perha-. Perhaps the most sense of like, a, you know, that weight coming off of their shoulders is when we can take all of this data input it in one place and organiz their junk drawer junk garage or really their entire state the barn. The the shed all of it. And in doing that, the sense of clarity. There's a TV show on Netflix, which I haven't watched, but it's all the rage. There's a lady from Japan. Her name is Marie condo. And all she does is she goes into people who are semi hoarders. And she helps them to find out. What's important? Find out what brings them joy and helps them to get rid of the rest. And so that spring cleaning in that organizing of what you've got that clarity that brings you get to know yourself. But you also get to know where you really are. And that alone it really just when it comes to emotions it gives you sort of this positive feedback in it starts. Positive momentum. If you haven't already done it. The key though, too is is if we're going to do it do it in a way that is idiot proof do it in a way. That's that. You do at one time, and it's very easy to maintain. That's the problem with organizing. Your garage is you've got to get a system in place. And will we use here is we use what we call the Pravada wealth dashboard. And it's an online place where we can aggregate all of the assets investments that you have with me as your adviser. But also investments in cash accounts and other benefits that you have elsewhere, and it's able to aggregate from lots of different places and create this database for you this organized one-stop online situation where we can build financial plans that are truly informed and so-. Hiring a fiduciary knowing your risk tolerance. And then finally nowhere everything is. And why you have it you do those three things and you start to raise your emotional intelligence. You start to know yourself. And after a while you realize you got a lot of cookies the. We like cookies we do we do. But I will say this. You know, this is a podcast. You're listening to don't take any advice from this podcast. I don't know anything about person that's listening to this. This is something that you really got to sit down face to face talk with somebody. And and naturally if you'd like to learn more feel free to reach out to us. Yeah. That would be fantastic. It's a great idea. And I will tell you this Ray if you come out with the Pravada wealth garage organizer down. I'll be the first person in line, brother. I mean, it's you're absolutely right. I got tons of stuff in there. And a lot of it's good. And a lot of it could probably just go away. And I need somebody to help me through that. And so this Marie lady. She's sounds pretty good. But I'm not gonna I'm not gonna I'm not gonna let my wife. Listen to this podcast because she'll hire her right off the bat. Just to get my stuff organized. I need all that. Right. I just need it all, but no. I really don't you're right. All right, right. This is a great podcast. I appreciate your time. Thank you, sir. All right. Thank you. And thank you for listening to the return on lifestyle podcast with discuss. Oh of not subscribe to the podcast yet. Please click the subscribe now button below this way. When Ray comes out with a new podcast it'll show up directly on you're listening device. This makes it much easier to share these podcasts with your friends and family. Thanks again. For listening today for everyone to provide a wealth management. This is Eric Johnson reminding you to live your best day every day, and we'll see you next time. Thank you for listening to the return on lifestyle podcast. Click the subscribe button below to be notified when. New episodes become available. The information covered in posted represents the views and opinions of the guests and does not necessarily represent the views or opinions of Proventil wealth management. The content has been made available for informational and educational purposes. Only the content is not intended to be a substitute for professional. Investing advice, always seek the advice of your financial advisor or other qualified financial service provider for any questions, you may have regarding your investment planning the following program sponsored by Proventil wealth management, which is solely responsible for its content and visory services offered through j w Cole advisors incorporated. Securities offer through j w financial Inc. Member FINRA SIPC Pravada wealth management is an unaffiliated entity from j w Cole visors and j w Cole financial the opinions expressed by Ray desk. Also, should not be construed as specific investment. Legal or tax advice, all economic and performance information as historical and not in. Indicative of future results. Investing may involve the risk of loss of principle. Any tax advice on the show is not intended to be used by any person for the purpose of avoiding US, federal or state tax penalties net may be imposed on such person and each listener should seek advice from their tax advisor or legal console on topics that arise from the show. Nothing should be construed a solicitation of an offer to buy securities. The preceding program sponsored by Pravada wealth management, which is solely responsible for its content.
Apples iPhone 12 event is finally here (for real this time) (The Daily Charge, 10/6/2020)
"Support for this podcast comes from at and T. you know throughout history switching to new technology wasn't complicated. Ancient Roman acts made water fast, reliable, secure, and nationwide electricity made candles fast reliable, secure and nationwide. Today we have at and T. Five. G. It's fast reliable, secure and nationwide put into a historical context gets kind of a no brainer at and T. Five G. It's not complicated. Five requires compatible plan may not be in your area see at dot com slash five G. for you for details. Invites apples event next. Tuesday are out and all the confirmed the debut, the next iphone. So what are we expecting? Roger Chang, and this is your daily charge with me is our apple expert ensure welcome in. Hello. So jumped the gun a bit last time when the invites came out and we talked a bit about the iphone and turned out no iphones at all this September event, which is highly unusual first time ever that they as timber event without an iphone but second time around it's gotTa be iphone twelve right I mean if. They're going to have a lot of trouble I remember a long time ago. There was talk about how there's expectations around various events and I didn't know this but there's actually a fiduciary duty apple and companies have when rumors get out of control on a product and people say it's imminently coming and it's not gonNA come. It's almost like they have to dispel the rumor just to make sure that they're okay with finance and all that because people might be buying the stock at a crazy rate based on that one rumor and if they make an announcement but don't acknowledge it, they can't. So it's actually kind of i. have a really strong feeling bottom line that's an iphone. This time Brian so I mean we ran through the last time. But let's talk about what we're expecting from the IPHONE twelve for one, there's there's multiple models. There's a whole bunch of new bells and whistles, but let's let's get into it. What what are you expecting with this new family phones? This new family of iphones is going to be very similar in terms of the lineup to what we're used to. Right. There's going to be kind of an entry point one, which will be somewhere around seven hundred dollars or whatever it will be. Then they'll be the normal one which is around a thousand dollars and then the step up, which is the largest one for eleven hundred. What's going to be interesting is that there are rumors of a fourth iphone, a quote unquote mini, which for those of you remember the ipod mini that actually supercharged the ipod though I don't know what supercharging an iphone even looks like at this point, but it could draw even more demand and offer something between the iphone se. Whatever this new iphone is. But in terms of design, it's expected to look a lot like the IPAD pros. So think box here now scurvy and that's supposed to have a new chip. No surprise it'll be faster. I'm sure will change the world somehow, and then it's the big thing otherwise is five G.. That extra G is going to give us a lot faster surfing in hopefully really make a compelling argument for why people need to buy this thing. Yeah. That'll be the interesting one is the the idea that Five G. I mean there's been a lot of hype obviously talked about it a lot on this podcast of, but as I looked at it and look practically and I've asked you know some of the carriers about this, like what is the main benefit of five G. When we're all stuck at home? There isn't really a great answer. It's more like well, you know you really want it what you do go back. Out there and so it'll be interesting to see how apple frames the the benefits and the need for five. Because right now, fascists when you're on the go, you know better responsiveness when you're on the go allowed that we're not we're not on the go right now. So it'll be it's it's for me something I've had to like kind of square way like the benefits of all this but also the reality that. We're not really gonNA enjoy some of those benefits for a little while what you mean. You don't download an entire television series while you're going out to get groceries, I, I used to. You Know I. Think What's interesting is that there are surveys out there that say. That apple has an actual problem with five G., which is that a stunning number of people believe they already have five jeep and a lot of this is thanks to at and T. we've written about it on. The little five G. at the top of the phone I. It's a staggering number of people who are. Who are? Convinced G. and they don't so apple has to convince them. Oh, you actually don't have five G. YOU WANNA get five Gina G. which good luck with that one, and then also the other thing that's interesting is that there's a survey that came out from declutter just recently the. Electric's recycler and reseller. They said that fifty three percent of respondents planned to buy this year's iphone that is ridiculously high and what's interesting is that a lot of analysts expect this to be what they call a super cycle as well. They're likening it to when the iphone six came out in two thousand fourteen, which was huge. It was one of the big purchase points. A lot of people got that iphone six or iphone success. That's when a lot of people jumped. So I'm curious to see how this is going to be that again or whether the economy, the corona virus. General. Justice Malays about the world is going to Kinda slow down apple's role. Yeah. I get the sense that you know we've looked at the impact of the coronavirus I. think that's that's really stalled SP- consumer spending on a lot of different things. I don't know if the phone is one of them it may still be like one of the few items where you're willing to disband up on because it's such a hurdle advice because you spent so much time on it but we'll see like it's We'll the pricings ranged you alluded to that the of cheaper iphone that might help as well. I think the fact that it's going to be different it'll look physically different over the first time in three three generations at this point at least. Yeah. If we think the iphone ten was twenty seventeen, right so yes. So you re years I mean that that's that hits right about at the two to three year upgrade cycle where a lot of people just want upgrade because batteries not working, and so I think they're right there's definitely going to be a super cycle there I'm really Intrigued, you know we've talked about this with Blumenthal while back about some of the deals that might come from the carriers because I'm sure they'll be eager to push five G. as well. when it comes out the estimation is that apple will immediately become one of the biggest five G. players out there. So this is one of the law of large numbers things right just the fact that they move into the market means that but I- again, it's a lot of interesting question marks that were not there in January definitely the five G. aspect again, it's the other part of this. Apple has been known for controlling their experience. It's and the software the hardware for once this feature five G. is like the one experience that they can't control. Right? They don't have. They're not the ones figuring out how to roll out the network and how well the service runs. So the the key benefit of this new iphone alive it's GonNa depend on how well verizon network holds up the mobile at and that right now is if iw for skiers I, think you'll remember that back with four G. and three G. when. New York in San. Francisco. In particular just had terrible. Service problems all over the place I remember it was it was really bad. It would be block to block in New York and it was it was sometimes even worse than San Francisco and a apple would wine about it all the time like every event whenever anyone talked about. Your. Service on these phones is terrible. Do like well, not our problem. It's actually it's really eight hundred verizon, and by the way it's really hard to build new towers in San Francisco. They're really hard to get them approved. So I, think that you know if it doesn't go well is going to be pointing their finger in other directions, right? Right they've. Done that in the past I'm sure they'll do it again beyond the iphone. What else are we expecting 'cause? We got a bunch of stuff last month right? We got an IPAD two new ipads to new apple watches we got was that it I remember? Getting into the apple one apple subscription. So we got a bunch of stuff last month. Are we what's left? Well assuming the IPHONE is going to be probably the biggest thing I think the other two interesting items that I'm going to be looking at is there's apple headphones which are rumored. So think of Studio Cup over ear headphones which you might say, well, wait a minute. Don't they make headphones under the beats brand and I would say, yes, they do and I don't know what's going to happen to that but. There's been a lot of patents we've written about on seen it where they have done stuff like they've come up with interesting ways to make the design lay flat which again when we ever start moving around again would be pretty cool to just toss in your bag. And there's other stuff as well where Apparently, other headphone makers have this where they can actually figure out the position of your ear inside the cup in kind of make the audio just like just. So for that stuff in considering their pods, pro have adobe atmos- in them now, which means surround sound it would be logical for them to do it in the cups the headphones as well. So that would be interesting. I don't know whether it will sell. Well, if you look at other headphone stuff, they've done the pods are going gangbusters, but the home pied is debatable subject. We don't hear about a lot which is usually a sign that they don't WanNa talk about it, and then the other product is the computer they said that they're going to have an apple silicon computer out by the end of the year. The first non Intel computer in a long long long time and I'm really curious to see what they do last time when they made this transition from. From IBM. POWERPC. To Intel they created a MAC book pro. We went from the powerbook which was a pretty good design to the MAC pro which had the magnetic power adapter. It had the camera and the screen that was the first time. They did that nothing a lot of different changes they made that really got people's attention and I'm curious what they'll do for this one I hope that they'll. They'll do some new stuff for the laptops particularly magnetic power adapter. If you're listening to him cook I'm really I'm still bothered by that. And then. There's also the possibility of an I mac or Mac mini something that has this chip in it to show. Hey, this is going to be really awesome and we want to start seeing how successful this thing will be right, and then there's the long rumored air tags as well. which may or may not come I feel like they're rumored at every single event. But CATHRO them in there you did mention the home pod let's say there were reports about apple removing sonos equipment from its retail stores, as well as those equipments, which which led to some speculation that maybe they were ready to present a new as you set the studio headphones Air Pods Studio headphones. Off as well as maybe an update to the home pot, which as you rightly note, hasn't really done a lot of attention. They don't talk about that much at least from the outside data we've seen the sales have not been that great but at this point like. Does apple sort of. Keep going down and invest more into a new model or do they just sort of like, let this away. It's interesting. You know part of this I I think is to Kremlinology of Apple, right? Like what what do they think it? How do they think it? In one of the things I find fascinating about them. You may remember if you go back way back machine, they had a thing called ipod Hi fi, which was to compete against all the bose sound docs and everything, and it was a really good device. It got good reviews but it was too expensive. In the home pied similarly gets great reviews, but it's considered to be too expensive and Amazon has just completely undercut them in terms of the performance for every dollar that you get and I think that the question apple has to answer this time around if they're going to keep this going. To, make it compelling enough that it's GonNa be worth buying this thing instead of the Sonos or instead of and the thing about Amazon is that a lot of people including myself in my home, it's bought including the other stuff. I have my old stereo and I have some Vamos on stuff and that that's hard for apple I. Think they really that's where they got themselves in a bind was that they actually are competing against a home stereo already have versus adding to it Joe. Well, there's lots of lots of SPECULA-, any other surprises or anything else that you're expecting from that event You know I think the only other thing that I would be looking for is that there is too long rumored headphones. Glasses, right. The glasses I don't expect it at all but. We've heard so many people now talk about these things and we have reported on them and we've heard so many things about what the future looks like in facebook makes all this big deal about it. Microsoft. Makes this big deal about it and apple has in the past shown off device up to six seven months before it's released. So maybe they could tease the future, but we'll see well, thanks Ian you can read all of our apple coverage on Senate Dot Com if you have any questions about what's coming up his twitter at the charge and we'll try something you if you'd like to receive direct text messages from me. Go to joint subtext dot com slash the daily charge to sign up. And also please subscribing rate the show it really helps out for the daily charge I'm Roger Chang. Thanks for listening. Hey. Do you like saving money on Tech Gadgets? Cool stuff. Then we've got a podcast for you. You know that guy as Rick Roy seen that's resident game I'm Dave Johnson and together we host the cheapskate show in recent weeks we've told you how to save money on phone service why you don't want to apple air pause and where to find the very best pre password manager. So join us for more great deals and freebies every Wednesday.
Ep 164 Your Personal Financial Snapshot With Kyle Christensen
"The. Welcome to top advisor marketing where you will learn how to become a prolific online influencers attract more ideal clients and grow your practice. Wrought to you by top advisor podcasting a done for you podcasting solution. Bill just for trusted advisers, and now nor co hosts of top advisor marketing Turk glow and met Halloran. Hello. And welcome to another top advisor marketing podcast today. We have somebody who I talked to a couple of months ago, and you know, when you have the opportunity to meet new people who've created new products and services, we get inundated with us a top adviser marketing, you everybody's got a great product everybody super excited about what they do. But then you actually meet somebody who's actually create something that is actually truly unique and different in. That's that's who we have on the podcast today. So his name is Chris, and he is the president and founder of personal financial snapshot. And the reason why really wanted him on is because we're always looking for ways for you as a financial services professional to separate yourself from the advisor down the street. And I believe in of course, I know Kyle to that. This is a great great way to separate yourself. Sokaiya? Look, I'm gonna show man. Thank you so much. Appreciate it. All right. Let's before we really jump into. The snapshot itself tells a little bit about your history. Like, you know, how did this come about? What what what is your history within the industry and stuff like that? Okay. So I started twenty years ago nineteen ninety nine in an interesting time to start in the financial services industry because it was right at the tail end of the dot com. Boom. And but I was introduced on the protection side, I didn't come in on the equity side and so right away from the beginning. You know, I started to develop a focus more on on the protection on the fixed. You know products part of the business, and I fell in love with ninety sided that. That's what I wanted to do for my career. A my was actually on a path in college at the time to become a physical therapist. So. Yeah. So quite a change of direction. But I I was pretty lucky to be at a university where it was also an accredited university for the certified financial planner. And so I decided to add that as a minor, and I took personal financial planning. And went that direction. And I found myself, you know, in my spare time reading all kinds of financial books, really loved all of Robert Kia Sakis books. Rich, dad, poor dad series and started to develop my belief system about money that time in in you know, took off from there. I started with a company called guardian life, and I'm sure many advisors that listen to this whole now who that is and probably associate with them or have and in two thousand four I ended up starting my own financial planning business when off on my own. I I realized that I wanted to be in control of my own reputation. And when you're in an office with a bunch of other advisers in their constantly recruiting, you know, you don't have much control over that. So that's kind of my starting off point. Yeah, we actually have halfway decent amount of our podcasting. Clients are guardian reps. We for some reason guardians compliance understands. The power of this medium. And so that's kind of cool that that's where your where your where you're you kinda cut your teeth. Let's talk about this thing that you've created right? Let's talk about the creation because I know there's a lot of people listen to this who think that they have a great idea. It might not fully understand the complexity the investment of not only money, but time that goes into creating something like the personal financial snapshot. Oh, I had no idea what I was getting into. If. Looking back. If I could have bought something like this out on the market. I would have you know, knowing what I know now. But it's also really satisfying to think of something have an idea in your head and see it come to fruition. See it come to life in. That's what happened in in two thousand twelve I was kind of at a turning point in my career, and I needed to to get a new system, and I really created the software out of necessity because I didn't feel like there was a great system out there. I didn't feel like there was one that fit my philosophy in the way, I approach things in and specifically simplicity which we may have a chance to talk more about that here in a little bit. But I really wanted something simple. I wanted something that clients could understand. I wanted something that advisors could follow. And like I said I created at first for me. I didn't really initially have the idea of saying. You know, I wanna create this on I'm gonna market it to the thousands of advisors across the country. I mean that wasn't my original intent, but I feel like it's it's a great tool, and I feel like it's unique like we've talked about in other people are gonna appreciate it. So let's talk about the philosophy for what what are the philosophical underpinnings of? Why you created the software? So so we know in this industry that by far the majority of financial planning is is needs based analysis, and it's also projections based it's based on projecting future need, and you know, at the women in financial services conference that they had last year their annual conference. I brought a crystal ball with me in the crystal ball had a a taped on the front said out of order, and it was such a great conversation piece because people would look at that. And and be like, I have to know why you have this. You know? And that's really a huge. I feel like it's a huge problem in our industry that we spend a lot of time we're trained we're trained by the CFP board trained by financial institutions to try and predict people's future needs. And the reality is is we can't predict that we can't predict what people are going to go through. We can't predict what they're going to need in the future that number that we may show them is is almost guaranteed to be wrong. And so our philosophy underpinning of of personal financial snapshot is that it's not based on projections or predictions of the future, it's based on principle, and I talked to an adviser the other day, actually, the WAFS conference to came to me. And she said, so if you don't plan a person's financial plan based on a future value of what they need than how do you do that, you know? And I and I asked her I said, you know, let's say we did that. In. Let's say this person was on target. This client was on target or maybe even ahead of schedule. And this is two thousand seven and they have saved in their their assets or performing better than expected. What will be the tendency of that client, if if they feel like, hey, I'm ahead of schedule. I don't really need to to save as much right? That will be the tendency is that they can put the brakes done put the brakes on and they can slow down their savings in and said is that what you really want your client to do? Do. You want them to stop saving or slowdown there saving and she said, absolutely not. And I said, well, that's why the principal is the reason is what you really want to teach the client. You wanna teach them to save, regardless of the circumstances. And she said, that's right. So what we want as financial advisers as people to make decisions based on principle. But the way we sell is need based analysis, which is a conflict there, they're contradictory. And so. So that's the first thing is personal financial. Snapshot is is principles based we want people to save regardless of the situation even into retirement continue to save. We don't know how long people are gonna live. I don't know how long Matt Holleran is gonna live. I hope he lives a longtime, and I don't ever want you to stop saving because we don't know what's going to happen in the future. And we don't know how much money you're going to need. We can't predict people's, you know, needs when it comes to insurance in how much does a person need if you don't know that they're going to have cancer. I have a friend here. Actually, the her husband just just was given to two months to live. Oh, yeah. And if we would have done a needs based analysis for this guy, this friend is named chip if we would have done a needs based analysis for chip ten years ago. Would we have predicted that they would be in this circumstance right now the this time in their life and they owe over a million dollars now in medical bills that aren't covered by their insurance. So, you know, needs based analysis could have never predicted that so one of our principals is maximum protection. If we would have given chip if I if I had the chance to work with chip before I would have recommended his maximum life insurance. Would that have been enough? Who knows but it would be the best position he could possibly be in. And that's just an example of of how personal financial snapshot is so different. Okay. So get Yup. Oh, no. I'm sorry. Say that last part of your I was just going to say we give our clients the opportunity to know what they could have. And we let them stay in the driver seat. You know, we want them to be the ones that get to make the decision based on an educated, you know, situation where they feel like, hey, I'm informed. I know what I have available to me what I could have. And I'm gonna choose that. And I think financial advisers might be surprised that most clients want their maximum. And I think a lot of financial advisers are so when I talked about this in February. But I think there's so many financial advisors who started off in the insurance industry, and hated it so much that they just don't like talking about that. Because it's a lot more of a sale, right? It is anything else. But that's what personal financial snapshot helps them with. Right. Is. It's not a sale it is it is the beginning of a discussion. And it's kind of proof in the pudding is that fair. Absolutely. Yeah. It's it's so systematic in its comprehensive and and yet it's not a sales pitch. I mean, we start out in the most important thing what I train advisers to do in the very first meeting. Listen is ask questions, and listen don't give any recommendations in that first meeting, and that's that's different for clients when they meet with someone and they're in the clients are generally so on the defense. Because they're afraid that they're gonna get sold. Right. That it's very difficult to have that conversation. The most successful financial advisers from a marketing standpoint, and from a referral standpoint are the ones who really truly do know how to listen, and that's one of those skills, and in Qom really glad that you teach that because it is actually a skill. It's a muscle, right? It's something you have to practice because if you don't then you're not going to be as good at it. So let's talk about how how can you use this from a marketing perspective, right? How do you use this conversation to really separate yourself from the advisor down the street? Well, I mean, my first question would be can you predict the future in all honesty and most advisers, I think will say no, we can't predict the future. And so let's not base are planning on that. Wouldn't you rather? Teach your clients to make decisions based on on principle principles that have been time tested that are proven economically that have worked for people over time in any circumstance versus showing them something that that even you know is probably not correct. Even you know is probably not the right number, right? That that you can't predict that. And and you know, that's that's the big difference. Another one is is our software is not charts and graphs and numbers oriented, you know, at the end of the day the report that we give our client is a one page view of their entire financial situation. And it's a one page. View that if you slid that page in front of them and said, this is your entire financial situation. What can you tell me about it? They could tell you a lot about it by looking at that one page I've seen other programs. I've seen other systems, and you know, I've seen others say that they have a one page view. And if you put that in front of a client and ask them to explain what they're looking at a guarantee. They couldn't tell you much. It's blinding. Right. It's it's so confusing. And I love that you actually took me for our listeners. Kyle took me out a demo of of this. And do you. Remember, what I said when you showed me that final page, hopefully said, wow, I guess I say, wow. Oh my gosh. I can't believe how easy this is to understand. You know, some advisers Kyle seem to think that when they show their clients and prospects this insanely complex financial plan. It's like the idea of an attorney with heft. Right. Well, if I don't give you eighty thousand page document than I can't just. Fai my fee, but personally when I saw the result of of of the sample that you took me through which by the way, I highly recommend that you all either get on a webinar with Kyle or connect with him on social media because when you see this, especially for those of you who want to enter more into the world of real life planning instead of, you know, maybe just just doing life insurance or just being a traitor or not being involved in either of those at all and just kind of trying to provide advice. This is a really great tool. Now, I do have to say something I'm gonna play devil's advocate here, which is for some reason when they defined the fiduciary standard, they seem and I'm air quoting they seem to feel that insurance is not fiduciary. Yeah. How how do you respond to that? Man. Well, it's interesting. I mean from the very beginning of my career like I said, I became a certified financial planner. So I had voluntarily took on the fiduciary responsibility right away in my career in and I feel like I understand that what that means which which what that means to me is I'm looking out for the clients best interest. So number one, you talked about people who are maybe selling products individual products, not looking at things holistically if you went to a doctor and the doctor before he even checked you out didn't check your records didn't test. Anything didn't look at you holistically. He starts prescribing some medication to you does that make you nervous. Yeah. Yeah. So so from fiduciary responsibility in the financial services industry, can we possibly give what's in the best interest of client. If we don't really have a comprehensive view of their entire financial situation. Even if we're only giving product advice about life insurance. For example, don't we really need to have a comprehensive view, at least basing that decision on that view. Yes. Yes. Absolutely. Because there's no way to separate it out. There's no way to say. Okay. Well, I'm only doing life insurance, and that doesn't affect any other part of my financial life. No, they're totally interconnected. They will absolutely affect each other. And so we have to base recommendations in and hopefully clients base their decision on the comprehensive view. So that's one thing. You know? The other thing is is is far as being a fiduciary conflicts of interest. You know, you mentioned the that the insurance industry is really the focal point of that. And I agree. I think it's really interesting. I I would say I maybe I'm biased. I'm sure I'm biased about it. But who's hiding the fees? You know, what industry what part of the financial service industry is hiding the fees. There's a great book a Galt called take on the street. And I'm trying to remember the author. He was a former SEC chairman, Arthur Levitt, that's his name. He. He was a SEC chairman under the Bill Clinton era and during that era, he he tried to get things passed to to make it. So the clients people who are investing in mutual funds could clearly understand what they're paying and guess what he came up against a brick wall. He couldn't get anything past. And he said he this his own words. He said if he said, I I realized the complexity of this in the problem when I'm the SEC chairman, I'm the one governing the whole industry and I pick up perspectives. I can't understand it. And he said what is the average person to do? Yeah. So talk about you know, not being clear. But yeah, the the the deal rule was very focused on the fixed business six judy's fixed life insurance side of the world of of planning, and in my opinion unfairly so. If I think about when I when I run a whole life illustration, for example, can I'm in if you late any number in that illustration might by my own choice. No, it has has two columns. It has guaranteed and it has current period. It it doesn't allow me to manipulate anything. But if I'm showing projections of retirement rates of return and things like that on mutual funds. Can I'm initiate that. Absolutely. I can I can raise it up to twelve percent, right. So it's an interesting thing. I think that there were going to be some unintended consequences, which we could talk about another time maybe related to the deal rule, but the fiduciary role in I think that the heart of it is that we should be having our clients best interests at heart. We should know and understand the client situation. Sometimes the client doesn't know what's wrong with their plan. I would say oftentimes it's like someone knowing that they have high cholesterol. You don't. You don't feel that you don't feel that you have high cholesterol. But you go to a doctor in they do testing, and they can find out let you know. Right. Yeah. And I think that's what our model helps us do. All right. So before we get into some of the personal questions about really who. You are what makes you tick. What's the best way for people to reach out to you do like webinars and stuff like that to teach people and show people what you got. Absolutely. So the first thing I would recommend people do is is go to the website personal financial snapshot dot com. And and download the software for free. You get a download it and try it out for thirty days and every week every Tuesday ten AM central. We do a webinar for licenses and it's just a ongoing training in those get recorded in. There are five on the website. There's a access so anybody who's a licensed does I'm saying get get that free license going then you can participate you can join in. And you know, it's it's a comp. Lex, the the reality is is the software takes time and effort to learn and figure out why everything's the way it is. And learn about those principles. So you can teach them effectively to your clients. But I would say that everything everything that is worthwhile. And enduring requires time and effort, I don't know of anything that doesn't and so we absolutely have selfish interest in people succeeding with our software in our system. And we want them will do whatever it takes to help you succeed. That's awesome, man. All right. So we are going to switch gears in a what we have found. Kyle is that people like to do business with the people they'd like and have things in common with. So we try to highlight some of the things that make you you outside of this amazing piece of software, and this this philosophy that you've created you're ready. I am. All right. So what do you do when you're not working? I am a big time fisherman. I love. Just being on the lake in the only thing you can hear is the wind blowing through the trees along the shoreline or here birds flying in out. That's that is just my recharge. Awesome. Who's your hero? Man. Currently I would say it's my wife. She is just an amazing example. She's the most incredible person I've ever met in my life. So, you know, she's the most selfless person that I've ever that. I've ever known. I when sometimes I think, I'm I'm pretty selfless. But then I see her do things in the way, she thinks in her constant care and concern of other people. You know, I I hope one day I can be like that. I really do. If you had all of the money in the world you ever needed? What would you do? I mean, all the money in the world. There are so many needs out there. I was lucky enough to serve a mission for my church in Brazil and for two years. And I think it's, you know, leaving the United States and going to see other places, especially third world countries. I mean, we we think we know what poverty is here. But then you leave the country, and you go somewhere like that. And you realize oh, you don't know. What poverty is. And and they can't lift themselves out of it. You know in America, you can come from pretty poor circumstances and still go to college in you can still change your circumstances. But places like Brazil, you can't without some kind of help. And so I feel like I would want to focus my efforts in that. I love the Brazilian people. I'm sure I would do something as far as that goes who's your favorite person in history and y. Oh, man. That's a great question. Shoot my favorite person in history, you know, in this'll price aound religious, I guess, but I'd say Jesus Christ. And you know, there have been tons of people who've done incredible things, but, but none has impacted more in my mind in the world than than Jesus in the philosophy of love, thy neighbor as I self, and and, you know, treat treat people with kindness and love, and and no matter what their circumstances. You know, the the idea of of love even your enemy. I just think. Wow. That's a challenge. I mean, I've got I still have a lot to learn as far as that goes. But no one has had a more impact in the world in my opinion than than him. You know, I've a lot of people who say that just so, you know, so that what I asked that question, you, you you. Not be surprised. How often comes up? All right. How do you define success? What does success mean to you? Success to me is is lifting my own family and others around me kind of like your raise the water in. It lifts all the boats. Right. And that's how I feel like if if my success only helped me and only helped my own family than in my mind. That's not really success. I I love helping others in and I've learned in my life that that's where true happiness comes from is reaching beyond yourself. And like, I said ambers, my my wife is is a great example of that. And that's that's what I wanna do with this software with with this program. If if I was the only one that benefited than it would be a failure to me. All right. So my last question is what is the one thing that you recommend to family or friends or clients could be a book a tad talk a philosophy anything along those lines. The one thing that all stick with the maybe the financial part of it. I would say that I would want. I'd want people to not follow the crowd. You know, I would want them to look outside the box and not follow the crowd because the majority of people are not financially successful. And I would recommend that they start maybe with rich dad poor dad. I mean that was the starting point for me to and he does a great job of of introducing a philosophy. That's different. You know that that's outside the box. It's not the norm in I want people to be successful in. If they want to be successful. I think you started out this way with the the podcast is that you've gotta stand out. Right. You have to be different. If if you wanna follow the crowd than you're gonna go where the crowd goes. And most of the crowd is not going to be successful. So. Being willing to stand out different than think differently. I think is a huge key. So that's what I recommend. Well, kyle. Thank you. Thank you very much into rap today's podcast up. Can you give us the contact information again? So people can reach out to you and find out more about personal financial snapshot. Absolutely. So the website is personal financial snapshot dot com, and you can Email me directly. If you have questions I'd love to do a demo for you at some point to visit with you and see how see how the software see how this flossy can fit in with your practice or improve your practice. My Email is Kyle Kyi L E at personal financial. Snapshot dot com. All right, China will again. Thank you. Thank you so much, and and everybody, you know, sometimes it is simple client interface that truly will change your relationship. Help you close more business and also help you communicate the ideas that your clients need to hear not just here though. But to be able to visualize and sometimes very very complex financial plan is not the best way to do it. It's just a nice easy way to to absorb and really, retain and understand the information. And that's really what personal financial snapshot is for. And it's also to make sure that your clients are truly protected because the greatest thing about yourself as one your ability to live and the other one is your -bility to earn money. And if you don't have those two things covered for your legacy and not just for your protection, but for your family's protection. I personally think you're really really missing a lot. So for Kyle Christian. Christians in the president and founder of personal financial snapshot in for everybody here. Top advice marketing, we will see you on the other side of the Mike very soon. Are you ready to change the way you communicate with your clients? Are you tired of being the best kept secret in your area? Learn how to become a prolific online influencers attract more ideal clients and grow your business. Contact us today and see what the power podcasting can do for your business. Could on the contact us link on our website at top advisor, marketing dot com and set up a call to learn more follow us on Lincoln Facebook for more updates information. This was brought to you by iris dot XYZ, a platform, helping financial professionals become better in business and life through new media and new voices, visit them and learn more at iris dot XYZ.
887: Financial Planning (Part 1): Time and Planning by Grumpus Maximus on Financial Independence Plans
"This is optimal finance daily episode eighty-seven Financial Planning Part One time and planning by G- rumpus maximus of Grumpy Maximus Dot Com and I'm Dan. I'm your host here on optimal finance daily and I am here every single weekday bringing you some of the best personal finance blogs on the planet in audio form and today. I've got a brand new author and website for you. The site is G- RUMPUS MAXIMUS DOT COM. He uses a pen name to separate his personal and professional lives and he has a bunch of helpful articles on his sites. You can check it out at grumpy Maximus Dot Com and with that let's hear our first post from him. As we start optimizing your life financial planning part one time and planning by grumpiness maximus of grumpy maximus dot com quote in preparing for battle. I have always found that plans are useless but planning is indispensable cool Dwight D Eisenhower bottom line up front bluff. I received comments in response to my last post from people who were receptive to the idea of financial independence F I save but for one factor actor the amount of time it would take to figure out how to achieve that goal I get it life has a knack of interrupting attempts to plan long-term from babies to hobbies to the day to day grind of work. There's just not enough time in one day one week or. For one month to sit down study the problem and conduct the planning that F. I. requires no doubt F. I. Takes Time. I used a three month temporary duty T._D._y.. Assignment to develop my plan since I was separated from my family I decided to put my time to good use however you may not be so lucky as to get three months of T._D._y.. From life other responsibilities to conduct F. I. Planning if lack of time is your biggest obstacle to planning for F- I I'm including an outline to follow in an attempt to save gave you some time depending. On how well you track your finances using the outline. We'll probably cut your required planning time in half speaking of the need to track your finances. If you have not already done so. Please read my post on the need to track your finances before we're going any further with this one some questions you may have. What method do you use? I use the grow method G._R.. O. W. or as I like to call it the grow to w method grow to w stands for goal all reality obstacles options and way ahead. It's a method for goal setting and problem solving that life coaches used to help their clients. I found the grow to w model particularly well suited for F. I. Planning so will it be a one hundred percent fit for me. You know everyone has different financial circumstances that might dictate a need for either a simpler or more detailed planning method Herald pollock recently made the Washington Post with his four by six note card which is pictured in this post filled with what what he claimed was all the financial advice person might ever need he wrote nine pieces of advice or steps to take an all but one of them appears to be perfectly valid advice based on the most current research in the personal finance industry another website. I recently discovered E._S._i.. Zayn money dot com has boiled everything down to three steps. Earn Save and Invest Easy E._S._I.. Something that simple may be more suitable to the particularly money savvy or frugal the rest of US myself included are probably better off off with a few more steps and details are planning method. Is it guaranteed to work. nope I offer no guarantees when it comes to something as nebulous as planning for the future however I would refer you to the quote by Dwight Eisenhower at the start of this post referencing using the value of planning versus the plant itself even if this method does not produce a workable plan. I would argue that you would be in a much better place having conducted F. I. Planning Than had you not. Shouldn't I hire someone to do this for me. Maybe but only after do you consider the following points. There is an entire industry out there devoted to financial planning that would have you believe it requires special Voodoo magic skills to do this all while they tried to sell you their products and services in order to solve your financial issues for a slick like one to eight percent commission in fact beyond your time it does not require anything more than an ability to read comprehend and some basic math skills. Can you add and subtract good you qualify certainly not all financial planners are out there to fleece you especially the ones who operate by the fiduciary standard however all of them cost money and even those who operate by the fiduciary standard face conflicts of interest with the various compensation methods that serve as industry standards furthermore there is a large and growing body of. Evidence demonstrating the irrecoverable negative effect that active management fees 'cause a portfolio needs some more convincing than just the ramblings of some guy who decided to start a blog good it pays to be skeptical. When it comes to your money I could be wearing tinfoil hat for all you know I would suggest you find a copy of neat silvers book the signal and the noise? He has an entire chapter devoted to the issue written in much more elegant pros than yours truly can manage. That chapter was the straw that broke the proverbial camel's back for me. Don't trust some author. You've never you heard of Nice that was a test and passed again. How about the S._e._C. The Securities and Exchange Commission then they produced a short pamphlet with pictures and words demonstrating the effect of fees over time? Maybe I was wrong about the need for math skills putting my snarky nece aside. If you feel like this is something that you cannot do by yourself I would recommend a fee only advisor think of it as pay-as-you-go for their advice they tend to have the least conflict of interest but they could still prove expensive depending on the type of services you want and honestly I do not know how expensive since I never used a fee only advisor although I wished I had rather than paying a full fee adviser for several years check out the website Napa dot org that's N.. A. P. F. A. Dot Org for the details details of a fee only advisor in your area also go into the interview. Yes you should interview your adviser like you would Anani or employees armed with questions with all that said it remains my humble opinion that you can do this yourself. I did and I am a liberal arts major after all besides who do you think is going to look after your money better than you. You just listened to the post titled Financial Planning Part One time and planning by Rumpus maximus.
#249: Information Fiduciaries: The Privacy Awakens
885: Front-Loading AND The Benefits of Keeping Your Finances Separate by The Mad Fientist on Tax Optimization
"This is optimal finance daily episode eight eighty five frontloading and the benefits of keeping your finances separate both by the mad scientist of mad scientist Dot Com and I'm Dan. I'm your host here on the show very happy Friday to you. Hope you've had a great week weeks so far this is where I read to you from some of the best personal finance blogs on the planet and thank you to our friends at helper and financial. If you're trying to save for retirement or your Kid's college funds it helps to be organized with your finances let Helper and financial coordinate award innate your financial life helper and financial is a fiduciary fee only independent advisor that offers a combination of online tools and personal connection to help clients systematically achieved their goals find out how close you are to achieving your financial goals at helper and financial dot com slash O. F. D. that's H._A.. L. P. E. R. N.. Financial Dot com slash lefty and I've got two posts for you today both of them from the mad scientist so let's get right to it and continue optimizing using your life <unk> frontloading by the mad scientist of mad scientist DOT COM. I wonder what my H._R.. Department thinks of me not only am I probably one of the youngest August employees maxing out every tax advantage to count available. I recently elected to divert nearly my entire paycheck or these accounts since I'll be quitting my job sometime this year I wanna make sure I take advantage of my contribution allowances. Well I still can so. I'm contributing thing as much as possible for the first part of the year. This move got me thinking about whether frontloading your tax advantaged accounts is a good thing to do every year. There are a few reasons. This is likely a good idea stocks go up the S&P five hundred has risen over nine point five percent annually on average since nineteen twenty eight while it hasn't been a steady march higher. The overwhelming trend is upwards so it's reasonable to assume that investing earlier in the year is better than investing later since you're more likely to capture a bigger piece of. That upward movement this is one of the main reasons dollar cost averaging is considered a sub optimal strategy for investing lump sums postponed taxes another benefit of frontloading. Your retirement accounts is that you defer your taxes until later in a year. If the majority of your pretax paycheck goes to tax advantage to counts. There's very little income to tax so you don't have to give the government as much of your money. During the first part of the year contributing to retirement accounts doesn't affect your FICO taxes though so we'll still have to pay the full amount for social security and Medicare each month you'll end up paying the same in taxes by the end of the year but the money you save on taxes early in the year can be invested in your portfolio and can grow for you rather than for the government tax free growth frontloading also shields more of your investment earnings from taxes since you'll get more of your money into tax protected accounts sooner. Leave your job. If you lose your job or decide to quit during the year and you haven't frontloaded you may not be able to Max out your contributions for that year as I've shown previously maxing out your retirement accounts can help you retire years earlier so frontloading helps ensure that you take full advantage of those accounts every year final savings boost. If you're like me and are preparing your last year of full-time employment it may be possible to eliminate all of your federal income taxes during your final year. If you calculate how many months it would take to Max out your retirement accounts plus your standard deduction and then only work work that many months during your final year you could avoid federal income tax altogether employer match one caveat. You should talk to your H._R.. Department before frontloading any accounts that receive an employer match some employers only match a certain in percentage when the employees also contributes the same amount so it's possible frontloading would stop you from obtaining an employer match during the final months of the year which would be bad. I luckily received the same employer contribution whether I personally contribute or not so I don't need to worry about this but you should check before changing your monthly contributions. If you do need to contribute every month to receive the match you could always front-load the bulk of your contributions but leave enough of your allowance to contribute the match percentage for the rest of the year. You'll probably want to also leave a bit of room to account for any raises you may get during the year conclusion the benefits of frontloading compelling so I plan to front-load my retirement accounts from now on Sir and I have another post in just a sec but I thank you again to our friends at halpern financial. If you're like me you could probably be more organized with your finances. Maybe you're saving for retirement or for your kids college funds you want to find and an advisor whose independent fiduciary and fee only because fee based usually means that there's a commission involved helper and financial is all of these which means you can trust your best interest comes first with institutional access helper and financial nanteuil clients benefit from bulk pricing on investments not only that but help earned financial has no association with any bank broker or insurance company which gives them the freedom to select from any investment available to make the right choice for you find out how clues you are to achieving your financial goals at helper and financial dot com slash O. F. D. that's H._a.. L. P. E. R. N.. Financial Dot com slash Oh F._d.. The benefits fits of keeping your finances separate by the mad scientist of the mad scientist DOT COM. I've been in Scotland recently marrying my girlfriend of nearly ten years. We've been there for the last few weeks spending time with her family. She's Scottish as as well as visiting our friends and doing a lot of last minute wedding planning once my family and friends touchdown in the U._k.. For the wedding things got even crazier so I've pretty much been offline since posting my interview with Mr Money Mustache because this is my first post after getting married I I figured I should make it about my wife. Isn't everything about her now. In my Mr Money Mustache interview we learned that he and Mrs M. Both set out together to achieve financial independence and retire early hearing him describe their shared path to financial independence. It seemed like a great. Great situation since both husband and wife working to achieve the same goals and were willing to make the same sacrifices. Our situation is different. She loves her job. My wife isn't Afyon `test. She actually loves her job. And wouldn't you want to stop working even if she had millions of dollars in the bank since she has many decades of wage earning in front of her. It's hard to convince her to make some of the same sacrifices I'm making in my effort to achieve financial independence as quickly as possible doomed marriage no lucky for us we have had separate finances from the very beginning we met when I was studying abroad in Scotland in two thousand to being a typical American. I insisted on paying for everything for our first few dates. She led me pay a few times but then told me that usually people in Scotland split everything fifty fifty since I've never liked spending money and had no intention of trying to impress her by throwing cash around. I was happy to comply things soon became serious between us. I ended up moving back to Scotland after graduating. We bought a house together and all the While we continue to maintain our own separate finances joint account being homeowners and living together. We had many joint expenses that we needed to take care of so we decided to open a joint checking account every month we would each transfer for an equal amount into the joint account to cover our bills and then we were free to use whatever was left over in our personal accounts to do whatever we wanted this worked out great for us and continues to work well to this day happy coexistence since we are both contributing equally to the essentials. It doesn't matter what we each like to do with what's left over she can buy or save as much as she wants and I can save as much towards early retirement as I want and it doesn't cause any fights or disagreements love and marriage and if I while it is probably better to have both people in a marriage on the same path to F I if one partner is not up for it. It's not the end of the world. If you're willing to keep some of your finances separate one person can work to achieve financial independence while the other her can pursue his or her own goals. What works for you? How about you and your loved one? Are you both on the same path to F I or you in a one fantasy family like I am. Do You keep your finances separate or have you found an alternative way to make it work.
MarketCounsel Summit: Innovate, Disrupt, and Win with Eric Clarke
"Welcome to the permission to succeed podcast. The purpose of our podcast is to inspire you with stories and wisdom. Learn for people who are out there, killing it people who at some point in their life themselves permission to succeed now out of the show with your hosts Matt Helen, and Doug hike, Annan. Hello and welcome. We are live from the Market Council summit meeting, and beautiful Vegas at the four seasons hotel. Our next guest is, Eric Clark. The founder NC Yeovil Ryan advisor services, the industry's premier portfolio counting platform for visors now, the permission to succeed podcast is about learning from and being inspired from the people out there who are just killing him. And because it some point they gave themselves permission to succeed much like our guest Erik. So Eric, you have achieved something. That a lot of people have stepped up to the plate for man, right? They have technology solutions. But the biggest problem that, that I wanna know how you've overcome his advisors implementation of technology. They're like technophobes. How have you been able to bring them into the fold in really? Use what you've created. Absolutely will thank you to not or to be on the podcasts of afternoon and to spend some time with, you know, when we look at helping our advisors implement technology. You know, we really got our start as the operations in IT group, for registered investment advisor. And as we were out looking for technology to better support our fiduciary advisory business. We couldn't find what we needed, and we had tried series of off the shelf solutions that didn't, you know, didn't meet the Mark as far as what we were looking for. And because we had that experience and because we were not a technology business. Selling into the advisory community. We were in adviser I and we knew exactly what technology. We needed to support our business really presented a huge opportunity for us because the business plan came to us, so to speak, when we were creating the technology, the Orion technology. We really needed it, and because of that need, you know, really formed the, the start of our business. And we did know one thing, right off the bat, and that is that we needed to have other advisory firms participating and utilizing that technology for us to remain relevant over time. That's the nearly twenty years ago that we started our business and today, we support just over eighteen hundred individual firms tens of thousands of advisors that use our technology and. We maintain and support just over seven hundred fifty billion dollars of, of assets on the technology platform today. Well, let's talk about the platform itself because it has grown exponentially. Since what you have built what you built at the beginning, would you mind just giving us a little brief glimpse of the amazing created? Absolutely. So we do three main things for the advisory firms that we support, we do reporting we do billing, and we do trading and under the reporting category, we do some really innovative things you know, reports of evolved over time certainly were, not just focused on, you know, creating printed and mailed reports anymore today, we have interactive, you know, onscreen presentation capabilities, we support client portals mobile apps. The ability to text information to clients those types of things, so underneath the reporting category where we have a lot of really fun. And, and intr-. Interesting ways that we can help. Our advisers be innovative beyond that when it comes time to billing, that's the technology that we have at a Ryan, that is near and dear to our advisers, heart, because that's how they ultimately get paid. And we support you know, lots of different ways for advisors to work with clients. Whether that on a assets under management basis, a flat fee basis, or even the ability to support financial planning fees as they're working with new relationships or prospects and beyond the Bill in the third main component of our technologies the trading, and we are really focused on creating ways for our advisers to create scale with their businesses and one of the ways that we do that is allow our advisors to assign model portfolios to a whole series of underlying client accounts. They can assign those not only at the account level, but also at the household level. To create some tax efficiency, which is a really exciting thing for advisors to talk to their clients about these days is adding tax to their portfolios. So there's the three main things that we support with technology. And there's a lot of technology out there that advisors the that we don't support natively from our system. And so we do have a web API layer that efficiency integrates. Our technology with the other third party technologies that are advisers use, like financial planning systems CRM systems risk management systems. Those types of things now. Everything is moving so quickly technology. We were joking this morning on the way. Here, it was watching a, a Netflix special, just algorithms alone, which is like a two and a half hour, Netflix special. How do you keep up? I mean, how do you stay so relevant? Because I think that's one of the biggest strengths for Orion. You're absolutely correct. The rate of change in the world around us is moving at an increasing rate, certainly the change that we see in our lives day today is much more rapid than say it was two or three years ago. And if we look to three years ahead into the future, we would definitely see or intimidate that the rate of change at that point is going to be moving out of faster clip than it is today. So an order for us to be successful in the technology business we have to constantly disrupt our own business. So we have to do. Do things that are constantly challenged, challenging the way that we think about our business the way that we think about providing services to our advisers and beyond that the way that our advisors provide services to their clients. And so, for us to be successful into the future, we are going to have to disrupt our current business model, and continue to disrupt that model and think of very innovative ways that we can help our advisers win. Eric success personal success doesn't happen overnight. It's through a series of experiences through people along the way, can you share with us a little bit about growing up, and what were your influences? Absolutely. So I grew up in a household where my father and mother encouraged us to work. I was one of four boys and I have one sister. But if you get imagine a household with four, boys. Your, your parents are going to be busy having you work in. We were encouraged to start our own businesses, MB entrepreneurial, so. I used to mow yards, you know, at a very basic level kind of teaches you the importance of, you know, good customer service collections invoices, those very simple business things, and I also learned that I didn't like mowing yards. And so my brother Scott and I decided that we were both competitive swimmers. And we decided that we would start teaching swimming lessons in our backyard, and we actually did that for a period of eight years, all through high school college and a little bit into grad school, as well, because we got that business built up to the point where we're teaching over five hundred kids summer, and that business really gave us both really entrepreneurial. Beginning to deciding, hey, you know what I'd like to start and run an operating my own business. One day now as I finished up graduate school. My father had a financial planning and investment advisory business, and it just made sense for me to go to work in our family business, and ultimately, while I was there came up with the business plan to start the, the Orion technology business and had the support of my father and his partners at the time to start that business, and we spun ourselves out of the or a deform, the company that today's a Ryan in December of nineteen ninety nine so was there a point through all this? And this podcast is called permission to succeed where you came to a point where you're like, I don't know and you look deep inside. He said I can do all this. I think that the best way. To describe that feeling for me was that I didn't have a plan b it was make this business success or be in jeopardy of alternately, not making a house payment making a car payment. I didn't have the luxury of saying, well, if this business doesn't work out. I'm going to go do something else. This was that for me. I mean, I had an accounting degree in graduate degree in business. But ultimately, I felt like this was a plan a and plan, B all at the same time and, and, and it was incredibly important me on a personal basis that this business be successful. And I think that as you look at a lot of entrepreneurial, entrepreneurial success stories out there you realize that they were successful because plan B didn't look all that attractive. And as a result of that, you know, you make it work, and you figure out how you're going to, to make this business success. And that's fortunately, what we're able to, to do over the past twenty years at Orion. Okay. I want to we're going to rewind the time line here, because they're couple of things that you just said, are utterly fascinating. Pains me that your parents, try to foster that entrepreneurial, so the they gave you permission. How did they do that? I mean, did they say air go make some money? I mean help us understand because we don't hear that often on the podcast. Right. It's usually somebody has an epiphany. They fell down, and they're like, I'm going to dust myself off, and I'm kick this, but help us with that way. Absolutely. So my father was an entrepreneur entrepreneurial, he had that entrepreneurs mindset you know, he left of a brokerage firm in nineteen seventy three to go out on his own with an independent broker dealer. And at that time, there weren't too many breakaway brokers, as, as we referred to them today in this business, and, you know, he really went out with his partner, you know, his branch manager at Dean, Witter when they were bought out and they went out on their own and were selling mutual funds in the, the mid to late seventies, and decided to put a manage to count wrapper around those mutual funds. And so with his mindset, you know, we grew up in a household where being out on our own was not something that was out of the norm. In fact, I, I know that my father took a, a little bit of heat about his entrepreneurial desires, from his father in law, who had worked at the same company is very successfully for over forty year timeframe. So I do think that there was a mindset that, that was an okay thing to take a risk and not only take a risk. But you were expected to work really hard and make it work. How did they support you with that? Because with that risk. And since that was something that was just part of your dad. Right. And he instilled that on you and your brothers. When you did fall down, right? What sort of stuff did he pass on going back to my, my years, and my college years, Monique, even the summer that I did this in graduate school? When we were doing swimming lessons, and I know that is not what this podcast is about. But the entrepreneurial spark in the, the being given the, the freedom to, to experience both risk and failure. You know, most people don't put in swimming pool in their backyard to allow five hundred kids to come and participate in swimming lessons, not only that, but our parents paid for the chlorine wheat, we had to maintain the pool for them. But from eight to five every day that pool was in full use, and people were coming and going from our home. We drove our neighbors crazy. You know, our parents stuck for us with, with the neighbors as they would complain about the traffic from time to time. But those types of. Of support systems really allowed us to say to ourselves. Hey, we can start something we can make something here. And in fact, we can experience a greater reward by starting our own business as opposed to going to work somewhere else at the time. You know minimum wage was not a very attractive rate at, at that point, not that it is today, but his certainly wasn't then compared to what we could make by starting in running your own business. No, Matt to the way back machine and we're gonna come back to today and warming up and talking to you about a Ryan the first thing you said was you have a great team. And that's everybody needs to team. But what have you learned about yourself along the way? That's been key. You know, I've learned that I have a lot of ideas I, I love to be innovative. I have to be careful though, because not all of my ideas or good ideas, and I have to leverage the skill said and the diversity of my team to keep my ideas and check so that I don't go too far down a road that, that ultimately won't be successful. And when I say my team, I would also include our advisers that we have the opportunity to serve and to work for our advisers. I feel are some of the very best advisors in the country and they have shared invaluable ideas and feedback with us over the past twenty years to make our technology, what it is today. We would not be where we are today without the incredible. Feedback of those advisers and their teams in addition to my staffs ideas and feed. Bac. But all of those types of things have allowed us to keep our ideas in check. Well, one of the things that I really want to try to do with his podcast when Doug, and I talked about giving people permission. If you were able to give a young entrepreneur, that one piece of sage advice that, either you wish you had or you heard early on in your entrepreneurial career, what would that be? You know there are three things that I think are core to our Orion DNA, and they're certainly core to my DNA, and that is Enervate, disrupt and win. And I love to think that regardless of what business I am running that those three things, I would I would carry with me. I'm a huge believer in being innovative. It doesn't take a lot of brilliance to determine that you need to be innovative in the tech space. But our advisers need to be innovative, as well were all threatened by technology, different levels at different way. As Kamata ties in the value add and the specific value proposition that we have at any given point in time. So we always have to be innovative. None of us want to be, you know, tomorrow's blockbuster videos or the blackberry phone where we enjoy a lot of market, share and a fair degree of success. Ultimately gets a leapfrog by being innovative out innovated by the competition, and to be innovative, you have to be willing to constantly disrupt your business model. You have to constantly challenge the way that you do things to become a better and ultimately those two ingredients should lead you to fair degree of success and result in wins. And having a culture that fosters not only trying hard and putting a lot of effort in but the end result of winning is really a lot of fun to be a part of and something that the. You know that we certainly strive for a Ryan. So we, we try every single solitary time. We do this podcast to pull little nuggets. Right. Well, I don't know if you noticed I took a bunch of extra notes, because your nuggets were fantastic. So the first nugget, which I think we could do an entire podcast on this. So I'm just going to do this as a rhetorical question which is disrupt your own business. Isn't that scary? Right. I mean you have used that word repeatedly and I just before we wrap things up. That's terrifying. Man. I mean business people are like, I'm not gonna updates working what is terrifying to me is letting someone else, disrupt your business, so you essentially, you have two choices in this life. You can either be the one that disrupts your business and helps your business move forward or you can let someone else do it. I always think of the NFL dilemma as not being a dilemma, you need to be willing to identify the innovators dilemma. What's holding your business back a lot of times? We have artificial boundaries if I ever hear my staff, say, you know what if I was going to start over this is what I would do. And then I would ask them what's preventing us from doing that? You know, and really being able to play kinda the devil's advocate, if you will, and constantly challenging our way of thinking because when we have those ideas when we have those thoughts, I think we're onto something great. And there's a real. Opportunity. Forced capitalize on that. Eric, thank you so much for hanging out this day and talking about this stuff. They accuse well four Doug and Eric, this is Matt Halloran just to wrap things up. If you have not disrupted your own business, somebody else's going to disrupt it for you, in fact, Racine and financial services, left and right. That technologies are coming in. Robo advisors are coming in no fee, platforms are coming. There's a lot of different things that are coming into disrupt. And if you don't get in front of that, unfortunately, you're going to be left behind number two. You have to be innovative. We have this inherent fear and financial services to try something unique and different, whether we have the excuse of compliance or whatever terrible excuse that you want to use. You have to really get past that. But the favorite thing that, that I think Eric said today, that really just makes me super happy is celebrating the win very few of you stop and say, I won because this is not a marathon, this is. Series of sprints? And if you always see where that finish line is, and if you're always going to celebrate each individual win one, you're going to be more motivated to your team's gonna be happier and three. You're gonna run a better business. So four Eric and four Doug, and everybody here with performance to secure permission to succeed. This is Matt Hallard. And we'll see on the other side of the Mike very soon. This was brought to you by iris dot XYZ. A platform helping financial professionals become better in business, and life through new media and new voices, visit them. And learn more at iris dot XYZ.