Wealth from Wisdom

Setting the Record Straight on 7 Toxic Investing Myths

June 10, 2017
Wealth from Wisdom
Setting the Record Straight on 7 Toxic Investing Myths
Chapters
Wealth from Wisdom
Setting the Record Straight on 7 Toxic Investing Myths
Jun 10, 2017
Carson Wealth
Show Notes Transcript

People adopt certain beliefs, or make assumptions about investing for retirement. Join Ron and guest Mark Schlipman to set the record straight on 7 toxic investing myths you see and hear in your everyday client meetings.

Speaker 1:
0:00
Okay, and here's the legal Mumbo jumbo. The opinions voiced and wealth and wisdom with Rod Carson or for general information only and are not intended to provide specific advice or recommendations for any individual to determine what is appropriate for you. Consult a qualified professional. All indices are unmanaged. I may not be invested into directly. Investing involves risk including possible loss of principle. No strategy is your success or protects from loss. Past performance is no guarantee of future results. Advisory Services offered through Cwm LLC, an SCC registered investment advisor.
Speaker 2:
0:30
The stock market hit another all time. Records as much as $10 billion in social security benefits go unclaimed every single year. Federal Reserve announced that they will raise interest rates by 250 the skyrocketing cost of healthcare and retirement could now run 350,000 planning for retirement today is a whole new ball game. It's loaded with challenges, obstacles, and trap doors that you can do this and we can be your guide. Welcome to wealth from wisdom with Barron's hall of Fame Advisor, Ron Carson. Straightforward and objective advice and how you could make your money go further in retirement. And now here's your host, Ron Carson. Hi, I'm Ron Carson,
Speaker 3:
1:08
my cohost Paul West. Welcome to wealth from wisdom. Right now you're probably in one of two camps. One, you don't have a financial advisor because you don't know who to turn to or who to trust. This is a common problem I hear about all the time or two, you have a financial advisor, but you're not 100% convinced they're creating any value for you or you're concerned that you're not getting the entire picture. You're just getting a piece of the overall puzzle. And you know, I know hiring a financial advisor is one of the most important decisions you're ever going to make. And if you're hanging onto the wrong advisor, if they're not creating value or just focused on a piece of the puzzle, it could cost you more ways than you're ever going to know. But if you have someone that's truly in your corner that's qualified and competent, they many times, most of the time in fact bring real tangible, measurable value in so many ways.
Speaker 3:
2:21
And this is a real sign of a great partnership with those that you're actually paying for help. You want to be able to see the return you're actually gonna you're gonna get and you're going to want to see the return on the investment in time. But you make into that relationship and it should have been really evolve around many different areas, reducing your risk, influencing your behavior. Paul, I've talked about that so often on, on the show here is your behavior, how you react to investments as critical. If you don't have confidence at a team, you're not going to be able to, to influence the behavior in a positive way. Reduce your taxes. I mean, this is a biggie. Optimize social security, generate income, and really protect you from skyrocketing healthcare costs. And there's a lot more and it's a real game changer. So how do you know if you have the right advisor?
Speaker 3:
3:11
On today's show we're going to talk about the warning signs that may say it's time for a change and we're actually going to cover a document we created and it's 10 questions to ask is something you can go to wealth and wisdom and get, but it's really a great document. Take your existing advisor or if you're interviewing advisers, this is a great roadmap to follow and I believe it will dramatically improve your chances of hiring someone that's going to create true, true value for you and your family. Paul, thoughts on this? Yeah, I think it's such a wonderful topic because when we're out there, they invest in public's, always asking two questions usually, Hey Paul and Ron, what are, what are you and all of your advisors returns? That's one question I ask and to what are your fees? But there's so many more things they need to be asking and we want to help.
Speaker 3:
4:01
I mean cause one of the things is you only know what you know. You don't know what you don't know and we want to help educate all of the consumers out through country. What are the real questions your adviser needs to answer for you and to think about. So in today's show is we talk about Iran. I think about all the conversations we have and I think about is throughout life we get coached through different things. You Love Aviation, you've had to learn things, you've had to learn what questions to ask. Yes, I help coach soccer for my kids. I've got to help educate them. What do they need to know? What do they need to ask? And so we want to help all of you today think through these important questions. You know, and Paul, I take for granted sometimes being in this profession for 35 years, we just accommodate cumulate a lot of things that we know and we don't even know how we know it.
Speaker 3:
4:46
We call that being an unconscious competent. And those are really the kind of professionals you want to surround yourself with. And it doesn't take me long if I start to get into somebody else's profession, what they take for granted and knowledge, I struggle sometimes understanding. So it's all about making the complex simple. That's really the key. Whoever you're working with, you have to understand, we're going to talk about this today in the 10 questions, but let me, let me share a story that happened recently that really illustrates just how big a deal this can be. So yesterday I was in Denver, Colorado and I was talking to a prospect and they were interviewing us to handle everything for them. And what attracted them to us was the fact that we had a team in house, CPAS, attorneys, investment advisors, CFPs to do the plan. So they really liked all of that and but they also didn't want to replace their entire team.
Speaker 3:
5:42
So it was appealing that we would work with their existing infrastructure that they already had in place. And as we're going through and I'm talking about, you know, what happened that you knew you needed to replace parts of your team and they said, well, we sold a business and we had a gain on this business and two days before the taxes were due, our tax advisor call us up and said, you owe two point $1 million and laughed about it. Wow. 2.1 2.1 he said, I knew I was going to owe something, but I was appalled that there was no conversation. There was no planning, there's nothing that could have been done, and by asking four or five questions to this person, if they would have been working with us, they would have paid maybe four or 500,000 and he's like, well, we'll just go back and amend the returns.
Speaker 3:
6:44
I got to know this stuff had to be done the year of in order to get the deduction. So right there immediately easily could cut through it and say, here is 1.6 1.7 ish million dollars that could have been saved. That goes a long way and establishing the team's value in the advice that they're giving. Yeah, so Ron, was that the person just lacked experience or was it they just had never handled a situation like that before cause that's pretty, he tough to handle as a client. I can only imagine, oh, let's go pop into the bank account and send over two point 1,000,002 days. Exactly. My question, Paul, I said, was this something that you just hired this tax advisor and all of a sudden they, they really weren't part of the process. They go, no, that's what upsets me the most is they've been our tax person all throughout.
Speaker 3:
7:35
They were involved in, they knew the sale is actually coming and this just really hit us hard. There was no thought, no proactive, just no planning, and he said, I'm bad. I should have liked, had some common sense, I guess that we should have been doing some stuff. I just assumed and I think you do have that right to assume that your team should be proactive, reaching out, anticipating things that can be done because there was maybe a little bit of responsibility there for the client to say, hey, should we be doing something? But you know, I go to my doctor, I'm not going to wait for, I don't want him to rely on me to tell him what he should be prescribing for me to do. Right. Cause I don't know what he knows. Yeah. There's no worse feeling around then a client experience, whether you're staying at a hotel or somewhere else where you've got to go do all the work.
Speaker 3:
8:23
I always think about my best travel experiences when I'm pleasantly surprised, whether it's an airline or a hotel or anywhere where they notify me ahead of time of something and that's a simple experience. But as you think about your financial life, the stakes are much higher. I mean now you're just talking. They're 2.1 million versus it could have been 500,000 that's a huge number for someone with a little bit of planning would help out so maybe that's tip number one for everyone is check out the experience of your advisor but not just them, their team and everybody that's of their team and have they worked with families like yours? I know we talk all the time, Ron, about putting together, everyone has their own unique personalized game plan that's important for them and their family but still members of the team have encountered the complexities of similar situations.
Speaker 3:
9:13
The numbers and your personal goals are may be different, but figuring out the experience level of everybody you're going to be working with. Just to illustrate that, I mean a good team would have already been well involved in the whole process even before a contract to sell the business even happened because is there other things that should be done before you trigger that event to reduce the taxes and you think about, I love Amazon by the way. I'm an Amazon prime. I've talked about it here on welfare. It wasn't before Junkie, but why? Why do I love it? Well, a lot of the same things I would expect from my professional team of advisors. What's Amazon do? They make the complex simple. They give me total fee transparency. We talk about that. And that's the number one question to ask. What's fee transparency? Can you imagine if you went on and you ordered something from Amazon and they just surprise you with a price, right?
Speaker 3:
10:09
Or better yet they said, you know, go ahead and buy it. Here's what we're going to charge you, but there's some other charges we're going to hit you with. If we can figure out a way to do it and you don't know about it, we hope you don't find it. That would destroy trust. Right? So they, they're great about fee transparency. What else are they great about? They do what they say they're going to do. They tell you exactly what kind of shipping option do you want, when are you going to receive it? So they make the complex simple. They feel trust. They do exactly what they said they're gonna do and on top of that, on top of that, Amazon makes my life easier. They proactively think about things that are coming up that I've ordered before so they get to know me and my preferences and then they even take the next step to say, do you want to put these on auto order?
Speaker 3:
10:55
I know for those of you listening, you go, Ron, what the heck's Amazon got to do with it? But everything complex, simple. They're leveraging the best technology to deliver the greatest client experience for the lowest cost. And guess what? They continue to evolve. Just Jeff Bezos recently wrote a piece. I thought it was awesome. He said, we continue to be a day one company. How do we continue to surprise, delight our clients and that's Carson grew up and our partners were a day one company. I'm very pleased with where we're at. I'm never going to be satisfied because we can continue to get better all the time. You want to know the fastest way to make your money work harder for you? You want to know the fastest way to get a bigger return on those investments.
Speaker 3:
11:42
Here it comes. It's silver bullet. It's lowering those fees and expenses. This could have a real impact starting a today, not tomorrow, but today. Right now you're losing a@hiddenfeesandexpensesjustusingtheamazon.com example we were talking about, so if you have stocks, bonds, mutual funds, Iras, four one k's retirement accounts, get our latest report. It's a true cost of investing, will cost you anything and you've got nothing to lose. Give us a call to get this complimentary report. (888) 419-8513 that's (888) 419-8513 (888) 419-8513 by lowering your investment fees and expenses, it will have an impact on your returns starting today, not tomorrow. (888) 419-8513 eight eight (841) 900-8513 coming up next, one of the biggest financial adviser red flags that you're going to need to watch for so you can make a better decision of who you work with or who you hire. I'm Ron Carson. You're listening to wealth and wisdom with my cohost Paul West.
Speaker 4:
12:51
He's a published author and has been featured in Forbes Investment News, the Wall Street Journal, CNBC, and more. Now back to welfare. Wisdom with Barron's hall of Fame Advisor Ron Carson. Welcome back. I am Ryan Carson was my cohost. It was
Speaker 3:
13:04
Paul Wesson. Thanks for joining us on wealth from wisdom. Check out the recent headlines from the SCC Merrill Lynch to pay 415 million for miss. Using customer cash and putting customer security's at risk investment news, Morgan Stanley find more than 10 million for violating customer protection rule. As it turns out, many of the biggest, biggest and trusted names in investing are often the ones who have had the biggest black eyes. So how do you know if you have the right advisor? And what are the warning signals to watch out for coming up next? In this segment, we're going to pull back the curtain on the nine biggest red flags and signal it's time for a change and how the right of eyes or can help you make much better decisions, not only get to retirement, be able to stay in retirement and joy, the Sandra living in which you've gone, you've grown accustomed to.
Speaker 3:
14:02
And Paul, we had a recent partner, it was great cause this, we put this 10 questions together and it is, you know, you're working with Carson group. You should bring the tank question, isn't it? Go through it with your advisor if you haven't done it, whoever your partner is. But they actually someone hurting on wealth from wisdom. They went to their adviser actually with Wells Fargo and the advisor not only couldn't answer the questions, I got offended by the questions. There's not a question on here by the way that anybody should be offended and it ups and it upset them. Um, and the clients left. Yeah. They're not asking personal information on it. No, no. It's like, really, you have a problem answering these basic questions about our relationship and did they said, okay, if you can't answer it, we're not going to work with you anymore.
Speaker 3:
14:47
And they left, they transferred their accounts out. That's crazy. Ron. So I mean, I think the number one question everybody needs to ask and more importantly understand, and your advisor has to be just as good educating you about your investments as they are actually managing them. Is it about fees? So fees is one of the most complicated issues, but it doesn't have to be if everybody straight forward in explaining the cost that you have. So first is ask your adviser, how do they actually get paid for offering advice? Are they fee based or are they paid commissions? And if they are, explain how it works. Also, do they get paid money from the products they recommend? So if they're in mutual funds or other investments, do they get any additional compensation? So then if you hear that, Ron, what's that red flag? Hm. If they're going to get paid more for offering something, are they acting in your best interest versus yours?
Speaker 3:
15:40
Yes. That's the biggie right there. And here's some that aren't so obvious. It's are you receiving order flow payments? I mean I'm, the average client doesn't even know that someone could direct trades somewhere and be getting a credit for research and other things. Well, even though the is not writing a check, the client doesn't see it. That's an additional cost. Someone's getting some additional compensation that absolutely should be disclosed and just because it's legal, just because it's legal doesn't make it right just to, I want to say that again, just because it's legal doesn't make it right just because it's disclosed in some document somewhere. It doesn't make it right. So go in demand these questions of people can't answer it with confidence and clarity. Then start, I'm not saying you should change your relationship. It start digging a little further. Just like last week we talked about the lady in the Wall Street Journal that couldn't get a straight answer on fees.
Speaker 3:
16:38
She actually had four different conversations. It was more confused than ever. Boy, you know, that's, to me, if I'm getting one question that's not quite clear, but if I get a bunch of them, I'm getting the run around. That's not a kind of relationship I'm going to have confidence in. You know, going back to if, imagine if Amazon did that. Imagine if your family physician did that. You would have no confidence in their recommendations. Yeah. So I think about three main areas to ask about fees. So one, how are you getting paid to, are you making anything additional on what you're recommending? And three, what additional costs do I have? Do you have trading costs? Do I have to pay for trades or is there something that goes to that are or anything else? And if they can't answer those right away, Ron, or if they start wishy washy or they start going into long explanations, I know what I feel.
Speaker 3:
17:22
They're hiding something from me. And if they can't answer that quickly and effectively you have an issue. And one of the biggest things I think about, I was actually just talking with a family from wealth, from wisdom Ron. And they're with a large wirehouse firm, a, and they said, Hey Paul, I'm paying the normal 1% and he said, but the good news is, is I'm doing pretty good with them, but I don't really think I have to pay anything else. So he sent us over a statement. We look at it, he said, I've got a bunch of low cost ETFs. I said, yeah, you do. But you also do, you realize all of your other investments in there are mutual funds. And we're looking at the mutual funds run. And these things were actually over 2% of costs inside of there. So while they think they were only paying 1%, they're actually playing a little bit over three.
Speaker 3:
18:11
Wow. But they didn't know that. But the perception is, I said, well, have you ever asked your advisor about this? They said, no. Has it ever been explained to you? And their answer of course, was no. So get those answers to those three questions. And if they can't tell you right away, that should tell you everything you need to know. Well, there's a lot of news. Let's next one. We're going to talk about just regulatory controls and what's the difference between a fiduciary and a broker? Just simply put, a fiduciary is required by law to put your interests ahead of their own. A broker is required only for suitability, so if it's suitable for you, then they can give you a prospectus and a mountain of information, of legal ease and have us disclose them there. They can do it. And I think most people used to really be confused about this.
Speaker 3:
18:53
They thought everybody was quote unquote, a fiduciary and they find it impossible to believe that there's such a difference in standard of care that has to be taken in the relationship. But now with the DOL rule, there's a rule going into it force June 9th and then even more rules going in January of 2018 that really have highlighted the difference between a fiduciary and a broker. And by the way, will be the first to say there's times when a brokerage, a brokerage trade or relationship is probably in the client's best interest because you don't want to pay an ongoing fee. But most of the time it's not the fiduciary. The pay as you go model is much preferred. And why not have the standard of care where by law they have to put your interests ahead of their own. Yeah. Q magic. Go into a physician and wondering if they were putting their interests ahead of yours.
Speaker 3:
19:42
We never would. We would go immediately find another physician to help out our personal life. So Ron, the other day, you know, you don't need a heart transplant, but I'm going to do it because I got a house payment coming up. Yeah. Could you imagine if that happened? So I was with a business owner the other day and he's asking me what I did and I explained what I do and how I help families across the country. And in one of the questions to me, he goes, Paul, I want to know if I'm on the right path for my retirement. I said, okay, well what are you doing? He said, well, I work with an insurance company and I just put money into an insurance policy every year. So is that what I should be doing? For my retirement plan. I said, well, that's all you're doing.
Speaker 3:
20:20
He said, yeah, that's it. He said that all I need to do is keep buying more insurance every year and that's going to be my retirement plan. And I said, do you know how your insurance person's getting paid on this? He said, I have no idea. I said, do you know if he's putting an investment account? And I said, no, no, no. I think it's just purely an insurance policy. I said, you need to ask, and I gave them questions to ask because at that point in time, there's no way this person's behaving. A fiduciary insurance, as we talk about here is absolutely part of an overall financial plan, but it's not the sole element of it, Ron. So that's something you have to look at. And we talked about this a little bit last week. Another red flag is if someone's pushing to me, I need your old 401k.
Speaker 3:
20:56
Now granted, there are times when a rollover makes sense, but there's many times it does not make sense. Tour all over the 401k. You have other options. You have more flexibility by leaving it there. And so it's not, not always, I mean this is, this is all going back to the history of the Carson grew up, you know, I started the firm in 1983. We always pushed, uh, to rollover back when I was a one man band and didn't have any resources and really didn't understand all the different optionality you had. You're really focused on, okay, what do I need, you know, to, to gain assets and manage, you know, manage my business. Um, so I was, you know what I would call an unconscious incompetent. Didn't know, but I didn't know that. I didn't know. So experiences. One of the other questions we're going to talk about some of this is what is the experience do you have?
Speaker 3:
21:48
You don't want your advisor to be a library. There's no way to stay on top of all the information, but a librarian now we have a deep resource and not just as anybody you're going to work with. Do they have a resource right there? Not that they have outside strategic relationship at internally because there's such a high quality of sharing of information that can be done proactively for the client. So experience is really important, but that red flag isn't, if they're really pushing hard for your 401k to be rolled into an IRA. Yeah, no, that's definitely a huge red flag. And Ron and I also think about, uh, just as you're telling people what's most important for them. Uh, I was talking with the family and they were asking me the other day and by the way, they found us via our Forbes ranking, which was nice of them, but it was, the conversation was, I'm nearing retirement, I have half of my money that I manage myself today and I've got half with an advisor.
Speaker 3:
22:41
And as we getting to know each other better and figuring out what was in their family's best interest, this individual said to me, he goes, for Paul, how much do you guys want to manage? And I always like, tell everyone what are you most comfortable with? And I call it delegating the dangerous, what do you cannot stand if you would ever potentially lose delegate that. But if you want to keep your hands on the steering wheel, and I know I give car analogies a lot over here. I love it. I've, I've used you're speeding all the time now am I talks. Yeah. So as I explained to him and I said, hey, if you want to manage 80% of it, if you want to manage 50% if you want to manage 20% but you have to let us know everything you're doing on the other part because it's part of your personalized game plan.
Speaker 3:
23:21
We've got to know how everything's working together. And Ronnie said, Paul, you're the first advisor I've talked to that's given me advice to let me choose what's best for me. And he built more trust and he said end ended the day. I'm actually going to give you more cause I trust you more now. You weren't trying to grab money. Well, Paul, that leads me to what we do across the country. All of our partners from wealth, from wisdom, we work with people that have modest means or they're very wealthy and it really doesn't matter how big they people have different preferences. We want to start to relationship based on the needs and what the client really wants out of that. But the one thing everybody has in common is they want to optimize social security benefits. If you think about it for a minute, over the past decade, everybody's contributed so much money to the social security trust fund.
Speaker 3:
24:05
A, we all want our money back. I know I do and you know, even if you haven't made a ton of money, you've probably contributed at least six figures of social security and optimizing that will go a long way to really giving you a better retirement. But claiming these benefits, as we have talked about is complicated. It's riddled with all kinds of trap doors and if you make a simple mistake, they're not forgiving and they used to give you all kinds of time to go back and fix it. Now you've got a very short period of a window. We've been out. Go back and help some clients actually do that. Uh, but we have something we can give you and it's a specialized report that show you how to claim your benefits. Also, are you eligible for additional benefits? And how do you reduce the amount of taxes you pay on these benefits? It won't cost you anything to get this report. Give us a call. (888) 419-8513 (888) 419-8513 call us (888) 419-8513 coming up next, more of these red flags that may signal it's time to find a new advisor. You're listening to wealth and wisdom with Ron Carson and Paul Weiss.
Speaker 4:
25:13
He's a published author and has been featured in Forbes Investment News, the Wall Street Journal.
Speaker 3:
25:18
See more now back to wealth from wisdom with Barron's holiday.
Speaker 4:
25:22
Same advisor, Ron Carson. Welcome back. I'm Ron Carson with my cohost Paul West side. So you're
Speaker 3:
25:28
listening to wealth from wisdom. You have a financial advisor and have you ever wondered, are they truly putting your interests ahead of their own? If you're hanging on to that wrong advisor and they're not truly creating value, or maybe they're just focused on one issue, it could cost you a lot more than you're ever going to know, but on the other hand, if you have a team that's truly in your corner that's qualified and competent, they will bring much value and very tangible, measurable ways. It's truly a game changer. And Paul, we're going to continue to talk about this. We fit fee transparency, finding the right team. We've talked about the regulatory fiduciary, we've talked about expense, proactive communication. This is one where our clients, our advisory council, by the way, it's not actually on our 10 questions, but that's when I would ask is do you have an advisory council?
Speaker 3:
26:25
We have four different advisory councils. We run at the Carson Group. We're continuously getting feedback from the people we serve to say, what can we do to make it better? And we get a lot of our communication, our proactive communication has calm from what our advisory counsel has recommended over the years. Yeah. Well, let me think about it, Ron, do you, and I think we know the direction we want the business to go and we've done a lot of get to make a lot of decisions. But the power of the simple things that our clients tell us on ways to improve their experience with the firm are priceless. So if your actual advisor isn't listening to their clients and making adjustments based on their clients' needs, that's something they're missing. So as we think about proactive communications are on, there's so many ways to communicate now with everyone and, but we're also all inundated with electronic communications.
Speaker 3:
27:15
Email floods, everybody's inboxes, text messages Galore. There's so many digital communication tools between apps now of whatsapp, snapchat, you can just go on and on and on. So your advisor's got to figure out the right way to communicate with you. And I think a lot of weird things happen. One is there's always weekly commentaries or things like that you're getting from advisers. Uh, there's a lot of that is can material coming from somewhere else that they're repurposing and it covers everything in a technical forum. There's, in my opinion, there's negative value to that because it's not personal to you and it's just a lot of information. Yeah. And we also think about many advisers, uh, when they contact you it's to give you updates and explain what's going on, what's happening. Uh, we take another approach though. So as you work with fee based advisors, those of us that are fiduciaries and are registered investment advisors, we take on discretion.
Speaker 3:
28:10
So you're allowing us to give advice and we don't have to contact you ahead of time cause you're putting the trust in us to do that. But Ron, we don't want to just go make a bunch of trades and not communicate that with everyone. We actually send out trade notification. So we explain to clients what we're doing. Like we bought apple or we sold apple or whatever we did for them, but it's not done in a six page gigantic report that has more charts and graphs. It's very simple and easy to consume. This came again from our advisory council years ago. They said, you know, we don't, we're not going to second guess, but boy, it'd be nice to know the rationale. What was the business case for the strategy and it's written in layman's terms. It's very simple to understand whether we're trimming a position, adding to a position, eliminating a position, and you only get the communication if you actually own that security.
Speaker 3:
28:57
So you're not just getting everything if you're getting something, it's specific to your overall game plan that you have in force at the Carson Group. Yup. And so other part of proactive communications, Ron is US pushing information out to people but also giving people the opportunity to pull information. And so that's really our next one, which is access to my information. So in the past, many people, or maybe your adviser is still, it lives in the past and says, we're going to have a quarterly meeting at your quarterly meeting. I'm going to give you all of your balances, or I'm going to give you all of your performance in today's world. You should be able to pull up your information digitally. At any point in time and if you can't or we're shit, if they send you like an excel spreadsheet of something, you're not up to speed at all.
Speaker 3:
29:45
While I was in Chicago a couple of weeks ago and meeting with an advisor that works with the large have is with UBS and he said, you have terrible technology. Instead of a client asked me, we put this one pager together, it takes one person a day to pull it together. Then if we're putting in outside stuff, it's through a spreadsheet and a lot of times it's inaccurate. He says, I'm sad to say, and I pulled up my iPad in in 20 seconds. I was able to produce an accurate, beautiful report. The same one our clients can run anytime they want to see it. So having continuous access to accurate information that you can rely on is critical. And it just really, that speaks to how heavily have they reinvested back into what they're doing for the benefits of their clients. I eat technology. Yeah, well, and it also, you know, they can't, they're not gaming the system because if they're bringing you in and giving you a report for a certain period of time, of course they're going to choose the best time period that makes them look good.
Speaker 3:
30:47
But imagine now you, you have complete open exposure. If you can come in and you can run any date range of your performance as a client. You know how that makes me feel run really good and comfortable. The reality is though, because you're sharing this all with me, I probably don't go look as much because I know I can go do it at any point in time, so it makes it easier. Let's talk a little bit about the next one. Personalized services is what is exactly are you going to be able to do for me? Is it using an advisor? If you're a one man band that's trying to do market research, this doing everything, how deep do you really think that person can go? So they have to have a variety of services, not necessarily to replace your team of professionals, but to work in harmony with your existing team of professionals.
Speaker 3:
31:33
A big red flag is if an advisor says, oh I customized portfolios for my clients, I can tell you our research group, that's all they do. And they spend, you know, 50 60 hours a week. That's all they do. And there's many of them. So if an advisor is trying to meet with clients, bring on new clients, manage portfolios, that's a massive red flag. Do you have a CPA? Do you have an attorney? Do you have a whole group that can provide these personalized services proactively? For me? Yeah. So a lot of families when they come and talk to an advisor, Ron and are asking these questions first, you want to make sure that your advisor can handle the complexities of your situation too. You're concerned about how are you going to invest my money and really for some people as much or as little as they want to know about that.
Speaker 3:
32:16
But the third thing people ask you is what additional services do you have? So that I'm with you. You can help streamline my life and make it easy. Most of us are so busy now that you want that central advisor that can help you. They may not manage every part of it, but they can pull in the tax planner as appropriate. That can pull in the individual financial planner. They can pull in the legal element of it. So if you're from can't do all of that or if they can't effectively communicate. It amazes me, Ron, when someone has an advisor and the advisor doesn't talk to the tax professional, I mean go back to your example from a couple of segments ago. Yes. The fact that the tax person wasn't talking to this individual is fascinating to me that they can't make that happen, so that's got to be there.
Speaker 3:
32:59
Another one is the investment philosophy. In simple terms, can they describe the process? Because if it's, if it's guessing that's not going to add value, but if they're repeatable process something that you can rely on so they can make adjustments, it's critical to success. And are they passive, are they active? Where do they fall on the spectrum? The Carson group, we're agnostic. We have both paths of passive and actress strategy cause it depends on what you're trying to accomplish and what market segment you're actually in. We'll drive which one of those philosophies, but mainly do they have a philosophy and do you believe it's a repeatable process so they can make adjustments to that process if it's not working or the market environment is actually changed. And if they tell you, Ron, oh, I'm going to know when to get out. If they don't say they have a process and a discipline process, that means they got to guess and they're going to have to guess right when to get out of the market.
Speaker 3:
33:51
If they think it's going down, they're gonna have to guess. Right. Again, when to get back in. And what we see happened is people tend to get paralyzed when they start making those decisions. Uh, because you may guess, right? Once you make a guess right. Twice. But to keep doing that, if you don't have a process, it's not going to work. I agree. We're gonna come back. We're going to talk about this on the risk and people promising to beat the market. That's probably one of the biggest red flags out there and you know, have you ever questioned your financial advisor or had a gut feeling that says, you know, he seems nice enough, but is he really bringing true value to the table and trust me on this? If you're hanging onto the wrong advisor and they're not creating value or you're just getting one piece of their overall puzzle, it's going to cost you I think a lot and it's also going to cost you a lot of ways.
Speaker 3:
34:36
You don't even realize. Going back to the conversation we just had Paul about the two point $1 million surprise tax bill. What we can do and you owe it to yourself and your family to get a second opinion. We have a five step master plan, will address all the key components to a comprehensive game plan and we won't charge you anything for this analysis. It's worth it just getting someone else's opinion on what you're doing. So call to schedule your initial analysis right now at eight eight (841) 900-8513 that's (888) 419-8513 call (888) 419-8513 coming up. Next we're going to continue to talk about these red flags and next one is someone promising they're going to beat the market or they downplay the risk that you may be taking in a current market environment. I'm Ron Carson. You're listening to wealth from wisdom with my cohost Paul West.
Speaker 4:
35:31
Is it possible you could pick fewer taxes in retirement and keep this money for yourself? You could learn right here and right now on wealth and wisdom with Barron's hall of Fame Advisor Ron Carson. Welcome back. I'm Ron Carson with my cohost Paul Westhead.
Speaker 3:
35:49
You're listening to wealth from wisdom. Do you have a financial advisor and have you wondered, have you ever wondered, is this as the right person for me? Are they truly adding value or they just focused on one thing or have you suspected maybe they don't have a team, not because they don't want to, they just can't afford it. You need to have someone, a team that's qualified and competent to really do and maximize all the wealth that you're trying to create or have already created. And you should be able to measure the value your team is bringing in a lot of different ways and having one is a true game changer. We're going to continue to go through, we have 10 questions to ask your financial advisor. You can go to our website, wealth from wisdom and download the infographic we actually have, but the big one, Paul, we're talking about is someone promising that they're going to beat the market.
Speaker 3:
36:40
That's a dangerous thing to do because you know, very few people beat the market and, and most people have no business even attempting to beat the market. I was in Denver, I had many meetings this weekend, Denver and one of our longterm clients. Um, we were, we were having a drink together and I said, how's everything going? He goes, you know, I love working with you guys. I love everything I one complaint and go, what's that says? Why didn't match the market last year? And I said, well, but you're a conservative investor. I know, but I still want to match the market. I go [inaudible] we've had this conversation before you matching the market means a lot of additional downside. And you said you have limited downside that you want to have with your portfolio. And he says, Oh, you're right. He says, sometimes I think I might be testing your on.
Speaker 3:
37:26
I go, yeah, I know. See if I'm consistent with my, with my answers. But you know, most people should attempt to beat the market because you're going to get sucked in, you're going to have more risk and you can turn a temporary loss into a permanent loss. And by the way, a lot of lot of financial advisors talk about how much money they can make you. I'd like to talk about how much we can lose you. Your risk always has been, always will be doing the wrong thing at the wrong time, locking in a bad result. And if you can accept the downside and you don't do stupid things, the upside will take care of itself. So let's focus on the opposite of beating the market. Let's focus on what the maximum downside is and then plan accordingly what you can have for what kind of return we think we can get from that approach him or I don't want to make a lot of life's decisions.
Speaker 3:
38:11
So if we're going to move into a new home or not, what do we usually do? We make a pros list and a cons list. It's no different in looking at your investments. The pro is your upside opportunity. The con is your downside opportunity and you have to look at both of those. And if you are dealing with an advisor, that's all they're going to talk about, their potential to beat the market, you're going to eventually play. Not a winning game because people may achieve that over short periods of time. But as we like to say, what, what does the market due to most people, it makes a fool of them because it does what most people don't think it's going to do. And I will tell you around there several times where we turn away, people who want to come work with, well from wisdom advisor across the country because they have unrealistic expectations.
Speaker 3:
38:57
They want market plus plus returns with conservative risk. And just as you're describing what the client out in Denver, that's not possible. And we have to keep educating people and reminding people for a period of time. It is, here's a risk with that. Let's just say you hire an adviser, they promise you can get, you know better than market returns. And you do. And there's a probably a time when you're going to, especially if you're taking more risk than the market, then you start to believe that that's possible and repeatable only till it doesn't work anymore. And that's the question is, is this something that over a full market cycle, you know, the, the, the peak as well as a trough? Can you actually do well? And the answer is probably not. If you're going into the relationship thinking that they're the next Warren Buffett. Yeah, no, I think your default Warren Buffet was Warren Buffet by the way.
Speaker 3:
39:46
Very true. Yeah. Yeah. So let's think about another one around the support and it is next. What's your ideal client? So who does that look like? You want to make sure that the person there, um, can handle similarly situated people. Everybody's unique and has their own personalized plan, but can they handle that? So the next one is a succession plan, Ron, and this one's huge and I know you've been very vocal in the press and the media about this and I think it's completely warranted for that conversation. But what is your succession plan? What happens if you're not here tomorrow? What happens? Uh, when, when are you going to retire? Who's going to take over? Because I look at, most people are going into retirement and so let's just call that mid sixties on average for people. And then we know life expectancies, his mid eighties, that's 20 years.
Speaker 3:
40:31
Most people want to only make one change and go to one advisor for the rest of their life. So what does that look like? Or am I going to have to keep changing again in three years? Because you're no longer going to be part of that firm. Well, it's succession. You're right. It's been a hot button because I've seen the devastation it's caused on the client's left behind when someone unexpectedly has a death, a disability, where they're unable to provide the services they provided in the past. This is all the importance of having a well rounded team, so I want you to ask your financial advisor, if you were to die tonight, is the firm you're leaving behind, the one that you would entrust to manage your family's wealth without you being there? I mean, that's a big question because that's powerful. That's powerful. It's a gut check.
Speaker 3:
41:15
It's like, is it really a great firm without you being here? Because if you're not here, I don't want to have total chaos in my life. 7% of financial advisers have a succession plan. That means 93% do not have a succession plan and push him on it. Okay, Ron, if you're die day, what's, what's tomorrow look like? Who do I work with? The other question is, do other stakeholders? If it is a team, do they have equity in staying? Because we're seeing right now there's a firm that we work with in Philadelphia and some of the advisors are leaving and taking clients. We've seen it at the death or disability of a client where advisors will run and it's chaos cause everybody's grabbing for clients to go move to another firm because another firm would actually pay money. That's the only thing you got to watch for.
Speaker 3:
42:06
If your advisors moving firms are they getting paid? You know, this succession creates a lot of those kind of movements that happen and there's no benefit being created for the client. And so ask your adviser, uh, it's, it's just such a simple question and just to repeat wrong, cause I think it's one of the most powerful things you can say is, does your own personal plan stay? Say That if you're gone tomorrow, does your spouse and your family, is there wealth going to stay and be managed here? And if it's not, and if they can't answer that, that's going again, tell you everything you need to know. Well, and I've done that. Yeah. I've been very vocal about that. I mean, in the event of mine, genie and I died today, Carson wolf and a value proposition. I have total confidence that we won't miss a beat, and I've even recorded a death message.
Speaker 3:
42:52
So you clients out there listening, I've got a video that you'll get to see. You know, I'll be flying tonight to Zion national park if I don't survive, fall off a mountain. I have clients that know I'm going to sum it all the fourteeners in the u s and they worry about it, but you know, I know you'll miss me, but you'll be in just as capable hands with me not being here. As with me being here, some of us would argue more people buy it. I would probably, I would agree. I would agree with. I would absolutely agree with that. You know, on this show we're talking about red flags. You really need to pay attention to when selecting a financial advisor. Go to wealth from wisdom. We have an infographic. 10 questions to ask, but you need to take action and you need, you need to choose to have a powerful team that's going to put your interests ahead of their own, and this is really critical today more than ever with all the information, all the volatility, all the possible outcomes you need to be informed to know you got a proactive team.
Speaker 3:
43:51
We can prove to you that we have something that will add a lot of value. It's our five step retirement master plan. This plan tackles all the important components of a comprehensive retirement game plan, social security, taxes, generating income, IRA's, 401ks, risk management, healthcare, longevity, diversification, and so much more. It's complimentary. It won't cost you a dime. Give us a call. Call (888) 419-8513 that's eight eight eight 41985138884 nine 85 13 well, you've been listening to wealth from wisdom. I'm Ron Carson with my cohost Paul West and we'll see you next.
Speaker 2:
44:32
[inaudible]
Speaker 5:
44:32
sweet
Speaker 2:
44:46
risk, social security, income taxes, estate planning. Every week we talk about how to make your money go further in retirement right here on wealth from wisdom with Barron's hall of Fame Advisor, Ron Carson.
Speaker 1:
45:00
Okay. And here's the legal Mumbo jumbo. You opinions voiced and Wellframe wisdom with Rod Carson or for general information only, and are not intended to provide specific advice or recommendations for any individual to determine what is appropriate for you. Consult a qualified professional. All indices are unmanaged, I mean not be invested into directly investing involves risk, including possible loss of principle. No strategy assures success or protects from loss. Past performance is no guarantee of future results. Advisory Services offered through Cwm LLC, an SEC registered investment advisor.