The Financial Detox for Financial Advisers

Jason and Alex are almost always speaking to investors, but in this show they shift gears and focus on talking to the financial advisers out there. There are many types of advisers, and advisors, out there. Independent financial advisers, financial consultants at large wire house firms and low-cost brokerage houses, insurance professionals, and the list goes on and on. There are so many types of professionals that work in these various forms, both individually and as teams. The quest to serve clients and provide clients the best possible financial advice unites all of them. Jason shares his story of spending six years at Merrill Lynch, then another six years at Smith Barney, now Morgan Stanley. He recalls the silo environment, the lack of transparency in how the firm received revenue from both clients and the industry, and how that created massive conflicts of interest thus resulting in biased investment experiences for investors. There appeared to be no uniformity on what an investor experience was supposed to look like so advisers were left to pick from a menu of options that seemed endless and riddled with conflicts of interest. There were dozens of advisers in one office, hardly any of which shared the same investment philosophy. This must have been incredibly confusing for the investor. He talks about how he didn’t even know what a fiduciary was at that time and how little education there was about the topic. Alex shares his story of starting out in the insurance industry as his first career out of college. He talks about how his experience during this most recent market drop has been so much different than the prior one in 2009 when his only focus was providing fixed insurance solutions for clients. Owners of fixed index annuities were not nearly as panicked as investors who owned stock and bond portfolios. This short-term reprieve from volatility was replaced with much lower expectations on long term growth. It was only after meeting Jason in 2012 that his eyes were opened to the world of what a full-time fiduciary wealth management client experience was, and how powerful it could be when combined with a comprehensive financial planning process. These stories are shared to personalize their journeys to listeners and remind them that we all have origin stories. Our stories help to guide us in making decisions in how we serve clients. Listeners who are not financial advisers can glean perspective from learning how these foundations drive what financial advisers do for their clients. All advice is truly not created equal.

In this show you will learn about:

- The financial adviser “origin stories” of Jason and Alex

- The difference between advisers who work at large wire house firms and the independent adviser

- How working as a full-time fiduciary can truly benefit both the client and the adviser, creating a long term sustainable business model

- How working on a team can bring and adviser peace of mind when confronting extreme market volatility

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Transcript

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thing is financial detox helping you retire with confidence featuring Jason Labor, a certified financial planner and founder of I D. A. Well, intelligence driven advisers. For over 20 years, Jason has shown people had to steer clear of toxic advice, achieve financial peace of mind and manage their wealth for maximum impact. Join Jason and co host Alex Clinton Smith as they simplify the complex share industry secrets and provide proven strategies designed to take you from financial insecurity to financial independence. This is financial detox. Welcome to

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financial detox. This is Jason labor. Um, and I am your host in studio

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with

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Best Cohoes ever out spring. It's Alex. How we doing? But I'm doing fantastic. I served again yesterday evening. Beautiful. No. Alone. Yeah, The sunset was incredible. That there is my two of my kids to my kids. My brother hit for you, man. Yeah. How about that? He, uh Did you see the moon rise last night? Yeah. Giant. Full noon, Right. Harvest Moon, That was That was really special. It was unbelievable. Um, good stuff. You know, I think my text this morning and my message started, he was said it all right. Summer here. Cove is dying. Life is good, and financial detox is here. Also help you make better investment decisions to help you purge yourself of the toxic financial thought, the financial processes, the things that is just nasty and messy and help you make better financial decisions and improve your financial life. But today we have a very special show. We're shifting gears, right, Alex? We're gonna totally turn and shift gears here. I think it's still going to be a great show for our listeners. Who are the target audiences is individuals and business owners and pretty retirees, people, executives about to retire. That's our target. Today we're shifting it. Why don't you give a little intro? But what we're gonna do here, um, Alex and we'll let her rip? Yeah, thanks. Okay. Thank you. I think we always talk to investors. We always talk to individuals. That's our audience, right? A different audience, that ideas for today. And also we've been talking about Covad for two months. So it's time for something different, right? Not that fun down. But we want to talk to advisers today. Our audiences to advisors, financial advisers, you know, insurance professionals, any kind of Financial advisor wealth manager out there. That's the audience were speaking to today. And the reason is because during times like these, it's it's really interesting to think about what's going on in their minds in their world and their businesses and their teams. I mean, that's what we're talking about right now, right? We just talked about this morning before the before the show. Um, so we want to talk about the differences, right? And from what? We're gonna give some stories from our own personal experiences before, before idea was formed, um, and maybe and maybe shed some light on a way of doing it better. Yeah. I love it, Alison. And let's let's start by. Given the advisers out, there are phone number. If you're an adviser and you maybe don't like where you work or you don't like your life as an adviser or your firm that you work for, then we would love to help you, right? I mean, are we are not overly concerned about competition. I think there's plenty of business to go around. There is, ah, finite number of advisors who are truly focused on what is doing best for clients and who work intelligently. So we're really not worried about competition. And we would like to help advisors become better, because in our quest to serve people and investors in general, if we can help an adviser become a better adviser, then I think we're helping people in turn now. We may not be the direct adviser and getting compensation for that, but that's OK because we have enough clients and we certainly want to grow. But we want help advisors to. So give us a call at 877707 88 89 I think 77707 88 89 you could shoot an email right to Jason. Financial detox dot com on Alex and I will get that message and we'll reply and and take care of you and have a chat. So you know, Alex, I think we're in an interesting position here to be able to talk about this because and we've been advisers for a long time. So not only are we in a good position to talk about how to help clients, but I think worry are in a great position to talk about how to help advisors. I spent my 1st 6 years of my career at Merrill Lynch where was a great place to train in a great place to get acclimated to the business and learned a lot of things. It was different then than it is today, I think. And ah, following that. I subsequently spent six years at Smith Barney where, um it was kind of jumping from the parts of the frying pan, both big organizations. That party ended up turning into Morgan Stanley while I was there. And then I left right about the last about my fifth business card changes when I left Smith Barney and started what was Labour wealth management has been rebranded the I D. A. But so I've been in a lot of these situations, like scene how seen the environment of advisers have toe work in. And I think we actually have a lot of sympathy for advisors who don't get to work in the environment. We get the work in right me, Alex, You came from an insurance environment where it was most everything was focused on insurance and selling different types of insurance and finding insurance solutions for flying right That's all I knew when I got to college, I went straight into I don't know why in hindsight, but it was a great opportunity for me to learn the artist sales, to learn rejection, to learn resilience, persistence. It was insurance only. So I learned how to sell term life insurance. I didn't really understand the different kind of life insurance, and that's all I was taught and then expanded on to learning about fixed index annuities, which at the time was like a privilege. This was back in, 04 or five. Um, I then went on toe build. You know, the owner found her passed away, actually, in 2000 and eight at the bottom of a I G was collapsing in the very near this end of a way of jazz in a It was a wonderful leader. It was really, really tragic and sad. He was too young, but it put me in a position where then the next opportunity was the Foreman agency, right? An insurance agency where I was just gonna do the same things with a partner in a bunch of agents. 30 agents, right? I had that experience back in 8 2009 10 so I didn't see or feel the that particular that crisis, right? The last market crash we had I didn't feel it the way that I'm feeling it now, in terms of having clients calling and wanting to talk about market volatility, cause all those clients that we're working with, work that term insurance or annuities which fix the next annuities. When the best things about him, they don't go down, Um, s so they don't go up very fast and there's very little liquidity about any at all. But, um, I didn't have that experience. That was something that was a positive may be right for me not having to go through what we just went through the past two months a za wealth management. But But then when I met you and even right before I met you, I started learning about the world of investments. And this is my story. That's a brief version of it. But it taught me that in life, you know, you don't know what you don't know, and as you as you continue to learn and should never stop learning because there's always gonna be more and you can always do better. Um, I thought I was doing a great thing for all those people on. I think I was given what I knew then as you learning meeting you and learning from all the things that you taught me about other ways to help client make, you know, earn money, invest money, save money. It really just changed. It changed my world. I don't have to go to break, but but I think that was a great angel. Alex. Thanks for sharing that. And I know there is a deeper story. I know it and it's a great story. And so I think again, you're an awesome resource for advisors who maybe just aren't they don't feel fulfilled. And they're in an insurance only environment or there in an environment that the company is pushing product onto the advisers. And then those advisers air out trying to sell that product because it's being pushed on them by their firms. And it's not fun situation to be in. We'll talk more about that, and we'll start giving you as advisers and the advisers out there. We'll give you some options. It's a different thought that may Ah help you think about your life differently and how you serve people differently because this can be the financial advisory business can be, I believe, one of the most rewarding jobs in the world. You work with people intimately and closely. You help them identify golden objectives. You deliver solutions, your handling something that's very important to them. You build these relationships that are just It's amazing, right? It's, I think it's one of the greatest jobs in the entire world. I wish more people did it the right way. We'll talk more about that when we come right back. Its financial detox on Jason Labor I'm your host with Alex cleaning Smith, you give us a call it a 77707 88 89. Ecstatic financially cox dot com Also, this show is for the adviser. Welcome back to financial detox on Jason Labor with Alex Cleaning Smith and here we are on the show for advisers. We're switching gears today. Today we're talking about financial advisors and what it's like to be in our job in our position, and I think Alex and I bring a wonderful set of of experience to help advisors being that I spent 12 years a major wire house, major Wall Street firms and analysis came from the insurance side of the business. And, you know, we just think we bring a lot of breath and depth to, um to the space where we can we can help you as advisers. I think this is also Alex's show should not be lost on our individual clients because I think it's very nice that we are giving our regular listeners an opportunity here to dive into the world of an adviser and see what it's like, right? And so I think that helps investors and individuals and business owners. And I think that it helps them be able to understand who they're getting the dot vice from and why, and so on and so forth. So they're excited home. There is actually why, why we do what we dio. Yeah, and I think we used the quote a lot. All advice is not created equal, and it is not right. There's so many financial advisors out there today, and unfortunately, they all fall under the category or the title of financial adviser or wealth advisor or whatever. But there is a stark difference between one financial advisor and another and another. I mean, you could put 10 quote unquote financial advisors in a room, and they could have completely and totally different product, highest investment strategies. Philosophies. The poor individual investor and the business owner and the pre retiree who's trying to talk to a financial advisor. Know if it imagine if we stop for a second as advisers and put yourself in their situation, Somebody situation doesn't understand the inner workings of our industry. It is our right. You have a guy who are Galvin dominating. Yeah, totally. I'm a financial adviser, yet you sit down with them and they have an insurance policy that they think it's really important you get a term. But then they also think it's really important. You also get a universal, guaranteed life insurance policy. They also think it's really important that you buy a whole life insurance, and then they also think it's really important that you have some other insurance and you like what is a finance? This Is this what financial advisors are about? They sell insurance, then you have another guy who comes along or Dow, and they just want to talk to you about individual stocks. They're gonna talk to you about picking apple and picking. You know, John Deere and picking all these different individual stocks. Then you have another person to come along that just by American funds. And they sell Americans. They take a 5% commission up front because American funds is their preferred fund family. Then you have another guy comes longer gallon. They only do financial planning and they were just finding your plan. We don't actually handle your investors. I mean, this is just stressing me out in the poor people well, but so the bank way. Let's let's let's present a solution before So we don't really dress up before adviser listening. There is a better way. And you taught me this when we first. When we first met in 2012 you said, you know, your great annuities, you know how to use them. But even I knew that it wasn't appropriate. Recommend that somebody put more than a certain amount of their money in an annuity. I knew that back then, so I was always leaving. Lots of you know, we call it market or wallet. Share as an adviser and we want to be able to manage the entire four believe the client cause, you know, because we think that we have the best way to do that. And I knew I couldn't even do that with as being insurance only person. So that other money was gonna just sit wherever it once I was only gonna be able to make you recommend 20% of their money to be in a nudie. That's the right thing to do. Suitable thing to Dio. And that's how I got paid. I only got paid as a transactional, you know, upfront one time, which is totally flawed. And even if I pick the trail option, it still wasn't early enough for me to survive. So it was never gonna It was always broken to begin with, right? And you taught me you're like, well, so you can manage money at we swab you can. You can manage a client's portfolio in a low cost, tax efficient way. Were you your 1% a year or so that re occurs every quarter of your 10.25%? That's your revenue income of an adviser. It's a slow I way to build, but you're aligning it with the client's best interest because in your always motivated to do the best thing for the client throughout the life of the relationship versus of one time deal, you know? Yeah, exactly. Alison, I think, for the advisor's out there who are listening this show, You know, you're either at a wire house, big wire house, you're at an insurance agency or you are at an independent broker dealer. Liken LPL or, you know, first trust securities, their guardian or whatever. All those there's a 1,000,000,000 of them. And in a lot of situations, I talked to multiple advisers who say, Man, hey, I love what you do. I know it's the best thing for the client. They literally say that, Yeah, but they can't quit. I can't quit. You can't change my lifestyle. I can't come Bert to an all eBay's business because I get too much commission on products that I'm selling, and that's how I sustain myself and multiple. I'm talking. Five or 10 advisers of Point Blank said that I think they're courageous and honest and awesome for saying that because that is why I believe most advisors don't work in an R, a registered investment advisory firm, because it is slower for sure to build. But it is. This is, in fact, one of those things where if you're trying to build a career of serving people strong an advisory standpoint, to be a fiduciary, you have to act in the client's best interest at all times. That does not mean suitability. There's a very big difference, the best interest, which means that you must disclose all sources of revenue. And you have to disclose if you receiving different compensation for different products. And you would also have to disclose whether your firm is receiving different compensation for products. A massive problem where I think advisers air getting the short end of the stick. It's not the advisers, a bad guy or a bad gal. The adviser is just living in this this, um, culture of their firm and their firm isn't educating them about the difference. The true difference between a fiduciary and suitability advisor. When I left Smith Barney and which was turning into Morgan Stanley when I left them in 2000 and nine, I did not fully understand the difference. I went and started my own firm, and I did not understand the difference between a fiduciary suitability. And I had been in the business for 12 years over the vice president. Top financial planning across the firm. It was crazy when I came out is when I started to learn. It's like all of a sudden I was under, I was out from underneath the shield of of the Shield of the Firm that was only letting me know and understand what they wanted me to know. You didn't You didn't You didn't know what you didn't know when you when you when you broke away and built what we have today. I think that's where a good part, maybe, to shift gears, because any we have only a little bit less probably before the next break. That talking about talking to advisers about how how you could be, how much better you know, how much better off you could be by utilizing a team right? Truly a team, not, and not just a team of you know, There's a lot of wire house teams that are teams, but they actually don't do the whole business. They just do what they team up on client conversation client communication, and that's the decision making. But when you when you're able to actually be part of all the operations of the whole business, you can really, really impact and effect change in how the plan experience in your life. Keep that going because I think that's it. Let's talk about the team approach and collective knowledge of advisers and a firm and independence and let's just finish off. And we might need to make this Siri's Alex because there's so much to cover here. We're talking two advisers and about advisers. We're talking about our business in general, and I think what we're realizing here, Alex would put together an agenda on topics. But what we're realizing is there's entirely too much to cover in it, and 26 minutes you like, Yeah, this has so many legs to it. And I think what we want to do is make sure that you know, if you're listening and you're not a financial adviser, it's very good for you to listen to this anyway because you can get some insight into the industry and what goes on on. And if you're gonna pay somebody for financial advice, uh, for the rest of your life, for a large part of your life. You really want to know what goes on in this industry because it's gonna cost you a lot of money over time. And, you know, make sure you're getting good value for that. But to focus back on where we were, you mentioned something at the end of last segment there where we were talking about the team approach, right, collective knowledge in and whether you're working on a team because I use this example a lot is if I'm a client and I go into a large firm more or even if little and large firm and I'm not picking on any names. I'm not being disparaging toward these companies, but I'm going to use names so there's a connection and people understand what we're saying. Morgan Stanley, Merrill Lynch, U. B s or alternatively, if I go to an LPL financial adviser or Raymond James, financial advisor or an Edward Jones financial advisor, let's just break that down. So I go to one of the Big three firms Big four Firm. There's 20 advisers in that office. I have a client. If I walk into that office and I talked to all 20 advisors. I'm going to receive probably something like 20 different opinion sets of advice, recommendations, strategies for loss of the Because in that firm and for you advisors, you have all these products to choose from, which, by the way, is limited to who has negotiated deals with Merrill Lynch. TVSURFER morning. It's not an unlimited product platform, whereas in a IRA A, we truly do have an unlimited product platform. We can truly go out and work to arrange, Um ah, to put a business arrangement together so we can deliver whatever it is your client's right, whether it's insurance, whether it's private money managers, whether hedge funds, we can get access to anything in the world. Whereas I suppose the Morgan Stanley's and the big firms could, too. But they have, you know, requirements in order to get on that platform. So it's not as open architecture, but the point here is think about that as a financial advisor. Anyone of those situations, the big firms of regionals. If a client goes into the Edward Jones office down the street, a different Edward Jones off, they're gonna experience a completely different set of it, right? If the client goes to one LPL person, they're gonna have a completely different set of advice. And if they go to a different LPL person for us, what we think is beautiful about working in an R. I. A arrangement registered investment advisory firm is in most situations. That firm hasn't investment philosophy that the collective knowledge of the T the collective knowledge of that firm comes together uses all the resource is in the world that are available. You know, whether it's black rock dimensional funds, whether it's Rob Barnett research affiliates, whether it's WisdomTree doesn't matter what it is. They bring together every bit of information they have of the team, and then they create an investment philosophy so that when the client comes to that firm, it is a consistent investment. Blossoming approaches like going to Starbucks. Imagine if you went to Starbucks in every single Starbucks was a different taste of coffee. Some had coffee cake alone. Starbucks didn't have Starbucks Dumpster, you know, some served, you know, it was a bar some. It was, ah, Marissa and coffee makers, and it was different every time that business would Bell. It wouldn't be because nobody would know what they're getting and a bigger and bigger thing for most advisors. And then and obviously, it benefits. Decline is toe have that consistency. And the experience actually makes your job a lot easier as an advisor, meaning that you don't have to come up with everything that you don't have to go to this giant menu of things and pick the things that you think are right and then question yourself, especially at times like these with so intense. And there's so much market volatility and so much anxiety amongst all of us. Right, Um, and after wonder like, Is this really the right thing? Because maybe you just are the one that made the decision. Or maybe you do have a teen, but it goes bigger than just choosing the investments it goes about. It goes into how you build the business and how you really operate a business, not just the investment decisions in the business, but having that believe in what you do makes your job a lot easier, especially in times like these. I think a lot of advisers right now are having a hard time because they're questioning himself. You know, I have my clients invest in the right way before Cove it and we're not doing right now during Cove. It is doing the right thing this way. There's almost too many options for advisors is too much information. Just like there's too much information about, um, there really is Alex. You make you make good points. I just I wish we had an hour to continue, so I think we'll do. Let's let's continue this Siri's next week because there's so much more to talk about. And I just the point. You made it like when your firm lays out 50 things that you can go dio and everybody your firm, that's something different. You're literally operating in a vacuum as a silo. You're trying to figure out what to do and we're here for you. We want to help you. Hopefully, this was useful, and we'll come back with a series to, uh, maybe next week literally on it, and we'll keep the discussion going. But unfortunately for now, we're out of time, so we gotta cut a short here. It's financial detox on Jason labor. I'm your host. You can reach us at 877707 88 89. You can also check out of financial detox dot com. We'd love to hear from you whether you're an individual client or an individual or a business owner about to retire lots of things happening in your life. Okay, uh, intelligence driven advisers will help you. We also want to give a special shout out of thanks for our sponsor. Riel Water. Real water. It is the best drinking water you can get with. Oh, Alex got a bottle right there with high sustainable pH and negative ion. It's unbelievable. You want to check out real water any chance you get? Thanks so much for listening its financial detox. I'm Jason Leg Room will catch an X ray.

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Learn more about financial detox and to get access to today's show. Notes Transcript and Resource is visit financial detox dot com. Call Jason and the team at intelligence Driven Advisors. If you're ready for financial detox and a better tomorrow, call 877707 88 89. Get answers to your questions. That's 877707 88 89. That's financial detox dot com for podcasts and information. And if you like what you've heard, be sure to hit the subscribe button. That way, you'll be notified about upcoming podcasts. You'll take one more step toward financial peace of mind things. Content is provided for informational purposes only, and should not be considered investment advice or recommendations to buy or sell any types of securities. Mr. Labor, um, an intelligence driven advisers are not responsible for the consequences of any decisions or actions taken as a result of information provided in this program and do not warrant or guarantee the accuracy or completeness of the information provided information. Discuss today reflects the views of Mr Labor, um, and his guests as of the date of the show and are subject to change without notice. Past performance is no guarantee of plagiarism. Any forward looking statements or forecasts are based on assumptions and actual results. Mayberry from any such statements or forecast. No reliance should be placed on any statements or forecasts when making an investment decision. Accordingly, listener should not rely solely on information provided today and making any investment decisions. There's a risk of loss of investing in securities including the risk of loss of principal, different types of investments involved, varying degrees of risk. And there can be no assurance that any specific investment will be profitable or suitable for particular investors by natural situation or risk tolerance, asset allocation and portfolio diversification cannot assure or guarantee better performance and cannot eliminate the risk of investment losses.