More Knowledge, More Wealth - Ep 150: Beware of Commission-Based Advisors

podcast 7/13

[00:00:00]

[00:00:43] Gabriel:

[00:00:43] Good afternoon, this is Gabriel Shahin, certified financial planner, and your host of "More Knowledge, More Wealth" here on every weekend talking about all important topics of personal finance. Our goal to give you the knowledge you need to increase your wealth, not to the listener. You can always reach out to myself or any one of our colleagues here at Falcon wealth planning.

[00:01:01] Give us a call, our phone number is (855) 963-2526, that's (855) 96-FALCON like the bird. We'd love to help relate this show to your specific situation. Now we've got offices all across Southern California, including other states, and we do help people nationwide. So feel free to give us a buzz and our website is falconwealthplanning.com, that's falconwp.com for short. Now, I'm a principal of Falcon Wealth Planning, we are a fee only registered investment advisory firm that also does investment management as well. But folks, we specialize in everything that involves a dollar sign that can go over your cash flows, retirement, social security, Medicare, tax planning, which is our biggest focus and niche, investments, voting high taxes, now, in the future, insurance, estate planning. Folks, like we said, anything that involves a dollar sign. Give us a call, doesn't matter where you are, guys. We focus all across the country, we would love to help and we are offering a free financial assessment to do that. Please take advantage of it.

[00:02:04] Now is the best time to do it with market volatility, with tax laws potentially changing, estate planning taxes, folks, you name it. And sometime when the market drops, it could be a good time for you to make the necessary changes. This could be it. So do not hesitate to do so, folks. We would love to help give us a call.

[00:02:25] Our phone number is (855) 963-2526, that's (855) 96-FALCON, like the bird. Today, I was gonna go over good, old compliance and the sec and all these things that they're coming in to change for the advisors of how they should talk to you, how they should relate to you. This is extremely important information because our industry is now forcing advisors to do what's called this PTE form. Now, what is this PTE form? This form tells you what the advisors are charging and more importantly, what you are currently paying. There are some advisors, these commission based advisors, that I've been upset about for multiple years. We've been talking about how they are taking advantage of you.

[00:03:11] So now they have to disclose to you what you're paying now and what you will be paying with them, and that does include commissions, and the fees within fees. You get what I'm saying? This is extremely crucial. Now here is the negative part: this is the department of labor, the DOL, that's putting this into account.

[00:03:32] They're the ones that's enforcing this. The problem is their jurisdiction is only within retirement accounts. That's your IRAs, your 401ks, 403Bs, 457, Roths. You name it, anything that's a retirement account is only jurisdiction. So you still have to, up to you to do what's right and to ask the questions and to figure out what makes sense for you.

[00:03:55] It's still on you to do. So with that being said is you have to be on the lookout for these forms and now advisors are kind of getting squirmish about this. This is becoming a problem. They're going try to hide these forms, but you gotta ask them specifically, what are the fees I'm paying you? And they can no longer lie to you and say, "Oh no, you don't pay me anything. The insurance company pays me," which is absolute garbage. And I'm sorry, I know you've heard that before. I know you have. I mean, multiple people have heard that line. That's their pitch. That's what gets them paid hundreds of thousands a year in commission. Assuming they're decent, by the way, not the really good ones that make millions of dollars a year.

[00:04:37] This is a shady industry, so much our government, the department of labor had to come in and say, enough is enough. We have to protect you of what's out there. We have to protect you of how they lie to you. Misinterpret. Misrepresent. Which is the nice word of saying they lie to you and how these things work.

[00:04:54] This is why I try to come on this show every once in a while, and even though I sound like a broken record and talk about investments and insurance products, whether it's universal life, whole life, annuities, you name it folks because people get taken advantage of, and you don't know, I don't blame you. I mean, most people don't know, but you have to be your best advocate.

[00:05:14] This is why we're offering that free financial assessment. For that simple reason, we're offering that assessment. So you can in fact get that opinion. You should always get a second opinion. Don't turn socialist on us here and have the government decide what's right for you or not. That's the problem with capitalism, our current market right now, capitalism allows us to grow by the ambitions that we may have.

[00:05:37] They allow us. So if you want to be a billionaire, great don't ever sleep and have an idea that you can sell to a billion people to sell simple as that make at least a buck off them. That's how you become a billionare. So we control that, not the government, but our government is stepping in now and helping you determine what's in your best interest or not.

[00:05:57] Some people like that, some people don't. It is going against the capitalistic approach, the capitalistic society. But I can agree with the government. That's why we have laws for certain things where you shouldn't be taken advantage of. You shouldn't be forced to sign over the deed of your house because somebody has, you know, held you hostage, and if you don't sign over the deed, then you know, I'm gonna hurt you. So I do agree where there's times it makes sense, especially when it comes to your money. You do not want to be held hostage by some savvy advisor, trying to tell you what you should do and lying to you of how it works.

[00:06:36] By the way folks, if you're just joining us, you're listening to Gabriel Shahin, certified financial, and your host of "More Knowledge, More Wealth" here on every weekend, talking about all important topics of personal finance. And today we're talking about this new PTE form from the department of labor that passed that enforced this July 1st, 2022.

[00:06:55] So if you're talking to advisors, if you're gonna consider working with them, they should be giving this to you before you ever sign any paperwork. So you have time to review what your current costs are and the costs of the new company and what services that you'll be getting. Listen, I have no problem with paying a fee, right?

[00:07:11] I pay fee for everything, I pay fee for my TV, I pay a fee for my PO box, I pay fee for internet, I pay fee to my attorney, I pay fee to an account, and I P for other professionals as well, like advisors, but you have to see the value of what you're getting. They have to now disclose that to you. What the value is that you would be getting, that is an important piece of it.

[00:07:33] And the problem is there's just not a lot of value people are giving because most firms out there- about 70% of the firms- all they do is sell investments. They have this fancy sheet that says, oh, oh, you have this much money. Tell me how much you spend. Great. You won't outlive your money.

[00:07:46] It's like, dude, you haven't even taken a look at my tax returns. You haven't even, you don't even know if I'm getting social security. You don't even know the balance of my mortgage. What are you talking about? You don't even know my goal is to move out of state. You get what I'm saying? Most advisors just manage money, that's all they care about. And they just so happen to throw in financial planning. Well, here at Falcon Wealth Planning, we're financial planners. And some of the most competent in the industry, may I say, in a biased manner, the most competent in the industry, you get what I'm saying? Other advisors are not even looking at your tax return.

[00:08:22] It's crazy to imagine, but that's just how the industry works. I don't blame them, they're not allowed to get it. They don't have the competency, they don't have the know how, they don't have the training, they don't have the certification to give you tax advice, but that is the core element of your financial planning. If you think about it, for most of us, that's our largest expense, including your mortgage, which could be your largest single expenses.

[00:08:44] Taxes could be more when you factor in the federal tax, the state tax, social security tax, Medicare tax, forget property tax and sales tax. Guys, I'm just here saying you deserve comprehensive help. You deserve to know what you don't know. And our system is so complicated it's purposely built where only the rich can afford the resources to make sure they are some call it loopholes.

[00:09:13] I call it tax planning, I call it strategy. I don't call it loopholes. I don't think that's fair. It makes us seem slimy if we're doing something smart to help reduce unnecessary taxes. Everybody pays tax, I get it. The main issue that I have is that people who think and get mad at the rich think it's only for the rich, and that is just not true.

[00:09:37] I'm trying to tell you that you can, in fact do this yourself. You can in fact, afford this. On top of that, we are offering a free financial assessment where we can help put this together for you at no cost. We can identify opportunities with you, assuming that we take a look at your situation and you're transparent about your situation.

[00:10:00] We will tell you what you should be doing, what you could be avoiding. We call those low hanging fruit. What opportunities are available to you that you could be taking advantage of? We don't know. We have to learn more about you. It's crazy how people are giving you advice and they don't even know anything about you.

[00:10:15] Would you take dating advice from somebody when you're married? I sure hope not. You get what I'm saying? Find out if the person is single or not for heaven's sakes. It's crazy when I hear these investment people trying to give advice for people who don't even need it, or it's not even applicable. And it sounds great, but it doesn't matter to me.

[00:10:35] I don't have 17 rental properties, I don't have 10 million liquid, I don't own a business. So the point is, you don't know what you don't know. Heck, I'm in the industry and it's changing daily, I don't know. That's why we have a team of advisors, of accountants, of the state planners, of multiple different professionals to come together.

[00:10:56] And this is why the certified financial planner designation is so important, because they are the center of all of that. They're the ones that can help identify what's out there that you should be doing and which professional needs to be involved at what time. They are essentially the quarterback of your financial situation.

[00:11:13] They coordinate with your estate planner, they coordinate with your insurance advisor or broker. They coordinate with your banking. They coordinate with your investments. They coordinate with everything, a proper financial planner. Ideally they are certified financial planner. They're held to the highest of standards, even though there's still some out there that charge ridiculous commissions that take advantage of people.

[00:11:35] My point is you should still be looking for something that adds value to your situation. You should still be looking for something that is able to identify that you are doing certain things wrong, which makes you normal. Like I said, our system is set up that way. Give us a call we'd love to help. We are offering a pre-financial assessment.

[00:11:56] Our phone number is (855) 963-2526, That's (855) 96-FALCON like the bird. Would love to help with any questions you may have. Folks, we are gonna be right back after a few words, we got a lot more to talk about.

[00:12:10] Welcome back folks. This is Gabriel Shahin certified financial planner, and your host of more knowledge, more wealth here on every weekend. Talking about all important topics of personal finance. Today, we are talking about just the overall regulation overall industry as a whole and how it's kind of a shady industry.

[00:12:25] I hate to say it folks, but some of these people out there that hold themselves as fiduciaries don't tell you that they're only doing that a specific part of the time. Now, what is this F word? The fiduciary? That just means it's somebody who's legally obligated to do what's in your best interest. Here at Falcon, north planning, we are obligated to do what's in your best interest 100% of the time, which is why we call yourself a true fiduciary, because there are other people out there that say they're a fiduciary, but they don't have to tell- they're not telling you that it's not 100% of the time. Where they can take that hat at any time and start selling you stuff that you may not be in your best interest that may be only suitable for you.

[00:13:04] This is sadly a shady industry. There's no other way to say it, I'm sorry. I mean, it doesn't matter what profession you're in. You can be an engineer. There are bad engineers out there- Basketball- There are some bad basketball players. Doesn't matter what you are. There are some bad doctors out there, and there are some fabulous ones in every one of the industries I just said.

[00:13:24] My point to you is, our industry is so sensitive because it's somebody's assets, it's their money. And sometimes people are given bad advice that can negatively hurt them financially, or even just the liability point of view. My point is you need somebody that has an unbiased point of view that whether you buy something or not, doesn't affect their compensation. Where there's nothing to sell.

[00:13:51] That's here at Falcon Wealth Planning, well we'd love to offer to you because the government's even becoming involved with department of labor documents and PTE forms that's trying to tell you, beware or look at the fee that you're currently paying, and look at what you will be paying with these new guys.

[00:14:05] And what services are you getting? Falcon Wealth shows that we're transparent. we're happy to help. And we don't like to work with people unless we can save them much more than what we're charging them. Right? It's only logical, so, we are offering a free financial assessment where we can help give you one to two hours, one to two meetings of our time at no cost.

[00:14:26] Give us a call, we're happy to do it. Our phone numbers (855) 963-2526 that's (855) 96-FALCON like the bird, or visit our website at falconwealthplanning.com, that's falconwp.com for short. We'll happily put together a customized assessment of your situation, we'll tell you what you should be doing.

[00:14:50] We're so transparent, we don't find great things that can save you a lot of money and say, "Uh, uh, we're not gonna tell you unless you hire us." That's not how it works, that's arguably vicious, that's just, it's shady. It's just ingenuine. Thank you for giving us all this information for us to do an analysis, just so we don't tell you what we find.

[00:15:06] That's ridiculous, that's not who we are, and other firms are like that. And, you know, I'm not even gonna bash them. You know why? Because we need firms like that for you to appreciate firms like us. So I have nothing against them. Everybody has their own way of doing business and I'm not gonna beat them up over it.

[00:15:22] It is what it is. My point to you is, by working and identifying a situation and advisor or person, a firm that can understand you and what you're doing, whether it's Falcon or not. I don't know. I don't care. I just want, you know, find that person. That's what I do care about. Have that confidant, have that person you can count on, have that confidence of that individual that can help achieve your mutual goals.

[00:15:50] Your goal becomes their goal. And sadly, we just don't see that often. This industry isn't compensated properly. It should be compensated on increasing your net worth any way possible whether that's buying real estate, whether that's working on the valuation of your corporation, helping it be more profitable.

[00:16:10] We see thousands of business owners. We've seen hundreds on an annual basis of business owners and we found out, and we see the difference between the good and the bad. And we can tell you what you should be doing that's different. We could tell you low hanging fruit items. We really don't want to be in the business consulting world, but it seems that we are like that more and more. As a majority of people out there, are business owners do have majority of the wealth.

[00:16:35] I'm just saying how the industry should be done. That's not how the business in the industry is. Most of the industry charges on investments. My whole point is be transparent on what you're charging. There shouldn't be a fee within a fee and if there is disclose it, disclose the commissions, don't lie about it.

[00:16:53] Unfortunately, this is our industry, and I'm just trying to tell you to be careful.

[00:16:56] Whether your advisor is at JP Morgan, Woodell Reed, wherever they are, my point is the fees are now gonna be disclosed and you have to be aware of this. And so you have to be your best advocate, you have to be the number one person that's out there To take advantage of this, to make sure you're doing the right thing.

[00:17:14] By the way, folks, if you're just joining us here, listening, Gabriel Shahin certified financial planner, and your host of "More Knowledge, More Wealth" you're on every weekend talking about all important topics of personal finance. And today we're just talking about this new department of labor ruling that forces advisors to finally be transparent, but only with a retirement account. That's the only thing they have jurisdiction over, so they're gonna be supplying to you, additional documentation showing this is what we charge compared to what you're currently charging, which may be nothing. And maybe currently paying maybe 20 basis points versus them charging you 500 basis points.

[00:17:51] You get what I'm saying? So this is quite substantial when you're paying 20 to 30 times more potentially working with somebody that kind of takes advantage of you. And so just understand always what the value that you're getting is what else are they doing on your behalf? Because there are so many different aspects to your wealth accumulation than just investments.

[00:18:12] It's a great part. But think about this, you have to get from your working and earning career, and then put it into an investment account. Whether it's from your paycheck every month that puts in there, or whatever the case is, you have to get to that point where you're getting enough cash flow, where you can put it off to the side.

[00:18:28] Well, you have to get to that point first, right? So there are some things to look at when you are before you get to that wealth stage, there's wealth accumulation stage. And so just be on the lookout for that and the things you can do, and that's what we pride ourselves in doing and helping with. We want to help you get to there faster.

[00:18:47] If you were working with a financial competent professional- competent financial professional might I add? You would probably get there much faster. That's where we like the opportunity to share that with our prospects. That's where we think you need to get professional advice. It's not just for the rich people of the world.

[00:19:01] It's for the aspiring who wants to become rich. This is where it's extremely relevant, and this is where we say, give us a call. Our phone number is (855) 963-2526. That's (855) 96-FALCON like the bird, or visit our website at falconwealthplanning.com that's falconwp.com. I have a list here of, on our YouTube channel of all the different topics that we're going over and we're constructing this where we can give you the specifics of what you should be doing and the things that you should be looking for. I'm gonna read to you some of these topics. Okay. Some of them is going over the differences of a Roth retirement account vs an insurance policy that people are trying to sell that are better.

[00:19:43] I know, by the way, I don't give you any math behind it. Kind of embarrassing. Ibonds, those things are paying almost 10% right now, but there's some rules behind it that you have to be aware about. Health Savings accounts vs Flex Spending accounts, going over also inter-quarter rebalancing and relocations, talking about 10 31 exchanges, homeowner gain exclusion, social security analysis, 35 years of paying into it. Windfall Elimination Provision, qualified charitable distribution, ESOPs, which is employee stock purchase programs. Standard vs itemized deduction, social security for non-spouse, social security for your spouse. Talking about in addition to that is estate planning, fixed income investment capital gains versus the federal and state 60 40 portfolio pass through entity mega backdoor index ETS qualified dividends vs ordinary folks that's not even halfway through.

[00:20:36] There are so many different topics out there that you don't even know about and this is what we try to show, just a fraction of it in this radio show of things you should be doing. This doesn't even include the legislative changes, the cost of insurance investments, what you should be avoiding. We don't sell insurance here at Falcon Wealth Planning.

[00:20:53] If anything, we would refer you to somebody that you're not overpaying, that will actually get you what you need. These are the issues that we are having in the financial industry. It pays very well this industry, because you sell things and earn commissions. You want to be able to talk to somebody that's unbiased of that.

[00:21:14] That is a crucial piece to what we're looking at through financial success. So my recommendation to you is to talk to a professional, talk to somebody who does this on a daily basis. Who has seen the situation before. These are the type of things that you have to continually look at.

[00:21:30] So get that opinion folks, you have to understand your situation, you have to understand what makes sense for you. My whole point is there's so many things that you don't know, and we are gonna try to go over every single week of those items and what makes sense for you. We're gonna discuss these topics every single week, and we're gonna build out a YouTube video series where you can educate yourself.

[00:21:49] We're calling it the knowledge center. So be on the lookout on this for the next two weeks, come, go to falconwealthplanning.com, we have an education center there, where you can take advantage of. We wanna get that information so we can send you these new videos that come out and as they come out, we would love to hear your comments on it as well.

[00:22:07] This radio show is actually converted to a podcast as well. So you can listen to this on Spotify and iTunes and so on, but it's a podcast version of this as well. So if you wanna put a face to the voice, then feel free to do that as well. I'm also an animated individual as well, so that can be fun as well.

[00:22:24] But folks we're, our goal is to educate you.. The more knowledge you have, truly, the more wealth you'll accumulate. And our goal is to give that to you and protect you of what's out there. That's our main intention. Folks that was a fast, fast show. We wanna thank you for tuning in with us this weekend. You can always reach out to myself or any one of our colleagues here at Falcon Wealth Planning.

[00:22:46] Our phone number is (855) 963-2526, that's (855) 96-FALCON, like the bird or visit our website at falconwealthplanning.com, that's falconwp.com for short. Our goal is to help you with your situation and answer the questions you have. Our goal is to relate this show to your specific situation. Call us we'll have a confidential, private conversation about your situation.

[00:23:14] Folks, we want you to enjoy your weekend. Have a great week, and God bless.