Which Financial Professional You Are Working With? And How They Are Paid

[@DevinCarroll]

I don't know these guys and have never heard of this channel before today. But holy moly, this video is one that everyone should watch. When I started in the business 20 years ago, a veteran financial advisor told me, "Devin, you have to keep three people happy: the home office, you, and the client. But you know...two out of three ain't bad." Thankfully, that sentiment has started to die, but a lot of it still lingers in this industry.

[@Theretirementnerds]

Hi Devin, so glad you found us. You may not know us, but we admire you. Thank you for taking the time to tune in and share your thoughts!

[@DevinCarroll]

@@Theretirementnerds Also...your lighting, audio, and video quality is stellar!

[@Theretirementnerds]

Thank you 🙂 Takes a lot of tweaking. The angle on Zacc is solid. Still tweaking the other angle.

[@zaccarycall]

Thanks Devin! Erik has a knack for hitting the topics people care about!

[@Theretirementnerds]

@DevinCarroll thoughts on a collaboration video? Not sure of the best way to get to you. My email is [e-mail] if it's something you'd be into.

[@stemikger]

This was so refreshing. Not since the late John "Jack" Bogle were financial professionals so honest!! Great service!

[@themorales6]

Wow! Zacc’s comment about consumers asking financial professionals whether they are a fiduciary FLOORED me. It really changed my perspective. I’ve been trying to use that question as a litmus test but have really not been getting a warm fuzzy feeling about the ones who’ve given me a “yes” answer (ie, I wouldn’t trust them to get me a Diet Coke). Thank you.

[@Theretirementnerds]

Isn't Zacc the best? So smart and so practical. Lucky to have him on. Thank you for spending time with us!

[@beaglebrigade]

Great discussion. Very informative. I wish I would have heard this 15 years ago before I was sold an annuity and a variable universal life policy which I still do not understand to this day!

[@Theretirementnerds]

Wish we would've found each other then as well! Thank you for tuning in!

[@chuckfoster1945]

15 yrs ago you may have bought the best option for the known informatiin at the time. We don't know when to have cash in a mason jar.

[@markbernhardt6281]

My mom bought an annuity when she retired in 2011 with only 100,000 saved. That annuity just won't die no matter what the markets do it's still hanging in there paying 500 a month. It's given her a lot of peace of mind. Can't speak to life insurance.

[@YingjiYin-b6h]

@@markbernhardt6281 Not really, 500 a month - inflation is correct formula.

[@sporter555]

Me too

[@thomasmoshier3920]

You two might just be the most honest two guys on KZbin.

[@Theretirementnerds]

Thank you so much! Zacc is amazing an love his transparency!

[@Pete-ql2pk]

Honest and very knowledgeable professionals

[@tadrenaline]

I work at a B/D and he really hit the nail on the head when it came to conflicts of interest when it comes to investment advice and the term fiduciary. No advice is truly conflict free and his example of the cabin was perfect. The goal should be to try and reduce conflicts as much as possible and honestly the big hurdle is always inaction and behavioral mistakes. This is honestly a fantastic reference video that people NEED TO SEE. Will definitely be sharing it.

[@Theretirementnerds]

Thank you so much for watching and sharing!

[@christinelawver1317]

7 minutes in and I've already learned so much! I am a newly licensed agent and my main focus is to educate and truly help people; im almost embarrassed to admit this, but commissions are a beautiful thing, but not my main motivator whatsoever. (I have a W2 career as well, so I will live) I just want to steer folks in the right direction for them, and be able to KNOW I did right by people regardless of my commissions. Very informative and helpful video, guys!

[@Theretirementnerds]

Thank you for watching!

[@mspadorchard1]

"Licensed"... does not elucidate your qualifications. So... what license do you have?

[@Sinisterdaze]

Love when Zacc is on. I watch the videos a couple times to make sure I didn’t miss anything 😊

[@Theretirementnerds]

He does such a good job. Love having the chance to speak with him about these topics. Recorded another one that we'll release here in a week or two :)

[@eslau14]

This is one of the most honest and real conversations I’ve heard on the financial advising industry I’ve ever heard. And from an industry insider, none the less. Although the guest was visibly conflicted, I could see him giving this same advice to his own children and loved ones. Bravo!

[@Theretirementnerds]

Thank you for tuning in! Zacc is the best!

[@trudyannlui5831]

Oh my goodness! This is SUCH a useful video. I really really appreciate Zacc's honesty and willingness to dumb things down for us mere mortals. He answered so many of my burning questions. Now I understand how and more importantly WHY things operate a certain way and when what tools are useful in what situations,. Thanks Zacc for speaking and Erik for hosting. And @Devon, I agree, everyone should watch this video 💯 PS @Zacc, you look REALLY good with the beard 😁

[@dawightg9787]

I have watched many financial podcasts in my time, and in this one video is the most Honest and straightforward look into the different financial categories that I have ever watched.

[@Theretirementnerds]

Appreciate you spending time with us and the kind words!

[@greggis3691]

This is the second video I've watched on your channel with Zacc, and both were extremely helpful. I'm retiring at the end of this year, and I'm suffering from paralysis by analysis. The goal is to move all of my assets under one roof. Now I feel I have some clarity about the different type of FAs, and pros and cons.

[@Theretirementnerds]

Thank you for tuning in! Zacc does a great job. Appreciate you watching!

[@kmng3207]

@@Theretirementnerds all the information you present is greatly greatly appreciated!!

[@Theretirementnerds]

@@kmng3207 thank you so much!!

[@janetkenny4861]

Wow, great conversation, I feel like you both pulled the curtain back on this very confusing and convoluted industry. I work with a certified CFP and, I truly feel that I am getting that extra value discussed. I don’t want to worry about my investing and fear the stock market moving up and day, so it is very well worth paying for the portfolio management. 8 Years in, and recently retired and feeling very confident with my money and its growth and sustainability.

[@Theretirementnerds]

Thank you so much for watching! So glad you are pleased with your relationship!

[@ShellyWest-d8x]

Super helpful, super informative! Thank you for the thorough compare and contrast walk through of these different financial roles.

[@Theretirementnerds]

Thank you for tuning in!!

[@tomm7505]

Great video, Erik. Lots a great information. I worked for 18 years for Delaware Investments and 13 years for Fidelity Investments in the 401(k) retirement plan field. I was Series 6 and 63 certified. So, I'm very familiar with everything that you two talked about in the video. When I first started working in the financial services industry (in 1986) it wasn't uncommon for a mutual to have an 8.5% front end load -- which today would be insane. Today I'm just a DIY investor with most of my assets at Vanguard. Thanks again.

[@Theretirementnerds]

Thank you, Tom! 8.5% 😬

[@tomm7505]

@@Theretirementnerds Yes, not all of them had such a high load. The one fund that stands out to me was Decatur Fund which when I started at Delaware Investments had the 8.5% load. Delaware was bought by Lincoln Financial in 1995 and then Lincoln sold all of Delaware to Macquarie Group (an Australian company) in 2010. You can still buy "Delaware Funds by Macquarie" but I think the high loads are all long gone -- thankfully. Delaware was a great place to work (I was there from 1987 - 2005) and it gave me the best start to investing and saving for my retirement.

[@cabragooncabulous4082]

As a past securities license holder this interview was right on. I’ve stopped pursuing the industry. Went another way. But It was good to hear some honesty.

[@Naomi-wb3dq]

What is the other way?

[@cabragooncabulous4082]

@@Naomi-wb3dq hvac. Sales, and a realtor. Tangible products. It sux i know but I sleep at night.

[@joem6832]

WOW, Probably "The" most informative video I've watched on the subject so far!!! Thanks so much for putting this one out!

[@Theretirementnerds]

Thank you so much for watching! Glad to hear it was helpful 🙂

[@SnowmanTF2]

Carburetors have not been on new vehicles since the 80s, basically replaced by fuel injection to meet tightening fuel regulations and respond to customer demand for better milage after fuel crisis in 70s. So today the first difficulty is even finding a car with one equipped, though since usually on top of engine block are one of the simplest components to find if it has one.

[@buyerclub2]

First, with me, you did not make an enemy, you made a friend with your very well done video. In fact Zacc, explained some scenarios that I had not considered for why whole life could be smart for a few people. In fact for a few moments, I though of contacting his firm to discuss scenarios where his firms financial planning might make sense for me. But, my portfolio is just too large to consider an AUM model. Also, one reason why I have been able to go from zero to close to 8 figures portfolio is my ingrain "value meter".. I just can not spend money where I don't see the return. So while I could take input, on things like tax reduction and legacy planning. Spending over $100,00 a year is just too much. But again, his video and explanations seemed complete and fair. So much so, I am forwarding it to someone who has an AUM "advisor" that I would describe as just a "stock picker". And not a good one at that. peace.,

[@Theretirementnerds]

Appreciate you tuning in and sharing these thoughts! Zacc does a great job and love having him on.

[@markbernhardt6281]

As assets grow the fees become less and less. I don't know about Capita Financial's fees but he said the percent goes down as assets under management goes up. Other KZbinrs like Root Financial is 1% for first 1 mil, .75 between 1 and 3 then .5 between 3 and 10 and .25 on amounts above 10 million. Safeguard Wealth Management is .60 percent no matter the asset value and they only invest your money into .05 expense ETFs. So all in .65. I'm sure Capita has some sliding scale and all of these firms have ranges where they are the cheapest. But with a 9 mil portfolio you're not going to be paying 1 percent.

[@robjennings106]

Good stuff, particularly for consumers with little knowledge of the industry. As a client of 7 years of a flat fee advisor, I would have like to hear more about the small independent flat fee advisors I feel like these folks are delivering some of the best value and are a small, but growing part of the industry. My guy developed his own financial planning software but other folks do have subscriptions I believe and are making a go of it limiting the number of clients.

[@Summerdee223]

I love it when you have this guest on. He is one of the best.

[@Theretirementnerds]

Zacc is amazing!

[@frankb1]

Annuities come in various forms. One form is the deferred variable annuity, which is essentially a tax deferred mutual fund investment account with a limited selection of mutual funds. The one I'm familiar with is Fidelity's. It has an S&P 500 index fund that mirrors FXAIX but with a fee that is 7 bp higher. In addition, you have to pay a 10 or 25 bp administration fee (10 bp if balance >$1 million, otherwise 25 bp). But the benefit is tax deferral and exemption from creditors (in the state where I live). So basically the trade-off is 17 to 32 bp higher fees for asset protection and tax deferral. That's pretty reasonable trade.

[@Stinadupreetattoo]

😅 my anxiety goes down with each episode thank you both for taking the time and explaining the difference between all of this!! Everyone has an opinion but as a consumer I need non bias information I can digest!

[@Theretirementnerds]

Thank you for spending time with us! Zacc does such a great job!

[@CaedenV]

You guys are so amazing! So level headed and able to bring clarity to things that so many people overcomplicate. What is evil about whole life insurance is that it is often pedaled to people and situations where it isn't appropriate... And that they are hound dogs worse than car salesmen. Nothing wrong with the product, it's just a niche specialty product. And perhaps the worse part is that the agents are sold on their paycheck for these products, and they spend a lot of money on training to sell these products, so it is just as much a trap for them as it is for the people they sell to.

[@Theretirementnerds]

Thank you for watching!!

[@HB-yq8gy]

The guy was very honest. I like his approach the interview was spot on.

[@Theretirementnerds]

Thank you for tuning in!

[@PS5820-wv7kk]

Your content is very informative! Keep up the good work! It's awesome you guys had this conversation!

[@Theretirementnerds]

Thank you so much!!

[@albertsly8026]

Thanks Zac and Eric for putting together this informative honest video highlighting the good, the bad and the ugly of investment brokers. Great video for both beginners and experienced investors!! Thanks again for sharing your honest thoughts about your profession!

[@Theretirementnerds]

Thank you so much!!

[@kw7292]

There’s some good with financial planners, hiring a fee based (by the hour) for their knowledge and ability to provide specific advice (establishing risk tolerance, general investment portfolio strategy, how to take from your nest egg, Roth vs IRA, taxes) is good. Pay them for their time not a percentage of your wealth.

[@jeffreyholt9624]

Great video and info - really helpful discussion with some of my longtime advisor questions answered. Thanks!

[@Theretirementnerds]

Thank you so much Jeff!! Another one is in the works...

[@professlch6347]

Thank you for this. Going to rewatching to let the details sink in.

[@brentshields8475]

Thank you for projecting this information. It’s such a struggle for too many of us.

[@Theretirementnerds]

Appreciate you tuning in!

[@LadyGaonouu]

Wow! Eye opening! Very informative! Great video!

[@dragonchild36]

This is such an awesome video. I've watched many financial videos, you two are my favorites. I love how straightforward and honest (and funny) you are. My question is (& we were told) that we cannot manage our own 401k. I don't trust our advisor to advice because he has been wrong on several occasions and I had to fight for what's best for us. Yet, he earns a percentage on our portfolio performance (no thank to him).

[@dragonchild36]

Sorry. Can we manage our own 401k at a brokerage such as Vanguard or Charles Schwab or does it have to be 3rd party?

[@zaccarycall]

@@dragonchild36this is tricky. I’m guessing you work for a small to mid sized employer based on that limitation. There is a lot to this so here we go…. 1. Smaller employers often have a relationship with an advisor. The advisor’s loyalty is very much to the owner of the firm. In these small plans, often the only one who can place trades is the advisor and his/her company. 2. More robust plans often have a suite of fund choices and are housed at a larger company like Fidelity, Schwab, vanguard, etc. participants can buy whatever they want within the fund lineup and can adjust/trade on their own. 3. The Most robust plans have a broad core fund lineup and a brokerage link option which allows you to connect your 401k plan to a separate brokerage account allowing you to invest it in nearly anything you want as long as you could buy it in a brokerage account. 4. In the brokerage link (also called brokerage window, or self directed brokerage) some employers allow you to attach your own advisor to that brokerage link. 5. If you are being told you cannot invest it however you want within the investment fund options available, that may be accurate. However, that isn’t the most employee friendly 401k plan and the plan fiduciary (someone who works at your company and is responsible for the plan) is in charge of looking out for the employees. The tricky part here knowing how receptive that person might be to feedback about the plan to make changes. Also, the advisor may be putting on pressure to maintain it this way. I am our plan fiduciary at Capita and we set ours up to be extremely flexible with clear, simple, and low cost core funds and then a brokerage link with the ability to add whatever advisor they may want. (even though that is actually our core business). You also can’t make the core options too vast or participants get confused and don’t invest. It is risky on both sides, but that is the nature of the plan fiduciary responsibility.

[@TheLiberty1999]

Thank you Zacc, for going where few others have dared to tread. Very helpful. I now have more faith in, as well as understanding of, my advisor.

[@Theretirementnerds]

Zacc is the best! Thank you for watching!

[@kmng3207]

I’m so glad you’re having him back on! Talk about financial advisors who suggested people they take out HELOC to build their retirement funds most absurd thing I’ve ever heard however I was advised to do that

[@johnb1567]

Actually wouldnt be bad to do if the interest rate on the HELOC was low because the return on investment would be more if invested. Example : HELOC rate at 4% while getting 9% or more from investments.

[@kmng3207]

@@johnb1567 something like that was explained to me the other day. Interest rates are extremely high doesn’t make sense.Additionally, I have a mortgage ( my only debt) llnot personally comfortable with more debt. I worked hard to get rid of ridiculous credit card and consumer debt. I appreciate the feedback.

[@cjgray9352]

@@johnb1567 unfortunately right now rates are at 8-10 percent and that is highly risky but overall one thing I am not playing with is my house under any circumstances

[@brianadams6204]

@@johnb1567 Actually it wouldn't be bad it would be stupid the risk is not worth it why would you want to take out a second mortgage on your home just to invest.

[@johnb1567]

@@brianadams6204 , ahhh..so you dont know how to do math... got it...

[@peecmkr45]

This is a great episode. This exposed a lot of information that most clients would not be aware of.👍

[@Theretirementnerds]

Thank you so much for watching!

[@ytstsysjs]

These guys are so good with interview and advice 🤩🤩🤩

[@Theretirementnerds]

Thank you so much for spending time with us!

[@墨紫月]

Love this channel. You are a rare soul

[@Theretirementnerds]

Thank you so much for watching!

[@josephkeith6954]

you guys are pros and there’s no way i will pay 1-3% on faith especially the relationship is build on “what’s in it for me”. too risky.

[@sideler7057]

Good video with lots of info. I was curious how he was going to handle flat fee vs. AUM since advisors presumably like the AUM. For folks comfortable with investing, the financial advisor would provide advice on taxes, estates, etc. However, once I retire is my financial situation going to change much year to year? Doubtful, so I'd be paying AUM continually for years if not decades for not much useful advice beyond the initial retirement planning. Flat fee for me.

[@Geronimo2Fly]

That's the problem I see as well. They get 1-1.5% per year regardless of whether they're setting up a financial plan in the beginning (worth it), doing a tiny bit of rebalancing (not worth it), or talking you out of selling everything after the stock market tanks (worth it). Over the course of many years however, it's hard to imagine how a continual 1% fee would be worth it, when it seems like once everything is set up, it's pretty easy from that point forward. I'd love to see a video where Zacc describes what he does for his clients on an ongoing basis, even during years where everything is already set up and the stock market is fairly steady. How is he providing 1% of value in those circumstances? I'm not saying he's not, I'm just curious as to how much attention is paid to each client's portfolio on an ongoing basis.

[@kimduff7381]

Thank you SO much for opening this conversation. This life altering decision has been paralyzing. Who to trust?

[@Theretirementnerds]

Appreciate you watching. Interview whoever you are thinking of using. Use the things Zacc mentioned to see what their interests and strategies would be. There are good people out there.

[@andydsouza507]

I worked for a year after retiring with an advisor. However I have a basic problem with the AUM model. Lets say you are paying the standard 1% ongoing fee. That doesn't sound like a lot. But if you consider 4% SWR, that's 25% of your income, before taxes. Thats huge and higher than your tax bill on the withdrawals. Also, is the advice worth twice as much if I have $2M vs $1M AUM? Most advisors have set baskets of investments they put all their clients into based on age and risk tolerance. Investing 2M is no harder than $1M and the other advice (non investment) is the same in either case. In the end, I just took over the accounts and bought some very low cost index funds and have been sitting pretty on them for the last 5 years. I saved over $100K in fees in that time alone. More if you count the growth of leaving that money invested. With the amount of information available for free and discount brokers I think all 3 models (insurance, full service broker and investment advisor) are on life support. And that's before AI even enters the picture.

[@codegeek98]

0:20:11 if the medical singlarity - or even just a 120y avg life expectancy - arrives faster than expected, how do you think annuities will cope? Will they just go bust? Get laws excusing them from paying the unexpected amount?

[@mksati]

Love these guys!! Very honest and informative!!!

[@Theretirementnerds]

Thank you so much!!

[@leslieschultz5616]

I was able to pick out a couple of tidbits and I thank you for that but a great deal of this went over my head and I am a college educated person - registered nurse. I am nearing retirement and my husband is already retired, we have a great financial guy (we think, but do we really know?). I wish there was a place to listen to this type of info in a BEGINNER format.

[@jeanetteboule1962]

I love your channel! I just wish I watched it 3 years prior to buying an IUL from my sister! My monthly payment is/was $415 ! Within 3 years I funded it with $20 k . She told me , to be able to retire comfortably, I need to max fund it with Atleast $23k a year!! I never fully understood the gist of IUL. To be honest, I don’t think my sister fully understands what she was selling me . She sold me “peace of mind, and living comfortably with retirement income tax free”! Fast forward, my husband and I were buying a house and needed some money for down payment and didn’t want to touch my investment in the market . So I borrowed cash from my IUL . I could only borrow $5k out of $20k . I haven’t funding it and I told my sister I haven’t been bec money is tight. I honestly don’t want to anymore and would rather put my money into my IRA or do my own investment ! At this point, I don’t know what to do with the remaining $15k . Well I guess I can’t take it out anyway!!! Do I just keep contributing or let it die out?

[@Jrevardmedia]

Check out your policy. It gives you guidelines on your surrender values and that is based upon how long the policy has been in effect.

[@Ubiquitous_1]

This is useful information! I need to listen to this again! And then maybe again after that! Thank you for this!

[@Theretirementnerds]

Thank you for watching!

[@terracenight27]

I want to be a CFP but I’m nervous about job prospects after my military career. I have a degree in management and was thinking about getting my MBA just because the Army will pay for most of it while I’m active. Will that help my chances getting hired with just having a BS and CFP? What can I do besides getting the CFP to be competitive for employment in the financial advisor realm?

[@edavis5451]

To me financial advisors are kind of like hiring a plumber. I’ve got a leaky faucet. I could hire the plumber and have him look over the house and keep the plumbing working optimally. Or I can hire the plumber to fix the faucet and move on. Or I can watch a KZbin video and fix it myself. But what I really want is to hire a plumber to teach me how to do it myself and to make sure I’m doing it right. And I can check in from time to time to helpful fix other plumbing issues.

[@f18a]

This is a great episode, and exactly what I needed as I transition into retirement. Thanks.

[@Theretirementnerds]

So glad it was helpful! Thank you for watching!

[@MarkDenbaly]

This is simply superb. Very much appreciate it.

[@Theretirementnerds]

Thank you so much!

[@jamesbenge1159]

What an amazingly informative podcast. Learning so much! Thank you!

[@Theretirementnerds]

Thank you for watching!

[@RichG-zf9cw]

Thanks guys. Great show. Love you both together. Oh, individually too.

[@Theretirementnerds]

Thank you so much!!

[@cindyfeldkamp269]

Honestly people don’t need a financial advisor. Beware of them. You can be your own financial advisor

[@lesthompson608]

Is there a way to set a cap on the fee for assets under management? I don’t believe that the amount of value added scales with the assets under management so why do the fees?

[@laxnative4622]

Well then you may wish to take assets OUT of management. Hold individual stocks within a brokerage account at a company that doesn't charge you a management fee.

[@carieyounginsurance]

As an insurance broker - I don’t want to get into financial products despite the lucrative benefits- it’s not beneficial to me to put on another hat and take their money and give myself high commissions for products I would not invest in myself…! Sticking with Medicare and Health and registered social security agent is where I’m most effective and needed by my clients- it keeps me busy enough!

[@deba.2175]

So good I'd watch again.

[@Theretirementnerds]

Thank you! 🙂

[@codegeek98]

0:39:58 are those costs going to show up in the tracking error?

[@thareja12]

Excellent discussion! The problem is it is very had to find flat fee based advisors who are really good. Do they even exist?

[@Theretirementnerds]

Thank you for watching! They do exist, but the demands on their time and because they are good typically lead to charging higher prices or not having room for more clients :(

[@Adriana-wv6vx]

Excellent video!

[@Theretirementnerds]

Thank you so much!

[@lfrost6718]

Loved the highway analogy! Thanks for all the great information!

[@Theretirementnerds]

Thank you for watching! 🛣

[@vinnyg2619]

Thanks for both Zacc and you for posting this video! It was very informative. As a DIYer in investing and soon to be retired I would love the opportunity to speak to a qualified financial advisor to pick his/her brain. My wife and I discussed going to an hourly advisor but around here they are scarce, getting Zacc's take on it makes me understand why. At this point in my life I don't need a financial advisor taking care of my finances as I have a plan, have run the projections and it seems like all should be OK. But I do realize someone who is experienced in this will be able to offer something that I don't know. I watch a lot of KZbin retirement channels and try to gain knowledge from what they are saying and I've picked up quite a lot of bits of information and trying to cram them together. Hopefully Zacc and you continue to put out more great info!!!

[@Theretirementnerds]

We have another video that will be released in the next 2 weeks :) It's been interesting because I have been searching for a flat fee or hourly advisor to partner with for people like yourself. It has been very difficult finding one who is experienced and willing to take on new clients.

[@vinnyg2619]

@@Theretirementnerds I spoke to an advisor who would charge me a flat fee and "write up a plan". He sounded OK but I realize that a plan may need to be tweaked and a one time plan may not be in our best interest. Thanks again for all the great content you provide

[@Theretirementnerds]

@@vinnyg2619 that's what Zacc has noticed. A plan is put together to execute, and then a month later, something changes that throws off the plan.

[@Coleman-w3r]

Good stuff, very honest and informative guys.

[@kinggeek1960]

Would like to see a future episode dedicated to annuities (pros and cons), SPIAs, MYGAs, FIAs, QLACs and Variable Annuities including RILA's - vs bond ladders, or tips ladders

[@nicolemoest9467]

Sunflower yellow! Fantastic video. Thank you for your straightforward approach and well organized discussion. It helps to clarify a lot and including a visual matrix is helpful to us visual learners. I’m still a bit hazy on how / if a “certified financial planner” or CPA overlap the 3 categories. Any hints? Thanks much!😊

[@Theretirementnerds]

So glad it was helpful! CFP and CPA are quite different. One person can get both, but they are quite different. A CPA is a certified public accountant... more around accounting than financial planning, but again, a CPA can also become a CFA and vice versa. Does that help at all?

[@EdithEsquivel]

I have wanted to become a financial advisor with project based fees but honestly it has been financially unsustainable. And it's true: my clients don't take action on my advice most of the time. However, the one percent fee seems immoral. I'm confused as to what could be a sustainable advisory business.

[@zaccarycall]

Imagine a 1% fee on a $100k account. At least the way we bill, after expenses, we wouldn’t get our first paycheck for managing the account for anywhere between 3 and 5.5 months (depending on when in the quarter someone starts) then we would bill about $250 per quarter and get to keep way less than $200. That is not sustainable either. Many studies of flat fees are showing averages of $6k-$10k per year. Not saying one is better than the other, what most people find is they end up charging greater fees (flat or %) as they learn how much value they give to their clients. Many clients recognize the value and pay for it. However, too many clients pay advisors (flat or %) without getting enough value. This is a value vs cost issue rather than a flat vs % issue. Keep exploring. There are good options to add value for people on both sides. Frankly, you might not be charging enough of a flat fee.

[@ammytheGSD]

@ 16:15 - backdoor roth is always an option.

[@YingjiYin-b6h]

I study all 3 heads and current doing Medicare and regular health plans. But my goal is to be a CFP and running my own financial data center website. In general I don't believe most people in sales world would be honest, like i kept listening to life insurance agents hype sales pitch to the customers. Because if most of life insurance sales people are honest and telling the truth, then the customers would be turn off and ending up not buying the products. People want to hear great things and sales job is to feeding them. It is always conflict of interests going on in the financial sectors. I mean this is not the secret, most people already knew it. But I don't have problem with the oversold pitch as long as you pick a right life insurance or annuity products for the customers, some people don't know how to invest in risky asset like stock, so Annuity and life insurance actually fits them. Because insurance products is not as risky as other products, so if planning well, both ends will mutual benefit from it.

[@ABab-jf2jb]

Very informative. Thank you to both of you.

[@Theretirementnerds]

Thank you for watching!

[@joeysocks5718]

This was so informative and helpful. Thanks! 👍🏼👍🏼

[@Theretirementnerds]

Thank you for spending time with us!

[@kinggeek1960]

The point on the "flat fee" is the amount of work to provide planning on a $1m vs $4m isn't 4x most of the time. Paying $10k/yr is $40k/yr. 1% vs 25 bips. I would think a lot more people would want to pay $10/yr on a $4M portfolio /w planning

[@momhouser]

I wish you had discussed the CFP designation...how to parse that into which licenses.

[@Theretirementnerds]

We were going to touch on that. Slipped through the cracks. Much like the licenses discussed, the CFP designation can also be held by all 3 professionals.

[@laxnative4622]

CFP designation means the designer has training and passed exams in Insurance, Investments, Taxes, Retirement planning, and Estate planning. Also required to take continuing education classes, and follow a Code of Ethics. It doesn't mean the person can sell stocks or insurance. So most get additional licenses to do those things. For more info, search College for Financial Planning or CFP Board of Standards.

[@stevecaldwell6169]

The financial industry is intentionally set up to obfuscate the client and sound high falutin. Additionally financial literacy is sorely lacking. This has been baked into the "system" since man began to walk upright. Thank you for providing this information in a most presentable way.

[@Theretirementnerds]

Appreciate you tuning in Steve! We agree with you!

[@Lolatyou332]

@1:18:00 -- It's really just because your so used to the money coming in from AUM that it doesn't make financial sense to not do it.. I'm hoping AI makes financial planning much easier and less lucrative as a business. I don't think people realize how ripped off they are getting and how impactful a 1-2% fee on a portfolio is.. Many people work much harder on much more difficult intellectual tasks and make less money than some of these people.

[@joyblevins8712]

Remember 1% of 1million dollars is $10k per year. Financial advisor always talks you into putting your money on a fully loaded funds! Financial advisors always have the habit of wining and dining you and you are the main course.

[@Theretirementnerds]

Hi Joy, were you able to make it to the Part where he talks about loaded funds?

[@joyblevins8712]

@@Theretirementnerds yes.

[@kayakor118]

@@joyblevins8712 not mine

[@kayakor118]

Not ‘always’. My advisor hasn’t put me into any fully loaded funds.

[@DianaGarcia-hn8te]

Love the info

[@Theretirementnerds]

Thank you so much!!

[@kinggeek1960]

Had a recent equitable FA/RIA pushing a Jackson Variable Annuity and a Kai-Zen plan to "protect cash flows, income" 1/3 of the portfolio

[@JustAVariation]

The guys voice is like Deadpool lol. Pretty cool and I love this video

[@Theretirementnerds]

He's had a lot of Ryan Reynolds comparisons... Zacc is great!

[@DaystarHiker]

"your limited to the investment options that the annuity provides". Not all annuities provide investment options, those that do (variable rate), not a good option. FIA's, SPIA's are not investment vehicles however. They are ROC vehicles. They are , as you alluded to, a good choice for the cautious near retiree as a hedge against longevity risk.

[@freedomlife3623]

And cognitive risk, don’t hear lots of advisors talk about that.

[@rchatto05]

Great topic! When I Asked My financial adviser about the Mutual fund and ETF Expense Ratio. Then told me that they will eat it or absorb it and I don't have to pay for it. Is that common and how do they do that. How will I know that they are absorbing it. Mutual fund /ETF that I personally own, never show those fees that I can think of, we just assume. It's almost hidden.

[@zaccarycall]

I’ve never seen a way for a company to “absorb” an expense ratio. They can eliminate it by not using funds at all and buying the individual stocks/bonds. The expense ration is built into the share price each day by the fund company. You would literally need to see a credit to your account by your advisor to offset that. In fact the opposite often occurs. Not only do they not absorb the fee, but Some big brokerage companies actually ask the fund companies to share a portion of their expense ratios with the brokerage company. This is why only certain funds are available to purchase without commissions at each brokerage company. (They have revenue sharing agreements)

[@kylezundel7124]

Zacc is awesome!

[@Theretirementnerds]

He really is!

[@zaccarycall]

Hey Kyle!! Cool to see you in here watching. Been a long time. Hope the family is well!

[@stevenjames14]

Great content.

[@Theretirementnerds]

Thank you so much!!

[@bryan61-b2y]

We have found that AUM advisors develop large confusing plans with 10-20-30 funds. Advisor coats may include a 1% AUM, fund expenses (both net and gross), front or back end loads and possible trailer fees. Sometimes this can add up to 6% and you have to look deeply deeply to understand the total fees. The financial industry is very opaque. I personally believe the AUM advisor will gradually be replaced by AI and consumers will move away from active funds with high expenses ratios to passive index funds with minimal expense ratios. The consumer is slowly becoming educated.

[@77magicbus]

Great video.

[@Theretirementnerds]

Thank you for watching!

[@christinewallace9251]

Good video. Nice summary

[@Theretirementnerds]

Thank you!!

[@seth1208]

Great content. Very fair.

[@Theretirementnerds]

Thank you!

[@billmoyer3254]

Every financial advisor I have ever met with seemed to have a fiduciary with their wallet and nothing else. Management fees combined with a strategy to just keep me in the game is blatantly self serving. I always suspect young advisors have done little to nothing to prove their worth or provide me with information I cannot access myself The minute I lose money on my advisor's advice, and he gets paid for it, our interests are opposed.

[@powderriverfarrier]

Speaking from first hand experience with him if you listen to Erik you are guaranteed to gain useful information and have a better outcome than if you listen to other youtube videos.

[@Theretirementnerds]

You are too kind! Appreciate you so much!!

[@nataliamodiodio]

Really important video topic to shed light on and overall just a very honest and informative conversation

[@Theretirementnerds]

Thank you for watching!!

[@youdqtube]

Good stuff. Thanks.

[@Theretirementnerds]

Thank you!

[@kinggeek1960]

misquoted mary oliver fyi - it's actually "Tell me, what is it you plan to do with your one wild and precious life?" which is actually better since your discussing "planning"

[@zaccarycall]

Thank you!! Yeah I’m sure I didn’t get it just right. Hopefully people still understand the discussion.

[@Carlg26]

I would love to know if Canada, and the USA have the word, have the profession of a Fiduciary? ... Which if a fiduciary gives you really bad advice it is called a breach of fiduciary duty. Thus they are held accountable? I hope some one can help me understand this term?

[@Steve_SEC]

Do you know any CFPs specializing in physicians working for the pharmaceutical industry?

[@Theretirementnerds]

Sent me an email and I'll connect you with Zacc's team to see. [e-mail]

[@Hawkeye242]

Charging a percentage of assets under management is a red flag. Fee for advice is what most people should be seeking (if at all, if your situation is simple, you don’t need an adviser).

[@mehawinct]

Great topic, great guest, great discussion -- BUT the mis-matched voice levels are killing me!!! The askew books behind Zacc aren't helping either... ;-)

[@unclesam7212]

"Fidelity Tax Managed US Equity Index Stratagy" management service. Worth it?

[@zaccarycall]

One of their best products. Yet other firms have found ways to implement the tax management overlay on top of any strategy. This is a tax overlay on just one strategy. (A S&P 500 custom Index)

[@unclesam7212]

@@zaccarycall Thank you.

[@JoseRodriguez-yr9uv]

Zac attack is from Disney’s ‘Sky High’

[@Theretirementnerds]

Thank you! It's been bugging me for quite some time.

[@thadeusmoor3535]

I've learned quite a bit thank you so much I'm just a guy who's getting ready to retire I do have a financial advisor I talked to him at least twice a month. I asked lots of questions if I don't see anything moving I asked more questions. I seem to be doing well with this guy. My money is moving up but I still have many questions I do invest on my own also

[@Theretirementnerds]

Thank you for spending time with us and sharing your experience!

[@travis10466ny]

are ya hiring? I would love to work with this firm!!!!!

[@zaccarycall]

We hired 6 people 4 weeks ago. 58 employees and rising. There will always be a need for humans advising humans on life’s biggest decisions.

[@travis10466ny]

@zacccall9897 what qualifications do I need? I'm always willing to learn the process. Can I contact the firm?

[@dwight_klaus2981]

Good luck finding a financial advisor that will do anything for a flat fee. They all want either a percentage of AUM, or a retainer. Ask them what their hourly rate is for financial planning. See how it compares to your hourly income. How many hours do you get before they have consumed 1% of AUM? And they are rarely working exclusively for you - they feed the same analysis to all of their clients... Its not as complicated as these FAs make it sound.