Not all financial advisors are created equally. Some have certified credentials, some charge their clients fees, and others may get paid on commission (if they offer investment products). In part two of this podcast episode, our own Tom Romano, Head of Strategic Relationships and Product Development, is joined by Symmetry's Michael Storer, Senior Regional Director, and a financial advisor from our sister firm, Apella Wealth, Peter Leppones, CFP®, to discuss the important credentials of, and differences between, financial advisors.  If you have any questions or would like more information, reach out to us at https://symmetrypartners.com/contact-us/ You can also find us on Facebook, YouTube, Twitter, and LinkedIn. As always, we remain invested in your goals. Symmetry Partners, LLC, is an investment advisory firm registered with the Securities and Exchange Commission. The firm only transacts business in states where it is properly registered, excluded or exempted from registration requirements. Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. No one should assume that future performance of any specific investment, investment strategy, product or non-investment related content made reference to directly or indirectly in this material will be profitable. As with any investment strategy, there is the possibility of profitability as well as loss. Due to various factors, including changing market conditions and/or applicable laws, the content may not be reflective of current opinions or positions.   Please note the material is provided for educational and background use only. Moreover, you should not assume that any discussion or information contained in this material serves as the receipt of, or as a substitute for, personalized investment advice. Transcript: 0 00:00:01.900 --> 00:00:07.500 Welcome back 1 00:00:07.500 --> 00:00:10.500  to part 2 of choosing the right financial advisor. This 2 00:00:10.500 --> 00:00:13.100  is Tom Romano with unfiltered finance and I'm back 3 00:00:13.100 --> 00:00:16.200  here with my guests. Mike store senior Regional director at 4 00:00:16.200 --> 00:00:20.000  symmetry partners and Peter laponis financial advisor 5 00:00:19.200 --> 00:00:22.200  and cfp at Apollo wealth. Thank you for joining us 6 00:00:22.200 --> 00:00:25.400  gentlemen, so go Peter certified financial 7 00:00:25.400 --> 00:00:28.400  planner see FP Mike. I'm 8 00:00:28.400 --> 00:00:31.800  asked this question to you because Peter is a cfp. What 9 00:00:31.800 --> 00:00:34.700  are the credential what other credentials that investors should 10 00:00:34.700 --> 00:00:37.200  be looking for as they're going through this process of choosing a 11 00:00:37.200 --> 00:00:40.500  financial advisor. I mean cfp certainly is one of them sure. There's 12 00:00:40.500 --> 00:00:43.200  you know, I mean I come across a wide variety 13 00:00:43.200 --> 00:00:47.500  of different advisors and that have different different designations 14 00:00:46.500 --> 00:00:49.300  and it and sometimes it 15 00:00:49.300 --> 00:00:52.400  depends on it depends on you know, what type 16 00:00:52.400 --> 00:00:56.400  of work they're doing for the client. It may not always be, you know 17 00:00:56.400 --> 00:00:59.400  cfp, but most of the advisors that I'm working with their 18 00:00:59.400 --> 00:01:01.500  certified financial planners, but there's 19 00:01:01.900 --> 00:01:05.000 there's SEMA, you know, which is a certified Investment 20 00:01:04.500 --> 00:01:07.800  Management associate, I 21 00:01:07.800 --> 00:01:10.500  believe and that I look 22 00:01:10.500 --> 00:01:13.500  at CFA and see Sima as kind of two different 23 00:01:13.500 --> 00:01:14.300  designations that 24 00:01:15.500 --> 00:01:18.200 Are are very strong. I mean these people are incredibly smart. 25 00:01:18.200 --> 00:01:21.700  They pass a lot of tests to get where they are. But I 26 00:01:21.700 --> 00:01:24.500  look at the see the SEMA and the 27 00:01:24.500 --> 00:01:27.300  the CFA which is a chartered financial 28 00:01:27.300 --> 00:01:31.100  analyst as more geared towards Investments to 29 00:01:30.100 --> 00:01:33.300  a certain extent. So they're if you've 30 00:01:33.300 --> 00:01:37.000  got an advisor that is more seamors or CFA oriented. 31 00:01:36.500 --> 00:01:40.300  I think you're probably you could and Peter 32 00:01:39.300 --> 00:01:42.900  you can correct me if I'm wrong lean more 33 00:01:42.900 --> 00:01:45.800  towards them probably approaching it from an investment perspective. 34 00:01:45.800 --> 00:01:49.100  Whereas I think a cfp is 35 00:01:48.100 --> 00:01:52.100  going to approach the relationship from everything 36 00:01:51.100 --> 00:01:54.400  that Peter just talked about in terms of how they 37 00:01:54.400 --> 00:01:57.200  want to how they want to work with you moving 38 00:01:57.200 --> 00:02:00.300  forward Investments are important no doubt, but I think from 39 00:02:00.300 --> 00:02:03.700  the standpoint of the approach if 40 00:02:03.700 --> 00:02:06.200  you're looking for a planner, you know a cfp is 41 00:02:06.200 --> 00:02:10.000  where you want to be if you want someone that's more focused on. Okay, I'll construct 42 00:02:09.300 --> 00:02:12.800  a portfolio for you, but I think Sima and 43 00:02:12.800 --> 00:02:15.300  CFA tend to lose tend to 44 00:02:15.400 --> 00:02:18.200 Themselves more towards investment only to a certain 45 00:02:18.200 --> 00:02:21.400  extent now that's not every single or CFA but I think from that 46 00:02:21.400 --> 00:02:24.400  perspective those types of designations. Those are the ones that I come across 47 00:02:24.400 --> 00:02:27.700  primarily obviously, there's other designations with 48 00:02:27.700 --> 00:02:30.400  the insurance realm that you know, you like a 49 00:02:30.400 --> 00:02:33.200  chfc that would be which I 50 00:02:33.200 --> 00:02:36.400  I don't even remember that. It's a chartered leave its chartered Financial 51 00:02:36.400 --> 00:02:39.700  consult consultant, right which is different than a chartered financial analyst 52 00:02:39.700 --> 00:02:42.400  which is kind of interesting but you know, they'd be focused more on 53 00:02:42.400 --> 00:02:45.500  and probably the insurance side of the investment process. 54 00:02:45.500 --> 00:02:48.200  So I come across a lot but I would say 55 00:02:48.200 --> 00:02:51.900  that I feel comfortable saying it that the 56 00:02:51.900 --> 00:02:55.400  cfp is the designation where you know, mostly you're 57 00:02:55.400 --> 00:02:58.600  going to be getting more of a planning approach. Whereas I 58 00:02:58.600 --> 00:03:02.200  think the other designations might lean towards something else within 59 00:03:01.200 --> 00:03:04.700  the whole scope of planning but more, 60 00:03:04.700 --> 00:03:07.100  you know designated or specific on that 61 00:03:07.100 --> 00:03:11.000  side sure. I think it's important, you know, individuals professionals 62 00:03:10.500 --> 00:03:14.000  regardless of the industry having credentials after 63 00:03:13.400 --> 00:03:15.400  their name shows that they're 64 00:03:15.400 --> 00:03:18.600 to the business. They're probably lifelong Learners, 65 00:03:18.600 --> 00:03:23.000  which is something you probably want to look for in a financial advisor. And 66 00:03:21.200 --> 00:03:25.300  I would agree with you a cfp 67 00:03:24.300 --> 00:03:27.600  is probably the starting point. However, the 68 00:03:27.600 --> 00:03:31.000  the SEMA the Cima in the CFA, 69 00:03:30.200 --> 00:03:33.900  which I would agree are more investment driven. 70 00:03:35.700 --> 00:03:38.100 Um working with a firm who has a cfp has the point 71 00:03:38.100 --> 00:03:41.300  of contact Peter, but that doesn't mean you don't have access to 72 00:03:41.300 --> 00:03:44.500  cfa's and seamas as well. Right, correct. And 73 00:03:44.500 --> 00:03:47.500  that's that's part of the teamwork approach here that you 74 00:03:47.500 --> 00:03:51.200  know behind the scenes. I know that there's cfas working on our portfolios. 75 00:03:50.200 --> 00:03:53.100  So so I think 76 00:03:53.100 --> 00:03:57.500  you could see someone with another non-cfp designation 77 00:03:57.500 --> 00:04:00.200  but is what's their firm like do they have a team behind 78 00:04:00.200 --> 00:04:04.100  them is maybe they have a a young hire 79 00:04:03.100 --> 00:04:06.700  a new hire coming out of college who's studying 80 00:04:06.700 --> 00:04:09.200  for his or her cfp and that's their parent plan 81 00:04:09.200 --> 00:04:12.600  who works on the financial plan. So I mean to I think 82 00:04:12.600 --> 00:04:15.300  you might be doing a disservice just because 83 00:04:15.300 --> 00:04:18.400  someone doesn't have cfp understand more about what's 84 00:04:18.400 --> 00:04:21.200  what's going on at the firm and not just 85 00:04:21.200 --> 00:04:25.100  the designation. But I do agree having a designation and you 86 00:04:24.100 --> 00:04:28.400  made you reminded me. My continuing 87 00:04:27.400 --> 00:04:30.500  ed is coming up and it's it's comprehensive. I've 88 00:04:30.500 --> 00:04:34.000  got I've got a lot to do several hours to to 89 00:04:33.000 --> 00:04:34.100  keep 90 00:04:34.600 --> 00:04:37.500 Cfp designation current I've 91 00:04:37.500 --> 00:04:40.800  got to do some continuing education requirements online. Yeah, me 92 00:04:40.800 --> 00:04:43.100  too. Thanks for the reminder. I would say I didn't 93 00:04:43.100 --> 00:04:46.300  mean to say that, you know, the cfp is definitely starting point. But Peter 94 00:04:46.300 --> 00:04:49.800  brings up a great point that you when you visit with these cfps. They 95 00:04:49.800 --> 00:04:50.800  do have those other. 96 00:04:51.600 --> 00:04:54.400 People in their organizations that cover those parts 97 00:04:54.400 --> 00:04:57.200  of the planning process for them from that standpoint 98 00:04:57.200 --> 00:05:00.200  So and I've met many cfps that have their SEMA or have their CFA as 99 00:05:00.200 --> 00:05:03.400  well. So depends on who I'm speaking with, but there's there's a 100 00:05:03.400 --> 00:05:06.400  wide variety of different designations and some have won 101 00:05:06.400 --> 00:05:10.000  some have many or some have, you know, more than one right? So something 102 00:05:09.200 --> 00:05:12.400  that you would recommend investors look for as they're gonna 103 00:05:12.400 --> 00:05:15.200  go through absolutely. Absolutely. Absolutely. Yeah Mike we 104 00:05:15.200 --> 00:05:18.100  for all the cfps out there yet. We're definitely the top 105 00:05:18.100 --> 00:05:21.200  designation. No doubt about no doubt about it. We can 106 00:05:21.200 --> 00:05:25.900  leave it at that. Very good very good. So I 107 00:05:25.900 --> 00:05:28.500  have a few more questions and this has been great gentlemen, but 108 00:05:29.700 --> 00:05:32.800 What are some of the resources online resources 109 00:05:32.800 --> 00:05:35.400  right, you know, I don't think people use phone books 110 00:05:35.400 --> 00:05:39.100  anymore to find Financial professionals. What are 111 00:05:38.100 --> 00:05:41.100  some of the things my gear you're working 112 00:05:41.100 --> 00:05:44.000  with thousands of advisors. Like how do you how do you 113 00:05:44.100 --> 00:05:47.200  go about and find an advisor that that you would want to work with 114 00:05:47.200 --> 00:05:50.600  a professional level but not only professional of 115 00:05:50.600 --> 00:05:53.900  us person maybe from even personal standpoint where can 116 00:05:53.900 --> 00:05:56.300  investors go? Well they can they can you 117 00:05:56.300 --> 00:05:59.800  know go online and you know, there's a couple of different organizations that 118 00:05:59.800 --> 00:06:02.700  are out there that you could look at like the Financial Planning Association is 119 00:06:02.700 --> 00:06:05.600  a great place to start that's that's a 120 00:06:05.600 --> 00:06:08.600  big one National Association of 121 00:06:08.600 --> 00:06:11.800  personal financial advisors is another great site 122 00:06:11.800 --> 00:06:14.600  as well the certified financial planner 123 00:06:14.600 --> 00:06:17.100  board. You can go that route as well. I mean, 124 00:06:17.100 --> 00:06:20.400  that's probably the best place to start you can find someone in your general area 125 00:06:20.400 --> 00:06:23.100  that could help you there. There's another firm out there 126 00:06:23.100 --> 00:06:26.600  XY Planning Network which is which 127 00:06:26.600 --> 00:06:29.300  is a pretty good tool for to search for fee only. 128 00:06:29.700 --> 00:06:32.200 Financial advisors you mentioned, you know 129 00:06:32.200 --> 00:06:35.200  word of mouth or referrals from from your friends 130 00:06:35.200 --> 00:06:38.200  or family that may be working with a financial advisor. So all of 131 00:06:38.200 --> 00:06:41.100  them are great great ways to to identify some of 132 00:06:41.100 --> 00:06:44.300  that you might want to work with at least get the opportunity to interview them to see 133 00:06:44.300 --> 00:06:47.700  if they would be a good fit for you. Yeah. I think there's a lot of great resources online, 134 00:06:47.700 --> 00:06:50.500  you know, one of the things that Peter and 135 00:06:50.500 --> 00:06:53.500  I talk about quite a bit is you know working with someone 136 00:06:53.500 --> 00:06:56.200  who understands you someone who's working with 137 00:06:56.200 --> 00:06:58.600  other investors like me. 138 00:06:59.300 --> 00:07:02.900 Right in a lot of times if someone has a very specific need or 139 00:07:02.900 --> 00:07:05.500  specific sort of outcome. They're 140 00:07:05.500 --> 00:07:08.800  looking for they can identify the right Financial professional 141 00:07:08.800 --> 00:07:11.200  by not only looking at those websites, but 142 00:07:12.200 --> 00:07:15.100 LinkedIn Facebook. Look, who are these? 143 00:07:15.100 --> 00:07:18.300  Look who at the who these advisors are look at 144 00:07:18.300 --> 00:07:21.500  the circles that they're in right? You know it a funny story my parents 145 00:07:21.500 --> 00:07:24.200  who are not great investors. They were 146 00:07:24.200 --> 00:07:27.400  both School teachers had a pension but when they were looking for 147 00:07:27.400 --> 00:07:30.400  financial advisor, they didn't look any 148 00:07:30.400 --> 00:07:33.700  further than you know, the Connecticut Teachers Retirement Financial 149 00:07:33.700 --> 00:07:36.400  advisory. It was a really long name like 150 00:07:36.400 --> 00:07:39.500  that. I know I'm butchering it and talking it right but they will 151 00:07:39.500 --> 00:07:42.600  work Connecticut Teachers that must be the guy that we work with without even 152 00:07:42.600 --> 00:07:45.800  thinking twice about it, but they knew they felt comfortable and 153 00:07:45.800 --> 00:07:48.500  they trusted that the this particular individuals working 154 00:07:48.500 --> 00:07:49.900  with other, Connecticut Teachers. 155 00:07:50.800 --> 00:07:53.400 Here to add to any of that Peter. I mean, I think that 156 00:07:53.400 --> 00:07:56.400  you know, I've had done. Oh my 157 00:07:56.400 --> 00:07:57.600  second cap. We have pulled that one back. 158 00:07:58.300 --> 00:07:59.300 I won't ask that question better. 159 00:08:00.300 --> 00:08:00.300 All right. 160 00:08:04.500 --> 00:08:05.500 so Peter 161 00:08:06.900 --> 00:08:09.200 You know, I've talked about this it it's a mutual 162 00:08:09.200 --> 00:08:12.400  interview between an advisor and an investor the investors making 163 00:08:12.400 --> 00:08:16.000  a choice, but the advisors making a choice as well. So talk 164 00:08:15.200 --> 00:08:17.800  a little bit about that process if you will. 165 00:08:18.400 --> 00:08:21.700 Yeah, I think that's that's a great question. And I definitely 166 00:08:21.700 --> 00:08:24.300  encourage people to come up with a 167 00:08:24.300 --> 00:08:28.000  list of questions and interview multiple 168 00:08:27.500 --> 00:08:30.200  advisors definitely. But yeah, when when 169 00:08:30.200 --> 00:08:33.500  I'm meeting with with a New Prospect, I'm interviewing 170 00:08:33.500 --> 00:08:36.700  them as well. And there's things I'm I'm looking 171 00:08:36.700 --> 00:08:39.900  for I want to make sure that number 172 00:08:39.900 --> 00:08:43.600  one there. They're gonna be happy working with us. I've 173 00:08:42.600 --> 00:08:45.500  told people who I refer to 174 00:08:45.500 --> 00:08:48.000  them as Gunslingers. They want to pick stocks. They want to 175 00:08:48.100 --> 00:08:51.500  be in and out of the market they want they want action and I've told 176 00:08:51.500 --> 00:08:54.800  people I go I don't think we're gonna be a good fit. I'm a 177 00:08:54.800 --> 00:08:57.000  nice person. You seem like a nice person you seem to get along but 178 00:08:57.800 --> 00:09:00.300 we're going to have different philosophies and and I want 179 00:09:00.300 --> 00:09:03.200  you to be happy and I don't want to waste your time and I 180 00:09:03.200 --> 00:09:06.200  don't want to have my time wasted and so I've had to tell people I just don't think 181 00:09:06.200 --> 00:09:09.800  that this is necessarily going to work. Um, also there's 182 00:09:09.800 --> 00:09:12.300  when I start to hear people talk and I say this 183 00:09:12.300 --> 00:09:12.800  to clients 184 00:09:13.500 --> 00:09:16.600 and Prospects I start to get a gut feeling about what's 185 00:09:16.600 --> 00:09:19.400  going on. And when I start to hear about things like 186 00:09:19.400 --> 00:09:22.300  well a lot of debt, you know, you've got 187 00:09:22.300 --> 00:09:25.600  and not good. You don't have good financial habits. 188 00:09:25.600 --> 00:09:28.300  You're spending all your money. You've got 189 00:09:28.300 --> 00:09:31.200  a lot of debt a lot of bad debt. It's one thing to have a mortgage your car 190 00:09:31.200 --> 00:09:34.100  payments. Those are those are necessary. We'll call those 191 00:09:34.100 --> 00:09:38.200  good debt necessary debt. We start talking about large student 192 00:09:37.200 --> 00:09:40.500  loans. We start talking about large credit 193 00:09:40.500 --> 00:09:41.300  card balances. 194 00:09:42.500 --> 00:09:45.900 I may not be able to work with you. I you may be better off going 195 00:09:45.900 --> 00:09:49.600  and having credit counseling done first because I 196 00:09:48.600 --> 00:09:52.000  can maybe give you some pointers but I've 197 00:09:51.100 --> 00:09:54.400  had to unfortunately tell people that we may 198 00:09:54.400 --> 00:09:57.600  not be a good fit. There wasn't a whole lot I could do because they 199 00:09:57.600 --> 00:10:00.700  just they just didn't have the assets. They needed to get really the 200 00:10:00.700 --> 00:10:03.400  basics of their budgeting or spending plan 201 00:10:03.400 --> 00:10:06.600  down and start to work on that debt. And that's not something we're 202 00:10:06.600 --> 00:10:07.000  necessarily. 203 00:10:08.500 --> 00:10:11.600 Working on it'd be more of sort of a credit agency 204 00:10:11.600 --> 00:10:14.600  helping them to kind of get that square away. Absolutely. You 205 00:10:14.600 --> 00:10:17.500  mentioned working with, you know, other sort of 206 00:10:17.500 --> 00:10:20.200  financial professionals that you you work with 207 00:10:20.200 --> 00:10:20.400  other. 208 00:10:21.500 --> 00:10:25.400 Financial professionals as well. I mean maybe not direct financial 209 00:10:25.400 --> 00:10:28.400  advisors, but tax advisors and things like that. Oh, definitely. 210 00:10:28.400 --> 00:10:31.400  I like to say that the analogy is I'm 211 00:10:31.400 --> 00:10:34.600  I'm sort of the quarterback or I'm your 212 00:10:34.600 --> 00:10:37.700  your primary care physician if we need to bring in a specialist, 213 00:10:37.700 --> 00:10:40.300  you know cardiologists so forth 214 00:10:40.300 --> 00:10:41.900  weekologists. 215 00:10:44.400 --> 00:10:46.100 So but I'm working with. 216 00:10:47.200 --> 00:10:50.300 I'll work with the client's attorney to talk about their state plan 217 00:10:50.300 --> 00:10:54.500  work with a client's accountant or CPA to 218 00:10:54.500 --> 00:10:57.500  talk about if we need to do some rebalancing in the portfolio before 219 00:10:57.500 --> 00:10:59.200  I do any of that. 220 00:11:00.200 --> 00:11:04.000 And start triggering capital gains. I want to make sure that the accountant is 221 00:11:03.400 --> 00:11:06.400  on board with it and we understand what the 222 00:11:06.400 --> 00:11:09.500  ramifications are of those actions or in 223 00:11:09.500 --> 00:11:12.800  actions because the last thing a client wants is a 224 00:11:12.800 --> 00:11:15.800  surprise attack time. There's something psychological about 225 00:11:15.800 --> 00:11:18.700  a big tax bill staring you in the face and it's 226 00:11:18.700 --> 00:11:21.100  one thing to not know about it and have to 227 00:11:21.100 --> 00:11:24.200  pay it. It's another thing. All right, you know what we knew about this, but we know why we 228 00:11:24.200 --> 00:11:27.300  did it. So I'm constantly working with 229 00:11:27.300 --> 00:11:30.900  with other Professionals in helping clients 230 00:11:30.900 --> 00:11:32.800  with taxes and in legal issues. 231 00:11:33.700 --> 00:11:36.300 That's fantastic. Yeah, so that's another thing that investors should 232 00:11:36.300 --> 00:11:39.100  be looking for. Is there a true team approach? Maybe not even under the 233 00:11:39.100 --> 00:11:42.700  same roof under the same corporate umbrella if you will but making 234 00:11:42.700 --> 00:11:46.100  sure that the advisors acting in that quarterback capacity 235 00:11:45.100 --> 00:11:48.700  and has the right Specialists for 236 00:11:48.700 --> 00:11:51.200  those needs that might be outside of the scope of 237 00:11:51.200 --> 00:11:54.700  what the advisors doing on a day-to-day and that could be another point 238 00:11:54.700 --> 00:11:57.300  of reference for a client. If you have an accountant who 239 00:11:57.300 --> 00:12:00.400  you've been working with for a long time and you happen to like him 240 00:12:00.400 --> 00:12:03.800  or her in the way that they work maybe they could be a place 241 00:12:03.800 --> 00:12:05.100  where you could go to get a referral. 242 00:12:05.900 --> 00:12:08.800 Because I'm in all likelihood that that CPA 243 00:12:08.800 --> 00:12:11.600  or that attorney is has some 244 00:12:11.600 --> 00:12:14.400  type of relationship with a financial advisor and could give 245 00:12:14.400 --> 00:12:17.100  you a couple of places to go. Yeah, I think that's a great 246 00:12:17.100 --> 00:12:20.200  great piece of advice there. All right. 247 00:12:20.200 --> 00:12:23.300  I want one more topic here because this comes up a 248 00:12:23.300 --> 00:12:26.800  lot and it's the notion of compensation for financial advisors. 249 00:12:26.800 --> 00:12:29.700  I've heard individuals say 250 00:12:29.700 --> 00:12:32.200  that I don't pay my financial advisor or anything. He does 251 00:12:32.200 --> 00:12:35.100  it for free sure right there is 252 00:12:35.100 --> 00:12:38.200  there's a problem this industry, I think with transparency at times and 253 00:12:38.200 --> 00:12:41.500  there's a number of different ways financial advisors are 254 00:12:41.500 --> 00:12:44.100  being compensated. I didn't like frankly I think advisors should 255 00:12:44.100 --> 00:12:47.300  be fairly compensated. They're doing really good work, right? 256 00:12:49.100 --> 00:12:52.300 Depending on the advisor. Of course, Mike tell us 257 00:12:52.300 --> 00:12:54.500  a little bit about the couple of different. 258 00:12:55.300 --> 00:12:59.000 Fee structures or compensation structures there are for financial advisors. 259 00:12:58.600 --> 00:13:01.800  And if there's one that you would recommend over 260 00:13:01.800 --> 00:13:04.300  another I'll rattle them off because it's a 261 00:13:04.300 --> 00:13:07.100  lot of different ones. There's feel only which we've talked a little 262 00:13:07.100 --> 00:13:09.400  bit about there's fee-based. There's Commission 263 00:13:10.100 --> 00:13:10.900 There's retainer. 264 00:13:11.800 --> 00:13:14.900 There's subscription. There's 265 00:13:14.900 --> 00:13:17.400  another one I've heard that I know is out there not as 266 00:13:17.400 --> 00:13:20.600  popular but it's there and there's flat fee. 267 00:13:20.600 --> 00:13:23.600  So there's a number of different ways that advisors are 268 00:13:23.600 --> 00:13:26.700  compensated and the one 269 00:13:26.700 --> 00:13:29.300  of course in my line of work and in terms 270 00:13:29.300 --> 00:13:32.400  of what I do on a daily basis working with us, I come across primarily 271 00:13:32.400 --> 00:13:35.100  not always I would say fee only 272 00:13:35.100 --> 00:13:38.100  in fee based or the two that that primarily I work with 273 00:13:38.100 --> 00:13:41.300  although there are there are others that are 274 00:13:41.300 --> 00:13:44.100  less. So like a retainer I've seen I've come across that 275 00:13:44.100 --> 00:13:47.400  but I say primarily it's fee only and fee-based that 276 00:13:47.400 --> 00:13:50.000  I typically work with advisors and you know, 277 00:13:50.300 --> 00:13:53.100  I'll let Peter elaborate but I'll just say generally that fee only would be 278 00:13:53.100 --> 00:13:56.100  just be be charging, you know, 279 00:13:56.100 --> 00:13:59.300  a fee for services. It could 280 00:13:59.300 --> 00:14:02.100  be it could be a flat fee or could be a fee based 281 00:14:02.100 --> 00:14:05.400  on assets under management that the investor might have with that advisor 282 00:14:05.400 --> 00:14:08.000  fee base is is kind of 283 00:14:08.300 --> 00:14:11.600  a combination of the only and commission if you will it has 284 00:14:12.100 --> 00:14:16.600 The concept of building on assets but also the advisor 285 00:14:15.600 --> 00:14:19.300  has the ability to offer commission-based 286 00:14:18.300 --> 00:14:22.300  products that would follow outside of the fiduciary scope. 287 00:14:21.300 --> 00:14:24.800  I believe Peter and so those are the two that primarily 288 00:14:24.800 --> 00:14:27.500  I see in my kind of interactions with 289 00:14:27.500 --> 00:14:30.400  advisors around the country. Yeah, I think most of our listeners are 290 00:14:30.400 --> 00:14:33.800  probably falling into the fee only fee-based camp 291 00:14:33.800 --> 00:14:36.500  or the commission side right there. There 292 00:14:36.500 --> 00:14:39.600  are a number of different fee models out there in compensation models 293 00:14:39.600 --> 00:14:42.800  and I think they all have their pros and cons but you 294 00:14:42.800 --> 00:14:45.100  just said something that I'm gonna ask Peter O'Brien on 295 00:14:45.100 --> 00:14:45.300  right? 296 00:14:46.100 --> 00:14:47.600 We talked about fiduciary. 297 00:14:48.500 --> 00:14:50.800 If you are paying a commission. 298 00:14:51.900 --> 00:14:55.200 Is your advisor acting as a fiduciary necessarily? Yeah, 299 00:14:54.200 --> 00:14:57.500  if you've your your fee only your 300 00:14:57.500 --> 00:15:00.200  being charged in a fee for your advice and 301 00:15:00.200 --> 00:15:04.700  and whatever the the Investments would be. Where's fee-based 302 00:15:03.700 --> 00:15:06.400  you could be receiving commissions. 303 00:15:07.400 --> 00:15:10.100 On investment products. It's sort of 304 00:15:10.100 --> 00:15:15.800  I guess I'll use the term hybrid approach. So it's 305 00:15:14.800 --> 00:15:17.800  a gray area. They I don't 306 00:15:17.800 --> 00:15:20.100  know if because we don't do that here, you know, 307 00:15:20.100 --> 00:15:23.600  we don't have commission based investment products. It's strictly 308 00:15:23.600 --> 00:15:26.300  putting people into no load low cost 309 00:15:26.300 --> 00:15:29.100  mutual funds and ETFs and we are being 310 00:15:29.100 --> 00:15:32.300  paid a fee based upon those assets under management. We don't 311 00:15:32.300 --> 00:15:35.500  have commissionable investment products to sell and if 312 00:15:35.500 --> 00:15:38.100  you're if an advisor is doing that. 313 00:15:39.300 --> 00:15:42.200 I don't think they can put themselves out there as 314 00:15:42.200 --> 00:15:43.700  as a fiduciary necessarily. 315 00:15:44.500 --> 00:15:47.800 Yeah, I think that the commission side I'm not 316 00:15:47.800 --> 00:15:50.500  knocking it. Just calling it 317 00:15:50.500 --> 00:15:53.100  what it is. It's it's rot with conflicts of interest and 318 00:15:53.100 --> 00:15:56.500  you just said something that I think would would mean 319 00:15:56.500 --> 00:15:57.500  a lot to our listeners, right? 320 00:15:58.500 --> 00:15:58.800 these 321 00:16:00.600 --> 00:16:03.600 percentage of assets fees paying fees you're paying 322 00:16:03.600 --> 00:16:06.200  for advice in that fee stays the 323 00:16:06.200 --> 00:16:09.900  same regardless of the investment product. It's a 324 00:16:09.900 --> 00:16:12.500  with your charging 1% regardless of 325 00:16:12.500 --> 00:16:15.400  the advice you give you earn five you earn that one percent rather. 326 00:16:16.100 --> 00:16:16.900 commissions 327 00:16:17.800 --> 00:16:20.700 Is in compensation for advice it's compensation 328 00:16:20.700 --> 00:16:23.300  for selling a product and that product 329 00:16:23.300 --> 00:16:26.100  has to be suitable not necessarily best interest. 330 00:16:27.700 --> 00:16:30.500 Okay, so that I think that's something that people 331 00:16:30.500 --> 00:16:34.000  don't understand outside of this industry. You 332 00:16:33.400 --> 00:16:36.300  know, there's two ways two major ways 333 00:16:36.300 --> 00:16:39.200  that advisers get compensated fees versus commissions and 334 00:16:39.200 --> 00:16:42.500  one other point that I'll make about fees and correct 335 00:16:42.500 --> 00:16:45.400  me if I'm wrong gentlemen if you're charging fees on assets. 336 00:16:46.300 --> 00:16:49.600 If the asset level goes up the advisor 337 00:16:49.600 --> 00:16:52.900  gets paid more the asset level goes down. I 338 00:16:52.900 --> 00:16:55.800  mean the percentage stays the same but the actual dollars change, so 339 00:16:55.800 --> 00:16:58.500  I think that it actually aligns the interests. 340 00:16:59.400 --> 00:17:02.500 Of the investor and the advisor using a fee model 341 00:17:02.500 --> 00:17:05.400  for Susan commission model where someone might 342 00:17:05.400 --> 00:17:08.600  be asking you to buy a product that you may not necessarily 343 00:17:08.600 --> 00:17:08.900  need. 344 00:17:10.500 --> 00:17:13.800 Correct. And that's that's the thing. We you 345 00:17:13.800 --> 00:17:14.800  start talking about different. 346 00:17:16.100 --> 00:17:19.700 Whether it's Insurance products investment products that have commissions on 347 00:17:19.700 --> 00:17:20.000  them. 348 00:17:20.700 --> 00:17:23.500 Now all of a sudden it could be suitable. But if product 349 00:17:23.500 --> 00:17:24.600  a May pay 350 00:17:25.300 --> 00:17:28.900 X percentage products B may pay X 351 00:17:28.900 --> 00:17:31.100  percentage plus something on top of 352 00:17:31.100 --> 00:17:31.300  it. 353 00:17:32.700 --> 00:17:35.400 A non-fiduciary advisor is probably 354 00:17:35.400 --> 00:17:38.400  going to go to product B because it's going to pay him 355 00:17:38.400 --> 00:17:41.000  or her more and it's a perceived conflict of 356 00:17:41.400 --> 00:17:44.300  interest. I'm not saying that every person out there who's earning a commission is 357 00:17:45.100 --> 00:17:48.500 Is not acting in good faith, but there 358 00:17:48.500 --> 00:17:51.600  is there's a potential for that conflict to be there. Sure. It's 359 00:17:51.600 --> 00:17:54.900  it's all things being equal right? It's they're gonna pick if it's 360 00:17:54.900 --> 00:17:57.500  if it doesn't necessarily hurt the 361 00:17:57.500 --> 00:18:00.500  client and all and the Investments are relatively the 362 00:18:00.500 --> 00:18:04.100  same they're going to gravitate probably towards the higher commission product. 363 00:18:03.100 --> 00:18:06.400  Not that it's a bad thing. But that's the conflict of 364 00:18:06.400 --> 00:18:09.000  interest that we talk about right isn't necessarily in the best 365 00:18:09.300 --> 00:18:12.600  interest of the client. Yeah, and I think investors don't need products as 366 00:18:12.600 --> 00:18:15.600  much as they need advice. Yeah agreed. I totally agree. 367 00:18:15.600 --> 00:18:18.700  We were talking the the other 368 00:18:18.700 --> 00:18:21.800  day just that the the meetings we were we were at and 369 00:18:21.800 --> 00:18:24.300  and the model the way it was is you 370 00:18:24.300 --> 00:18:27.700  had insurance companies or investment firms sort of 371 00:18:27.700 --> 00:18:30.900  sitting at the top designing product and starting 372 00:18:30.900 --> 00:18:33.400  to push that product down to advisors who would 373 00:18:33.400 --> 00:18:36.300  then push it to clients down at the bottom and really our 374 00:18:36.300 --> 00:18:37.800  model is where we flip the script. 375 00:18:38.600 --> 00:18:41.600 The client is at the top and the client comes to the advisor. 376 00:18:42.200 --> 00:18:45.400 And we then go out to the product manufacturers to 377 00:18:45.400 --> 00:18:48.400  find the the best product the best solution for 378 00:18:48.400 --> 00:18:51.000  for the client to make as part of 379 00:18:51.500 --> 00:18:54.300  their financial plan. So I think that's that's a big difference there. 380 00:18:54.300 --> 00:18:57.600  We have nothing proprietary and we are acting in the best interests 381 00:18:57.600 --> 00:19:00.500  of the client looking for a best of breed approach. And 382 00:19:00.500 --> 00:19:03.600  again, usually it comes down to well, what 383 00:19:03.600 --> 00:19:06.100  are the fees associated with that and that's another great piece of 384 00:19:06.100 --> 00:19:07.000  advice for clients. 385 00:19:08.400 --> 00:19:11.300 Understand who you're paying and what you're paying 386 00:19:11.300 --> 00:19:12.100  them and what for? 387 00:19:12.900 --> 00:19:16.000 Whether it's mutual funds inside your 401k or 388 00:19:15.400 --> 00:19:18.800  something inside if you have an IRA through your bank 389 00:19:18.800 --> 00:19:21.500  understand what it what it is and and 390 00:19:21.500 --> 00:19:24.500  how it works. You're the one paying it and and understand how 391 00:19:24.500 --> 00:19:27.400  all of that works and a lot of times people don't realize 392 00:19:27.400 --> 00:19:30.500  that because a lot of times things are are not 393 00:19:30.500 --> 00:19:33.300  apparent you got to do a got to do a little bit of digging to understand 394 00:19:33.300 --> 00:19:36.500  what those those fees are inside of certain products. 395 00:19:36.500 --> 00:19:39.300  Yeah. Absolutely. No, no what you're paying and I think 396 00:19:39.300 --> 00:19:42.200  that there are some compensation models for 397 00:19:42.200 --> 00:19:45.700  advisor out that they're a little bit opaque if 398 00:19:45.700 --> 00:19:48.600  you will but as an investor 399 00:19:48.600 --> 00:19:51.600  working with the financial professional transparency matters, 400 00:19:51.600 --> 00:19:54.200  and if someone's not being transparent, then there's 401 00:19:54.200 --> 00:19:57.000  probably not a lot of trust there in this business is built on trust. 402 00:19:58.100 --> 00:20:01.300 So yeah, I have to disclose everything to everybody up 403 00:20:01.300 --> 00:20:01.700  front because 404 00:20:03.300 --> 00:20:06.300 It's coming out. It's coming out of the account and they'll see it right on the statement as 405 00:20:06.300 --> 00:20:09.600  a line item to the penny. Yeah, exactly, except a 406 00:20:09.600 --> 00:20:09.700  penny. 407 00:20:10.200 --> 00:20:13.700 Absolutely. Well gentlemen, thank you so much for your time. So I 408 00:20:13.700 --> 00:20:16.400  just want to kind of recap because there was so much great information 409 00:20:16.400 --> 00:20:19.500  that the two of you shared if you're an investor 410 00:20:19.500 --> 00:20:22.300  out there if you're one of our listeners and you're looking to work with a financial 411 00:20:22.300 --> 00:20:25.500  professional or if you're looking for maybe a second opinion a couple 412 00:20:25.500 --> 00:20:28.100  of things that that Peter and Michael had talked to us 413 00:20:28.100 --> 00:20:31.400  about today. Make sure you ask the question. Are you acting 414 00:20:31.400 --> 00:20:34.600  in a fiduciary capacity? Probably the most important question to 415 00:20:34.600 --> 00:20:35.700  ask a financial professional. 416 00:20:36.300 --> 00:20:40.100 Number two. What is your financial planning process? Right 417 00:20:39.100 --> 00:20:42.200  the value proposition of a 418 00:20:42.200 --> 00:20:46.200  financial advisor should be based on that planning process. And 419 00:20:45.200 --> 00:20:48.500  since you are paying for advice, I think a great 420 00:20:48.500 --> 00:20:51.300  question is what is your investment philosophy? How do you see the 421 00:20:51.300 --> 00:20:54.400  world work? How are you going to advise me based on that investment 422 00:20:54.400 --> 00:20:55.200  philosophy 423 00:20:55.900 --> 00:20:58.300 When it comes to credentials, I think looking for any credential 424 00:20:58.300 --> 00:21:01.100  makes a lot of sense after a person's name. But if you're 425 00:21:01.100 --> 00:21:04.100  looking for a true financial planner, the cfp designation is the 426 00:21:04.100 --> 00:21:05.900  one that that our guests recommend. 427 00:21:06.600 --> 00:21:09.400 Look for people that work with people like 428 00:21:09.400 --> 00:21:12.600  you look for advisors that are working with people like yourself 429 00:21:12.600 --> 00:21:15.900  and there's a lot of resources out there. Mike mentioned 430 00:21:15.900 --> 00:21:18.600  Napa. There's the advisor's website. Of 431 00:21:18.600 --> 00:21:21.300  course Facebook LinkedIn are great ways to look at how 432 00:21:21.300 --> 00:21:24.200  these advisors are working with 433 00:21:24.200 --> 00:21:28.200  people that may or may not be like you and let me throw another resource 434 00:21:27.200 --> 00:21:31.200  out there. A lot of investors don't realize that you 435 00:21:30.200 --> 00:21:34.300  can Google broker check broker check 436 00:21:34.300 --> 00:21:38.000  is a government website where tracks the history 437 00:21:37.100 --> 00:21:41.000  of every single Financial professional whether they're SEC 438 00:21:40.600 --> 00:21:43.900  registered or member of finra and you'll 439 00:21:43.900 --> 00:21:46.400  see if there's any disclosures or anything like that 440 00:21:46.400 --> 00:21:49.400  so broker checks are great way to see if 441 00:21:49.400 --> 00:21:52.200  if there's any dings on the record of 442 00:21:52.200 --> 00:21:55.100  the person that you're speaking to and then in terms 443 00:21:55.100 --> 00:21:58.700  of compensation look for fees versus commissions not 444 00:21:58.700 --> 00:22:01.200  to say that commissions are necessarily bad, but they 445 00:22:01.200 --> 00:22:04.100  there could be some conflicts of 446 00:22:04.100 --> 00:22:06.500  interest in there and a fee-based advisor. 447 00:22:06.600 --> 00:22:09.200 Even a fee only advisor is going to sit in the same side of 448 00:22:09.200 --> 00:22:12.700  the table as you the investor. So Michael, thank 449 00:22:12.700 --> 00:22:15.200  you so much for your time. Thanks Tom Peter. So thank you 450 00:22:15.200 --> 00:22:19.100  for joining us here today. This has been a great conversation and so 451 00:22:18.100 --> 00:22:21.300  for our listeners out there. Thank you for joining us. 452 00:22:21.300 --> 00:22:24.200  We'll get you on the next one. And if you 453 00:22:24.200 --> 00:22:28.400  want to look at any of our previous unfiltered Finance podcasts, they're 454 00:22:27.400 --> 00:22:30.600  available wherever you might be getting your podcast today. 455 00:22:30.600 --> 00:22:34.200  So thank you till next time. Bye Cemetery Partners. 456 00:22:33.200 --> 00:22:36.600  LLC is an investment advisor 457 00:22:36.600 --> 00:22:39.300  firm registered with the Security and Exchange Commission 458 00:22:39.300 --> 00:22:42.500  The Firm only transacts business in states where 459 00:22:42.500 --> 00:22:45.600  it is properly registered or excluded or 460 00:22:45.600 --> 00:22:49.200  Exempted from registration requirements registration of 461 00:22:48.200 --> 00:22:51.400  an investment advisor does not imply 462 00:22:51.400 --> 00:22:54.500  any specific level of skill or training and does 463 00:22:54.500 --> 00:22:57.300  not constitute an endorsement of the firm by the 464 00:22:57.300 --> 00:23:00.300  commission. No one should assume that future performance of any 465 00:23:00.300 --> 00:23:04.400  specific investment investment strategy product or 466 00:23:03.400 --> 00:23:06.100  non-investment related content. 467 00:23:06.600 --> 00:23:10.000 Reference to directly or indirectly in this material will be 468 00:23:09.000 --> 00:23:10.500  profitable. 469 00:23:11.400 --> 00:23:14.300 As with any investment strategy there is the possibility 470 00:23:14.300 --> 00:23:17.500  of profitability as well as loss due 471 00:23:17.500 --> 00:23:20.200  to various factors including changing market 472 00:23:20.200 --> 00:23:22.600  conditions and/or applicable laws. 473 00:23:23.400 --> 00:23:27.000 Content may not be reflective of current opinions or 474 00:23:26.600 --> 00:23:29.600  positions. Please note the material 475 00:23:29.600 --> 00:23:32.300  is provided for educational and background use only 476 00:23:32.300 --> 00:23:36.000  moreover. You should not assume that any discussion or information 477 00:23:35.700 --> 00:23:38.600  contained in this material serves as 478 00:23:38.600 --> 00:23:42.400  the receipt of or as a substitute for personalized 479 00:23:41.400 --> 00:23:43.700  investment advice.  

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