Why You Should Get a Second Opinion on Your Financial Plan

Welcome back to another episode of We're Talking Money. My name is Spell Carr. Alongside me, I have our CEO and president, Phil Clark. And today we're going to go through a case.

So, Phil, a couple weeks ago, you and I were sitting in a room with this new relationship, which is a great opportunity. They've got an adviser and they've had an adviser for a while. And you asked one question that changed the meeting entirely. What question was that?

My question was simple. What value? What's the greatest value that advisor brought to your family over two and a half decades?

And how long was the pause between your question and the answer?

Well, it probably felt longer to them than it did to us. Probably we've seen this kind of response a time or two. I think the more concerning part is they couldn't really find an answer. That was the more concerning part, and it finally ended with something along the lines of they've managed my money pretty well.

Mhm.

And that is where I think a lot of people miss what real value is all about, because if that's all the advisor is doing, chances are a lot of things are being missed.

Yeah. Yeah. What was his wife doing? Because the question was posed to him, what was his wife doing while he was attempting to answer or come up with an answer?

Well, at one point I felt like she was wanting to say something and she was, I wouldn't say squirming.

Yeah.

But wanted to say something.

Yeah.

And I think it was pretty obvious that she didn't have this same belief that someone had really delivered a lot of value.

Yeah. When ultimately the answer was put back on the table to you, and that, well, they've done a nice job managing my investments, what was your response to that?

That's their job, right? That's what they're supposed to, at the very least. That's what they're supposed to do. If you can't get that part right...

Mhm.

...you might be in the wrong business.

Yeah.

I think one of the other misnomers that unfortunately doesn't get talked about a lot: financial advisors or brokers or financial planners, whatever they happen to call themselves, most of them are not managing the money in the first place.

That's a good point. And what do you mean by that?

Well, most of them are using third parties. They're using ETFs or exchange traded funds, or they're using mutual funds, or some combination. Maybe a peppering of a stock or two.

Y.

But they're not building and managing a portfolio. They can help with an asset allocation. They can help a person understand what that means based on a risk tolerance score, which is one of the simplest methods to helping a person find the right investment strategy. In fact, I'm not, we don't necessarily buy into that more archaic way of doing things, because there's so much more than just a person's gut check, how they're feeling about a market's volatility.

But that advisor typically will help them through a series of questions understand, this is what you can stomach in a volatile market. Well, chances are they can stomach a lot more. And if they're 30 or 40 years from retirement, yeah, they shouldn't be thinking about stomaching anything. They should simply be investing aggressively, knowing full well that they have probably three, four, five market cycles before they ever get to a point of needing the money.

Right?

So then to take that a step further, that advisor probably isn't managing it. They build the allocation and then they go to these third parties, and sometimes they use, beyond just picking the funds, they might actually pick a fund manager, and those people, yet another third party, if you will, they put together these allocations.

And I think worse, worse than really any part of what I'm saying so far, is that that's just more and more layers or cost, hands in the cookie jar, so to speak. And I think the client doesn't know it. They don't know what to ask. And so then when you start talking about cost, they don't realize advisor paying all these fees.

Yeah. Yeah, that's true.

But rarely is that advisor managing the money.

I agree. Phil, let me pull you back for a second, because that was pretty technical. Would you say that it's fair to make the claim that maybe this individual just didn't have anything to compare their advisor to? And that might have been the reason that there was such a delay, or a very difficult, what seemed like a very difficult time for this individual to come up with a response as to what val, what's the most valuable thing that they've done for you over the last 25 years.

I think your point is spot on. I don't think they had anything to compare.

Mhm.

So you don't know what you don't know.

Right.

And so if you haven't compared it to something, then how would you know yours is good or bad, right? What you have might seem good, but it's because you know nothing else, right? And so if you don't, then you have to, and if you like the person and you trust the person, then I believe it leads you down the path of assuming that everything must be okay.

Mhm.

And I think unfortunately when a firm doesn't provide a system that helps the client understand that, and really educates the client, I believe the client is put in a weaker position.

Yeah.

Because they don't know what to ask. And if they don't do their research and they don't learn, then they have to assume that everything is okay.

Yeah.

And most advisers are not trying to educate the client. They're simply trying to help them with what that advisor believes is okay, right? That's reasonable. Maybe it's good, maybe it's not. But they're not educating that person to be able to ask the right questions. They're not saying to them, "Here's all the investments you can choose from. By the way, this one's better. This one's worse. This one more expensive. So ask me about these things." They don't do that.

And most of the time, if they're not acting in a fiduciary role...

Yep.

...then the only thing that matters from a regulator standpoint is that that advisor is offering suitable things. Suitability is quite different from the way we do things, where we're focused more on what fits the client, what's best for the client with the least amount of cost, right, associated with whatever those tools are.

Yep.

That's different from suitability. Suitability doesn't require anyone to be concerned with cost.

Yeah.

And that's problematic.

So for someone listening, Phil, I think you just hinted at a really, really interesting thing that we do daily here, and that is we give, particularly someone that we're not working with yet, something to measure themselves against, or maybe their adviser against, or anyone on their team. So walk me through that just from a high level. We call it a report card. So tell me about the report card and where it came from.

Well, our second opinion solution was the beginning of all of that.

Mhm.

A few decades ago, we said there has to be a better way for people to get educated. And what we didn't want was a technique that was more salesdriven. We didn't want to be biased. We didn't want a client to perceive, not even for a minute, that they were being sold something, right? What we wanted was them, we wanted them to get a fair opinion, which is why we charged for it. And we said, "Look, you pay us for this. We're going to give you an unbiased opinion, and if you want us to help you with it, great. If you don't, take it to whoever you want to help with whatever the situation happens to be." And in that way, they were getting an unbiased opinion, number one.

From that evolved this report card, and this report card literally a snapshot of everything they're doing. And much like what you received when you were in grade school...

Yeah.

...there was a score. And it's very easy for people to see if they're passing or failing.

Mhm.

And if you're failing, most people, they want to get better.

Yeah.

They don't want to fail. And so we designed it such that we look at all of the facets, if you will, within their financial house, and we grade that.

Yep. Yep.

Now, from that came the first iteration of our elements.

Okay.

Today, everything's built around those. And so, we're scoring everything based on that, which is everything you can think of finance.

Mhm.

And if they're doing well, great.

Yeah.

They might not need us. They're current relationship might be great.

Mhm.

But if that score is not so good...

Yeah.

...then that client or that potential client has a question that needs to be answered, and they must ask the question.

Let's go through an exercise real quick, because you're going down a really, really fun conversation. I think our viewers will benefit from this. Okay? So instead of explaining the report card, I want you to run the report card on me. I want you to pretend like I've just sat in front of you for a discovery meeting, is what we call it. And you're going to just facilitate through opening dialogue and conversation, but I want you to do it in a way that you're trying to check boxes or write a score on certain sections of the report card.

Okay, this is going to be fun.

Yeah, I'm excited. I think it is.

So, I've never really thought about taking you through a process like this, but okay, here we go.

All right.

So, Spell, it's nice to spend some time with you and learn a little bit more about you.

Mhm.

I need to know at the outset of this conversation, what's going to guide us through this is, first and foremost, how often are you reviewing your financial situation, and who's giving you the direction and the guidance?

Okay. Well, I've had a financial adviser for a long time, two decades. They're great. I love everything that they do for me. I don't think that there's anything that they're not doing for me. So, let me start with that. I'm here because something about your second opinion piqu my interest, and you all offer a free discovery session, and so I just said, "Well, if it doesn't cost me anything, it can't hurt." So, my advisor and I get together once a year, and that's really all I want, because I know that they're doing everything that they're supposed to for me.

Well, one, I'm glad that you work with someone. It gives me a good feeling inside to know that people work with someone and they're getting advice from somewhere. What I often hear though is people believe that everything is being done the right way, and they feel like their advisors got it.

Mhm.

And particularly when the relationship is 20 years old.

Yeah.

So, great that you've got a relationship. Obviously, you like and trust that person, and so there's a good relationship there.

Sure.

So, what are you using to measure what that advisor is doing for you? What's the measuring stick? And how do you know when they're giving you the best advice versus not? And how are you getting your information by which you measure, or with which you measure, your current advisor?

Well, the advisor, my advisor provides the measuring stick. They use standardized benchmarks and they use general ratios for where I should be. And that's sort of what lays the foundation of at least what my advisor tells me: you're on track, and here's why. There's not a, I haven't really gone through another advisor's model. So, I guess in that regard, I don't have anything to compare it to, but I feel pretty comfortable about the metrics that they're providing me.

Spell, I think what you just said is pretty consistent with what I've heard most of my career. So, if they're creating the measuring stick, chances are they're not out to fire themselves.

That's a fair point, right?

The second thing that I've learned in my career, Spell, is that no one has a monopoly on great ideas. And so when you're in this relationship where nothing else has been given to you by which you can use as a measuring stick, then it's, in our opinion, it's client beware. And so you have to believe, and you do, you believe that everything this advisor is doing for you makes all the sense in the world.

The problem is, if they're using standardized systems, it means they've placed you in a standardized box. And if you're standard, then great. But depending on what you're trying to accomplish in life, where you are in your business, where you are in your finances today, where you want to be, what you're trying to accomplish overall, that might mean that you're not as standard as they're telling you. And so if you never step outside of what's comfortable with them to see if there's a different way to do it, you may never know until you can't fix it.

So I'm not saying that what they're doing is wrong. It might be perfect.

Sure.

You might not find any val. In fact, what would be great for you, Spell, is we run our second opinion for you.

Mhm.

And we can't find broken parts. We can't find things that need to be repaired. And if that's the case, then you get confirmation that what you're doing is just where it needs to be.

Okay.

And it gives your advisor confirmation that they're doing a great job.

Yeah, nothing better than getting ranked by your peers. That sounds reasonable.

And if they aren't doing a good job, if we find holes in what they're doing for you, then your decision is simple. You get to decide if they fix it or someone else fixes it.

Mhm.

Simple.

How do you know if there are holes?

Well, I think what has to occur is when we go through a person's financial plan, whatever it is that you have, yeah, we have to go beyond a standard benchmark. We have to go beyond what's considered standard in the industry. We have to measure it against what you are trying to achieve, what you're trying to accomplish.

And when we do that, for example, Spell, are you paying too much for the services you're getting? Well, I think I'm paying 1%. What do you mean you think you're paying 1%? You think you are or you are? Because if you are, that might be okay. But depending on the size of your portfolio, depending on your trajectory, 1% might be too much. 1% might be just right. But are there other fees? So, are you paying that advisor 1% and then are you paying more under the hood, under the surface? What do you mean?

Well, if your investments are primarily mutual funds, then you've got another layer of cost. So, the advisor is going to charge you to go pick those mutual funds, and then the mutual funds are going to charge you a fee to use the fund. So, you're going to pay what's called an expense ratio. So, there's expense ratios, there's the advisor fee, there could be other fees, right? We don't know until we dig in. If there's annuities, if there's mutual funds, ETFs, etc., that there are fees associated with those and those generally come in addition to what the advisor charges.

Now, I'm not saying that's all bad because if they're giving you great value for whatever they're charging, then it might be justified. Sure. But I think you deserve to know. Every person deserves to know if what they're paying is the right amount. Gotcha. For the value you received. Okay. All right. Makes sense.

So when you're finished with that analysis, you'll give me a score. That's right. Okay. That's right. So we give you a score and you're going to be passing or failing. Okay. And if I fail, then what?

Well, if you fail, two decisions. One, do you want to improve your score? Okay. The second decision is who helps you improve it. I submit to you that if someone is allowing you to fail, then whatever their price, it's too high. Yeah. Doesn't matter what their price is, even free, it's too much. Okay? If you're failing, you deserve to have your plan improved.

I will say something to you, Spell, that I say this to clients pretty often. Mhm. If they're charging you and you're not getting all the value that you deserve, then they don't deserve to be the adviser. They don't deserve to be on your team. You can keep them. That's your choice. Now that you're informed, once we inform you, you have to make a decision. And either they get to stay on the team or you decide that someone else should be on that team that's going to give you what you deserve. Yeah. Right.

And I think the value is missed a lot by every level of people. You don't have to be the most intellectually gifted person to understand this stuff, right? But you have to be willing to look and you have to be willing to check what you're getting to be sure it has value, right? Our clients can do the same thing to us. Mhm. But it's partly why we have a report card. We want to show our clients. We try to poke holes in our own work and if we don't then I think we can become just like a lot of other advisers, we become complacent. We don't want to do that. Yeah. Right. Part of our mission is to never do it in such a way that we're complacent and is to always deliver to our clients in a way that no one else will.

One of the things I think that I'm learning in talking to you is one, it sounds like maybe I don't know everything and that my advisor may be great. They may not be so great. If you can punch holes in the plan that I thought was so perfect, are you able to tell me how much those holes cost me?

Well, we can tell you how much those holes cost. Better to look forward to say this is likely how it will affect you because we can't undo what's done. Right. Right. We can't go backwards and fix it. So there's no reason to disparage the other person. There's no reason for you to be angry about it. It is what it is. But we can certainly improve it going forward. And so I'm not saying that what you're doing is wrong. I'm simply saying that knowing if what you're doing is right, that's one of the best confirmations you can get.

I guess my question to you, Phil, in closing is one I'd want to go through with the analysis. I think it'd be great, but I just I've never heard this before. I've never heard of a report card and I've never even thought about well maybe I should compare what my advisor is doing to someone else. Never thought about that. So that in itself is somewhat concerning to me and I want to know why you think it is that I've not heard this before because I'd like to think that I'm pretty in sync with my finances and my advisor, but this is a little concerning.

Well, I think a couple things. One, most advisers, they're not, they don't think this way. They're not thinking about trying to score. What they're thinking about is how do I make you a new client? And we enjoy as much as the next person. We enjoy taking on new clients. Mhm. It's always an honor to get a new client, but because of the way we're compensated, we're not so concerned if you come on board or not. Mhm. We're going to get paid either way. And so you're paying us to give you an unbiased opinion. You choose to work with us beyond that, great. Mhm. Chances are it will be something that we welcome, but we don't start with that as the preconceived notion, right? We're not thinking that that's where we're headed.

We're thinking you ask us to do something and we're trying to deliver that in the best way that we can, in the most transparent way that we can. And then if there's a problem, we can help you fix it. Or you can take what you've paid us to do, have anyone fix it. You don't have to work with us. So, I think that taking the bias out of the equation puts us together from the beginning. It puts us on the same side of the table. I think that's so important.

The other thing, Spell, that often, by the way, that creates a lot of these holes that other advisers aren't looking for is the coordination. Yeah. So, it's making sure that everything's coordinated because actions in one element will affect another. Any part of your wealth strategy or your financial plan, it's all connected. And so when you make a move in one part, you may not see the effect immediately. Mhm. And if you do, it might be a very narrow effect. You may not see it affecting another part of the plan.

If you don't have the ability to forecast that and understand how it's going to affect and if your current adviser isn't doing that for you, then chances are you are going to make a mistake because every action creates another action. There's cause and effect. You do something in one element, it's going to harm or help another. Got it? One way, it's rarely going to be neutral. So that's important.

The other piece that people miss is the CPA coordination. So, they have a tax person and a financial planner and their attorney. Those three people need to be in harmony. Just before I walked in the studio today, the last emails I remember seeing, and I've got to respond to those tonight, is an attorney, a CPA emailing me about a meeting that I've requested. I'm not requesting it because I want to be chummy with them. Mhm. I'm requesting it because there are fundamental issues with the framework of a client that we're all working on and no one bothers to put those meetings together. I think it's paramount. Yeah.

If you don't get in front of those other people, they're going to do things the way they think they should be done. Meaning the CPA, meaning the attorney, and we're all running what we believe is the right thing. We're doing what we think is the right thing for the client, but if we're not coordinated, Mhm, we're probably going to get a result that brings unintended consequence. Yeah. Right. Yeah. And so that has to occur and I think that gets missed a lot. Yeah.

All right, that was a fun exercise. Thanks for putting me through it. That was nice.

We'll get right back to today's show, but first I'd like to ask you a quick favor. If you're enjoying this episode, hit that like button and make sure that you're subscribed to our channel so you don't miss what's coming next. And hey, if something in today's episode has you wondering about your own financial plan, why not get a second opinion? Visit omnistarfinancial.com to schedule a consultation with one of our team members. It's quick, it's easy, and it could make a huge difference in your financial future. Now, let's get back to the show.

All right, Phil. So we're going to bring this back to the case that we mentioned at the start of the video and go into some of the other not necessarily giveaways, but cues and subtle nuances that we recognize and that you particularly pick up on very quickly having done this for better part of three decades. We're going to go into some of those things and I want you to walk me through your process. But before we do that, let's answer a question. Someone watching right now might just say, "Well, this is OmniStar's way of getting me to just fire my advisor and hire OmniStar and that this is a sales pitch." Why is that not the case?

Well, fortunately, we don't want everyone, right? The last thing we want is for anyone watching an episode or coming in for a discovery. Mhm. We're not all things to all people, right? And so, we don't start out believing that because we sit in front of someone or take a call that, oh, this is the next client, right? That's not how we view this, right? And so I think that's important for a couple reasons. We are okay if we don't take on every person as a client. In fact, that's how we're designed. We don't have capacity for that. Right.

Secondly, it's why we charge for a second opinion. Yeah. Because we want to start unbiased and we want to get paid for our time. We put a lot of work into these plans. We put a lot of effort into these, the effort, the time, the human capital. It doesn't come for free, right? I heard a long time ago, Spell, I had a great, somewhat of a mentor. He shared with me one day, he said, you usually get what you pay for. And I think that adage is something of a maxim that holds true today. Might seem cliche, but I think it's real. You typically get what you pay for. Yeah.

And so we have a team of very, very astute people that can bring a lot to the table. Mhm. We have to be able to start the conversation and finish that initial dialogue without anyone believing that, okay, this is all about getting someone as a client. It should be about delivering on the expectation of that person that we're going to give them an unbiased view of what they're doing.

So anyone watching who thinks this is a sales pitch, unfortunately, I know why they think that. Yeah. Because I think the industry, the profession probably has a stigma about it that makes this kind of conversation, it naturally sounds like a sales pitch. What I want is for everyone to get their financial house in order. Yeah, we can't serve everyone, nor do we want to, right? But we can certainly, after 34 years of doing this, we know where the broken parts generally happen. And if we can expose that for someone, you don't have to work with us. Yeah. But you deserve to know. That's why you can take the plan and walk. Absolutely. Yeah. Yeah. Absolutely.

That's a good point, Phil. One of the things that I want to shed some light on is that this individual said that the advisor showed up when their parents passed away. And that's a great thing. You're grading this advisor on whether they've looked at tax return and how expensive the funds that they're using are. Someone listening might say, "Well, their advisor showed up when it really mattered." What would you say to that?

Death is one of the most difficult things that we all have to face. It's easy from an emotional standpoint to feel like, well, someone showed up and so that feels like the right thing. And in a lot of ways, it is. I've been to a lot of client funerals, unfortunately. Yeah. And the families appreciate it. They've seen me at many of the family's most important events. Mhm. And I'm glad that I could do it. But at the end of the day, they should not grade me on that. Yeah.

What they should grade me on is the efficacy of how we handled their finances and did we get them to the best place possible with the least amount of cost and risk? Did we get them where they were trying to go and did we help them realize when they were trying to go somewhere might be the wrong place? Were we able to take them through those parts of life?

Yes, we're going to be there for a funeral, and I'm glad that this adviser showed up for the funeral or for the parents when they passed or for them when the parents passed, but that's a piece that is expected. Mhm. And that anybody worth their salt with a heart is going to show up. Yeah.

But that isn't where we get graded, right? Because showing up for a person's funeral doesn't guarantee that I'm going to take good care of you on all the other things. Yeah. And so I don't want that to sound like I'm not, that I don't have respect for that. I do. I think it's really important. But that's not how you grade someone who's handling your wealth. Yeah.

So, one of the other things that we talked about in this meeting was estate planning, which is one of our elements. What did you immediately notice about this individual or this case's estate planning, didn't have a will, no planning documents whatsoever. When you hear that, yet you also hear that this has been a great relationship with this adviser for 25 years and everything is perfect. What do you think? And what do you say?

I say one, shame on the adviser because if that adviser is really holding themselves out to be cliche but a holistic planner, someone who's there looking out for all the things. Yeah, I'm glad that advisors will show up for a birthday party or a funeral or a wedding. Mhm. But where are you when those fundamental, the most basic components are getting missed? Where are you?

Now that advisor is not an attorney. Yeah. Right. They can't write the will. But you know what they can do? They can orchestrate that will getting done. They can have that attorney in the room. They can set those meetings and they can reinforce the importance of those documents and they can implore their client to get it and they can stay on them until it's done. Yep.

That is what an adviser does. An adviser does the tough things. They give you the tough questions. They make sure that you are responsive when it comes to the things that can be landmines or roadblocks or as we call them blind spots. They're not doing that. I don't know that you get a great grade for being there because someone passed unless you did something that was monumental that changed the course of everything. Maybe then there's kudos for that. But otherwise, there's so many other parts to the financial house that must be dealt with.

And I think a lot of advisers, they say that they do comprehensive planning, greatest buzzword in our profession. Yeah. I get so sick of that word. It's pretty tired. Oh my gosh, this, the... Oh, it's the most tired phrase. Yeah, it is. Give me something original. What a banal thing to say. Yeah. And it's always comprehensive. Comprehensive. Prove it. Yeah. Exactly. Prove it.

If you're comprehensive, then don't send your client on the road looking for a new relationship potentially, right? Such that they can tell an adviser that's about to do a second opinion for them. You just gave them the ammo to get you fired. Yeah. Do your job. Yeah. Yeah. That's true.

Phil, one of the other things that we took away from that meeting was specific to another element, and that's tax strategies. Not tax planning, not tax reporting, but tax strategies. And there's a difference between all of those things that I just said. But in mind you this was an hour and a half conversation. So it was not a long protracted half-day event. It was an hour and a half conversation and we came away more or less knowing that there were some pretty significant blind spots specifically because we were going through our elements during a lot of the conversation.

We have a path and when we stick to that path it's amazing what you can uncover. Yeah. In an hour, an hour and a half. And that's generally all it takes for us to discover what's good, bad, maybe in the middle. Then of course, it's up to us. Sure. To be able to build on that and then turn it back to the client to say, or to this person that's hired us to say, "Here's where we go next." Mhm.

What do you say to the person now who's listening and maybe a lot of this or some of this or one piece of this has resonated? What do you say to that person?

I say anyone that's listening, if this hasn't resonated, then congratulations. Yeah. Because you might very well have a perfect plan or you don't have a plan. It probably isn't simply one that's broken. It's probably you either don't have one, therefore it won't resonate. Yeah. Or you have one and something is making you say, "Oops, I haven't done that. Why hasn't someone told me to do that? Why don't I know exactly what my funds cost? Am I using funds? Am I using individual equities? What is right and what is wrong?

That's all that needs to resonate because people don't realize this, Spell. But the longer you leave things unattended or the longer you leave things in a state that may be inappropriate for you or that may be costing more than it should, the longer that stays in place, Mhm. the harder it is to undo and the more it's going to cost you over however many years you have. 5 years, 10 years, 20, 30, 40 years, those costs compound. Yeah. And what can seem like something that's an innocent mistake, and most of the time they are, they can add up and they can in some cases be detrimental. Yeah, for sure.

Phil, I'm gonna ask you a weird question because I want to. Would you feel comfortable if someone ran a report card on you? Sure. Yeah. Has anyone ever run a report card on you?

Spell, years ago, I was the test case in the firm. Okay. So many of our advisers when we were running test cases, I was the one and so they would run test cases on me and part of that was because I was the only one that would volunteer and I felt like it needed to be real. Yeah. So I've done it. I haven't done it in a long time. We haven't done that. But yeah, I'd feel comfortable with that. Sure.

Interesting. Interesting. So you'd be okay if I picked up the phone and called your CPA? I would. You'd be okay if I mandated it? I would. You'd be okay if I had picked up the phone and called your estate planning attorney? I would. And you'd be okay if I forced the issue?

I'd want you to force it. And I'm going to tell you why. I think we all run through life at a pretty rapid pace. We have distraction after distraction. Spell, nobody wants to talk about finality. Yeah. No one wants to hear the death word. And because of that, we don't have a lot of free time or we choose not to have a lot of free time. So whatever it is that keeps us busy takes us away from doing the things that we know are important. Mhm.

But it's either the speed at which we live life or it's the unwillingness to talk about finality. Yeah. People don't want to talk about morbidity. They want to live. Yeah. And people want to be invincible, right? They want to live. Yeah. So they don't want to talk about that stuff. I believe that anyone who says, "No, I'm not okay with you pressing the issue," they're scared of something. Yeah.

But I think the minute that a person will open their mind and say, "I'm here for a finite period. I want to make the most of it. I want to do the best I can. If that means running fast, then do it. But get somebody on your team who's willing to help you make the right moves while you're running fast. Yeah. So that you can make the most out of your life. Whether that is a life full of raising a family and guiding them. Yeah. Or if it's a life of philanthropy or if it's a life of whatever. Sure. Sure.

You need that person on your team who will ask the hard questions, say the things that might offend you, knowing full well they're doing it for one reason. It's for your own good. And when they will do that, that's who you better keep on your team. No doubt. No doubt.

It sounds like you'd be willing to allow me to take some stress off your plate is what it sounds like.

I'm always good with that. If someone will take a little bit off Yeah. and de-stress me a little bit. I love it because you know me, I like to run hard. I like to run fast. I'm always thinking about what's next for our firm. Yeah. And those things are so important to me. Spell, having someone that would be willing to do those things, I welcome it.

I would say to any listener, you should welcome it. Regardless of what stage of life you've reached, Mhm. your life will generally get more complicated as you get older, earn more, save more, build wealth. Life doesn't get simpler generally. Yeah. And you need experts who know what is going to give you the best outcome. Yeah. Along the way. Yeah. That's what helps de-stress.

Well, I think about the meeting that we had this morning and it was with two folks who run or help run a very large company. CFO came to the office today and she along with her family, their clients, and they're in the midst of, I would call it a transition period in life. There's been some health issues in the family. There's been, they just purchased quite literally a family compound and they're dealing with moving and her conversation with me. I could feel the stress from this person today. Caught her in the lobby. I could feel her stress.

She said, "We've been dealing with a number of things that I won't get into, but two sets of estate planning firms, estate planning attorneys that can't get something to the finish line." And I just looked at her and I said, "I'm glad you told me." Didn't realize that all this was going on because this is the part of the family that we're referring to. They're just coming on as clients. And I said, "Well, let's just have a meeting and we'll get an estate planning attorney involved. We'll have them at the table with us and we'll talk about the next steps and here's where we need to go." And she threw her hands up in the air and said, "Finally, thank you."

I don't understand why more people don't welcome that. I don't get it. It's not common in our industry because more times than not people don't experience that with their relationships, their advisor, client advisor relationship and I don't understand it. Maybe you can shed some light on it, but I scratch my head.

Spell, you learn every year situations like that exist. Yep. And they're never going to go away. Here's what I can tell you. I think people are easily embarrassed. People want you to believe that they've got it dialed, that they're in good shape, and they're holding it all together. And advisors that they work with, they would tell you, "Oh, we've got all this. This is buttoned up tight. Great. No, no worries. We've got all this done."

The fact is, people eventually hit a breaking point. Yeah. And when they do and when they will admit what's going on. A seasoned advisor, someone like yourself who understands and someone who's part of a firm who believes in doing for our clients things that no one else will. That's a big point, that mission Yeah. is so important and we live it.

And being able to do that, to say the things that need to be said, they might get mad. Yep. Heck, they might fire us. It's true. But if they can hear what they need to hear, then we'll take that risk. We'll take that chance. And if they fire us, then so be it. But if we can nudge them closer to getting things in order and not being stressed all the time, they're going to live a better life. Yeah, I agree.

And I think that is part of what gives me desire and reason to wake up every day and do what we do because these people, they deserve that. But that does, because they deserve it doesn't mean they're getting it, right? Our job is to listen for it and to play back to people what we're hearing. And if we get it wrong, then they have to correct us, right? But if we're right, generally we're going to see it. Mhm. And when they will finally open and allow us, then we can do a lot of good. We can fix a lot of problems. Yeah. And at the end of the day, if we can fix those problems, their life gets a lot better. It's true. Everybody wins. That's true.

All right, Phil. So, someone's watching this right now, what's the one question they should go ask their CPA or their advisor this week?

So, if they're going to ask their CPA a question, I would ask my CPA, what things inside of the tax code today are affecting me that we haven't talked about? What are those things? That's great. What are they? Because most CPAs, they do a tax return, you sign it, they file it. Yeah, but they need to have a deeper conversation with the client. Mhm.

Ask them what inside of the tax, because we had a lot of changes in the tax code. It's true. And if they can't give you two or three things, they probably don't know the changes in the tax code. Yeah. But I'd ask that question. Yeah. They're going to talk to their advisor.

What's the question? And this is someone they've worked with, right? Yeah. Okay.

So if they're working with an adviser, I would ask that advisor, what is the one risk that you see me taking right now that I need to change because it will affect the rest of my life? What is that risk? Be a great question. And if that advisor can answer it, good for them.

But there's a follow-up question. Yes, there is. When were you going to tell me? Yep. When were you going to tell me? Did I have to ask? Because sometimes advisers don't want to say anything because they believe it might offend. But you ought to ask that advisor, what's the one thing that you see that you consider a risk that I need to change? Yep. See what that adviser says.

Okay. To either of those, so the CPA or the adviser, you just laid out some great questions. Great questions. If people take those to their adviser or their CPA, you're going to have some people put on the spot pretty quickly if they're not used to doing what we probably some advisers that won't like me. They're not going to like you. That's okay.

So, let's say I go and ask my adviser or my CPA vet. What does a good answer sound like? A good answer says if it's CPA, sure, that CPA says, I am familiar with the tax code. I'm monitoring what we're doing for you and I'm working with the other advisers on your team. Y and I understand what's going on with your investments. I understand your business. And I am monitoring all of that. And don't forget, we're planning throughout the year so that we're ready for year end.

If they don't say something like that, they say, "Oh, you don't have to worry about it. You're going to bring me all your stuff in March." So, this would be maybe a bad answer. This would be a bad answer. Okay. Certainly not the one you want. Yeah. Just bring me all your stuff in March or February and I'm going to get you done by tax deadline. Well, great.

But I learned what I'm about to say in a book and what it talks about is a person trying to lose weight and how often they ought to step on the scale. And that book teaches, this is an analogy of course. Sure. But you ought to step on that scale every day. Yeah. Because if you wait until the end of the year, you are looking backwards and you can't get back those 364 days. It's true. And if you didn't lose the weight that you intended, that's on you.

If you step on that scale every day, you can begin to make adjustments throughout the year and chances are you're going to hit your goal. Yep. But if you wait and step on that scale at the end of the year, then you are playing in a world of hope and you hope that you lost the weight and maybe you're right, maybe you're wrong. And if you're wrong, you wasted a year, right?

So I believe that that CPA has to be touching things on a regular basis. You got to be having conversations with them just like we have with our clients when we're tax planning or doing any other kind of planning. That is critical, right? That is so important. And if they do that, you've got a good CPA. If they're not doing that, you might want to ask some more questions.

Last thing, which of the 10 Elements, and this is specific to the case that we talked about, which of the 10 Elements ran into one another in this case? Well, unfortunately, we didn't get to talk about all of the case. No, but there were, I would say that there were three elements here that were literally flashing. Yeah.

So, one, the estate planning because they didn't have wills or legal docs. Y the second one was investment management. Mhm. Because when we looked at their statements, we immediately saw one advisory fees, two mutual fund fees. Yeah. That's a potential problem. Certainly not the most efficient way to do it. Yeah.

The third one was cash flow and their cash flow not bad but the way in which they were approaching cash flow. They're missing certain things that would improve their cash flow and allow them to live a better life, right? And a more predictable outcome with their money. Yep. So, I would say it was those three. You were in that meeting. What did you think?

I would say that those three were certainly the flashing lights when you're going down the road and you see the flashing lights. Those would be the three that would be primary. And of course, the one that's always at the center, it's almost like the nucleus is lifestyle. Lifestyle, right? Yeah. That because they all drive that one and it drives everything else. Yep.

Everything gets affected by lifestyle and it was really their lifestyle that I think probably drove them towards us because they wanted a second opinion and a lot of it's hinging, yeah, on their lifestyle. Y I would tell you that those four but primarily the three that you mentioned were the collision pieces because like you mentioned at the beginning if the elements are not coordinated and you're not paying attention to each of the elements.

Not all 10 apply to every relationship, but if you're not paying attention to the ones that do apply to you where you take the eye, you take your eye off the ball, taking your eye off the ball, that ball could zip by you and crash three of your other elements and then that can be very costly. That's the risk. Yeah. Right.

Everything has to be coordinated. Remember, we always say this, actions in one affects another, another and there's no better way to say that. Yeah. When you make a move, it's going to affect other things. No doubt. Your tax return, whatever you do financially, believe me, it's going to show up on the tax return.

Whatever you do, selling stocks appreciated or stocks at a loss, whether it's short-term, long-term, the simplest things will show up on that tax return. So, and that's an easy example, but literally everything you do in each element, anything you do in each element will affect another. Got it. Got it.

Okay. Let's say that someone handed me or you gave me that report card 10 years ago. Do you think that today if I came into your office, I still wouldn't have a will and I still wouldn't have my advisor looking at my tax returns and I still would have problems with my cash flow.

Never say never because the client is the boss at the end of the day. That's who we work for, right? We're not the boss. We bring the ideas, we bring the advice, we help implement. That's what we do.

What I can say is that if I have a willing participant who wants to improve, they want to improve and they recognize by their own volition that what we've identified are things that need to be improved. If I've got that willing participant, mhm, then I can tell you unequivocally that two years later, 5 years later, 10 years later, you are going to be better off.

And I don't say that as a guess. I say it because I've got family after family after family after family after family that we've worked with for decades and it is quantifiable. I can look at their report card from the beginning and I can see what they look like today and I can say unequivocally that their financial house is not a little bit better, it's a lot better.

And they've lived a better life as a result and they have a future that they're proud of and they have everything in place to see their next generation and beyond be taken care of in a way that brings them a lot of joy. I can see it. That's what we do. So, I can tell you, yes, you'd be better off if you were a willing participant.

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