The Uncomfortable Truth About Financial Advisors

Choosing a financial advisor is one of the biggest financial decisions you'll make—but do you actually need one? Brian and Bo break down the uncomfortable truth about financial advisors, including advisor fees, fiduciary standards, commission vs fee-only advisors, behavioral coaching, retirement planning, tax planning, estate planning, investing, and why portfolio management is only a small part of real financial planning. You'll also learn when DIY investing makes sense, how advisor value is measured, and the biggest mistakes people make when hiring an advisor. Whether you're building wealth, approaching retirement, or deciding if professional financial advice is worth the cost, this episode helps you make a more informed decision. ⁠⁠⁠⁠Jump start your journey with our FREE financial resources⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Reach your goals faster with our products⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Take the relationship to the next level: become a client⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Subscribe on YouTube for early access and go beyond the podcast⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Connect with us on social media for more content⁠⁠⁠⁠⁠⁠⁠ Bring confidence to your wealth building with simplified strategies from The Money Guy. Learn how to apply financial tactics that go beyond common sense and help you reach your money goals faster. Make your assets do the heavy lifting so you can quit worrying and start living a more fulfilled life. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Speaker 00

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• 0:30Speaker 01

  Blowing ad budget on metrics that look great till the CFO sees them? That's bull spend and marketers are calling it out in Dashboard Confessions.

• 0:39Speaker 02

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• 1:00Brian Preston?

  Here's a question. Are financial advisors worth it? And do you really need one? You might be surprised by our answer.

• 1:06Speaker 04

  Brian, I am so excited because today we are addressing the uncomfortable truth about financial advisors, including an honest look at fees and how paying for an advisor actually affects your portfolio.

• 1:17Brian Preston?

  I'm Brian, he's Bo and we're two financial advisors revealing the uncomfortable truth about ourselves. And with that, let's dive in.

• 1:30Speaker 04

  Yeah, Brian, I think financial advisors get a bad rap and some of it is warranted and some of it's not warranted. So today, we want to peel back the curtain and we're going to talk about the uncomfortable truths about financial advisors and their profession. And I think uncomfortable truth, number one, is not going to be incredibly surprising if you've been out there in the financial world at all, but some advisors are really just salespeople.

• 1:54Brian Preston?

  Yeah, I think when people find out we're financial advisors, I'm almost embarrassed to tell people I'm a financial advisor because the reality is anybody can call themselves a financial advisor. And then you find out, most of them are selling some type of product or good like life insurance, or they maybe only know about this mutual fund family. So there's all kinds of things you need to be looking out for.

• 2:17Speaker 04

  So when we use the expression, "financial advisor," we're going to talk about holistic financial advisors. And if you're someone who falls into that camp of being a holistic advisor, there are a number of different areas you're likely going to cover. Those are like tax planning, insurance planning, investment planning, behavioral coaching, retirement planning, estate planning and cash flow planning. It's not one single isolated thing. It's really taking a look at the client's entire financial picture and helping them figure out how do all the pieces fit together.

• 2:47Brian Preston?

  Yeah. And when we talk about holistic, because each one of these, if you're watching this versus listening to it, you see, we have a whole list of things. I feel like it's almost like the R E M song, "It's the end of the world" and we have to start naming these things out. But in all seriousness, your financial advisor should be able to get in the weeds. Like if we're talking about tax planning, how, how does the asset location impact things? How does tax loss harvesting? So you can turn lemons into lemonade. There's all kinds of things that go into this. Even when you get into estate planning, how do we make sure that your kids, not only are you passing the assets well, but we make sure that they're going to be good with the money when it actually comes that way? These are things that a holistic planner can do for you.

• 3:27Speaker 04

  So if that's what a holistic planner is, let's talk for a moment about what a holistic planner is not. And do not mishear us. We're not saying that these types of individuals are bad people or that they're bad professions. We're just simply stating, these are not holistic advisors. And the folks that would not be holistic advisors are folks that are focused solely and exclusively on asset management. All they're doing is investing or all they're doing is money running. That's not a holistic advisor. Insurance agents, another great example. If someone is only selling insurance products, whether that be life, health, disability, or even whether it be a property and casualty, they're likely not a holistic financial advisor.

• 4:06Brian Preston?

  And then there's financial coaches. Now, look, this is a new trend that's kind of popped up. A lot of people, and I think when you find out that you have an aptitude and you love personal finance, you're like, well, hey, I can get into this. Our whole thing is, there's nothing wrong with, and you'll hear in a minute, how we talk about how financial behavior is definitely a key part of what you want your financial advisor to do. But there are huge limitations we see when we find the whole category of financial coaches.

• 4:32Speaker 04

  And so you may need, in your world, potentially, an asset manager, an insurance agent, or a banker, or some sort of financial coach, but that's very different than a holistic advisor. Someone who's taking a look at your entire financial picture and helping you put all the pieces together. So that's uncomfortable truth, number one. Brian, uncomfortable truth, number two, is I think going to be a little surprising. When it comes to clients, not every client gets treated the same when it comes to financial advisors.

• 5:00Brian Preston?

  Well, I mean, there's a huge difference between somebody who's at the beginning of their journey. So you have your first $100,000 versus somebody who's at $10 million. They have different needs, but also, and I think this is not a negative. I mean, because you're going to hear in a minute that we think that there's actually a time and a place where there are moments in your life where you just need somebody to tell you, "Hey, what's the answer so I can get past this problem and then keep living my best life?"

• 5:24Speaker 04

  Yeah. And so if you have an advisor, depending on your circumstance and what you need from the advisor, they may serve a unique and distinct role. One of the roles that an advisor might serve would be something similar to like a mechanic, someone who sees what's going on in your life and understands the process and the things necessary to fix it. This is where you can think about, from your financial standpoint, these are where your functional needs are met.

• 5:50Brian Preston?

  Yeah. Look, from a peace of mind standpoint, if you had a one-off thing come your way, this is going to help if you have any anxiety about it. You just don't know what you just don't know and have a blind spot about it. It makes sense to find somebody who might be an expert on this one specific thing.

• 6:06Speaker 04

  Yeah, maybe it's someone you're retiring and you're trying to figure out, "How do I simplify my account structure for required minimum distributions?" Or maybe I have an inheritance coming in and I have specific questions around how to navigate that. When a financial advisor is serving solely as a mechanic, this may be for a unique circumstance or potentially even for like a one-time, one-off situation.

• 6:29Brian Preston?

  So we like those. The mechanic can serve that purpose, but you might want to move to the next, if you think about categories of needs, the doctor. This is somebody who understands more of your full picture and can monitor changes and also foster that you feel good about where you are financially.

• 6:46Speaker 04

  Yeah. If you think about a medical professional, oftentimes what they're able to do is catch problems before they actually become a problem. They're allowed to be more forward thinking, like focusing on estate planning or wealth transfer. Not only can they diagnose and assess where you are today, but they can also help paint a picture and a path for where you ought to be in the future.

• 7:06Brian Preston?

  And they can work with specialists, just like, and we always say, you know, health is wealth. But there's so many correlations between, you know, where you are with your health as well as what you're building in wealth. And so I like pointing out that like just when you go to a doctor, you might need a cardiologist if you're trying to focus on your heart, or you, you might need somebody who's going to help you, a physical therapist if you have something that you're going to need to rehab. Well, we're the same way. You think about when you're working with attorneys to help you with the estate plan, or maybe every year when you do your tax prep for compliance, you work with your CPA. Wouldn't it be nice if you had somebody who could sit between there and kind of communicate, talk their language, but help you in a holistic way, do the best thing with your financial

• 7:48Brian Preston?

  life, just like you would if you were navigating, going through whether it was cancer, a heart issue, or rehab issue. It'd be nice if your primary care physician could help navigate all this and serve in the quarterback role.

• 8:00Speaker 04

  And so a lot of those two roles, whether it be the mechanic role or whether it be the doctor role, are sort of IQ focused. But there is another role that a financial advisor can satisfy. And this oftentimes is more EQ. And this is the personal trainer role.

• 8:14Brian Preston?

  Oh, Bo likes this one.

• 8:15Speaker 04

  This is a huge one. Just like when it comes to fitness, just like when it comes to working out, sometimes you need someone to help you know the things that you don't know. And then actually, once they educate you on the things you need to know, help keep you motivated to stay the course and make the good decisions easy and the bad decisions harder.

• 8:31Brian Preston?

  Look, this is one I don't mind. Bo, because it's back to the correlations of health and wealth, is that we all need a good coach. And if you've ever, like, I don't like working out. Bo does like to work out. But you can know that sometimes you need a good trainer to kind of enforce the good behaviors. Because, you know, like if I, if I had to go to the gym and just do it by myself, I'm probably just doing the beach muscles. You know, I'm going to do some bicep curls. I'm going to do a little bench press. That was a great workout. No, when you go to a personal trainer, they're going to actually make you not skip leg days and do all the, and also protect you from, you know, anything that you don't want to do. The finances is the exact same way. You think about when the stock market's getting his teeth kicked in. Maybe you have a risk or a scare with you're losing your

• 9:14Brian Preston?

  job. It's good to have somebody help you navigate both the negative and the positive behaviors or life events that are coming. That's where a good financial advisor is going to be able to navigate that, just like a good personal trainer will help you do that in your exercise.

• 9:27Speaker 04

  And they can keep you accountable. They can say the things to you like, "Oh, hey, you're not saving enough. You need to change this." Or on the flip side, "Hey, now you can start spending more. You get to actually enjoy the fruits of your labor." And so Brian, when I think about how we get to work with our clients and serve them, what's interesting is we kind of move in and out of these roles. And sometimes we are the mechanic and other times we're the personal trainer. And then even other times, we're the doctor. And so when it comes to a financial advisor, depending on who the advisor is and where you are in your financial journey, the way that they treat you and the way that you interact with them might be very different. It's not going to be the same cookie cutter solution as every other client. And we would argue, that's actually a good thing.

• 10:07Brian Preston?

  Yeah. I think it comes into, because like even back to that accountability point, you think about sometimes like estate planning, husband, you know, spouses will have different opinions about something. It's nice. And so the work never gets done. What I always find funny is that when you know you have a client appointment scheduled, how they all procrastinate, but then at the last minute, they start pushing to get that. And it's the accountability that makes it happen. That's why I love bringing it all together, whether it's the mechanic who just has a one-off, you know, where you're just trying to get through the solution. Help me with the logistics of it. The doctor who knows the whole situation, can talk to your accountant, can talk to your estate planning, or is the personal trainer who's going to hold you accountable to make you the best version

• 10:51Brian Preston?

  of yourself. All these things are interconnected.

• 10:54Speaker 04

  And what's interesting, as you think about how they serve different roles and they have distinct responsibilities, it kind of leads into uncomfortable truth, number three, which I think is a common misnomer out there in the public, that when it comes to financial advisors, picking your investments is usually not going to be the main value that they provide.

• 11:15Brian Preston?

  This is one, whenever I meet anybody and they don't really know what I do for a living, and they hear a financial advisor, they ask me for stock picks. And this even... Turned into a whole new, new level this year with some of the IPOs that are coming out and so forth. And I hate to break their heart and I always tell them, hey, instead of trying to beat the market, I'm just being the market. I like index funds, which are about as sexy as, they're just not. I can't even think of what I would fill in the blank with on that. But that's where I think most people are really in a situation where they don't understand what a good financial advisor will do for you. It's more about the planning than it is trying to pick the next investment. In a lot of ways, investments have been commoditized

• 11:57Brian Preston?

  because index funds, if you go look at the SPIVA data and other things out there, in, you know, in investing in general has been commoditized. You better be getting more value than just asset allocation.

• 12:09Speaker 04

  That's right. A really good advisor should be able to help you with taxes, estate planning, retirement planning, risk management, cash flow, college planning, home buying, refinancing, fill in the blank of any financial thing that might come across your desk, they ought to be able to help. So the question becomes, if a financial advisor is doing all these things, and it's not specifically investment related, how do I quantify value? How do I assign some value to what it is an advisor does? Well, the Russell company actually does an analysis of this every year through their advise, value of an advisor study. And in 2026, they actually found out that the potential value of an advisor in

• 12:48Speaker 04

  the US is estimated to be 4.92% annually of additional value add to a client situation and circumstance.

• 12:58Brian Preston?

  So when I first heard about this, I was like, wait a minute. So 5%, close to 5%, where is this value being added? So I love that they actually stratify this. And I think it's important for us to kind of go over it because it makes the point that I was making earlier. If you think that your investment advisor is only going to be adding value through investments, because that's what all over social media, you hear people, why would you hire a financial advisor when you just buy an index fund? Or you see that meme where the guy is stopping the subway and then, you know, he's pretending that he's stopping, then he walks, walks away, and then he pushes it away when it goes. And it got gazillions engagement on it because people love trashing financial advisors. And I'm like, guys, that's not where we add value. If you think that it's only in the

• 13:41Brian Preston?

  investments and look at this, right here, when the value of an advisor, what's the smallest subset here? It's asset allocation. It's only 5% of that extra gamma that you're kind of expecting from a financial advisor. If you look at what the biggest thing is, it's all about the behavioral coaching. If you think about how many people get trapped in this trap of fear and greed, meaning that, you know, when markets are getting their teeth kicked in, scared to death. When markets are all time highs, let's go get some more of that. This is the things that I deal with on a day to day basis. And by the way, it gets really amped up when you are in the two comma club, when your assets are in the

• 14:22Brian Preston?

  millionaire and beyond, beyond status, you start panicking about what you don't know.

• 14:27Speaker 04

  So 47% of the advisor value add is through behavioral coaching. Another 23% through customized wealth, family wealth planning, and another 25% just through taking into account taxes and tax smart investing and planning. So an advisor can add the tangible value, which Russell's able to quantify in a dollar figure, but there's also some non-tangible value that an advisor adds on the psychological side. In fact, 93% of people that are looking for an advisor or have an advisor currently said that the reason they wanted an advisor, the reason they're looking for one is that they would like an additional peace of mind when it comes to their financial circumstances.

• 15:07Brian Preston?

  This is what I love about what we do. Just like one of my favorite books, when I first discovered the wonderful world of personal finance was Millionaire Next Door. And I love that, hey, somebody has actually taken the time to go out there and interview millionaires, find out what they know about money that the rest of the public doesn't know. You can imagine as we've started working with thousands of wealthy families, we're like, hey, maybe we could also start shedding a light on what millionaires think about things by doing annual surveys of our clients. We also survey our financial mutants in our audience as well. But what it really highlights with our clients, and this is very fulfilling, is we asked that question. We said, hey, if peace of mind is the goal, are you more confident with your financial decision making now that you have an advisor? And look at

• 15:51Brian Preston?

  this, 81% of our millionaire clients say they are not stressed about money anymore. Now compare and contrast that to the general public. If you look at this Capital One and the Decision Lab, they ask Americans, what do you feel about money? And 77% say that they feel anxious about their current financial situation. Guys, that is a stark compare and contrast on what the difference is between these two groups of people.

• 16:18Speaker 04

  So there are obviously quantifiable things that a financial advisor can help you with, but there are also qualitative things that a financial advisor can help you with. And so you think, all right, there's value that can be added, there's value that can be assessed, but financial advisors don't do this for free. There are often costs associated with this. So that leads to uncomfortable truth, number four, that when it comes to a financial advisor, the fee structure and what you're paying, it matters.

• 16:47Brian Preston?

  But people who are watching this, like, finally, they got to the fees. Let's talk about the fees. These guys are ever gonna share, yeah, let's, let's have a conversation about this. The first tier, commission. Now, look, when I first got in the industry, I've been doing this since the nineties. This is where the majority of people were. And it's still a lot of people are in this commission or we'll talk about fee based in a minute, but it's still a little gray, but it's starting to get a little more clarity now that we've gotten into fiduciary rules and so forth. But when you're talking strictly about, hey, I'm going to sell you a product and I'm going to make money off of that, that's the commission. That's your life insurance agents. That's in some of what I call the grocery store financial advisors who are in the strip shopping center, selling you goods. These are things that are pretty in your faces that you go and you, you're not

• 17:31Brian Preston?

  really buying the advice. You're more buying a product and they're getting paid a commission.

• 17:36Speaker 04

  Yeah. The way that they get paid is not actually from you, it's from some third party company encouraging them.

• 17:44Speaker 00

  The action's on the court. And as the official beer sponsor of the NBA, Michelob Ultra is getting fans closer to the game with a chance to win courtside seats, merch, and more. Visit michelobultra.com/courtside to enter. Michelob Ultra Courtside, 26 to 27. No purchase necessary. Open to US residents 21+. Begins on October 1st, 2026 and ends on June 30th, 2027. Multiple entry periods. See official rules at michelobultra.com/courtside for free entry, entry deadlines, prizes, and details.

• 18:12Speaker 01

  Are your ad campaigns lighting up the dashboard, but not the pipeline? That's bullspend. And marketers are calling it out in dashboard confessions.

• 18:21Speaker 02

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• 18:42Speaker 04

  To sell their products. That's the commission base. Well, then there's the fee based side where perhaps commissions is still part of it, but there's another fee. There's more of a flat fee or retainer fee or an asset based fee that goes along with it. And it's kind of like dipping your toes in both worlds. I have some fee based business, but then I also have some commission based business. They kind of blur the line between where the distinction is.

• 19:05Brian Preston?

  And then the last is the elusive fee only fiduciary advisor. This is the one where legally the financial advisor is required to put your interest ahead of even their own. If they don't, you can legally sue them.

• 19:18Speaker 04

  Yeah. And surprisingly, right now, the fee only advisor space makes up around 4.92%. So less than 5% of the entire financial industry. Now, truth be told, it has increased. In 2018, it was only 2% of the industry. So it's doubled, but it's still a relatively small portion of the entire financial advisor space. But even inside the fee only world, there are different business models, different structures that you ought to be aware of. The first are advisors that work on an hourly basis. And it's exactly what it sounds like. They bill based on the hours they spend working on your financial plan. And oftentimes,

• 20:00Speaker 04

  those billable rates can be somewhere around $200 to $400 an hour.

• 20:04Brian Preston?

  Yeah. What's really beneficial about this, it is a lower cost. You know, if you've got a problem, remember how we were talking about mechanics? If you've got a problem, you got a one time thing that you need somebody to look at, this is a great opportunity. The cons, it is more transactional. You know, every time that you call the advisor, there is going to be an invoice or cost, and that creates some form of friction.

• 20:25Speaker 04

  Yep.

• 20:25Brian Preston?

  There's also a loss of the shepherding process or the logistics. Like if you need to transfer assets or implement a plan, you're more likely for it not to happen if you're the one that's responsible and there's nobody that's shepherding you through the process. And then let's not forget, it's difficult to scale.

• 20:41Speaker 04

  That's right.

• 20:42Brian Preston?

  Because you're, you know, you're limited, all of us as individuals are limited by the number of hours that we can work. So that also impacts the financial advisors operating this way.

• 20:51Speaker 04

  So where the hourly model has some shortcomings in or in the retainer or the flat fee model, and this is a little bit different. Rather than tracking the hours that you're spending, there's an agreed upon scope of work and an agreed upon fee that that will cost. It can be one time or in a lot of circumstances, it's an ongoing flat fee. And usually this can be anywhere from $2,000 to $7,500 a year. But for more complicated engagements or larger scopes, it could even be up as much as tens of thousands of dollars a year.

• 21:21Brian Preston?

  Yeah. What I do like about this is it's nice and it's appealing to have fixed costs. And I also like that if, think about if you're a younger person. Big income, but you just haven't had time to build up assets and you don't have assets to manage necessarily. It is nice that this is available to smaller asset sizes if you needed that type of advice. The only thing is, is that there is some type of the con wise, there is some friction in the fact that it's less likely to be concierge service because, look, they've put boundaries on how much of a scope that you can do in a project.

• 21:53Speaker 04

  There's a defined scope of work.

• 21:54Brian Preston?

  There's a defined, and then there's also the incentive volume, because if you have set where the limit is on the relationship, that means you're, there is a goal to take on more and more clients, and there could come problems when it comes, once again, to scaling of that business model.

• 22:09Speaker 04

  And now, there is a time and place where the flat fee structure does make a lot of sense. And if that's specifically what you're looking for, if that sounds like that might be a fit for where you are, keep listening, because we actually do have a solution to share with you there. And then, then there's the third fee model. And this is what you hear us talk about a lot, because this is what we do here to bound wealth management. And it's the assets under management fee model. And what that means is, the way that the advisors compensate is based on the size of the portfolio, or the size of the assets that they are tangibly helping you manage.

• 22:41Brian Preston?

  Yeah. And this is, you can imagine on the pros side, the aligned incentives, meaning the more money you make, the more the advisor makes. If the account loses value, the fee also comes down. It is more likely to be more of the concierge services that we talked about. It's a more of a premium, premium product. So there's no limits on the service necessarily. And then, what we, we talk about decreasing effective fee. What that basically means is, the bigger the account size, there is a bigger and bigger discount based upon the assets that you are having managed.

• 23:09Speaker 04

  But there are downsides. One of the downsides of the assets under management model is that it does generally require a focus on higher net worth clients. In our world, we want to be able to build intimate, deep, ongoing relationships with our clients. The only way to be able to do that effectively, is if you have some sort of minimum fee service, or minimum level of client that you work with. And because of that, there tends to be a higher cost. Again, this is holistic planning, not just looking at investments, but looking at the entire financial picture, to bring it all together. So, those are the three different fee only models. And that's how much an advisor could cost. So now, let's see, okay, when you think about the fee, how does that ultimately affect you? Let's break it down. Let's use a common example that we see in social media all the time.

• 23:53Speaker 04

  Let's assume that you have a do it yourself investor. And this person has a portfolio of a million and a half dollars, and they decide, hey, I'm not going to hire an advisor, and I'm going to have a diversified portfolio. And over the long term, I'm going to make an 8% rate of return. Well, if that do it yourself investor invests that million and a half dollars at 8% over a 25 year time period, they would have over $10 million by the time they get to the end of that 25 years. That is remarkable. Do it yourself investors have the potential, have the ability to do that. We said at the beginning, we don't think that every single person needs to hire a financial advisor. Now, here's where social media always goes wrong. They say, okay, but if this do it yourself investor

• 24:36Speaker 04

  would have hired an advisor, and that advisor would have charged a 1% fee, rather than this client ending up with $10.2 million, they would only have $8 million. That's a 22% haircut on how much money they would have had. Now, let's pause there for a moment before we even talk about anything else. If that were your circumstance, and that were your situation, and on your own, you could have 10 million, but then you hired an advisor, and you're only going to have 8 million, you should never do that. That, that doesn't make any sense at all. And we would agree with that. But when it comes to this illustration, there's something you ought to know.

• 25:14Brian Preston?

  Well, first of all, everybody should know, is that most people we work with, millionaire and beyond, they can vote with their feet and move their assets. They're not idiots. These are, this is really smart people. And every year, they re-sign back up. There ought to be a first clue. But the other thing is, that really irks me about the, when people do this math, it's a straight up math crime, is because they assume, you know, and I alluded to this earlier, is that if you've got a million dollars, but now you've grown it to $10 million, and they're doing the math on their 1%, just assuming it's a flat 1%. It's probably because it's easier to do that math, and it creates this huge spread. But

• 25:59Brian Preston?

  it's back to my point, when you show up with more assets, just like when you go to Costco, and you know, you can take it back to when toilet paper became the most premium precious thing in the world, that it was on nightly news. It's the same way with asset management. The more you show up with, the cheaper your fee is. Guys, you show up to a financial planner, a good holistic planner, and you tell them you've got $15 million, watch how good they can sharpen that pencil in their fees. And that's the thing, is it's a math crime to assume that people are going to be paying 1%. There are breakpoints, there are discounts, there are effectively lower fees, the more money you have, and you get invested. And people kind of, I don't know why they skip over that. It's a little disingenuous, but

• 26:43Brian Preston?

  it does always get skipped over.

• 26:45Speaker 04

  So, for example, if you want to take a bound well, this is our fee structure. We charge 1 and 1/4% on the first million, 1% on the next 2 million, 0.75% over the next 2 million, and then half a percent over the, over 5 million. So, the math crime, number one, is they didn't factor in that our fee actually decreases effectively through time. But the bigger math crime, and I think this is the more egregious one, if all you do is hire an advisor, and all the advisor does is take 1% of what you would have otherwise made, then that's not a favorable trade off. All you're doing is spending money, getting nothing in return. Because when you hire an advisor, you ought to get value for that service you're paying for. So we said, all right, Russell did this analysis, where they

• 27:29Speaker 04

  said that on average, an advisor can add 4.9% annualized to the value of a client. We said, what if we just took half of that? Cut 4.9 in half, so we have 2.46%, and factor in the effective fee. So, in reality, the client with an advisor ought to be able to do better than he can do on his own, through all of the different areas where an advisor adds value. In that scenario, after you fact in the effective fee, after you fact in the value add, this client, over a 25 year time horizon, would actually end up with over $14 million. That's 39 and 1/2% higher than they would have ended up with on their own.

• 28:13Brian Preston?

  Yeah. You know, this is what I'll, you have to be careful when you just look at raw stuff. And that's what, because it's back to the, what is the value that an advisor is doing? And I love, because I, look, I've had even my own clients who fall on prey, do they see some of the stuff on social media? And I had a client who'd been with us for 15 years. And I literally feel like I have dragged this client into financial independence, because he's not a natural saver. He's not very good at understanding deferred gratification. So, every time we've had our meetings throughout the years, I have really held him accountable, and squeezed a little bit more out of him. But, you know, fast forward, now he's a multimillionaire, even though he never made huge incomes, and I've pulled him through for the last 15 years

• 28:56Brian Preston?

  that he's been a client. He's like, man, I just watched something, I'm getting close to retirement. I see that how expensive his fee is. And I was like, pause. I was like, we're about to reach where we're going to be doing annual Medicare analysis, we're going to be doing Roth conversions, we're going to be, and I named off this whole list of all the things, plus the annual stress testing that we do for our, and I was like, you realize that we have grown this thing to a level of value now, that, and you're about to get even more value out of this. This is the worst time to, because, and after I showed that, he's like, you know, I didn't even think about that. I was just thinking about this, this analysis I saw where somebody said, this is what you're paying. It's also about what you're actually receiving in the services. Like I said, these, a lot of these

• 29:40Brian Preston?

  people are smart people. They wouldn't do this. And I tell you that because I'm unapologetic that this is how we get paid. Because just like your time is the thing that helps compound growth, that helps you build wealth, it's also your limitation. You know, I am no longer a young man that, you know, that I'm limitless on my time. We only can work with so many clients. And you'll find, I think, when you interview people, we've, we've been in, we were in, just in some calls in the last week, where you get in a room with attorneys, accountants, and others, and you realize, oh my God, how many people can you help speak the language and make sure that this person's not trying to nerd out and show how smart they are from ego? This person's trying to show, somebody's got to be humble in this room, and actually

• 30:25Brian Preston?

  help the client understand what each of you are saying, and then bring it all together. And that's what I love we get to do. And I'm not trying to, I say this because I'm not, it's not a defensiveness. Don't mishear this. It's more about, I'm so passionate about what we do, that it breaks my heart if you, if you think that people can just charge fees and not add value, and it is going to end in a successful place. And that's just not where it's at. And I think that's probably a great segue, Beau, to our next uncomfortable truth, and this is what makes us unique. We don't think everybody needs an advisor. Hence, back to the origin story of why the Money Guy Show even exists.

• 31:02Speaker 04

  Yeah. If your life is relatively simple, or you're a do it yourself, or you have a special affinity for this, it's why we have all the free content out there. It's why we have, it's why there are books, and YouTube channels, and courses, and deliverables, and the Financial Order of Operations. All of this is out there to help you do money better. There's advice on how to pay off debt. There's advice on how to save for colors. There's advice on how to allocate a portfolio. And a lot of that stuff is out there for free. So that's why I say, a lot of folks, up until a certain stage, you might not need a financial advisor. But some people say, okay, I hear you, and I believe that, and that was true, and I have been do it yourselfer, but I'm just kind of the place where I want

• 31:47Speaker 04

  that second set of eyes. Or I want to make sure that there aren't things that I'm missing, or I need to figure out, how do I answer these questions that I have? I'm not quite ready for that full service thing yet. I'm not quite ready for that concierge, white glove treatment. But I would love something to help me do a little better than I am now. I'm not ready for taking the relationship to the next level. I just want to figure out how to level up my finances. And that's why. That's one of the areas where the flat fee model makes a lot of sense. You can start as a do it yourselfer, but then you can move to a planning forward, flat fee type service like LevelUp until you're ready to ultimately go to the full

• 32:30Speaker 04

  concierge holistic all in one approach when you take the relationship to the next level.

• 32:37Brian Preston?

  That's what I love is I feel like we reach people in all the places they might be. If you're just at the beginning of your journey and you just want to maximize what's going on in your mind, please go take advantage of our free stuff. You know, we listed the Financial Order of Operations because it is your all terrain, all weather vehicle to help you know what to do with your next dollar. But go to moneyguy.com/resources, we'll load you up with all kinds of free stuff and it's going to help you out. If you have reach, or maybe you're one of those unique people that you have a great income, but you just, you're not quite there. Maybe your assets are below 500,000, but it's coming in quick and you just don't know what you don't know. You need more of that doctor or mechanic type view. Go check out our LevelUp, you know, because that's one of the things we're trying to help people do with a fixed fee type option.

• 33:19Brian Preston?

  And then of course, when you get to a point where your life is complex and Bo is going to give you more signs that you need a financial advisor, I want you, this is where I'm hoping you will remember what a bound wealth has planted with all the seeds. Cause your life will get complex when you reach some level of success.

• 33:39Speaker 04

  That's a great question. How do I know or what's a sign that it might be time for me to hire a financial advisor? Well, number one, complexity finds you. When we start out, our life is fairly simple, but inevitably as life goes on, as our wealth builds, it naturally gets more complex. We don't really understand or know all the things we don't know. Or maybe you arrived at this conclusion that man, the numbers are so big that the decisions I make right now carry a lot more gravity than they used to. If I make a uh oh on a thousand dollars, it's probably not going to change my life. But if I make an uh oh on a million dollars, now it's going to be life changing. Or, and again, this is something that a lot of folks, as you get into your 30s, get into

• 34:20Speaker 04

  your 40s and even into your 50s, you recognize that the things I know that should be important, like doing my estate documents, reviewing my tax return, rebalancing my portfolio, they just fall in the back burner because I literally don't have enough hours in the day. If you find yourself at any one of those places, or maybe you find yourself at multiple of those places, that might be a sign that it's time to think about getting a professional to step in and help.

• 34:44Brian Preston?

  Okay, let's go ahead and transition. So somebody has said, yeah, I'm realizing I need to take the relationship to the next level. I need, I don't know what I don't know. What do they need to look for when it comes to finding a good financial advisor? Cause there, as I've already alluded to, they're not all created equally.

• 35:00Speaker 04

  Well, I think one of the things you can look for that's an easy litmus test is are they credentialed? What is the substantiating thing that says they actually know what they talk about? And what's difficult is there's an alphabet soup of a thousand different letters out there that people could have behind their name. So you want to make sure the ones that they have behind their name actually matter and actually what you're looking for. Some great ones to look for, Certified Financial Planner, the CFP designation. That's kind of like the gold standard of someone who wants to take a holistic approach to financial planning. But then there's also investment specialists, like the Chartered Financial Analyst, tax specialists, like a Certified Public Accountant, insurance specialist, the Chartered Life Underwriter, or even the Chartered Financial Consultant, which is a slightly lighter designation.

• 35:44Speaker 04

  All of these would be ones that would be materially substantive to say this person is actually doing financial planning and there's a high likelihood they know what they're talking about.

• 35:54Brian Preston?

  The next question, look, we did, just spent a lot covering the fees, understanding, I think there needs to be some transparency with what you're paying. So what's their fee structure? How do they get paid? What are the conflicts of interest? Look, everybody's got conflicts of interest. So you just need to know that and it's okay, as long as you have a conversation to understand what are each business model's conflict of interest? And how do you overcome that to make sure you're getting the best advice for your personal situation?

• 36:22Speaker 04

  And then with the individual that you're looking at, do they meet your needs and your money beliefs? Are they solving the role? Do you need a mechanic? Do you need a doctor? Do you need a personal trainer? Is the advisor that you're working with, are they going to be able to satisfy that? Or do you need multiple of those at one time? Is that person going to actually be able to deliver on that?

• 36:45Brian Preston?

  And then I've already talked about this earlier, but it's worth repeating is what's the number of clients they work with? Because as I've already shared, we're pretty transparent in the fact that we believe in the Dunbar principle. 150 relationships is about all a human can do. So that's a good question to ask somebody because you're going to be, it's going to be alarming. You find out they're working with 450 households. You're like, well, where do I fit into this from an actual relationship? Or is it okay that they have a ton and this is more of a transactional thing? I just want you to know what you're getting into on the front side of it.

• 37:14Speaker 04

  How do they communicate with you? What's their style? Are they deep in the weeds and spinning your head? Or can they break down complex topics into simple, easy to understand management? Or are they just totally surface level and there's no depth? You need to make sure that the person you're working with matches you where you are.

• 37:32Brian Preston?

  Yeah. And then the specialization, look, we've already shown you, when you, when you look at that study is how does an advisor add close to 5% better long-term value? 25% is how good they are with taxes. Taxes, and I'm always amazed when I talk to other advisors and you find out how woefully unprepared. And maybe it's because I have 16 years of tax prep and reviewing and actually representing clients before the IRS, that that's in the DNA of our firm. But a lot of people just don't know what they don't know. And it's, you see the same thing when you talk to attorneys, you know, when you're structuring the estate plan. So figure out where does specialization, if that ties into your need, whether it's tax planning, whether it's estate planning, and even retirement and education planning, make sure the person you're working with has that expertise.

• 38:17Speaker 04

  And then as an advisor, do you have aligned views on how money works? Some advisors believe a lot in philanthropy and some don't. And some advisors, this is not a statement on, okay, well, is this person aligned with me politically or something like that? But do they take the time to understand what it is that you care about? What it is that you value? And are they able to deliver advice that can allow you to use your money to be the thing that you want it to be, to reach the life goals that you have?

• 38:47Brian Preston?

  I hope you weren't feverishly taking notes because we've made this easy for you. If you want to go to moneyguy.com/resources, we actually have eight questions to ask your financial advisor. This is going to give you a huge leap forward in trying to make sure you can navigate this process to figure out which business model or what type of advisor is the perfect type of financial advisor to make you live your best life and have that peace of mind that we talked about earlier.

• 39:13Speaker 04

  Not all financial advisors are created equal. Not all clients are created equal. Make sure you understand what it is that you're looking for, why you're looking for it, and what would be a great fit for your financial circumstance.

• 39:26Brian Preston?

  And then I'll close it out and say the obvious thing. Look, we love what we get to do for a living. I think you can tell we have hearts of educators. That's what the start of this in 2006 was. I really did feel like the market and the public had a need, that they needed somebody just telling them, how does money work? Tell me the real stuff. And I realized this was not done as a business model. It was done as truly an education play, a passion project. And then I realized after starting this in 2006 and 2008, a number of you started reaching out and saying, hey, I like your philosophy. I like how you process and think about money. How can I work with you? And then fast forward to, I think it was like 2013, 2014, and had an advisor say, are y'all not asking for business on the show? And I was like, no, I'm too worried it's going to sound like an infomercial.

• 40:11Brian Preston?

  And like, no, I think you've done enough goodwill with the show that you can start asking for business. And then we went to a whole nother level. So that's why now we're unapologetic is that we know if we, we trust in our skillset, you see our knowledge, we lay it bare for you with our passion, our expertise, but we know when your life gets complex, there is a better way to do money. And we're going to leave the porch light on for you. And if we invite you, if you've learned, if we planted that seed of knowledge that created any ounce of your success, when you come to the point with your complex life that you want to take the relationship to the next level, give us a shot. Go to moneyguy.com, become a client. We welcome the opportunity and we work with clients all across the country. I'm your host, Brian, joined by Mr. Bo, Money Guy Team, out.

• 40:56Speaker 05

  The Money Guy Show is hosted by Brian Preston and Bo Hanson. Brian and Bo are partners with Abound Wealth Management. Abound Wealth Management is a registered investment advisory firm regulated by the Securities and Exchange Commission in accordance and compliance with the securities, laws, and regulations. Abound Wealth Management does not render or offer to render personalized investment or tax advice through the Money Guy Show. The information provided is for informational purposes only, may not be suitable for all investors, and does not constitute financial, tax, investment, or legal advice. All investments involve a degree of risk, including the risk of loss.

• 41:36Speaker 06

  Hey, Bo's here. When your next track starts, listen for the decisions that the artist makes. The vocal pushed right up front. The bass that waits half a beat. That sample from a 70s underground gem. Every choice deliberate. With Bo's, you'll hear it all. Your music deserves Bo's.

• 42:03Speaker 07

  If you're building AI agents, you should check out Strands Agents. It's an open source SDK for Python and TypeScript. The idea is simple. Give a model some tools, let it decide what to call and when, and loop until it's done. No chain convicts, no graph orchestration, and works with any model provider. It's also open source and built and tested for production agents. Get started at strandsagents.com.