What Drives Your Financial Advisor Crazy?

No industry is without its flaws, and the financial industry is no exception. Let’s explore some times where we’ve encountered annoying or frustrating elements of the financial world.

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Transcript Of Today's Show:

Speaker 1: Hey, everybody welcome into Plan with the Tax Man, and this is our final podcast of 2020. We have made it all the way to the end of this kooky year, well, almost any way. Tony and I are doing this about two weeks before the year actually ends, but with the holiday season and all that kind of stuff, this will be our final podcast. And we are going to talk about some things that drives advisors crazy on this show, and actually some of these probably drive clients crazy, as well. We'll get into that in just a second, but Tony welcome in my friend. How are you?

 

Tony: I am good. I'm getting ready for the holidays, looking forward to it. It's going to be a little different this year.

 

Speaker 1: Little different. Yeah. We've made it, though. We're here, right? End of the year. Any major plans are probably not right? Trying to keep it subdued, I guess.

 

Tony: We are this year. We're actually still going to get together a small family, but it's not going to be the big shindig that it normally is, which I think is probably the case for most, but we're fortunate because all of us are in the same city, so we're able to easily do that.

 

Speaker 1: Gotcha. Well, this is our 36th podcast. So I've had a good year with you. It's been a lot of fun. Hopefully, we've shared some useful nuggets of information with folks, and expectations, Tony, are often really important when working with an advisor and an advisor working with a client. Those relationships, that back and forth, setting expectations is a good thing, and I think we should do that for ourselves going into 2021, as well. So many of us are so ready to see this year end, but I don't want us to go into it thinking, as soon as that ball drops, that somehow everything gets better, right? It's a lovely notion, but we're going to be contending with this for a while in 2021, as well. So setting some good expectations, I think, is good in that respect is also when it comes to our retirement dreams and our retirement goals, expectations are always good.

 

Speaker 1: So with that said, let's talk about... Let's have a little fun. Let's finish up the year here with some things that drive you guys crazy in the industry, and there's no industry without flaws, right? And financial services is certainly no exception. So I got a couple of ones here that folks might find interesting that it drives you guys just as much as nuts as it drives us on the other side of the desk. So for example, hidden fees, we don't like them. We know we don't like finding out that there's fees we're paying that we didn't really know about, and I'm sure you guys don't really enjoy having to explain why they're ... It's almost like cell phone charges. Sometimes some of those fees that we can't ... There's nothing that can be done about them.

 

Tony: Yeah. Sometimes there's not, depending on what type of investment.

 

Speaker 1: What it is.

 

Tony: Yeah, and what it is. In insurance products a policy, long-term care policies, they're just not sold without that, but I think it's a good question clients ask for us. It's a no problem because we're fee only. So we're just advisory fees. So the way we describe it is there are no hidden fees. The fee is just like you pay us for a tax return or us for advice or your attorney for advice. It's usually set, and you either decide is that acceptable or it isn't, and you find value in that or not, but it is hard for clients when they find out later, and I don't think clients ask enough on fees.

 

Tony: I think they're kind of scared to maybe insult us and it's not an insult. It's not an insult. I think that's a fair question. It's no different than asking what you're buying your groceries for. You're looking at the price, but the thing with hidden fees, I'll give you a quick example. I had an older lady just call me yesterday. She's a tax client, not a financial client. And she says her advisor, and she's 87 years old, advising her. She's got a single premium deferred annuity. It's coming due, and he wanted to give her another one for seven years, and I said, "Well..." She didn't know what that meant. I said, "What that means is you're going into another annuity. You've got new surrender charges. If that's okay with you at your age, it's fine. You're not going to see anything, but if you needed more liquidity than it had, you're going to be paying a penalty."

 

Tony: Again, those are some of the things, that's kind of a hidden fee that it sounds to me like he didn't really explain to her, and you want to get that. Sometimes again, we all deserve to be paid for what we're doing. I'm not trying to say that, but you want to make sure that you understand the fees you're paying and why you're paying them. It's really what it comes down to.

 

Speaker 1: Yeah, absolutely. And so going through the conversation, sometimes it's not the most fun and it certainly drives advisors crazy as well, but has to be done whether it's the mutual fund fees or whatever the case is, go through and kind of talk about some of those. Okay. How about advisors, well, maybe sort of to that conversation that you just brought up, who put their own goals ahead of clients? Now, I don't know if advisors is the right word here, Tony. Maybe this is really more broker-based and again, not trying to bash anything, but there is suitability versus fiduciary. And fiduciaries have to put their client's needs ahead where a suitability does not.

 

Tony: It does not. And I think that that's the troubling part that I think clients struggle with is that sometimes they assume that all advisors are going to have their best interest at heart. Generally they do. I mean...

 

Speaker 1: I'd say 90%. Yeah.

 

Tony: Yeah. I mean, generally that happens. However, along with the hidden fees, I don't like it. It drives me crazy because I like to be very transparent because I don't want the client thinking that, number one, there's some sort of fees. I have to be held to the fiduciary duty, being a CFP.

 

Speaker 1: Right.

 

Tony: And so you would just think that everybody ethically would always do that, but...

 

Speaker 1: We assume that in all walks of life, right?

 

Tony: We really do.

 

Speaker 1: It is what it is. Yeah.

 

Tony: It does drive you crazy, especially if you see something that somebody brings in front of you and it's really just kind of, you're just saying, "Wow, that's really not in your best interest. It really isn't." I don't like to bash other advisors or brokers, any salespeople. As long as they've explained it and there's a need for the product, it might very well be worth the money. it does drive you crazy when you see somebody really trying to take advantage of someone.

 

Speaker 1: Yeah, I think nine times out of 10, that is typically the case. Most folks are hard working just trying to do a good job for their clients, but there's always that bad apple or even that person that just really didn't realize that it's just not communicating well. We'll get to that one in just a second, actually.

 

Speaker 1: I'm going to lump three and four here together because I think they could really just kind of go hand-in-hand and for the interest of time, that'll work well. Basically I've got cookie cutter, one-size-fits-all plans and big companies who push products, and I think those two, to me, kind of go together because you often will see that a big box outlets, no matter what it is, whether it's retail, electronics or clothing or even financial products, sometimes the powers that be say, "Hey, product X is what I really want us moving for this quarter." So often people will get jammed into a one-size-fits-all plan that really maybe doesn't take all the things that they truly need into account because they're trying to meet quotas.

 

Tony: Yeah. I mean, the big companies do it, and you've got a lump some of the investment companies in there, as well, and they do. They make it sound like, "Well, if you just do this, you'll be okay."

 

Speaker 1: Right.

 

Tony: And most of the time you might be, especially if you've got a long-term timeframe, but doesn't take into account the nuances of you specifically and especially... I think that what drives us crazy, advisors, on this is that bigger companies and some people in the profession think, "Well, the one-size-fits-all, if you just do this..." And we're out there saying, "Well, not necessarily." You want some personal advice and handholding and help through this journey rather than just a cookie cutter type of thing and hoping that it works.

 

Tony: I think the other thing, what they don't realize is even if you have something that's not working, you got to have somebody in there saying, "All right, this isn't working. We got to pivot a little bit. We got to change, and we've got to make... If your goals have changed, then this may not be suitable anymore for you."

 

Speaker 1: Well, it's like anything, too. Sometimes people... There are certain industries, I still feel like me personally, certain businesses and certain types of things that you're dealing with in your own life, where you want a bit more of that personal touch, where you want to be looked at as more, well, more of a person versus a number, right? Client number 3,212 type of thing. And so sometimes I think there's different industries where that smaller...

 

Speaker 1: If you go into a place to cut your hair, and it's one of these chain places, yeah, you might get to know the person's name, that you might pick a person that you see on the fairly regular, but often it's anyone who's available is going to take you and cut your hair versus having that one person that, going to the "barber" who you're jaw jacking with, and they know your life, and they're asking you about your kids and all those kinds of things. We can get doses of that. I'm not saying that some of these big boxes places don't do some of that, but I think, for me anyway, there's a personal aspect and a personal touch sometimes with not that cookie cutter, big box thing, but more of that individualized, specific treatment for my unique situation.

 

Tony: Exactly.

 

Speaker 1: Okay. Now, I said before I was going to tie this one back out to the advisors who maybe put their own goals ahead of clients. And I said most of the time people are trying to do a good job, but maybe in the instance when that doesn't happen is because of buzzwords or jargon. Often, I think any industry, no matter what it is, you guys have sayings and words and things that you use on the regular, and you talk about them, and you maybe say those with clients sometimes not realizing that we're just not keeping up because you're so used to doing it. You're not trying to talk down or over someone's head, but it just is par for the course in what you do on a daily basis, and so there's some disconnect there sometimes, and it also can be frustrating for those advisors, unfortunately, who do take that and kind of make it, "Hey, look how smart I am."

 

Tony: Exactly. Yeah. And it does drive us crazy. I know for most advisors, they really try to, and so do I, pay attention to making what we talk about so that the average person can understand. People don't want to hear... I always say it's really all about the client. Everybody cares about themselves.

 

Speaker 1: Right.

 

Tony: They don't want to hear from us how much we know. They want to hear from us how much we can help them and how to help them in a way that they can understand and feel good with, and I think it goes to the next topic on our list here which is plans that consist of 25 pages of very detailed charts and graphs and things like that that after about the fourth or fifth page, the client really doesn't understand and probably just saying, "I don't know if this is going to help me or not."

 

Speaker 1: So you mean a financial plan doesn't have to be like War and peace?

 

Tony: I try not to make them that way.

 

Speaker 1: This massive book.

 

Tony: I try to limit it to four pages, and here's our major goals. Here's what we're going to do, and of course, we can get more elaborate as we get going, but at least the start, very basic. Most of our clients are at or near retirement, and the ones that are younger, we start with the very simple plan. Here's your goal, and we're going to work backwards, and here's how we're going to do it, but to get all that research and some of those charts and goals and most of it's handled by software now, anyway. So even us, we can't explain half of it half the time. I think it's overkill, and I don't think it does anything to help the relationship and the average person at all.

 

Speaker 1: Yeah. That's a great point. I was talking with somebody about that and I mentioned the War and Peace comment. Tolstoy's War and Peace is 1200 pages, or your mortgage. Right? At some point when we're doing a mortgage, they've gotten definitely smaller for sure, but years ago, you think back, the eighties or nineties, you go to do your mortgage, and it was like it seemed like you were there for hours signing papers. It wasn't that long, but it certainly felt like it. So many pages.I think that's a great point, whether it's buzz words or jargon, or just overly complex plans, at some point that the lay person just is going to fuzz out.

 

Tony: They do.

 

Speaker 1: That's why we're turning to you guys as professionals to say, "Okay." I like to use the car analogy. I don't need to know how to take the combustion engine apart. I know enough to know how the car works. Right?

 

Tony: Yeah. Right.

 

Speaker 1: I know to put the oil in it. I know to put gas in it. I know to check my tires. I know the basics. The nuts and bolts and the really dissecting the problems, the diagnostics of my car, I'm going to leave to you.

 

Tony: Yeah.

 

Speaker 1: Same kind of [inaudible 00:12:26].

 

Tony: It's the same logic. Exactly. At the end of the day, you've got to be the driver of the car or the captain of the ship even with your plan because in the day, it's your plan. You got to make sure that you're on track, but you're leaning on other people to fill in the gaps, the stuff that you don't want to know and you don't care to know. I think sometimes we in the industry get a little too enamored with, look at our software, look at all these things we can do. And like you said, if they wanted to go do all that, there's plenty of resources out there nowadays that you can do all that on your own. They're they're not coming to us to wow them like that.

 

Speaker 1: Yeah, yeah, absolutely. Well, that's going to do it. That's going to wrap up our things that drive advisors crazy, and some of those drive us crazy, as well. Maybe the final one would be something as simple as, "Hey, what do you think is going to happen with the market? Do you think..." It's like, again, who knows? It's so fickle. There's indicators, but at the end of the day, it is what it is. So advisors are folks, too. They're just doing their job. They're just trying to do the best they can, and I think often that's the case for many people, and it's certainly an industry where you can still definitely get a lot of value, and that's really, I think when it comes down to, Tony, is what is the value that you're receiving for the fees or whatever it is that you're putting into it for the services that you're getting? Right?

 

Tony: That's it. I mean, at the end of the day, that's what it's about. If you can't find value in it, it doesn't matter what the fee is because you're not going to be happy with it.

 

Speaker 1: Right.

 

Tony: I think with today and the technology that we have, I think advisors still can provide value and get people to their goals either on a tax advantage basis or on a risk basis, and you just got to keep that in mind when you're talking to advisors.

 

Speaker 1: Well, you sometimes say things like, "Let me put my tax hat on for this one," and I think, yes, the technology that's there for a lot of different things, but we're, to me anyway, and this is my opinion where advisors really come through is the sounding board of the other person. You guys have seen so many different things and you wear so many hats, whether it's a counselor, whether it's tax advice, whether it's just an ear to listen to, to say, "Here's what I'm thinking about. Is this a good or bad idea?" And having that sounding board to relay back to the client why what they're thinking is a great idea or not a great idea. You're just not going to get that from the technology. I know a robo advisor is... You put it in, and it's just going to execute.

 

Speaker 1: There's no real give and take in that. So I think that's a great place for us to finish up this week on the podcast. It's a great way for us to finish up the year here in 2020. Again, we'll be back with more episodes starting in 2021. So if you have not yet subscribed to the podcast, consider doing so. We'd certainly appreciate it. You can find it in Apple, Google, Spotify, iHeart, Stitcher, so on and so forth. Many platforms. Most phones, smartphones nowadays already have a lot of these podcasting apps pre-installed.

 

Speaker 1: So for example, if you're an Apple user, you probably have Apple podcasts already right there on your phone, just tap the app, open it up type in in the search box Plan with the Tax Man. You'll find the app that way, and you can subscribe to it. I believe it's the heart button or whatever it is that does that, and that'll give you a future episodes as they come out.

 

Speaker 1: You can also find all of it at Tony's website and make it pretty simple for you. Plus there's a lot of good tools, tips, and resources there as well at yourplanningpros.com. That is yourplanningpros.com to talk with Tony Mauro and his team. And Tony, thank you so much, my friend, for your time, and I've enjoyed chatting with you this year, had a lot of fun and learn quite a bit and hopefully we'll do more of that next.

 

Tony: Absolutely. Everybody have a great holiday and stay safe.

 

Speaker 1: Absolutely. Stay safe and sane. That's been my motto all this year.

 

Tony: That's right.

 

Speaker 1: So we'll keep at it. You folks have a wonderful holiday season. Tony and I will see you in 2021 here on Plan with the Tax Man.