Who’s On Your Dream Team? Book Launch

The Pennsylvania Capital Management Team talks about Irvin’s newest book, Who’s On Your Dream Team?

Transcript:

Welcome everyone to our webinar today. It is book launch book launch Day for Irvin‘s book, Who’s On Your Dream Team? I’m not sure if you can see that. It doesn’t work that well with my background, does it? We gotta pop it in there. Gotta pop in it a little bit. Okay. There, there you Chris. This looks great. That works better. Um, so welcome everybody. Thank you for joining us. We’re gonna, uh, talk about some of the concepts that are covered in the book today.  

And we’re joined by Irvin, the, the author of the book and some of our other PCM team members. Um, I’ll start it off. The, the, one of the really main concepts in the book is, um, talking about a fiduciary. Um, can one of you explain to me what, what it means to be a fiduciary? (···2.8s) Be happy to, I’ll start it off. (···0.7s) Being a fiduciary means that as (···0.8s) the firm or as an individual fiduciary that you agree in writing to put the client’s best interest ahead of the firm (···1.3s) in all situations from when you start (···0.6s) throughout the entire relationship.  

(···0.8s) That’s really different. (···1.4s) And that is a central part of what I wrote in the book. (···1.5s) And it’s missing in this industry because close to 94% of the advisors out there are not fiduciaries. (···1.3s) So you gotta look hard to make sure you find one of the real ones.  

(···1.6s) And, and what do you mean by that? You know, can you, can one of you give an example of how could, how could a firm not put the client’s interest first? What, what would that look like? (···0.8s) Yeah, um, I’ll take that. So where it comes up more often or more frequently, Lisa, is with commission-based products essentially. ’cause that person is more so a rep for either an insurance company, um, usually it’s insurance, it’s annuities as well. Or particular mutual funds will give bigger kickbacks to advisors for using their products versus another.  

Uh, so that’s typically where those conflicts of interest can arise. Um, versus being, you know, with an independent fiduciary, then there’s no, there’s no really even incentives in place for an (···0.5s) advisor who is a fiduciary to go that route and say, okay, I can make extra profit going this way even though it might not fit the best for, you know, x, y, and Z client here. And I think a lot of it has to do with how is the individual getting paid?  

(···0.9s) Are you getting paid by, you know, the client or are you getting compensation, as Chris mentioned, through commission products, (···0.7s) through a selling a mutual fund through the particular wirehouse that you might get a percentage of. So there, as Chris mentioned, the conflict of interest. How does a, uh, client pay, uh, for the services?  

(···2.6s) Steve, it’s interesting you would say that because (···1.2s) I find that (···0.7s) some of our clients have no idea what the fiduciary role is, (···1.0s) but also they have no way at all of figuring out whether the conflicts exists. Is it at the product creator level? (···1.0s) Is it at the broker level? ’cause they’re getting commissions or wrap fees. Um, they just know that, um, their broker tells them, or their advisor tells them that they’re doing well.  

(···0.5s) And (···0.5s) our view with this book is that’s not good enough. (···1.6s) We need transparency. (···0.5s) And the book is filled with the right questions to ask to figure out whether you’re fiduciary, whether your advisor (···0.5s) is in fact a fiduciary or a charlatan. (···0.9s) Yeah, I think one red flag we see sometimes, or even just talking to friends of friends or family, it’s like, oh, you know, we do, you know what your advisor charges? And they go, oh, I don’t think they charge me anything.  

And say, okay, well they’re getting paid somehow. They’re not doing it for free. So it’s usually a, you know, a common thing we’ll hear and then have to address. Okay, well here is how they’re getting paid. (···0.9s) Oh, that’s interesting. Chris. Somebody just said that to me. I asked somebody the other day, you (···0.7s) know, how much are they charging you? And, and she said, oh, I don’t think I’m getting charged anything. And I’m like, what the heck does that mean? So, so that’s a good point. That means that they’re paying some other way by the, what they’re being invested in. Right. There is no free lunch.  

Right? Yes. And I think, well, and, And a lot of times when we’re looking at, um, when we’re reviewing, you know, people’s statements of (···0.8s) outside that want to get a second opinion from us, and as a fiduciary, we’re gonna give them the honest opinion. And sometimes you can see if it’s a different class (···0.5s) of mutual fund, well that’s how we know they’re getting paid. The, the, (···0.7s) the fund companies are paying the advisors that way. And that is not, that is not how we work.  

That is a Dreaded C we only get paid by the client. (···1.8s) And I think also being a fiduciary requires, uh, taking a very holistic approach (···0.6s) to the client. Not just dealing with the investment aspects, but the planning, understanding life goals. (···0.6s) So to be a fiduciary and put the client’s interest first, you need to really have a total understanding of the client, the client’s family, their goals, (···0.6s) and just a more comprehensive approach to the client relationship.  

(···1.9s) Yeah, absolutely. And I think that’s actually one of the chapters in the book is, is perfect partnership. So, um, that’s a, that’s a great segue, Steve, and, and talking about, you know, what makes a perfect partnership between a, (···0.6s) a fiduciary firm and a and a client. And I think what you, what you just said speaks to that, you know, we, we know our clients, we know their goals, we know their struggles. (···0.5s) They’re, they’re not just, you know, assets on a, on a piece of paper.  

Yeah, Yeah, yeah. It’s knowing their whole team. Right. So who’s on your dream team? It’s not typically just an advisor. There’s accountants involved, the state attorneys, (···0.7s) you know, insurance brokers, that whole group of the, you know, the dream team Right. Is kind of working with all of those people and not being siloed in your one duty and not really interacting with the rest is an important piece of it. (···1.1s) Sure. Is very important piece.  

(···0.9s) I think also when (···0.9s) we get an initial (···1.2s) individual who says, you know, tell me about what you do. (···1.7s) This is how you wanna approach your fiduciary firm. Or at least figure out if you have one. (···0.7s) If they’re only selling you products and calling you once in a while (···0.8s) and saying everything’s really okay, you have nothing to worry about. You gotta wonder. (···2.0s) You need to figure out, well, what exactly are their capabilities?  

And with a fiduciary firm who’s truly looking out for your best interest, (···0.6s) it should be as life changes, not some static portfolio that they put you in. That’s a model. (···0.6s) And they go, well, periodically we’re gonna change the model. And that’s all you get. (···1.8s) Our view is there are a lot of other aspects (···1.2s) and, uh, Steve, maybe you wanna comment on that or, or Andrew, what, what are some of the other things that a fiduciary firm should be providing?  

(···1.0s) Well, I, I think, uh, helping you mention, uh, changes (···0.7s) dealing with life changes, (···0.9s) preparing, uh, clients before, during, and after life changes and life changes can be retirement, loss of a spouse, (···0.5s) preparing the family for college, education for the children, um, inheritance (···0.6s) any of these, uh, life events that make a difference in their lives.  

Uh, preparation needs to be, uh, you know, set forth. And I think that, uh, that is what we really work on with our clients is dealing with their lives, working with them during life changes. (···2.6s) And to touch on that, I almost want, I always like to use the baseball analogy, we want to cover all of your bases. Um, investments is just first base. Uh, you wanna make sure you’re covering insurance, (···0.7s) income taxes, (···0.6s) estate planning, um, all those important financial a those financial planning aspects and facets that are important to the whole thing.  

So it’s a cohesive picture for your financial plan (···2.1s) Well stated. Yeah, absolutely. And I know one of the things, um, that, that we really rely on here and that, um, you know, we’ve worked hard to, to (···0.8s) cultivate over the years is a, a professional network (···0.8s) of other (···0.6s) professionals that we can refer our clients to.  

Um, Irvin, do you wanna talk a little bit about our professional network? (···0.7s) I do. (···1.1s) I think it’s essential and often overlooked. (···1.0s) And when I explain to people I meet along the way about our firm, it’s one of the central concepts that I bring up because I don’t know of other fiduciary firms that have an extensive and vetted (···0.9s) professional network.  

Meaning each of the providers that we bring in (···0.5s) is on a non play to non-pay to play basis. We don’t pay them anything, they don’t pay us anything. (···0.7s) They got in because they do a great job at what they do. (···1.2s) Whether it’s an actuary, whether it’s a CPA, whether it’s an attorney, whether it’s an architect, (···0.8s) whatever the client needs, (···1.2s) we wanna make sure we have top quality expertise. And each of these providers knows if they don’t provide the highest level of service like we do, (···0.6s) they’re out.  

(···1.3s) There’s no vested interest in us using (···0.5s) one versus another. But to this date, we have over 56 different firms that we (···0.8s) share with clients on an as needed basis. The way Steve described earlier, (···1.5s) and (···0.8s) we’ve gotten some very strong accolades, literally yesterday, (···0.9s) one of our long-term clients said to me, you know, I really like that bill paying service where they can analyze what we’re spending every month and pay all the bills and send us a report regularly (···0.6s) of what that looks like.  

And it’s taken such, um, stress off of our life. And since my wife did a faceplant and in injured her eye, (···1.4s) we now wanna give that firm a lot more to do ’cause it’ll help us with coping with what life changes came across our plate.  

This was yesterday. (···1.1s) And Irvin, another big life change for many, many people is the move, whether it be, uh, downsizing or moving to a continuing care retirement community is the decluttering process, which is a huge stress (···0.6s) for anybody going through that. And I know that you’ve recommended, uh, several people that would come in help with the decluttering process, you know, get rid of things, put things to auction, and do an actual sweet cleanup, uh, you know, of their home.  

(···0.7s) And, you know, that’s a pretty simple little thing, but it’s an important thing and it’s something that creates, uh, anxiety and anxiousness, uh, in many clients as they go through that. Uh, because of many cases they’ve been there 20, 30 years in their current home and they’ve accumulated so much stuff and they have no idea what to do with it.  

(···1.5s) Yeah. It’s like, where do we start? (···2.3s) Yeah. It’s a great example (···0.8s) of, of a service that we can connect our clients to. Yeah. (···1.2s) And that you might not think that, uh, you know, my financial, I’m, I should ask my financial advisor if they could help me declutter my house. I mean, no, nobody’s gonna think of that. (···0.9s) But, (···0.5s) you Know, Leslie, a actually I want to take that a step further. (···1.1s) I find that clients in some cases think, well, it’s just a matter of finding the right continuing care retirement community.  

(···0.5s) It isn’t very often the mom or dad or mother-in-Law or Father-in-law (···1.3s) is stuck. There might be some health issues or there are health issues that are pending (···0.8s) and we have the ability to go on and figure it, figure out with the help of those outside providers, (···1.0s) after the kids get their chance to pick out the furniture or the belongings or special things that they like, (···1.7s) then we’ll send in the proper group to figure out internet auction or in-person auction (···1.4s) and who’s gonna handle the remainder items that aren’t saleable to get them to the thrift shop.  

(···0.8s) Who’s gonna come in and broom sweep the house? (···1.2s) Who’s gonna get the moving company to coordinate. So it fits with mom or dad’s schedule, (···1.2s) and that’s something we coordinate Mm-Hmm. Not what you typically expect out of your (···0.5s) wealth advisory firm, (···0.8s) but as fiduciaries, that’s a part of our role.  

(···2.2s) Yeah. I think that