Episode 156
Top Quality in a Financial Advisor – Trust or Performance?
In this special episode of Ditch the Suits, Travis and Steve break down the results of a recent survey that asked 1,000 investors working with financial advisors: What matters more—trust or performance?
Should it be just one thing or a combination? Don’t you deserve to work with someone who you can both trust not to rip you off and expect performance from? Join us as we challenge the status quo and discuss why clients should raise their expectations.
Key takeaways from the survey:
🔹 Why 72% of investors prioritize trust over performance
🔹 How proactive communication and a clear financial strategy build confidence
🔹 The top reasons clients leave their advisors—and how to avoid the same mistakes
📢 We Want Your Input! Take our quick two-question survey here and tell us what’s most important to YOU when choosing a financial advisor.
🎧 Tune in now and start getting the most from your money and life!
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We'd love your input. Take our quick survey at https://forms.office.com/r/837zquxdET
🅿️ For more DTS content check out our Patreon
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Thanks to our sponsor, S.E.E.D. Planning Group! S.E.E.D. is a fee-only financial planning firm with a fiduciary obligation to put your best interest first. Schedule your free discovery meeting at www.seedpg.com
You can watch all episodes, as well as other great content produced by NQR Media through their YouTube channel at https://youtube.com/@NQRMedia
📧 For more information or to get in touch with us, visit https://www.ditchthesuits.com
👍🏼 You can also follow us on Facebook, Instagram and Twitter at @nqrmedia
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About Your Co-Hosts:
Travis Maus has been in financial services for over fifteen years. He is a Senior Wealth Manager and Chief Executive Officer at S.E.E.D. Planning Group. Travis also hosts the Unleashing Leadership Podcast, where he dissects some of his favorite books on leadership and how you can apply it to your business or life.
Steve Campbell has over a decade of industry experience and is a Senior Marketing Director at S.E.E.D. Planning Group. Steve also hosts the One Big Thing Podcast, an interview-style show meant to inspire and encourage 30 and 40-year-olds going through difficult seasons of navigating marriage, raising kids, and growing personally.
Transcript
Foreign.
Speaker B:Welcome to Ditch the Suits podcast, where we share insights nobody in the financial services industry wants you to know about.
Speaker B:We're here to help you get the most from your money in life.
Speaker B:So buckle up and welcome to Ditch the Suits.
Speaker A:It's time.
Speaker A:This is the first time we've been together in a room.
Speaker A:Hi.
Speaker B:Oh, here we are.
Speaker A:Yeah.
Speaker A:First recording in three, four years.
Speaker B:Four plus years.
Speaker A:How long ago was it?
Speaker B: Yeah, January: Speaker A:Recording the same room.
Speaker A:Welcome to our new studio.
Speaker A:This is exciting today.
Speaker B:Very exciting.
Speaker A:Yeah, it should be a little bit more fun.
Speaker A:Normally we're yelling at each other through a wall.
Speaker B:Yeah.
Speaker B:It's pretty hard to communicate with a co host when you can't see them and, you know, there's like no visual.
Speaker B:I'm just going to jump in.
Speaker B:Are you going to jump in?
Speaker B:So we've survived this far four years in, you know, getting to this point, but now being in the same room, we actually get to interact.
Speaker A:Well, the other thing is nice too.
Speaker A:There's normally like a lag on our Internet.
Speaker A:So you're like over here talking, I'm over there trying to hear what say, and we can't really figure out if we're talking.
Speaker B:It's like a bad dubbed European movie.
Speaker B:But we figured it out now.
Speaker B:Yeah, just like that.
Speaker A:Just like that.
Speaker A:All right, well, I guess we got to get started today.
Speaker A:So we're going to talk about the state of the financial industry.
Speaker A:We've got a survey that we were looking at online, and one of the things that we want to do is bring perspective about how the financial industry works.
Speaker A:What are other clients thinking about or other people out in the community who use financial advisors?
Speaker A:What are they thinking about?
Speaker B:Right.
Speaker A:And kind of what are some takeaways from that and maybe even from a perspective standpoint, what can our listeners take to say, how do I better engage with financial advisors?
Speaker A:And maybe what should I be looking for?
Speaker A:Or what are the pitfalls?
Speaker A:So we've got this survey and it talks about trust and performance as a top quality that people are looking for in a financial advisor.
Speaker A:And the question is, for people listening, is it trust, is it performance, or is it something completely different?
Speaker B:Yep.
Speaker A:And we'll go through the survey kind of what it says.
Speaker A:We'll talk about where the survey comes from and everything.
Speaker A:But my question was too, going through the survey was, does it just have to be one thing?
Speaker A:Does it have to be a winner or loser here?
Speaker A:Or could there be like multiple things that people are actually looking at?
Speaker A:A financial advisor saying, this is really?
Speaker A:Why?
Speaker A:I want to work with a financial advisor.
Speaker A:This is what's really important to me.
Speaker A:And like, for example, don't you think that you deserve to work with somebody that you can both trust and who performs well?
Speaker A:Like if you go to a doctor, let's say you're gonna go to a surgeon, you're gonna have heart surgery and you really trust a heart surgeon, but they're really not a good surgeon.
Speaker A:Yeah, that's a little bit of a concern.
Speaker A:Or they're a really good surgeon, but you can't trust them because sometimes they operate on like, you know, different parts of you that you didn't like actually ask them to operate on.
Speaker A:I know it's funny, but still, it's like, shouldn't you be able to have trust and performance?
Speaker A:Have your cake and eat it too.
Speaker A:I don't know why we have to, you know, shortchange ourselves.
Speaker A:So I think through this we're going to talk about a paradigm shift a little bit from, you know, you can, I think you can expect more than just one or the other.
Speaker A:But we want to look at what maybe the general market is saying and maybe what's trying to shape and drive the industry.
Speaker A:So welcome to our discussion and hopefully we're going to help our listeners raise their expectations a little bit.
Speaker B:Yeah, and I always like, I mean, this is a brand new series today, so welcome in to Ditch the Suits.
Speaker B:I'm Steve Campbell, senior marketing director at Seed Planning Group.
Speaker B:And for the first time in the same room we got Travis Moss, our CEO at.
Speaker A:He's the one with the hair.
Speaker B:Yeah, the one with the hair.
Speaker B:In case this is your first time seeing us in four years, this is the differentiation.
Speaker A:But for the other guy.
Speaker A:I think they just call me the other guy.
Speaker B:Yeah, that's what's in the show credits.
Speaker B:But Seed is a fee only financial planning firm.
Speaker B:So we have a fiduciary obligation to put our clients best interests first.
Speaker B:And the show has been four years of us bringing our experiences day to day what we're seeing day in, day out to help you as a listener really get the most from your money in life.
Speaker B:And this is going to be a fun one because it's a brand new series.
Speaker B:So if you're brand new to ditch the Suits, Travis does a really nice job of coming up with topics and we give you series one episode at a time, really digestible.
Speaker B:And these are always fun ones because this is not necessarily our own data.
Speaker B:This is what the Internet and individuals are saying.
Speaker B:And we're just going to kind of extrapolate it a little bit.
Speaker B:Like, what does this actually mean for you as a listener?
Speaker B:Does it apply to you?
Speaker B:And we got some cool stuff we're going to put in the show notes.
Speaker B:So make sure you pay attention to those, those links for where these surveys are as well as maybe our own survey because we'd like some information from you too as well.
Speaker A:Yeah, we want some feedback.
Speaker A:Yeah, yeah.
Speaker A:And I think this is going to be more fun.
Speaker A:I think it's a lot more interactive being able to sit next to you and with this beautiful fake fern between us.
Speaker A:Like the visual is really good.
Speaker A:I think the energy is really good.
Speaker A:So we should have a little bit of fun today.
Speaker B:Yeah.
Speaker B:And this is just the beginning.
Speaker B:So let's go.
Speaker B:Let's pause and hear a word from our sponsor.
Speaker B:This episode is brought to you by the One Big Thing podcast.
Speaker B:If you're in the thick of life as a parent or a spouse and just trying to grow as a person, then you won't want to miss this show.
Speaker B:Hosted by Steve Campbell, the One Big Thing is an interview style podcast where he brings you guests from all walks of life.
Speaker B:Picture professional athletes, influencers, business owners, and even some rockin stay at home moms.
Speaker B:Each episode will bring you as a listener, a life hack or a way of looking at life that will help you move from inspiration to transform.
Speaker B:Listen to the One Big Thing podcast and all major podcast platforms today.
Speaker B:So Travis got this survey, trust her performance.
Speaker B:And you know, we get callers all the time who really don't understand how our industry works.
Speaker B:And you've done a really nice job of trying to address the industry, help people understand that.
Speaker B:Unfortunately it is a huge marketing machine.
Speaker B:You know, story based selling is what keeps people in.
Speaker B:But now you got individuals, they're on podcasts because they care about their money, they care about their family, they want to make good decisions.
Speaker B:And so to have a larger conversation around, really what's more important to you?
Speaker B:Is it trust or performance?
Speaker B:And why do you have to give away one, maybe not to have the other?
Speaker B:So talk to us about the importance of why this episode matters.
Speaker A:Well, it's hard work.
Speaker A:I think if you want good results in anything, it's hard work.
Speaker A:Right.
Speaker A:We were picking on doctors there.
Speaker A:If you want good results with your medical, you need to go find the right doctors.
Speaker A:If you go to the dentist or an eye doctor, if you go to an attorney, if you go to an accountant, if you, I mean, how many people will interview more than one roofer, you know, and get more than one quote, you know, or somebody.
Speaker A:They're gonna invite somebody into the house to babysit your kids.
Speaker A:You know, I think with financial planning and investments and stuff, we just want it to be easy.
Speaker A:Cause it's confusing and the industry does everything I think it can to make it even more confusing because like hey look, if you can't figure it out, you have to hire us.
Speaker A:Right.
Speaker A:And I think people should hire people because maybe they can't figure it out but also because there's a big time commitment for it and they're like look, I could properly figure it out.
Speaker A:I could probably make it my second job, but I don't want to.
Speaker A:I'll go like live my life and have fun.
Speaker A:I want my money working for me and I don't want to have to run everything.
Speaker A:That's a better reason than feeling like oh, I'm just helpless because they say I'm helpless and so I need to hire somebody.
Speaker A:And I think that that gets at the whole thing between trust and performance.
Speaker A:So we have this article that was written on wealthmanagement.com so that's just somehow I got on that subscribe to that and I get these articles every day from wealth Management and this one happened to be titled Investors Value Trust in Advisors more than performance and it's from January of this year so this is kind of cool.
Speaker A:Their conclusion from the survey is that trust is the most important thing.
Speaker A:I think the survey says a lot more than that but.
Speaker A:But it definitely kind of like that's the end result.
Speaker A:I think it's maybe a little bit of a guided survey but.
Speaker A:But it's certainly something to talk about because the financial industry, if you Google least trusted industries, I think politicians are probably first, weather people probably second and financial advisors might be third somewhere on there.
Speaker A:You know what I think people trust car salesmen sometimes more than they trust investment people.
Speaker B:Sad state of affairs.
Speaker A:Yeah.
Speaker A:You know used car sales, right?
Speaker A:Yeah.
Speaker A:So this survey was conducted by Cap and Tel I no idea what what this company is.
Speaker A:I didn't, I didn't dig into the behind the scenes on the survey.
Speaker A:Yep.
Speaker A:I just think that the talking points from the survey are at least worth discussing which is a business to business fintech company.
Speaker A:You and they use logica logica I guess L I G I C a research to collect a survey from August to September last year.
Speaker A:So they reached out to a thousand investors and they said a thousand investors, give us your opinions.
Speaker A:In order to qualify for the survey you had to have more than $50,000 of investable assets and also work with a financial advisor.
Speaker A:So they wanted to know people who are actually engaged with a financial advisor, not people who are hypothetical about it.
Speaker A:A couple of things that I would say there.
Speaker A:First and foremost, $50,000 investable assets, probably not enough assets unless you understand the demographics of the underlying group to really, you know, use this as a, as an authority.
Speaker A:And what I mean by that is if anybody's ever played like Texas Hold'em on the weekend with their friends, and if it's a $20 buy in, people do wacky stuff, right?
Speaker A:They don't really care.
Speaker A:It's only 20, blah, blah, blah.
Speaker A:In the investing world, $50,000, although it's your money and it's a lot of money to you in the investing world.
Speaker A:I mean, that doesn't even meet the minimums for a lot of firms.
Speaker A:So those folks maybe are limited in options or limited in experience and maybe not as interested.
Speaker A:A lot of times we'll have retirement investors that are a bit older or a bit younger and they've accumulated some retirement monies in a 401 plan.
Speaker A:It's kind of like found money to them.
Speaker A:It's not that important yet.
Speaker A:So they don't really have like whatever happens to it, happens to it.
Speaker A:And So I think $50,000, if you did a poll with investors that had a million dollars performance, is probably gonna be a little bit higher.
Speaker A:Right.
Speaker A:And they're gonna approach the trust part a little bit differently.
Speaker A:I think when you have less money and you're so reliant on it, or you just, you don't wanna have to pay attention, maybe trust is a little bit more of an issue.
Speaker B:Well, and I find that the three factors are fascinating.
Speaker B:The thousand investors, I mean, that's a pretty roundabout number, right?
Speaker B:It's not like you went out and interviewed 50 people and got them, but 50,000 like you said.
Speaker B:Okay, is that really a valuable number to start with?
Speaker B:And then even just you and I have talked about the word financial advisor.
Speaker B:What does that mean to you?
Speaker B:Because we just had Jess Blake on, she crushed four episodes talking about a real financial advisor.
Speaker B:A real financial advisor, not a so.
Speaker A:Called a real one.
Speaker B:A real planner who has credentials next to her name.
Speaker B:And we talked about you're a certified trust and fiduciary advisor.
Speaker B:To us, that's awesome.
Speaker B:But to you as a consumer, like, what does that mean to you?
Speaker B:And when you see cfp, when you see some of these designations, does that really mean that there's more professionalism or did they Just study really hard, cram first continuing ed and pass an exam so they could use it.
Speaker A:You can be a CFP and be an insurance agent.
Speaker A:Right.
Speaker A:And so when you say financial advisor, you get insurance agents, you got brokers, people at banks, registered representative, we've done episodes in the past.
Speaker A:Registered representatives, you've got investment advisor representatives, you got captive people, you've got people can do whatever.
Speaker A:You got fee only, you got fee based, which is just a joke of a term.
Speaker A:And then you got commission advisors.
Speaker A:So you've got like all these so called financial advisors.
Speaker A:And a lot of them are just product or program salespeople.
Speaker A:And so when I go out and I ask you know, a thousand people with $50,000 of assets who have a financial advisor, I probably ought to also categorize it and say these are a thousand people that work with insurance agen as their primary advisor.
Speaker A:Or these are a thousand people that work with, you know, brokers as their primary advisor or fee only planners as their primary primary advisor.
Speaker A:I think that you'd probably get some, some more variation in the answers here.
Speaker B:Yeah, I'd also be curious too because again, talking with people for the first time.
Speaker B:Callers love connecting with you guys.
Speaker B:Sometimes people even think they're 401k providers.
Speaker B:They're financial advisor.
Speaker B:Like I got a guy and it's just the guy everyone else has at your job that gives you 15 minutes to sit down in the lunch cafeteria.
Speaker A:I got a guy we're going to bring on later.
Speaker A:This, I didn't tell you about that yet, but I got a guy who's gonna, who was one of those guys.
Speaker B:Breaking news.
Speaker A:He was one of those guys.
Speaker A:He used to go into the lunchrooms and work with people.
Speaker A:Now he's a full fledged financial planner.
Speaker B:Oh, I, I know who you're.
Speaker B:Yeah, I'm drinking what you're saying.
Speaker A:Yeah, we signed him up today.
Speaker A:It was a big, it was a big deal.
Speaker A:He didn't have a choice.
Speaker B:He didn't have a choice.
Speaker A:No, he did, he did.
Speaker A:It wasn't much of a choice.
Speaker A:But, but even just we asked him.
Speaker B:What day, even just that survey, it's great, the number, it's cool to know you have a baseline figure.
Speaker B:So a thousand people gotta have $50,000 and then they claim that they have a financial advisor.
Speaker B:And it's like even two, you get a call from a third party logica and it's like, do you have a financial advisor?
Speaker B:I wonder how many people are like crap.
Speaker B:Yes I do.
Speaker B:And it's like, do you really.
Speaker B:So the term financial advisor to could be my kid.
Speaker B:So called in just, just as a point, because we got new listeners.
Speaker B:I love the idea that you said fee based.
Speaker B:What a, what a ridiculous word.
Speaker B:And I, I sometimes correct people when they say, yeah, seeds, fee based.
Speaker B:And I say, no, we're not, we're not.
Speaker B:We're fee only.
Speaker B:And it's never to be demeaning to individuals, but I want them to really understand that when we say fee only, it means our people are salaried, no sales.
Speaker B:The commissions, they aren't there.
Speaker B:Fee based means you can operate in one of two ways.
Speaker B:Hybrid, flat fee.
Speaker B:And it's very confusing for individuals.
Speaker B:So I know we're picking up a lot of new listeners today.
Speaker B:The words matter.
Speaker B:And I think that's really important because when it's overwhelming, it's easy to go, yeah, yeah, I got it.
Speaker B:But the words really, really do matter.
Speaker B:And we've recorded, we've written blogs about it.
Speaker B:Understanding termin and what you're getting into is really the baseline start for most people.
Speaker B:They got to understand.
Speaker A:So let's go back to the survey.
Speaker A:72% of people, their number one thing with financial advisors, they want somebody they can trust.
Speaker A:So 72%, it's like almost three out of four.
Speaker A:I thought that was interesting, especially because of some of the other answers.
Speaker A:39% said that to get trust, when I see a proven track record, which is kind of funny.
Speaker A:So they want to make sure that there's performance there in order to earn the trust.
Speaker A:39% are saying that performance is part of the trust equation.
Speaker A:That means 61% of people are basically saying, I'm not worried about performance.
Speaker A:I just want to make sure you don't steal my money from me.
Speaker A:That's like, as an industry, that's appalling.
Speaker A:It's absolutely appalling that more people are worried about being robbed or ripped off than they are about whether or not they actually get any performance, which is just another interesting thing.
Speaker A:Like, how do you gauge trust?
Speaker A:I trust you because I like you.
Speaker A:We go golfing together, we go to church together or something like that.
Speaker A:And if I'm not performing but I'm kind of presenting myself as though I'm performing, isn't that undermining trust?
Speaker A:So, like, this is where I'm going with this.
Speaker A:I really think that trust and performance have to walk together, not separate.
Speaker A:31% said that both equipping them with knowledge to make informed financial decisions and personalized advice could help them develop trust.
Speaker A:So at Least a third of the people out there are saying, look, if you could actually be a financial planner and educate me and army with knowledge so that I better understand my financial situation, I'm going to trust you more.
Speaker A:So you've got 39% of people say, if you have a track record, I'm going to appreciate that.
Speaker A:And then 31% of people say, if you could educate me or help me understand things better, I'm going to trust you more.
Speaker A:Why isn't that number higher?
Speaker A:Why aren't more people saying, I want to see performance and you better educate me, you better help me.
Speaker A:I'm hiring you to help me, not sell me stuff.
Speaker B:Yeah.
Speaker B:And you and I have talked about.
Speaker B:The word trust is fascinating because there's layers to saying the word trust.
Speaker B:If you come to me as your financial advisor and say, hey, what do I do with my taxes?
Speaker B:And you go, travis, sorry, I can't give you tax advice.
Speaker B:Is trust being established that I acknowledged I can't give you tax advice?
Speaker B:You know what I mean?
Speaker B:Like with individuals, are they being told by financial professionals what they can and can't do?
Speaker B:So that's establishing trust.
Speaker B:But it may be that a professional is also not giving the full value or getting into planning.
Speaker B:And so the word trust is fascinating.
Speaker B:Is it just that I know you're not gonna steal my money?
Speaker B:Is that trust?
Speaker B:Okay, that's fine.
Speaker B:But what is also not being discussed?
Speaker B:Is it being forthright?
Speaker B:Is it communication that's building trust?
Speaker B:There's a lot of moving factors.
Speaker A:Well, how do you.
Speaker A:If you wanna trust somebody?
Speaker A:Is it, this person has a ton of confidence.
Speaker A:This person went to Ivy League.
Speaker A:This person has a cfp.
Speaker A:This person looks right, right?
Speaker A:They're wearing the right suit or the right clothes, are very clean looking.
Speaker A:They look like they've got their stuff together.
Speaker A:How do you actually get trust?
Speaker A:We've talked about.
Speaker A:We did an episode years ago where we gave out questions to ask your financial advisor.
Speaker A:And people still call up and ask for that.
Speaker A:You know, what was it?
Speaker A:The 13 questions ask your financial advisor or ask somebody when you're interviewing them to be your financial advisor.
Speaker A:Like, how do you establish that you trust somebody outside of the superficial?
Speaker A:Right?
Speaker A:Like, I want more than your credential.
Speaker A:I want to know more than your credential.
Speaker A:There's plenty of people out there with credentials that suck at what they do in real life.
Speaker A:They're book smart, they're street dumb, right?
Speaker A:And when you're doing financial planning, you actually need street smart because your life doesn't happen the way the book says your life happens by all the chance and all those strange turns that not only are happening to you, but everybody in your life.
Speaker A:And books can't cover all of that.
Speaker A:And so how do you apply it?
Speaker A:That's the art of financial planning.
Speaker A:So I want somebody who's.
Speaker A:I need to interview them and really, really understand.
Speaker A:Is there death behind the sales pitch?
Speaker A:Right.
Speaker A:Is there death behind.
Speaker A:It's like, you can't judge a book by the COVID but it's very easy to judge a book by a cover in this space.
Speaker B:Well, and I could just.
Speaker B:Okay, so we're talking money.
Speaker B:Maybe it's overwhelming.
Speaker B:Like, what are you guys talking about?
Speaker B:I got four kids, right?
Speaker B:If I go hire a babysitter, if baseline trust is.
Speaker B:I trust when I come home, these kids are still gonna be here.
Speaker B:Like, is that the baseline that I'm paying a babysitter?
Speaker B:Or is it like, if I come home, I'm gonna know you gave them a bath, you fed them good stuff.
Speaker B:They didn't sit in front of a tv.
Speaker B:Like, we understand in the natural sense when we hire individuals what we're looking for.
Speaker B:But I think sometimes when it comes to money and finance, it's like, I don't understand it, so I want to avoid it.
Speaker A:Terminology is what it comes out to be.
Speaker A:You know, we were getting into a.
Speaker A:We're doing some consulting for a foundation, and they have a advisor that they work with.
Speaker A:We help them kind of understand what that advisor is doing for them.
Speaker A:And, you know, the other advisor's using these big words, and they're just flat out twisting things, and we're like, that's not what that means.
Speaker A:This is what it actually means.
Speaker A:That's salesmanship.
Speaker A:There's some reason they're doing that.
Speaker A:Don't know why, but there's some reason.
Speaker A:They're explaining it in a certain way, and the client's smart enough to pick up on it.
Speaker A:They don't know how to necessarily decipher it.
Speaker A:Or they're like, they do this for a living.
Speaker A:They must be right.
Speaker A:They're a big multibillion dollar firm, but at the end of the day, they're just trying to collect and retain assets, and they're using all kinds of sales gimmicks to try to do it.
Speaker A:Playing with their verbiage.
Speaker A:So back to our survey, though.
Speaker A:50% said that investment experience is important.
Speaker A:So let me get this straight.
Speaker A:You're going for financial advice to somebody which is going to be heavily influenced by how you invest your money.
Speaker A:And people do this all the time.
Speaker A:My financial advisors and do investments.
Speaker A:I, you know, I just go and get index funds.
Speaker A:Because he says nobody can, you know, predict investments and stuff.
Speaker A:Then he can't give you advice on anything those investments are going to touch.
Speaker A:So if he's trying to do a projection and he projects you at 8 and a half percent and he doesn't know anything about investments, how did he know that?
Speaker A:8 and a half percent with the right percentage to use, based on how you're investing.
Speaker A:It's a very interesting thing.
Speaker A:You're getting financial advice now.
Speaker A:It doesn't mean you have to have an investment guru.
Speaker A:I think there's a difference between somebody who's in the weeds on portfolio management versus somebody who understands diversification, correlation, stuff like that.
Speaker A:Not the candidates.
Speaker A:Modern portfolio theory.
Speaker A:You're supposed to have five different mutual funds.
Speaker A:Look at my pie chart stuff.
Speaker A:Actual correlation and understanding how things move based on causation.
Speaker A:And when there's no causation, when it's just simply, completely uncorrelated kind of events that are happening or performance based on the events that are happening.
Speaker A:You need people who understand investments better and aren't just trying to sell you, because that was a wholesaler that took them out to lunch or something, which is very, very common for the industry.
Speaker A:So it struck me that 50% of people are like, investment experience is important.
Speaker B:Should be 100% or even just the world you and I came from that we were taught.
Speaker B:I manage the managers.
Speaker B:Right.
Speaker B:You remember that?
Speaker B:It was like, I'm your relationship person, and I get to help and pick what mutual funds we use and what managers.
Speaker B:And I know when we should get rid of them.
Speaker B:So when you say investment performance, if you're always saying it's somebody else's fault, how are you also making decisions in that?
Speaker B:So it's a pretty interesting.
Speaker B:Only 50% view investment experience as important.
Speaker B:Okay.
Speaker A:And I just butchered the whole correlation diversification part.
Speaker A:I trip over the.
Speaker B:It's fine.
Speaker B:We're four years in.
Speaker B:People are forgiving.
Speaker A:They're.
Speaker A:Yeah.
Speaker A:At this point, they're used to it.
Speaker A:For me, 46% said that they wanted the bill.
Speaker A:Their advisor to have the ability to look at the whole financial picture.
Speaker B:And what does that even mean?
Speaker A:So you.
Speaker A:So let's flip this over.
Speaker A:Because a lot of people are working with an investment advisor, not a financial planner.
Speaker A:Yeah, Right.
Speaker A:Or an insurance advisor.
Speaker A:So you got somebody who's selling you investments or insurance products.
Speaker B:Mm.
Speaker A:And 46% is saying, I'd really like Somebody who looks at the whole picture.
Speaker A:You are buying investment products or insurance products, and then you're trying to figure out the financial plan that makes them work.
Speaker A:You should have the financial plan first, and then you find the investments that fit the financial plan.
Speaker A:The financial plan is your life, right?
Speaker A:So you're giving somebody else your money and then saying, tell me how to live my life.
Speaker A:You should be figuring out how to live your life and then telling somebody else, here's my money.
Speaker A:Make it happen.
Speaker A:We have a backwards.
Speaker A:It's the inverse.
Speaker B:What a novel idea.
Speaker B:Well, and even too, the whole financial picture, if your financial planner or advisor, whoever you use, is just helping you aggregate accounts onto one platform so you can see your 401k and your IRA, that's not looking at the whole picture from a financial planning standpoint, that's just pulling in data.
Speaker B:And so it's interesting.
Speaker B:When 46 or whatever the number is, 46, say the whole financial picture, like, what does that actually mean in the realm of planning, you know?
Speaker A:Well, we know what it means because people come in, they're like, yeah, I mean, we had a client one time, they came in, they were paying $50,000 a year to this financial advisor, and they had CFPs and attorneys and CPAs on staff and an investment guru.
Speaker A:And they had never been through financial planning.
Speaker A:I mean, like, we put together a financial plan, they're like, yeah, they kind of did this when we first started working with them years ago, and they never revisited it.
Speaker A:It's like, you're not.
Speaker A:You're paying a lot of money for somebody to basically run a generic portfolio for you.
Speaker B:Or even just the stuff we just went through with Jess for four episodes.
Speaker B:You say tax planning, people go.
Speaker B:People do that?
Speaker B:Yeah, yeah, yeah.
Speaker B:Financial planners do that, or estate planning.
Speaker B:So really interesting.
Speaker B:Go through some of these other numbers because I think they're pretty enlightening, too.
Speaker A:Yeah.
Speaker A:The other one, I think that was really important on this particular list was 34% said that they wanted their advisor to have the ability to explain their approach to managing client finances.
Speaker A:That's a must for everybody, right?
Speaker A:Like, you're going to watch my kids.
Speaker A:What's your approach if one of them swallows a penny?
Speaker A:Like, what do you do?
Speaker A:Right.
Speaker A:Or what's your approach if one of them falls on, hits their head?
Speaker A:Like, you want to know these things.
Speaker A:You want to know that the person's going to be competent, is not going to panic and just leave them.
Speaker A:Right.
Speaker A:They're going to actually deal with whatever the problem is.
Speaker A:But 34% said that they would love it if their advisor could explain their approach to managing client finances.
Speaker A:You are hiring somebody to manage your finances when you buy investments from somebody.
Speaker A:So let's say you don't do financial planning, because a lot of people, I don't need financial planning.
Speaker A:But you give your money into an investment, you are turning your money over to a company to run it for you.
Speaker A:You really owe it to yourself to ask that company or that salesperson or that person in charge.
Speaker A:I want to know what your approach is to handling my finances.
Speaker A:I want to know what I can hold you accountable.
Speaker A:What are you specifically responsible?
Speaker A:I want a black and white in writing.
Speaker A:I want to understand what you see your job is and where my job is.
Speaker A:Where's this line crossed between it being my fault or your fault?
Speaker A:You know, however this thing plays out, because you know what?
Speaker A:A good advisor should be good with that, hey, this is the line.
Speaker A:I think we're doing such a great job, and if we do such a great job, then I can come to you and say, hey, you want to do more of this, right?
Speaker A:But if this is the line and we're not doing a bad job, you don't want them saying, oh, that's your fault.
Speaker A:I had a client one time who hired us.
Speaker A:They said, well, I went to my advisor and I asked them why we weren't making more money.
Speaker A:And the advisor says, well, we'll make you more aggressive.
Speaker A:The underlying, they were in mutual funds.
Speaker A:The underlying funds were in the bottom 10 percentile of the industry, of the peer groups.
Speaker A:I mean, like, every single one of them, it wasn't that they needed to be more aggressive.
Speaker A:It's that they had some of the worst mutual funds out there that you could possibly buy.
Speaker B:Pick better funds.
Speaker B:And I think this one is interesting.
Speaker B:Next, it says 23% said proactive communication.
Speaker B:And again, I think if we go back to the original data, there's 1,000 people.
Speaker B:So just looking at the numbers, you hear 23%, it's like, oh, what does that mean?
Speaker B:That means 230 out of 1,000 people said that they want their advisor to be polite.
Speaker B:Hey, Travis, it's Steve.
Speaker B:I was thinking of you.
Speaker B:Hey, there's a couple of moves we want to make before year end.
Speaker B:And it's like, oh, I find value in that.
Speaker B:What does the other group of people want?
Speaker B:You go back to the investment number.
Speaker B:Only 500 people are as concerned about investment experience.
Speaker B:Or 720 of a thousand said, I want someone I can trust.
Speaker B:So these numbers, when you take 1,000 people, almost half the group.
Speaker B:There's some big holes and it's like, what are we signing up for?
Speaker A:But still, what is trust?
Speaker A:Trust to me is proactive communication.
Speaker A:Trust to me as you're looking at the big picture.
Speaker A:Trust to me is that you actually know what you're doing.
Speaker A:All of these things are a part of trust.
Speaker A:You should not say, well, you know, I trust them because so and so told me I should trust them.
Speaker A:So it doesn't matter if you're not getting performance or if you're getting things that don't jive with your life.
Speaker A:You can go to your planner and say, we need to get these in line or I have to fire you.
Speaker A:We have to make a change.
Speaker A:If you've been in charge of anybody at work, or if you've had a babysitter, or if you hired somebody to build your porch, you can fire them if they do a bad job.
Speaker A:And it's the same thing with your financial advisors.
Speaker A:Look, I expect to be able to trust you.
Speaker A:Don't do things that run the trust bank down.
Speaker A:But at the same time, you still gotta do your job, damn it.
Speaker B:Well, and we think about, right, if you have a million dollar ira, we view that as our retirement money.
Speaker B:But if your neighbor down the street, you gave them a million dollars, wouldn't you expect they'd report back what they were doing with the money you gave them and communicating with you?
Speaker B:And we'd go, well, of course they would need to tell me what they invested in and where we did.
Speaker B:But when it comes to our IRA in the financial world, we don't hold those same kind of accountability standards too.
Speaker B:How many people we talk to go, yeah, I don't know when the next time I'm speaking to my advisor is or when I'm going to meet you.
Speaker B:And you're paying them significant amounts of money for investment management.
Speaker B:So it's just alarming.
Speaker A:Yeah, well, you know, the premise of investing is you're buying a company, right?
Speaker A:Or a portion of a company.
Speaker A:So if you break this down to like the most basic nature of it, I'm going to trust you with my money, but you better make me some more money, right?
Speaker A:Like, you don't buy an investment and say, it's okay if I lose all my money because I really trust the CEO.
Speaker A:No, you buy an investment and say, look, I really trust you, but you better perform.
Speaker A:And if you don't perform, we're going to have to make a change at the top.
Speaker A:So then we have why clients Leave an advisor.
Speaker A:And I think we got to kind of hit this fast because we run up on time today.
Speaker A:But 61% said that they no longer.
Speaker A:They would leave their advisor because they no longer trust them.
Speaker A:That's the top reason why they would leave.
Speaker A:So I'm going to say that something else happens in there.
Speaker A:I think trust is kind of like a cop out, like how and like we've talked about.
Speaker B:Yeah.
Speaker A:So one of these other things happen.
Speaker A:They never hear from them.
Speaker A:They don't know their financial planning, the investment performance isn't there.
Speaker A:They don't have experience.
Speaker A:So they, they erodes trust out over time.
Speaker A:You want to do the next one?
Speaker B:Yeah.
Speaker B:So then we had.
Speaker B:We have 54.
Speaker A:54.
Speaker B:So 54.
Speaker B:They would look for a new advisor if their investments perform below their expectations.
Speaker B:Now only 50% of these people said that it was important to have good investments, but now are gonna fire them if they don't do it.
Speaker B:I don't understand.
Speaker B:I mean, I know how math works.
Speaker A:Because they're making a hiring decision based on trust and not checking all the boxes based on track record and those things.
Speaker A:And then they get into it and they don't get the results and they're like, what the heck's going on?
Speaker A:You gotta do more due diligence on the way in so that you don't have to say, I'm gonna fire them over performance.
Speaker A:A good advisor, you shouldn't be firing them over performance.
Speaker A:Cause the market does what it does.
Speaker A:And you should have an investment thesis that's being followed.
Speaker A:You should be firing them when they're not following through with things that they say they're gonna do that they should be doing.
Speaker A:Or when they're not adjusting the plan to your life situation and they're constantly behind the eight ball.
Speaker A:That's when you should be firing them.
Speaker A:The performance thing, a good advisor, that's a bad reason to fire them.
Speaker A:Unless there's something chronic related to it, which there can be.
Speaker A:Right.
Speaker A:But again, it comes down to investment thesis.
Speaker A:How many people have ever asked their advisor, what's your investment thesis?
Speaker A:And didn't get something generic that looks like they got it from Wikipedia.
Speaker B:Yeah.
Speaker A:All right, so then we had 46% said that they would look for a replacement if their advisor didn't communicate clearly.
Speaker A:However, back to the other question.
Speaker A:Only 34% said or 23% said they needed proactive communication.
Speaker B:So half of that number said that they valued proactive communication.
Speaker B:And now almost 50% want to replace them if they don't communicate.
Speaker B:Clearly.
Speaker A:Which means you're not thinking about that when you're hiring somebody.
Speaker A:But once you're in the relationship, you're like, oh, buyer's remorse.
Speaker A:So as you go into the relationship, ask them, what's your communication?
Speaker A:How often should I hear from you if I want to get a hold of you, how do I get a hold of you?
Speaker A:How often?
Speaker A:Like if you hire a solo planner, it's just one planner all by himself.
Speaker A:How often do they go on vacation or get sick?
Speaker A:Because who are you going to talk to when they're on vacation?
Speaker A:They're in the Grand Caymans on the money that you're paying them.
Speaker A:And yet you need something and you have to wait for them to get back in town.
Speaker A:That's not a good situation.
Speaker A:That's good if you don't have a lot and you can get a good deal on the planning or something like that, and you're trying to stretch dollars and you're willing to deal with the fact that you have kind of like blackout periods.
Speaker A:But it's not good if you're running a money business.
Speaker A:You know what I mean?
Speaker A:If you got million plus dollars, you're running a money business.
Speaker A:You need your executives that you've hired on the job, or if they're not there, they're number two's on the job.
Speaker A:You kind of need that type of thing going on.
Speaker A:You want to hit the last one.
Speaker A:Yeah.
Speaker B:So 45% of the thousand people surveyed, so 450 people, said they would leave if the overall client experience was not good.
Speaker B:And how do you even judge what client experiences?
Speaker A:Beauty in the eye of the beholder?
Speaker A:You know, it's just like some people like a lot of calls.
Speaker A:Some people don't like phone calls.
Speaker A:Some people like emails.
Speaker A:Some people, you know what I mean?
Speaker A:Like, it's just some people like in person, some people.
Speaker A:So I think that that's a really subjective thing.
Speaker A:I think you should choose a firm that fits the way that you want to operate.
Speaker A:You know, you should be asking the firm, can I have in person meetings?
Speaker A:Do we do virtual?
Speaker A:You know, I really think people should spend a little bit more time.
Speaker A:You're hiring somebody who you are going to be telling very intimate things to.
Speaker A:You're going to be telling them all about your life, all about your relationship with your kids, all about these things, all about your hopes and your dreams and where things came from and where things are going.
Speaker A:You really ought to be looking at when I walk into this office or when I talk to their staff, you know, how Do I feel, do I feel like I belong here?
Speaker A:We talked about this in episodes when we moved to Tennessee about, you know, relocating.
Speaker A:You need to.
Speaker A:People who are thinking about relocating, retirement need to relocate to a community that when they go out and they meet people they're not going to be fighting with all the time.
Speaker A:Right.
Speaker A:If you're really politically charged, don't move to the opposite kind of political community.
Speaker A:You know what I mean?
Speaker A:If there's certain things that are triggering to you or important to you, don't go to somebody else's house and tell them they have to change their house.
Speaker A:Just, just find a place where you belong and go there.
Speaker A:And I think a good planner will tell you that if you don't belong with a good planner, they're going to say, look, this doesn't work.
Speaker A:Can we get you a new home?
Speaker A:Can we find someplace where you're going to get better value out of this?
Speaker A:And we're not going to feel the stress that we feel because you're expecting something and we can't deliver on that.
Speaker B:Yeah.
Speaker B:And at the end of the day, I mean, everyone prices their business differently.
Speaker B:But working with a financial professional is not the cheapest endeavor ever.
Speaker B:And so if you just had a line item on your budget that said, we spent 40 grand every year on X, someone would look at that and go, we spent 40.
Speaker A:Which is, by the way, we charge.
Speaker A:No, not clients paying.
Speaker B:See a lot of clients that are paying a so called financial advisor, they.
Speaker A:Come in and they meet with us for the first time.
Speaker A:They're like, I'm paying 40 grand, 40 grand.
Speaker B:And that's like, what are you getting if you had to write a check every year for 40 year?
Speaker B:But we don't because it comes out of investments and other things.
Speaker B:So when you talk about the overall experience, if that proactive communication isn't there on tax planning and things you can do, then, you know, this raises the alarm.
Speaker B:And why don't you then for the last talk about these two questions and I'll tell them about the survey in the show notes.
Speaker A:Yeah.
Speaker A:I'm also thinking, you know, 40 grand a client, that's pretty good.
Speaker A:Imagine like we could have a yacht if we charge 40 grand.
Speaker B:We just got into the same room for the first time in four years.
Speaker B:So this is good.
Speaker A:I guess we're not doing it yet.
Speaker A:We'll take donations though.
Speaker A:We'll let other people come on the yacht.
Speaker B:That'd be fun.
Speaker A:Yeah.
Speaker A:And just no yacht.
Speaker A:It's too much.
Speaker B:So you got these two questions and we created a survey.
Speaker A:Oh, yeah.
Speaker A:So we have a survey.
Speaker A:What we were asking for our listeners.
Speaker A:You can explain the survey.
Speaker B:Okay.
Speaker A:Because I don't actually know where it lives.
Speaker B:Okay.
Speaker B:So there was two questions that we posed.
Speaker B:It's a very short survey.
Speaker B:We'll have it in the show notes that you guys can fill out.
Speaker B:It's kind of open answer, but there's two questions that we're thinking of.
Speaker B:What do you think as a listener?
Speaker B:Ditch the suits.
Speaker B:What do you think is the most important thing when selecting a financial advisor?
Speaker B:That's question one.
Speaker B:And then as we talked about in this survey, there was reasons you would leave.
Speaker B:Question two is, why would you consider leaving your current financial advisor?
Speaker B:So you don't have to put your name or anything with this, but we'll.
Speaker A:Have no name, no email, no nothing.
Speaker A:Just give us some info.
Speaker B:Travis and I are interested from you guys as listeners as ditch the suits.
Speaker B:Right.
Speaker B:We just said what these thousand people said was important to them.
Speaker B:But we want to know from you as our listener base, what's important to you.
Speaker B:So we'll have this link in our show notes.
Speaker B:If you need it, get in contact with Travis or myself.
Speaker B:You can head to ditchthesuits.com, we'll personally send you the link.
Speaker B:Because at the end of the day, I think is what people forget.
Speaker B:You and I are real human beings that interact with people every day.
Speaker B:And so it's always funny to me when people call in from the show and I'm like, yes, Steve from Seed.
Speaker B:And they're like, it's the guy from the podcast.
Speaker B:We're real people.
Speaker B:So if you guys want to get in touch with ushoots.com no, we have a screening system to just keep him at bay.
Speaker A:Too many rings.
Speaker B:Yeah.
Speaker B:Yeah.
Speaker B:The experience is really important.
Speaker B:But at the end of the day, very quick survey you guys can take and just do it, because we'd love to hear from you in terms of.
Speaker A:What's that for people, too?
Speaker A:Because I think when you hear it like this, when we talk about it, if you're trying to make a decision to hire somebody, or maybe you've been working with somebody for a while and it's maybe not working out or you have second thoughts, this is a really good way to think about this, and it'll give you a little bit of shape to that kind of that next discussion that you probably need to have and that next decision that you need to make.
Speaker A:And more importantly, if you can share with us other perspectives, we can share that with the Listeners as well.
Speaker A:And I think that that helps other people make better decisions.
Speaker A:So we have some thoughts just to close this out.
Speaker A:Trust and performance.
Speaker A:So here's our big takeaway, right?
Speaker A:We try to do like one takeaway every.
Speaker A:Every you could.
Speaker A:Our listeners get to take something home with them.
Speaker A:Basically.
Speaker A:Trust requires vetting, and that includes establishing expectations on performance.
Speaker A:Right?
Speaker A:So when you say that you trust somebody, you haven't really fully committed to that unless you've established expectations on the performance.
Speaker A:Performance is not just investment.
Speaker A:Performance says, you said that we would have meetings every six months or every three months.
Speaker A:You said that this, this, and this would happen on these times.
Speaker A:You said that the investment thesis is xyz.
Speaker A:Are we performing to the investment thesis?
Speaker A:Right?
Speaker A:I can't control if the market goes up or down, but I can control if we're staying on track.
Speaker A:So you need to establish that ahead of time.
Speaker A:If you can establish, if you have trust for them and you establish the expectations and you manage your advisor to the expectations, or if you have a good advisor, they manage themselves to your expectations and they say, see, these were your expectations.
Speaker A:Look, we beat the expectations, right?
Speaker A:Or we're lagging a little bit.
Speaker A:This is what we're gonna do to fix that.
Speaker A:You know, we do that.
Speaker A:We revamped our newsletter to help clients participate with that interaction with expectations.
Speaker A:How do we do a better job on that?
Speaker A:To me, that's where the trust lives.
Speaker A:Because then you clearly will know, maybe this is smoke and mirrors trust or this is real trust.
Speaker A:I'm really getting what I'm paying for.
Speaker A:Yep.
Speaker B:And then my final thought is, don't wait for something to go wrong to realize it's time for a change.
Speaker B:Right.
Speaker B:If we say proactive communication and trust is important and they didn't send you money when they said they would, or your investments went way down and you don't know why, that raises the alarm that, okay, what's going on with this practice?
Speaker B:As you, as a listener, though, think about the value.
Speaker B:Are you getting questions answered proactively about your taxes or your estate or the other parts of your life that are important to you, your kids, and how to make all those things come together?
Speaker B:Don't wait for something to go wrong to say, maybe it's time for a change.
Speaker B:Just think about, in a perfect world, what would bring you greatest peace of mind?
Speaker B:Knowing every year what to do with your taxes, knowing to make sure your kids are taken care of.
Speaker B:If you're getting those things, then I think trust is a good baseline.
Speaker B:But again, humor us take the survey.
Speaker B:Thanks for bearing with us in our first in real room time.
Speaker B:We try to keep episodes to about 30 minutes.
Speaker B:So for the first time being together, we weren't too chatty today.
Speaker B:But we got another episode coming up after this.
Speaker B:Thank you for being our guest on Ditch the Suits.
Speaker B:And until next time, here's to getting the most of your money in life.
