Where Vanguard Really Stands on Using an Advisor – Episode 174

Pay someone to manage your investments, or do it yourself?

Vanguard founder, John Bogle, is known for giving individual investors access to the market through low-cost index funds. The approach bypassed unnecessary management fees and allowed people to “buy the market” using diversified funds. To this day, John’s following of “Bogleheads” remains energized by his philosophy and often steers other investors toward a self-directed path. And yet, recent Vanguard studies show how guidance from an investment advisor can lead to significantly better returns. So what’s the right strategy for you? In this episode of Dentist Money™, Reese and Ryan discuss common misconceptions about Vanguard’s position, when it makes sense to hire an advisor, and the type of advice worth paying for.

To find out who needs a financial advisor and why.

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Podcast Transcript:

Reese Harper: Hi, Dentist Money Show listeners, it’s Reese Harper here. I have a great episode mapped out for you today. Lately, one of the biggest questions that we’ve noticed repeating itself quite often in the dental space is, should I hire a financial advisor, or should I just go online and do this with Vanguard? Or, insert any other platform that you can think of. Hiring a financial advisor is a really difficult question, and there’s probably a right and wrong time about when to do it. But there are a lot of ideas floating around that convolute the difference between getting financial products and getting financial advice.

Reese Harper: There’s a huge difference between getting access to investments, and then getting access in a service model or consulting relationship that provides advice. I know this kind of information that’s floating around the internet is well-intentioned, but it also illustrates how much confusion there is about financial advisors, the role of financial advice, and financial planning in our lives. Bottom line, I’m excited to share with you a few of my favorite ideas on this topic, share some of our favorite platforms, and talk about ways that you can know when the right time is for you to access an advisor that’s the right fit in your situation.

Reese Harper: Make sure and visit us at dentistadvisors.com, and check out our education library. You’ll find a lot of videos, podcasts, and new articles that we’re releasing every week. Also, when you go to the website, don’t forget to book a free consultation, clicking the book free consultation button, where you’ll be paired with one of our dental specific financial advisors on a day that works for you. We book appointments on off-days, lunches, even on some Saturdays. Just check out the calendar and find a time that’s convenient. Call us any time, at 833-DDS-PLAN. You can also text us at the same number.

Reese Harper: Don’t forget to submit your financial questions on our free Facebook group at dentistadvisors.com/group. We take the questions from the Facebook group and use them in the podcast. Thanks again for listening, and enjoy the show.

Announcer: Consultant advisor conduct your own due diligence when making a financial decision. General principles discussed during this program do not constitute personal advice. This program is furnished by Dentist Advisors, a registered investment advisor. This is Dentist Money. Now, here’s your host, Reese Harper.

Reese Harper: Welcome to The Dentist Money Show, where we help dentists make smart financial decisions. I’m your host, Reese Harper, here with my trusty old co-host, Sir Ryan Isaac.

Ryan Isaac: That was deep. That was dramatic.

Reese Harper: That was a new little intro today.

Ryan Isaac: Yeah. The voice inflection made it seem … It was like a nature show. Like a narration of a nature show.

Reese Harper: Like you’re going to be a deer springing from the woods.

Ryan Isaac: Oh, I don’t want to be the deer.

Reese Harper: In my cross hairs.

Ryan Isaac: You always know how those end. Unless it’s a kid’s nature show, here’s what I’ve learned, my daughters love nature shows. If it’s a kid’s oriented nature show, the deer springs up, the lion crouches, there’s a chase, and they’re like, the deer got away in all the kid’s ones. But, if it’s not a kid’s one, you know how that deer’s going to end up.

Reese Harper: The deer is not really a strong animal

Ryan Isaac: The circle of life. Circle of life.

Reese Harper: It’s everyone’s prey.

Ryan Isaac: If I could be any animal, let’s do this, any animal in the animal kingdom that’s a real animal, I would be a silverback gorilla.

Reese Harper: Not bad.

Ryan Isaac: That’s what I would be. That’s my favorite animal in the zoo to go see, is the gorilla enclosure.

Reese Harper: Well, the seque of this idea of deer and silverback gorillas-

Ryan Isaac: You got to tell me what you would be besides a bovine.

Reese Harper: Oh, for me, I think everyone knows what animal I would choose.

Ryan Isaac: You’d be a cow.

Reese Harper: Yeah.

Ryan Isaac: They have a lot of utility.

Reese Harper: They are the most utilitarian animal in the whole world. Tell me one animal that gets more use.

Ryan Isaac: I can’t. We need to move on.

Reese Harper: Okay, fine, a chicken.

Ryan Isaac: Chicken’s better. There’s a lot more utility-

Reese Harper: Find a pig. All right.

Ryan Isaac: You get a lot more utility out of a chicken.

Reese Harper: Okay. But that’s just not silverback gorilla and a chicken. Sounds like it’s there enough notification. Protein source. They’re very low cost to raise-

Ryan Isaac: That’s true. It’s very sustainable protein source for the future of our planet. Chicken.

Reese Harper: You listen to the last podcast?

Ryan Isaac: I did, yeah. I referenced the one sometime ago.

Reese Harper: [Spanish] is the Spanish word for cheese, but also a segue word. [Spanish] is the next-

Ryan Isaac: Sponsored in part by [Spanish] cheese.

Reese Harper: This week on animal planet, I was sitting in the dental investment group-

Ryan Isaac: Facebook group.

Reese Harper: Speaking of animal planet-

Ryan Isaac: Speaking of animal kingdom [crosstalk].

Reese Harper: Are you just saying it’s a wild world out there.

Ryan Isaac: Yeah, I felt like wow. A lot of species and look at all this.

Reese Harper: It’s very diverse.

Ryan Isaac: I love that channel, shout out to Sunny and I found a question that came up for like the fourth time in the last like six weeks.

Reese Harper: How big is that group, by the way?

Ryan Isaac: I mean, it’s thousands. I mean 8000 to maybe 9000. There’s a lot of questions every day.

Reese Harper: This one comes up quite often. And I, it was a young dentist you could tell just kind of getting into the swing of things and just trying to feel nervous about asking this question.

Ryan Isaac: So props to the young dentists for asking a question among his peers.

Reese Harper: And you could tell, he said, I’m thinking about hiring a financial advisor.

Ryan Isaac: I know where this going.

Reese Harper: And should I hire one? And do you guys have any thoughts? Like is this a good idea and the responses varied, you know, some saying you should hire all Tom and it was Tom himself under a pseudo name advertising his services go in like a, it feels very Michael Scott.

Ryan Isaac: Tom Tom is the best guy ever. you should hire him.

Reese Harper: You should totally hire Tom and then everyone’s like unbiased third party here. Fake Tom.

Ryan Isaac: get out of here.

Reese Harper: Anyway, no, there were some people saying you shouldn’t hire. This guy’s my best friend from college. He only got me in one Ponzi scheme and I think he’s very trustworthy sense then.

Ryan Isaac: Yeah.

Reese Harper: Um, yeah, a few great recommendations but the bulk of the thread, uh, all, and I knew this would happen. I just opened up the comments because I wanted to see, and I thought I said, I know.

Ryan Isaac: You broke the number one rule of the Internet. Don’t read the comments.

Reese Harper: Don’t read the comments. I knew there’s going to be, this one was going to show up because it is like verbatim the classic and there’ll be like,

Ryan Isaac: I know what it is.

Reese Harper: Don’t hire an advisor. Just go to vanguard.

Ryan Isaac: Let’s put that on t-shirts.

Reese Harper: I thought yes. I mean it’s.

Ryan Isaac: that’s really common.

Reese Harper: That is a very common response and I think it’s really important to pick apart the multifaceted thing that’s going on here. When someone says don’t hire an advisor, just go to vanguard.

Ryan Isaac: Yeah.

Reese Harper: What is really happening here? And then before you jump in, I want to kind of, you don’t know where I’m going with this.

Ryan Isaac: This is a surprise episode to me.

Reese Harper: And I’m going to kind of, [crosstalk] I want, I’m going to pose some questions to you and you’re going to kind of help walk through this.

Ryan Isaac: Okay.

Reese Harper: Using your seasoned wisdom experience

Ryan Isaac: Yeah.

Reese Harper: And well trimmed beard.

Ryan Isaac: Oh yeah.

Reese Harper: So first off, why do you think, or what, what is the person saying or could be saying when they tell this person, don’t hire an advisor, go to vanguard. What are the things that are going through your mind as you hear that?

Ryan Isaac: I think the number one thing is that everything else is equal and it’s all about cost. That’s it. It’s just purely cost savings. Clearly Vanguard’s just a really cheap, inexpensive company to work with. Great, great products. And I think that’s what it’s going through everyone’s head. It’s like, well, everything else is the same because like anyone can pick a mutual fund, anyone can rebalance and diversify, whatever. It’s the big differentiator in a, whether or not you’re successful in your portfolio or you know, building your net worth is cost. It’s all cost. That’s the message from our industry. Rightfully so.

Reese Harper: Yeah.

Ryan Isaac: Over the last few years. So I think that’s what’s going through everyone’s head. It’s just like, well, that’s cheaper, so you should just do that. It’s cheaper.

Reese Harper: That’s cheaper.

Ryan Isaac: It’s cheaper.

Reese Harper: I think. I think he’s this other, the commenters also may be worried for this young dentist.

Ryan Isaac: Yeah, that’s totally fair to, it’s like, why would he be worried? Why is he worried for him?

Reese Harper: Well man, choosing a financial advisor, it’s a big world of financial advisers and that’s a very, very loose term. Like if you think back to the carnage and dumpster fire of the last 40 years of the financial advisor’s dumpster fire.

Ryan Isaac: Yeah.

Reese Harper: If you think about like start with, let’s just go back and let’s think wolf of Wall Street and then think boiler room with me. Then think Gary, Glen Ross.

Ryan Isaac: Who is your favorite in boiler room?

Reese Harper: Um, I’m going to continue mate my points hold. I can’t get tangent into the actual movie.

Ryan Isaac: You just stopped me on that.

Reese Harper: Okay.

Ryan Isaac: Think of those things in the dumpster, fire of the past four decades.

Reese Harper: And then, and then, and then, so you have this vision of like Wall Street.

Ryan Isaac: Oh yeah.

Reese Harper: Excess greed.

Ryan Isaac: Yeah. taking advantage, shady.

Reese Harper: Compulsive buyers.

Reese Harper: Oh yeah. Then you, and you still have some of those now. Like you forgot your, then you’ve got a different genre. You’re Bernie Madoff’s.

Ryan Isaac: Your high end sophisticated scam,

Reese Harper: Utah. You’re Rick curbers.

Ryan Isaac: Yeah.

Reese Harper: From the Oh eight oh seven days to remember the real estate.

Ryan Isaac: Equity Millie

Reese Harper: Equity milling, you know, reverse mortgage, 4% a month.

Ryan Isaac: You’re 24, you should have five mortgages. Totally all of them tapped out.

Reese Harper: You think of those guys?

Ryan Isaac: Yeah.

Reese Harper: And then that’s what if you could ever possibly get over that.

Ryan Isaac: That’s a really good point.

Reese Harper: Then you go to the mutual fund industry of the eighties and nineties where it’s like, so what’s this cost me?

Ryan Isaac: Don’t worry about it.

Reese Harper: Don’t worry about it.

Ryan Isaac: It’s not in writing, so.

Reese Harper: Okay fine. Do we have to disclose something to you? Well, what’s that? Let’s just say it’s one and a half percent and put that on a thing. Okay. We don’t have to disclose what we’re paying this guy to sell that to us or this guy and that gal.

Ryan Isaac: Well it is, it’s just in the 60th page of our PD.

Reese Harper: It’s called the, it’s, this is called a, selling an administration charge. We didn’t have to disclose that to you.

Ryan Isaac: Yeah.

Reese Harper: This is called the marketing expense.

Ryan Isaac: Those are still like, that’s still bleeding over though. I mean people are still trying to overcome one and a half percent mutual funds in 401k is that they didn’t know they owned.

Reese Harper: Well that’s what they thought they cost.

Ryan Isaac: Yeah. Yeah.

Reese Harper: But they really cost like three and a half percent

Ryan Isaac: Plus the six upfront. The year guy.

Reese Harper: I mean the mutual fund industry just basically lied to the public for like 25 years.

Ryan Isaac: Okay. So Wolf of Wall Street and then mutual fund industry.

Reese Harper: And during this whole other time you have the pseudo financial advisory industry. [crosstalk] That’s like some form of financial product, let’s call it advisory services. Let’s call it advice and planning.

Ryan Isaac: Well, I was thinking, the entire insurance industry.

Reese Harper: Yep.

Ryan Isaac: So you’ve got the life insurance and annuity quote, financial advisers quotes un quote un quote

Reese Harper: un quote, and they’re, you know, paying like they, you don’t even know what they get paid.

Ryan Isaac: Uh, I just had one of those conversations is this last month.

Reese Harper: It’s insane.

Ryan Isaac: Yeah. Tough.

Reese Harper: And so this is the context of which young rise Isaac comes into the industry in 2007, you know, seven and just goes, let’s start a firm. Reese seems like he’s got a couple of good ideas and, and we’re like, yeah, you should trust financial people.

Ryan Isaac: Yeah.

Reese Harper: Right before the entire market implodes in oh seven and goes into a deep recession.

Ryan Isaac: That’s true. But yeah, besides all the, the intentionally bad service, then you just have the natural market process of yeah, sometimes this thing just implodes for a couple of years.

Reese Harper: Yeah. And so, so the intentional, I guess like blatant a greed and ambition and uh, theft, just general robbery, general robbery [crosstalk] run it. The old run of the mill

Ryan Isaac: Run to the mill.

Reese Harper: Um, we didn’t even talk about the Ponzi scheme industry or the, or the hedge fund industry.

Ryan Isaac: Yeah.

Reese Harper: Like you’re Bernie Madoffs and whatnot. I mean, these, the hedge fund industry basically was gouging for like.

Ryan Isaac: Oh yeah.

Reese Harper: You know,

Ryan Isaac: And severely underperforming 15 years.

Reese Harper: Anyway, like at some point, John Bogle comes out who is the founder of vanguard

Ryan Isaac: RIP.

Reese Harper: You know in the 90s and he writes the little book of investing, a little common sense, common sense book of investing, the little common sense book of invest

Ryan Isaac: Doesn’t take a lot.

Reese Harper: I mean it wasn’t as, it’s a small book.

Ryan Isaac: Yeah.

Reese Harper: It’s like a hundred and change pages.

Ryan Isaac: You get through it

Reese Harper: And it basically says one thing. All right. It says, why would you pay a financial advisor right here? This is coming from the context of the mutual fund industry in the nineties like why would you pay a financial advisor to sit on your money when you could just like by the market and skip them all together?

Ryan Isaac: Yeah.

Reese Harper: You don’t need no middleman. You don’t need an intermediary in between you and the returns. Just go put your money in them, which is actually at the time like a super innovative,

Ryan Isaac: That was part of the solution. I mean that that was part of the solution that was part of the problem.

Reese Harper: Yes.

Ryan Isaac: So.

Reese Harper: And, and it’s, and it made, it made significant that that has made significant shifts in

Ryan Isaac: big time.

Reese Harper: In a positive direction.

Ryan Isaac: Oh yeah.

Reese Harper: By just saying if someone’s getting paid something, what are they getting paid for?

Ryan Isaac: And should you know about it.

Reese Harper: And really, honestly, what happened was like if you look back in like the, the boiler room era, see these stock brokers were getting paid massive commissions to trade securities and the client’s really didn’t know like what they like the, what we call the spreads were, they didn’t know that they weren’t really get getting an execution price that was fair and that their broker might be making like 50 grand on a trade.

Ryan Isaac: lack of technology and information to played into that.

Reese Harper: Yeah. And so that was tainting like John Vogel’s like kind of Lens a little bit. Like he had seen this gouging of stock brokers.

Ryan Isaac: Yeah.

Reese Harper: Then he saw the mutual fund industry just like hiding fees from people.

Ryan Isaac: Yeah.

Reese Harper: And then like the best thing he could do and still is, one of the best things that could’ve happened for the industry was somebody comes out and says, look, like you just need to own the market. The market will give you a predictable expected return

Ryan Isaac: over long period of time.

Reese Harper: And avoid this middleman nonsense. Right?

Ryan Isaac: Yup.

Reese Harper: And that I mean, but e-trade and Charles Schwab and Ameritrade, like these brokerage firms were established in like the late seventies early eighties and to try to combat these like regional brokerage houses that were gouging with these big spreads.

Ryan Isaac: Yup.

Reese Harper: And the cost of trading started like coming down like 100% less from like 1980 to 2000 and then another hundred PR, you know it’s like 90% and then another 90% and like now we’re at Schwab, Just a couple of years ago it was like at six bucks and they’re like four bucks.

Ryan Isaac: Yeah.

Reese Harper: And now there’s like no, I mean.

Ryan Isaac: There’s like free mutual funds. There was one that just launched. It was, it would actually pay you.

Reese Harper: Yeah.

Ryan Isaac: Until they raise enough money.

Reese Harper: The truth is enough money. You’re slowing down the rate of cost cutting now. Now the rate of cost cutting is starting to slow down.

Ryan Isaac: Yeah. Cause it served its purpose.

Reese Harper: Yeah.

Ryan Isaac: It did what it was supposed to do.

Reese Harper: The challenge of what’s happened is that you’ve eliminated, I mean, what happened was the mute to see the stock brokers of the late seventies and seventies and you know, that kind of era, they then became the mutual fund salesman of the eighties and nineties and cause you go from gouging in one place, you can, like we got to still make our money and

Ryan Isaac: like look I was raised to gouge. I don’t know what else to do.

Reese Harper: but then I go make my money in the next [crosstalk] And then this whole time it’s like, what do they know how to do? They just knew how to sell. They didn’t like most of the industry didn’t know learn finance.

Ryan Isaac: Well most of the industry wasn’t actual advice for, I mean most of its history it was, so it was sales.

Reese Harper: So you went from sales in the seventies and eighties to sales in the eighties and nineties and then once the margins for sales went away. Like right now we’re in a market where there is no margin for selling. Like there’s not a say, not, not like what it was.

Ryan Isaac: Yeah.

Reese Harper: The sales margins declined a lot.

Ryan Isaac: Yeah.

Reese Harper: In financial services now it’s all about.

Ryan Isaac: cause there’s access and there’s information now.

Reese Harper: And in the engineering you look at it like the money that has been being extracted from the system, like two advisers, it hasn’t actually changed that much over time. It’s just shifted in where it was going, like the financial services industry, you can look at a lot of different research about how much money the financial services industry extracts from the general economy.

Ryan Isaac: Yeah.

Reese Harper: And, you know, I think the data shows that somewhere like around 2%, you know, of like the economy goes to services in the financial space. Something like that.

Ryan Isaac: Interesting, Serve as providers, Huh?

Reese Harper: Yeah. And it’s like kind of shifts from the places that they’re taking it from, from sales of stocks in the 70s to two mutual fund raps. And now today, see it’s just kind of gotten to the point to where the people that are doing the work for the client, like the financial advisors that are right on the edge of the client relationship.

Ryan Isaac: Yeah.

Reese Harper: They’ve, they’ve gone, well, I, I’m not going to like let a mutual fund take all the revenue and I’m not gonna let stockbroker is done and over

Ryan Isaac: Yeah.

Reese Harper: like I’m going to cut out everyone out of this equation. I’m going to do it all myself.

Ryan Isaac: Yeah.

Reese Harper: And then I’m going to work with the client and then I’m going to deliver as much value as I possibly can for that money that they’re paying me and I’m going to eliminate all costs like around me as much as possible so that my clients returns are as good as they can be.

Ryan Isaac: Yeah.

Reese Harper: That’s the, that’s where this registered investment advisor fee only model is. Finally,

Ryan Isaac: people are still paying advisors. There’s doing it differently in transparency and getting different things for it.

Reese Harper: You could say back in the day in the stockbroker era, like there was some good advice like I’m, the best advisors at that time were stockbrokers and they were getting paid, disproportionate amounts of money for sales, but they were, the best ones were probably getting those because they gave you any advice.

Ryan Isaac: Yeah.

Reese Harper: They got to get it to give you advice.

Ryan Isaac: Hot stock tips.

Reese Harper: Then the mutual fund industry when it was really clustered and the fees were all over the board. I’m sure a lot of people made good money there because they were helping people make the right decision between which mutual fund to get. And now in today’s market, you basically either provide some kind of significant advice or value or a service or you’re going to be out of business.

Ryan Isaac: Yeah.

Reese Harper: Like that’s where the market’s at now.

Ryan Isaac: Yeah.

Reese Harper: John Bogle, his book in the nineties basically said, eliminate that middleman so that it returns can be higher

Ryan Isaac: because the only thing that matters here is the product anyway, so just get right to the product.

Reese Harper: Yeah, [crosstalk] that was the assumption. But the crazy thing that people probably don’t realize today is that the firm that Bogle started vanguard is receiving as of this year. I just got off the phone yesterday with one of the regional wholesalers from vanguard around that had some access into fund flows. Vanguard’s getting an increasingly larger percentage now at half of their total flows are not coming from people directly to them. They’re coming through the advisor.

Ryan Isaac: financial advisors.

Reese Harper: That John Bogle was basically saying to get rid of.

Ryan Isaac: Yeah.

Reese Harper: You know, in the 90s.

Ryan Isaac: Yeah.

Reese Harper: You know, and they’ve written a significant amount of research papers, like a, a big research paper chain called advisors Alpha.

Ryan Isaac: I love that.

Reese Harper: That has been, I don’t know, for five plus years now.

Ryan Isaac: Yeah. I might even be a little bit older than them.

Reese Harper: And, that measures the, the, the amount of additional return that the right financial advisor and the right financial advisor relationship can add. And they believe ads for their client. And, they’re saying right now that that financial advisor involved in the right way with the client is adding over 3% per year.

Ryan Isaac: Yeah. Net of fees,

Reese Harper: Net of their advisory fee.

Ryan Isaac: Net of fees. I love, there’s a few firms around that do those kinds of studies. But I liked that one probably the most because it’s coming from the, you know, historically like anti adviser from,

Reese Harper: Yeah. And it’s, and it’s, so.

Ryan Isaac: It was pretty unbiased. It’s pretty, it’s pretty cool.

Reese Harper: So that like the context there, I think just really interesting because I think it’s important to, to kind of pick apart what, what misconceptions are actually happening when in this well intentioned Facebook chat. One dentist is telling you another one, don’t hire an advisor, just go to vanguard.

Ryan Isaac: Yeah.

Reese Harper: I mean there’re all kinds of things that are misconceptions around that and, and I think it’s important to break them apart. The first one we kind of gone through, which is even vanguard doesn’t view financial advisors as a even van Vanguard’s probably the strongest advocate right now for the use of a financial advisor. [crosstalk] Not because it’s bringing them fun flow. I mean the, the reason that they would be incentivized by, I mean, cause vanguard has a competing service to financial advisors.

Ryan Isaac: Their in house advisors.

Reese Harper: they have in house advisors.

Ryan Isaac: Yeah.

Reese Harper: And they, they don’t charge usually as much as an outside specialist would. Um,

Ryan Isaac: It’s a call center.

Reese Harper: Because it’s, uh, it’s uh, you know,

Ryan Isaac: It’s still cool.

Reese Harper: It’s a well appointed call center.

Ryan Isaac: Yeah. That’s cool. That’s cool. It just needed.

Reese Harper: It’s interesting to see that. That is, I’ve, I’ve posted this article a few times around the Internet that Vanguard’s written.

Ryan Isaac: Yeah.

Reese Harper: About Advisors Alpha and I’ve gotten like big Bogle head blow back up. Bogle head is someone who’s like a vanguard.

Ryan Isaac: Diehard.

Reese Harper: groupie. It’s a Groupie of people that. [crosstalk]

Ryan Isaac: If vanguard tour, they’d be in every city.

Reese Harper: And I’ve had people say that is ridiculous that you would say that vanguard advocates for the use of an adviser. That’s crazy. They would never do that.

Ryan Isaac: You’re like just read the executive summary on just three.

Reese Harper: Just go to their website for once. You know, like it, the fact that, that’s even, that just blows people’s minds

Ryan Isaac: Well its change though. Like you said, it wasn’t the original vision and it has changed. They, they, they even have like actively managed funds these days, don’t they?

Reese Harper: Yeah.

Ryan Isaac: Which is.

Reese Harper: They’re launching a new one right now. I mean they’ve always had actively managed funds, I think that would surprise people.

Ryan Isaac: Yeah.

Reese Harper: The Wellington Fund at Vanguard’s, probably one of their most well known, best performing oldest funds and it’s an actively managed mutual fund.

Ryan Isaac: Yeah.

Reese Harper: You know, and they’re launching several active funds this year.

Ryan Isaac: Yeah.

Reese Harper: So, I mean, the first thing is that vanguard likes advisers. So that’s kind of something we should just, vanguard likes advisers for a few different reasons.

Ryan Isaac: The right kind of advisor.

Reese Harper: We’ll go into those later in more detail. But just briefly and they like advisers primarily for a few. The largest reason being helping clients make smart decisions during really emotional and difficult times with their money.

Ryan Isaac: Their behavior.

Reese Harper: Because one or two big mistakes throughout an investing lifetime kind of destroys your average return.

Ryan Isaac: Yeah.

Reese Harper: I mean there’s just a lot of data on this. Okay. The thing about this comment in the Facebook forum though, I don’t want you to kind of hit on this, is there’s a big difference between products and advice. And I think that people don’t know that. They don’t realize, when you say don’t hire an advisor, work with vanguard, it, to me that’s kind of showing some ignorance or in the market around the difference between product and advice. I don’t think people really know how to separate the two.

Ryan Isaac: Yeah, I think, well I think that just goes back to what you were saying about the history of our industry, which is the, the product was the advice and that’s actually a lot of people’s experience with the financial services industry is like that’s the advice is here by this thing, you know.

Reese Harper: that’s how it used to be done.

Ryan Isaac: It’s been done forever and it’s changing. But I think that’s just what people are conditioned to think. Like the product is the advice. So I might as well just skip the guy selling it and just go get it myself.

Reese Harper: Yeah. Well, and I think that at the time you could argue, you know, 15 years ago, 20 years ago there wasn’t that much advice to be given. Like it was the financial market as complex 20 years ago as it is today. Was Tax legislation more complex or less? Was retirement plan law more or less complex? What about estate planning law or asset protection law?

Ryan Isaac: Well, yeah, it’s actually an interesting point

Reese Harper: What about entrepreneurship. There’s more small business, you know.

Ryan Isaac: Than there’s ever been.

Reese Harper: Then there’s ever been.

Ryan Isaac: And we’ll think about the generation before us and before them that relied heavily on pensions. I mean, there was an entire couple of generations that that was retirement. So it was, it was a lot less to think about.

Reese Harper: Yeah.

Ryan Isaac: In terms of preparation,

Reese Harper: I mean, if you need advice industry was needed, it probably would have showed up before 1980 but it didn’t really, let’s get started about then.

Ryan Isaac: Yeah.

Reese Harper: And so, you know, it’s kind of like the rise of complexity that the increase in people’s overall net worth, the, the general, um, income disparity between rich and poor as that continues to kind of like grow.

Ryan Isaac: And the amount of options.

Reese Harper: And the amount of choices that he wants to make, all the financial planning jobs they have to get done. I think it has made people have to be more aware of the need for advice, I don’t think advice was really viewed before. Products were advice and probably advice wasn’t, wasn’t perceived as.

Ryan Isaac: yeah.

Reese Harper: As necessary.

Ryan Isaac: Yeah.

Reese Harper: You know, or people didn’t get overwhelmed as much. It’s like Casa as long as they get my, I mean think about the eighties and nineties and is basically a 20 year bull market too. Like if financial advice, the industry of financial advice kind of started in the early eighties and again, for those of you not familiar with advice, we’re talking about like fee only fiduciary advice.

Ryan Isaac: Yeah. Not, not the person that just giving you access to the mutual fund.

Reese Harper: but let’s click yeah.

Ryan Isaac: Let you make decisions when something.

Reese Harper: Yeah, let, let’s clarify a, the types of advice real quick that you can get in life. Okay. Like let’s just talk about some types of advice you can get.

Ryan Isaac: I like this, Okay.

Reese Harper: Okay. So tell me a type of advice that you’ve gotten recently. Just any type of advice that you’ve gotten from someone.

Ryan Isaac: You want the specific advice or the type of advice,

Reese Harper: Yeah, specific advice.

Ryan Isaac: A friend at my gym who’s a incredibly strong lifter encouraged me to stop wearing weight belts when I lift.

Reese Harper: Okay.

Ryan Isaac: He said that you’re relying on too much. It makes your core weaker. It’ll feel weird without it, you’ll feel weaker without but you’ll be stronger eventually without it.

Reese Harper: So when he gave you this advice.

Ryan Isaac: Yeah.

Reese Harper: Did you, did you take to internalize that and kind of like go, you’re right, you know, I kind of need to do that. Or what did you did?

Ryan Isaac: Yeah, I mean, I think so. I mean that’s very specific, just off the top of my head. So you asked about it.

Reese Harper: Did you internalize this?

Ryan Isaac: Well, yeah, so like a weight belt, you know, if you start like squatting heavier, dead, lifting heavy, a weight belt, gives your core something to push off of, you tighten the belt really tight around your core and it gives you your, you can push out against, it stabilizes you. So thinking about not having that, yeah, internalize it for sure. Cause I thought like, Oh man, I’d probably drop more lifts or I won’t be able to lift as much. And that kind of feels weird. I’m used to doing it, but he’s better than me and knew more than I did. So I thought, okay, you know what you’re talking about. I’ll listen to what you’re saying.

Reese Harper: Okay. So, so the advice you got from him is, do you, would you say he lifts more than you?

Ryan Isaac: Oh yeah.

Reese Harper: Is he’s stronger

Ryan Isaac: 250, and he’s like.

Reese Harper: More capable.

Ryan Isaac: Yes. Yeah.

Reese Harper: Just a general overall better person.

Ryan Isaac: We call him the bear. We call him the bear. He’s so strong.

Reese Harper: Okay. So that.

Ryan Isaac: Shout out to the bear.

Reese Harper: Okay, that type of advice, was that paid or unpaid advice?

Ryan Isaac: Unsolicited advice. But I do bring him, um, uh, Swedish fish a lot.

Reese Harper: Okay. So there’s some kind of intermediary compensation

Ryan Isaac: A little bit, yeah, yeah.

Reese Harper: What if another person.

Ryan Isaac: I told them how to allocate is he’s a teacher. I told them how to allocate his account and his four o three B, he brought a statements one day.

Reese Harper: Yeah, okay, nice.

Ryan Isaac: Yeah, we swapped advice.

Reese Harper: Okay. So this, you’d have to look at this and say this is pretty authentic.

Ryan Isaac: For sure.

Reese Harper: Unsolicited.

Ryan Isaac: Yeah, he’s my friend. He’s my friend who knows more about something than I do and saw an area that I could improve in to. I wasn’t catching myself cause I didn’t have the experience in it and he told me about it.

Reese Harper: Okay. So,

Ryan Isaac: and by the way, this is like three months ago too, and I don’t know why that was just off the top of my head, but it was actually true.

Reese Harper: Yeah.

Ryan Isaac: Yeah. It’s, it’s been helpful. Yeah, it’s been way helpful.

Reese Harper: So let’s say there’s another guy in the gym that it comes to give you some advice and he gives you this same, a similar piece of advice, a different piece of advice or health advice.

Ryan Isaac: Okay.

Reese Harper: And he gives you the advice to, while you’re lifting, I want you to, you, you should be using this, particular workout drink. It’s a pre workout shake.

Ryan Isaac: Okay. All right.

Reese Harper: And it’s the best he works out with you.

Ryan Isaac: Yeah.

Reese Harper: He’s your friend.

Ryan Isaac: Yeah. And he says, take the, take the shake.

Reese Harper: Yeah. Take the shake.

Ryan Isaac: Shake it up.

Reese Harper: You should do it.

Ryan Isaac: Yeah.

Reese Harper: You now start to smell something a little differently in that scenario.

Ryan Isaac: Yes.

Reese Harper: Right?

Ryan Isaac: Yeah.

Reese Harper: Because shake guy might have some kind of financial reasons. I don’t know.

Ryan Isaac: Well shake guy holds meetings in his living room on Tuesday nights to have other people buy the shake as well.

Reese Harper: It’s scary. Here’s, here’s the, here’s my point is that there’s, there’s advice you pay for, right? But then there’s advice that you get that kind of feels like free popcorn at a gas station.

Ryan Isaac: Like yeah.

Reese Harper: like the carwash free.

Ryan Isaac: Yeah, okay.

Reese Harper: So you get, you go to the carwash

Ryan Isaac: Like a timeshares sale.

Reese Harper: And you, there’s free popcorn there and you got to ask yourself the question is this popcorn? Like

Ryan Isaac: It’s actually the mechanics.

Reese Harper: What is this thing?

Ryan Isaac: Yeah.

Reese Harper: Like what kind of popcorn is it? Like where did it come from? Why are they giving it to me for free? Is there no cost to the popcorn? Like why would they give this away? Do they charge too much for the car wash then, like getting close, getting paid for giving me the pop.

Ryan Isaac: Why am I eating it at a carwash?

Reese Harper: Why is the bag so small? I knew they weren’t giving me a good portion size. They’re being cheap on me. Like you just start worrying about this stuff. Okay. I know you’re all thinking like, I’ve never done that before. This is.

Ryan Isaac: You’ve eaten popcorn at a car wash. And if you’re not, you’re lying.

Reese Harper: So there’s just this, there’s a difference between, I get something for free, right? Like the guy can’t give you advice at the gym to take his shake for free unless at some point down the road he knows that he’ll make money on.

Ryan Isaac: Sure.

Reese Harper: Your shake purchase.

Ryan Isaac: Yeah.

Reese Harper: You can’t meet with a life insurance broker or even a mutual fund salesman or a 401k TPA or an estate planning attorney or a tax play planner or a financial advisor. I mean whoever you’re meeting with, the truth is like they have some way they’re going to get paid and either the payment you give them is going to compensate them for advice on an ongoing basis where they have to live or die by what they tell you.

Ryan Isaac: Yeah.

Reese Harper: Or they’re going to get compensated through some intermediary product, I. E. The shake guy that gets compensated through the shake. The guy that was talking to you about the belt stuff, he wasn’t going to get paid in any scenario.

Ryan Isaac: Well friendship.

Reese Harper: That’s advice.

Ryan Isaac: Yeah. I mean it’s like

Reese Harper: It’s the most pure form of advice. Right?

Ryan Isaac: Yeah.

Reese Harper: Now, you could argue that if he doesn’t lift with a belt, right, if that’s his, he might be stronger than you and he might be more capable and maybe that’s not the best advice. That’s him projecting.

Ryan Isaac: That was. It works for him.

Reese Harper: That’s what worked for him. Right, and, and, and in my experience, I don’t like to get advice from people who I’m not paying to give me actual advice. I don’t like free advice

Ryan Isaac: Yeah the free stuff.

Reese Harper: Because even if it’s well intentioned from my friend at the gym, who’s he still bringing baggage to that conversation.

Ryan Isaac: If I, if I said, I’m going to pay you 100 bucks a week to just watch me lift and then you got to

Reese Harper: Assess me.

Ryan Isaac: He’ll think about it more than the free events.

Reese Harper: He will!

Ryan Isaac: Yeah, I’m going to get something different.

Reese Harper: You going to get something very different. I would never want to get advice from the guy selling me the shake. Especially if it’s ancillary advice. Just like I don’t want the, the car wash to give me free popcorn. I want him to just

Ryan Isaac: I’m paying for a car wash.

Reese Harper: Pay my, just lower the cost of my car wash.

Ryan Isaac: Don’t give me any popcorn.

Reese Harper: Just like cut the cost you get out.

Ryan Isaac: Do you get out, Where do you wash your car that you get out and eat popcorn?

Reese Harper: Well, I don’t like get eat it anymore. It’s ever since I changed my dietary preferences. I still have a nibble.

Ryan Isaac: Okay.

Reese Harper: No butter added.

Ryan Isaac: Okay.

Reese Harper: well it’s not really.

Ryan Isaac: But you’ve gone car wash where like you hand them the car and then they wash it for you.

Reese Harper: Well this is if I was going to get it detailed.

Ryan Isaac: A nice car wash.

Reese Harper: Yeah. I mean my.

Ryan Isaac: Because I’m hitting the $3 one, down the street.

Reese Harper: It’s the Chevy Silverado needs to have the plastic seats cleaning up kind of car wash. So you get it. I just think it’s important for listeners to think about the type of advice you’re receiving and is it paid advice or is it an opinion of something, someone that’s free who is getting compensated through an intermediary product? There are, there are nine 95% of the people who are giving you advice in your life are either free, which affects their advice, or their getting paid through an intermediary product. I mean, tell me that number of people in your life who give advice on a regular basis that are not free, that paid. Like how many paid pieces of advice do you get?

Ryan Isaac: Like is the seeking there for their time.

Reese Harper: Yeah. Think about that.

Ryan Isaac: Yeah.

Reese Harper: I mean even most of your CPA relationships that are supposed to be as objective as possible, you’re hoping that, that’s the case. They’re actually getting paid to file the tax return and help you comply with federal law, but they’re not getting, you’re not paying them in some of your relationships. Not all. Some of your relationships don’t actually pay for advice. You’re just paying for filing of your return.

Ryan Isaac: Yeah.

Reese Harper: And the CPA will consequently in many cases have advice that corresponds to filing the return.

Ryan Isaac: Yeah.

Reese Harper: Cause that’s the job he’s getting paid for.

Ryan Isaac: Yeah.

Reese Harper: It’s not getting, he doesn’t get paid if that tax return, it doesn’t get filed.

Ryan Isaac: Yeah.

Reese Harper: He doesn’t get paid if he just to like sit down with you. Let’s extend it for like 17 years and just talk about tax. It’s like he’s filing.

Ryan Isaac: Yeah. That’s the job.

Reese Harper: Same thing with attorneys. They can get paid to draft a will say Venmo.

Ryan Isaac: I mean I was thinking about most industries are that way. I mean most industries only can compensate on the delivery of a product

Reese Harper: A house the realtor isn’t giving you real estate advice.

Ryan Isaac: Yeah.

Reese Harper: They’re selling you the home.

Ryan Isaac: Yeah.

Reese Harper: The mortgage broker’s not giving you financing advice on your loan. They’re getting paid to sell unique mortgage.

Ryan Isaac: Yeah, that’s true.

Reese Harper: Everyone. Most everyone is that way.

Ryan Isaac: Except for your therapist and your financial adviser, which most of the time or the same thing.

Reese Harper: Yes. They’re the same. Consult consultants generally are getting paid for advice. Most consultants are, unless they’ve got some product they’re selling that you don’t know about. That’s the real moneymaker. He got it. You got to dig.

Ryan Isaac: Yeah.

Reese Harper: But like you really got to follow the money trail and be like, and I think this is where it gets really confusing when it gets to wealth management and financial planning because most people are thinking right now, well financial planners are getting paid on those investments. They’re selling me investments. They don’t get paid unless I give them money.

Ryan Isaac: Yeah.

Reese Harper: And I would say if that is the case with your financial advisor, then you are right to feel that way.

Ryan Isaac: Yeah.

Reese Harper: Because what happens is a financial advisor don’t have any kind of like minimum revenue that they need to make or some kind of fixed fee or any kind of.

Ryan Isaac: hourly agreement

Reese Harper: Hourly agreement or any kind of consulting arrangement. Like if.

Ryan Isaac: Or you could go implement everything by yourself or with your brother-in-law or somewhere else, but you’re just paying for the person’s time.

Reese Harper: Yeah.

Ryan Isaac: Like basically.

Reese Harper: well, no, I’m just saying, well not quite. That cake is implementing yourself. I, that’s not what I wanted to bring into it.

Ryan Isaac: Okay.

Reese Harper: But I’m saying

Ryan Isaac: I want to make this hard.

Reese Harper: Yeah. You’re making it difficult for me. It’s already hard as it is. I think it’s, if you, if the financial person that you’re working with says whether you give me 50,000 or 500,000 or 2 million or 50 grand, I’m going to give you a plan and guidance and be your, your financial advisor

Ryan Isaac: No matter what you give me.

Reese Harper: Like if, yeah. Then basically what they’re saying is like they don’t like, they don’t have an actual cost and they’re getting paid. Hopefully at some point. What they want to with that person is hoping will happen is that you won’t ask any more questions so that they can just sit on the product. The product is,

Ryan Isaac: yeah, the bragging rights in our industry among, we’ve had peers that are.

Reese Harper: Say that like I just, they’re not housing clients.

Ryan Isaac: Never call him.

Reese Harper: No one has called me for four years. It’s amazing. Well that’s a product focused relationship.

Ryan Isaac: Yeah.

Reese Harper: And, and so when you see a financial advisor, let’s say like Dennis advisors or other financial advisors who are saying, I’m sorry, like to access this package of services that we have, you have to pay something and you can either pay that through a specific amount of money that I managed for you or you can pay me in an hourly rate or a fixed fee.

Ryan Isaac: Yeah.

Reese Harper: That’s starting to get in the vein of like, nor like we’re now starting to smell like advice.

Ryan Isaac: Yeah. Do you want 10 hours of someone’s time every year? Do you want 40 of someone in time every year? Do you not care? Really? You just want them to invest your money?

Reese Harper: Yeah. Because if you’re just trying to get somebody to invest your money, you might as well just find the lowest cost provider that does that. In which case Vanguard’s a really good option.

Ryan Isaac: That’s why they were invented.

Reese Harper: And you can like call them on the phone and just have them like, yeah. By the mutual funds for you.

Ryan Isaac: Yeah.

Reese Harper: And the real question is if you call vanguard and you’re on the phone with them and you’re saying, is this like the best total stock market index fund that I should even own? Or is this the fund I should own? Don’t expect to get advice from them on that because

Ryan Isaac: How should I allocate this? Should I, Well, let me tell you a story then. So, two weeks ago and.

Reese Harper: Just finish that thought. They are not going to tell you what and outside of their fund family you should use, they’re not gonna give you funded advice.

Ryan Isaac: Fund advice or decision.

Reese Harper: They’re going to give you product advice

Ryan Isaac: Specific to what they.

Reese Harper: Specifically what they sell.

Ryan Isaac: So in the last two weeks I sat down, we’ll just call it a family friend, not a client. He is like three years from retirement.

Reese Harper: Okay.

Ryan Isaac: Fairly good sized portfolio that’s allocated to like 95% domestic stocks like three, three years before his retirement and it’s all a vanguard. And I sit down with this person and kind of just, you know, as a friend gave some of my time to walk through this and like you’re, you’re illustrating something that’s been happening. This is a very intelligent person.

Reese Harper: Yeah.

Ryan Isaac: Like self directing, like spends time researching very smart person who’s worked directly with them for a long time, but they’re three years away from needing the money sitting in 95% equities had been undiversifiable globally for this whole time and have some kind of like more expensive funds to, you know, and it’s, and it’s like interesting because he got access to the products but not access to like what should I do in terms of how my career is evolving and when I need this money. In my time frame or how should I allocate this thing?

Reese Harper: Yes.

Ryan Isaac: You know, it’s always been like, well what do you want to do? I don’t know.

Reese Harper: Think about the incentives that vanguard has in that model.

Ryan Isaac: Not even saying like they were, I mean they provided a service, they provided access for this person to buy cheaper funds that he could have it like prudential or I mean whatever is some other.

Reese Harper: Yeah and were not saying you can’t buy products and without advice, you can, you could totally just go buy products like that.

Ryan Isaac: Now more than now, more than ever.

Reese Harper: Like you can go buy a house with a realtor and,

Ryan Isaac: but this decision, [crosstalk]But it was scary

Reese Harper: Because decision making is not the same as the, by having someone give me advice about which house to buy and how to buy it and whether it’s the right time for me, I have to pay for that advice.

Ryan Isaac: Yeah.

Reese Harper: I can’t ask a realtor about that and I can’t go to vanguard and just assume that I’m going to get advice.

Ryan Isaac: Yeah. Well, and I mean he got free advice from me. I’m not rebalancing his account. I don’t know if he made the changes.

Reese Harper: Yeah.

Ryan Isaac: Exactly the right way. But if there was a 30%.

Reese Harper: He got free advice from you,

Ryan Isaac: He got free advice from me, which is basically like it was in that moment.

Reese Harper: It’s a little better than nothing.

Ryan Isaac: It was better than like if we had a 30% downturn before he’s done working, he couldn’t be done when he wanted to. I mean it was like I looked at these statements and thought, holy cow, man, I’m glad we’ve been lucky and had a good run, but it’s time to change this stuff.

Reese Harper: Yeah.

Ryan Isaac: You know.

Reese Harper: you are like the guy that in the story.

Ryan Isaac: You’re gonna be the story of.

Reese Harper: Going to be the same.

Ryan Isaac: You’re going to be the story.

Reese Harper: My account die and.

Ryan Isaac: Wall Street rob me and those stock market’s screwed me out of retirement and it’s, it’s fall. And it’s like, no, you hold almost all equities a year before he retired. That was the problem and no one, and you didn’t have anyone in your life that was compensated to just give you advice on whether that was right or wrong to make that change. And so you’ve never made that change.

Reese Harper: Yeah. And so, so just to recap this, historically, financial advisers did claim to, advisers didn’t exist historically, it’s more something more recent. Okay. But historically financial professionals, financial people, they, the value they were claiming to add was through products that, that was the value they were claiming to add. Stock access, mutual fund access product access.

Ryan Isaac: On one hand it was uh, I mean there was no other way there. So that was it. A value, it was.

Reese Harper: At one time in the past they gave value as the market shifts. Then that same compensation model didn’t work anymore. John Bogle comes out and says product is cheap. Like you should just buy it direct.

Ryan Isaac: Yup.

Reese Harper: Go to Costco, buy wholesale mutual funds. You don’t need to like go in,

Ryan Isaac: They don’t sell financial products yet. Do they?

Reese Harper: They will one day. I mean they’re going to have to get

Ryan Isaac: like right next to like

Reese Harper: It’s too regulated.

Ryan Isaac: Yeah.

Reese Harper: They’d rather to probably keep rather doing a trips. Disney cruises

Ryan Isaac: A tire, a cruise, a big thing of raisins and a mutual fund.

Reese Harper: Okay. Ryan and I are here trying to preserve our jobs. We don’t want to be like gobbled up and lose all our clients to the big bad vanguard. The truth is like we use vanguard funds and like almost our portfolios people, like we liked them, we liked the product.

Ryan Isaac: It’s a good.

Reese Harper: It’s a really good product.

Ryan Isaac: It’s good product.

Reese Harper: It’s an, and I should have started at the top of the show with this. It’s a real good product but it’s a commodity. Okay. It is a commodity and it’s starting to become like such a commodity that there’s like not a discernible difference between vanguard total market [crosstalk] and Stock Fund. I share, you know IWV Russell, 3000 indexes, State Street’s total market fund, wisdom tree’s total market fund, even active management costs is coming down.

Reese Harper: So I guess what we’re saying here is that financial advisors used to be product centric okay, so I can understand why everyone’s like get the product cheap, gets the product cheap. You should really be asking though other questions. Okay, so if you’re going to pay anything beyond free, which is you should be either free because product is free now. I mean,

Ryan Isaac: Yeah.

Reese Harper: Like there it should be on [crosstalk] less than five bips. Okay. Like it’s, it’s basically free if you’re paying 0.25% just for product from betterment, you’re overpaying like fidelity direct, Schwab direct, vanguard direct, like you, you can get it almost free as long as you’re willing to let them know.

Ryan Isaac: What’s crazy is all those places, no, they’re, they’re raising their prices.

Reese Harper: Well Betterman is and so as well front. Why? Because they’re actually providing a service.

Ryan Isaac: Yeah.

Reese Harper: You can call them.

Ryan Isaac: They want to talk to humans fine, now we have to double our charges.

Reese Harper: You want to talk to us humans, you’re going to call and we’re going to,

Ryan Isaac: you don’t want to push buttons on the app the whole time. Fine.

Reese Harper: Just go to the app. It will be cheaper, everyone’s like, I don’t get it. The numbers are not making sense to me. Why did my account just go down and talk to a human?

Ryan Isaac: Yeah, I want someone to talk me out of this bad decision I’m going to make.

Reese Harper: There’s a lot of things that are worth paying for, so you’re either should be free. That’s the, you’ve got to like decide are you the free person or do you want some advice? If you want some advice, there’s a lot of spectrums of how to pay for it, but you think about why you would want to hire an advisor. Why, why vanguard might say this person is worth paying for. Okay.

Reese Harper: You can reinvest your time at a higher rate. You can, you know, build some intellectual capital in your practice by focusing on marketing and letting someone else do a lot of this, like financial jobs that need to be done. You can get some really important behavioral coaching and making decisions during very difficult.

Ryan Isaac: which is another advocate, which is what half of the findings at vanguard publishes are. They come from behavioral.

Reese Harper: yeah.

Ryan Isaac: I mean, half of the value.

Reese Harper: Yeah. If you haven’t listened to our podcast on, what financial planning is really, is that the name of it?

Ryan Isaac: Oh, what is fun? What does financial planning mean?

Ryan Isaac: What does financial planning even mean? We go through a laundry list of jobs, you know, hundreds of little jobs that like you don’t have to do, your financial adviser can do them. Um, you can have someone help you get some clarity like once or twice a year on a big choice you have to make, you know, sometimes like you’re, that big choice is, is so different if someone else is just there by your side and like helping you stay accountable, and you know, getting up with you, you know, and working with you throughout the day and working with that and through throughout the year when you’ve got a challenge. So this is nice to have that person who’s

Reese Harper: Talking you through something. I mean I was just on the phone call right before this. This is the same kind of thing, you know, feeling some anxiety and some stress. It maybe do something risky or outside of a area of expertise and just having a sounding board, you know, like here in another human being walked through something with you.

Ryan Isaac: I agree. And I just think that it really basically boils down to like a financial advisor can save someone a lot of time and help them make smarter decisions. You save time like in a lot of different ways. Like by saving you time you can, you can reinvest your own time and grow your net worth by focusing on other areas or you can, you know, they can save you time that you would just otherwise waste on stuff.

Reese Harper: You don’t even worry about it.

Ryan Isaac: You just don’t efficiently get stuff done. Like I mean how many times like is this the hypothesis I have right now? This is my bias and I didn’t have this when I started business, but I’ve got it today, which is I think that by paying someone who has economies of scale and as smarter at this stuff than you are, I think you’ll actually spend twice as much of your own time then we would spend as a firm, like if someone hired our firm today and they said you guys do the jobs for me versus all do my the jobs on my own. Like, as long as we all agree that of the jobs that need to be done right.

Ryan Isaac: You know, x job on insurance, on disability, on life insurance, on debt,[crosstalk] financing, on investments, on retirement plans, on taxes, on estate planning will.

Reese Harper: Might take us like 30 hours in a year.

Ryan Isaac: It might take us 30 hours, but it will take you 60.

Reese Harper: Yeah, I believe that.

Ryan Isaac: I believe that. So if you’re 60 hours is worth 500 an hour or if you’re off times worth anything to you, if your family time’s worth anything to you, like if you like your,[crosstalk] once you’re tying starts mattering at all, all you’re doing is you’re basically like wasting time because like, it just, you’ll spend half as much money by paying for this stuff to get done in a lot of cases, if your income is high enough and if your net worth is high enough, meaning like you’re a dentist for sure. Other occupations I think would work towards needing an advisor.

Ryan Isaac: Here’s the truth about financial planning though. The higher someone’s income is and the higher their net worth is, the more it makes sense to not do this stuff on your own and the lower your income is and the lower your net worth is your, that’s where we have a big challenge in the industry right now. We’ve got to help people in that part of the market.

Reese Harper: We do, but that’s why it’s cool to see betterment and wealth front and, an in house call center at Vanguard. That’s really cheap. I mean there’s a huge market that needs that.

Ryan Isaac: So shout out, but an elements APP coming out, to a place near you.

Reese Harper: We’ll throw a hat and.

Ryan Isaac: Throw my hat in the ring there and the next few a months.

Reese Harper: New grads, new students.

Ryan Isaac: People that have low incomes and low net worth or even average, even median income and median net worth

Reese Harper: Aren’t ready to hire someone or.

Ryan Isaac: There not ready to like, it’s expensive to get like,

Reese Harper: yeah, it is.

Ryan Isaac: You know.

Reese Harper: You’re asking a human being to walk, you know, 20 to 30 hours a year with you through a bunch of different tasks. I mean, it costs money.

Ryan Isaac: Yeah. And so I just, I think it’s important to make sure that we don’t convolute someone who comes to a thread and says.

Reese Harper: Yeah.

Ryan Isaac: I want to hire a financial advisor. Do you guys think it’s a good idea?

Reese Harper: And everyone’s like No.

Ryan Isaac: No you idiot. Just go to vanguard. It just, this is the, it’s a really important concept. So yeah, on that note, on a good cloth, blinky, thanks for joining us today. If you have any questions that you’d like to throw in a forum, we have our own forum. It’s very good. It’s awesome. It’s a great forum, Dennis advisors.com/group it’s our Facebook group. Go post questions, polls.

Ryan Isaac: We take questions for our Q&A episodes from there. So Dennis advisors.com/group. Do you want to talk to one of our advisers? Maybe you’re wondering, Hey, is now a good time to hire someone? Maybe I should wait until your APP comes out. Use the APP a little bit. What do you think, Reese?

Reese Harper: I think that if you’re calling learned about this question, and if you’re on the fence about whether you should save like money and not pay for professional advice, then that’s a relevant question. You should be contemplating our option and a bunch of others. Let’s talk about it, you know? But humans will always be of, I just think that if you can afford a human, you’re going to get a better result. If you can afford a human, you’re gonna get a better reason.

Ryan Isaac: I like that. So call us. Call and chat to one of our humans. We have great humans. I’m biased, but I think we have really good humans here. You can call us at eight three, three DDS plan. You can text us humans at the same number, eight three, three DDS, plan or book a free consultation in our website, Dennisadvisors.com. Click on book free consultation. Thanks everyone for joining us. Until next time.

Reese Harper: Carry on.

Ryan Isaac: Thanks again for listening guys. I really hope that you enjoyed the show.

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