-> Create Your Custom Strategy To Retire Early
It doesn't make sense to hire an advisor if you're not getting significant value in excess of that fee. There's both value you can quantify and value that's less quantifiable - peace of mind.
Ari shares a real client story who has had multiple financial advisors and what prompted them to make their decision.
Here's to retiring only once, and doing it confidently!
Email me directly: ari@rootfinancialpartners.com
Create Your Custom Early Retirement Strategy Here
Ari Taublieb, CFP ®, MBA is the Vice President of Root Financial Partners and a Fiduciary Financial Planner specializing in helping clients navigate the nuances of an early retirement.
PS: Before anyone decides to move forward with our services, I want to ensure we're the best fit to help you reach your goals and I personally have the first conversation with you.
-> Create Your Custom Strategy To Retire Early
It doesn't make sense to hire an advisor if you're not getting significant value in excess of that fee. There's both value you can quantify and value that's less quantifiable - peace of mind.
Ari shares a real client story who has had multiple financial advisors and what prompted them to make their decision.
Here's to retiring only once, and doing it confidently!
Email me directly: ari@rootfinancialpartners.com
Create Your Custom Early Retirement Strategy Here
Ari Taublieb, CFP ®, MBA is the Vice President of Root Financial Partners and a Fiduciary Financial Planner specializing in helping clients navigate the nuances of an early retirement.
PS: Before anyone decides to move forward with our services, I want to ensure we're the best fit to help you reach your goals and I personally have the first conversation with you.
I'm one of the weird advisors that doesn't think every single person needs to work with an advisor. Now, other advisors don't like when I say that because it's bad for business, but it's true. I think it just depends what stage of life you're in and what experience you're looking for. Some of you I know you, and it doesn't make sense to work with an advisor. It just depends what stage of life you're in and ultimately, once again, what is the experience you're looking for. The two most common phrases that I will hear and other advisors tell me it's I don't know what, I don't know or I know enough to be dangerous. So today's episode is not me going through. Here are 10 reasons you should or shouldn't hire an advisor. I go through three primary considerations, but more than me going through that, I'm giving you a client story of someone who actually had multiple financial advisors and how they thought through their process. I think it's going to be insightful for you.
Speaker 0:Now, the audio on this episode, once again, is not the best, unfortunately, because I did record this while driving the state of mind I was in. I wanted to have it come across that way. So hopefully that you guys find this episode helpful and we're going to hop right in. A few weeks ago I recorded a podcast and the audio wasn't the best, but I had a point that I wanted to get across. It was a client story. Now a lot of you listened to that episode and said, ari, I want more of that. That was awesome. I don't care, the audio wasn't great. So I said, okay, this is resonating. I want the audio to be the best because when I listen to podcasts and the audio isn't crisp, I'm saying, hey, I wish this was, because it's just nicer to listen to.
Speaker 0:The reason I'm telling you this is because I've got one more client that I want to bring to your guys mind, and the client that came to me was working with Vanguard, and if you're familiar with Vanguard I imagine most of you are, but if you're not, vanguard super low cost index fund approach. They had come to me and they've already had three advisors. So they came to me and they had three advisors in the past. They were burned by one advisor who was selling them these products with high commissions. They said, hey, ari, we were young, dumb, didn't know what we were doing is what it is. Then they had another advisor who was a friend of theirs and their friend actually did a good job, but then they retired. So then they're going. Okay, now what do we do? They were passed off to another advisor and they said you know what? We've got to figure this out ourselves.
Speaker 0:So from there they went to Vanguard, which is the super low cost once again index fund solution, and Vanguard is great. Let me be clear I like Vanguard, and Vanguard was giving them some very basic guidance on how they should invest their funds, and I believe the basis points that they were being assessed is 35 basis points. So 0.35% was their annual fee, which is very low, and they were getting some basic guidance. Now they came to me going Ari, I don't know if it makes sense for us to pay you, because we're getting good guidance right now. It's not the best and maybe we're leaving something on the table, but it's pretty good right now. I said, great, like I don't think it makes sense to pay me anything until we even see if I can add value. And there's, of course, the quantifiable way of looking at should you hire a planner. And then the not so quantifiable piece, and the reason I'm bringing this up today is this is a current client of mine. So I, of course, could cherry pick and show you a client where they didn't end up working with us and I will in the future.
Speaker 0:I'm all about transparency and showing you guys these stories, but the reason I'm titled in this episode is when should you consider hiring a planner, instead of why you need a financial planner, because I don't think all of you do. Now, other advisors don't like when I say this because they go no, ari, don't say that You'll need to work with an advisor and I tell them who cares. It depends on what stage of life you're in. If you're 20 years old and you just want to make sure that you're saving and doing all the right things, I tell you probably don't pay an advisor. Like set yourself up well, educate yourself and you'll be in a pretty good spot. Now some people truly just do not want to ever think about investments or look at it and there could be some value of having an advisor. But I'd probably say don't work with us. We work with people that want to retire early. Those are the only people that I work with and the benefit from that is that's where I can add significant value because of all the tax planning work that I do Because of the estate planning, because of how income gets generated and you know where to pull from what.
Speaker 0:So I'm telling you this because I want to go through three quick reasons on when you should consider hiring a planner. Number one is if you're not sleeping well at night. The first reason, before we go through any financial examples, is if you're not sleeping well at night and the client that came to me, they're like already I'm at Vanguard but I'm not sleeping because I know I could be doing better. I know I haven't had a great advisor in the past. I don't know if you're going to be a great advisor if I work with you, but I know I'm leaving something on the table and some of the stuff that you talk about resonates. So I said, okay, let's even have a chat to see if it makes sense.
Speaker 0:That's step one. And what they were telling me is that when they asked their Vanguard advisor what the right allocation is, it's a little cookie cutter, it's like here's your age, here's the model, and they told me that their model would not allow them to have 80% in equities, even though they ran some planning projections themselves and they knew that that was the right allocation for them. And Vanguard just wouldn't let them do that, because if they didn't fail at a certain form or paperwork, vanguard's going wait a second. This doesn't make sense. Look at your age Like, your age just shouldn't allow for this amount in equities. What Vanguard didn't understand is they had a pension that was going to cover all of their needs. So, once again, going back to being cookie cutter, I'm not going to ask someone their age and risk tolerance.
Speaker 0:And so this step one once you consider hiring a planner, are you sleeping at night? Some of you are like, yeah, I'm sleeping great. I'm like, great, maybe don't hire an advisor. But some of you are going you know what? Yeah, I'm sleeping well, but I just don't know what I'm missing and I don't want to look back in five years and go why didn't I look at planning earlier when I could have added millions of more dollars to my plan through just thinking through this a little differently? That's number one. Number two is is your advisor competent, meaning, are they a certified financial planner, which all of us are here at Root Financial Partners? But that's, once again, step one. Okay, a lot of dopey jokes you're gonna hear from me. You've probably heard a lot of these already.
Speaker 0:But a neighbor of mine a few months back said Ari, I think I should consider hiring you because you're a fiduciary. I said no, no, no. That's when you're gonna consider having a conversation with someone. That's the basis of when we're gonna even consider talking. When you hire someone is when you see that there is quantifiable value and the not so quantifiable value Because at the end of the day I asked all my clients. I said why did you actually hire us? And they said, Ari, to be honest, I hired you and your team because tax planning was not happening in my plan. I said okay, and this is the current client. I said is that the only reason they go? Yeah, pretty much Like I have a good advisor today. I know I can be doing better. I see the value of doing tax planning with you and your group, so that's why I'm hiring you. I'm like, okay, a few years go by, I said why are you working with us? And they said well, I'm working with you because I don't want to have to deal with it. I now see what I was leaving on the table by not investing a certain way. I now see the value of estate planning. I now see why insurance is important, yada, yada.
Speaker 0:So the point of this is is your advisor competent? Meaning, are they a certified financial planner? Do they have other designations? You know I have my MBA as well, but the reason for that is I want to be able to run a business a certain way. I want to run my practice a certain way. If an advisor doesn't have their MBA in addition to a CFP, it doesn't mean they're bad, and if an advisor has a thousand designations, it doesn't mean they're good. So I've seen people and interviewed and trained advisors who have all the designations in the world and I wouldn't give them a dime of my money.
Speaker 0:So number three here, which in my opinion is the biggest, not just can I add value, not just is my advisor competent, but do you enjoy meeting with them? To me, if you're working with an advisor, I don't want you going ugh. It's boring. Already again that's going to talk to us about numbers and graphs. I don't subscribe to that. I believe in saying I can't wait for this meeting with my advisor. Unfortunately, that's not the case. I want hiring an advisor to be up there, just like you married your dream spouse, you picked your dream college, you have your best friend and you have your advisor. Unfortunately, that is just not the case.
Speaker 0:More often than not, people coming to me they've had two, three, four, five advisors and now and sorry for the audio, I know once again. But people are coming to me and they are saying, once again, I need help. I just don't want to get screwed over. At the end of the day, if we're just being transparent, people are going. I don't want to pay a fee and not get value for it clearly, and I tell people please don't pay the fee, but on top of that they're going. Hey, I want to make sure that if someone you know I hire resonates with me that they're going to speak a language that's going to resonate with my spouse, because one day I'm not going to be here and I want my spouse taken care of. And if this advisor uses all these big fancy words that I understand because I'm a podcast listener and I understand Roth conversion language, but they do not want to hear about it, I want to make sure that this advisor understands how I want my spouse to be spoken to. So there's multiple levels of planning and here's how I like to break it down.
Speaker 0:There's three types of advisors, there's a financial picker. This is traditionally, even in the 80s and 90s, someone who's just going to say you know what? Client X, client Y, you need this stock, apple stock, is going to do XYZ for you if it grows like this over time. That's like level one. They're not doing tax planning, they're not doing insurance guidance, they're not doing estate planning. That's level one. They are a financial picker. They are picking solutions for you. Then there's level two. Level two is a financial planner. Now, a financial planner there's a lot of these today, in my opinion Someone who's going to say you know what, joe and Sally, what's your name, what's your risk tolerance, when do you want to retire?
Speaker 0:Let's plug some figures into this graph or this calculator I found online, and it's going to spit out a model and it's going to spit out a level, percentage of success, and that's level two. Then there's level three. Level three is a financial protector and that's what I view ourselves as, which is not what's your age and risk tolerance, but to tell you what do you really want to do with your life and, based on that, is your plan accurately reflecting that? And that's it. Let me get to know you If I don't get to know you and you don't know what you want to do in retirement, then that's a problem. Let's talk about it and maybe with us or with our retirement lifestyle coach, who's on staff and it's asking hey, what's your estate plan? You're like, no, I already have a trust in the will and we'll tell our clients. That's not what I'm talking about. I'm saying what's your plan to not die with $10 million, so you don't become a burden to children where now they don't take a job that otherwise they would have loved because they're like I don't want to get taxed like crazy. If God forbid something happens to you, guys, I'm now taxed at the highest rate. So estate planning is beyond. Do you have a trust and a will? It's saying, hey, do you have the right level of spending? Are you spending the amount that allows you to do everything you want to do? And do you understand if you don't spend it? Here's the ramifications. Do you know that if you want to leave $2 million to each child, here's what has to happen. So estate planning multiple levels to this Same thing with insurance.
Speaker 0:A lot of you are coming to me. You have umbrella policies. You don't need them. Some of you are going. You know what? I have an umbrella policy, but I'm just sleeping better at night because I have it. I say, great, I'm a financial protector, I know what's most important to you, which is your sleep, and making sure and I know the audio is a little better now because I'm on a better part of the road that, no matter what happens financially, you are going to sleep better by having insurance.
Speaker 0:I have clients that go Ari, I'm happy to overpay, I'm happy to overpay for insurance because I'm sleeping better at night. I say, great, let's understand what is most important to you. When do you want to retire? How much can you spend? And if we really don't get to know you, we really can't give guidance. So to summarize for you we're looking at this going. Are you excited to meet with your advisor? Is your advisor competent and can we add significant value in excess of our feet? If it's incremental, we'll say, hey, don't hire us. So this client that did end up working with us, who came to us from Vanguard they were getting cookie cutter guidance and wasn't bad, but they knew there was something better and we showed them how we could help. There are other instances where people have similar thoughts and they don't end up working with us, but they feel better because they go.
Speaker 0:You know what I went through your process? It was a meeting, it was a couple of meetings and now I see what we're on track for and they go. Wow, I'm in a better spot than I thought. Like I really don't need you guys and I love tax legislation and I love staying up to date on the latest. You know, financial, you name it and they're good and I say great, then don't hire us. Like I want people hiring us who are going. I cannot wait to pay the fee. Like I'm excited, I'm over the moon every month I see that fee comes out of our account and I see the value I'm getting for it. And if not, it really doesn't make sense to pay us or anyone. So when are you going to hire an advisor? It's when you're excited to meet with them. It's when you go. You know what I'm tired of leaving money on the table.
Speaker 0:The two most common phrases I hear personally are I don't know what, I don't know, okay. So some of you are going yep, that's me and more of you are going to resonate with the following, which is I know enough to be dangerous. I feel like I kind of got my head around tax gain harvesting or when to implement a Roth conversion or how to lower my RMDs, but I know high level. I don't know actually how to execute this and how this should shift, based on when I want to retire, or based on my pension, or based on when I collect Social Security, and it's the the coordination of all of those that people I find are missing and that a Vanguard type solution is not offering. Vanguard has great products. A lot of my clients stay invested at Vanguard, so they're coming to me from Vanguard where they're getting super low cost. They've been burned by multiple advisors and we're sticking with Vanguard products, so those types of mutual funds and ETFs, but we're just adding on that layer of planning.
Speaker 0:Now a lot of you will ask us the following do you do one time plans? Do you do hourly billing? Do what other options do you have? And I've tried all the options. Okay and from a profit perspective, it did not hurt our company by doing one time plans or hourly planning. I found it was not in the best interest of the client because people ended up not implementing things or implementing them incorrectly, and I found the only way to really work with an advisor effectively now this isn't for everyone, but to people that want to work with us is on an ongoing basis. So we only work with people on that assets under management model.
Speaker 0:Now some people come to us. They've got $500,000 with a million dollars locked up in a 401k people. I'm saying, hey, let's manage the $500,000 and implement it well, let's give you guidance on the million dollars and when you retire, we can talk about what makes most sense then. So it's not as if all of this has to be eligible for management by us. Now, by the way, pro tip for all of you if you are over 59 and a half and you are listening to this episode, ask your employer if an in-service distribution or in-service withdrawal is even an option. What this means is you can move your money once you're over 59 and a half for a lot of your plans into an IRA or Roth IRA and invest in however you want, instead of just those limited options that are at your employer. It could be a really helpful tool.
Speaker 0:So, with that being said, trying to put this all together for you when you're thinking about this okay, what makes sense, what doesn't make sense? Hiring a planner is a big decision and I want it to be one of the best. Unfortunately, it's not the case. So go look at Google reviews, go look at Yelp reviews of any advisory that you're considering working with to see if it makes sense. To see if people say, yeah, this guy or girl knows their stuff, but on top of that or they should, I say nowadays, they know their stuff, but do they actually find that clients like meeting with them? I know it sounds a little odd to say that, but I would ask that, okay, and then finally ask yourself, of course, meaning when you're doing research, is it? Yeah, yeah, this makes sense. This is someone that I really think I'd enjoy meeting with. I've heard their podcast. I've interviewed this team for thousands of hours.
Speaker 0:This is the group that specializes only in early retirement planning, because that's all we do. We don't work with everyone. If you are in your 70s coming to us, we'll only work with you. If you retired early before now you're retiring again because there's nuance to that. But most people they're between 50 to 65. They've got 1 to 3 million bucks in liquid assets. They're coming to us. They want to retire with confidence.
Speaker 0:So that's all I had for today's episode. Thank you. A little bit of a shorter one still at the early retirement show. If you have a question that you weren't answered in a future episode, you can always go to our website. I can't edit this podcast today just because I'm driving and I had something stuck, so I know that audio is not going to sound great right there, so I apologize for that. But you're getting it as transparent as it really is against right now. Thank you for listening. If you do want to work with us, in the description of today's episode you are going to see a link to apply to work with us and you can go ahead and fill that out and you are going to get a response based on what you fill out there. So, with that being said, I hope that this episode was insightful and I love you guys, and we will see you for our traditional podcast episode every Monday. See you guys.