You know, we spend a good portion of the beginning of our lives in school, we go to elementary school, middle school, high school, and some go on to college, some go into advanced degrees, but go through this entire all these years of education. And at some point, we get that first job, whether you're, you're not going to go to college, you're graduated from high school, you start that first big job, or you graduate from college, you start that big job, and you're getting paid. And it's all relative, of course, but you're getting paid more money than you've probably ever been paid because now you can work full time. And the irony is, is that you've got this now you got this big responsibility of dealing with money, making decisions with money, and you're making decisions based on an education you never guide. This is the problem with the school system and the education process, I believe, and which leads to financial illiteracy.

Amongst many generations is that there's not dedicated time in the school system to teach about how money works to prepare you for that day that you do start your career and start getting paid a good bit of money and learning how to live within your means. Now, I will be fair and say that some school districts are starting to implement these programs, which is good, but it's not enough we really need to see this become a priority. And so because of that, you start that first job and you think you know, and this is kind of a fortunately unfortunately thing, which I'll explain in a minute. But fortunately, you think there's the financial advisor community, all I have to do is connect with a financial advisor, they'll teach me how to do things like prepare for my retirement, create a spinning plan, make decisions, know what kind of insurance to buy.

Go with me along a lifelong journey of, of finances and help me make decisions. Be there by my side, to you know, make these calls critical decisions. Unfortunately, the vast majority of financial advisor, relationships with a client and advisor fail. And that is a big problem. And I think that the reason that you can point to that is all about human nature. You go and you sit down with an advisor.

And let's face it, this is not the most pleasant experience from the standpoint of, depending where you are and your financial, your financial situation, you may think you're extremely behind and you're embarrassed, you don't want to talk about the stresses of money, you don't want to deal with the problems, you'd rather just push it to the side Now think about it by going out and interviewing financial advisors while you're putting it out on the table. So there's a tendency to rush the process and make mistakes along the way and not get the right fit. And that's why I wanted to do a teaching program completely on how to select a financial advisor because I think it's so very important because here's the reality at it, the reality of it is, is that you have to issue trust. And this is a big problem. So I find that there's two different types of people, well, actually probably three different types of people.

The first person is, has a real difficult time with trust. So they're always going to be keep one eye on, they're never going to issue more trust in that initial trust. And they're going to get in their own way and probably sabotage that relationship with that financial advisor. And so that's that's a trust issue. Obviously, you might have found the right person but if you can't end up fully trusting them, then it's it's a problem. The second person goes by what are the old Russian proverb that ronald reagan made this quote, so very famous, he said, trust but verify this person issues in a certain level of trust as a foundation, but does not give out more trust until that trust is earned.

So it's a little bitter to chime in. Through the years, you build level of trust that you know what to expect. There's a consistency, you know that they have your best interest ahead of their own, which is a big deal when it comes to financial advisor. So trust is a big issue. Then you've got the third person, this that rushes through the process. They go through and it's painful for them.

They're embarrassed, maybe a little guilty about the decisions they made. And they lay it all out and they say, Boy, I really trust this this guy or this girl to be my financial advisor. Here you go My turn it all over to you full amount of trust hundred percent right up front. And then they do the worst possible thing is they detach from the situation. And they just assume that the financial advisors taking care of things, they don't look at anything, they don't check anything. And then 10 years later, it ends up that they find they wasted time and that is The most precious thing that we have is time when it comes to money.

Because you don't know really till you're about three or five years out, you got to if you start working with a financial advisor, and you go through the process the appropriate way, you should be able to say, Okay, I'm going to invest three to five years to see if this is the right relationship. And if it's not, then you cut your losses as quickly as possible, after giving a lot of benefit of the doubt, because you really, you're investing into this relationship. But for those who don't who detach, 10 years goes by and they've wasted a lot of time. So it's a real, real concern, a real problem, and I see it all the time. The people who trust but verify, unfortunately, are a very small percentage. So I asked you this.

Would you rather put in the time on the front end and do it the right way? Take the time, invest the time, make it a priority, or would you rather put as little as time possible on the front end and then make a have to put in a ton of time when you realize you've wasted all these years. And that's the question that I that I want to pose to you. The good news is that after you watch this teaching course, you're going to be able to do this, you're going to see it's going to make sense to you. You're going to see the ins and the outs of the financial advisor relationship. And you're going to be able to determine right away what the best relationship for you in your family would be when it comes to hiring a financial advisor.

Now, here's the, you know, the problem spot. There's all kinds of people who call themselves advisors from the property casualty agent who sells liability insurance for your home and your auto and that type of thing to the property casualty insurance agent who sells life insurance. Then you've got your stockbroker that just deals in stocks. Then you've got your financial advisor who's a registered representative of a broker dealer who deals in certain products. Then you have your financial planner, then you got your Certified Financial Planner. And then the list goes on and on of different advisors that you can choose from.

The key is, do I want to we'll talk a little bit more about this down the road after this course. Do I want to find one person that can be a jack of all trades and bring in specialties, people with specialties when they need it? So for instance, I, from a from a financial advisor standpoint, money management, insurance, financial planning are all skill sets of mind. Now, when you start getting into advanced tax planning, I bring the CPA in but I act as a quarterback between my client and the CPA and make sure that everything's going well. I'm included in every meeting, I take care of the client, make sure that they're getting the best situation for them. When it comes to estate planning.

Some of that gets pretty advanced. I am smart enough to say you know what, let's bring In an estate planning attorney, or an estate planner to, to really go through this process with you. So you've got to figure out, okay, what's my type of advisor that I that I really want, you could say that I just want a certified financial planner. Now, here's the thing about a certified financial planner, they went through all this schooling and the coursework in the educational process to get that certification, which is a big deal. That does not mean that every CFP is the right choice. That just means they've got a great edge education, you still have to kind of check the boxes and make sure that this a fit for you because there's so many things that goes into a relationship with a financial advisor, versus one that's successful versus one that's unsuccessful.

Now, some of the things that you really want to look at are is what's going on relate from a relationship standpoint? You know, you've let's assume that you've checked the boxes from the standpoint of Okay, the advisors, competent advisors has shown a degree of success. had the experience, you know, they can handle the technical aspect of it. But how did they communicate with you? Do you feel rushed through the process? You should never feel rushed when it comes to the process of selecting a financial adviser, a good financial adviser will take their time and make sure that they are getting to know you.

I mean, are they into you? Are they asking you all the questions? Are they determining how your what your core values are, what your financial goals are? Because here's the thing about it is before you can even make a recommendation as a financial advisor. You need to know the backstory. And sometimes that's a couple of appointments to really understand what's going on what's important, what's their concerns, what's their fears, what's their greatest strengths, what's their weaknesses, that takes a lot of time, and most the good financial advisors will spend that time will invest that time in the process.

And we'll do that too. Show Hey, listen, I'm in this for the long haul. So I want to get every every single piece of your life and make sure that I understand exactly what's what's going on. So I can come up with the perfect recommendation. So you know, are you comfortable with them? And do they communicate and communication is one thing that is a tough one, you may check all the boxes and say this is perfect, but you may have a horrible ability to communicate, there's always these communication gaps between the two of you.

That's a big red flag because you got to make sure that you're on the same page and proper communication gets you on that same page. And the other challenge is that as you mature with your financial advisor, you're going to be talking about some pretty serious, confidential, private things. And so are you comfortable, really letting you know everybody's got a financial closet in their house? You know, that that that room or that closet where you just throw stuff into, and it come becomes a junk room? Everybody's got one? At least I think they do.

And you keep that door locked when companies over because you don't want anybody to see your junk room. It's the same thing in your financial life. Everybody's got that closet, or that room that they've got their financial regrets or financial mistakes, they don't want anybody to know. And they think they kind of come to that, that their thought that I'm the only person like this, but let me tell you, everybody's got their financial issues. I've got them. I've dealt with them.

And I've got my own financial claws that I keep locked as well. Because there's some things in my financial past I'm not proud of. But it's all a process and selecting the right financial advisors. So key to it. Now let's talk about the red flags because the red flags are very, very obvious, but unless you're familiar with the red flags, then maybe you don't know. Now in the news today is is is the talk about the judiciary responsibility.

And I almost feel kind of ridiculous about talking about this because it should be something That should be across the board, but it's not. As a registered investment advisor for myself, I will say I am held to the financial risk, the fiduciary fiduciary, excuse me, responsibility for my client, which means and is defined as I'm going to put I am bound by regulation by law to put my clients best interest ahead of mine. Now on the commission side of the business, and you got to realize that there's the fee side of it, financial advisors or financial planners who just work on a fee basis. And then there's the commission side. And that gets kind of dicey because they're not held at least at right now that the point of this taping, they're working on this in Congress and the regulators are working on this. The SEC is involved in trying to set a cross the board fiduciary responsibility for every financial advisor including those who are in debt to sell products for commission Now here's where it let me give you a good example on both sides to be fair, where this is problematic.

On the commission side, you could come to me and say, you know, Bob, I want to invest into annuities. Can you make your best recommendation? So you have two annuities, annuity a pays a higher commission annuity B. So the adviser says, justifies in his or her mind, innocently, that well, the higher commission paid is the best. And so that's the one they recommend. Now, there's never any conversations about how what the commission rate is or anything like that.

But the the there's a question now that did the advisor put his or her best interest for the commission dollar above what was best for the client? And I see this all the time, whether it's intentional, whether it's about pure sales, motivation, whatever it happens, and this is what the fiduciary responsibility The new fiduciary regulations and laws are trying to curb. Now here's the problem with this, the regulators are going to muddy the water, for sure. And they're going to make this they're gonna it's going to damage you're already seeing some damage to the financial services industry because of it. I could take if you said, Bob, will you write a new fiduciary law I could make I could do it in two pages. The current one this that's on the on the books, that's even a question mark is even if it's valid or not, it's like 100 I think it's 1000 something pages, which is absolutely ridiculous.

Now, let's shift to the fee side. Let's say that I managed money for a living if you moved your money from your old 401k plan to my money management, then is that now you're gonna start paying fees that you weren't paying before. Is there a value for that that type of that fee that's being charged, if what you're doing in the 401k if I were just to move that Money over and duplicate what you were doing in your 401k plan. I'm not creating value, I have a conflict of fiduciary responsibility because I want to move your money over the fees. But I'm not creating any value for it, but I'm getting paid fees. So that's that's that that's a good example on the fee based side.

So some of the questions you want to you want to deal with, are you working with a salesperson or a consultant? Now, I would suggest that it's very easy to determine when you're working with a salesperson, or you're working with a consultant a consultant takes their time they ask other questions. I've already kind of described what a consultants, what a financial advisor the consultants are, that's why I call it a consultant takes their time they ask the questions they get to know you they're not rushed, the salesperson rushes is all about the sale, about the process. They've spent a little time talking about your situation. And what they do is they take a product and they fit it to your situation versus taking you situation and finding the right combination of strategies to meet up with your situation they make your situation fit the product so that they can sell the product.

So you want to make sure you're working with a consultant versus a salesperson. Now there's there's three definitions of a salesperson. There's the definition that says that you go through the normal sales process. And if you if you come to terms that this is the best thing for the client, then the seller has made a commission is paid the the client invest money into the product that was sold. Then there second is the person who's all about the sales process. And they are focused on the tricks and techniques of getting you to close the sale so they can get paid commissions and then there's the worst of all three, the person that is just all about the Commission's not really they're about sales process, but they're really about the Commission's and they're gonna Do whatever it takes to get paid.

Having said all that I'm not on the purpose of talking about this is not to beat up on salespeople say all salespeople are bad. There are some great advisors who are on the sales commission spaced side. Now I think as they pass these new financial these fiduciary regulations in the making really starts to become into a part of the fabric of the financial services industry. I think you're going to start to see a lot of the commission based products go away. But there are good people, just like in any, any profession, there's people who are out for your best interest. There's out people that are out for their own best interest and you got to be able to determine who you're dealing with.

You know, other questions to ask, is the advisor captured. Now what that means? Let's say that they work for XYZ insurance company and XYZ insurance company has mutual funds and They have their own life insurance and disability insurance, that type of thing. If they're captured, they can only sell and recommend XYZ mutual funds XYZ insurance products. Now, that might be fine, they may be great products. But wouldn't you want to work with somebody?

And this is nothing against captured agents because there's good captured agents and captured financial advisors but wouldn't want to work with somebody that is able to look at the whole broad universe, which leads to the second question do you need to advisors, maybe you know that XYZ company is the best when it comes to insurance and that's the real specialty. And you could do the insurance with them. But then you look for another financial advisor that can do the investment work, or the other the financial planning work, whatever it might be. So you need to determine, do any two advisors and I would tread lightly to make sure that if if they're a captured agent that What they're suggesting is a good fit and you're getting a fair value for it. Now finally, the three secrets to getting ripped off by con artists. Here is what amazes me.

I can be driving down the road on a Saturday which Saturday am radio is littered with pitch, pitch people, pitchmen, pitching annuities pitching financial products, it's just like one big sales presentation disguised as a radio show. And not to be fair, not all of them are like that on Saturdays, but most of them aren't. And I will hear someone get on the radio and say, I have a real estate investment is guaranteed 12% per year, you get that 12% year in year out, there's no risk. And all you have to do is call one 800 this and we'll get you set up with it and they talk about the real estate and this that and the other well 12% Guaranteed is a red flag. In fact, there was one. One gentleman that was in a radio and in fact, he's on multiple radio stations on Saturday am radio that would market this real estate in this real estate investment at 9%.

Guaranteed. And I thought to myself, this guy is a con artist, this guy's ripping people off, because you just you can't get a guaranteed 9%. We'll talk a little bit how that works in a second. Sure enough, they the regulator's raided his office and found out he was running a Ponzi scheme, and people lost a lot of money because of it. The problem was the problem with someone getting on the radio is that you would think there's a little bit of credibility there. You would think that because they're on the radio because they are saying this out in public that it's that's the real deal, but it's not always a real deal.

That's always amazed me. I always kind of caught the arrogance of con artists because they'll get on the radio They'll still say things as if a regulator couldn't flip the switch and listen to what they were saying. I don't know I've never understood it. secret number one, you write the check the money you're going to invest you write directly to the bank account of the advisor. This is problematic. There are when you're working with an advisor, there's layers of protection, there's there's walls of separation.

Do you have the the advisor firm, you have their broker dealer, their broker dealer is watches over monitors. They're separate, separate company monitors the advisor, then you had the clearing house, they deal with all the money. And then you had the client. Now under the particular situation that I'm talking about is the advisor who you're writing to Xyz financial firm, you're writing directly to them, not a credible broker dealer and they can take that money and put that directly into their, their bank account and That's a situation where they could be running a Ponzi scheme. So you want a broker dealer involved in you know, like a fidelity maybe TD Ameritrade any rep Charles Schwab reputable broker dealer. That is, so you're never writing a check to the advisor.

But this is where people get in into troubles. They write that check, thinking that they're doing the right thing. Then the advisor produces false account statements and they spend their money. And if you've ever watched American greed on CNBC, that a an hour show that talks about all these ripoff artists, it's a good thing to watch because this does happen in real life. secret number two, you fall for the it is too good to be true claim. Now, I call it a filter.

If someone is saying to me that I can pay you 12% a year year in you're out and you have no risk. That's a little too good to be true from to me. And so There is a huge red flag that you're gonna have a tough time getting me past because I don't necessarily believe that that's the case that you can pay me 12% and there's no risk. So listen to that too good to be true. I got an S ask Bob about something that's circulating the internet an ask Bob is a question that goes to my website. And in the reader asked, Is such and such a scam?

Because it sounds too good to be true. And I listed all the things that were too good to be true about it and said, What do you think thing is too good to be true? Then I would if you even still considering it, I would tread lightly because typically two things are too good to be true are too good to be true. The bottom line is if you're talking with somebody and they say there's no risk, there's always a pro and a con to everything. And you always check the going rate. So what I mean by that, in the world of guaranteed rates today as the filming of that The best guaranteed rate that you can probably get is a fixed annuity taken out for for a long time at 3% a year.

So 3% pretty much is the going rate for guaranteed riskless type investments. Okay. So if there's a gap between the 3% and say, maybe they're offering you 5% or 6%, you got to say, Well, why are you able to give five or six when the going rates 3%? And so it's a it's a very fair question. So I had a client call me one time and said, Bob, listen, we'll call him Jim. Jim said that.

I have an opportunity to put money in a CD and draw 6%. Well, the going rate by all banks, the maximum you could get was 4%. I said, Well, Jim, the problem that you're looking at here is that there's a 2% gap between 4% 6% so how are they able to pay 2% more and still make money Unfortunately, he didn't heed my advice, it turned out to be a Ponzi scheme. He lost $300,000 of his own money. So always check the going rate and and ask the questions. Why are you able to pay that and you have to go further deeper into it.

I would just stay away from anything personally, and that's my own my own advice I give to myself. Anything that sounds too good to be true. That is higher than the going rate. The third secret is the investment advisor has a past. What most people don't understand is there's a set of regulations, compliance laws, that if you get into the securities industry that you have to follow. If you violate those laws, you could be fined worse if you do things like sign an application for a client boards, their signature, whatever, you could get penalized and you could get suspended for 30 days but you get back in the business.

You see, I think personally there's levels of degrees. of unethical practice, this should be one strike You're out. But the industry doesn't seem to agree with that. So your your advisor you're talking to could have a checkered past. Now having said that, if you find out that they do, give him the benefit of the doubt, ask the questions and give them their their opportunity to plead their their innocence, or admit to their guilt and how they change their ways. But, you know, if someone has been deceitful and unethical in the past, there is somewhat of a chance that that continues.

So you gotta be real careful about that. The best way to check that out is to go to do a background check broker check comm will take you directly to it, you can enter the name, the address, and you can see their record. And it's amazing to me that so many people don't do this. But before you work with a financial advisor, it's imperative that you do this. secret number four, the investment is not registered nor The adviser in this is at the heart of just about every investment scam, that you have to know, the gentleman that was there was pitching the 12% guaranteed returns, that investment was not registered. A registered investment has to adhere to a vetting process.

It has to if the regulations are there, the registration is there to protect the community and the consumer from people who are trying to rip them off. So if the person is registered, you know, they're being watched by the SEC by regulators are being audited, they have to follow certain rules and regulations. So they're so the advisor needs to be registered, and the investment needs to be registered. And if it's not, boy, I would run and for the door, and you really gotta check that out. The background check will tell you if the advisor in fact this particular advisor that was pitching the 12% guaranteed rates, I did a background check on him and he had checkered past, this should have been red flags all over the place. But you can tell and in fact, you could tell that he was not registered.

So you have if you are going to offer up a product for sale, you have to be registered with the regulators to make sure that you are doing things the appropriate way. And once again, the investment needs to be registered as well. I call this the financial advisor minefield because it's like tiptoeing through a minefield. And if you're not careful, you may step on the wrong mind and blow up. It's the same thing you I'm a bit odd. So I've got a bias here.

I'm a big advocate of having a financial advisor. I think the right relationship can work wonders for your financial future. And there's a lot of great financial advisors that do good work. The problem is, is that it's a first a sales oriented business, and the percentage of people that will what I would determine as a good advisor are smaller than the percentage people of people that are trying to make a sale. And you really have to make be able to determine the difference. Excuse me the difference between the two because you don't have time to waste