Speaker 1: If we start with social security, the greatest impact will
be primarily on the voters in red states who are
the most dependent on social security. So cutting off your
nose to spite your face, you kind of think about
it in that way. They played around with extending retirement age,
they played around with the actuarial tables, they played around
with privatization. I don't know that there's necessarily a great
answer to it, with the exception of just adding to
the already enormous debtload we have, which is in the trillions,
which obviously just spikes inflation, keeps interest rates high, and
prevents mortgage race from coming down.
Speaker 2: You are listening to Carrie Letz's Financial Survival Network, where
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Speaker 3: And welcome you are listening to and watching the Financial
Survival Network. I'm your host, Carrie Lutz got a special
guest for you today, somebody who basically is kind of
like that brother you love to hate the overachiever. That's
grade a's and everything and everything, Well, you had to struggle,
Gary Cendebrand Financial Advisor par excellent. He set the training
for Merrill Lynch when he was there. They emulated his
system and a lot of other companies are doing it now. Gary,
welcome and hey, we're kind of living in a new
world right now. We're talking about pre col majority of
people don't believe social Security is going to be there
for them in its current form.
Speaker 4: I mean the government will.
Speaker 3: I guess there's a bail in set for Social Security
where benefits could be cut from twenty five percent to
a third. If we get to that point, I think
there will be We'll see DC become an armed camp
because people just will not put up for it. But
then we have inflation. All of these things going on
with doge, etc. Greatly complicate the retirement investing landscape of
how do you deal with it?
Speaker 1: Cury, It's nice to be here. Thanks for having me
on your show. There's a lot to unpack there. If
we start with social security, the greatest impact will be
primarily on the voters in red states who are.
Speaker 5: The most dependent on social Security.
Speaker 1: So cutting off your nose to spite your face, you
kind of think about it in that way. They played
around with extending retirement age, they played around with the
actuarial tables, they played around with privatization. I don't know
that there's necessarily a great answer to it, with the
exception of just adding to the already enormous debtload we have,
which is in the trillions, which obviously just spikes inflation,
keeps interest rates high, and prevents mortgage race from coming down.
So there's a lot of complexity to deal with. One
of the trend as I've noticed, especially among the advisors
at the large wealth management firms I now do consulting with,
is our two trends that I think are gathering speed.
One is an increased personal savings rate over and above
the growth in income, over and above the growth and
popular what the normal population is doing as people move
into having to capitalize their savings to take them through
the rest of their life as opposed to depending on
social safety.
Speaker 5: Nets such as social security.
Speaker 1: At the same time that this is occurring, the average
financial advisor is probably somewhere in their mid to fifties
to mid sixties. Thirty eight percent of that group, most
experienced advisors will be retiring in the next five to
ten years. The issue that we face is that their
clients are aging as well as their clients age and
leave their money downstream to their errors. The next generation
of finance advisors are woefully unprepared, almost catastrophically. So when
I started, more years ago than I care to remember,
I got one thousand dollars a month draw against future
sales commissions. There was no plan B. You either made
it or you didn't. I made a ton of mistakes.
I survived them. I started focusing on client outcomes instead
of the firm sales pitch, and fortunately I was kind
of at the front end of the line, recognizing my
job was to solve problems for people, not to try
and predict.
Speaker 5: What the market was going to do. Somebody asked me
what the market was going to do.
Speaker 1: What an analyst thought, what a stock would do. My
basic response was if that person knew, why would they
tell you or me or anybody. So I defaulted into
things I knew over time would work. Markets equity markets outperform,
bonds outperform cash, but I don't know.
Speaker 5: What year they're going to do it.
Speaker 1: Fifty to fifty one year, seventy five over three years,
eighty percent over five, ninety five percent over ten. So
somebody says, is it a good time to invest in
the market.
Speaker 5: I don't know. I don't have an answer for you.
Speaker 1: I do know that if you've got targeted goals out
there that are twenty five and thirty years out, we've
got to have a disciplined approach to do it.
Speaker 5: And that was hard earned.
Speaker 1: So what happened after eight is all the major firms
basically dumped their training programs. Meryll was always the best
place to be trained because maryl believes in pure based training.
Meryl Lynch and I wasn't the only fa out there
had a partner Bob Pain I worked with. There were
probably fifteen or twenty other really good financial advisors. They
also trained the various aspects, and peer based.
Speaker 5: Training was really the way to go.
Speaker 1: If you want to learn how to be a pilot,
you find the best pilot you can that knows how
to teach.
Speaker 5: You don't get someone that read the book on aerodynamics.
Speaker 1: When the training dissolved, the firms basically took an approach
of let's throw a bunch of things against the wall.
And see what works, and unfortunately nothing has worked. They've
all pressed in to form teams. So vertical team is
a senior advisor such as I used to be hiring
someone maybe in their twenties or thirties that will one
day take over the book of business. The problem is
is if that person comes in and even adjusted for inflation,
instead of the thousand a month I got when I started,
they're more on the order of twelve to fifteen thousand
dollars a month because their senior partner is basically floating them.
The senior partner in a typical wealth management firm at
this point is probably making between seven to fifty.
Speaker 5: And two million dollars. It's incredibly loose.
Speaker 4: Sure who could have career.
Speaker 1: So giving away one hundred and fifty thousand They don't
really feel it. However, the junior advisor knows they just
have to survive until a senior advisor walks away. The
firm pays off the senior advisor when they leave a
substantial amount of money, and the junior advisor gets kind
of a reduced payout on the assets that remain until
it's all paid off. There's the problem. I went to
work every day, scared of death, knowing I had to
earn my spot, continue to grow.
Speaker 5: Or I'd be done. I didn't have a choice.
Speaker 1: I joined a team and all of a sudden, I'm
making something that is, you know, ten times what I
was really worth. How motivator and am I to learn?
And that's what we're seeing right now. We've got a
whole generation of advisors, younger advisors that are just watching
the clock. They're being supported by their senior advisors. They're
not prospecting, they're not hunting, which is an artful skill
that you have to have, and the senior advisor wants
to get out. They have no idea how to train
the younger advisor, how to motivate them, or how to
compensate them. That's where I spend a lot of my time.
But I have to tell you I'm not optimistic. As
clients age and pass away, their errors have no connectivity
to their parents' former advisor who's well into their sixties
or seventies.
Speaker 4: So where do you go?
Speaker 5: So they're going to go and try and find somebody.
Speaker 1: And it's got a good line at BS A value proposition,
which by the way, I think is completely useless. How
Can I propose something that you're going to buy into
if there's no proof of value, It's it's ridiculous. So
I'm concerned about the industry and where it goes. Mckensey
just released a report. It's pretty interesting on the looming shortage,
and they get some of it right, but they get.
Speaker 4: A lot of it wrong.
Speaker 1: And this is what senior leadership that the big farms
listens to. And I'm looking at it going yeah, yeah, no, wrong, wrong, wrong, wrong,
Like AI is not all of a sudden going to
replace a financial advisor unless ay, I can figure out
a way to do the one immutable talent the best
advisors have, which is empathy. Got to be a political
and we got to meet the clients where they are.
Speaker 4: Yeah, and even five people in this day and age
to do that, I don't know it. You know. It
reminds me of.
Speaker 3: Benjamin Franklin when he said he was working on his
vices and trying to accelerate his virtues, and he said
there was one thing that he really had trouble with,
and that was being humble. But he found that if
he just acted as if he was humble even though
he really wasn't, people accepted it. So AI acts as
if it's empathetic. That should be enough for most people, right,
even though it can't really feel empathy.
Speaker 1: And I saw a report the other day, I'm not
sure where I saw it, might have been on John
one of the one of the shows that like twenty
or twenty five percent of people right now have what
they would classify as intimate relationships with their AI.
Speaker 5: That's a tad frightening.
Speaker 4: Well, they really expand them. Yep.
Speaker 1: Developing an advisor's skill set is done by almost like
how Michaelangelo assembled David. You just got to get rid
of everything else and what's left is what you need
to do.
Speaker 5: It is nothing even close to what the public thinks.
Speaker 4: It's a real process.
Speaker 5: Oh yeah, and it's painful.
Speaker 1: Yeah, and experience is the best teacher. Unfortunately, experience is
usually painful. I've been doing a lot of work with
AI models where I load in baseline training from programs
I've delivered and tapes I've developed, and I'll load those
into an AI like Google LM, and then with my clients,
I do follow up zoom calls and hold them accountable
once a week.
Speaker 5: So I had the zoom calls.
Speaker 1: Transcribed at Google LM, and I blend those in and
it produces basically what I would call a kernel or
a wisdom high, if you will, because I can blend
all the experience and all the baseline knowledge together, and
all of a sudden I can ask it questions and
it will answer, not always in my voice, but it
will answer in with new information from an experienced's perspective.
That a question that could be posed by an advisor
that basically has been in business a year. So the
firms are terrified of what it's.
Speaker 4: Going to do.
Speaker 5: They're going to be very slow to embrace AI.
Speaker 3: So that's not going to be a solution, right, So
how do you get more people involved in this, motivate
them to do the hard work that's necessary so they're
not like living off a dwindling book of business.
Speaker 5: That's the question.
Speaker 1: A long time ago, I think it was in the
maybe you saw it, The Moving Major League, Tom berens there,
Charlie Sheen, all the rest of it. They were trying
to figure out to motivate the ballplayers, and Tom Berenger,
who played a catcher in the movie, basically said, you know,
they've all got making a lot of money, you got
to scare the hell out of them. So in the scene,
the manager who I can't remember who played the role,
picked up a bunch of baseball bats, walked into the showers,
and threw the bats in the showers to.
Speaker 5: Scare the hell out everybody.
Speaker 1: Yeah, that was kind of a pivotal moment from them.
Speaker 6: As it relates to financial advisors, if you don't have
a combination of hunger, ambition, and fear, you're not going
to make it in your early years.
Speaker 1: So what I do is I work with these teams
and whatever compensation schedule the senior advisor is negotiated with
the junior advisor. Basically, I say, are we're going to
leave it in place for one month now. On every
advisor's book of let's say two hundred and fifty households
five hundred million dollars in assets, it's not two hundred
and fifty households with two million each. It's of that total,
it's fifty households that have maybe three hundred and fifty million,
another seventy five or eighty households that have everything but
are remaining fifty million, and at the bottom there's two
or three hundred households with fifty million bucks, they're not
getting called. Nobody's profiling them. There's no financial plans in place.
These were the accounts the advisor opened when they were
first starting that were incredibly important to them. Some of
them might have been the biggest accounts. Now they're largely ignored.
The advisors are saying, well, they don't bother us, blah
blah blah blah blah. And we do certain calculations for
profitability per household, and those households at the bottom of
which there are many still have to be taken care of,
are probably ten percent is profitable on a time expended
date the households at the top. So one of the
things I do is I work with book advisors and
say you're now in charge of these two hundred and
fifty households down here, who are generating a total revenue
back to the firm of two hundred thousand dollars. Any
upside you get on this fifty million, which should be
generating revenue on the order of five hundred thousand dollars,
you're going to own eighty percent of it. Anything new
you bring in from a referral, you get to keep
one hundred percent. Oh and by the way, twelve months
from now, your compensation from your senior advisor is going
to get cut in half. I'll train you, but you've
got to get to work. And the fear in their
eyes is the same thing I felt and their senior
advisor felt, because we've got to take away the safety
net until they recognize how socially important this job is,
how meaningful you can be to other people. You eat
less as a service job, but if you do.
Speaker 5: It well, you really eat well.
Speaker 1: You can make more money as long as other people
benefit first. So it's kind of the ultimate altruistic job
as long as you're focused on engineering outcomes. It's not
for everybody.
Speaker 3: Yeah, yeah, well it never has been. But if you
want to make money, you go where the money is.
And like, why did Willie Sutton rob banks? Because that
he never said it, but it's been attributed to him
because that's where the money is or was. Now there's
no money in the banks, it's all digital. Anyway, had
to go where the money is and rich people, you know,
it's that old thing. It's just as easy to fall
in love with a rich guy as a poor guy.
Speaker 1: Right, Yeah, my wife reminds me of that all the time.
Speaker 3: Yeah, all right, Hey, so how do we how do
we connect with you on the web?
Speaker 4: How do we find you and tell us how?
Speaker 1: So I've launched it. It's really kind of interesting. This
was a kind of an AI generated idea. I took
about I don't know, a couple hundred hours combination of
teachings that I've done, programs I've run, you know, given
to firms, and then a bunch of zoom calls and
I picked at random from advisors that I counsel with,
and I cracked it all into an AI model using
Google LM. And I said, so, if I wanted to
create a podcast that would help the public understand if
they've got an advisor that actually knows what they're doing
based upon sitting on the other side of the desk
inherently knowing what's contained in the AI currently, see if
you can generate ken scripts for me. And with a
little tinkering, it came up with my first ten scripts
and I did some editing on it. I came up
with my own spin on a few, but I was
blown away. So that led me to believe, well, this
is stuff the public needs to know. Especially since there's
going to be such a jump ball coming up for
where do you go and what do you do? So
I've got a podcast which i'm just launching. It's titled
If the Public Only Knew, and I think it's up
on Spotify at this point. I'm just getting it going,
which is why I appreciate you having me on. And
it's just guidelines that they should use for everything as
to why a bond and a bond fund are completely different,
all the way down to understanding if an financial advisor
can't ask the question about why it's important to dynamical
rebalance and market extremes, what the answer is, and why
they need to go find somebody that can make an answer.
So that was pretty much pointed it to the public.
And I've also got one cunning right behind it.
Speaker 5: I'll be launching.
Speaker 1: Title Financial Advisor Masterclass. They're both available. You can find them,
i think right now on Spotify. Just getting them underway,
but I'm pretty stoked about it. For now, they're free,
there's no premium to pick up. But I think what
you're going to find is the information in these things
is incredibly useful and it's things the general public just
doesn't know that. A good advisor does know that. I
think the public has to know. I started every relationship
with every household. I took care of every client, took
care of sitting down and educating them in an agnostic
way with no firm collateral, basically saying, if you hire me,
here's what we're going to do, and here's why. If
I'm not for everybody, if you don't want this, you
need to go someplace elseuse I'm always going to tell
you what you need to know may not be what
you want to hear. So it's that kind of approach.
I built a very successful advisory practice, and I've trained
thousands of other fas how to do it. But that
universe for investors is in the tens of millions against
the dwindling set of qualified advisors.
Speaker 5: I think it's going to be timely for the public.
Speaker 4: I tend to agree with you. It sounds great, all right.
Speaker 3: So if you've got a question for Gary or myself,
you can shoot me an email.
Speaker 4: Dary, what's your website?
Speaker 1: So right now, the website they can find me on
is all one word, Better Path Training, Betterpathtraining dot com.
They'll be links to my podcast up there that's primarily
written for financial advisors to support my training and coaching business,
but they'll be able to hit the menu item that
talks about the podcast if the public only knew, or
they can find it directly by just going up on Spotify.
And I think I've got some RSS feeds elsewhere and
told trying to get it up on app but I'm
told that should happen hopefully sometime before the turn of
the decade, so I'm not sure when it's going to
appear there, but that's the easiest way to find it.
Speaker 4: All right.
Speaker 3: Well, I'm going to do a podcast myself about the
legal profession called legal Theft, and you look out for
that one.
Speaker 4: We'll talk to you again soon. Thanks for coming by.
Speaker 5: Dary, Thanks Carry, it's been a pleasure.
Speaker 2: Thanks for listening to Carrie Letz's Financial Survival Network, your
solution to today's trying times. For the latest, go to
Financial Survivalnetwork dot com. Financial Survival Network
Speaker 5: Now more than ever