Speaker 1: You know what that music means. It means it's time
Speaker 1: to call with your retirement related questions for our retirement
Speaker 1: planning professionals from Class Financial join this week by CJ.
Speaker 1: Closs and Eric Schwartz. Telephone number to join us on
Speaker 1: the program. All you gotta do is dial in six
Speaker 1: oh eight three two one thirteen ten. That's six soh
Speaker 1: eight three two one thirteen ten. Love to get you
Speaker 1: on the air this morning. Don't forget. You can learn
Speaker 1: more about Class Financial on their website Coss Financial dot com.
Speaker 1: That's Class Klaasfinancial dot com. And they're telephone number six
Speaker 1: oh eight four four two five six three seven. No
Speaker 1: charge for that initial get to know your appointment tech
Speaker 1: Class Financial. It will be complimentary to you again their
Speaker 1: number six oh eight four four two five six three seven,
Speaker 1: And again phone lines are open for you right now.
Speaker 1: If you've got a question, get you live on the
Speaker 1: air at six oh eight three two one thirteen ten.
Speaker 1: That's six oh eight three two one thirteen ten. As mentioned,
Speaker 1: Joined this week by CJ. Closs and Eric Schwartz. CJ.
Speaker 1: How you doing this week?
Speaker 2: I'm doing great. How are you, Sean?
Speaker 1: We're doing good? Great to talk with you, Eric, How
Speaker 1: have you been.
Speaker 3: I am doing great, glad to be back this week.
Speaker 1: It's great to have both of you along, great to
Speaker 1: hear from you. And we've got fees and we're going
Speaker 1: to talk about fees and commissions, which obviously people it's
Speaker 1: an important part of a conversation. People don't always want
Speaker 1: to know entirely how that works. Sometimes there's sometimes a
Speaker 1: little you know, some sometimes you don't always understand what
Speaker 1: that stuff is. And we're going to kind of break
Speaker 1: down and kind of demystify fees and commissions and really
Speaker 1: help folks understand when it comes to financial professionals what
Speaker 1: they're getting paid for and or how they're getting paid
Speaker 1: and product services all that. Because it's it's one of
Speaker 1: these shows and as I got a chance to preview
Speaker 1: the notes the other day, it's one of those shows
Speaker 1: where you really want to pay close attention because there's
Speaker 1: some really really important information and really really good information.
Speaker 1: Of course, we do this each and every week with
Speaker 1: every timement planning professionals from COSS Financial. Before we get
Speaker 1: rolling on this week's topic, let's actually look back at
Speaker 1: last week's show. Of course, each and every week we
Speaker 1: do the class quiz question the week chance to win
Speaker 1: a fantastic prize this week no exception, our friends Class
Speaker 1: Financial have provided a twenty five dollars gift card to
Speaker 1: Amazon Jelly. A little bit later on the program, how
Speaker 1: you can win that prize. A little tip they'll listen
Speaker 1: closely because oftentimes the question answer to the Class quiz
Speaker 1: question we come up during the show. As mentioned before,
Speaker 1: we get rolling on this week's conversation, let's actually take
Speaker 1: a look back at last week. Shon't get the question
Speaker 1: and answer there as well.
Speaker 3: Yeah, so thank you to everyone for listening as usual,
Speaker 3: and congratulations to our winner from last week. And that
Speaker 3: was Tom from Waterloo. And last week's question was true
Speaker 3: or false Choosing a joint and survivor and nuty option
Speaker 3: on your pension will allow your spouse to receive benefits
Speaker 3: after your death. And again that was true or false
Speaker 3: and Tom knew that the correct answer was true.
Speaker 1: Great work, Tom from Waterloo, and you can be like Tom.
Speaker 1: Just pay close attention to the program. I'll tell you
Speaker 1: how you can win a little bit later on and
Speaker 1: the show phone lines there open for you right now
Speaker 1: at six oh eight three two, one thirteen ten. That's
Speaker 1: six oh eight three, two, one, thirteen ten. Of course,
Speaker 1: today we are going to be talking about demystifying fees
Speaker 1: and commissions and of course helping folks better understand how
Speaker 1: financial professionals I generally get paid for the product or
Speaker 1: services they provide. And CJ, let's kind of set this up.
Speaker 1: What do folks need to know here?
Speaker 2: Yeah, So, in our opinion, there's nothing more frustrating than
Speaker 2: working with someone in financial services and not understanding how
Speaker 2: they get paid or how they're incentivized. Therefore, during our
Speaker 2: show today, it's our intent to demystifize fees and commissions
Speaker 2: so that our listeners can be better prepared to engage
Speaker 2: professionals connected to financial services. Now, let's begin with the basics.
Speaker 2: Who are these quote unquote financial professionals you might engage
Speaker 2: throughout your life. To narrow our focus, we're only going
Speaker 2: to discuss the primary financial professionals that a typical American
Speaker 2: individual or household might engage over a lifetime. Some of
Speaker 2: those individuals or entities might include some of the following
Speaker 2: bankers or credit union representatives. And this would include like
Speaker 2: loan officers, insurance agents, are brokers, accountants, a state planning
Speaker 2: attorneys and financial advisors. Now again, you may engage other
Speaker 2: peripheral financial planners, but especially in our industry, as as
Speaker 2: financial planners, as investment advisors, these are the core ones
Speaker 2: that we often see our clients needing to assemble to
Speaker 2: have a successful financial plan. So these are the ones
Speaker 2: that we're going to talk about. We're going to hone
Speaker 2: in on a few here in just a moment to
Speaker 2: kind of ask some questions about how do they get
Speaker 2: compensated and what are their incentive structures.
Speaker 1: That's really good stuff, and so as we kind of
Speaker 1: talk about this stuff when it comes to individuals or entities,
Speaker 1: how do they typically get paid or you know, kind
Speaker 1: of looking at another way, how exactly do I pay
Speaker 1: them and what are their incentives there?
Speaker 3: Eric, Yeah, that's a million dollar question, Sean, and hopefully
Speaker 3: it doesn't cost a million dollars. But we're primarily discussing
Speaker 3: this because not only are fees I think sometimes difficult
Speaker 3: to understand to the general consumer, but it's also an
Speaker 3: awkward time topic, right, I mean, I think a lot
Speaker 3: of people don't really want to confront the person they're
Speaker 3: working with to ask them. So it's it's really oftentimes
Speaker 3: incumbent upon the professional to kind of come right out
Speaker 3: and say, hey, this is how you know, this is
Speaker 3: how I get paid, this is how we work together.
Speaker 3: But you know, the financial incentive incentives are really powerful motivators,
Speaker 3: regardless of the setup that an advisor or other professional uses.
Speaker 3: As much as we might try to avoid it, it
Speaker 3: does drive human behavior and understanding someone's financial incentives and
Speaker 3: or their typical compensation structure when they're providing you with
Speaker 3: the financial product or service. That's going to be really important.
Speaker 3: All consumers should know that more potential conflicts of interest
Speaker 3: arise when someone is selling you a product for a
Speaker 3: commission versus providing you with a service for a fee. Okay,
Speaker 3: so in one case, you know, when someone is selling
Speaker 3: you a product and they're earning say a percentage or
Speaker 3: some other incentive. As we said there, it generally creates
Speaker 3: more potential conflict of interest when you are in that
Speaker 3: situation versus say, paying a financial planner for a fee
Speaker 3: or providing investment services for a fee. So during our
Speaker 3: show today, we intend to discuss a few of these
Speaker 3: common financial professionals, and we're going to use a force
Speaker 3: like a four question framework to help us better understand it,
Speaker 3: and those four questions are going to be number one,
Speaker 3: what core products or services does the professional provide? Who
Speaker 3: do they sell these services or products to, how do
Speaker 3: they typically typically get paid for their core products or services?
Speaker 3: And finally, number four, is there any potential conflict of
Speaker 3: interest between what is best for the financial professional or
Speaker 3: or I'm sorry, and what is best for the customer
Speaker 3: or the client. So I'm going to start with a
Speaker 3: pretty basic one here that I think most people would
Speaker 3: would encounter, and that would be bankers or credit union representatives.
Speaker 3: And as CG said earlier, we're also talking about loan
Speaker 3: officers at those institutions, so it's really important to note
Speaker 3: before we dive into this year. Some banks and credit
Speaker 3: unions offer various investment products or financial planning services, but
Speaker 3: we're not going to look at those right now. We're
Speaker 3: going to look more at their core, their core banking services.
Speaker 3: We'll talk about financial advisors later in the show here,
Speaker 3: but the first the first question for bankers or credit
Speaker 3: union representatives is what core products or services do they provide?
Speaker 3: So banks and credit unions typically primarily provide core deposit
Speaker 3: and loan products, So these are your your basic deposit
Speaker 3: products like checking accounts, saving accounts, money market accounts, maybe
Speaker 3: CDs are pretty attractive over the last year or so here,
Speaker 3: So those types of deposit products. And then on the
Speaker 3: on the loan side, we're talking about you know, mortgages,
Speaker 3: auto loans, credit cards, even business loans if you're if
Speaker 3: you're talking about like a commercial bank, in home home
Speaker 3: equity lines of credit, all these different types of loan products.
Speaker 3: Second question here is who do they sell. Who do
Speaker 3: they sell or provide the services to. So generally we're
Speaker 3: talking about the general public, individual consumers in many cases, businesses,
Speaker 3: and even some other financial institutions, and government or public
Speaker 3: sector entities, and how do they typically get paid. So
Speaker 3: generally we're looking at two ways that folks in the
Speaker 3: in the bank or credit union world get paid. Number
Speaker 3: one is known as net interest income. So essentially this
Speaker 3: is the difference between what they earn on loan products
Speaker 3: in the amount that they pay on deposit products. Okay,
Speaker 3: so the interest rates they collect on loans that they
Speaker 3: offer to consumers, and then the amount that they actually
Speaker 3: pay when it comes to interest on your checking, money
Speaker 3: market or savings account for example, So that that differential
Speaker 3: creates something called a net interest income spread. So Sean,
Speaker 3: when we're when we're talking about this, and you know,
Speaker 3: over the last year and a half we've seen interest
Speaker 3: rates I'm sorry, over a much longer time per frame
Speaker 3: than that. Now we've seen interest rates go up, and
Speaker 3: we say, gosh, the car loan interest rates are going
Speaker 3: up a lot, but my deposit accounts are are coming
Speaker 3: up so quickly.
Speaker 4: You can see here this might be why.
Speaker 3: The second way that they're typically going to get paid
Speaker 3: for their core products is through non interest income, which
Speaker 3: is often referred to as like fee income. So think
Speaker 3: of you know, account or service fees on checking your savings,
Speaker 3: account lending fees, credit card fees, and you know, even
Speaker 3: even wealth management or advisory fees. Again, we're not going
Speaker 3: to die into that too much. That's more of an
Speaker 3: additional service that those institutions provide, and we'll talk about
Speaker 3: advisors later. Number four here is is there any potential
Speaker 3: conflict of interest between again, what is best for the
Speaker 3: financial professional and what is best for the customer or client.
Speaker 3: And the very short answer here is yes, there can
Speaker 3: be potential conflicts of interests that arise from the inherent
Speaker 3: tension between the bank or credit union sales and profit
Speaker 3: motives and their customers financial wellbeing, especially when employee compensation
Speaker 3: is tied to product sales targets. So banks and credit
Speaker 3: unions they can generally mitigate this conflict by limiting employee
Speaker 3: sales only incentives and instead diversifying their employee financial incentives
Speaker 3: across sales, customer satisfaction, customer retention, so that there are
Speaker 3: ways to mitigate some of the conflicts of interest, But
Speaker 3: it is definitely definitely president in this situation.
Speaker 1: I love this four question framework and we're going to
Speaker 1: continue on more with this with our retirement clinic providential spores.
Speaker 1: Eric Schwartz and CJ Closs don't forget if you've got
Speaker 1: a question, We've got a line for you right now
Speaker 1: at six oh eight three two one thirteen ten. That's
Speaker 1: six oh eight three two one thirteen ten.
Speaker 4: You can learn more.
Speaker 1: About COSS Financial. They've got a great website class financial
Speaker 1: dot com. That's Coss k l a A S Financial
Speaker 1: dot com gets no Eric and CJ and the whole
Speaker 1: team at COSS Financial. You can also sign up for
Speaker 1: the weekly Market Ball's newsletter and also learn how they
Speaker 1: can help you or if you're a business owner as well.
Speaker 1: All that great information available to you at Cossfinancial dot com.
Speaker 1: Speaking of things available to you tel full number six
Speaker 1: oh eight four four two five six three seven. That's
Speaker 1: COSS Financial office right here in Madison. No charge for
Speaker 1: that initial gets to know your appointment at Loss Financial.
Speaker 1: It will be complimentary to you again their number six
Speaker 1: oh eight four four two five six three seven. Well
Speaker 1: to your conversation with CJ Eric and take your calls
Speaker 1: next as Money in Motion with Class Financial continues right
Speaker 1: here on thirteen ten, wuib A talking with our retirement
Speaker 1: playing professionals from Class Financial online Coss Financial dot com.
Speaker 1: That's Coss k l a A S Financial dot Com
Speaker 1: at telphon number six oh eight four four two five
Speaker 1: six three seven. No charge for the financial gets to
Speaker 1: know you appoyment tech LOSTS Financial, It will be complimentary
Speaker 1: to you. This week we're talking about demystifying fees and
Speaker 1: commissions and kind of running things through through four questions
Speaker 1: when it comes to the different the different areas and
Speaker 1: the different operations, whether it's banking and other areas as well,
Speaker 1: that you want to ask when it comes to when
Speaker 1: it comes to the fees and services and as we
Speaker 1: were talking at last segment about banks and credit unions,
Speaker 1: what about this framework when it comes to financial incentives,
Speaker 1: compensation structures, potential conflicts of interests? What about accountants in
Speaker 1: that world?
Speaker 4: CJ.
Speaker 2: Yeah, yeah, good question. I want to before I even
Speaker 2: get into accountants, I just want to remind everybody of
Speaker 2: an important phrase that Eric gave you there at the
Speaker 2: beginning of the show, which is, all consumers should know
Speaker 2: that more potential conflicts of interest arise when someone is
Speaker 2: selling you a product for a commission versus providing you
Speaker 2: with a service for a fee. That is one of
Speaker 2: the overarching themes of our show today. Now that is
Speaker 2: not always true, right, just like everything in life, when
Speaker 2: people try to give you absolutes, you can find an
Speaker 2: exception to that absolute, but it is very much generally true.
Speaker 2: And so with that frame, now, now, does that mean
Speaker 2: that everybody who sells you a product is a bad
Speaker 2: person and every company who has products to sell you
Speaker 2: are really just out to get you? Not at all.
Speaker 2: That's not what we're saying. What we're saying is that
Speaker 2: more potential conflicts of interest could exist. So I hope
Speaker 2: you guys like this four question framework. By the way,
Speaker 2: we just kind of came up with this on our
Speaker 2: own and said, what are the things that consumers should know?
Speaker 2: What are the questions that they should be asking to
Speaker 2: any financial professional. So as it relates to accountants, again,
Speaker 2: these four questions that we're asking across every one of
Speaker 2: these professionals or industries are the following. What core products
Speaker 2: or services do they provide? Who do they sell their
Speaker 2: product or services to, how do they typic get paid
Speaker 2: for their core product or services? And finally, is there
Speaker 2: any potential conflict of interest between what is best for
Speaker 2: the financial print professional versus what is best for the
Speaker 2: customer or the client. So, as you just said, let's
Speaker 2: think about this for accountants. Accounts typically provide services and
Speaker 2: not products full stop. Remember what I.
Speaker 1: Just told you.
Speaker 2: There is a higher potential for conflicts of interest when
Speaker 2: products are being sold, lower potential conflict of interest when
Speaker 2: services are provided. So let's actually just think about this
Speaker 2: for our listeners.
Speaker 4: Pause.
Speaker 2: Do you hear about like a lot of massive complaints
Speaker 2: around accountants, you know who file your incomes AX returns
Speaker 2: for a few hundred bucks every year?
Speaker 4: No?
Speaker 2: I mean you may or may not like them, but
Speaker 2: you're not coming to find out that they're like selling
Speaker 2: you a bunch of stuff you don't need. They're typically
Speaker 2: providing a service, and you either like the amount that
Speaker 2: they charge you don't. So you can already see it's like, oh,
Speaker 2: that's true. If it's a service for a fee less
Speaker 2: potential for there to be a problem or a conflict
Speaker 2: of interest. So let's kind of break this down. What
Speaker 2: core product or service do they provide? Obviously, tax services
Speaker 2: this includes tax prep and tax planning. Accountants will often
Speaker 2: provide bookkeeping and record keeping services, including recording financial transactions,
Speaker 2: maintaining general ledgers, and reconciling bank statements. They'll do preparation
Speaker 2: of financial statements, including like p and ls or loan applications.
Speaker 2: They'll do payroll services occasionally. This could include employee wages,
Speaker 2: calculating payroll taxes, filing payroll taxes, and issuing W twos.
Speaker 2: And then at times, accountants can provide advisory and consulting services.
Speaker 2: This includes business consulting and personal financial planning consulting. This
Speaker 2: could be on debt management, cash flow management, so on,
Speaker 2: and so forth. The next question for an accountant is
Speaker 2: who do they sell to or provide services to. So
Speaker 2: accountants can serve a bought a broad spectrum of clients.
Speaker 2: Most commonly they provide services to individuals and families, small
Speaker 2: to mid sized businesses, nonprofit organizations, trusts, and estates. Next
Speaker 2: question is how do they typically get paid for their
Speaker 2: core product or services. Accountants primarily get paid through fee
Speaker 2: based structures that include hourly service rates, fixed fee arrangements,
Speaker 2: retainer fee arrangements, and contingent fee arrangements, although the contingent
Speaker 2: fee arrangements are much less common. And then final question
Speaker 2: for accountants is is there any potential conflict of interests
Speaker 2: between what is best for the financial professional and what
Speaker 2: is best for the customer or client? And the answer,
Speaker 2: which is going to be true for every single one,
Speaker 2: is yes. As with almost every financial professional, potential conflicts
Speaker 2: of interests can arise. Some examples include a conflict can
Speaker 2: arise within the hourly versus fixed fee arrangement when the
Speaker 2: accountant could be incentivized to spend more time on a
Speaker 2: project when paid hourly versus when being paid a fixed fee.
Speaker 2: You get the idea, right. Have you ever ever heard
Speaker 2: the phrase like, oh, I was talking to my accountant
Speaker 2: and they're going to charge me five hundred dollars or something.
Speaker 2: They're talking a million miles a minute. Conversely, when somebody
Speaker 2: says I was talking to my accountant and they were
Speaker 2: so slow because I'm paying them hourly, by the way,
Speaker 2: that could be the consumer's perception of that, but you
Speaker 2: get the idea, So that could be a conflict. A
Speaker 2: conflict can arise within cross selling or referral programs with
Speaker 2: other professionals like insurance agents or stockbrokers. You'll run into
Speaker 2: this occasionally, like why is my accountant so excited about
Speaker 2: referring me to this financial planner? What's going on here
Speaker 2: right now? With that being said, the conflicts of interest
Speaker 2: that typically arise between an accountant and their clients are
Speaker 2: less common and less severe than the potential conflicts that
Speaker 2: arise when selling a product. So again, everybody, that's kind
Speaker 2: of the theme here is remember that, and again you're
Speaker 2: going to have to engage people who sell a product.
Speaker 2: If you're ever gonna buy a car, that is a product.
Speaker 2: If you're ever gonna buy a telephone or I should
Speaker 2: say cell phone, smartphone, whatever they call these things these days,
Speaker 2: that's a product. So you're gonna have to buy products.
Speaker 2: This is not a bad thing, But you just have
Speaker 2: to your hackles need to go up a little bit more.
Speaker 2: You need to be more cautious when you're buying a
Speaker 2: product because many of the people selling them to you
Speaker 2: could be incentivized, and so you just you just need
Speaker 2: to pause and be aware of what those incentives are.
Speaker 1: Really fascinating information this morning, as always, from our retirement
Speaker 1: planning professionals CJ. Closs and Eric Schwartz. If you got
Speaker 1: a question for CJ and Eric got a line for
Speaker 1: you six oh eight three two one thirteen ten. That's
Speaker 1: six soh eight three two one thirteen ten. Of course
Speaker 1: you can learn more about Class Financial their website class
Speaker 1: financial dot com. That's coss k l a as financial
Speaker 1: dot com and their telephone number six so eight four
Speaker 1: four two five six three seven. So when it comes
Speaker 1: to uh financial, you know common financial categories, those professional categories.
Speaker 1: Are there anyone else that we want to kind of
Speaker 1: add these and kind of apply these simple four question frameworks.
Speaker 3: Too, Absolutely, Sean. We're not letting the financial advisors off
Speaker 3: the hook here just because we are financial advisors. So
Speaker 3: we're gonna we're going to apply our four question framework
Speaker 3: to advisors like us here at cost financial since our
Speaker 3: listeners will quickly understand why our industry and other regulators
Speaker 3: have some work to do when it comes to creating
Speaker 3: better clarity for consumers around who they're engaging and how
Speaker 3: they're actually getting compensated. In many ways, it's like I
Speaker 3: said earlier, it feels like it often comes down to
Speaker 3: the industry professional that you're working with when it comes to,
Speaker 3: you know, how clear they are about the fees that
Speaker 3: they're charging. So to begin here, our audience should know
Speaker 3: that the term financial advisor is a really really broad
Speaker 3: term and how they operate, how they get paid, potential
Speaker 3: conflict of interest that can vary a lot based on
Speaker 3: you know what licenses or firm affiliations, or even their
Speaker 3: fee structure. So currently individuals or entities who use the
Speaker 3: term financial advisor they can either sell products or they
Speaker 3: can provide services, or they.
Speaker 4: Can do a combination of the two.
Speaker 3: So depending on their license, their affiliation, and their business model,
Speaker 3: they can have very complex fee structures. So let's go
Speaker 3: back to our four question framework. The first one, what
Speaker 3: core products or services do financial advisors provide? So they
Speaker 3: can offer you know, investment management, investment products, sales in
Speaker 3: many cases they can do financial planning, they can help
Speaker 3: with risk management and sell insurance. They can help strategize
Speaker 3: around a state planning and tax planning. Obviously those last
Speaker 3: two state planning and tax planning. Most advisors do not
Speaker 3: actually prepare legal documents or prepare tax returns, but they
Speaker 3: do help strategize around it. And who do they sell
Speaker 3: these products or services to. So generally we're talking about
Speaker 3: individuals and families, business owners, corporate executives. Sometimes they work
Speaker 3: with nonprofits or trusts and endowments. It's a pretty broad
Speaker 3: population of folks that get served. So how do they
Speaker 3: typically get paid for their products their services? This is
Speaker 3: where things get really confusing, because advisors can sell products,
Speaker 3: so you know, sell a for example, an annuity or
Speaker 3: life insurance policy and earn a commission. They can provide services,
Speaker 3: which means that they can technically provide for example, building
Speaker 3: a financial plan and charging a one time fee for
Speaker 3: doing that, or providing investment management services for an assets
Speaker 3: under management fee. Right, So, because there's so there's such
Speaker 3: a broad spectrum of fee structures, advisors can technically get
Speaker 3: paid a commission, they can get paid a fee for
Speaker 3: just doing a service, or again, you can have a
Speaker 3: firm that does both of those things.
Speaker 4: So some financial.
Speaker 3: Advisors also will will work for banks or brokerage firms
Speaker 3: and maybe primarily get paid a salary with you know,
Speaker 3: maybe some financial incentives outside of that. But the point
Speaker 3: is there's just so many different.
Speaker 4: Structures that exist out there.
Speaker 3: Consumers really need to be they really need to advocate
Speaker 3: for themselves unfortunately in these situations, and when when you're
Speaker 3: forging a new relationship with a financial professional or or
Speaker 3: evaluating a financial professional, this needs to be a question
Speaker 3: that folks are asking. And the last of our four
Speaker 3: questions here is is there any potential conflict of interest
Speaker 3: between what is best for the financial professional or the
Speaker 3: entity versus what is best for the customer or client?
Speaker 3: And in this case it is again a resounding yes,
Speaker 3: there is significant potential for conflict of interest. But the
Speaker 3: degree to which this applies it does depend on the
Speaker 3: fee structure, so whether it's a commission or fee for
Speaker 3: service or whatever it might be. So again we would
Speaker 3: want our listeners to hear be a good consumer, advocate
Speaker 3: for yourself and ask questions.
Speaker 1: Really great guidance. And it's it's interesting as we kind
Speaker 1: of break all of these different areas down. It's just
Speaker 1: one of those programs where I think it's important to
Speaker 1: listen back if you also, if you enjoyed the program,
Speaker 1: also share it as well, and you can do that
Speaker 1: right at clossfinancial dot com. That's coss k l a
Speaker 1: as financial dot Com. Of course, can listen to the
Speaker 1: podcast this and previous shows right on the website Class
Speaker 1: financial dot com. You can subscribe there as well. Speaking
Speaker 1: of subscribing, great day to sign up for the weekly
Speaker 1: Market Pulse newsletter from Class Financials, head on over to
Speaker 1: classfinancial dot com Delpha number six oh eight four four
Speaker 1: two five six three seven. No charge for the initial
Speaker 1: gets to know you appointment at Class Financial. It will
Speaker 1: be complimentary to you again, they're number six oh eight
Speaker 1: four four two five six three seven. Put a nice
Speaker 1: go on this conversation. We'll also do the Class Quiz
Speaker 1: Question of the week. We will do that next as
Speaker 1: Money in Motion with Coss Financial continues right here on
Speaker 1: thirteen ten, WIBI talking with CJ. Closs and Eric Schwartz.
Speaker 1: They are our retirement planning professionals from Class Financial. The
Speaker 1: website colss financial dot com that's coss klaas Financial dot com.
Speaker 1: And they're telephone number six O eight four four two
Speaker 1: five six three seven, So CJ. As we're kind of
Speaker 1: going through, there's a lot here, a lot to know
Speaker 1: when it comes to engaging with financial professionals and of
Speaker 1: course avoiding conflicts. But as as Eric left that last segment,
Speaker 1: especially with financial advisors as well, there's a lot to know.
Speaker 1: There isn't there there is?
Speaker 2: I was I was showing these these show notes to
Speaker 2: a friend who's in the accounting world, and as as
Speaker 2: he was reading through them, He's like, hey, you're making
Speaker 2: it sound like you know everybody's got a conflict, and
Speaker 2: I'm like, well, we do. I mean everybody does, I said,
Speaker 2: But read to the bottom of the show notes. I said,
Speaker 2: if you want to see who we really hammer on
Speaker 2: having conflicts of interest, actually people in our industry, and
Speaker 2: the account goes that's right, that's right. You guys have
Speaker 2: more potential conflicts than we do, which is true. I
Speaker 2: want everybody here. We talked there's more financial professionals, but
Speaker 2: we talked about three different ones and applied that four
Speaker 2: question framework. We talked about bankers, credit unions, loan officers,
Speaker 2: we talked about accountants, and we talked about quote unquote
Speaker 2: financial advisors. And I say that because it's such a
Speaker 2: broad term. So if you just want to apply, like hey, CJ,
Speaker 2: if you were to just say, like highest potential conflict
Speaker 2: down to lowest out of those three, bar none, highest
Speaker 2: would be in financial professionals, mainly because you don't or
Speaker 2: I'm sorry, bar none would be financial advisors, my apologies,
Speaker 2: mainly because you don't know what hat they're wearing half
Speaker 2: the time. Are they selling me a product? Are they
Speaker 2: acting as a fiduciary for a fee? What are they doing?
Speaker 2: The second one, in terms of conflict of interests highest
Speaker 2: conflict of interests would be banks, credit unions, loan officers,
Speaker 2: and then the third would be the accountants. So again
Speaker 2: no preferential treatment here. Financial advisors can often be the worst.
Speaker 2: Now some of you are going, what is he doing?
Speaker 2: He's still himself under the bus here. No, so let
Speaker 2: me clarify. COLSS Financial. COSS Financial is actually a fee
Speaker 2: based fiduciary. We do not sell you products, so we
Speaker 2: do give advice for a fee. What I'm saying is
Speaker 2: that our industry makes it hard for you to determine that. Now,
Speaker 2: if you go to our website, we clarify that we're
Speaker 2: SEC registered, we are not broker dealer affiliated, on and on,
Speaker 2: but we do have advisors like they have insurance licenses.
Speaker 2: Now they don't sell insurance, but how do you know that?
Speaker 2: So you get my point, it can be complicated for
Speaker 2: consumers to try to understand and filter through all of
Speaker 2: this on their own. Again, we are a fee based
Speaker 2: financial planning firm. We try to remove as many, if
Speaker 2: not all, of the conflicts of interests that could exist
Speaker 2: between us and our clients. Okay, now, as i'm we
Speaker 2: do want to see further reforms within our industry that
Speaker 2: hopefully will help consumers more easily decipher between an individual
Speaker 2: or firm that is primarily selling products as a broker
Speaker 2: for a commission versus an individual or firm that is
Speaker 2: primarily giving advice as a fiduciary for a fee. The
Speaker 2: industry has actually made a lot of progress in this regard.
Speaker 2: Regulators have made a lot of inroads. If any regulators
Speaker 2: or anybody in these industry are listening to me, I
Speaker 2: just want to say good job. I think we have
Speaker 2: more work to go, but we're headed in the right
Speaker 2: direction and in the meantime for consumers, we think it's
Speaker 2: paramount that you become aware whenever you're engaging anyone using
Speaker 2: the term financial advisor or wealth manager or private wealth
Speaker 2: manager or anything similar entitle. One good place to start
Speaker 2: to kind of figure out who they are and how
Speaker 2: they function is by visiting the Certified Financial Planner Board
Speaker 2: consumer website at www dot Let's make a plan dot org,
Speaker 2: and you can review their various resources and suggested questions
Speaker 2: to ask a financial advisor before engaging their services. You
Speaker 2: can also go to something called go to Google and
Speaker 2: put in broker check and you can look at their licenses.
Speaker 2: You can look at their history to see if anybody
Speaker 2: that you're working with or planning on engaging has any
Speaker 2: violations or anybody who's filed a complaints against them. So
Speaker 2: there's two resources, Let's make a Plan dot Org and
Speaker 2: then broker check, just to do some some background digging
Speaker 2: on the person it is or the firm that it
Speaker 2: is that you're engaging.
Speaker 1: Speaking of going online as well, mentioned the website colssfinancial
Speaker 1: dot com that's coss Klaas Financial dot com. I always
Speaker 1: mentioned I can learn more about the separate divisions at
Speaker 1: COSS Financial, things like fee for service to the coloss
Speaker 1: three sixty and costs four O one k fee based
Speaker 1: retirement plans, all that stuff. A lot of this information
Speaker 1: also spelled out right at cossfinancial dot com. Great website
Speaker 1: to get to know the team at Coss Financial as well,
Speaker 1: great data. Pick a bone game call six oh eight
Speaker 1: four four two five six three seven. Little added bonus
Speaker 1: that first gets no appointment at Loss Financial. It's not
Speaker 1: gonna cost you a thing that'll be complementary to you
Speaker 1: again their number six oh eight four four two five
Speaker 1: six three seven. You can want to hold on to
Speaker 1: that telephone number now as well, because it's time for
Speaker 1: the class quiz question of the week. It works like this,
Speaker 1: just a moment to ask you the class quiz question
Speaker 1: the week. You well, then if thirty minutes from the
Speaker 1: today's program to call the Class Financial office right here
Speaker 1: in Madison at six oh eight four four two five
Speaker 1: six three seven if you are the first call with
Speaker 1: correct answer to win this week's prize, which is a
Speaker 1: twenty five dollars gift card to Amazon. This week's class
Speaker 1: quiz question of the week is this true or false?
Speaker 1: More potential conflicts of interest arise when someone is selling
Speaker 1: you a product for a commission versus providing you with
Speaker 1: a service for a fee. Telephone number six oh eight
Speaker 1: four four two five six three seven. First call with
Speaker 1: the correct answer win the twenty five dollars gift card
Speaker 1: to Amazon. Don't forget as well. It's Class Financial's office
Speaker 1: right here in Madison. The number one more time six
Speaker 1: oh eight four four two five six three seven CJ. Eric.
Speaker 1: It's always great chatting with both of you, guys. Enjoy
Speaker 1: this beautiful day.
Speaker 3: Thanks Sean, Thanks Sean, see you guys.
Speaker 1: Doctor Barti Greer comes your way next here on thirteen ten.
Speaker 1: Wiba