Tyson Ray joins today show to discuss his wealth management practice and Total Relationship Approach™ . You can also grab a copy of his book The Total Relationship, and take advantage of several free resources with the link below:
https://totalrelationship.com/internaluseonly/
Securities through Raymond James Financial Services, Inc. Member FINRA / SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors Inc. FORM Wealth Advisors is not a registered broker/dealer and is independent of Raymond James Financial Services. Raymond James and its advisors do not provide tax advice. Investing involves risk regardless of the strategy selected. Podcast guest is Tyson Ray, CEO & Founding Partner at FORM Wealth Advisors and Senior Wealth Advisor with Raymond James. FORM Wealth Advisors is located at 431 Geneva National Ave S, Lake Geneva, WI, 53147; 262-686-3005.
Tyson Ray joins today show to discuss his wealth management practice and Total Relationship Approach™ . You can also grab a copy of his book The Total Relationship, and take advantage of several free resources with the link below:
https://totalrelationship.com/internaluseonly/
Securities through Raymond James Financial Services, Inc. Member FINRA / SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors Inc. FORM Wealth Advisors is not a registered broker/dealer and is independent of Raymond James Financial Services. Raymond James and its advisors do not provide tax advice. Investing involves risk regardless of the strategy selected. Podcast guest is Tyson Ray, CEO & Founding Partner at FORM Wealth Advisors and Senior Wealth Advisor with Raymond James. FORM Wealth Advisors is located at 431 Geneva National Ave S, Lake Geneva, WI, 53147; 262-686-3005.
A reason for the cold today. John is Welcome to Internal Use Only. Something just came across my desk, john. It is perhaps the best thing I've seen in the last six months. If you have 60 seconds, I'd like to share the idea with you.
Speaker 2:Got a minute A podcast for Wholesalers.
Speaker 1:Always be closing, always be closing. Buy Wholesalers. Blue horseshoe loves anacostia. Okay, before we get started, I have one question. Anyone here passed a Series 7 exam? I have a Series 7 license. Good for you, you can get up to it. Let's cut to the chase.
Speaker 2:Here's your host, dan Sullivan. We've got a very special episode on tap today with an advisor affiliated with Raymond James. When I did the 2023 survey, the audience shared that you'd like to hear more conversations with advisors, so this one is a little bit different than most interviews, I would say. When I recorded and edited this, it really felt like it was just a conversation, as if I was a wholesaler in the field, trying to get to know this advisor, as if he was one of my prospects. You'll hear this particular advisor lay out his entire story about how he got into the industry, how he manages clients' money and, finally, how he interacts with wholesalers. And in this case, he has a different background on actually how he is using wholesalers, how he isn't using wholesalers and what that does or what that means for his practice. So I hope that you enjoy this conversation. Like I said, it's a little bit different. Feel free to give me feedback, either on the podcast Instagram at internal use only podcast, or through email at internal use only podcast at gmailcom. Without further ado, let's get to today's interview.
Speaker 2:Welcome back, everyone, to another episode of the internal use only podcast. My name is Dan Sullivan. I am joined today by Tyson Ray, cfp certified exit planner SEMA. He is the form wealth advisors CEO, founding partner and senior wealth advisor. Tyson, thank you so much for being here with us today. It's a Friday afternoon. How's your weekend?
Speaker 1:Dan, it has been great. Thank you for having me on. I love you've like, took something that was negative the internal use only and have turned it into a positive. So I'm just excited to be on the podcast today and looking forward to sharing.
Speaker 2:So I was very fortunate to get a copy of your book, the Total Relationship, which we'll talk about the tenants and the core philosophies within it. But from the first chapter it's very evident that you came up in the industry at a time where stock brokers were really driving the ship and that was commission based sales, and that seems like it really fueled the direction of your career. So why don't you just tell us a little bit about that, how you started in the industry and really how that led to where you are today at form wealth?
Speaker 1:I kind of had the upbringing of you know, the ad left mom with the four kids and an eviction notice in the refrigerator. And when I was like 12 or 13, I lied on the work application and said I was old enough to basically go work and that was to go ride my bike about a mile or two to a restaurant where on Friday night and Saturday night I could work my tail off. But it was all you. It was a fish fry on Friday night, all you could eat. Fish is very popular in the Wisconsin area and that means I got to eat all I wanted as part of like like, fed you like. I even got paid to be fed like that. I was like blew my mind. And then Saturday was all you could eat peel trim, I mean King, right. I mean I had to go to the bank and I had to go to the bank to eat fish and shrimp Friday and Saturday night. But I started saving the hundred bucks I can make on a Friday and Saturday night into my chubby, chubby chicken bank account. And this is back in the 80s when interest rates are like through the roof, right. So also I'm watching the bank put money on top of my money. Now it was only, you know, dimes and nickels and quarters, but every month it was adding up as, like, wait a second, this is fantastic, fantastic. And when I was 16, or a little bit before I turned 16, I had been asked I had gotten a separate job of filling up the gas pump at the end of the pier broke, and so basically I got hired to carry five gallon gas cans in each hand, barefoot, down the drive down to basically gas up these boats. And at the end of one weekend a mastercraft pulls up which is a really high end professional ski boat and they like, hey, kid, can you spot for us? Because you had to have a third person right, one in the boat driving, one skiing and then one one watching to see if the guy fell or gal. So I said Sure, so I jumped in. They thought it was fun to teach me a little bit about skiing and barefooting, which we did.
Speaker 1:Anyway, it was getting dark and I was about to walk back to my house and the guy says, hey, can I drop you off? And I'm like, yeah, sure, it was. In a Ferrari I was. I was like afraid to get into it. Right, like my suit, my seat. My my swimwear suit was still a little damp, but he put a towel down like it was all in care, chill.
Speaker 1:And I lied at what house I lived in because I was too embarrassed as he pulled into the neighbors a couple of doors down nicer house. I said you know how'd you do it? Like mastercraft, ferrari, like what was it. And he talked about you know, I had this business I owned, but I really did really well in the stock market. That's all I said.
Speaker 1:And I got out and was just like Okay, like check the box, right, stock market. Not sure what exactly that means, but you know, okay, about a year or so later in high school they played the stock market game where the kids in school get phony money to go into the, go make stock selections and you have like a two month window in the economics class where a stock broker came in to talk to us about how it worked and you got to kind of pick your investments and you got to trade and actually teaches all the worst fundamentals of investing, because the whole game is trying to make as much money as you can In a two month window of time yeah, leverage, leverage, right, all the margin.
Speaker 1:Anyway, I wanted to buy a stock now also, by the way, this is just to date myself, and I don't feel I'm that old. This was like all done in the newspaper, right? This was not typing into a computer with the stock quote was like you're pulling it off the Wall Street Journal and you're looking for the ups and the downs and the biggest movers and little sections, and it was all the symbols and the data printed out on these pieces of paper from the close the day before. But I had signed, I had picked out a stock. I didn't know anything about it. I knew the symbol was INTC, which was Intel at the time. Back then it was before it was inside anything. They were just the little startups that they were and it had gone from 12 to seven for whatever reason I didn't know. I knew it was at seven bucks and I'm like, hey, I could buy 100 shares of that and I probably wouldn't be doing what I was, what I'm doing now. Had my mom said, yes, son, that's a great idea, because then I would have got it and you don't have to go after what you often get. She said, no, well, it's like what? Like it's my money, like wait a minute, I'm busting tables, it's my no. And then I was mad. I even had to have her permission Because it's like, wait, it's mine. So I dragged her into the broker's office and thank God that broker's a saint, because she actually tolerated me coming in with my 700 bucks that I wanted to invest in my mom who was saying no, and we had to wait to do it in the evening because my mom couldn't come otherwise. Well, this lady took the time Karen took the time to talk to my mom and convince her. You know what? All right, no individual stocks, but we'll let him put $100 a month into two different mutual funds. And that's how I got started at 16.
Speaker 1:When I was 18, and I didn't need my mom's approval anymore, I went off and bought a few individual stocks and rode the tech bubble and then blew myself up like everybody else did, but in the process, came out of college and I had spent so much time trying to convince my mom why this was working and a good idea that I decided this was just kind of a natural fit and by divine intervention I got introduced. A couple things came into a broker dealer office and right out of college was pretty rare, but same thing. It was okay. Here's your 3000 people you got to call every day, or every month, I should say and it was about peddling product and it was about trying to make a commission and making a living and trying to figure out how you're going to pay your rent but still do what's right for the client. That I didn't like so much, so that when the first email came out and this was like the dial up like it sounded like a fax machine while your computer was getting the email up and going right, and then out it comes. The email message was like the first email message my family put out on AOL that grandma was sick and basically someone needed to opt to move home and be at grandma's farm with her or she's, not to go to a care facility. Now, this is the woman that basically helped me learn how to read. You know, when my mom couldn't stand me anymore, I got to go to the farm and then I got to go crazy and food and running around and playing with it, whatever, and there was a tug on my heart of wait a minute, you get one honorable, go back and honor your grandmother and I had been away from years, from everything family and two, if you don't have to have rent and the farm always has food, so you can basically have the rent and lip and food expenses, some major hits to living expenses, like all of a sudden I don't have to have this burden about how to make enough money to do the right thing. So move home, start over basically my career.
Speaker 1:I walk into an office of this same broker dealer. That is an office down the road. In that office is a senior advisor. I think he was 68 at the time. I walked into the office, kind of got started after a month or two, just getting started slowly. I went into his office one day and basically said hey, dan, like I was talking to you, you know, let me see your portfolio after 40 years of being a stockbroker, like, is this really what I want to do for my career? I don't know anything. I just moved home, I'm living at the farm. I feel like a loser, but I'm not having to screw people out of trying to figure out this conflict of what's best for them and what do I need to do to feed myself.
Speaker 1:And he hymned and hawed and basically printed me this statement. And here he prints this statement, that seven figures. And he had picked some wonderful stocks for the whole run of the 80s and 90s market and he was looking for me to give him information. It's like, wow, right, and what I said was wait a minute, why isn't this in the trust? Why do you know what you'd pay in estate taxes if you and your wife died? It'd be millions. And he's just like I didn't know. Two months before I showed up in that office, which they had an empty desk for me to work at this is how I started there they had sent a million. It was almost exactly a million. It's like a million dollars in the dollar. I still have a copy of that check to the IRS as an estate tax.
Speaker 1:And so he watched the family have to liquidate a significant amount of money that they weren't planning on to basically go satisfy this bill. So also, when I'm saying, hey, you know you don't even have this problem, he didn't know how to fix it. And I said, well, if you give me access to your account, because I'm new and been trained and I know how to do all this stuff, but I don't have any clients to do it for, I'll help and we put together an elaborate estate plan and he came back in the end and basically said I'm never going to be able to get this done. I'm like why he's like I'm never going to get my wife to agree to it. Okay, well, why don't you let me tell her? Well, I don't think. He's like, I don't think that's a good idea.
Speaker 1:I'm like, well, you've been, you've been married for 50 or 60 years to this point she doesn't want to listen to you. I said she has no me from Adam. So why don't you let her come in and I'll try and explain to her. I said, with one rule. He's like what's the rule? I said you can't talk, right, if you've been married this long, she's not gonna listen to you. She doesn't want to hear your two cents. And really what it was is she wanted him to be done and retired and the business had kind of come first and it was his career and his success and it was just this conflict in their relationship and the business was what made the money. That made the problem.
Speaker 1:Anyway, she comes in and sits down with him and I asked I explained hey, we have this problem that everything half, you're gonna lose half everything you guys have, and I don't think you understand that. She said I really not worried about it. I said okay. I said I asked you a different question. She said sure. I said you do you have family China that you plan to pass on to your daughter? She's like, yeah. I said how many place settings do you got? You got eight or 12. She said 12. I said well, you're gonna have six because the government's gonna take half. And I said let's talk shoes for a second. All your left foot shoes are gonna go to the IRS and you have two Toyotas, so let's just assume one of the Toyotas is going to the IRS. When I'm saying you're gonna lose half of the value of everything you have, it's gonna be half of the value of everything you have financially and that's an example. That's how I want you to think about it.
Speaker 1:She looked at the senior advisor and said you better fix this and got up and walked out and the rest was history, because we went, put the whole plan together and irrevocable trust and Cheryl Mainer, trust to avoid taxes is fantastic and that then led to do you have other clients we should be doing this for, and that experience took me on the path that I've never gone off of and what the total relationship the book we wrote talks about is the difference between the conflict of the sale or self versus the opportunity to speak into someone's situation, build a relationship and provide a solution that they didn't see and add value and may or may not even be paid for that. But just it's amazing how one energizes me to write a book, to be excited, to go make a difference, and one sucked the life out of me of just the struggle, the negativity of just the conflict. And the reason we wrote the book is I just think there's a lot of advisors or a lot of people in the financial services industry that just feel like there's gotta be a better way to do this, and a lot of people say they do some of these things that are in this book but in the end they're still talking about a portfolio or thinking their value add is beating some performance of some picket index and the industry is the constant here we've done better than, or here you gotta have something else. You can never be content with what you have and I think we've created kind of the antithesis of this. That I think the last thing about the book, maybe before we dive into it, is the other, and I didn't write it for this purpose, but it's what it became. This industry is regulating the whole best interest, what's best for the client. They're trying to create checklists and FINRA and SEC are trying to create these regulations and effectively I feel like the book is a how to guide to do what's best for a client.
Speaker 1:So anyway, that's a long story to the story, but there's that, if I played that out just a little longer, four years or so after that event of helping him with his estate plan she had passed, he decided to retire and I took over a 40 year established financial practice and the beautiful thing about that was is from when I helped him and then we helped do the estate planning for all of his clients and in what Pandora's box that opened up for opportunities to have relationships and learn a ton of things, especially when he retired and I took that practice over. I never and to this day I've never had to have another client or had to feel like I needed a sale or I had to try and cover how I was going to pay my team or pay myself. It's like we could just do what was good and what was right. And a lot of times we do what's in conflict. Us Like we spend a lot of time in our careers convincing clients to make, pay off debt or go enjoy some of the money that they have.
Speaker 1:And I actually told a CFO of a company this morning cause he's frustrated with a defined benefit plan that's just a mess and the 5,500s all screwed up. And I just looked at him. I'm like if this is such a headache and you guys don't like it, why don't we just close it? Or if you don't like it cause it's in this brokerage account, which is how you had it and how I ended up with it roll it back into the TPA so they can consolidate and simplify it. And they kind of thought about it. I was like that'd be great and I said but I said I want you to realize where I'm coming from. I said I'm paid to manage that account here and if you roll it back into the TPM and lose being paid, but if that's what's better for you guys, cause this is driving nuts I'm not in the business of driving nuts and that's the fun part, cause you do that when enough people, they refer people. Right, you do that, you do. Do it put out enough good in the world, it comes back.
Speaker 2:There is an inherent I would say you've mentioned the word conflict before like it's hard to change overnight, and I'm a little bit far from removed exactly with how, like, younger advisors are transitioning into their, like, the peak of their careers. But at the end of the day, even if you're a fee based manager, you're still getting paid on assets under management, and so there is a correlation between how much success that you can have and the AUM that you've got, regardless of the problems you're solving and fees sorry, problems that you're solving and the services you can offer. From a pure like holistic planning standpoint, I know that the industry is definitely evolving and changing, but you're correct that there's, like there's always going to be a wear and tear, unless you're in a position where one you are able to join a team that's already so established that you kind of have that leeway or you've just maybe you've started with you know whoever very wealthy individuals that kind of get you off your feet quicker, but we don't need to dive into that fully. But I think I would agree with anybody probably in a sales role, like in anywhere like you want to hit a point where you're successful enough where you can really take a step back and say I'm not here trying to hustle and bustle, to like pay my rent or to get my basics taken care of.
Speaker 2:I can now think further about what's going to be more meaningful. How am I going to be able to help clients? And once you start doing that, then you can really put out there what will help attract the right people towards your practice. And that's obviously what you've done here with the total relationship framework. So I wanted to carve out some time to just go through a little bit more of like the specifics in that, because you did mention it's almost like a how-to guide, especially in a regulatory era that has things like best practice and, you know, avoiding those conflicts of interest. So if I'm understanding correctly, there's essentially three parts of this, like a life plan, a wealth plan and a care plan. Can you just dive into that a little bit and how that fits to the total relationship framework?
Speaker 1:Yeah, I mean the would love to. So the yeah, it is three pieces that make up the puzzle, and it's if the piece starts with the life plan, if you're coming to us and you're new, so okay, first of all, everyone's got the word process right. So everyone's got their steps. They're going to take someone through If they have their you know, certified financial planning practitioners. They're going to do the financial plan on the front end, because that gives you the roadmap. Or, if you're a Nick Murray fan, you do the fan, you do the plan first, and that predicts the portfolio. Totally agree with all that. What we've found, though, is it's one thing to basically find out okay, dan, you buy a car every five years. By the way, people buy automobiles in by the time they're 30, they have fallen into a rhythm of automobile purchasing Most people and it's either a number of years, it's a number of miles, or you're driving it till it's dead.
Speaker 1:And one of the things in the life plan is an example where, early in my career, individual came to me. They were like ecstatic, it might have been an inheritance thing, anyway, they got this $100,000. And I remember that because it was a break point on A-share's back in the day, right. So I was being paid a little bit less, but it was like a bigger ticket and this is a great day and it was a co-call or whatever it was. Anyway, they came in long-term investment, setting it aside. They feel like they're adulting their money, right that they've moved on and made this investment in the stock market Anyhow. Two years later, they call me the tech bubbles, burst the hundred grand's, maybe worth 80, and they bought a $60,000 car the day before and called me for the money. And I'm like, wait a minute. We talked that like this was like forever, and it's two years since forever and now you want $60,000 of an $80,000 portfolio. That's underwater because we started with 100 and the market went down and thankfully there was no cost to get them out of it. But I felt like crap. It's like okay, so I got paid to lose you money that you didn't tell me you needed and I didn't know to ask. You needed it.
Speaker 1:And what the life plan is designed to do, it is to try and bring a lot of clarity to every client's relationship, whether they're new to us or their existing client is to what do you need in the next 12 to 24 months and where's it coming from? Are you saving it? Is it coming from the portfolio? What is it? And we go through a process of asking questions about things that we've found that the answers for every client are different. But the questions are similar because we found these are categories that people just surprised us with what they needed money for, and I also think, from a litigious standpoint or a compliance standpoint. It's like these are where the complaints come from. Right, I needed money. The market's down, it was my long-term portfolio. Now I'm upset because no one knew I needed the money, but then wait a minute.
Speaker 2:And so we just want to. That's like the position for any fun sales people or wholesalers tuning in that are either new or haven't really been involved in this industry for longer. That's the worst case scenario is when there's either a complaint filed with the advisor particularly if there was maybe out of the blue or just a situation like this where it was like caught everybody by surprise and is completely the opposite of what was intended when that investment was made at the time.
Speaker 1:Yeah, and or if you know those dollar amounts and you've worked this plan out and you've done this process that we're talking about here, the building out this life plan, and what we're about to go through, the piece of the piece that the clients have, because they know the things that they need are set aside in cash that's not invested. They tolerate volatility that I think a lot of other people would call and panic out, and then you're dealing with repercussions, that. But so what are those things we talk about? So go back to the highest, most important. We ask about family and we ask about their parents specifically, because all of a sudden, just like grandma got sick and I moved home, like there are people out there that are going to need to help with the transition of mom or dad, or I'm calling to talk to them about their investment, but mom just got diagnosed with stage four cancer. It's like this is not the time to be talking about the long-term investment, because your heart's all tied up, the fact that you're finding out your mom's got a health issue and you can't fix it. So, and that's we, the, the. The firm's name is foreign wealth, because we start everything in the F as family, we, every meeting we have a client and he changes the mom and dad, everybody, okay, yeah, great. How about your health? Because, again, if your health is bad now, you can't help other people and you can't do anything you want to do. How are your kids, the people that you love? That's the F in family. Any changes there? Updates there we then transitioned into because I found people will actually. So people are going to sacrifice for family first or surprise us with needs for family first marriage, weddings, babies, care facilities, vacation excuse me, not vacations well, that's second. So the next category Important, but maybe less of a priority.
Speaker 1:Yeah, family is great, you know, especially post COVID, all of a sudden, like everyone came out of the woodwork again with travel or vacation or leisure activities Like this is what I'm going to do to justify my existence because I work hard, or the sacrifices I made. And what are those trips? When are you taking them? When's the deposit needed? Where's that money coming from? Are you sticking out a credit card and surprising me a year from now that you want me to pay off the credit card because you took the vacation that you knew you were going to take before you spent the money, and so it's all like. It's interesting.
Speaker 1:The industry wants us to do financial planning for the rest of your life. Let's go project to do an auto purchase every five years. You're going to work this many years, you're going to have this portfolio, we're going to project it with these rates of return and we're going to come up with a percentage probability of whether you're going to run out of money or not, and there's all kinds of variables in that. And yet what I found interesting is all the software I've ever looked at to use and have access to now to use doesn't tell me that if you were going to buy a house in 2023 and now it's 2024 when we're looking at your plan, the data just falls off. It's like wait. I'd rather ask did you buy the house? Like, where are you at? That's part of that relationship.
Speaker 1:Did you enjoy the vacation you took? And so we're literally tracking these things within the software that we built to basically identify how's mom and dad mom's in the care of silly dads, okay, or dad's deceased, or how are the kids? Hey, you said you're going to go to Napa for two weeks last month. How was the trip? What are you planning in the next three to six months, because the closer in the timeframe, the more certain clients know what they're doing. Most people have no idea what they're doing three years from now. They have a general idea, they might be on a rhythm of life, but specifically like are you taking a summer vacation? You're going to get a, yes or no? Where exactly are you going? How much is it exactly going to cost? Do you need money from the account to do that? How about Christmas? You know, we just started asking questions 12 months out to find out what are these activities.
Speaker 1:So, family travel and leisure, how's the house? Specifically, home improvements, what is it? The bathroom that, like, what's going to be the thing that goes bad? That you didn't tell me? It's the roof and it's leaking in. The next, you know, hail storm, we got to get a $20,000 new roof, or the septic's got to get redone, or the furnace is going to go out or the windows or whatever. Because in life that happens. And had someone asked it's like, well, yeah, no, I'm that furnace man, I'm just holding on Like I don't want to wait, but that's going to be maybe 10 grand when it all comes. And it's like all these little five, 10, 15, $20,000 increments add up when all of a sudden, out of the blue, they call and they need it. And then the advisor has got to be surprised that the client needs money that no one bothered to ask when you were going to need that and now you're at the mercy of the market.
Speaker 1:Not any value, only travel, leisure, home, home improvements, vehicles, homes and vehicles in financial planning are the biggest areas where clients can make the biggest mistakes, because it's so easy to just add five or $10,000 to the purchase of a house or even a car, and in the cars it's finding out what's the rhythm of the cars. Is the ears, miles? We actually track clients. The vet, the year of clients cars and the mileage on clients cars, just for the simple stack, is like, hey, if your car is 10 years old and you got 200,000 miles on it, like I'm like, when are we buying the next one? Or I may encourage you, hey, the markets are all time highs. These were up on a trend. We got extra profits here. Why don't we carve out that 50 or 80 grand to buy that next car now and you can then figure out when you want to go get it Instead of when you finally need it. Now we're going to be at the mercy of what the markets are at and I don't know what that's going to look like.
Speaker 1:So the life plan is taking kind of the concept of long-term financial planning but bringing it to the where the rubber meets the road, which is really is it going to hit the client's bank account and is the money going to be in that bank account when they want it and who's responsible for that? And when clients start realizing that we're kind of raising our hand to be responsible for that part of funding their retirement, beyond just the cash flow month to month stuff, one we get to participate in their life in ways you don't normally. That's the whole relationship, part of it, right Either for empathizing with their situation is with their parents or what's going on with kids in college and what have you are just celebrating vacations or sometimes just encouraging them hey, you got the money. Go like, enjoy this. So that's the life plan part of the total relationship.
Speaker 1:And again, I think a lot of people's websites, a lot of TV commercials try and hint to that. They do some of this, but I know so few that actually will like put out there on a task or put out there and track that in July of next year you're planning to buy $100,000 or something, or rather, you're going to take that vacation that you want and $80,000 needs to come from the non qualified account and the advisor's job is to pre fund that over the next 12 months. I think not every. I think the vast majority of advisors are just waiting for clients to call, ask for the money and then send them the money and appease them, whatever that looks like, at the mercy of wherever the markets are at. And the more volatile the markets have gotten, the less value that advisor adds when they're allowing the randomness of that withdrawal versus hey, if you know six to 12 months in advance, you have a greater likelihood of trying to carve that profit out when the markets are at an all time high.
Speaker 1:It's not timing the markets. We're trying to time clients needs, and you can. You don't know what the markets are going to do, but you can find out what your clients are going to do and all I tell clients is the number one goal is to don't sell shares if we don't have to in the markets down. The only way you do that is when the markets are up, which is I don't know if a market's going to go higher than it's all time high, but you know a certainty if it's at its all time high or near it, and you know a certainty if it's 20% off, it's all time high. And the whole goal to building wealth is don't sell when it's down.
Speaker 1:And so when the markets are all up, we built technology that we can go for every client pull the dollar needs for the next, whatever timeframe we ask, and if we want to say here, most recently I said, pull the cash flow requirements that clients have given us so we get out into the February of 2025, we'll just post the presidential election, post the inauguration of the new president. And so I know that everything our clients have told us they need, has we actually raised it? When the markets tipped over here at the higher levels, different from where they were in October, when they were down 20 or 30% from where they are now, and we just added a ton of value? And if the markets keep going higher, so be it. I'm willing to accept that and, at the same time, if they sell off, we've raised it.
Speaker 1:That's what the life plan gives us the data and the opportunity to do in the conversation with the client, the wealth plan becomes some of what I just talked about with regards to the cash management putting it in the system, identifying where it's going to come from and then being able to act as a whole. So, instead of randomly deciding when to pull money out, we as a firm, I sleep and I have peace of mind because I know that, unless a client didn't tell me we have raised what our clients have told me, and that it's usually six to 12 months. In some cases we'll go out two years in advance and we park it. We pull it from a separate account. Usually we'll park it in the money market and earn some interest, which is finally getting back to being more significant. We point to it that the clients can see it and then the rest of the portfolio can fluctuate.
Speaker 1:Because what we found with the wealth plan side of things is, if you don't start defining how we're funding things or what, or maybe not in accumulation phase of life, maybe not adding to things, because we need to build up this reserve before we add to it.
Speaker 1:So that's just cash management planning. If you don't do that, we had the client come in. That's just like the million dollar account drop 10%, it's 100 grand and they started telling me that was the car I was going to buy. You just lost my car in the market because they tangibly are equating it to something that they're looking out in the future that they need. And what dawned on me is hey, if we can take what you're tangibly looking out in the near term and needing and funding it now when your million dollar account becomes $900,000, if you're not attaching it to something tangible you thought you needed, you tolerate that more that. Actually the behavioral finance shows that the person that thinks that attaches a loss to a need will actually go liquidate the portfolio and buy what they thought they lost. So that's a double hit. If I needed the $50,000 car in two months and I lost it in the market, I'm going to go buy it now and it's a double hit to the portfolio often.
Speaker 2:So the bottom line is we're managing behavior here just as much as people's taxes and investments.
Speaker 1:Right? Yes, nick Murray got it right years ago about the behavioral finance and, ironically, the education system has come up behind them is it is trying. The number one job of a financial advisor is to protect the client from themselves, and I'll go one step further it's also to protect the advisor for themselves. I think way too many financial advisors panic faster or do more damage to their clients because they're as scared as a client is. And the wealth? So the wealth plan, outside of taking the information from the life plan and the cash flow needs, the wealth plan is on our end, you know. Going back to designations, I got somewhere in this neck of the somewhere in the years I got the SEMA, the Certified Investment Management Analyst.
Speaker 2:Yeah, I was going to ask you about that because I know you've got SEMA, cfp I think, the Certified Exit Planner. So obviously you're brushing up on various industry certifications, so you'll get through how you're applying today. But I was going to ask, I wanted to see, which of those three are most applicable or which ones you've you've found yourself actually implementing the most in your career, because a lot of young people are taking these exams, I think, just because they need some extra education, but it's not meeting where they're practicing at the moment. So I'd be curious for someone in your shoes which of the designations is actually like making its way into your practice the most. But you're going through SEMA now, so let's hear on that.
Speaker 1:Yeah. So I think my answer to that is and I'll come back to the SEMA real quick I think my answer to that is all these certifications are any type of education. Quite frankly, like you can ace driver's ed, it doesn't mean you're going to be a good driver. The real hard part of any of these designations is how the application of that knowledge works and how it's communicated to a client. Going back to losing place settings or losing shoes meant more to her than losing millions of dollars. The dollars didn't mean anything, but when you tied it back to something that like where that value is, that's where the rubber meets the road with these designations and trying to discern what's noise in the financial services industry and what's important. And so the SEMA. I signed up. There's only certain universities that will teach it. I signed up at Yale just to get my oldest kid a hard time thinking I got into Yale. I'm like it's an executive program, but technically, yes, it's Yale.
Speaker 2:They get you that with your LinkedIn certifications. They'll be like it's like. Well, no, none of the wholesalers or advisors went to Yale and bought in, or I think they do. Booths in Chicago is like the three big ones. It's like booths. We paid for a week. We may or may not stay there, depending on when you took the exam, and it was cool and it's a nice little nugget here, but, yes, executive education program.
Speaker 1:Yeah, so the short version is Yale, first class and first chapter and like first page it's like, okay, real returns are unknown because they're in the future, right, so what's really going to happen, no one knows. Okay, we got that and so now we're going to go study expected returns about what people think are going to happen. So like, okay, and I say to people with that, what the SEMA means is I said it means I got a certification and no one knows what's going to happen.
Speaker 2:Unpredictable, can't be held accountable for what happens in the future. Past performance is no guarantee of future results.
Speaker 1:Yeah, it is, but some of my you know. It's like you don't know what you don't know until you know it, and like the scales fell off my eyes when I started getting in that first class about expected returns and something about capital market assumptions, which in all the financial planning software we're all clicking off. Yeah, they updated the capital market assumptions. I just want to get to the plan that I need to do the work on and the Monte Carlo system that I'm working on or whatever the planning software is that someone's using. But capital market assumptions is where a firm is taking the past rates of return and volatility and projecting it some point in the future what they think those returns are going to be. What we've built and what we're encouraging in the wealth plan is we take four different companies capital market assumptions, so we're not hanging our hat in any one because there's every firm's got bias, people have bias and so what we found is, if you go and grab institutional your vanguard, your Fidelity's, your Schwab's, your Black Rock's, your I-Share's, your Invesco's you know it's like that's more than four. It doesn't matter which one you grab, but grab different ones and we blend both time frames. So we blend 10 and 20 year time frames, with one to 10 year time frames from four different firms, and pull an average, we pull inflation out of that and then it's like, okay, what's your real expected return of different asset classes going forward? And what was mind blowing to me is, had you done that in 2019, with the markets getting toppied, before COVID hit? That was telling you, hey, the future expected return was not very high because of how well the market had done for 10 years, much less, a little better on fixed income Post COVID. So fast forward, six months later, markets are shellacked, interest rates have gone to zero. That capital market assumption shift that our asset allocation almost entirely out of fixed income, almost entirely for everybody, because it was basically predicting you're, you are going to have negative real returns in every, at every fixed income class.
Speaker 1:And guess what, by avoiding it also showed that by the the run up in 2021, in 2022, hey, take some profit off the table on the fixed, you know, on the equity side and go back into the fixed income side because the interest rates were starting to go back up or the expectation of future rates were going to go back up. So it's, it's just a guide, but if you're trying to get a client a five, six, seven, eight percent you know net real return, hey, why don't you look at a roadmap of a bunch of firms that are guessing where that's going to be as a as a compass, so just guessing, like people are filling out these questionnaires, and based on the client's question or answer to the question, or based on the bias of how the questions were stacked? Like you know, there's a difference response between you know, how do you feel about losing 20% of your portfolio value versus how do you feel about running out of money if you don't subject your portfolio to a 20% loss? Right, you're going to get a different answer depending on the questions are spelled out, but we're going to take these questions. They're going to tell us what these answers are. The answers are going to spit us into some formulas. Form is going to spit us into some asset allocation and that's what the client's supposed to have.
Speaker 1:And I'm going time out because what I found for the last 20 years plus of my career is, depending on where interest rates were at or the valuations of equity is we're at, that should be driving the asset allocation, because that has a lot more to do with the volatility and where the returns are going to come from than what these textbooks are averaging out for 50 or 100 years. Right, the entry and exit point of how capital gets put to work or gets taken out should be considered, and what we found is like there isn't a secret sauce out there, but if you take the average of four different firms, you're more likely going to get closer to what the averages are, and then we do the same thing for different, for how we actually go build our model. So how we're going to go build our model is we're going to go take the asset allocation 60, 40 or 80, 20 of all these same four different firms, put them in a blender and pull out and just see what are the assets they're putting in there, what are the positions, what's the percentage, how do they change? And all I found is that if you follow the flow of how money gets put in the market, you participate with those flows, which tends to return back into performance, right, too much money is coming out of something that's probably not going up in price or vice versa, and so it's taking me out of it.
Speaker 1:That's the first thing I want to do, because I have emotions and I have biases and I have my opinions and things and I can be wrong, and it's taking and applying a bunch of what I think history has to say. And then, if they're guessing about the future, rather than putting my hat on one firm or one person's guess by blending it. And I laugh every time stuff comes out, and so does my team, because nine times out of 10, the research report is going to come out and one company says go left. One company says go right. One company goes straight. One company says stop. And you put them in a blender and it says don't do anything, leave it where it is. And what I have found is had the less you do to portfolios, the better they grow. In a world that tells you you should be doing all kinds of things to these portfolios, I could go on a rant for that for like hours, because it's kind of-.
Speaker 1:Yes, go on your turn.
Speaker 2:And no, I'd say it's just kind of hilarious to think about how we have an industry of professionals whose responsibilities to be more aware of these things, but yet if somebody were less at, let's say, 85% of moments of time, maybe even higher some quant has better information than me If you essentially did nothing, never touched it and just continuously added to a broad base of like asset classes, like you're going to be fine, so that we don't necessarily need to get to that on this podcast.
Speaker 2:But having provided that overview that you've got for your firm and how you manage clients assets, I did want to carve out a moment here because I know we're going to be on the clock here up at five, but I wanted to talk about, obviously, the rubber meets the road at some point with the investments that you're actually making. So, being a part of the broker dealer, you obviously will have your selected funds and fund families and investment options that are available on the various platforms. Maybe there's some direct investing that your team is doing yourself, maybe it's just ETFs, but why don't you describe and share with the audience like, how are you actually leveraging asset managers, maybe the wholesalers, or I know some advisors? They honestly just don't. So I'd be curious like how do you manage that and what's the rationale behind that?
Speaker 1:Yeah, so I don't anymore. I did. I found the mistake of doing it, meaning I had I was a branch manager back in the day and had what I have. I had like five or six teams, including my own, in the branch and part of the requirement of being a branch manager of the broker dealer was you facilitated the meetings of the firms that we wanted to come in and present the product and it was educational right and you'd meet some wonderful people that are presenting this wonderful information and maybe they took you to lunch or they brought donuts to the office or whatever.
Speaker 1:They gave you a nice pen when they left or a pad of paper, whatever it was, and all this and then the yeah, a packet of some type of information that now I'm trying to decide what, what I should do for the large cap money manager. And here's the large cap money manager packet of the guy that brought me donuts the other day, and again, it's all shelf life and what's on top of your shelf, of your head and where the information is sitting, is what you're going to act on. What I realized was simultaneously one of my mentors back in the day, named Bob Dunwoody, who I don't think is with us anymore. He had a saying. It's like hey, financial advisor, take your AUM. What's the value of all your assets, of your clients, right? What's that dollar amount? Is it 100 million? Is it 200 million? Is it 500 million? Whatever it is, put it in cash. So now see it as dollars, literally liquid cash. Now ask yourself, where should it be invested? Not where is it. What should it be in?
Speaker 1:I wrote a book in 2012, which was my first crack at trying to help financial advisors, called your World Impact as a financial advisor. It's in there. It's expanded on a little bit in the total relationship. What do we do? Our philosophy is we have a predetermined investment strategy and approach based on the client's need. In other words, it's a long term or short term. Is it beyond three years or less than three years? If it's beyond three years, it's long termed to us and we have a solution for that. Are you going to be living off of that portfolio? Are you accumulating? So that'll be another differentiator. But the bottom line is it is a predetermined portfolio strategy set up ahead of time that money goes into. It's not created for the client.
Speaker 1:The idea that you can create all these different custom portfolios for the client is a facade, unless you only have one client. Because Bob Dunwoody, going back to this mentor, his point was if it's all in cash and it should be why isn't it where it should be? And if it was all in cash, it kind of freed your mind up. Wait a second. And I think back in the day the average advisor had over 1,000 positions. They can't track 1,000 positions, they can't stay on top of 1,000 positions. They don't know what happens to the money manager or the individual stock or whatever it is. And yet the clients are all expecting you to pay attention to that and part of the wealth plan is building predetermined custom portfolios.
Speaker 1:I'm a believer that the actual investment it doesn't matter Over the next 10, 20, 30 year timeframe that these clients are asking us to help them in their lives and the generational wealth that is this business. It does not matter what large cap fund you have, what small cap fund you have. What matters per vanguard is keep costs low, keep turnover low, purify it so it can't drift and all of a sudden start owning something it wasn't supposed to own, and follow the stewardship principles of asset allocation, diversification and maybe rebalancing. Actually, I'm starting to find that rebalancing doesn't have a lot to do with anything in the grand scheme of things, other than it sounds good. It's definitely a way to take money in and out of a portfolio, but just to do it for the fun of it, I think we're just creating more tax consequences. So we're building and have been for 20 years now, no, not quite 18 years discretionary portfolios that money goes into.
Speaker 1:That we've identified, and that's where the difference is. Instead of trying to build a portfolio that that fuels all these clients needs and wants together into some asset allocation, we're just carving out what do you not need into the future, that's long term, with what you need now and the customization is what doesn't go in the model. We created models and, instead of customizing for the client, we allowed ourselves to add scale and accountability, meaning every client's getting about the same experience, which the other thing that drove me nuts is. I'd show up at the dinner table and a family get together and it's like, depending on when I talk to somebody is what portfolio they got or what their experience was in the market is depending on how they added to the portfolio and without having a predetermined portfolio strategy. I wanted to fix the now with this wealth plan and this philosophy we've come up with. It's like I want to sit at the table and know everybody's returns are the same for the long term money. The customization came into what they need in the next three six, 24, 36 months.
Speaker 2:So, like with that, with those portfolios underneath the hood, is that like ETF based? Is it mostly yes? We've gone ETF based because the mutual fund it's been a tough go honestly with, like the funds, mutual funds- are doomed.
Speaker 1:I was told that a decade ago and it's just. Mutual funds are doomed for the fact that technology came to the place that allows things to just there's efficiencies. It's efficiency.
Speaker 2:You know like a large growth. It's like I'm sure there's three or four funds that have outperformed significantly, but if you like, throw any performance metric on. Basically, I mean, things change but like 2009 forward, it's kind of like sure you, maybe a few active managers hit some home runs, but like by and large it does not make up for the ones that underperformed. I think the most recent report I saw on active manager flows was like only 40% of last year's managers outperformed the S&P and I think that was large growth. So, like sure, that's an asset class where you can just set it, forget it, etf it.
Speaker 1:But well, and Russell did a study. Russell did a study years ago that it's like the top performing money managers over a 10 year timeframe underperformed 70% of the time, which means you can identify them in the 10 years. You can see what they are when you look backwards.
Speaker 2:Right, yeah, it's so easy when you see the sheet right, it's so easy. When you see a fact sheet, it's like every calendar year or whatever, but it doesn't really necessarily mean this pull, it doesn't account for that experience and that is kind of what happens whenever you're making an investment choice for your clients, which, if there's any takeaway from a lot of what you've talked about, I know I mentioned upfront, like before we started recording, that a lot of this audience is the sales people and the fund wholesalers out there. They only see we only see like a net flows of money into our funds and money out from your funds. And I remembered when I was working with financial advisors like it never occurred to me until I was sitting in meetings with their clients that this is money that's just funding their lifestyle. So like they may have put in $500,000 into my equity SNA five years ago. And now my managers like, well, why do they redeem? And I'm like because the person whose money it was just had like sold their house and is buying a vacation.
Speaker 2:It was like it has nothing to do with them being mad at the performance of the fund. It's just like we are. Our instrument is a vehicle for them to build wealth over their lifetime and at some point they cash it out like has nothing to do with the fund. It's just the way the world is.
Speaker 1:Yeah, and the whole problem with I have so much empathy for the wholesaling industry it's because the whole industry is renting other people's money. They're charging a fee to have access, to add value and to turn and that asset is going to go to another generation or it's going to go to a purpose because the money flows and thank God there's a ton of money out there. And again, I think everybody's trying to add value and not necessarily. There's obviously good and bad in the world, just in general. But the problem is there when you try and drive costs low on the ETF side especially, you pay attention to trading, daily trading volumes that you don't get a put. You don't want to own more shares in your practice than the daily trading volume, which means you're going to move the market on your own shares, trying to get out of them, which nobody pays attention to. Or the bids and the asks. You know you got to put limits, orders in on everything you do. It's just technology is making more and I'm not saying it's good, I'm just saying it's the reality that the ETF space is making money management more and more easier to build what has been asset allocation, diversification, low cost and participation.
Speaker 1:I think there's also trade offs, that it also creates rallies and falls in the market because the human race can click their mouse and all panic at the same time.
Speaker 1:And that's also the undoing in the mutual fund world, because those mutual funds and markets that are down and they're dealing with those redemptions at the end of the day they have to go sell often when you get what they don't want to sell to meet the redemptions. Because, as I explained to the client which is my favorite way of explaining a mutual fund to an ETF is, if you have a mutual fund house and you have an ETF house and you're going to buy the house, a mutual fund, they build the house for you, the ETF. You buy the house. It's finished. When you go to sell the house, the mutual fund they start ripping the windows off and the roof off and they dismantle, they redeem all the pieces of your shares in to give you back your money. The ETF just sells the house. And so it's the efficiencies of those two worlds. One was the only way to do it in the 1940s and it's just it is what it is.
Speaker 2:I know I've tried to think of a good comparison, either with a relevant like business or some other example to use, as far as what will eventually be like that shift and takeover between the ETFs and like those active flows. But it's a competitive industry. A lot of sharp people are in the space. So things like active ETFs and vehicles that are more you know, they're less expensive but still add value. Obviously we've got a lot of these tax efficient vehicles coming.
Speaker 2:But this is this is an interesting and a good conversation. Why I love being able to have these discussions with advisors is because, sort of like, at the end of the day, I just like trajectory wise. 15 to 20 years ago it seemed like there was a lot more importance on the singular investment of any given client and whereas now it's sort of like this is just a sum of its parts that the advisor is managing and so sure, like I could give you a $500,000 for a tax efficient separate account, that big, big whoop that does that, that saves that tax on maybe 5% of a $500,000 account. I'm thinking about like this person's life and their holistic picture, so I feel like that's kind of a trend.
Speaker 1:And that's so. That's right. Yeah, we put no value because I don't think there's any to be put on a diversified portfolio of exchange traded funds. The value is on the total relationship of paying attention to when the money comes in and out of those, where I think you can add a ton of value. With markets that bounce around 5, 10, 20, 30% in weeks and months over the last couple of years, when you're adding and, more importantly, when you're redeeming those shares, when you do that matters. It actually locks in the return. I think there could be a lot of value added to that.
Speaker 1:And by not by using blending multiple pieces of research together, I'm removing my ability to go guess, because I found most people's guesses is wrong. Now, everybody that's doing this and the industry that's doing this is also creating the opportunity. And, by the way, I'm a proponent of the reason wealth is made in the marketplace is because humans are irrational. If everybody was rational, the markets would only grow based on the company's earnings. Grow like it would grow like a straight line or fluctuate right to line with the fundamentals, and the reality is that's not what happens. The greatest returns happen because people panic and then people that have the guts to take, you know, plug their nose and take advantage of that do, or the very companies themselves do. And that volatility of people's emotions is what I think gives us these return potentials, because everything just keeps swinging in and out of its trend line, at the expense of some, for the benefit of others. And by taking a approach of taking my emotions, taking my team's emotions, my bias, my team's bias, anyone firms bias and using blended research I don't care what research you use, but using several, I think has done a wonderful job of giving us more of the average return that we're looking for. Ironically, you start getting an average return of the institutional models that are out there, because that's what you're deriving your portfolio from and that's what you're trying to do for a client in the first place.
Speaker 1:And, lastly, I can stand in front of an arbitration panel and raise my hand and explain this is why I did what I did, this is why I have that ETF, this is why it was in this percentage and it was the blending of these four firms research. Now, they may not like that's what I did, but it's like I can defend the snot out of that. But if in Dan's portfolio, I bought XYZ fund because the other guy took me out to lunch and it was a great day and I forgot about it and that was your fund. And now something went wrong and I'm in the panel. Do I have the documentation to justify why I earned my fee for that advisory portfolio? That's the risk I don't want to take.
Speaker 2:It'd be like your honor. The wholesaler came in great doughnut, great suit. We had an awesome dinner that night, and so I made the purchase outside as part of my portfolio the next day. I solemnly swear but yeah, that's super helpful. And you've actually mentioned the planning software a couple of times. Is that something that's internally available through Raymond James? Is it like an e-money of sorts, because I feel like it seems like it's worked well for you. So if you want to give it a nod, understanding the tools that advisors use is always helpful.
Speaker 1:So we built it inside of Salesforce and have recently grown it into a financial services cloud. We're working currently with, and part of the resources at, the TotalRelationshipcom, which there'll be a link for the podcast for you here, but where we've built a website to build a community behind. Hey, here's how to do this. We're building, or we're trying to build, a tool that, basically, will be just the way of this data capture. How do you capture some of this data that's consistent. It's a place that also here's the different questions to ask, because the client, the customization, is the client's answers to their lives and it's the client that has the answers. The best advisors are the ones that know how to ask the question and listen and find out the why behind the question and help prioritize. Hey, you can't do everything, but in this order you can do these things, and the whole goal is to try and avoid future regret and part of that whole third part of care, is just caring enough to basically say, hey, I want to sign up to monitor your life, I want to sign up to be responsible for the things you want to do in life. I want to be responsible, remind you, I want to be the person that gives you permission to enjoy your life, because I think a lot of clients have shown me they're afraid to spend the money and it was literally not until I took out the 50 grand and put it in the bank account that they actually would go buy the car, because otherwise they think that's the portfolio and that's for later and I can't touch that and I don't want to touch that. And what do you mean? I'm going to take money from that and it's just like no, here, boom, there's the extra. It's just such a it's a different way to go about a job that otherwise is trying to outperform a portfolio, trying to do better than some other guy, and there's plenty of people out there that want to try and do that, and I just think the world's getting set up more and more. It's like if you want to do that, there's too many people that want to do that themselves. Like I want to be the solution of the do it yourself, or that got sick of doing it or blew themselves up, or the widow of the do it yourself, because I think there's way more people. It's just like I just want to be protected for myself from my life savings and I want someone else to be responsible to help me spend and not run out of that which I have, and can I enjoy a little bit of it along the way and get decent returns and beat inflation right? This isn't it's like hey, yes, I can do that. You may not like it. It's volatile at times, but we're going to try and set it aside and we put a little system together.
Speaker 1:And it's not pie charts and 100 page perspectives and portfolio management. It's a discretionary portfolio. We'll decide what's in it. You got to tell us when you're going to need money in and out of it and we're going to work together and have this relationship. And so let's talk about your family and talk about your occupation and talk about your hobbies and travel and your home and your car, and how are the kids and how are the pets and how is life and in its day and age. Like, all of a sudden, that's a value add In a social media, like everyone's looking through computer screens and we're trying to like understand people's hopes and dreams and lives in ways that it's coming down to which vacation they're taking next, or an asking them to enjoy it, or asking them the mileage on their car, because I will you know, it's funny ones.
Speaker 1:I only have to ask them that once. And when they want to ask why, I'm like well, guess what, the more miles you have, more likely you're going to need another car. Those things are expensive, so I want to pay attention when that's coming, so we're not surprised. It's like okay, so it's just, it's just, it's so. It seems crazy that you know, in the NFL, which I don't follow all that much, there's professional coaches to coach professional athletes how to block or tackle, like they're in the NFL or to teach a professional golf ride a putt, and it's like. It seems like that's this way too, like they still need to do those basic things, and it's just like I think the financial industry has gotten so lost in trying to add value in some other way that just doing the basic things about how was mom and dad doing and are you responsible for them when they go into the care facility?
Speaker 1:And do you know that? Do you know where the documents are? Are you going to have to fund any of those expenses? Are we going to get parents or one of three things. They're going to basically die with their last penny. You're going to need to help them or they're going to leave you inheritance. Which one of the three is it? And just asking the right question. It's just, it's it. We're having a lot of fun with it. It's like the whole.
Speaker 2:We got a lot of problems to solve. But you're right, it's the simple ones. But that never, that never makes its way into. But I'm the wholesaler's nightmare.
Speaker 1:I'm the wholesaler's nightmare because, like I, I've removed the whole reason why any one of them mattered to me. And yet they're all great people.
Speaker 2:Let's we can, we can wrap on this one because it's been fun and, like I said, there's no hurt feelings out here, because I think I think anyone who is a good wholesaler like understands that, one, they're not going to work with every potential advisor out there and two, if they're paying attention to what's happening in the industry, they're probably not disagreeing with you at all. So so there's probably some that are like yep, I actually get it. But I do want to close on this. Are you, are you swatting away emails and phone calls from them all the time? Are they like, are they hitting you up and trying to get in touch with you or someone else at your firm, like on blast? Is that like a problem that you're trying to deal with or that you are dealing with?
Speaker 1:Yeah, they, they. There's different. I think we actually have a policy and procedure for gatekeepers of how they, how they, get access to me, or don't? The four companies that we use their research? I will, I will interact with.
Speaker 1:The hard part is I basically say I need nothing from you other than the research. I don't want to go to lunch, I don't want to have, I don't want to pen, I don't want. You know, I just, I just give me the research, or here's the criteria that we use, of the puzzle, the pieces that could go into our portfolio, which are quite limiting, ironically, between cost trading, volume and track record. But you know, I was, I was at a strategic coach event and one of the participants at the coaching was a wholesaler and he was talking about the struggle that he was having of coming up with an event, and the purpose of the event was to solely was to give the advisors a good time and allow him to share a little bit about the product, with the hope that they somehow would come around and do a sale in in the product that they sold. And it was just like it. It, you know, and that's that's how that industry has been working forever, and it's just like man.
Speaker 2:I just want to use good products that have low cost, that don't need to have a commercial or don't have to take me out to lunch to find them, find the way into my portfolio and yeah it's, that's what keeps, that's what's keeping today's wholesaler up at night is because once you strip away the wholesaler being the conduit for fund information like I, like individuals used to show up needing to present information that was on the fact sheet or whatever else you just you just don't need that anymore and like, and you can look up anything you need to look up on a fund at your own, on your own time, with your own tools, and so it really just makes it makes for.
Speaker 2:It, makes it difficult for someone who is not thinking that way to like go about maybe running an event. That's like really, that's like actually impactful and valuable when they're supposed to focus on products, but lo and behold, the people they're trying to invite like they don't need that information in that forum. Like that's, that's really where the tide is shifting and that's where I, that's where I felt it, it's where everyone out there in the field has felt it, and it's it's just there's going to be a path forward, but I think it's still getting ironed out and it's still going to be a little choppy until it does.
Speaker 1:Yeah, I had a relationship with a wholesaler back in the beginning part of my career in the 2000, the 2008 realm and we switched to go to discretionary and I realized that that product was it wasn't going to be a fit for the direction that we were going and I called him and told him I was doing it. But we pulled a hundred million dollars out on a day in a day because we went to scratch area and then sold the models.
Speaker 2:Well, bad day for the wholesaler in the office probably.
Speaker 1:Oh, it was just I ruined his year. I, like I, to this day still feel bad and yet to this day, have said to myself I am never going to put myself in a relational position that again, that I have to feel bad for doing what's right for hundreds or thousands of people that entrusted me with their life savings. I don't want that conflict.
Speaker 2:Because there was a great relationship there and there was nothing the wholesaler did wrong.
Speaker 1:I love the guy. Still do we have and we have and we there's a, there's some. It's kind of a joke and it's kind of not a joke, but he got crushed in his business that year and it was my fault. But I bring him on the show, we'll get him on the show.
Speaker 2:We're going to run back an episode with him about the worst year of his career because of Tyson. How about that? We'll facilitate that, yeah, yeah. Awesome he might hear this episode and I might get a phone call because he knows who he is.
Speaker 2:Let me know We'll get it over to him. But there it is. Yes, tyson, thank you so much for for spending some time with us this afternoon. I have so obviously we have the total relationship. We'll make the link available. We talked about the framework. This is both for advisors, obviously out there, and for any wholesalers that might want to check this out just to get a perspective about what advisors are dealing with today. Certainly, check it out and, tyson, we welcome you back whenever. Feel free to be at your. Your officially a friend of the show, so thank you so much for joining the internal use only. Thanks for listening. Find us on Instagram at internal use only podcast or email us at internal use only podcast at gmailcom.