Welcome once again taxes to retire smart Austin with Phil Capriotti senior, he’s the founder of Empower Wealth and tax. I’m your host, Mike Spangle. On today’s program, we are going to be talking about the kinds of questions you need to ask a potential financial adviser who is going to manage your nest egg and make sure that you’ve got an income stream through retirement. I’m even going to press Phil on the hard questions of things like fees, compensation, and what to expect not just from him, but the kinds of things you’ll hear around other financial advisor offices Phil Capriotti senior you ready for me to put you on the hot seat on financial advisors?
I am every advisor should be ready for that. And it’s not a shouldn’t be a hot seat if you really have your act together to be quite honest with you. Yeah, is actually should be a feather in your cap, so to speak, without doubt.
One of the one of the things that you know, if you open up and you start on research, you’ll have- everybody can write their own bio, right? We’ve even goofed around, and you can AI and you can make yourself sound incredible. But what kinds of qualifications credentials what should we really be looking for on someone’s website, including your own?
You can look at the website, I believe you should interview the advisor in person, the website can be very, very deceiving. It could have a plethora of people up there. With a lot of designations, I’ve actually seen websites where the designations weren’t legit. Whenever we’re looking at an advisor to add on, we want to do a background check. I’ve actually had advisors put themselves up as certified financial planners and never got credentialed. So, you have to be very, very careful. And it was posted on the website that they’re certified financial advisors, the very first thing that I look for, and I would recommend it you let’s start with why do folks change advisors? Why should they either there’s one or two reasons. Number one, they have always done their own portfolio management, their own taxes, they’ve done they were their own advisor, that’s one. The other is they have an advisor that they love. But they moved from another state, and they want to have that eye-to-eye contact, they want to come right down to the office, make an appointment, stop in and see you and talk about maybe a multitude of different topics. Okay. The other thing is, they loathe their current advisor. I’ve had folks come in and I ask, why are we interviewing? I mean, what can I say? What is it that I can do to help? Is that Well, you know, Phil, I’ll be quite honest with you. My advisor never calls me I always get the runaround. And even when, when we do have reviews, I can’t understand a word he’s saying. Okay, speaking of an individual’s head. So, for most of us, most folks, when I look at looking for at for another advisor, you want to, whether it’s your first or whether it’s your fifth, you want the complete package, don’t let credentials only steer you. Okay, so the first thing is credentials.
What about the experience, so it should we go (indistinct)? Because it’s been known as the alphabet soup behind people’s names. Some of them are, you know, 60 minutes of studying online and get you get some letters, some of it take four years, you have to have a certain amount of clients. And how do you know (indistinct) expertise?
I’ve seen advisors with 30 years’ experience, and they are and then they’re not current on anything. They’re not current on their tax law. They’re doing the same things they did 30 years ago. So, that continuing education, and having an office with a deep bench of licensed professionals, a tax, an attorney and estate attorney, all of these things are really important. So, it’s not always the amount of years. Okay, and it’s not always the credentials, but it’s really a combination. I like to ask, number one, are you a Certified Financial Planner? If not, why not? Don’t just ask the question yes or no, if not, why not? Are you a Certified Financial Analyst? Have you taken those classes? Do you work with them? Is there anyone in your firm? Okay, what’s your experience? Now, I’ve been in the business 25-30 years, I have constructed 1000, 2000, 5000 retirement income plans.
Did it include tax planning, estate planning, health care, Social Security?
Exactly. So, we want to get- we really want to quantify the type of experience, and this is what I do, because this is how this is how I pretty much make sure it set the bar and make sure that they clear it. I want to know what their specific expertise is, how can they help me better my tax situation, or my portfolios management? I want them to sell themselves to me, not with a lot of lip service, but with actual facts. Also, it’s extremely important to look them right in the eye and ask, what is your compensation? How are you paid? When an individual asked me how I’m paid, I love the way that- when they do that
Well, some people would prefer to tap dance around that, or they’ll say, I don’t get paid anything this insurance company pays me.
I doubt if a financial advis- Well, actually, to be quite honest with you. I’ve actually seen portfolios like that. I don’t pay a management fee for my financial advisor. Well, yeah, you do. Okay. So, if once we run a Morningstar report on that portfolio, and we see the internal fees, okay, and 12, b1 fees, that they’re being charged, that’s, that is the fee. But the point is, you want to make sure you’re working with a licensed fiduciary who works for you, not necessarily for a company, broker dealers are all well and good, and I have nothing against them. Okay, broker dealers who are also a fiduciary, they wear two different hats, a licensed fiduciary that does fee-based planning. And you’re basically you’re hiring them to set you straight should. And that’s what I recommend not commission based, not just fee based, but I want to be make sure that as your portfolio grows, okay, both of our incomes grow. But I want, I also want to make sure that I don’t have that the financial advisor doesn’t have a monetary interest that can circumvent them from offering me other products that are better.
And a concept on fee based is that if you’re managing the assets, if they go up, and it’s a set percentage of let’s say, a point seven, five or point one, if it goes up, that point, one is being able to earn from a larger amount, but if the value goes down, because you can’t control the markets, then you would earn less as well.
Your compensation goes down. And that’s the way it should be it should be equitable that way. Are you a licensed fiduciary? Will you always have my best interest as number one priority? You see these specific pointed questions. This is the way you interview a financial advisor in my professional opinion. I don’t believe in asking for references, because many times references can be not as accurate as we’d like. And not only that, if after interviewing with me three or four times I need to give you a reference. Obviously, we’re not a good fit. You don’t trust me or believe me. But what is a better question, in my opinion. And the other thing is, for us to give out references, you’re asking us to violate the security of some of our clients. I just, it’s just dirty. But I do like your clientele. What clientele do you specialize in helping and assisting. So, this is an extremely, because you may have a clientele with very low net worth, I’m just saying you might have done 100 200 1000 different, but you’re working with folks who have very moderate retirement accounts. Okay. Are you a CPA? Are you attorney? Are you a recovering CPA? Okay. That’s one that’s retired. What about our communication and accessibility to your knowledge? And how often are we going to meet? And exactly what are we going to review when we meet? So, these are some of the questions I’m going to get back with more when we come back down. When we come back. These are the some of the questions that you want to ask. Look the advisor in the eye, forget the Zoom calls, go into the office in person, look around, look at the staff. You’ll it’s very revealing and then look at the level of work they’re willing to do for you before they even ask you to work together.
Folks, don’t go anywhere. For several years Phil has been doing television here helping you understand the markets, what kind of tools he uses what you need to be aware of what you shouldn’t pay attention to this program, though, specifically about the kinds of questions you should ask a financial adviser who you want to help manage your nest egg into retirement. Not only is he telling you the kinds of questions to ask other advisors, but ask him and see if it makes sense when you sit down across from the team here at Empower Wealth and tax for watching this program for our TV viewers. You can actually get your own complimentary review we’ll do a tax analysis investment The analysis, and you will actually leave with written statements of where you’re at for your retirement planning. But we can only do it for the first five callers today. So, the for the first five of you who reach out 888-818-6557. Or you can use the QR code as well open up your phone to the camera function when I went the wrong way. See that QR code right there. Click on it, it’ll take you over to our landing page, you can schedule an appointment or with Phil Capriotti senior right after this.
Most of the folks that we work with are not going to outlive their money. When an individual comes into our firm the very first question they ask, How do I know you’re going to be here five years from now, your financial advisor and your licensed fiduciary this should be a lifelong commitment. It shouldn’t be a revolving door exercise generational planning, we have an opportunity to not only work together with retirees, but having my children work with their children, my grandchildren working with their grandchildren. So, we’re establishing a relationship that will literally go through several generations. I have three children that are actively in the business. My youngest son Parker, who’s 22 is a junior trader. He works in our home office in Phoenix with foundations. He’s in a three-year mentoring program. My son Phillip is also a licensed fiduciary he’s 41 years old, he will take over the business and my daughter Lisa, my oldest daughter, who’s 42 also has her securities and fiduciary license as well. This company will pass to my children, and hopefully someday to my grandchildren, but in the interim, teaching them through my example. That’s our firm.
Welcome back to retire smart Austin with Phil Capriotti, senior I’m your host this week, Spike Spangle. In fact, our producer in here, Randy was saying that you seemed a little serious in that first segment. Where’s your smile? You’re really intense about this.
Sorry, this is probably- I’ve seen so many clients make- be won over by personalities. Fluff or sizzle, okay, there’s really- there isn’t detail. And I really believe that it’s important for all clients to understand their interviewing process when interviewing a new advisor. Most of our clients that come in our new clients come in, they have a tax problem. They love their old advisor, but they moved from California from New York or wherever they want to get the same, or their advisor has been advising them for 10, 20, 30 years and getting ready to retire. Yeah, so or their advisor does not have a CPA on staff or does not have a tax practice, or they don’t believe in Roth conversions. There are a number of different reasons. So, what I’m trying to say, folks, and I’ll lighten it up, I’ll try to smile. You want to make sure when you’re interviewing for your new financial advisor, who should he or she should be finding a licensed fiduciary, you want to make sure that they can touch all of the retirement bases that are important to you. You want them to do your taxes, you want to do the tax planning, you want them to do your social security planning. You want to talk about legacy planning with your children. Yeah, and you want to make sure that they have a specific process. Okay, what is your process? What is your software look like? Now, another question? How often are you going to update my retirement income plan? How often will you make changes in my portfolio? How often will we speak? My clients, my personal clients have access to my cell phone. Now I’m not trying to brag, I’m just saying, if you call my office during office hours, you’re going to get a response. But sometimes something might be bothering an individual, whatever it happens to be. And if it’s on a Friday or a Saturday, I want you to feel free to shoot me a text and say, Hey, Phil, you know, I could have waited till Monday, but it’s really bothering me. I wanted to get out of my system. What about this, this and this, right? So that accessibility is extremely important.
And for compliance reasons, I’d be clear on that, we can’t do anything like perform trades with a trade to talk about any of that kind of stuff. But on a personal level, yeah, we’ve known people who’ve either had an accident or somebody’s had a stroke. And you know, where do I get started? And you’re saying we can reach out to you on the weekends.
Yeah. And then I also want to offer performance metrics. I want to show a client this particular portfolio has this much downside risk. However, its average return over the last six years has been 13%. Just give it magic showing the metrics now you don’t you should never ever, ever sell returns, I don’t believe in that. Basically, you should, in my professional opinion, build the portfolio around the family you’re serving, if it’s a single individual around their needs, so the portfolio should be built around their needs.
I think part of the issue though, with the performance metrics and the comparisons, we could take the same lump sum of money, put it into the same portfolio, but do it at two different years, and 10 years down the road, we’re gonna look completely different. So those performance metrics, what kind of measurements do you use to compare?
You know, I’ve seen old school advisors say you need buckets, you need a bucket for the first five years a bucket for the next 10 years. I mean, please, we’re not playing in Sandbox here. Okay, you need separate different accounts that are designed to accomplish separate different objectives. And so how are those objectives isolated? The conversation with the client? Is this particular is, is planning for your demise, okay, and your wife’s income if they’re married, is that an important priority? So, we want to go through a list of priorities with you. And this is part of being very thorough, ask you questions that you haven’t thought of. So, this is what we want, we really want to take a look at getting into the clients head and becoming my clients are my work family, okay. They’re the people I work with. But we do not take on clients who we do not personally like and do not personally like us. We’ve gotten to the points for 17 years, where that through the grace of God, we select our clients, and our clients select us. Many times, folks will come in for the first time. And I had this happen just last week is gentleman, we’ll just call him Mr. John came in and he said, I know you’re about to shake my hands. It’s a pleasure to meet you. So that I met you three years ago, I’ve been watching you on TV on Sunday mornings for the last three years. I feel like I know you. I said why did you finally make the call. He said it was something about he said something about what you said about taxes, it rubbed me the wrong way I talked to my current adviser, he said don’t worry about taxes until they go up. Don’t worry about taxes till they go up. A Roth conversion is a bad idea for you. Because you’re at a highest tax bracket. I thought I’d come and get a second opinion. And you know what, I’ve been watching you for the last three years, I trust you because you know what, you’re still here after the last three years. I took it as a compliment. And But at any rate, it’s a number. Mainly when you go into the office, this staff, there should be a deep bench, not someone not you know two people or three people, you should have in my opinion that you should have a good seven, eight a dozen people in the office to be able to service because when you get busy, you the last thing you want is for a client to have to wait on you. Time is valuable. And I don’t like to waste my client’s.
Dr. Phil, we’ve got a dedicated message here from the program. If you would like get your own complimentary Tax Review, investment review, if you’d like to sit down with the questions that Phil is providing today, and take them to a financial advisor, your financial advisor and see if they’re working, doing all of these things for you what’s on their menu offering for you, are they helping you with taxes, investments, estate planning, how and when to take Social Security, what to do about your Medicare, your health care choices, long term care, what does your income look like? And can you outlive it? They can answer those questions. Phil can call the phone number right here. 888-818-6557. For the first five callers, we will set an appointment for you to come into the deep bench of our office and get your own no cost retirement plan or with Phil Capriotti, senior of Empower Wealth and tax right after this.
The work never seems to end until the day it finally does. After nearly a lifetime on the job. You should be rewarded for all the time you spent working. Whether that’s crossing off items on your bucket list, learning a new passion or rekindling the love of an old one. After all, life isn’t over when you stop working. It’s the start of an all-new chapter, the one where you’re the writer and you get to choose how your story will go. A way to achieve that is by having a clear financial plan to sustain your golden years. The biggest fear most retirees have is if they’ll have enough money to maintain the lifestyle they’ve always enjoyed. Having a plan to help protect you against the curveballs life often throws will help to maintain your lifestyle. Call today to get your free written financial plan. See me live every day to the fullest and enjoy the retirement of your dreams.
Welcome back to retire smart. Awesome with Phil Capriotti senior He’s the founder of Empower Wealth and tax what kind of questions should you ask a financial advisor who’s going to help you with your nest egg into retirement. Phil is answering those questions right here today, we covered a lot of ground, you even talked about fees, you’ve been very frank about it and how you work. And so, I appreciate you being open about it. Compliance, how folks should be registered? Let’s talk a little bit about the risk management, I would think that people want to know, how are you going to both protect my assets, but make sure I don’t run out of my assets.
This is probably the least frequent question that’s asked, how do you structure risk management strategies? And if your advisor looks, looks at you with that deer in the headlight? Look, you definitely might want to ask some additional questions. So, what are they? So, I want to ask the adviser and jot this down, feel free to jot it down? How do you approach risk management to mitigate risk in a in a severe downturn market? How? What? What have you put in place to stop me from losing 2030 40%? And what strategies can you implement to make sure that I stay within my risk tolerance? Do you do tax planning? Do you have a CPA on staff? Do you do tax returns? Do you structure RMD distribution reports? Can you estimate what my RMDs my required minimum distributions are going to be when I’m 75, 80, 85, 90? Does your software help me understand that? Yes or no? How many clients have you done it for? So, tax planning should be a must? Your financial advisor and licensed fiduciary should have the ability to take a look at your will and ask simple questions. When was the last time your Will was updated? If you came from another state, have you updated or changed your will and or trust since you moved to this state? Because state laws are different in varying states? So, these are the questions that I asked. And these are the questions I expect clients or potential clients to ask when they come into the office.
I want to stop you there because I have some experience with this and knowing hundreds of advisors close to a couple thousand advisors across the country. There are not many firms, Countrywide, that do what you do with both the wealth planning. And the tax planning. It’s usually separate. Or it’s usually outsourced and saying I we know some good colleagues in the area, and I can tell them how to help you with the tax plan. The tax planning for you is all under the same roof. Right?
Yeah, we’re in the same building with the same, excuse me, the same company. Yeah, they’re my employees. Okay, let me be that specific. Yeah, they’re my employees are the company’s employees. I am a firm believer, and I believe that taxes and wealth management and retirement income planning will go hand in hand. And if you’re worried this is my own professional opinion, maybe not necessarily an industry’s opinion, if your financial adviser is not or isn’t also your personal tax advisor, I believe you can do better. They should not be offing you to the CPA in the next building. They should because you should have an open line of communication. If you, as taxes go up, if your advisor, here’s another knock off for me, when I talked to a person that has a portfolio, and they had significant savings. Okay, we’ll say it’s a million dollars, 1.5, something like that. I’ll ask how long have you been working with your financial advisor? Has he done a mock tax return to see how much you can convert to a Roth in the lowest tax bracket? Has he done any tax planning for you? Has he estimated for you what your RMDs are going to be? If you’re getting no no, no. Or we have a person that does that over here? Chances are you don’t do you do not have a complete financial advisor in my personal opinion. what type of technology and security Do you have? How are you going to protect my accounts? So, this is an extremely important question as to now I know it may seem a little overdone. How many times are we going to meet together before we’re going to expect a (indistinct)
Yeah. And how much (indistinct) and how much is it going to be involved, and how many times do I have to come?
So, I’ll just give you an example. We normally meet with an individual between three and four times before we actually start to work together with them. We want them to have plenty of time to interview us and feel comfortable with us. And we want our staff, and myself, and our advisors to feel comfortable with the client.
Sounds like you want to make sure it’s time to hear Here’s the door and you’re welcome to go get a second opinion and a third opinion and can we welcome it?
We truly do. And you know I had somebody say Yeah, but you don’t understand Phil the last one and wins Unlike what does that mean? He says the last advisor they see is the one they work with. And this was, and I said, Well, you know what, I don’t know whether it’s true or not, it’s irrelevant. But the fact of the matter is, you should interview several advisors. And the one you feel has the better credentials, the better experience, the one you get along with the one that is a licensed fiduciary, one that works in your best interest, I can get all those aces.
But I think that that that sounds like it came from a salesperson Who’s afraid of the sale or yours is a process yours is getting to know people, like you said, it’s your work family. These are people going back from what you’ve talked about, you say, give us a call. If something is going on, you do annual reviews, you got all kinds of reports that go out, you’re in communication with these people. So you don’t want to work with people that you’re not a fan of.
I send a newsletter two newsletters out to my clients every single week. One is a wealth management newsletter, one’s a tax newsletter, I think is extremely important because these things change all the time. We have zoom meetings, okay, we have normally three and four month reviews. Every five weeks to six weeks, I also do a zoom meeting for everyone, just basically updating market conditions and so forth. It’s a lot of interaction, because guess what, your client should be your friend, you should treat him like family or your best friend. And that’s my personal opinion.
So, do you have a summation on it? That’s a lot to take in on trying to determine how to find a financial advisor. If, if it was a buddy of yours who was across the country and you weren’t able to help them out? What would you say?
Well, I’m gonna preface that with having an exit strategy. Okay. And what I mean by that is, if you’re unhappy with your advisor, if you feel you’re underserved if you’re interviewing other advisors, have an exit strategy for terminating the relationship on a on a on a good note. Okay, but be honest, say, You know what, there’s just- I love your credentials. I love everything that I but I just don’t feel as though we’re a good fit. Or, you know, I don’t really care for your credentials, this credentials, you know, from this advisor, but I really liked the way you talk to me. So, it has to be a good fit, and there should be harmony between you and your advisor and constant communication.
Phil, I’ve got actually it’s just a comment here from the management team at Horseshoe Bay, they said, they’re so happy to finally see after 25 years of engagement, a married. Phil Capriotti, how does it feel?
It’s a beautiful, beautiful thing.
Congratulations, buddy. Congratulations.
Thank you, I appreciate it.
Very excited about it.
I appreciate that.
Make sure you update your estate planning. You got to make sure you’ve got all the names.
All of that was done before I asked the question the second time.
Folks call the phone number at the bottom of the screen so you can get your complimentary review. 888-818-6557 Thank you for watching. We’ll be back next week.
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