This is the Truth Network. Um Welcome to Finishing Well, brought to you by CardinalGuide.com with certified financial planner Hans Scheil, best-selling author and financial planner, helping families finish well for over 40 years. On Finishing Well, we'll examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Social Security, Medicare, IRAID, long-term care, life insurance, investments, and taxes.
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So welcome to Finishing Well with Certified Financial Planner Hans Scheil and today's show. Why does being a fiduciary matter? And so fiduciary word kind of a big word we're going to get into that a lot but You know, it's fascinating that there's a big correlation in my mind between a fiduciary and a steward. And in 1 Corinthians 4. It tells us very, very clearly in the scripture: it is required in stewards that they be found.
Faithful. In fact, it's kind of a one-line job description that the scripture gives us of what a fiduciary is, and that Paul doesn't say they need to be successful, they need to be brilliant, they need to be profitable. What what he says is they need to be Spaceball. Right? And you know, somebody that, when the chips are completely down, You know, that's when they're, you know, then that's when they rise to the occasion.
Somebody that you don't have to wonder if they're trying to. to figure out something on their own benefit You know, a faithful friend is is one that you feel like puts You know, your interests ahead of their own. And it's fascinating to me that when you look at that idea. of what a fiduciary is, Hans, it's right on the money, right?
Well it is when it just The simplest Definition of a fiduciary. He is like, Robbie, if you're my client. I'm the advisor. And I'm a fiduciary. I have fiduciary duty to you.
What that means is I've got to put your interest They had a mushroom.
So You know, in other words, I've gotta figure out what have been lobbying. And then that needs to be the priority. I hear a what is in Flows is it? Falling. Right?
And clearly I have interest in the dealership. If you hired me as the advisor, You're gonna even pay me fees Or I'm gonna earn a commission. on something that you buy from.
So I get changed with what I do. Yeah, I'm um Doing a job off pay for your money. Pursuing condition three men. And they're just like any source person I in my own interest, or my own living, to support myself, that's what I need to do. Then what is the good theory?
says is all extra good That can't be the main advantage. The main advantage is we've got to get through the special responsibility that you have to get applied here. to help rob the woman. What's it his best answer? And to find that out and then discover it and then act.
Then Robbie can first From my introspective.
Okay, that's my interest. Oh actually. in conflict with the fiduciaries. But then what I need to do When I'm acting in my own interest, it is to be stereotyped, but What I need to do was I need to First of all. to identify We are the kind of thing that.
Like paying a commission is one of them. You know, that I'm going to get paid by the insurance company to recommend this insurance policy.
So, figure out what they are. And then I need the oil. You. and they need to do everything in my power to mitigate. Diet means They're still there.
The block and open. And I have to be able to approve to a higher authority. Or not a higher authority like that, but to whoever, the people who supervise me or the SEC, I need to be able to show. But I acted as a proof. Thank you.
I mean that's that kind of gifts in a summary. of what's going on. And so Like, why are we talking about the new theory? Why does this matter? Yeah, well, that's.
I happen to know, in my opinion, because. Both you and Tom are fiduciaries. Uh which? You know, from my standpoint, knowing what it is now in my own life, I can't imagine. Um talking about Things like life insurance and long-term care insurance and all that stuff, I would much, much, much rather.
Especially when it comes to your IRAs and and conversions and all that stuff wanna be dealing with somebody who's gonna put my interests ahead of theirs. or at least, like you said, disclose it and have full disclosure on what's really going on. Yeah.
Now let's get Claire here. Is you don't just become a fiduciary by declaring. I'm a producer.
Okay, this is something that's in the regulations. in the laws because you have fiduciaries But then you have people in the investment, financial, and insurance data. But are not things.
Okay.
So it's not something you do by declaration. Let's break it down a little bit. Then people that fell in dust or provides financial advice. And they're under the um It's just in action. In nineteen forty the nuclear contractor management.
But So in other words There's a certain group of investment advisors. We will lead the definition in a later stage. Volume stop. I'm one of them. Tom's one of them.
Yeah.
We owe our clients. a fiduciary we have a fiduciary duty to our clients. to frighten the logs in the regular.
Okay.
What? But then you also have people that are CFP. in which Tom and I are CFP's certified financial plans. There's a whole lot of specs. What's not a life.
It's a professional designation. It's very hard to get. and it has very high stan high standards. After you get it. One of those is the alphabet produced dairy many times as providing planets for plants.
And that's how my uh produced your standard It carries over the instructions. Because when I Fell you in firms in fact. I'm viewing it in the context of financial planning.
So I owe the CFP forward. that you require Under my CFP A federationary media.
So actually when I introduce a show every week When I say certified financial planner, That's the long form of CFP. I just made, you know, I hate that I just now made that connection, but hey.
Well, you know, Tom and I don't throw that professional designation around. too much is You know, it's kind of annoying, actually, when you get around somebody that's doing that to me. I mean, so your CFP, dude.
So so am I.
So uh you know, 80,000 other people. And I think it's remarkable. But quit telling us that every five minutes. Thanks. Unless you're going to stop and tell us what it means.
So I'm telling you what it is today, even though we've been working together for eight years. I never really told you that. Because they really don't have to. Yeah, um I'm just telling you that this fiduciary for us. comes from two places.
It comes from How we're licensed. and registered in the investment business. That covers all the investment which is computed. We had the financial planning and the financial planning These reach are. But it also covers us again for all that.
plus anything else that falls under financial planning, Because By the CFP board.
So it it's kind of like we have fiduciary twice.
So enough with the technicalities 'cause that people aren't tuning in. hear all this mumbo jumbo. I mean, we are fiduciaries and what we want to talk about, why does that matter? Exactly. Yeah, I'm going to answer my own question.
It matters because You know, if somebody is a f is a fiduciary, that you can pretty much count on the fact that they're going to be looking after you first. It was well set.
Okay, then they're gonna use all the charges of that's actually That looks after themselves. In other words, I have to disclose to you. that I paid a commission or that I Things that are unavoidable. I have to disclose those. And it gives you a perhaps a Another level of security will You know this person's doing trick.
Okay.
Right? What's worth mapping? Um And it matters for my own activity. You know, a little conversation we had at the beginning of the show.
Well we were talking about Because of I've been doing this 50 years. And I've been a sales leader, a agency manager, branch manager and I've done very publicly and very successfully. And so You know, I've done a lot of scale training and lead beatings. People are always coming up to be asking the questions. And one of the questions I get.
When we really sit down How do I build? How do I. You know, how do I get people to trust me? You know, and I always answer that.
Well, you know, it it's kind of a a question a lot of people ask, and it's like, you know, just the whole idea of getting someone to trust you. Mm-hmm. That's impossible. I mean, and so what what what I'm gonna ask them is to finish the conversation. My advice to them is Yeah.
Trustworthy. If you start working on yourself. And you start examining yourself, are you tough person? And then we'll all be at the end of the conversation. Because at the end of the interaction, I'll ask somebody.
I'm just asking Taylor how you suffer. But no scale options. But you know what some of the looks like. This would be a good time to remind you that our show is brought to you by Cardinal Guide, CardinalGuide.com. And if you go to cardinalguide.com, you'll see there.
Um Seven worries tabs. And fascinatingly, I guess that this one. Would fit Under all the above to some extent, but is it They're under estate planning? Or do you think is going to be under investment. And any time.
Okay, investment in income. If you go to that investment income, you're going to see this show, you know. Why does it Why does being a fiduciary matter? And as well as the show notes and other legal information that's all about the idea of being infiducially, it's all there. Again, at cardinalguy.com, of course.
Really important stuff from my perspective is that you've got all these different resources and videos. You've got Hans's book, The Complete Cardinal Guide to Planning for and Living in Retirement, as well as, of course, the ever-famous Contact Toms and Tom page.
So if you need a fiduciary, guess what? That's how you do it. You just go to cardinalguide.com and click on that Contact Toms and Tom button. We'll be right back with a whole lot more. Why does being a fiduciary?
Ah. Investment Advisory Services offered through Brookstrone Capital Management LLC, abbreviated BCM. a registered investment advisor. BCM and Cardinal Advisors are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents.
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So welcome back to Finishing Well, a Certified Financial Planner, a CFP. Hans with today's show, Why Does Being a Fiduciary matter. And so Hans, there's the question on the tank.
Well, why does that matter? It matters because Will you go? to someone. We come to you. And you you need somebody Or you've chosen to have somebody like me.
who is going to give you investment advice. financial planning advice. We have The reason fiduciaries exist is it's a general understanding that a lot of people are not too spiffy with all this stuff, that they need to hire a professional that's. Educated and knowledgeable and Again, trustworthy. and a fiduciary Because a lot of this stuff is maybe over your head.
Yeah, if it's not over your thread making decisions about it. maybe a little bit out of your boxes, so you need assistance with that. And so a fiduciary Relationship, a fiduciary responsibility, a duty of fiduciary was just created within the law by the SEC.
Okay.
Why don't we just break down like what does the SEC say that this? Is there's five Duties That some being a fiduciary. I'm just going to go through them real quick. is the duty of loyalty.
So, you know You need to start out loyal, you need to remain loyal, and you need to, just throughout the whole thing, I need to be loyal to me and my clients.
Okay, then there's a breakdown. We're not going to get into all the bullet points, but So the first reading is wall. Uh the second one is the duty of prayer. Yeah.
No, that's a hard one to find. But the fear is absolute. It's pretty easy to look at it there's average. But then we cure a project. If you were clean enough, you could see that you We have a dream to act with things.
You know, and that means to understand people said to understand your situation. understand the financial situation to make working agreements imputable and appropriate. and review my research and development.
So I've got a few of the first things that the producer I have a deed to. The third one is Paul and Soul Despite And that's where I spoke to you earlier. I've got to tell you all the material facts. I got disclosures to you. disclosing to you in a way that you're gonna understand.
We gotta put them in white. Or About verbalizing. I've gotta go all the way up. And it's my responsibility to flows all material fast easily. And then it's my responsibility to make sure that you grab an onto it's not the case.
When the boiler down the puckles are active. Yeah, but we need to sponsor that. Good. The fourth one is the duty to act as big brain. Personal.
That almost speaks to itself with clear communication.
So Probably heard a lot of people talk about the wolf and the dogs. Right. There you go. They may think there's a skin colour, but they're not, so It's it's like we're talking about. Yeah.
Yeah, no, honey. Thank you. So it's pretty broad, but good communication. Accurate report. That sounds reasonable, but we just need to report to you.
where your money's at and to do it in a very accurate way. To not be misplaced. It's kind of hard to not be something, but. No. Of course.
They got that in there, the absolute. Don't be misleading me.
Okay, a fiduciary It it was on shaky ground for the clean. The market for the rest of us are marketing.
So, in other words, we can't have fake books going on, we can't be showing.
some high interest rate. Is that really not gonna qualify for If anything that is even spells against green, we gotta keep out of our minds.
Okay.
And the last one is this the D3 thing is an ongoing responsibility. You know, you just start it continuous.
So, you know, we not only do this in the beginning, when we're setting up for products and investments and things pretty fixed. I need to continue to be a fiduciary. Then all are asking. And I guess the place that this would come up is W with when we get down the road, and something doesn't appear right, I don't need to be defensive. We're giving you a long way to stuff, you know, about what I mean, just I need to be a fiduciary two years from now.
Maybe things aren't going like we planned. I I still have magic clothes. I've got to communicate clearly, get to get answers promptly.
So it's a whole problem. What I'd like to tell you is the examples that I can give you are only general. Because I don't remember, I don't even make note of this stuff day to day. Right. If I give you an example.
It's going to be about somebody else. Dead. should have been acting like a fiduciary and they weren't. And I don't have any examples like that of comedy, so. Um At least none that come to mind.
Um I'm not going to say over fifty years, maybe I didn't. Cross the line or something somewhere, somehow, but I don't really have a good example to throw out of bad behavior. I can only demonstrate how we've set up this evening. It's a matter of business. And we document all this stuff.
behind the scenes.
so that we're ready. to be challenged. I mean, we're ready for a complaint to come in. That would say, hey, these guys aren't doing right. And here's why.
then we're going to be able to get out. Our records. And then you I can speak here without records. I just know how all our sculpts are set up.
So that we're there just there's just no way for us to ask out of that.
Okay.
Yeah, I would imagine that it comes into play a lot when you're talking about investments. As you talk about it, that's where you'll find it in the. Um Seven worries tabs is under investments is I would think that the commissions are completely different on an annuity versus a life insurance policy. Uh The verses You know, some other investment instruments that you're using. But again, you're looking at the person's Long-term goals, what their health is, you know, maybe it fits into their long-term care and all sorts of other things that you're evaluating all into it.
to try to figure out what their best interest is. Not Keeping in mind what the commission structure may be on the different products that you're looking at, essentially, right? Yeah, and commissions is just one piece of it. You've got also. Is this thing that we're going to recommend.
Is it right? For Robbie or or anybody else. We got to be thinking about your needs. First And it might not have anything to do with the commission. We're not going to sell you something that has more risk.
then you're able to stomach or you're able to afford Some of that is your age.
Some of that is your marital status, your other bunny. um how you were raised dealing with money. A lot of the communication.
So we've got to make all these decisions. kind of behind the scenes. But we've got to act in your best interest. That's what I'm saying. And a lot of times, It might irritate you if I told you everything I was thinking.
You know, say, well, who me? You know, I'll take that.
So, a lot of times we're just evaluating people. And then we're acting as them. acting like their brother or their You know, really. On your behalf, I'm going to make some decisions and jump to some places. In your interest, not mine.
Yeah.
What? You know what? I'm not really answering your question clearly with a story, but I'm just kind of. tell you how we think and how we act. Yeah, and we think about this all the time.
I'm even thinking about it right now when I'm making a radio show. Um where I'm Trying to act as a fiduciary, I've made my listeners. Thank you, the listener. Right. The client.
And then I'm trying to act in your best interest to tell you about the future.
Okay.
Yeah, and so it's a way of life. It's not just necessarily something that has to do with your financial. aspect of what you're doing. Right. you know, when it comes to allocating your time and and and a lot of other things, they all fit into the equation, right?
They do. Yeah.
Very important on our end to document. Document, document, document. Yeah.
You know, we have a documentation of every conversation. And we're looking for these five things. I mean, we don't actually go one, two, three, four, five, but when you look in the notes. We're showing that you know, the duty of care. I mean, that's all in there, making references to how we did that.
Full and failed disclosure. We have copies of what we sent to you. And then we have a record of that we went over this with you. Um And so this is this is just all kind of built into the way we act. every day and just not misleading in marketing.
Every radio show before it plays Yeah. goes to The compliance control. We had You know, they could turn one of them down, and every now and then they'll come back and they'll say, You need to blip this out, or you need to add this to closure.
So you need to say this. But it's still even a reasonably low bar that goes you on that. But I'm thinking about that. Every time I open my mouth, you know what I'm saying? We're gonna make a show.
That's not misleading at marketing, like the scoreboard. Exactly. Again, we want to Remind you that our show is brought to you by Cardinal Guide, CardinalGuide.com. And if you go to CardinalGuide.com, there are the Seven Warriors tabs. And today is going to be under investment and income.
You're going to see another whole video with Tom and Hans. a board all sorts of show notes on this whole idea of Now why the fiduciary? As well as, of course, other amazing resources there at the website. Videos, galore, as well as radio shows, and of course, Hans's book, The Complete Cardinal Guide to Planning for Living and Retirement. The wonderful workbook that goes with that.
And of course, the ever popular Contact Hans or Tom page. And it's all there at cardinalguide.com. Great show, Hans. Thank you and God bless you. Registered investment advisors and investment advisor representatives act as fiduciaries for all our investment management clients.
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