What is a CFP?

This is Andy Thomas from the Masculine Journey Podcast where we discover what it means to be a wholehearted man. Your chosen Truth Network Podcast is starting in just seconds.

Enjoy it, share it, but most of all, thank you for listening and for choosing the Truth Podcast Network. Now, let's get started with Finishing Well. How fun today on Finishing Well, a Certified Financial Planner, which we'll say is a CFP today.

Hans Scheil, my good friend. And so, today's show is what is a CFP, which you might have heard me just say is a Certified Financial Planner. But along those lines, I thought a great question on a spiritual level is what is a disciple, right? Because Jesus described that and what we know is the Great Commission and any salesman worth his salt has always been interested in the Great Commission. That's good.

Yeah, I've always thought that. But so, what the Great Commission was in Matthew 28, right, is Jesus said, Go ye therefore and make disciples of all nations, baptizing them in the name of the Father, the Son, and the Holy Spirit. It's a beautiful policy, but it's also a beautiful scripture. And I love that word disciple. When you look at the Greek version of that, it means an enthusiastic learner. When you look at it in Hebrew, it has to do with this concept of being a scholar.

It's very similar. And when you look at that word scholar in Hebrew, one of the main letters in it is this heart letter. It's called a lamed and it means in your heart. And so, have you ever noticed that you love to learn? You were born like as a little kid, you had asked 40 billion questions. Daddy, what is this?

What is that? Because you love to learn. Unfortunately, sometimes school takes that out of us. But one of the joys of life altogether, in my opinion, is that loving to learn. And as you begin to read the Bible, and the reason you get fed by reading the Bible is that you love to learn. And when you are around a true disciple, it's been my experience, that as they begin to talk about God, their eyes light up and they begin to tell you, Look how cool this is.

Look how neat. They don't preach to you. What they do is they show you something that just absolutely wowed them about God.

And they love their enthusiastic learners and they can't get enough, so where do they find themselves? Always going back to the Bible, looking at this in a new way and learning, learning, learning, learning. Well, beautifully, in my experience, that when you find discipleship in any field, you're gonna find people that really have fun with that. And interestingly, the greatest car salesman I ever knew that were true disciples of selling cars, those people had a big smile on their face because they had fun in the learning process of what they were doing with every single customer, learning about them, learning about how their situation would fit what was going on. And the same is very much true, from what I've experienced in what I would call the discipleship of the man sitting next to me, because this man has studied and studied and studied certified financial planning. And so as we get into the show today of what is a certified financial planner, I don't want anybody to miss it. In my opinion, in the heart, the heart of what this is, is this God-given love of learning.

And oh, by the way, if you don't think God loves to learn, that's the reason why He's with you every single day, because you change every single day, and every day you're a little bit different person than you were the day before. And God loves to learn about you, and that's part of the beauty of how He made us with that same desire to learn about our customers, to learn about our products, and to learn about ways that we can best, you know, create an abundance, whether that's in finishing well or at the beginning. So we, just being straight with our audience, is that we do a little recording over in our offices.

We do a video, which we shoot. It's shorter than the length of the show, just going over the topic, which Robbie gets to look at before we prepare for the show. And the one where we decided during the investment segment to talk about a CFP and why a CFP and what is a CFP, frankly, what we sent, Robbie was a little flat, and he called me on it. So we just had a discussion in preparing for the show, and that's what I love about him. It's just, I mean, I told him, I said, I didn't feel it while I was doing it.

I just felt it was kind of flat. So we really just had a discussion, and we talked about, so why a CFP? Why is this important enough to talk about and take up 30 minutes of your time listening? Why would a person that needs to do some business in the financial services area, why would they choose to do business with a CFP?

I mean, what are they going to get out of it? What does this mean? And so when we began to really talk about that, Robbie really kind of pinned it on me, is that I guess I have a little bit of difficulty just talking about myself. It's very self-serving. I even said that on the video, to talk about how great it is and all these wonderful things you get with a CFP, given the fact that I'm a CFP and I've influenced several others that work in my agency. So we're going to have him just kind of pull it out of me today. Which is fun, because to me, when I'm around, and I am around, Hans, which you get to see, and you've heard Tom on the show a few times, I think we may have had Buddy once.

But here are some people that, from my perspective, not only love what they do, they've studied it in such a way that it brings a smile to your face to see their scholarship, right? And so I think a great story that we talked as we were preparing for the show is you had this client that had a very intricate stock portfolio in his own business. A stock, an employee stock ownership plan that was really tailored for the executives.

Right. And this guy isn't one of the big, big, big executives. He's just a big executive.

He doesn't have three bigs before him. And this thing is really tailored for the big, big, big executives, the people that are being paid millions. He's being paid, well, he's got in the millions in it, but just a couple of millions. And then he's got some other money. But these are still working folks that need to scratch out 100, 150 grand a year to live on for the rest of their lives in their early 60s. And so when we're looking through this, I mean, most of their stuff, like everyone for us, it seems complicated, but it's not to us.

And we go through and think through and discuss, and we come up with a really nice plan. But in this particular guy, he owns over a million, almost $2 million worth of company stock. And he has not paid taxes on any of it, okay, to this point.

So it's wonderful to look at these large numbers. And it was all real well-planned, getting it in there tax-free, tax-deferred, tax-postponed, whatever it is. But now he's got the problem of getting it out of there and paying the tax and turning it into real money that he can spend. He's got another problem in that he's got too much of his net worth all in one company star. Very stable company, dividend aristocrat. I mean, there's every reason to make the case that this money is solid and sound and this company is to the point where he's not going to all lose out.

But stranger things have happened. So how would you like to go into your retirement where every day you've got to look at the stock price of the company you quit working for a few years ago. And if something bad happens, it's going to be ugly. So our first goal with this guy is to get it out of there.

Then to get more of it and to diversify a way to get invested in some other stocks or annuities or just something that isn't going to all go down at once if something bad happens. So that's one problem. The other problem is taxes. So if we sell it all at once, you know what the tax bill looks like on a million or a million and a half dollars. I mean, it's just, which we could do, but we've got to make an election now that starts in a couple of years of whether we're going to take it all at once.

We're going to take it over 10 years or we're going to take it over 15 years. But the longer we leave it there, the more of it stays in there. And so you can make all kinds of arguments of spreading it out from a tax perspective, but then you're not serving the plan. But before we even learned all of these options, we're sitting here looking at it and it had some, they all have a number and a name on them. It's like 401k, but it's not 401k.

It's 4293 CXQR VW. I mean, I just made those up. I mean, there's something that you can read and then we can go into the journals and look that up at these kinds of plans with the IRS and look at the regs and figure out, because we didn't even know our options. All we've heard is what the company's telling them. And so we've got to be experts on that. And we have one of our guys that works with us. His nickname's Buddy that just, I mean, instantly Tom knew this is when we got to send to Buddy. And Buddy, you know, Buddy's a CFP and he's a lot more than a CFP. I mean, but he learned how to study and he's a student of the game. And so Buddy did all the research in a couple of days.

He didn't spend the whole days, but he can go through and read things and find it on the internet. And he was an expert on this particular type of executive compensation plan, and then specifically an expert on getting it out of there and paying the taxes. Yeah, I just found that fascinating. And there's no school in the world that would teach you how to do that, but he really learned the basis of that in CFP. So here you have a disciple and, you know, it's not hard if you know Hans and you listen to him on the show, but he has studied, you know, from Ed Slott to all these different peoples. You study because you love the learning process. And so when you, you know, and I hope that you're this way with the Word of God, you know, everybody listening that when you fall in love with something that you've been studying and you go to talk to your friends and your wife, you know, they naturally open up their Bibles and then they begin to smile. And so when God said, go make disciples, you're going to make more disciples.

Well, it's the same way, right? With studying this financial. And so there's Hans working with Tom, working with Buddy, working with his brother, Jim. And you can see that these things, they spread because enthusiasm is a godly spirit. And so here's an example, you know, from my standpoint, not only did they learn these investments, but they enjoyed the process of it. And the customer doesn't feel like they're talked down to because they're like, like, hey, look what we found.

And this is really cool. And this guy didn't know what to do. And so we showed him what his options are and then what the tax ramifications and then the risks he runs by having too much of his money in this one stock. And then we showed him, if he ends up there, a strategy that we can protect him on the downsides of that. We can, there's some options that we can buy and some put options, and we can consistently minimize or not minimize.

That's a bad word. I don't like using minimize. We could lower his risk. How does that sound? But all of this tracks back not to where we learned how to do that in CFP. It's the fact we laid out the framework and you do have choices. So when we, when we come back, we're going to talk really a little bit more about what it takes to become a CFP, but more importantly, what you get out of the fact of choosing a CFP.

Okay. Darrell Bock Oh yeah, that's going to be fun. And don't forget, this is brought to you by Cardinal Guide and Hans' book. If you want to be a disciple, study this one, right?

A Complete Cardinal Guide to Planning for and Living in Retirement. The joy of learning this stuff, which I've been doing it for two and a half years, it's contagious. So stay tuned.

We got more coming up. Hans and I would love to take our show on the road to your church, Sunday school, Christian or civic group. Here's a chance for you to advance the Kingdom through financial resources by leveraging Hans' expertise in qualified charitable contributions, veterans aid and attendance, IRAs, Social Security, Medicare, and long-term care. Just go to cardinalguide.com and contact Hans to schedule a live recording of Finishing Well at your church, Sunday school, Christian or civic group. Contact Hans at cardinalguide.com.

That's cardinalguide.com. Darrell Bock Welcome back to Finishing Well with Certified or CFP, Certified Financial Planner, Hans Seil. Today's show, we're talking about what is a CFP. And it comes from the chapter in Hans' book, The Complete Cardinal Guide to Planning for and Living Retirement on how to choose an advisor. And as we're talking about, discipleship is a hallmark of how you become a CFP. But in this segment, we want to talk more about, you know, what the requirements are.

Hans Seil I can go over that quickly. I mean, you just used to, when I got it, you had to take 10 courses. I think it's seven courses now. Each one of those has an exam.

They're pretty extensive. Most people that take those, the exams for the individual courses pass them. When you're done with that, then you have to sit for a national exam that you have to apply for. And over 40% of the people that take the national exam fail. I mean, it's the pass rate is like in the 57, 58, 59%. Yeah, and most of these are adult learners. A lot of people are getting into this in their 30s and 40s and maybe some in their 50s. So you've got to be smart and good to take a test.

That's what that's going to say. But you need to be a good student and you need to meet a certain level of just knowledge. Then next, you have a two-year or three-year, depending on how you set it up, experience requirement where you need to work under a CFP and you need to actually be practicing as a para planner or assistant planner. And then you also need to pass all their background checks. And then you've got to swear into this code of ethics.

And the practice standards. And then the most important thing in there is you are now a fiduciary. When you hang your shingle out that says I'm a CFP or certified financial planner, I am a fiduciary. So when you engage me, when we have a financial planning arrangement, then I now need to act in your best interest. And that, pretty simple, but it's different than a lot of other people in our business. Most of them just simply need to do things that are within the law and they need to prove that whatever they recommended to you was suitable for you.

We got to go much higher than suitability. We need to be able to establish that this was in your best interest. And if I have any conflicts of interest, if there was something that I'm getting out of the deal, like a commission or like a payment from some third party, I need to disclose that to you and do everything in my power to mitigate. So having a fiduciary and like a couple examples is I'm helping a couple of older clients get reverse mortgages now. And I don't, fundamentally, I don't like them too much, but I've grown to like them for the right person.

And so I had the hardest time with these people getting it across. I'm not going to sell you the reverse mortgage. I'm going to be your like buyer's agent. I'm going to be your fiduciary. So I'm going to sit on the same side of the table as you. And we're going to decide, first of all, if one of these would be, if we're in the right arena.

And then once we decide that, yeah, we want to investigate this, then we're going to find somebody. And I've already done this for both these clients. And then I'm going to make nothing off of the reverse mortgage sale. And they, I'm going to sit on your side of the table and I'm going to be the tough customer. And looking after your interest. I mean, it's just that simple.

And then they are paying me a fee to do that. And one of these isn't because I'm doing it pro bono because the lady really needs the money and I just want to help her. And she's a good follower.

And I'll do that for people that are listening. In complete disclosure, she's a good friend of mine that I had her call Hans because I knew based on her lifestyle, she was house rich, but very poor, unable to keep the house up, unable to take the right care of her health. This is going to be a miracle for her. Right.

And this happened to be something that you can see, normally you wouldn't, but there are cases where these products out there, it's worth studying them and knowing them. Yeah. It's just going to, it's just going to make her situation for the next hour, many years of retirement wonderful. So, but you can have this, I mean, all seven subjects that we cover on this show, social security, Medicare, long-term care, IRAs, investments, which is the topic of today's show and investments in income, estate planning and life insurance and taxes. You can have a fiduciary in all seven of those areas because I am one and I employ CFPs and I have a program in my agency where everybody that's in there is on track to become a CFP.

Less than half of them are, but we're going to get there. A lot of the people were in their twenties that worked for me. And the point being that the fiduciary is not just limited to investments or insurance. So when you buy life insurance from us, we have to act in your best interest. And we represent a whole bunch of companies. We have to, because we need to be prepared to defend that the recommendation that we made to you was in your best interest. We chose from a group. Right.

Which is one of the reasons when I watched the video, I said, you know, the, the challenge with the video is that it was in a vacuum. And so when you heard what a CFP was, but normally if I get a call from a life insurance agent, you know, hi, you know, this is so-and-so with MetLife. And, and I have this great investment strategy for you. And you, when you do a little checking, you know, well, who do you work for? Well, MetLife or your CFP, no, I'm licensed to sell this product, but you know, essentially who's best interests. It doesn't make them bad. I'm just, what I want to point out is the level that we operate at.

And I really needed to go out on my own and that's what I did. And you know, that we represent just about everybody that sells insurance in a particular area that we operate in. I mean, we've got over 150 different insurance companies that each have probably 10, 15 products. Well, the other thing that you can't help but note, if you're choosing a financial planner or choosing a CFP, you know, everybody's specialties are different.

And so as I've had a chance to work with you guys now for the last couple of years, you know, it's one thing if you're a financial planner for somebody that is in their forties, and those are the people you normally work with, but the taxes and all sorts of things are completely different from people that are from the age, you know, 65, obviously, as they finish well, which when you've worked this whole part of your life on not just obviously the investment strategies, but you also know how that fixes up with long-term care and how that fixes up with, you know, your social security and how that, you know, all those things figure into what your major course of study has been. Well, and it's important to understand that being a CFP is voluntary. It's not something like getting an insurance license or passing the series seven exam for securities. That's not optional. That's not voluntary. You have to pass that and that teaches you the law and it gives you a base level. And then when you're in those programs, you have to go through training programs to stay certified. So I'm not implying that these other people don't like know what I know.

I'm just simply saying that the CFP is a purely voluntary thing, okay. And when you sign up for it, the CFP board polices this stuff. Some of you I'm sure see the commercials where they're showing that and some of them are kind of funny and they have a code of ethics and they're not kidding about their code of ethics. And we have to take an exam on that every couple years and sit through a class just to make sure we've heard them again. And I always take that seriously because it's just, it's good to read them again.

And I read them more often than that. The practice standards, so they tell you within, there's a lot of room in here to tailor your practice to what you want it to be, but there's standards as to how we operate, the things that we do and how we keep records and how we advise clients and how we sign off on things and how we answer complaints. And just a whole, and we're tested on that and then we need to follow that and we need to be able to prove to them that we monitor ourselves because they can come in and check us. So it's a voluntary thing and I really have put off talking about this on the radio just because it sounds so self-serving.

And that's probably why it didn't sound very good the other afternoon when we made those in prep and for today. But this is just something that I'm very, you know, it's voluntary. It's not voluntary in my business though.

All of this is how we operate. We even take it down to Medicare supplements. I mean, we're going to run a report and we're going to show you like three or four options every time we sell you a Medicare supplement, anybody. And then we're going to make a recommendation that's in your best interest.

We're doing life insurance. We're definitely going to consider three or four options. We might only show you one, the one we're recommending. We might tell you about the other ones, but we try not to get too confusing in things.

But in our notes, we've considered three or four to get down to the one we're recommending and we're prepared to show how this is the best thing for you. And one of the beautiful things about, I heard this once from John Eldridge, the young man came up to him and told him he wanted to be his disciple. And he goes, well, if you're a disciple, you know, you need to have a question.

So what's your question? And if you think about what Hans has been teaching on the show for a number of years is mostly getting at the questions that are necessary in order to put you in a position to have choices, right? And so in order to develop what's in somebody's best interest, you've got to ask a lot of questions.

Or we do. And some of those are about preferences, you know, like about risk. I mean, we got a lot of ways to try to get people to come out with where they stand on taking risks with their money and how they feel about losses. And everybody feels about the same about losses.

It's just different levels. You know, how tied up they are in gains and what they're willing to accept and what's the trade off. And then, so we got to do a lot of fact finding and learning about them. And then we got to do a little bit of just kind of guessing or putting together a model. And then we got to take that all back to a recommendation. And we need to be able to prove that we made a recommendation based on something and based upon this person's preferences. And you get into needs, capacity for losses. I mean, there's just, there's all kinds of things in the investment world that factor into this. But when it's all said and done, we need to be able to prove that we acted as a fiduciary.

And we just operate that way. From my standpoint, you know, as I think about Hans and Tom and Buddy and these people that I know, you know, they clearly love people, right? And they love understanding their story so that they can figure out what is in their best interest.

And so, as you look at the question they're asking and think of the things, or if you even think back to the shows, that you've listened of Hans as he went into the depth of what was going on in the person's story, which points to why this decision fit their story the best. And so, the beautiful thing about people that have learned how to learn or true discipleship is that it fits well with what God has been planning, right? And I, no doubt, think that it was just no accident at all that, you know, based on my love for learning, and it's been my whole life that he put us together, and we were able to do this show together for these years. And it's been a complete delight, because I can't tell you all that I've learned. So I hope you have too.

We appreciate you learning with us today on Finishing Well. Again, the show is brought to you by cardinalguide.com. If you go to Cardinal Guide, there you can get Hans' book, The Pleat Complete, Cardinal Guide to Planning for and Living in Retirement. Today's chapter, of course, is on investments and how to choose an advisor. Again, cardinalguide.com. Thank you so much, Hans. Thank you. This is the Truth Network.