More Knowledge, More Wealth Ep 196: What Makes Falcon Wealth Planning so Special?

[00:00:00] Good day. This is Gabriel Shahin, certified financial planner and your host, more Knowledge, more Wealth here on every weekend, talking about all important topics of personal finance. My goal is to go over the knowledge you need to increase your wealth now to the listener. You can always reach out to myself or any one of my colleagues here at Falcon Wealth Planning by giving us call 8 55.

[00:00:55] 9 6 3 25 26. That's 8 5 5 96. Falcon like the Bird, or visit our website@falconwealthplanning.com. That's falcon wp.com for short where you can go and visit our knowledge center. And if you have a question you want us to answer online on air, go ahead and send that to radio@falconwp.com. That's radio. At Falcon wp.com for short.

[00:01:21] Now I'm the president of Falcon Wealth Planning. We are a fee not commissioned true fiduciary folks. We go over all important topics that , has a dollar sign involved with it, that talks about where you are today, investments, estate planning, insurance, tax planning, folks, you name it. Anything that involves that dollar sign, give us a call.

[00:01:36] We would love to help relate this show to your specific situation. Our phone number is (855) 963-2526. That's 8 5 5 96 Falcon. Like the bird or just go on our website and put in an inquiry where we'll be reaching out to you cuz we got offices all over. We can help you. Doesn't matter where you live, all across the country, folks.

[00:01:57] We're happy to help. Now, today I just want to talk about core differences and what makes us special. We've been getting multiple industry awards, almost every industry award that you could think of. Not the ones that you pay for or anything like that. Like Forbes has one that you actually have to pay for.

[00:02:11] It makes no sense. I wouldn't want to pay for a ranking. You, you don't feel like you actually won anything. You literally just paying for the advertising. So we've been blessed where we're being. Recognized as one of the top firms of the country. Top advisor firms of Advi, uh, in the country. Top wealth management firms, top executive leadership folks.

[00:02:28] You name it, we're blessed, right? But let me talk about the core differences and just big picture. This could just educate you on how the industry works, so this is important for you. Okay, so let's, let's talk about this. First off, I wanna talk about there are three different types of advisors out there.

[00:02:42] There are an insurance broker, There is a a stockbroker and then there is a registered investment advisor. Okay, now here's the crazy part. Titles mean nothing. They can call themselves a financial advisor, an investment consultant, a wealth manager, a vice president. Everybody seems to be a vice president.

[00:03:03] You ask 'em what? Their VP of their VP of nothing, folks, so, so without due respect to these VPs and whoever out there, senior VPs. That means nothing. Industry doesn't regulate what you call yourself, but there are three core competencies or three core distinctions. There's insurance broker, they're commission based.

[00:03:20] They can only sell insurance product. They don't even have the full licenses required to give you stock advice. Another second one is that stock broker. These are typically people that are series seven. That series seven license allows you to get commission, so you should ask the person you're working with, do you have your series seven license?

[00:03:35] If they probably say yes, now you know they're proudly selling you product so they can make themselves commissions. The last one is a registered investment advisory firm. These are the only one of the three. Now, some of 'em may say, oh yeah, I'm a fiduciary. Yeah, I'm legally obligated to do what's in your best interest, but that's not the case.

[00:03:52] They can't say that fully because they're working for an employer that only offers 'em a certain subset of investments to sell to you. They have to make commissions or they don't eat. Some of them are only commission based. And they may have a c fp, well, a certified financial planner designation, which is very difficult to get.

[00:04:09] All the financial planners here at planning have that designation. We have a well over a dozen of 'em. So yes, it's extremely important with that designation. And that C F P says you have to be a fiduciary, but here's the thing, who do you really hold? More to a higher standard do you to the CFP board or you to your employer.

[00:04:27] That's a big issue in the industry right now, just so you're aware. So RIAs registered investment advisors can also have their series seven and make commission and hold their CFP charter so they not all CFPs have to do what's in your best interest. Even though there's an oath they have to take. It depends on the firm they're working for.

[00:04:46] Let me put it into context. You can have a fantastic advisor and a really crappy firm. But guess what? People work with the advisor or you can have a fantastic firm and a crappy advisor. You know, here at Falcon Wealth, we pride ourselves to being a fantastic advisors and a fantastic firm. You, you win a lot more business that way.

[00:05:05] It's easy, it sells itself, right? So let me tell you the other sides of compensation in this industry, and this is where it gets tricky. God bless Wall Street for this folks. Number one, they are commission-based advisors. Well, that's like the insurance. Brokers earlier, so commission based. Number two is fee-based advisors.

[00:05:27] Now, this is Wall Street trying to confuse you. People always ask, tell us Falcon Wealth Planning, who are fee only advisors? They say, oh yeah, you're fee-based. Well, well, well no, because fee-based, you could still make commissions off them, and you think that they have to do what's in your bench interest at all time.

[00:05:40] Why they have an A D V. You wanna know if your advisor is a fiduciary. Ask if they have an a d D, the advisor disclosure document. So anybody could say, oh yeah, I'm a fiduciary. Why? Because they got that C F P exam, uh, certificate that we were talking about earlier, but doesn't mean they are truly 100% of the time a fiduciary.

[00:05:59] So fee base is tricky. It's a hybrid between commission-based and there's fee base, and then fee only. Fee only is the only type of firm that 100% of the time they have to do what's in your best interest 100% of the time. Versus the fee based where they can actually take off that fee only side of them, the fee based, they can actually take off the fiduciary side and switch it for a commission based side without you even knowing it.

[00:06:26] They don't have to disclose it. They're the ones selling you annuities and insurance products and telling you it's good. And oh yeah, this is fantastic. This is what I do for myself and my family. Really. Show me your statement. I want you, I wanna see that majority of your net worth is in it. It's garbage.

[00:06:40] Most of 'em have a little crap policy just so they bought it, which they made commission on, just so they could tell you, look, I got it for myself. Like ask em, I wanna see your portfolio. They don't do it. Ask em, show me a client who's done it for the past 20 years, cuz you're showing me how great I'm gonna do over a period of time.

[00:06:57] It doesn't exist. It's a new flavor of the month that they're trying to sell you to take advantage for. Commission, a fee only advisor, which is what we are here at Falcon Wealth Planning, are the only ones where 100% of the time we have to do what's in your best interest. And a lot of companies out there do not do that.

[00:07:14] It's less than 2% of the industry. That are fee only advisors. Why? Because you can't make commission. You don't make as much as the other guys. Quite frankly, you have to work harder. People all heard of the Merrill Lynch, Morgan Stanley, Edward Jones, ubs, Wells Fargo Advisors, JP Morgan Advisors. They all heard of them.

[00:07:33] They all heard of them. And quite frankly, you take all the registered investment advisors and Adam 'em together, they're still not as big as Merrill Lynch or Morgan Stanley, just to show you how small the RA world is. So therefore, Carter, cuz you don't know the name, And they get paid less. It's kind of crazy, guys.

[00:07:50] Whew. By the way, folks, if you're just joining me, you're listening to Gabriel Shahin, certified Financial Planner and your host of More Knowledge, more Wealth on every weekend, talking about all important topics of personal finance. And today we're just talking about the basic concept of a fee only advisor, which is what we are here at F Wealth Planning.

[00:08:04] It's sometimes the good guys finish last, but we are blessed here at Buffalo Wealth Planning. We grow ridiculously on volume. It's kind of, I always say we're the Costco financial planning. Why? Because Costco, they don't make a lot of margin, right? They make thin margin, but boy, oh boy, those lines are always busy, aren't they?

[00:08:19] That's Falcon Walt. We are blessed. We have people like yourselves that are calling in, that are inquiring where we selflessly generously help with one to two meetings, one to two hours of our time, folks at no cost because we are the good guys in the industry. And that's why we're recommending to give us a call.

[00:08:35] If you have a question, you wanna help relate the show to your specific situation, take a look at what you're doing, take a look at your broker out there who's doing what's in your best interest to see if in fact they are, get that second opinion. You have nothing to lose, folks. Our phone number is 8 5 5 9 6 3 25 26. That's 8 5 5 96 Falcon. Like the bird where we'll be happy to answer the question that you have to help really answer the fact that, well, who you're working with, what type, how are they compensated? How are they investment? Are there fee within fees that are not disclosed to you?

[00:09:08] Most of the time people don't disclose those to you. So fee only advisors, so here are the levels. Number one, the best fee only, and I'm not even biased, it's a reality. You, you work with a fee-based person or even a commission-based person. You are paying three different people. You're paying the firm, the advisor, and you're paying the fund company.

[00:09:29] Here at Falcon Wealth, you just pay Falcon Wealth. The fee only advisors, you only pay the advisor and the fund. The fee within the fee where industry, on average with a commission-based firm or a fee-based firm like them, or is maybe 1% annual fee inside their annual fee. So the fund fee is roughly 1%.

[00:09:45] Here at Falcon Wealth is 0.08%. Why? Because you could choose from an infinity, we can choose from an infinity of investment options that are available. So putting that into context, that's why it's important. We are an independent registered investment advisory firm. Independent. That is an extremely important distinction right there.

[00:10:06] Cuz we don't work for an Ameriprise, a Raymond James, an l p L, right? Because if you did, you can only offer what they tell you. You can offer. Our client's assets are at that TD Ameritrade, Charles Schwab Fidelity Investments. TD is soon to be Schwab, but the point is our client's assets are there. That's where a majority of our client assets are independent.

[00:10:27] So they're with these big names. They're not with us. Falcon is not the bank and the advisor. We're just the advisor. By the way, the last person to be the advisor and the bank and hold your money was a guy named Bernie Madoff. Heard that name didn't end so well. He stole everybody's money. Way too much power for one person.

[00:10:47] So independent RA a Yes. We're still fee only. Yes, we're the top. We're not a stock broker and we're not, definitely not an insurance sales rep. We are the peak. We, we do not carry series seven license. Why could we are not allowed to make commissions. The irony is everybody here pretty much started and got their series seven.

[00:11:05] That's just how it starts in the industry. You start at the wirehouse. Which is like the Morgan Stanley Merrill Lynch, UBS's of the world. We did not do that. So here at Falcon Wealth, yes, they started with it, but when you work here, you forfeit your series seven license. It's no longer relevant. It's no longer important.

[00:11:22] It's no longer needed, and it's no longer even appreciated Here at our firm, because that shows, it tells you the consumer, which a lot of people aren't aware of this, it tells you that I'm allowed to make a commission fee based firms, even if they're a registered investment advisory firm, fee based, they sta their advisors still keep their series seven license.

[00:11:40] It's kind of crazy. It's it, it's so complicated. God bless Wall Street for creating that fee base. It makes it more complicated when people come to us that we're telling them, we're Fi, we're fi, we're fi. We a hundred percent of the time have to do what's in your best interest. Which is why I say we're a true fiduciary.

[00:11:57] It gets complicated though because people just don't understand. They're like, oh yeah, yeah. You're fee based. Right? No, I just told you I was filming. Folks, we're gonna go on a quick little break. When we come back, we're gonna talk about more of the distinctions and differences between the two. We're gonna talk about how fiduciary, we're gonna talk about process.

[00:12:18] We're gonna talk about how they get paid at these other firms, and we're gonna talk about the questions that you should be asking and how you should see if your advisor truly is that 2% that, quite frankly doesn't overcharge and not give you all the value that is necessary. Folks, we're gonna be right back after a few words.

[00:12:34] This is Gabriel Shahin, certified financial Planner, your host of More Knowledge, more Wealth. That's on every weekend. We're going over all important topics of personal finance. We're going over retirement planning, making sure you're prepared for retirement, social security and strategies, real estate taxes, avoiding them now and in the future, investments reducing.

[00:12:53] Fees, commissions, and so on. Insurance and estate planning. Folks, we are offering a free financial assessment that you could take advantage of. We have offices all across Southern California, including the Inland Empire. Give us a call to take advantage. Our phone number is (855) 963-2526. That's 8 5 5 9 6.

[00:13:11] Falcon like the bird, or visit our website, falcon wealth planning.com. That's falcon wp.com for short. Enjoy the show. We look forward to serving you.

[00:13:21] Welcome back folks. This is Gabriel Sheen, certified financial planner and your host of More Knowledge, more Wealth here and every weekend talking about all important topics of personal finance. And today we're just talking about truly the difference between fee only, fee-based and commission-based advisors.

[00:13:33] And then on the advisory side of it, you have the RIAs registered investment advisors, you have the stock brokers, and you have the commission based insurance sales reps. So, and keep in mind, broker dealers. And, uh, stockbrokers can also be commission only as well. And so it's the RIAs that cannot, yes, they can make commissions.

[00:13:51] But see, this industry is tricky. This is why when you go to the big banks out there, or the big wirehouses that we discussed earlier, uh, whether it's Merrill Lynch, Morgan Stanley, Edward Jones, ubs, Wells Fargo, JP Morgan, whatever the case is, your credit union, whatever, um, see, here's the thing. You're not always getting the same experience.

[00:14:11] You're just not, and I'll give you a few examples. Number one, here at Falcon Wealth, everybody here has the same process. We have the same training, we have the same software, we use the same investments, we have the same recommendations. Unlike those other firms where quite frankly, they could sell you stocks, mutual funds, wrap accounts, insurance products, bonds, annuities, options, like literally, whoever the rep you get placed with or recommended by a buddy or whatever the case is, they can sell you.

[00:14:39] Whatever is on their heart that day. Whatever they heard their wholesaler, pitch them that week, whatever their corporate headquarters is saying, Hey, this is really good. Offer this to your clients. I don't take it step further. There are different ways they get compensated. They may disclose to you, yeah, I make 1%, 2% annual fee.

[00:15:00] They might tell, not tell you there's a revenue share on the funds. In addition to that, if they're not disclosing to you what your fund costs are, There's, they're probably excess costs. Sure. 12. We're not even talking 12 B one fees. There could be additional compensation or revenue share to the broker dealer, which is like that Merrill Lynch, Morgan Stanley, Raymond James, l p l, or whatever the case is, which is why they're offering those funds.

[00:15:22] Why are they not offering a Vanguard fund? You ever thought about that? Oh, it's because they don't pay kickbacks and commissions. You get what I'm saying here? I. I mean, I'm not telling you Vanguard's the best in the world. I'm just saying, hey, they're really good at a lot of different things. Why are you not, why are they not recommending that?

[00:15:41] Because they don't get kickbacks from that in the form of a revenue share. So the rep you're talking to, why are they recommending a sale of a stock to you versus a mutual fund versus an annuity outside of the commissions? By the way, stock sale might give them 1% an annuity, might pay 'em 10. Okay. Well, that in itself is telling you they'll probably pitch you a higher commission based product.

[00:16:06] That's like number one. For starters, I should say. Let's take it a different route. There could be sales contests that are going on, which means if you fill up every single bucket of mutual funds, of stocks, of ETFs, wrap accounts, insurance bonds, annuities, options, they may get. A sales incentive, they might get a free trip.

[00:16:27] They get, uh, maybe a car. These are same times they run campaigns where they give additional bonuses saying, Hey, we need to get more wrap accounts, which is just a separately managed account most of the time. Or hey, we need to sell more insurance. Or maybe the Lincoln or the MetLife or the Great American or uh, Prudential, they may actually give their own incentives for you to sell more.

[00:16:50] They might do their own trips, not just the employers that we're discussing. Hey, you want tickets, uh, courtside to the Lakers game. Sell a hundred thousand dollars worth of these funds, and then you can do it. They have commissions. You know, one time back in my old life, They were trying to recommend that said, Hey, would you like to go to Augusta, Washington or Augusta, Georgia?

[00:17:13] I said, what's over there? That's like where the masters is. Absolutely. I want you to come on Thursday, Friday, the first two days of the US Open. We'll get you first class seats. We'll pick you up in a limo two and from the hotel to the course, but that's just for your friends for you. You get a helicopter and they'll land you on the 16th green v i p entrance with all the attention on you.

[00:17:36] So, whoa, this is crazy. You're offering all this to me for nothing, right? Everything's free, right? No. Gotta sell 1.5 million worth of our product, of revenue, of our product in the next two months. You get what I'm saying? These are incentives. This is the industry that we're in. This is why we're the good guys.

[00:17:55] Literally. I mean, majority of our clients have ETFs, exchange Trader funds. Index funds. That's why they're low cost folks. I mean, it's sad that this industry prays and takes advantage of individuals, but it happens all day long. Folks, this is why we're offering a pre-financial assessment to take a look at your situation and comment on it, let you know what you're actually paying, who you're actually working with, and what value is actually be provided for the premium cost that you're paying.

[00:18:25] Folks we're offering one to two hours, one to two meetings of our time. Folks at no cost. Give us a call. We would love to help. Our phone number is (855) 963-2526. That's 8 5 5 96. Falcon like the Bird, or visit our website@falconwealthplanning.com. That's falcon and wp.com for short. It's interesting that this industry here, as they always say, they wanna do what's in their client's best interest.

[00:18:53] I mean, you had Merrill Lynch in April of 2020 saying, oh, they're finally gonna go to this standard. This Department of Labor was forcing them on retirement accounts, and they're only doing this change of how they charge on retirement account. And then they've since retracted that, since it got pushed out in future years.

[00:19:10] But now it's actually, they have this department of Labor, they have this new document that needs to be done. For every client with a retirement account, and even then they're still not required to do what's in best interest. It's actually messed up. The S e C actually created this best interest ruling, which pretty much means nothing.

[00:19:28] And the sad part is now commission-based brokers say, Hey, listen, we uphold to the best interest ruling. Of the S E C, which is garbage. They're just disclosing in a document gave thick that they're taking advantage. I shouldn't say they're taking advantage of you. I'm sure compliance won't appreciate what I just said, but that's how I look at it.

[00:19:48] Like why? Let me put it like this. Let's say they're selling you some insurance product, right? Because you gotta understand two of the three firms out there and a majority in the industry are not the only. So, and insurance products pays the best commissions possible. So you gotta understand they're gonna be trying to sell you this like gonna bar.

[00:20:06] If it was that great of a product, why would they have to entice the person to sell it to you for it? 3, 7, 10, up to 20% commissions with no bonuses included in this. By the way, 20% commissions. If it was so great, why? Why are they even offering this to you? Let me take it a step further, if you really needed guaranteed income, cuz they're always gonna try to scare you of the stock market cuz you have to be scared of the stock market to be foolish.

[00:20:31] Enough to buy an annuity because essentially it's a return of principle product hell the IRS gives you for a charitable gift annuity, which if you really wanted that, I'd recommend a charitable gift annuity. You're gonna lose 50% cuz that's what they showed the tax write off is. It says right in the IRS code, you're gonna be a loser and lose 50% of your money putting your money into an annuity.

[00:20:51] You instantly lost it so much. So why are you giving it to the Lincoln Financial Fields, a MetLife stadium? Why are you giving it to the biggest buildings in your downtown are insurance companies? Why are you giving it to a for-profit company? I would give it to a nonprofit. Give it to your favorite alma mater.

[00:21:07] Give it to a big cancer research center with a lot of money in endowments. Give it there. They have charitable gift annuities where they can pay you. Number one, a higher rate of return. They pay you more. On an annual and monthly or monthly basis. Number two, you get a frontend tax benefit. You put in a hundred grand, you get a $50,000 tax write off potentially, which could save you over $25,000 in taxes potentially, which really means you didn't put on a hundred grand, you only put in 75 grand.

[00:21:37] You get what I'm saying? In addition to that, the payouts being higher. In addition to that, you also get. A pro rata of the income, the monthly amount that you get. Let's say you put in a hundred grand and you get 500 a month. That 500 a month, half of it will be income free. Income tax free, unlike a commercial annuity.

[00:21:58] You get what I'm saying? This industry is just not fair and it's just not right. Cause they always try to take advantage. By the way, folks, if you're just joining me, you're listening to Gabriel Shahin, certified Financial Planner and your host of More Knowledge, more Wealth here on every weekend, talking about all important topics of personal finance.

[00:22:14] My goal is to go over these topics, folks, and for you to understand the difference of the industry. I always try to say, this is what makes us special. You know what makes us special? Where everybody else sells a product to you. We sell brain to you. People retain us cuz we know more, more than they'll ever know.

[00:22:29] We have CPAs that are clients. We have attorneys that are clients. We have people that specialize in the financial sector, people that manage private equity funds that are our clients. Why? Because we do this every day. We know personal finance. They may know what investment to invest in in the private sector, not in the public sector.

[00:22:47] Public sector stocks. You get what I'm saying? They might not know how to analyze a mutual fund. Why? Because a mutual fund just holds a basket of stocks. Oh, by the way, just like an etf, ETFs used to be similar to an index, which means not actively managed. They just track an index, which there's a lot of data that shows an index outperforms active managers.

[00:23:10] Heck, Warren Buffet had a million dollar bet with a hedge fund manager, and he destroyed them the end of two years ago. So they couldn't even beat the s and p 500. Heck, Warren Buffett's, Berkshire Hathaway has been underperforming the s and p 500 as well. My point to you all is, number one, understand how much you're paying.

[00:23:31] Number two, then factor it in with the value that you're getting. And number three, is it transparent. Do you feel that you have a transparent relationship with your advisor? And by the way, they're trained to be nice. You think a rude advisor is successful? No, of course they're gonna be nice to you. And what value are they giving outside of being nice?

[00:23:53] This is your life. You're in charge, and there is no good luck advisor. The stock market was going up ever since the great Recession, 2008. From 2008. Up until 2022. Sure. We had a hiccup during Covid, but it bounced right back up that year, 2018. Kind of a little down year, but nothing like crazy. I. My point is, is you have to understand all investments.

[00:24:19] Here's the secret. In the industry, it's all about the same, which is why our firm says, let's try to get the lowest cost possible with the highest quality indices and build a portfolio that's globally diversified that could withstand any punch in the face that the stock market wants to give. When we say stock market, what does that even mean?

[00:24:36] Most of the time when I say stock market, what are you thinking? Dow Jones. Those are just 30 companies. S and p. 500. Largest. 500? Yeah, but those are only 500. And that's just the largest. You still have medium-sized companies, US small-sized companies, us heck, there're subcategories for each one of those of growth and value.

[00:24:55] In addition to that, you have international large cap midcap and small cap, and then you have emerging market as well. Large cap, midcap, small cap. There are multiple different asset classes that are out there. Then you can throw in real estate, you can throw in energy, you can throw in different types of fixed income, like private debt, treasury's, direct, and you name it.

[00:25:14] My point to you is understand who you're working with, folks, and if you need help, if you want a second opinion, folks, we are offering that free financial assessment. We would love to give that to you. Our phone number is (855) 963-2526. That's 8 5 5 96 Falcon. Like the bird, or visit our website@falconwealthplanning.com.

[00:25:34] That's falcon wp.com and fill out a form fill where we'll reach out to you as well. Folks, that was a fast, fast show. I wanna thank you for tuning in with us this weekend. You could always reach out to myself or any one of our colleagues here at Falcon Wealth Planning. Our phone number is (855) 963-2526.

[00:25:51] That's 8 55 96 Falcon. Like the bird, or visit our website@falconwealthplanning.com. That's falcon wp.com for short, where you can put in your information on where we reach out to you to help relate this show to your specific situation. And reach out and look at our knowledge center online where you can see our YouTube videos, where we have almost a million plus views on there.

[00:26:10] And follow us on that as well as we always are providing new content. And if you have a question, we can answer it online. Just send it to radio@falconwp.com. That's radio@falconwp.com. Folks, thank you for tuning in. Enjoy your weekend. Have a great week and God bless.