Introduction 

In this episode, we sit down with Dan Kain, Senior Wealth Manager from S.E.E.D. Planning Group, to tackle one of the most misunderstood aspects of financial planning: how advisors get paid and what real value looks like at every stage of wealth. We break down the myths around fees, commissions, and the true cost of financial advice, especially for smaller investors. This episode is all about empowering you to make informed decisions about your money and your life by exposing industry practices and clarifying what you should expect from a transparent, fiduciary advisor.  

Key Topics Covered 

1. Misconceptions About Advisor Compensation 

• Many people believe the size of their portfolio should dictate how much they pay an advisor. For example, someone with $5,000 may think they should pay far less than someone with $1 million, but the reality is that smaller accounts can require just as much, if not more, work. 
• There’s a common misunderstanding about what services are provided and how much work comprehensive planning actually takes, regardless of account size.  

2. The Challenge for Small Investors 

• Small investors often face unique challenges. It can be hard for them to work with fee-only advisors, and they are more vulnerable to practices like “churning,” where advisors repeatedly sell products just to earn commissions, often at the client’s expense. 
• This cycle can keep small investors from growing their wealth, as excessive fees and poor investment performance from structured products eat away at their returns.  

3. The Value of Fiduciary Advice 

• Paying a fiduciary advisor, even if it seems like a higher upfront cost, can be crucial for long-term growth. Fiduciaries are legally obligated to act in your best interest, and their guidance is based on experience and a deep understanding of your unique situation. 
• The value you receive isn’t just about the time spent; it’s about the expertise and the hundreds of similar situations your advisor has navigated before. Implementing their advice can lead to significant improvements in your financial situation, sometimes by six or seven figures.  

4. Comprehensive Planning Goes Beyond Account Size 

• The amount of money you have doesn’t always correlate with the complexity of your planning needs. Someone with less money might have more complicated estate or tax planning issues than a wealthier client whose finances are on autopilot. 
• An effective process involves digging into the details of each client’s life to determine the real scope of work required, not just basing it on the size of their portfolio.  

5. The Emotional and Practical Value of Professional Advice 

• Many clients are frustrated by the cost of planning, especially if it’s their first time working with a professional. But the real value comes from the advisor’s experience, ability to see the big picture, and the potential to improve your financial outcomes. 
• If you’re only looking for free advice or don’t see the value in paying for expertise, you may miss out on opportunities to significantly improve your financial future.  

Conclusion 

This episode is an educational look at the realities of financial advisor compensation and the true value of fiduciary advice. Whether you’re just starting out or have significant assets, understanding how advisors are paid and what you’re really getting for your money is essential. By focusing on transparency, expertise, and a client-centered approach, you can make smarter decisions and set yourself up for long-term financial success.  

Welcome back to Digital Suits, where

we are wrapping up our mini series with

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Dan Kane, senior Wealth Manager from

Seed Planning Group, and today we are

3

tackling one of the most misunderstood

aspects of financial planning.

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That is how advisors get paid and

what real value actually looks like

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at every stage of wealth for clients.

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So in this episode, we will break

down the myths between or around fees

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commissions in the true cost of financial

advice while sharing insights on why

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smaller investors often face unique

challenges, how industry terminology

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can be confusing and why working with a

transparent fee only advisor can make all

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the difference in your financial journey.

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I'm Travis Moss, the CEO of Seed Planning

Group, and this podcast is all about

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sharing professional knowledge and

experience with you so that you can

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get more out of your money and life.

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Travis: Seems like there are

a lot of misconceptions about.

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How will a financial planner

or wealth manager get paid?

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And we talked a little bit about this

in the last two episodes, but somehow

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people also think that the size of

the portfolio indicates the amount

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of work that somebody has to do.

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And we've had a lot of talks about this

internally, um, because we've never

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had a minimum account size, but we're

getting to the point where we kind of

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need to, because somebody with $5,000

literally might take as much work or

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more work than somebody with a million

dollars, but they don't understand it.

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They just say, well, I only have $5,000.

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Why should I have to pay you?

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You know, if I pay you 1%, that's $50.

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Why should I have to pay you $10,000?

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Like that person with a million dollars

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Dan Kain: Mm-hmm.

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Travis: not understanding, you know,

what the services are, how they work, how

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people get paid, those types of things.

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So.

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Um, there's a lot of misconceptions about

planners, how they're paid, whether or

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not the size of the portfolio should

dictate how much somebody gets paid.

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This is one of the biggest challenges

that that small investors have.

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So, a small investor, somebody

maybe starting out five, 10,

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$15,000 is very hard for 'em to work

with somebody who is fee only or

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somebody who is not gonna churn 'em.

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Churning as a term, when I sell you

a product to make a commission, and

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as soon as the, let's just say time

period where it's inappropriate to

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sell you something new, to make another

commission, as soon as that's over,

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basically they, the, the advisor flips

the product and makes another commission

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Dan Kain: Mm-hmm.

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Travis: no investment purpose,

just simply to make more money.

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And you see it a lot with annuities

and, and you know, different

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types of UITs and stuff like

that where people are just like.

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Essentially churning products, they're,

they're selling them over and over

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and over again just to make more

commissions, always at the detriment.

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And so what happens a lot of times a

small investor who has 10, 15, $20,000,

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they stay small forever because

they're giving up so much money in fees

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Dan Kain: Yep.

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Travis: bad investment performance

because of structured products.

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'cause that's where a lot

of the commissions are.

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Um, so I don't think people

understand that either.

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You know, sometimes even though you have

less money, maybe you need to pay a little

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bit more to a fiduciary to make sure that

you have a chance to grow your money.

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Because if you're dealing with a financial

advisor and you don't have a lot.

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They gotta make money somehow for the

time that they're spending with you,

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whether, whether it's productive time

or not, that's a different discussion.

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But they're looking at you like,

okay, you know, I, if I gotta

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spend time with you, I gotta eat.

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So what can I take outta your

account legally, basically.

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Um, but they, so they think that

like the size dicta dictates it.

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Um, uh, they, I don't think

people understand how much work is

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required for comprehensive planning.

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Um, and, and kinda what it's worth.

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And so I just wanted to know a

little bit more on your thoughts

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on, on that kind of experience.

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'cause you're coming from a place when

people first engaged you prior to seed, it

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was part of the cost of being in the plan.

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So you were basically free

to them as far as they know,

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Dan Kain: Yep,

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Travis: right?

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So then you get into comprehensive

wealth management, and now in order

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to work with you, I have to pay you,

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Dan Kain: yep.

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Travis: which is a part of your

discussion with every client that you

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work with, is what are we charging

and, and what are you getting for this?

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How has that experience been and

and what are your thoughts on that?

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Dan Kain: Yeah, and I think you,

you actually just said it, you

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know, it doesn't necessarily matter

like the size of the accounts that

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they have or, you know what I mean?

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Because you can have somebody that

has $5 million, but there's not, just

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not a ton of work for them to do.

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I mean, they're pretty

much on auto autopilot.

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Right?

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And then

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Travis: Right?

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Dan Kain: somebody with a lot less

money that has of these other issues.

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When we do comprehensive planning,

you're looking at estate planning.

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They may have some big

estate planning issues or

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Travis: Yep.

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Dan Kain: you know, a lot

of tax planning issues.

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So.

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Yeah, that dollar amount doesn't

necessarily mean that there's

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gonna be more planning if you

have more money, um, that's gonna

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be dictated by life situations.

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Right.

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And I know

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Travis: Yep.

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Dan Kain: in, in our kind of opening

meetings with, with clients, we really

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try to dig into like those details with

them and, and try to figure out, okay,

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what type of client is this going to be?

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Um, you know, how much work are we gonna

have around, um, all the different areas

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of planning, not just, know, they have a

few thousand dollars, so they're probably

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just a small client, no need to worry

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Travis: Yeah.

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Dan Kain: Um, so, you know, that

takes, that takes some skill and

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some investigative skills, I guess,

to kind of determine, all right,

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what is this gonna look like?

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Um, you know, the, what's the whole

picture gonna look like for these clients?

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Um, it doesn't necessarily

mean that money is less work.

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I mean, it could be the complete opposite.

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Travis: Well, so sometimes

people, um, they don't understand.

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They, they have, you know, some kind

of question that they have financially

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and whether or not you can answer

the question in just an hour or two

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is a question in the first place.

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'cause somebody asks you, kinda like a

deep question, you might need a lot of

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background and it might take a lot of

workup and projections to be able to

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give 'em an answer as a fiduciary, right?

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If you're just selling product, it's easy.

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I can give it to, you

have to sit on my desk.

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Dan Kain: Yep.

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Travis: But if, if we're talking

about from a fiduciary relationship,

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I might have to do a workup for it.

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But the other thing that people don't

understand is there's times where somebody

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comes in and, and we're doing planning

and they're frustrated over what they

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have to pay for the cost of planning.

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Dan Kain: Mm-hmm.

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Travis: Let's say it's maybe the

first time they've ever worked with

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a professional and you know, they're,

you're not paying just for time.

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You are paying for the fact that that

person or that person's team has looked

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at that type of situation hundreds of

times and understands nuance and all

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kinds of other things that we've talked

about over the last two, uh, episodes.

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You're paying for all of that.

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And so if they look at this situation,

they say, look, we're going to give

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you a, um, um, some guidance that if

you implement the guidance, we think

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it's going to improve your situation

by high six or even seven figures.

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And, and that's, that's

a pretty common outcome.

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Um, what is that worth?

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Is that worth you bickering over, you

know, a couple thousand dollars in fees?

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Well, you know, I need to see it first.

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Well, how do you see the

future before it happens?

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Or is there a chance that I've worked

on hundreds of financial plans and

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I could sit in front of you and

say, by implementing this, this, and

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this, these are the expected results.

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Here's the range of output

that has now been improved.

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That's worth something, you know?

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And so if you're going to someplace going,

I don't see why I need to pay these people

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for it, or I don't pay them, it's free.

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None of it's free.

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Dan Kain: Nothing's

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Travis: It's coming

outta something, right?

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You're buying proprietary

products, you're buying something.

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So not, there is not a nonprofit in

this industry, and even like, oh,

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I went to Fidelity, or I went to

Schwab, and they're working for free.

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They're not working for free.

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They're making money off of you.

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You better believe they're

making money off of you.

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Dan Kain: yep.

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Travis: you may not understand how the

product are designed, or like, even if

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you're sitting in cash in one of their

accounts, they're making money off your

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cash, they're making a spread off of it.

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There's no free lunch.

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So you have to understand that there's,

you are always paying something.

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So the question is, is what is the

value that you're getting out of that?

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And if you're like, well, I don't

wanna pay anything for that, then,

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then, and, and you're not even open

to the idea of, geez, you know.

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I spend a little bit of money.

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I make a little bit of money.

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Then, you know, as, as a

client, nobody's gonna help you.

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But that also gets you to the difference

in advisors and the difference in

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who you're working with and, and how

they're able to articulate the value.

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Because they're, like, we've talked

about, there's a dramatic difference

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between the different types of planners.

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And can they actually show you?

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Can they articulate?

177

Well, we do.

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Roth conversions are a great example.

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So if I showed you a Roth conversion

and I showed you, okay, I'm taking money

180

outta your IRA, we're converting over

to the Roth, we're paying the taxes.

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Look at the difference long term.

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And you might say, well, you know,

yeah, that makes, that's, I look at,

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look at how much more money I have.

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But if, what if, what if

in doing that, you've also

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manipulated the rate of return.

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So what if on the IRA you had a lower rate

of return and on a Roth IRA you have a

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higher rate of return 'cause you're using,

you know, some kind of historic analysis

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based on a, an estimated allocation.

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So was the, was the increase in assets

because you have a higher rate of return,

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or was the increase in assets because

of the differential in the tax planning?

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You don't know unless your

variables are consistent.

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That's what you're hiring.

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You're hiring people who

understand those things.

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It can actually articulate,

no, this is where the value is.

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This is where you find those values

so that you're not paying for people

196

just to move you around their products.

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Dan Kain: Yep.

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Travis: the industry terminology, making

it look like they're making you money.

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But in the end, it's kinda like, you

know, if every time you go to the doctor,

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they just give you a new drug, you know,

eventually you're gonna start scratching

201

your head and going, why am I just getting

new drugs every time I go to the doctors?

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Dan Kain: Right.

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Travis: It's, it's like that

with a lot of financial shops.

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Every time you go in, there's,

they're prescribing you something

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different or they're just

ignoring you completely, you know?

206

And it's like, okay, what's

this gotta actually do with me?

207

So I, um.

208

I do think that, that it's hard sometimes

for people just to understand what the

209

value is, um, that they're paying for.

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And that's the sign of, I think

a good planner is somebody who

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can help them understand, look at

the difference in the two paths.

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This is the path that

you're taking currently.

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This is the path that

we think you could take.

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Dan Kain: Yep.

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Travis: By the way, it's net of our

fees telling me that's not worth it.

216

Like I've had literally, people

come in, look at the difference.

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Yeah.

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I, I know that, and I know you can do

a, a, make a big difference, but I kind

219

of like, I, I don't care about money.

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I literally had people say, I

don't care about, about having

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better returns on my investments.

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Dan Kain: Yep.

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Travis: And I'm like, I,

I don't understand that.

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You know what I mean?

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Like what's the, so if you don't

care about having better returns,

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why don't, why don't you pay to have

better returns and then donate the

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returns to charity or something?

228

Right.

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Like, like, why are we haggling over a

fee if you don't care about the returns?

230

Dan Kain: Yep.

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Travis: It's a, it's a, it is just this

weird challenge, but I, I think it is

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very, very difficult sometimes for,

for clients or prospects to understand,

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what am I paying for in this space?

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Dan Kain: It's tough.

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And I think, you know, one of the

things I think that we do really well

236

is, you know, we not only look at their

situation, but then we say, okay, we

237

did these Roth conversions for you,

for example, but then also look at.

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For your kids down the road, right?

239

Like, this

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Travis: Yeah.

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Dan Kain: is what's gonna

happen for them as well.

242

So not

243

Travis: Yeah.

244

Dan Kain: what they have going

on, but also is what is gonna

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happen for your family too.

246

Sometimes that, you know,

strikes a chord with them, right?

247

'cause they're thinking,

248

Travis: Mm-hmm.

249

Dan Kain: now my kids

get the money tax free.

250

Like, you know, in that example, right?

251

So, um,

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Travis: Which is also kind of always

a little bit of a oxymoron to me.

253

It's like, I, I really care how

much money I have and how the market

254

does, but I don't care about the

taxes and I don't care about how much

255

taxes my kids are gonna have to pay.

256

Dan Kain: right.

257

Travis: Well, that's because the

problem that you have is when you

258

look at your account, you see dollars.

259

When I look at your account, I see

dollars that belong to you, and I

260

see dollars that belong to the IRS.

261

Dan Kain: Yep.

262

Travis: And so when I look at the

account, I'm always trying to figure

263

out how do I reduce how much of

those dollars go to the IRS for you?

264

Dan Kain: Mm-hmm.

265

Travis: But 99% of people

are the other way around.

266

They're looking, I've got

$3 million in my account.

267

Okay?

268

And 3 million of that's taxable.

269

And so either you're going to pay

the taxes or kids are gonna pay

270

the taxes, but nobody's getting

$3 million out of this thing.

271

Dan Kain: right.

272

Travis: So how do we chip away at

the, at the chunk of money, are they

273

gonna get 700 grand outta you or are

they gonna get 500 grand outta you?

274

How do we chip away at that?

275

Dan Kain: yep,

276

Travis: So one of the compounding

factors I think for this issue is

277

also the non-standardized terminology

that the industry is using.

278

And for instance, there's fee

only and then there's fee-based.

279

Dan Kain: yep.

280

Travis: And I always love when I talk

to somebody who has done just a tiny

281

bit of homework and they'll be like,

ah, so I see that you're fee-based.

282

I really like that.

283

And I'm thinking, you

mean fee only, right?

284

Dan Kain: Right, right.

285

Travis: I don't know anybody who goes, ah.

286

So I see that.

287

I have to have a PhD to know

when you're making a commission

288

from me versus when you're not.

289

I really like that.

290

Like nobody, nobody's

thinking that, right?

291

They're, what they're really thinking

is, is I see that you're transparent and

292

I pay you a flat fee for whatever you're

doing for me, and that's how it works.

293

I don't have to worry about you selling,

you know, me proprietary products and

294

making extra cuts on things and you know

what's in there for you versus what, like,

295

imagine, again, go back to the doctors.

296

You go to the doctors, they give

you a prescription, then you find

297

out that that doctor, you were their

298

you know, a villa in Italy for it.

299

You know, like that would

really piss you off.

300

You would not be happy about that.

301

Dan Kain: Yep.

302

Travis: That's what's happening.

303

Like imagine if you found out, oh,

I bought this insurance product, or

304

this annuity, this index annuity.

305

'cause they said, well, you

know, everybody needs it and

306

this is why I should get it.

307

And so I got it and I, and then,

oh, I, I just saw this announcement

308

that so and so won a trip through

the annuity company to, you know,

309

Punana to the Hard Rock Hotel on me.

310

Dan Kain: Yep.

311

Travis: know, it's like, yep.

312

Congratulations.

313

You fell into that one.

314

Dan Kain: and that does happen

with pretty much firms out there.

315

Right?

316

Those types of trips happen.

317

Travis: They're not

supposed to do it anymore.

318

That was, that They took, that

they, yes, they passed a law that,

319

or rule regulations said you're

not supposed to do this anymore.

320

But, um, you know, everything

can be signed away with the right

321

disclosures and the right paperwork.

322

I think for most places it's like we're

not really doing a sales quota thing,

323

but if you sell enough, you get to go

to the leadership council retreat now.

324

You know, so that's for

people up in this threshold.

325

Uh, but we're not gonna tell

you what you have to sell.

326

But some of these things pay you

8%, some pay you 2%, you figure

327

out which one you wanna sell.

328

Dan Kain: Exactly.

329

Travis: Um, or they all, they all

are the same, but some of 'em equate

330

to double the points, you know?

331

So it's like, yeah, okay.

332

Whatever,

333

Dan Kain: Yep.

334

Travis: know.

335

Um, so, uh, but what is it, how would

you explain the difference between

336

Yeah, I can joke about it and our

listeners probably get tired of

337

me saying it over and over again.

338

So how would you describe the difference

between fee based and fee only?

339

I.

340

Dan Kain: Yeah, I mean your, your fee,

your fee uh, advisors or planners like

341

us, the only way we make money is through

either an hourly or, yeah, an hourly

342

rate, I guess you would call it, um,

a flat fee or assets under management.

343

So there's no commissions

involved whatsoever.

344

Um, we have no incentive, you're just

talking about, to sell somebody an

345

annuity and make a huge commission off

of it or sell somebody life insurance.

346

Um, so, you know, all of

our planners are salaried.

347

Um, we don't have that incentive.

348

So, and, and honestly, that ties

in with all of our, like the whole.

349

Part of our business where we even talked

about before, like with teaming, right?

350

It's not my client versus your

client and I'm selling them a whole

351

bunch of products and you're sell

your clients a bunch of products.

352

It's, work as a team and these

are our clients together.

353

They're

354

Travis: Yep.

355

Dan Kain: Um, so yeah, so there's

no conflict of interest really.

356

That's, that's the main thing is to avoid

that conflict of interest where we don't,

357

you know, we're not selling you something,

um, just to make a commission off of it

358

and then never talk to you again, right?

359

Travis: Yeah.

360

Yep.

361

Dan Kain: that's not our

business model at all.

362

But that is, you know, there

is some business models that

363

are out there like that.

364

Um, the fee based is more of a

hybrid model, so you have that, they

365

may potentially pay assets under

management plus a commission, right?

366

They may manage some money

for you, but then also sell

367

you some financial products.

368

So I guess it's more of

a, of a hybrid model.

369

Um.

370

You know, and, and when you hear fee

based, I think people, like you said

371

earlier, confuse the terms fee based and

372

Travis: Yeah.

373

Dan Kain: So they think, oh, fee based

is, I'm not paying them a commission.

374

Well, you very well could be.

375

So, um, it's,

376

Travis: and people throw the terms around

too, though I'm a fee-based advisor, but

377

I don't sell anything where I can make a

commission, but I work with other advisor.

378

'cause like to call yourself

fee-based or fee only is

379

actually a dictation of the firm.

380

You can't be fee only if

the firm has anything where

381

they're receiving commission.

382

So that's why you see the bigger

firms, and none of them are

383

fee only because it can't be.

384

But then you can have advisors

within the firm who operate kind

385

of like a fee only, even though

they're licensed, where they work at

386

a firm to sell commission products.

387

They don't, but a lot of them partner

with another person at the firm who does.

388

So they're like, I don't sell anything

that makes commissions, but the

389

guy down the hall, he sells life

insurances and I send people down

390

to him and he sends people to me.

391

Dan Kain: Right.

392

Travis: Well, guess what that is?

393

You know that that's a nice way of saying

like, I've got an incentive that like,

394

I need to send you over to that guy

so he'll send me some of his clients.

395

Dan Kain: right.

396

Travis: Right?

397

So, and that's why it's at the firm

level, that designation is important.

398

So when somebody says, I'm fee only

or I'm fee based, you really wanna

399

understand how they operate and.

400

Are there situations where

they're kind of getting kickbacks?

401

You know, because it is, I like, I've

been in there, I've been in in the

402

industry before where I literally watched

advisors give other advisors envelopes

403

of money for sending them clients,

404

Dan Kain: Yep.

405

Travis: you know, um,

because they couldn't.

406

Split a product fee with them, but they

wanted to make sure that they were,

407

you know, rewarded for, for sending

them somebody, you know, so they might

408

throw them some dollars on the side

and it's like, okay, well you know, you

409

as the, as a client don't know that.

410

You don't know that, okay, they said

that they only do, you know, only

411

charge assets under management, but

yet they refer you somebody within the

412

firm who does something commissions

and that somehow matriculates back

413

to them in, in most situations.

414

Most situations.

415

I don't wanna say all, 'cause I

don't know, you know, I'm sure that

416

there's some places out there that

are, that keep the lines fairly clean.

417

But I would say that in the industry it's

probably, um, a minority of places that.

418

Have a, you know, a firewall there

where they say, look, if, if our

419

advisor tells you they only get paid on

assets under management, that's truly

420

the only way anybody here gets paid.

421

You know, if, if you have an advisor at

a big firm and they're getting paid only

422

in assets under management, that firm

though, and they say something like,

423

well, it's not on our approved list.

424

You know, Morgan Stanley, Merrill Lynch,

any of the big wirehouses and stuff, a lot

425

of companies pay them a fee to have their

investment products on the shelf at that

426

investment firm or at that broker dealer.

427

Um, there's a lot of other

money to be made behind the

428

scenes you don't understand.

429

So a lot of times it's like, well, you

know that I actually heard somebody.

430

Well, how do you pick

investments for clients?

431

Well, I use the firm's approved list.

432

Okay.

433

So that's everybody that's paying

the firm to have an investment

434

on a list to make it look like

the firm has somehow vetted them.

435

Dan Kain: Yep.

436

Travis: What's your vetting process

of the firm's approved list then, you

437

know, so if maybe I wanna work with

you, maybe you're great and maybe you

438

have to sell off this list of 8,000

investments, but how do you filter that

439

8,000 then that's what I wanna know.

440

And so that's, again, it's, it's

nuanced, but it's, it's the type of

441

advisor that you might be working with.

442

And you need to understand these

things when you're, I think when

443

you're engaging with 'em, because you

know, nobody wants to pay more fees.

444

Nobody says, well, geez, I'd

like to pay you an extra 1%

445

of investment management fees.

446

And in fact, a lot of people,

I'll go index investing so

447

I don't have to pay a fee.

448

Okay, but do you understand

all the hidden fees?

449

Do you understand all the ways that

they're making money off of you?

450

Because those are coming outta

your bottom line someplace.

451

Dan Kain: Yep.

452

Travis: Um, all right.

453

So a recent, uh, uh, in a recent

meeting, let me stumble over myself.

454

In a recent meeting, it came up,

um, so we were having a group

455

meeting and we were talking about

clients that have less assets that.

456

There was a perception that maybe they

don't need fee only advisor helping them.

457

Maybe they, they should just go to,

you know, just go, should go buy an

458

investment, get a in a fund someplace, get

in an index fund, get in a American funds,

459

just buy a fund, get your money there.

460

You don't have a lot, you

just need to grow your assets.

461

Um, and I think that there

could be an argument.

462

I, I do believe that there is an argument.

463

Get your, when you don't have a lot of

money and you're trying to accumulate,

464

it's more important to get as much as

you can working in a diversified way

465

Dan Kain: Yeah.

466

Travis: at as low a fee as possible

to kind of build that portfolio up.

467

Because your, your options at the

small end of things is you're either

468

going to get a lower quality advisor,

um, because lower quality advisors

469

will work with lower paying clients.

470

That's the reality of that.

471

Um, or you're going to be getting

sold things that are very expensive.

472

Dan Kain: Yep.

473

Travis: Um, and where you're gonna be

dealing with like pro, pro proprietary,

474

proprietary, let's go over that.

475

You're gonna be dealing with

proprietary type of en en

476

engagements where I call it Vanguard.

477

And they tell me what fund to buy, right?

478

Or, or what's, what's, they won't

even tell me what's funds available.

479

They'll say, these are all the

funds that are available based

480

on how much money you have.

481

These are the funds that you can get into.

482

Um, but they won't necessarily tell you

the difference between the funds, right?

483

You've gotta figure that out yourself.

484

So that means you now have

to become investment expert.

485

Um, so people with less assets, I think do

or would benefit from a fee only advisor

486

because they would avoid the commissions,

the proprietary stuff, getting in higher

487

quality investments right from the get go.

488

Um.

489

There's just a ton of

issues that plague 'em.

490

So let's focus on this a little

bit 'cause I do know we have a

491

lot of listeners that are in that.

492

I'm just getting started phase.

493

We would call 'em like Sprout

or Ignite Clients here.

494

Dan Kain: Yep.

495

Travis: Um, what are some of

the challenges that are facing

496

that group of clients that are

just trying to get started out?

497

They've got 5, 10, 15, $20,000

that they should be aware of.

498

Dan Kain: Yeah, I think, and you kind of

mentioned it, right, like getting started

499

and not getting frustrated when things,

um, don't quickly ramp up in that space.

500

Right?

501

So it's getting started and

being consistent with, you

502

know, putting money away.

503

I think having.

504

You know, a planner or somebody who,

who can be by your side to actually

505

show you, all right, this is, this

is what you will have someday.

506

Right?

507

Like, don't get frustrated that this

is gonna take a while because it

508

Travis: Yeah.

509

Dan Kain: It's, it's, it's a slow build.

510

Right.

511

But, um, know, and even, you know, away

from the investments and, and not even

512

necessarily younger people, but even

people with, uh, that are approaching

513

retirement that may have smaller account

balances that are like, you know what,

514

why am I paying for this planning?

515

I don't have much money put away,

but there's other factors that go

516

into all of these other things that,

that you can be helped with, right?

517

Like even like social security planning

518

Travis: Yeah.

519

Dan Kain: pension selection,

those types of things.

520

So, um, I think it kind of falls in like

the younger crowd, just kind of having

521

somebody by your side to help guide

you, but also, you know, even the crowd

522

that's getting closer to retirement.

523

If you may not have a ton of money

saved, but there's a whole bunch of other

524

factors that advisor, a good advisor,

525

Travis: Yeah.

526

Dan Kain: can help you save long term

of making the right decisions, right,

527

the make, making smart decisions.

528

So,

529

Travis: I think that that's

a good point though too.

530

That age group that you were talking

about, like, I'm getting new retirement.

531

I've got three or $400,000 that I think

is where most of the retail abuse is.

532

So what I mean by that is if you

wanna know where the most sharks

533

are looking to make a buck off of

somebody, it's in that dollar amount.

534

Because when you have three, $400,000.

535

Um, you can see how you

could run outta money.

536

You can see how you could spend

that much quicker than, say, if

537

you have a couple million dollars,

538

Dan Kain: Right.

539

Travis: um, and maybe bigger

pension and bigger social security.

540

So what happens is you've got every

insurance agent, every broker, every small

541

advisor kind of competing for that three

or $400,000 trying to sell their thing.

542

That can make a commission.

543

And a lot of times you end up with

products like indexed annuities,

544

Dan Kain: Yep.

545

Travis: variable annuities, fixed

annuities, CDs, stuff like that there

546

where they prey on your fear of losing it.

547

On the fear of running out.

548

Dan Kain: I was just gonna say, it's

a lot of fear-based selling right

549

Travis: Yep.

550

Dan Kain: Yep.

551

Travis: And they make

massive commit commissions.

552

But your upside gets inebriated

and, and your access to

553

principle can be taken away.

554

And, and my experience with

clients in that size is.

555

Yes, there is a, a potential

that you could run out of money.

556

There's a potential, anybody could run

outta money, but the bigger risk is

557

not that pot pool of money not growing

at all because you, you ended up in

558

a product where it's the top side is

cut off where losing access to your

559

principal and now life happens and you

need some of that principle and you

560

can't get it without blowing up All

these quote guarantees that you've paid

561

for that will never come to fruition.

562

Um, because you know what?

563

When you only have three or $400,000

and something happens to one of the

564

kids, you don't think of yourself,

you think of the kids and you cash

565

out part of that three or $400,000.

566

And a lot of times that's blowing

up some of the products that the

567

smaller advisors are gonna be selling.

568

Most likely, if you're dealing in the

three to $400,000 range and you're not

569

dealing with a fee advisor, you're gonna

be dealing with commission heavy products.

570

You know, or proprietary products.

571

'cause you're gonna be dealing with

smaller advisors, you know, people who

572

are newer in their learning or in their

career, or you're gonna be dealing with

573

people who are more seasoned in their

career, um, but not as successful.

574

Lemme put that way.

575

Right.

576

And that's why they're still

selling commissions or, or higher

577

cost products, trying to, you

know, get their next paycheck.

578

And that's a lot of times where

we see churn and stuff like that.

579

So I think that that's really, I think

that that's really, really good advice is

580

because it isn't just about young people.

581

This is also about, you know, I

have a lower assets for maybe my

582

age and, and, and retirement goals.

583

And it allows me to be preyed

upon based on, oh, aren't you

584

afraid you're gonna run out?

585

Let us show you how you won't run out.

586

Dan Kain: Yep.

587

Travis: Um.

588

So I, I also think that it's

like, it's like habits, right?

589

Like you need to have,

you need to be prepared.

590

And having, um, a coach and having

you establish certain disciplines

591

early is really important.

592

It's harder to change when

you're midlife, right?

593

I'm in my forties, I can say it's a lot

harder to get up and join a gym than it

594

was when I was in my twenties or thirties.

595

Um, you know, so it's

just harder to change.

596

So you build the habits early,

um, and get yourself set up.

597

You can accumulate faster, then you

have a lot more options, uh, and

598

a lot more flexibility as you age.

599

Um, and then you have

that compounding interest.

600

You know, you're, you're, you mentioned

it, you know, it sound, it feels like it.

601

It's very slow.

602

Your first $10,000, when you make 10%,

it's gonna go to 11,000, and that's

603

not gonna feel like it did anything.

604

You're gonna be like, so what?

605

What's a thousand dollars?

606

Dan Kain: Yep,

607

Travis: Your first a hundred

thousand, when it goes up 10%,

608

same 10% that it did when you had

10,000, it's gonna go up to 110,000.

609

Dan Kain: yep.

610

Travis: Now you're gonna say, Hey, that's

cool, but it's still only $110,000.

611

But when you have a million,

it goes up to 1,000,001.

612

Dan Kain: Yep.

613

Travis: Now you're gonna say,

well, that's a, that's a fancy

614

car I could buy right there.

615

And when you get to 3 million,

it's gonna go up $300,000.

616

Then you're gonna say, okay, I

could that, that's a vacation house.

617

You know what I mean?

618

So you're, you're, you have to understand

that it's not sexy and it's boring, but

619

in order to get to the bigger number, you

have to go through the smaller numbers.

620

The way that compounding math works, you

wanna get all those thousands as you can.

621

So if you have an opportunity to

keep more money in your pocket or

622

give yourself upside on investments.

623

You, you need to seriously consider how

are you appropriately doing that, even

624

if it means you have to pay for a coach,

625

Dan Kain: Yep,

626

Travis: because what you need to

do is avoid the pariahs coming and

627

basically keeping you small because

they're, they're living off of you

628

because they're not successful and

they bent your ear and they got you

629

kind of ensnared in kind of whatever

kind of business that they're doing.

630

Dan Kain: yep.

631

And that, and like you said, that first,

uh, that first a hundred thousand dollars,

632

that feels like it takes a while, right?

633

It feels

634

Travis: Yeah.

635

Dan Kain: when is this gonna happen?

636

And then all of a sudden the compound

interest starts to accumulate and

637

it's like, whoa, okay, here we go.

638

And you get some momentum, and you

get some momentum and momentum.

639

And all of a sudden, you know, like you

said, on a million dollars, a hundred

640

thousand dollars, that's a lot of money.

641

but it, it, it is a slow process,

for people who are just starting out.

642

But, you know, if you have somebody by

your side to tell you this is gonna look

643

like and show you what this is gonna

look like in 10, 20, 30, 40 years, um,

644

I think it makes it a little bit easier.

645

Travis: And I don't think you

have to have a million dollars

646

by the time you're 40 either.

647

Like I can think of a handful of

clients that we have that their goal

648

by retirement and retirement was

like, I think late fifties, early

649

sixties for them was to have a million

dollars and now they're at $2 million.

650

Dan Kain: Right,

651

Travis: And, and that was

five or six years ago.

652

They retired, you know, just before COVID.

653

And so you can see how quickly it

took 'em 30 years to get to a million.

654

It took 'em six years to get to

2 million or something like that.

655

You know, it was a pretty, it was a pretty

explosive pop from a million to 2 million.

656

I, I can't tell you exactly how much

time period, but it's a short amount

657

of time when you think about it.

658

It took their entire adult

life to get to a million

659

Dan Kain: Yep.

660

Travis: and then.

661

It took the, essentially we're

a couple years into retirement

662

and now they're at 2 million.

663

And they're like, well, I

never thought I'd be here.

664

And you know, you get that sheepy little

grin like, okay, now what do I do next?

665

You know?

666

'cause it's like I never

thought I'd be here.

667

You know, when I was a kid,

everybody talked about maybe

668

someday you get to a million.

669

And I did it.

670

And then, wow, now I'm at 2 million now.

671

And then, and this is why when, when

you re, when you retire, a lot of times

672

your, your goals and things change.

673

As you get into like your seventies, that

compounding math just starts to get wild.

674

Dan Kain: Right.

675

Travis: here you are, you've

been disciplined your whole life.

676

You've accumulated a couple million

dollars, you get to retirement and

677

you, and you don't need a lot of it.

678

Right, and that's part of how you

accumulated it because you've been pretty

679

disciplined living within your means.

680

So you get to retirement, now you

have this big pot of money and

681

you're like, okay, well I'm still

nervous 'cause I'm retiring, I'm

682

not getting a paycheck anymore.

683

Dan Kain: Yep.

684

Travis: so I'm, I'm not really

thinking about philanthropy

685

or giving to the kids at all.

686

Then you get into your seventies and

you start looking at what the RMDs

687

are gonna be and you go, holy cow.

688

I never thought I'd have

three and a half, $4 million.

689

I don't know how I got here.

690

Dan Kain: Yep,

691

Travis: Um.

692

But I'm looking at the tax bill that's

coming my way in the next couple of years.

693

What can I do about this thing?

694

And that then all of a sudden,

philanthropy comes in and the kids,

695

you know, giving to the kids or setting

money aside for the grandkids come in.

696

And that's when that conversation

actually starts to get fun because

697

you're subconscious or you're mentally

dealing with the fact that you also

698

never thought you'd have that much money.

699

Uh, but it happens.

700

And, and, and it just, it just goes to

show, you know, it's, it is that last

701

10 or 20 years, not the first 20 years,

702

Dan Kain: Mm-hmm.

703

Travis: you need to save in

the first 20 years so that you

704

have something to grow off of.

705

Dan Kain: Yep.

706

Travis: But the big growth is gonna

come in the last 10 and 20 years.