Latest / The Perfect RIA / The Transparency Edge: A Ponzi Victim's Manifesto for Value-Driven Financial Advice with Guest Kevin Thompson [Episode263]

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The Transparency Edge: A Ponzi Victim's Manifesto for Value-Driven Financial Advice with Guest Kevin Thompson [Episode263] · The Perfect RIA

• 0:30
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• 1:01
  Hello everyone and welcome to another episode of The Perfect
• 1:04
  RIA podcast. I'm your co host Matthew Jarvis, with me today's
• 1:07
  special guest Kevin Thompson who, Kevin and I met on LinkedIn
• 1:11
  some of you know that's one of my guilty pleasures. What I
• 1:14
  really enjoyed interacting with Kevin is that he and I could
• 1:17
  really go back and forth on issues and it still felt like we
• 1:19
  can have a have a beer afterwards. And so I said, Hey,
• 1:21
  Kevin, let's let's see if we can do this at least more real life
• 1:24
  than typing. So Kevin Thompson, welcome to the show.
• 1:27
  Kevin: Thanks for having me, man. And I'm gonna say this I'm
• 1:29
  gonna say this. I love what you do on LinkedIn. Don't ever
• 1:34
  change because there's people out there that are gonna be
• 1:37
  like, Oh, this Matt Jarvis guy He really grinds my gears. But
• 1:41
  man, I love it because I read the commentary and I'm like, oh,
• 1:45
  especially when someone attacks you. I get I get my popcorn
• 1:48
  video. I'm like, You're not gonna come back. I love what you
• 1:53
  do, man. Don't ever change my friend during the day.
• 1:55
  Matthew Jarvis: Tell me a little bit more about how Bitcoin will
• 1:56
  work in my practice. But Kevin, let's let's talk about you for
• 2:04
  just a little bit right so you've got an advisory practice.
• 2:07
  You're down in Texas, you played in the major leagues, you've got
• 2:09
  your own podcast, you're you're doing all sorts of things like
• 2:12
  give us a little little insight.
• 2:14
  Kevin: Well, so I got a podcast coming out. And I mean, I'll
• 2:16
  probably be out. But again, I'm talking to my former advisor
• 2:20
  from the Stanford group. So as you know, I was a victim of a
• 2:23
  Ponzi scheme, the Allen Stanford Ponzi scheme, right. And I
• 2:26
  talked to him last week, and it's going to be coming out in
• 2:29
  the next couple of weeks here. And again, I don't know when
• 2:32
  this airs, I talked to them my former adviser he explains
• 2:36
  exactly how it happened, what happened when it happened and
• 2:39
  what all how it broke down and unfortunately, he got caught up
• 2:43
  in this mess because he was kind of new in the business as well.
• 2:46
  Yeah. You know, just an advisor taking out hanging out with
• 2:49
  athletes and bringing them on and yeah, and then he said one
• 2:52
  day, and I don't want to spoil it. He says, One day I was on a
• 2:55
  phone call and next thing you know, offices are getting
• 2:57
  raided, and I was like, Whoa, so it's incredible, man. Yeah, but
• 3:01
  I was playing baseball, Major League Baseball, the Yankees and
• 3:03
  Oakland A's at the time. And yeah, he was managing the temper
• 3:06
  group was managing my money. And I found out because I was
• 3:10
  getting really in tune with investing, watching CNBC and
• 3:13
  Bloomberg. Like it was like it was a religion, right? Yeah. And
• 3:17
  I see Alan Stanford coming out in handcuffs and I'm seeing the
• 3:20
  office. I was just that being raided by the SEC. And I was
• 3:23
  like, Oh, this is interesting. Call my advisor man. And he was
• 3:28
  like, I don't know what's going on. Let me call you back. He
• 3:31
  calls me back an hour later. Hey, this is not good. Just
• 3:35
  yeah, man. It was. That's what got me in the industry today.
• 3:38
  That's why I'm here sitting in this chair because I went back
• 3:41
  to school when I was pirates. When I talked him into my wrist.
• 3:44
  I said never against that happened to me again. I wanted
• 3:46
  to learn everything about the financial world. And again, you
• 3:49
  can't learn everything about the financial world. We get it no ha
• 3:51
  and I love what I do. And I love learning I love not being a
• 3:55
  victim because at the end of the day, we can either be a victim
• 3:58
  or we can actually go and become the hero in our in our story.
• 4:02
  And that's what I'm trying to get. I
• 4:03
  Matthew Jarvis: I'm trying to say reflect. Man, I'm just like
• 4:09
  trying to, like how does that shape you as an advisor. Today,
• 4:13
  like we all hear about Ponzi schemes, we'll hear about fraud
• 4:15
  and those of us have been in the industry long time like we've
• 4:17
  seen it or we might have had some near misses. I mean, you
• 4:21
  lived it firsthand. I mean, like is that part of your describe so
• 4:23
  fast? Like is that part of your discussion with clients? Like,
• 4:25
  let's let me just tell you like, if it sounds too good to be
• 4:28
  true, maybe it is like how does this work in your life, man?
• 4:30
  Kevin: Absolutely, man. So it's just every day we're hit with
• 4:34
  something right? And I've gotten so in tune, whether it be people
• 4:38
  talking about MLMs or marketing scams, or what have you, and I'm
• 4:42
  like God leads stop like I can see it from a mile away. And of
• 4:47
  course I lived it because my money was frozen for almost, I
• 4:50
  don't I can't even tell you how long it was. But all my assets
• 4:53
  were there. So all my bill pays and everything was just it was
• 4:57
  stuck. It was so I was just basically saying, Oh, what am I
• 5:00
  gonna do? Luckily I had chips coming in. But at the end of the
• 5:04
  day, all the other assets were frozen. So when my wife had a
• 5:06
  relative's funeral, and they when they needed money, to go
• 5:10
  pay for things, I couldn't give him anything because I didn't
• 5:13
  have access to it. So it's those types of things that happened
• 5:16
  that it basically ruins a lot of people and changed a lot of
• 5:19
  people's lives. And I couldn't help anybody which was
• 5:21
  unfortunate, but luckily I did get some of my money back
• 5:25
  because my money was actually invested in actual assets. But
• 5:29
  yeah, it was it was very frustrating because the state
• 5:31
  administrator goes in , freezes everything and says, You have no
• 5:35
  access to anything and I'll call you when I'm ready. But really,
• 5:37
  yeah, unfortunately, so forth.
• 5:39
  Matthew Jarvis: Kevin, how do you advise clients then? Like
• 5:41
  when you're talking to clients or potential clients, and you're
• 5:44
  telling that story like what advice you'd give them to make
• 5:46
  sure they don't fall to that same thing?
• 5:48
  Kevin: I knew you're right there the business to men. You know,
• 5:51
  many clients don't want to say Hey, check this out for me. What
• 5:52
  do you think this? This this guy come over here? He says give me
• 5:56
  20 plus percent return on this real estate deal. And all I got
• 5:59
  to do is take 50 $60,000 out of my account and put it over here.
• 6:01
  What do you think I'm like, Oh, my God. We just get those every
• 6:09
  single like we get all these real estate deals. And you just
• 6:13
  say, man, just play it safe. I said let's just say
• 6:17
  hypothetically didn't get the returns or whatever. You're
• 6:19
  still going to be good. Why yes, anything. If you if you want to
• 6:23
  do that, take that money out. Go to Vegas. Go down versus just
• 6:29
  you know, give it to some guy he's, I got a client right now.
• 6:32
  I don't want to talk too much about it, but they're, they're
• 6:34
  giving money to a company doing something outside of us. I'm
• 6:38
  like, and they're taken out of a Roth account, and hey, I want to
• 6:41
  get the IRS. I'm just gonna let it let it go. But it's just
• 6:45
  crazy how some of these people come up with these schemes.
• 6:47
  Matthew Jarvis: Yeah, it really is. I mean, it makes me think
• 6:50
  some of the techniques I've used on that when I run into that is
• 6:53
  like, hey, let's Why don't you just have them send you an email
• 6:55
  summary like have a have a write of an email summary for me to
• 6:57
  take a look at because we want that we'll at least want to get
• 6:59
  some of that in in writing even a little bit like hey, listen, I
• 7:03
  you know, I'm sure that the guy told you everything he told you
• 7:05
  is true. But you know what, let's just make sure we have it
• 7:07
  in writing because you know, now compliance is gonna be issue
• 7:09
  suddenly those Indexed Universal Life that only go up and never
• 7:12
  go down. Just send me a quick email summary will be set on
• 7:17
  that. I don't know that when it comes down with a real estate
• 7:18
  deal as we always say, let me see the tax return. I'm sure
• 7:22
  this thing this Airbnb, a pays for itself in three days that
• 7:26
  let me just see the tax return on that puppy and we'll take a
• 7:28
  look at that stuff.
• 7:30
  Kevin: And you and I see it all the time. But I don't know where
• 7:33
  they get this stuff from. And when you look these people,
• 7:37
  yeah, you can never find any information about and it's like,
• 7:40
  Well, I gotta I had to dig on this website that I have to go
• 7:42
  back into something and you're like, where's this guy at? And
• 7:45
  you find out he's been at 17 different firms and whatever.
• 7:48
  It's just, it's a whole minutia of work that just nonsense. I
• 7:51
  feel like I'm a detective half the time. You know, it's just
• 7:55
  crazy to
• 7:56
  Matthew Jarvis: The Ponzi scheme, you're still working the
• 7:58
  major leagues. You go back to school, you study you become a
• 8:00
  financial advisor, volume Advisor Now Kevin?
• 8:02
  Kevin: So, I started advising in 2011 I started with a broker
• 8:07
  dealer slash insurance arm.
• 8:08
  Matthew Jarvis: That's how we all started back then you and
• 8:10
  Kevin: I go back and forward that like, you know, oh, you're
• 8:12
  an advisor. You can be an advisor. Well, now you're
• 8:14
  selling insurance.
• 8:15
  Matthew Jarvis: Let's call it let's call it this, like, just
• 8:17
  just own it, by the way, just because I'm an insurance guy,
• 8:19
  you know, my State Farm guy. Yeah, by State Farm guys. Like
• 8:22
  let me do a comprehensive it's like nice so PNC insurance all I
• 8:24
  do yeah.
• 8:27
  Kevin: Just own it, man. Just own who you are, be who you are
• 8:30
  and being the best person you can possibly be. Don't fake the
• 8:33
  fraud. And you're absolutely right. And I learned that a long
• 8:36
  time ago when I was with this insurance arm. I was like guys,
• 8:38
  I went in and I built an investment firm which is great.
• 8:41
  Yeah, but all the other stuff is like we're doing comprehensive
• 8:43
  planning. If you haven't seen the one tax return, you can't
• 8:46
  even read a tax return. You're talking about comprehensive
• 8:48
  plan. All you're trying to do is get somebody into a whole life
• 8:51
  insurance policy. I'm trying to get as much premium as possible
• 8:54
  because guess what, when I peel back the onion, what does it
• 8:57
  look like? The agency's making 90 plus percent on this product,
• 9:00
  and you're paying out the other agent 50% You got a nice little
• 9:02
  spread there for bone. This is a very profitable product for you
• 9:06
  call it like it is and stop lying to people. That's all I
• 9:08
  want to say. Just stop lying to people. Yeah.
• 9:11
  Matthew Jarvis: Well, that's a great one too, I guess. I guess
• 9:13
  this is almost becoming an episode on how to help clients
• 9:15
  avoid scams.
• 9:17
  Kevin: I'm not saying whole life is scam. I'm not saying a whole
• 9:19
  lot is a scam. I have four policies on myself.
• 9:21
  Matthew Jarvis: I'm a huge, huge insurance me so but when people
• 9:24
  come in and say there's no fees, no fees. So that's always when I
• 9:28
  say cool. How are they paying for that building? All right,
• 9:31
  and everyone thought about like, it's easy to be dismissive of
• 9:34
  clients. We can all fall for that stuff. So it's like what
• 9:36
  are those simple things we can help educate people? Hey,
• 9:39
  listen, they got to pay for this thing somehow she didn't know
• 9:40
  how.
• 9:41
  Kevin: This is perfect that you mention that. You know, those
• 9:44
  those index products where you're upside downside cash
• 9:48
  buffer and all this other stuff, right? Yeah. And there's no fees
• 9:51
  on them. There's no fees and I'm like, Oh, my god, stop saying
• 9:54
  that because I'm not getting my dividend. Where's that dividend
• 9:58
  going? It's going somewhere. It's just going poof up in the
• 10:01
  air. And by the way, I'm not getting all of the spread in
• 10:05
  regards to the upside and the downside and all the other
• 10:08
  stuff. Where's that go? Yeah, so they make it like, I think three
• 10:11
  is three card monte right there like, Hey, you're constantly
• 10:17
  trying to figure out okay, should I put my money here? Is
• 10:20
  that what the ball is? Yeah. And that's the standard string
• 10:23
  itself. And then my job is to make sure that my clients don't
• 10:26
  have to worry about that. Let me help you figure out what this
• 10:28
  looks like. And then you can kind of explain it in layman's
• 10:30
  terms. Don't get rid of all the noise this is so much noise out
• 10:34
  Matthew Jarvis: So much noise you're going through those
• 10:34
  there's.
• 10:35
  anything comes to mind is like they're tracking some kind of
• 10:37
  bizarre index, right? That's like some some index that no
• 10:40
  one's ever heard of. Give me your point like this. Isn't a
• 10:47
  slide on whole life or annuities or on structure notes. It's just
• 10:50
  like, hey, listen, just just be really honest with a client.
• 10:53
  Like, here's what works. And here's what does and I think and
• 10:56
  Kevin, I love your thoughts here. Sometimes we think like,
• 10:58
  hey, we told the client the downside of this. They're
• 11:01
  they're not going to do it. No, no, that's that's how you build
• 11:03
  all the trust when I come to you and I say hey, listen, here's
• 11:05
  the four pros. I got to be honest, here's the four cons.
• 11:08
  Let's weigh this thing out like now I'm in a win win proposition
• 11:11
  here.
• 11:11
  Kevin: The issue most people have. It's like, if you're an
• 11:14
  insurance guy, your whole life built around that insurance
• 11:17
  product that I'm telling you like when I first got to the G
• 11:19
  word right to the G, don't want to call it got to the insurance
• 11:23
  arm, their whole philosophy was we're gonna build your whole
• 11:26
  financial plan around this product. And I'm like, okay,
• 11:30
  that doesn't make sense. Because what if they can't get it?
• 11:33
  Matthew Jarvis: They're not going to their he financial plan
• 11:37
  if you're insurable. Yeah.
• 11:39
  Kevin: Exactly. So I say this is remove all of the other layers
• 11:43
  and say, let's start with the client, right? Tax returns and
• 11:47
  you said like the tax returns are important. And I listened to
• 11:50
  you because you have a lot of good insight even though we
• 11:52
  don't agree on everything.
• 11:53
  Matthew Jarvis: I suppose. It's good that we don't
• 11:55
  Kevin: A lot of good insight man, and I'm listening to you.
• 11:57
  I'm like, Ah, but I am alive. When people start going against
• 12:02
  Matthew Jarvis: If you could show me the light on another
• 12:02
  you as you start getting...
• 12:10
  way, like please, please do not count us specifically, right,
• 12:12
  like, but just it's like, hey, let's I'm wrong about a lot of
• 12:15
  things. But don't just say I'm an idiot. Like, that's how you
• 12:17
  always know like, well you're an idiot. Right? I used to Kevin
• 12:19
  funny story. I used to write the editorial column for our local
• 12:22
  newspaper and and which was right up my alley. And so I
• 12:26
  would write about politics and all this kind of stuff. And I
• 12:28
  learned really quickly that when someone didn't have an argument
• 12:31
  they were just go straight to name call. And I started saying,
• 12:33
  I don't know if we should give the school district more money.
• 12:35
  They will you hate children. Like, that's not notice. I may
• 12:38
  or may not that's its own issue. We're talking about the school
• 12:40
  district made more money. I don't know. So yeah, yeah. So
• 12:44
  tell us a little bit how your practice looks today. Right?
• 12:46
  You're down in Texas, right? I mean, you just had Josh Brown on
• 12:49
  your podcast like you do it a lot of stuff, man. Like tell us
• 12:52
  where things are at.
• 12:53
  Kevin: I love creating and I love just being just being out
• 12:56
  and just having like, one thing I like I like it's I love about
• 12:59
  you, it's like you're authentic. Like you're not gonna change for
• 13:01
  anybody. And that's what we need more of an authenticity in this
• 13:04
  business. Because we can all be the guy that's like, suited up
• 13:08
  and we're gonna say, hey, our deviation and yada yada yada and
• 13:11
  blah, blah, blah. And that's like, nobody's listening to
• 13:13
  that. And in this new world we're in we got to be authentic,
• 13:16
  and I love that's why I like I love the authenticity and I
• 13:19
  started my firm a little bit over a year ago. We're at 40
• 13:23
  million now of AUM, which is a good start. Not a bad start for
• 13:26
  a year. Yeah, I have two advisors. I'm onboarding one now
• 13:29
  from Washington state, your state matter of fact, and I'm
• 13:32
  assuming there's a lot of high tower advisors that just didn't
• 13:36
  pan out. Sure. I'm not sure what happened with that company. But
• 13:39
  I just know there was a merger and then people got mad and then
• 13:42
  there's a lot of this throw a lot of lawsuits. So... But
• 13:47
  anyways, yeah, so there's some emotions coming my way. And I
• 13:49
  know you feel this, but everybody likes to put people in
• 13:52
  boxes, right? Hey, you're gonna come in this industry, you look
• 13:55
  a certain way, you're gonna be a certain way. I'm just gonna say
• 13:58
  Man, if you want to come and have fun and do it your own way,
• 14:02
  and we can figure out how to stay within the lines of
• 14:04
  compliance. Of course, go ahead and do it. Now I know there's a
• 14:07
  downside to it, right? Because at the end of the day, it's
• 14:10
  like, well, then how do you market yourself? Because if
• 14:12
  you're doing multiple things, and you have one guy saying this
• 14:15
  one guy saying that no, we're not saying we're saying opposite
• 14:17
  things. What we're saying is, you can do it your way. But
• 14:20
  we're all saying the same thing. Yeah, I just want I just want
• 14:23
  people to be authentic and have their autonomy and just have fun
• 14:25
  doing the job.
• 14:26
  Matthew Jarvis: And that's a spot on Kevin, especially when
• 14:27
  you're kind of you know, in a growth mode or freedom mode,
• 14:29
  wherever that is until you call it's called a million $2 million
• 14:32
  in revenue, like people want to do business with people who are
• 14:35
  like them. And if that weren't the case, they would all be at
• 14:38
  Merrill Lynch, right. Like if people just wanted prestige,
• 14:40
  right? They would just Yeah, they'd be in Goldman. But and
• 14:43
  you and I can have it anything be a business. If we can go out
• 14:45
  our real self, like you said, deliver massive value be
• 14:47
  authentic, that people who are drawn to that will be drawn to
• 14:51
  that but if you and I tried to pretend like we're the same as
• 14:53
  Merrill or Goldman River, he's just not gonna win that game
• 14:55
  right? You got to be you.
• 14:57
  Kevin: There's not a competition here like they say the ocean is
• 15:00
  big man. So 4050 $60 trillion out there and not one of us can
• 15:05
  manage all of it. Right? Exactly. Right. So if I can have
• 15:10
  my wills piece of the pot, you have your piece of the pie,
• 15:13
  we're all gonna be happy here. And if so, massive RAS out there
• 15:17
  let them be but at the end of the day, we're all gonna have
• 15:20
  our pieces of pie and be very successful.
• 15:22
  Matthew Jarvis: Because what do you need right 100 150 clients
• 15:25
  and you've got the best practice in the world. Like we're not
• 15:27
  trying to bring on 4000 clients, trying to find 100 150 Really
• 15:32
  good clients so we can deliver massive value who like us and
• 15:34
  respect us and we like and respect them. That's the whole
• 15:37
  game. Right? That's perfect.
• 15:39
  Kevin: I got a question for you if you don't mind.
• 15:41
  Matthew Jarvis: Oh, please, please.
• 15:42
  Kevin: Where did you come up with this massive value? Because
• 15:44
  I love it. I love it. I love it. It's just and then you got your
• 15:47
  book of course. Yeah. How did it come to fruition?
• 15:50
  Matthew Jarvis: Alright, so I'm a massive contrarian, right like
• 15:52
  as you can see from my late I'm just kind of contrarian and one
• 15:55
  day I was brainstorming names for like my book and for
• 15:58
  whatever else and and I came up with just randomly like one of
• 16:01
  100 was delivered massive and if somebody told me that you can't
• 16:04
  do deliver massive value, because that's DMV and everyone
• 16:06
  hates the DMV, and therefore, and therefore they'll hate you.
• 16:10
  And Kevin, I swear I took it as like a dare like Oh yeah, I'm
• 16:12
  gonna make I already love DMV, like that's where it came from.
• 16:18
  Like, oh, yeah, I do it like I'm gonna bed like so. Yeah, you
• 16:22
  know, it's just and I know this is your your proposition as
• 16:25
  well. Like, you're not trying to trick clients into hiring you.
• 16:27
  You're not trying to be like, Hey, pay me this fee. And then
• 16:31
  look over here. You're you're coming in and you're saying,
• 16:33
  like, I'm going to do incredible work for you and your family
• 16:36
  deliver so much value, dare I say massive value. That's what
• 16:39
  I'm going to do.
• 16:40
  Kevin: This stuff. The argument in our industry, like, Why do
• 16:43
  like, let's go there. This is perfect. Yeah, it's the
• 16:45
  conversation between Hey, remember that one guy on
• 16:48
  LinkedIn saying that 1% fee, you shouldn't be charging that
• 16:51
  because you're not. And I was like, Ooh, I saw your name pop
• 16:54
  up. I was like Rico. You know, my question is this, like, Why
• 16:59
  Does anyone care what anyone else is doing in the business
• 17:03
  like if somebody wants to charge 5% Let them be if clients love
• 17:07
  them, and they want to pay them the 5% By all means, let them do
• 17:11
  it. I don't care. That's my own personal business. Right. Yeah.
• 17:13
  Matthew Jarvis: There's always there's transparency. Right. I
• 17:16
  you know, I'll take some issue with some hidden fees, right.
• 17:18
  The thing is, if you lead your marketing with price, like
• 17:21
  that's what you're going to die on, right? You're saying the
• 17:23
  only thing that's different about me is how I charge that's
• 17:24
  it like that's not that's like the Walmart model, right? And
• 17:27
  Walmart's obviously a very successful business. There's a
• 17:29
  place to be made for that. I don't think you're gonna win
• 17:31
  that game. I don't think you're gonna have any fun at that game,
• 17:34
  either. Right? Deliver massive value and charge accordingly and
• 17:37
  if that's how your model like backs off out, yeah.
• 17:39
  Kevin: And right now you've said it perfectly and a lot of doing
• 17:41
  the same thing. People saying a fee compression fee compression,
• 17:44
  freak, physical and not my business, my friend, my fees are
• 17:47
  actually going up. And I'm charging more because there's
• 17:50
  more than I'm offering, whether it be tax planning, whether it
• 17:53
  be estate planning, whether it be what have you, I'm giving
• 17:56
  that to my clients, and that value cannot be I don't know
• 18:00
  what I'm looking for. But you have to understand that the
• 18:01
  value that you provide to the client, you can't just discount
• 18:05
  it because you're like, Oh, well, they may not they may not
• 18:07
  want to go to me, so I'm gonna charge them half the price.
• 18:09
  Well, no. Are you doing half the half the value and that's it.
• 18:12
  That's a different story. If you're doing half half the
• 18:14
  value, I'm okay with that. But most of the time, you're working
• 18:17
  twice as hard. And making the making less money. It makes no
• 18:19
  sense.
• 18:20
  Matthew Jarvis: The place where there's fee compression is
• 18:22
  anything you're doing this commoditized right. So yeah,
• 18:25
  mutual funds massive. But that's every commodity every and that's
• 18:29
  not necessarily that's just the nature of commodities, the price
• 18:31
  will always go down on commodities. Can what you
• 18:33
  described as the furthest from a commodity, right? You're looking
• 18:36
  somebody in the eye and you're here what their concerns are,
• 18:38
  and they know they can call you and they're saying, Kevin, just
• 18:41
  the ability to be able to call you and make sure I'm not in
• 18:43
  some scam, like, cool. And again, it says that free markets
• 18:46
  I hear on my soapbox, it's a free market transaction. Like
• 18:48
  you said, if my clients are willing to pay a buck and a half
• 18:51
  grades and if you want to try to lower my clients, we've offered
• 18:55
  a lower price like good luck to you. It's not gonna work. Yeah.
• 18:57
  Kevin: And what's so bad about it? They're disregarding the
• 18:59
  fact that people live in different parts of the country.
• 19:02
  Yes, right. You know what I mean? It's like, okay, so a
• 19:05
  person and what I'd say Washington State or a person in
• 19:08
  New York, I mean, it's okay for them to charge what they want to
• 19:11
  charge but yeah, so it's like I'm living in like, Kansas. It's
• 19:17
  a different value proposition there. But you can't just sit
• 19:21
  here around the board, like everybody should be here. This
• 19:23
  is where we should be. I can't stand those conversations
• 19:25
  because I know where they lead. And because they know they're
• 19:28
  gonna get a lot of engagement which is kind of it is what it
• 19:31
  is.
• 19:31
  Matthew Jarvis: Yeah, they've made a lot there's obviously a
• 19:34
  lot there. I think there's two really big problems that come up
• 19:37
  with this fee compression is one is like the younger guys in the
• 19:39
  industry. They don't know any better, right? So they think
• 19:41
  they have to charge a lower fee. The other like you said, Kevin,
• 19:45
  you know there's different parts of the country that different
• 19:47
  markets but to assume that all financial advisors are doing the
• 19:49
  same thing. That's insanity, right? So like, again, if I was
• 19:53
  kind of check on a deal, and I'm like, Man, I wonder if this
• 19:55
  deals a little shady. Like, I'm going to call you up because
• 19:57
  you've got first hand experience with that and whatever you
• 19:59
  charge is going to be worth it right?
• 20:01
  Kevin: 1,000% like the tax planning stuff that you do all
• 20:03
  that stuff, man. Yeah, it's crazy.
• 20:05
  Matthew Jarvis: Yeah. So to say that every advisor is the same
• 20:07
  and the only difference is the fee that that that's absurd,
• 20:10
  right? It's, you know, whether we got to use major leagues as
• 20:12
  an example or medicine or anything else. Like there's a
• 20:14
  huge disparity of talent, spirit of talent, let's charge
• 20:17
  accordingly.
• 20:17
  Kevin: Absolutely, charge accordingly. Make your money,
• 20:19
  take care of your clients, all the value all the money and
• 20:22
  everything you're gonna make is going to come once your clients
• 20:24
  see the value, to be frank, I want you to pay me in addition
• 20:28
  to what they're currently paying me and I was like, You know
• 20:30
  what, you're already paying me above. It's okay. But I mean,
• 20:34
  maybe I should change my view.
• 20:37
  Matthew Jarvis: Why that I was used with prospective clients,
• 20:39
  whether they're talking about fees or performance, I got this
• 20:42
  one from Nick Murray and I have a big Nick Murray fan, which is
• 20:46
  like Mr. Mrs. Client, like if you're able to beat the market
• 20:48
  by 2% a year or you're able to get a half a percent lower fee,
• 20:52
  and you still run out of money at age 85. Did you win the game?
• 20:55
  Right, so you beat the market by 2%. And you run out of money
• 20:57
  like did you win the game? No, you did. Okay, so there's more
• 20:59
  going on here than just what's the maximum rate of return back
• 21:02
  to the beginning of episode. Ken, when you say listen, this
• 21:05
  guy who says he gets you 50% a year maybe he can probably
• 21:08
  can't. But if you run out of money, like did you win? No, you
• 21:10
  didn't win the game.
• 21:11
  Kevin: And you said hit the nail on the head. I had a guy that
• 21:13
  was in California. He's no longer my client. And yeah, we
• 21:17
  can have this conversation to about maybe needing to fire
• 21:19
  certain clients. But at the end of the day, I hate the look of
• 21:23
  my client, but he was always bringing me an idea like, hey,
• 21:26
  what do you think about I'm gonna invest in these
• 21:28
  businesses? I'm gonna invest in Windows, I'm gonna invest in
• 21:31
  some seawalls or something like that. I'm like, why are you
• 21:34
  getting this stuff man? And it's like, they always come to you
• 21:37
  with something over the weekend. They retested over the weekend,
• 21:41
  and they come to you with some kind of, I don't know what kind
• 21:44
  of idea it is, but I'm reading documents pages now. Like I
• 21:47
  don't know where this is going. But yeah, it was. It's one of
• 21:51
  those things where the value that's value right there because
• 21:53
  we're going to be reading the document saying, well, on page
• 21:56
  seven, this is what it says I don't want to be this
• 21:58
  termilonogy that value is something that you cannot
• 22:02
  understate but I will say this, the biggest value is this. Like,
• 22:06
  how often have you you've gotten a financial plan from a client
• 22:09
  and say, I want to look over this right? Because the guy was
• 22:11
  at JP or because of the name, right? And it was just one of
• 22:15
  the 17 advisors that that did a run through this program. And
• 22:18
  they'll put him in a money guide simulation or E money
• 22:20
  simulation, they'll pop out. You're gonna have 50 kazillion
• 22:23
  dollars when you're, you're done,
• 22:25
  Matthew Jarvis: Or it'll be like 60 to one of the two.
• 22:28
  Kevin: Yeah, yeah. And I'm like how how do I keep coming up with
• 22:31
  these ridiculous figures? So I go in and run them. And the
• 22:34
  first thing he says, Well, Kevin, you just cost us about $3
• 22:36
  million. I said, Why do you think that? Is it because now
• 22:39
  our net worth is now I think we could this is realistic. You
• 22:42
  know, things happen in life, you know, and me just said you're
• 22:45
  gonna go up in a linear rate of return. It is irresponsible.
• 22:48
  It's irresponsible. And I feel bad because he's not being
• 22:51
  taught the right way over at the other firm, and that's just my
• 22:54
  two cents as myself now.
• 22:55
  Matthew Jarvis: I'm with you and because it's a super alluring
• 22:58
  pitch because what they're what they're implicitly saying is
• 23:00
  work with us and you'll go from 3 million to 50 Like, which is a
• 23:03
  lie like it's an outright lie, but they're creating that that
• 23:06
  thing. That's why I'll never I never get into projections, I
• 23:09
  never get into performance. Like if I can't draw it out on a
• 23:11
  piece of paper. If it's the type of person who says whoever will
• 23:15
  project the highest return, that's who I'm gonna go with. I
• 23:17
  don't want that person as a client, because they're gonna
• 23:19
  blow the whole thing up. So yeah, I'm with you, Kevin stick
• 23:22
  to stick to the basics. Stick to what you're really good at.
• 23:24
  Kevin: And that's why I don't like if it's just a younger
• 23:26
  client, mid 40s, things like that. Three to five years is
• 23:29
  what we look at the 3-5 year time arises, what's the point of
• 23:32
  going out till 72? Oh, you have 72 million though. It's the
• 23:36
  stupidest stuff in the world and you're gonna you're gonna be
• 23:39
  good and retired. No, you're not because that future value is not
• 23:42
  going to be the actual money in your account.
• 23:44
  Matthew Jarvis: So it's some crazy assumption like, oh, yeah,
• 23:47
  we assumed you save $5,000 a month. I can't afford I can
• 23:51
  afford 500 Well, just let's just assume you do. 5000 You know,
• 23:56
  it's crazy stuff is crazy.
• 23:58
  Kevin: And life never changes. You know. There's no root
• 24:01
  problem. There's no AC problem. And I'm just going to be smooth
• 24:05
  sailing throughout this entire process. It's a joke, man.
• 24:08
  Matthew Jarvis: And so this ties back to the feet conversation
• 24:10
  and we always undervalue the ability to call someone Kevin
• 24:14
  like yourself to say, Hey, listen, I just got this offer. I
• 24:16
  have this thing. I'm considering this thing like this stuff that
• 24:19
  doesn't go into the software. That's where the real value is.
• 24:22
  That's where you're paying. Kevin, whatever your fee is, are
• 24:24
  you paying that? It's the ability to get on the phone with
• 24:26
  a human being that I liked that I trust that I respect to say,
• 24:29
  alright, what am I not seeing here? That's where all the value
• 24:32
  is what we do everything else, the investment management, the
• 24:34
  tax, everything else is ancillary to that it's really to
• 24:37
  be there to say, I can answer this question for you.
• 24:39
  Kevin: So I'm gonna ask you this question, please. How often do
• 24:42
  you like a screenshot, like I got one this this morning, a
• 24:46
  screenshot of a LinkedIn post or some random post? And he was
• 24:50
  like, hey, what do you think about this, but in the post says
• 24:52
  something like if you say, $500 a month to get free over a 30
• 24:56
  year, you're gonna have a million dollars in an IRA or
• 24:58
  whatever. And you say that for your kids. And I was like, and
• 25:03
  he called me he's like, What do you think about that? I was
• 25:05
  like, Man, that's ridiculous. It was ridiculous. Because let me
• 25:08
  let me tell you this, because right now, if you did that, for
• 25:11
  your son, he has a specially son as well. Oh, yeah. And all of
• 25:14
  his benefits. Yeah, he gets no. So this is the kind of stuff
• 25:18
  that irritates me because these people are talking to a grant
• 25:21
  audience thinking that everybody's the same. And
• 25:23
  everybody's different. Yeah. And that's the reason why people
• 25:25
  should stop putting that crap out there. Because they just do
• 25:29
  this. It'd be fun. They're gonna ruin somebody's life. You know
• 25:32
  what I mean? And that's just my soapbox, because I know I'm with
• 25:36
  you. I know. I know. People can get ruined by all the crap that
• 25:39
  people put on social media, maybe LinkedIn, Instagram,
• 25:42
  whatever. They come to me like, hey, what do you think I'm
• 25:44
  definitely coming to me because I'm commited but I feel like
• 25:48
  they're testing me at the same time.
• 25:49
  Matthew Jarvis: As what I hear Kevin well and for advisors
• 25:53
  doing I mean it gets if you're like some kind of like social
• 25:56
  media influencer and you're getting two pennies for because
• 25:58
  million people look at you, you're trying to do clickbait
• 26:00
  like, that's fine. If you're trying to build an advisory
• 26:02
  practice. If you're saying the same things that everybody else
• 26:05
  has said it's pure noise. It's like worrying. Again, we're
• 26:07
  feeling they were comprehensive financial. Everybody says that
• 26:10
  there's there's no value if you can say, I worked in the major
• 26:13
  leagues, and I was victim of a Ponzi scheme and I promised
• 26:15
  myself that I would never let another client have that but we
• 26:17
  say that's a different discussion. Then. Great news.
• 26:21
  You put a 5% IRR or whatever so you're absolutely right. Dude, I
• 26:25
  love this guy. I feel like we can do 100 of these episodes. We
• 26:29
  should we've kind of bounced all over the place, which I love.
• 26:32
  Even if no one else ever listened to this like I've had a
• 26:34
  blast. Let's let's transition but let's talk about some action
• 26:37
  items like you see a lot in the industry. You've got a good
• 26:39
  pulse on things. You've been industry longtime you'd be bold
• 26:42
  advisors listening what's the other than don't post about $5
• 26:46
  lattes making you a millionaire like what's what's an action
• 26:48
  that people can take that you would recommend today?
• 26:51
  Kevin: And to be frank I got this on my head. Yeah, cuz I try
• 26:55
  to be I read a lot of books, right? Yeah, no, I love them. I
• 26:58
  love my book like essentialism and all that stuff. Yeah. One
• 27:00
  thing is find yourself, right. Find who you actually are, and
• 27:06
  become that person. Find exactly what direction you want to be.
• 27:10
  Find what kind of practice you're gonna have. And just take
• 27:13
  some time to find yourself maybe a quiet space, whatever you just
• 27:17
  take some time. To do that. Then you get to become that person.
• 27:21
  Get people to tell you what you can and cannot beat. Because
• 27:26
  there's too much too many times this industry. And Jarvis will
• 27:29
  tell you right now. I love him because he's not afraid to be
• 27:35
  himself because there's gonna be some point in times in social
• 27:37
  media where people are going to tell you can't say something,
• 27:40
  you can't do something. don't don't listen to that. Be who you
• 27:43
  are. And then the third thing is going to be promote who you are,
• 27:47
  promote yourself. because, again, if no one hears you, no
• 27:52
  one sees you and if you're not saying anything differently
• 27:54
  you're just gonna be noise, and that's why I fear, that's what I
• 27:56
  fear about AI right now the everybody, everybody's gonna be
• 27:59
  saying the exact same thing.
• 28:09
  Find yourself, be yourself and promote yourself.
• 28:14
  Matthew Jarvis: I love it. I love it. Kevin. I think the only
• 28:16
  thing I would add to that is if you're struggling to find
• 28:20
  yourself right if you're looking at like, well, of course Kevin's
• 28:22
  got this personality because he was a major league baseball
• 28:24
  player. He's got this cool story and I don't and I don't have the
• 28:27
  backdrop I don't have a go back story either. It's okay to also
• 28:31
  find people that you can that as role models can I'm sure you had
• 28:34
  role models throughout your life professional and always
• 28:36
  everything's and Sarah there's something about that person that
• 28:39
  I admire, like I wish that part of their life was part of my
• 28:42
  life. This isn't about like plagiarism, right? It's about
• 28:44
  saying like, alright, you know, I love how Kevin is so
• 28:46
  authentic. If I if I was in Kevin shoes, like what would
• 28:49
  Kevin do about this thing? And that was a show with with Tom
• 28:52
  guy who was a mentor of mine for many years, like, what would Tom
• 28:54
  Gao do in this situation? By the way, only professionally, not
• 28:57
  personally and personally was a mess but professionally, like,
• 28:59
  oh, he would do one to try to plan he would ask for the tax
• 29:02
  return he would do whatever it was he does. I agree with you,
• 29:05
  Kevin. 100% Be who you are, like really be authentic. And it's
• 29:08
  okay to find someone who also has that similarity and mirror
• 29:11
  that.
• 29:11
  Kevin: Absolutely. Don't be afraid and finding a mentor is
• 29:14
  going to be powerful because that's better than any book
• 29:17
  you'll ever read. The mentorship is better than any book you can
• 29:21
  ever read. No matter how many books that person sells, and
• 29:25
  they're gonna give you all the secrets to success. That's
• 29:29
  right, the secret to their success. You buy his book.
• 29:33
  Matthew Jarvis: Success Yeah, follow my LinkedIn channel for
• 29:35
  more on my LinkedIn channel.
• 29:38
  Kevin: Man, I love it man. Again. I love you. Because,
• 29:41
  again, hopefully we'll cross paths here in the future, man,
• 29:45
  because I think it'd be it'd be a good grab a good time.
• 29:49
  Matthew Jarvis: Yeah, we will for sure. Stay in touch. Let's
• 29:51
  be sure our paths crossed. Kevin, thank you so much for
• 29:53
  your time today. Thank you for all of your insights and for all
• 29:56
  of our listeners. Until next time, happy planning!
• 29:58
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