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247: Commissions and Fees - "Whole Life Fees are too high!" · Wealth On Main Street

• 0:11
  Speaker A: Welcome to wealth on Main street. Where conversations about growing your wealth are fun and entertaining. Wealth isn't just about money. It's the skills and the knowledge that we develop to pass on to future generations. Tune in each week to grow your mindset and your net worth at the same time.
• 0:36
  Speaker B: Colonel.
• 0:37
  Speaker C: You snotty little bastard.
• 0:39
  Speaker A: Your Honor, I'd like to ask for a recess.
• 0:41
  Speaker C: I'd like an answer to question, Judge.
• 0:42
  Speaker A: The court will wait for an answer.
• 0:45
  Speaker C: If Lt. Kendrick gave an order that Santiago wasn't to be touched, then why did he have to be transferred?
• 0:54
  Speaker A: Colonel.
• 0:56
  Speaker C: Lieutenant Kendrick ordered the Code Red, didn't he? Because that's what you told Lieutenant Kendrick to do. Object. When it went bad, you cut these guys loose.
• 1:03
  Speaker B: Your Honor.
• 1:03
  Speaker C: You had Marcus and Sinophony transfer.
• 1:05
  Speaker B: Your Honor.
• 1:05
  Speaker C: You doctored the log book.
• 1:06
  Speaker B: Damn it, Captain.
• 1:07
  Speaker A: Worse, the doctor. Consider yourself in contempt.
• 1:09
  Speaker C: Colonel Jessup, did you order the Code Red?
• 1:12
  Speaker A: You don't have to answer that question.
• 1:14
  Speaker C: I'll answer the question. You want answers? I think I'm entitled. You want answers? I want the truth. You can't handle the truth. Son, we live in a world that has walls. And those walls have to be guarded by men with guns. Who's going to do it? You? You, lieutenant Weinberg? I have a greater responsibility than you can possibly fathom. You weep for Santiago, and you curse the Marines. You have that luxury. You have the luxury of not knowing what. I know that Santiago's death, while tragic, probably saved lives. And my existence, while grotesque and incomprehensible to you, saves lives. You don't want the truth because deep down, in places you don't talk about at parties. You want me on that wall, you need me on that wall. We use words like honor, code, loyalty. We use these words as the backbone of a life spent defending something. You use them as a punchline. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very freedom that I provide. And then questions the manner in which I provide it. I would rather you just said thank you and went on your way. Otherwise, I suggest you pick up a weapon and stand a post. Either way, I don't give a damn what you think you are entitled to. Did you order the Code Red? I did the job. Did you order the Code Red? You're goddamn right I did.
• 2:45
  Speaker B: Solving a problem versus solving for commissions. So we're going to have a conversation about that. And the reason why we're going to talk about it is what's interesting is that out There on social media in particular, which if you were to scour social media, you'll find just a wide variety of people's thoughts about the infinite banking concept, people's opinions about the concept, all of which people should view like you should get differing viewpoints that challenge you to think about your thinking, not the person who's created that social media content. But one of the things that I wanted to bring up was that often what you see is there's always a comment weaved in there somewhere about, you know, the agent who is promoting this concept because they're placing dividend paying whole life insurance. All that the agent cares about is commissions. But what I don't see in this social media content, there is never, not once, a logical, rational alternative to solving the problem. It's always a discussion about the tool not solving the problem. And the only lever that seems to get pulled out there is, well, let's set the whole problem aside because we perhaps we don't even know that we're addressing a problem. And let's just pull the lever that surely 100% of the agents out there who sell and place dividend paying whole life insurance only care about commissions now.
• 4:29
  Speaker A: Gotta be 100% of them for sure.
• 4:31
  Speaker B: While it's, while that's entirely absurd, I just, again, I think that it would be helpful and productive for people who put content out like that to present a rational, logical alternative to solving the problem. Not worrying about what an advisor is compensated. That doesn't help the prospective clients solve their problem, not one iota well.
• 4:57
  Speaker A: And additionally, it's like any business on planet earth can operate without revenue. And every business on planet Earth has expenses, including insurance companies. And every business on planet Earth, if they sell a product or a service requires distribution.
• 5:14
  Speaker B: Right?
• 5:14
  Speaker A: If it's a product like a grocery store, well, people drive to the grocery store, but they have a truck bring everything to them. So that's, that's part of the dis. It's distributing the groceries from wherever they receive the products and bring it to the store so that we can go to the store and buy them. And you know, then there's other, you know, other kind of stores you go to. There's, there's inventory, there's a truck that's bringing it to you. Well, the grocery store has got to pay for that truck to show up. The grocery store has got to pay for, you know, the truck driver, the cost of that, the fuel, the tax on the fuel, all of those things have to, in order for the groceries to land in the back of the warehouse. Then they got to pay a person to go to the warehouse and bring it out and bring it out and make it in the nice looking displays. And then they got to pay someone at the front door to make sure that as you walk through it goes out. And then they got to pay some people to manage and oversee the whole damn thing. Yeah, it's a pretty generic basic business structure. Insurance companies are no different. Just so happens that the distribution force is us, the insurance person. And it doesn't matter what the insurance is. Universal life is a term insurance. Is it critical illness is a disability? Is it, is it a home and auto insurance with a, with a, you know, property and casualty type of insurance company? It's the exact same mechanics. They're distributing the products to the people that need it and they need to get compensated because you know what, I don't know about you and if you're a listener, just maybe go ahead and check your calendar for the last 30 to 60, 90 days and decide, you know, how many of those days did you want to work for free? You aren't going to get out of bed and go to work. Whatever your job or vocation or business is with the expectation that you're going to earn nothing. It's not feasible. You wouldn't be able to manage supporting your family. So the whole system is just designed around distribution. That's it.
• 6:56
  Speaker B: Well, I've never personally and you and I can attest to this. In all the years that we've been doing this, you know, entering in my case, 17th year of doing this, I've never had a prospective client say I only prefer to work with an individual who's paid the least amount of money. And so it's a method of, for some reason, you know, some folks who see that as the only lever to pull to try and sell against the solution to a problem or to sell against the sale of a product. Again, just tapping into logic and thinking about our thinking. Whenever I read comments like that, because we do a lot of social media content and there's a lot of commentary and we don't block commentary, we encourage it. And we see these comments coming back and you can tell instantly that it's from an advisor or someone who's purporting to be an advisor saying all that these people care about is earning commissions. And it's like, okay, well everyone's entitled to their opinion. What logical alternative solution do you have to the problem? And there's never any dialogue back other than you shouldn't buy Whole life, you should put your money somewhere else, wherever that somewhere else is. And again, that's an interesting perspective. We're not talking about where to park money, we're talking about solving a problem. And that problem is who is the banker in your life? And how are you controlling how you finance all the things that you need over the course of your lifetime? So if I just decided that I wasn't going to purchase dividend paying whole life insurance and I was going to put my money into exactly what you recommend term invest in the stock market, invest in real estate, investing widgets. Widgets, cryptocurrencies, whatever it may be, that still leaves me in a position where I still have a problem. I'm not controlling the banking function as it relates to my needs. I'm not controlling how I finance the things that I need throughout my lifetime. I'm not recapturing the interest that I would have otherwise paid to someone else's bank or someone else's finance company. So what we focus on is solving the problem. And we just happen to by the placement of the tool. Dividend paying whole life insurance, we're compensated extremely well for what we do. And the life insurance companies, they determine the rate of compensation. And we're blessed to be in a profession that compensates us extremely well. And the clients that we have, and the clients we most want to have are telling us that they love the value they get in exchange for working with us. And so it's really, we're just commenting on this because it comes up and we're just encouraging advisors out there. If you feel that inclination to pull that lever, I would just encourage you to recognize you're not helping anybody. If you have a valid solution to the problem that is different than what we present to solve the problem. Not to get someone a return on investment, not to help someone build retirement income, not to help someone create generational wealth. Whatever it is that you want to help someone with. Posting content like that, disparaging people, casting a shadow on people, is not an alternative solution to the problem. And the people that we talk to who become clients, they just don't give.
• 10:28
  Speaker A: A shit about that.
• 10:29
  Speaker B: And so we're sharing this as a professional courtesy to anyone out there who thinks that that's the right approach. I mean, hey, take any approach you want, but just realize that we're winning in the marketplace and either everyone we work with is really stupid, or you think that if advisors were paid little to nothing at all, that that would somehow solve every consumer's financial objective and outcome that they're looking for. Like it's just, it's absurd.
• 11:00
  Speaker A: It's also because they do what Nelson Nash indicated is they take a little bit of information, regardless where they got the information from, and they jump to an absurd conclusion. So that information could be maybe they're licensed and they're focused on a different area of the business. That could be it. Yeah, it could. And they, they don't have a very good understanding of the different options and products are available. And they've been trained and taught, which is very common, that for whatever reason whole life insurance or some variation thereof is bad because they often make a statement and just a blanket statement of whole life. But what they actually mean might be maybe it's universal life, maybe it's non participating whole life, maybe it's like, it's a very broad statement that isn't specific enough to really identify what's truly going on. So the other component of this is that it's a scarcity mentality. And whether they were, maybe they were burned on a auto insurance or a home insurance deal, or their neighbor or their friend or their father got, you know, had a bad experience with an insurance agent at one time and then it just filters downward. Okay. It's like a top down thinking kind of a situation. So, so there's that lived experience that I think is what's coming out when we see those kind of comments. And so that's you, I mean, just, just challenge that a little bit. Is, is what you're hearing the truth or is it the truth as you see it? As an example? But the other thing that comes up for me, Jay, is this. It's like people that are focused on those kind of things, they're chasing the lowest common denominator and they're not recognizing what value is. And I'll kind of give you an example of this. So when we go and buy typical products or typical services, a lot of times we're having a transactional environment. Even like I was a licensed realtor for almost 10 years and much as I enjoyed that industry and I thought I was reasonably good at it, and I have a lot of great Realtor clients and I have a lot of great respect for realtors and the work that they do and also recognizing when they do a lot of work and don't get paid for it, they, they earn a commission for the transaction, but they don't get paid until a transaction is completed. So if you can't get your mortgage financing, they don't get paid if you can't close on the deal, they don't get paid. So they do all the work, but they don't get paid until the very end. And sometimes it's a maybe they don't get paid situation. So there's a lot of that that happens. So. So yeah, they might get paid really well on that transaction, but what about the eight transactions that they worked really hard on that didn't go through, that's never accounted for? Same thing happens in our industry, by the way. You know, we do a lot of work for people and we submit applications and sometimes they don't get approved.
• 13:29
  Speaker B: Right.
• 13:29
  Speaker A: People are uninsurable. They're, you know, they, they change, they change their mind or what. Any number of things could happen. But we might put in six, eight months, even a year's worth of work to try to get that moving through, and we might still not get compensated. So you have to factor that into the equation. Here's the other thing is that if you want to get into an environment where you, you buy a computer, you go in for the transaction, you do your research, but then you're out and you have your computer, you don't go back and get. Usually get service from that same individual that sold it to you. That doesn't really happen. There's not an ongoing situation there. It's a very transactional environment. That is often the case with many insurances, including, like, a lot of term insurance. It's not always the case, but just my experience personally, that has been the case. We have clients that we meet with all the time, every, every day, every week, every month. And I see what they have. They show me their laundry list of insurance contracts that they don't know anything about. Very common. And they can't tell you when it renews. They don't know when you know why they bought it again. It was a different person that sold it to them. They never heard from that person again. They don't even know how to get a hold of that person. They got a letter one day that that person has changed because they're out of the business and there's a new person that they never met. This is a very common experience. So there's no continuity in that because they bought a, let's just call a cheap item transactionally to solve an immediate need, and then they forgot about it and there was no ongoing service. So when you work with something that we're trying to create transformational change, not transactional product sales, but transformational change in the way you do things habitually throughout the Rest of your ever loving life for you and every family member that follows you. That requires a lot more time, commitment and energy. Not just from you as the person doing it, but from the coaches that are going to serve you. And so if you're going to do that well, you, you know, you need an ongoing method. Like I had a client, amazing client out of Ontario, real estate investor. I've probably had, man, maybe six or seven meetings with this individual in the last year. Just had one this week. Amazing person. But they're going through a lot of change and a lot of flux because of real estate interest rates and, and they're, they're looking at making some major changes. Got a big renewal coming up. We're trying to figure out how all this is going to work within their program that they've set up and it requires more intense time. Well, I'm not sending her a bill every time we spend 30 minutes or 45 minutes or an hour on the phone. I only got compensated when we got some insurance contracts in place and that was already two years ago. So it's not like I'm getting, I get some renewals, but they're very small and minimal. But I have someone for life that I'm working with. So just. People don't really think that through. They just take that little piece of information. They hear the word fee and their brain goes into some like, can't focus past these three letters and that's it. They take themselves out of the game. They don't actually look at what's really going on and what it looks like to have an ongoing relationship with it, with an organization or an individual advisor that's going to stand the test of time. They just don't consider that at all.
• 16:33
  Speaker B: What does this shirt read?
• 16:34
  Speaker A: Loved by those who don't love banks.
• 16:37
  Speaker B: It doesn't read Loved by those who don't love term insurance. It doesn't read Loved by those who don't love mutual funds. It doesn't read Loved by those who don't love. Insert whatever financial product there is. And so it's just important to ask yourself as a consumer, when you're reading or listening to stuff where you're hearing or seeing someone just sort of cast a shadow over an entire industry or an entire group of people, or make unsubstantiated, you know, claims about things, ask yourself a very important question. Would I take advice from this person? And if the answer is yes, then you should connect with that person. If the answer is no, you should disregard what you're Reading and what you're hearing. And I think advisors would do so much better if they focused on serving the client in solving for what the client desires, not what they feel the client should want. Think about Henry Ford when he was asked a fundamental question and he, he was talking about, listen, if I would have gone to the customer and said, what do you want? They would have told me a faster horse. He decided to revolutionize and build an automobile because he saw that there was a way to solve a transportation problem. Now, do you think there were a lot of people that were throwing eggs at Henry Ford back in the day when he was developing the automobile? Better believe it. And so it's just, as a consumer, the best advice that we can give is just ask yourself that question when you're researching this process and the conversation is not at all focused on solving the problem. It's all product focused. What product is good, what product is bad? What the motivations are for a person wanting to sell that product. Just ask yourself the question, like, would I take advice from this person? And if the answer is no, just move on. You know, hopefully just shedding some light on this for advisors who want to get better. Like, when we. Pulling levers like that is just amateur night at the arena. Like, just, God, you're not doing yourself or anybody any favors.
• 18:58
  Speaker A: We, we hear stories, and I've heard it from a number of our colleagues, you know, especially in the States. And I, I can't think of a direct experience that I've had with it. Maybe one kind of comes to mind, but where a consumer is researching, exploring this process, and then they reach out to a purported expert, whatever that is, and that expert, you know, they can't get an illustration or a couple illustrations into their email inbox fast enough. It's like the comment comes in, hey, hey, I'm interested in doing this. And boom, 30 seconds later, an automated email with three illustrations that are essentially cookie cutter shows up and said, these are your options. It's like, there is things like that that are apparently happening. And I just, I'm almost dumbfounded and astounded that that's even a possibility in the world, because it just, it just makes so little sense to me that people would, A, conduct their business that way and B, that a consumer would willingly agree to move forward with something like that. Like, if I received something like that, I'd be like, cool, I'm going to delete. I'm not going to delete this email because I might want to reference it later for its stupidity. But I'm going to immediately move on and go find someone who actually wants to engage in a real conversation with me, maybe has a few questions about how I'm structured financially and wants to understand my goals just like a little bit, maybe even just a little. And so, I mean, if things like that are happening or you know, someone that that's happened to, like, really, really encourage them to find, find some second opinions because there is no cookie cutter situation here. It just doesn't work that way. Yeah.
• 20:28
  Speaker B: And it's, you know, our position in the service that we provide, which, you know, as evidenced by the thousands of the few thousand five star Google reviews that we have. And you'd be hard pressed to try and find one that doesn't mention words like team. You know, I love working with Bern and his team, I love working with Sarblo and his team. And every time I connect, I'm treated with respect and professionalism and, and care. We were not interested in being compensated the least amount of money because then we have to provide the least amount of service. That would be completely illogical because the clients we have and the clients we most want to have tell us that that's what they value. And so in order to operate a business, which Richard did a great job walking you through that analogy, there's a cost associated with doing that. And thank goodness the life insurance companies compensate as well as they do, and we're very grateful for that and so are our clients by proxy. Again, just evidenced by the feedback. And so rather than focus on what an advisor is being paid, the moral of the story is to first of all be very clear about the value that you want and that you expect. As long as you're getting that value that you want and expect what your advisor is being paid doesn't matter because you're getting what you expect. It's like the analogy that Ray used to share with us. He was like, hey, if you shop at a grocery store, are you basing your shopping decision or destination on what the employees of the store are being paid? Yeah.
• 22:06
  Speaker A: How much is that meat manager back there making?
• 22:08
  Speaker B: Like you're basing it on person at the till making.
• 22:11
  Speaker A: Before I walk out of here with my groceries, I gotta know that I don't know if I should be shopping at the store. I, I don't know what you're making at the grocery store at the till, Sorry, I can't buy my groceries here.
• 22:19
  Speaker B: You're basing it on pricing, convenience, product, assortment. How you're treated when you're there does.
• 22:25
  Speaker A: The store have the things that you need when you go in, etc? Yeah. And so another thing that comes up with this, Jason, I think, and I think just the industry and just the general public doesn't really know and understand it's not the industry, but the general public is like. There's also something called a chargeback that insurance professionals have to deal with and it doesn't, I don't know if maybe it exists in some other industries. I'm not particularly familiar with that. I just know about it from the insurance world. But you know, when, when someone places an insurance contract, if that contract doesn't stay on the books for a period of time, like a, you know, two year or some, sometimes greater, you know, with, for us, there was a long period of time where it was five years, 60 months. And if I, if, if, if for whatever reason some financial calamity took place with a client, I helped them get a policy five years ago or four years ago and the oil price went down. Covid came up and they lost their job for an entire year. Like some financial calamity which many people have experienced. And they, they had to, let's say, cancel or terminate a policy. Let's just as an example, the advisor is on the hook to return the income that they earned.
• 23:31
  Speaker B: That's right.
• 23:31
  Speaker A: Not a lot of, there's not a lot of other businesses or industries that, that exists. They, they get compensated and then the money's in their bank account and they can spend it. Well, you know, if you, and if you work for an employer, you're on a T4 or a W2 type of a salary, the money lands in your bank account, paydays on Friday or whatever, and then you go about dealing with your bills? Well, how would it feel if you went and worked for a company for an entire year and then three years later or two years later, all of a sudden they reach out and say, oh yeah, by the way, all that money we paid you, yeah, we're gonna, we're gonna go ahead and get that money back. We've managed to get a legal issuance of a garnishee. So all of your future wages are going to come back to us until we get whole from what we paid you three years ago. I mean, it just doesn't happen in other industries and people don't understand that that's the case. And I'm not saying like we're not, I'm not complaining about it. I'm just indicating that it's important to be aware that that is the case. So that when we get into a relationship, someone with a new client, like we have a vested interest in maintaining that relationship and helping that person actually succeed. Because if we, if they don't, or if they don't have the right mindset, you know, and I'll be perfectly blunt, you know, it's been hard for me to learn over the years and I'm, I'm a slow learner. I like to think I'm worth waiting for. But there's been many times in the past where maybe I, I wanted to help someone more than they wanted to help themselves. Right. And the result of that is I become to some degree almost like a babysitter for that person's financial life. And anytime that they have a problem, they only call me when there's a problem. They don't call me when the things are going well and they expect that I will solve the problem that they've created yet again. And that isn't, first of all, it doesn't feel very good to be perfectly honest, to being that person. But, but it's also a situation where, you know, if I don't help them out now, potentially the income and my, you know, my family's livelihood is at risk. Yeah. You know, it's literally like if you don't do the things that I coach you on and you're not listening or paying attention, you're not doing the things that we're asking you to do because I can't go and do the workout for you, only you can do the workout, then you're actually potentially putting the food on my kids table at risk. And so we have to be, that's why we spend so much time on mindset. We, we have so much content, so much education, we have our client membership site, we do quarterly group coaching sessions where we've launched a new community. You can, by the way, you can sign up wealth on Main street community.com wealth on Main street community.com it has an app you can download. There's additional family courses to teach you how to start talking to your kids about money in a new and exciting way to help them become value creators in the world. These are all resources that we're putting together and investing in, both with time and money to give more value to people so that they can have the success that they actually want.
• 26:13
  Speaker B: Well said. There you have it. Be clear about the value you want and what you expect and just make sure that you're working with somebody who is delivering that to you over and over and over again. And thankfully, and hopefully those who's are being renumerated very well for delivering that value to you. Great episode. Just wanted to tackle that hope that our viewers and listeners find it valuable. Especially those because we get a lot of advisors that tune into our content which we're really grateful for. Even to those who maybe don't like our content or they don't like the concept or they don't like the product, it's like hey keep coming back and consuming it because you never know when your thinking will shift and there might be something that gets triggered where it's like whoa, hold on a second if I've been asking myself is this the truth or my truth meaning your dislike of whatever it is that you're unhappy with. Is it the truth or my truth? Continue to rethink your thinking and your eyes just might be opened up to a whole new financial world. Thanks for the conversation Rich as always it was awesome.
• 27:21
  Speaker A: Appreciate you man.