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A financial advisor isn’t just someone who invests your money and tells you what to do – they offer the experience of advanced planning and absolute trust to keep you on track for the most returns with the least amount of risk. 

And while the Internet is full of ways to “build and manage wealth for retirement,” an advisor who keeps you on track (and there for your best interest) is priceless.

In this episode, I discuss how a financial advisor sets your portfolio up for greater success and the retirement you want (without any limitations). 

Show Highlights Include:

  • The ‘Sir Edmund Hillary’ approach to instantly securing your most successful retirement plan (with minimal risk). (1:30)
  • Why hanging out on investment blogs harms your portfolio- and how a financial advisor brings peace of mind to your planning instantly.  (4:16)
  • What the Vanguard Advisor’s Alpha reveals about your investments – and how to increase the value of your portfolio right now. (8:00)
  • Why you shouldn’t plan your own retirement – and the five things a financial advisor offers for your most profitable retirement today. (14:41)

To schedule your complimentary retirement track review, head to https://onecapitalmanagement.com. You can also call us at 805-410-5454 or text the word ‘TRACK’ and we’ll reach out to you.

Read Full Transcript

Welcome to Make your Money Matter, the show that aims to change the way we think about financial advice. So you can make better decisions.

Brad Barrett is a managing director and partner at One Capital Management, a wealth management firm serving nearly 1500 clients nationwide. With over $2.5 billion in assets, they’re a group of advisors dedicated to ensuring their clients achieve their investment and retirement goals. And now here's your host Brad Barrett. [0:26.1]

Brad: Welcome to Make your Money Matter. The show for truth seekers who are fed up with outdated financial advice. My name is Brad Barrett, I'm a Managing Director and Partner here at One Capital Management. And it's my goal on this show to reaffirm what you know, to be true and to challenge the advice you may have been told is true. Here at One Capital, our mission is simple to help our clients and you listeners live well and not just survive, but thrive. Friends, we live in a world where we are consuming information at warp speeds, and it's easier than ever before to access information yet more difficult to find truth. And that's what we're after because after all your money matters and knowing how to plan your financial future is vital to your financial success. To find out more about me or our many credited fiduciary advisors here at One Capital Management, you can go to our website at onecapitalmanagement.com or you can give us a call at (805) 410-5454. You can even text us. You want to text us the word track, T R A C K to the same number (805) 410-5454. We'll reach out to you to set that time, that free complimentary retirement track review meeting to take a look at where you are in your overall investment and retirement planning in order to focus on the golden objectives, you have to live a happy and healthy retirement. [1:42.3]

Mount Everest, the tallest mountain in the world, it stretches over 29,000 feet above sea level. This gives climbers, you know, around the world, the ultimate challenge. And I want to speak about one experience in particular on today's podcast. In 1953, a gentleman named sir Edmund Hillary became the first known person to successfully scale the summit of Mount Everest. Now he was accompanied by his Sherpa, the crazy name, Tenzing Norgay, and a Sherpa like Norgay, he's you know, he's a native Himalayan guide who knows the region, this mountainous region of central Asia, and they help climbers complete their expeditions by preparing hiking routes and really sheltering them from life-threatening elements. Because up there there's plenty of those. Now during his attempt, Hillary actually fell into a Canyon, but actually was saved by Norgay his prompt action, securing a route with his ice axe. A Sherpas knowledge right here in this example and experience is what makes them invaluable. Now decades before Hillary’s successful climb, a man named George Mallory attempted the same feat and some believe Mallory reached the summit of Mount Everest years before Hillary. Unfortunately, Mallory never returned from his journey and his remains were actually discovered in 1999. He was found in his repelling gear, which indicated he was on his way down the mountain. [3:11.9]

A small backstory here. He had also told his wife; he would leave a photo of her at the summit, if he were successful. This photo was not on his possession, which gave more indication and more proof that Mallory did indeed make it to the top of Mount Everest. Now in hearing the story you may have heard of sir, Edmund Hillary, but I want to ask why is that most people never heard of George Mallory because unlike sir Edmund Hillary, he had not successfully made it down the mountain. In fact, the majority of deaths on Mount Everest occurred not in the ascent, but on the descent. According to scientific American of the 212 deaths that occurred on Mount Everest between 1924 and 2006, 192 of those that's 90% are attributed to climbers who were on the mountain’s descent. The difference between these two men in their efforts is that Hillary had a guide, a Sherpa who had the experience and the knowledge of the terrain. This was the key to Hillary's success. [4:14.9]

So why is this story so important? Well, I think it's a great illustration of the retirement planning journey that many do a terrific job of accumulating income. That accumulation phase you've heard me say on our radio program and on this podcast, you know, essentially making it to the top of their own financial mountain, but the challenge is making it down that mountain into your retirement years, that income distribution phase. So why am I telling you this? How does this relate to your retirement or to anything that we speak about here on Make your Money Matter? Are there retirement lessons to be learned here, in fact from Hillary Mallory's Everest adventures? Well as you think about your retirement journey, what we talk about here at One Capital Management, think about it as if it were a journey up and down a mountain. So, let's bring the image of a mountain back into our mind's eye for a second. [5:01.4]

Look at it this way. As you are ascending the mountain on the upward climb, you're in that accumulation stage I just mentioned. At the base of this mountain, when you were, let's say in your twenties, or maybe even your thirties, you were just beginning your career. You were being saved money for your retirement, but you had a long way to go maybe 30 or 40 years until you reach the top of the mountain, which in my analogy here represents retirement. Now, as time passed, you entered your early forties and you began to save a degree of money for retirement, but you were, we're only halfway up the mountain. You still had another, let's say 20 years to go until you reached the summit. Then one day you wake up and in the blink of an eye, 40 years have passed. You find yourself in your sixties and you're sending at the top of this mountain with retirement at hand. You've accumulated all of the retirement assets and hopefully if you're working with an advisor, you were avoiding some of the blunders that can happen along the way. And these assets at this phase of life, typically, maybe finite limit, but you've completed only one half of the journey. And that's something we speak about heavily here at the firm of One Capital Management around why an advisor is so important to complete that second half of the journey, not just the accumulation phase. [6:06.7]

We get very heavily involved with our clients in the accumulation phase, designing great portfolios, custom built tailored portfolios that fit into your wealth forecasting and your overall retirement strategy, but also adapting to different phases of your life. Going from that accumulation phase, bringing that back up for a second, that 30 or 40 years where you're working in saving into that retirement phase of life, those retirement years, that income distribution phase, that second half. And so many times people think, Ah, well, you know, I'm reading these, these blogs, these white papers out there, I'm kind of meandering through the investment world. I think I know what I'm doing. And that may be the case. You may think that way, but hear me out when I say this and over the thousands of clients that we serve as a firm across the nation in the over two and a half billion dollars that we manage. One of the biggest things that we bring to our clients is peace of mind when it comes to not only their investments, but their planning. And building that relationship, that rapport, that trust within an advisor while you're in the accumulation phase is vital to helping you down that mountain when you get to the retirement phase. [7:08.5]

And by the way, there's also a ton of advice and assistance needed in the accumulation phase, building that portfolio to make sure that we're weathering some of the storms of market volatility, and we're still in growth mode sometimes when we're working in savings. So understanding our maximum limits on investing in IRAs or SEP IRAs or 401ks, or how the pensions work, if you have those, those all come into play. So advice is very vital in all these phases of your financial life, but I'm bringing the story up around Everest because having that Sherpa in this example, that advisor, that guide who's been there before, who has experience, and you look at our firm across the firm, from our advisors to our portfolio managers, to our four general partners, we all have a ton of experience in this business, making sure that we navigate the retirement landscape and ultimately the investment landscape for our clients. [7:55.1]

Imagine if you will, you were going on a trip and you were offered the opportunity to fly on one of two jet airplanes. The first is piloted by an experienced pilot who was being paid to pilot. The second has no pilot, but you're allowed to fly the plane yourself. If you choose the plane without the pilot, the cockpit will contain a computer which hooks you up to the internet site and it will tell you everything you really need to know about flying. So, let me ask you which plane do you want for your journey? What you're paying for when you hire an advisor is not information friends. You can get that anywhere. You're paying for experience. I mean, if you think about it, stay on the aviation analogy for a second, good pilots have three basic skills. Aviation, they know how to fly. Navigation, how to get passengers to their destination and Communication, how to keep passengers informed of their progress. The same is true, a good investment professional and a good advisor. We need to have investment acumen, meaning we know how to manage assets for our clients, navigation, just like a pilot, how to get our clients to their destination, which ultimately becomes a happy and healthy retirement. And relationship and communication being in touch with our clients and understanding their changes that happen in their accumulation phase, their, their working years, whether they're owning a business and running a business or they're working or an executive in the company or whatever their job title is, is our clients, our firm, right making sure that we sit with them and communicate with them no different than a pilot communicates with us when we're in the air of where we're at, what's going on. Other, is there any turbulence ahead? [9:26.4]

We want to know those kinds of items as we get into how we manage assets for each of our clients. And great advice is sadly sometimes overlooked having that trust and relationship with an advisor who can help you with his or her own experience in the realm of the financial planning arena, the retirement planning and investment planning arena, how it relates to your tax planning and your insurance planning and your cashflow, putting all these things together while also growing and protecting your assets and keeping you away from some of the risks that are out there as well. [9:58.9]

And although sometimes it may not show up on paper, there was actually a study done. It's called the Vanguard study and it was titled, Advisors Alpha. And this study estimates that clients who work with a good financial advisor and advisor like we have here at One Capital Management will receive on average, a 3% increase in the values of their portfolios each year. Now, of course, this increase does not come and maybe a linear orderly fashion. I really advise you to go take a look at the study again, it's called the Vanguard Study Advisors Alpha. And these studies, in my opinion, they ultimately show that financial advisors truly earn their fees if you will, by acting as behavioral coaches, often times rather than money managers, all the time. This notion is further researched from a firm called Aon Hewitt and managed account provider Financial Engines from 2006 to 2008, the data that they obtained compared the returns of investors who sought advice from online sources or the use of target date funds or managed accounts to those who did it by themselves. [10:58.4]

The study concluded that the former group of investors enjoyed annual returns that were 1.86% higher on average net of fees, then their do-it-yourself counterparts. Now, again, these studies are great to reference because in my opinion, it actually adds some quantitative data to what we as advisors feel is our value to our clients. Cause it's not always shown up on paper. A lot of times it's like they said before, it's more behavioral coaches and taking the sharp knives out of the drawer if you will, from ourselves. And I say this sometimes to our clients and something I like to share. I shared on our radio program on KVTA Make Your Money Matter every Saturday at 6:00 AM and 10:00 AM. We talk about this and I mentioned it, my wife and I Veronica our assets, our 401k, our trust account, our joint account we have is managed the same way my clients at One Capital's accounts are managed. [11:47.3]

The firm, my firm, One Capital management, our portfolio managers manage that. I may know what I'm doing, even a guy like who's been doing this, his entire career spending almost 20 years. Okay. His assets are still managed by a firm because I'm still human. I'm emotional when it comes to me, my investing, my, my brain may think I know what I'm looking at, I'm looking at fundamentals, but having that objectivity, that unbiased opinion makes the difference time and time again. So, this podcast today, this week's episode around why you need a financial advisor, isn't necessarily, they're going to go make you more money. That's the goal. But it's also to protect that growth design, the allocation of your portfolio on the investment side to fit your risk tolerances. Because a lot of times we meet with clients that they say, you know, Brad or advisor in our firm, I'm really conservative. And we look at their portfolio say, okay, we'll take a look and we'll put it together. And we come back with a portfolio say, Hey, I just want to be very clear about one thing first and foremost, the portfolio in has about 80% of equities. So, in the grand scheme of whether you're conservative or aggressive, I was fall that into the category of more aggressive than conservative. And a lot of times our clients are shocked. [12:54.8]

So, understanding that most clients, most people listening right now, if you are, don't truly, always know exactly what's in their investment accounts. Largely because either the advisor that you may be working with, isn't communicating well enough to you, or truly hearing you about what your goals and objectives are with your investment account, or you set something 10, 15, 20 years ago, maybe your 401k, your IRA, and just haven't gone back to it. So, you may think you're being more conservative, but you're really not. So, number one, it's really good to take a look. And that's why we use what we call a retirement track review. And you can call us and set that up. You can go on our website at onecapitalmanagement.com. You can set a time with myself or one of our advisors on our team to be able to go through what we, it's complimentary. It's completely free to you, but it gives us a chance to help you understand where you currently are in your tracking, where your assets are, what your goals and objectives are. And if you don't know what those are, we'll help you define those. Okay. You can also text us. You can text us the word track T R A C K. You can text us at (805) 410-5454. A lot of our clients are doing that, and we'll text you back and we'll set a time to go through your track review meeting, to take a look at where you currently are, understanding if your investment allocation that you're currently in, matches up with your risk tolerance that you want to be at. [14:08.4]

And also having that advice to say, Hey, you know, understanding the entire picture now that holistic view that we at One Capital Management, make sure we put in place for each of our clients is all designed and organized to ultimately reach what it is you're going for. And we'll help you to find that. That happy and healthy retirement I keep talking about, being able to have enough assets or quantifying the assets that you think you need, and we'll help you with that. We'll help you understand with your distribution rate. Needs to be understanding at some point in your life. You're going to exit the accumulation phase, that phase of working and saving and working, and saving, and ultimately get into the retirement side of life and making sure that you have your assets work for you, right? You've been working for your money, let your money work for you then. So, finding that partner, that advisor, that trusted relationship is vital to the success of your overall goal. [14:58.5]

And as I had alluded to earlier, the data clearly indicates that financial advisors can provide the most valuable assistance, especially during periods of high market volatility when investors are more likely to react with their emotions instead of logic. We all do it, we're human and additional research actually suggests that advisors can have positive impact on their client's financial plans in other ways as well. So, for example, the Investment Funds Institute of Canada released a report back in 2012, which was titled, The Value of Advice Report. And this report revealed that clients who paid for financial advice have a one a half times higher probability to stick with their long-term financial plan than those who don't. And I wanted to reference that data specifically because us here at One Capital Management, you know, this shows us that what we do being good advisors for our clients can definitely be beneficial in the short run, but it can be exponentially more profitable for investors over the long period. [15:56.1]

So, in sum, why you need a financial advisor one and a good advisor will keep you on track with your investing plan. Two, because they do more than just invest money. Yes, you need to find a really good investment manager. That's what we do here at One Capital Management, but they do more than that. They do advanced planning, relationship management, building that trust, finding what you need in terms of estate plans, tax planning, insurance, planning, all of that. Number three, because even the pros need help. Look at any example of when it comes to golf, how much are they paying their caddies for good advice, 10% here and there. I'd pay for that when I'm looking at a putt. So, having even pros need advice, understanding that in our own life, it's good to kind of look at some of the pros that are going on there for, because we don't have the time all the time. We need that coach, that advocate, that trusted partner, I keep using that word that ways, I think it's important that trusted advocate, that advisor, that fiduciary advisor that is only there for the best interest for you. And that's what we strive to do here at One Capital Management, it's inherent in what we do to make sure that we obtain the goals that our clients set out with the least risk possible. [16:57.8]

Number five, because you're an emotional creature as any investor is because they're human. So, taking a look and finding that relationship with an advisor is paramount to make sure that you stay on track, understand what's needed in your overall plan, other than just investments looking what the pros are doing and making sure that you're setting your systems up to make sure you reach your ultimate goal. And because you may not have the time and because you want to take the sharp knives out of the drawer, when it comes to emotional investing and look at it from a logic and fundamental, find something that is objective and unbiased for what you're looking to do for your overall financial plan. [17:34.2]

Thank you for listening to Make your Money Matter. If you found this show helpful you can actually check out our radio program every Saturday morning at 6:00 AM and 10:00 AM on K VTA, 1590 am or go to our website at onecapitalmanagement.com. You can find more information on us as a firm, our investment philosophy and background on all of our great advisors here at One Capital Management, or you can give us a call (805) 410-5454. You can also text that number and we can set up some time to get together as well. (805) 410-5454, text the word track T R A C K, we'll reach out to you. Next week on Make your Money Matter podcast we're gonna be talking about planning in an uncertain world and remember to always make your money matter. [18:19.1]

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