What is A Fiduciary?

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This is the Truth Network welcome to finishing well brought to you by Cardinal guy, certified financial planner Lonza Schild, best-selling author and financial planner helping families finish well over 40 years of finishing well will examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Medicare IRA long-term care life insurance and investments and taxes. Now let's get started with finishing well, finishing well is a general discussion and education of the issues facing retirees guide.com Cardinal advisors on Schild CFP some insurance this show does not offer investment products or investment advice welcome to finishing well, a certified financial planner harm Schild today show. What is the fiduciary, let me just say that if you were to ask in a Sunday school class. You know what is a fiduciary is often Jesus is the perfect answer is Jesus was the ultimate as I described this from John 15 to Juergen Gagliano is the ultimate fiduciary which you know fiduciary would be someone who looks over at their clients interest in the head of their own. But listen to what Jesus said. Along these lines, because in John 1513. He said greater love hath no man than to lay down his life for his friends right that's right after he said this is your commandment that you love one another while he lately illustrates that he doesn't just tell you what that is but then he demonstrates what that is and he certainly demonstrated with his life right mean he was up on that cross. He was the ultimate fiduciary and what he's saying is, as we live our lives, we need to be thinking as fiduciary as our friends. You know, how can we lay down our lives in service right for the Lord and in friendship. So it's really cool this topic today and so at the onset you might go. I know what a fiduciary is I don't need to split the next 27 minutes about, but also let me just say that we had the saying in the car business that was simply put that presentation without demonstration is mere conversation and the idea being that you could sell a Jeep Wrangler and tell people all about how fun it would be to take the top down and go driving out in the woods, but if you do take the top down and you go drive them out of the woods. It's just a whole lot different experience. So as we go through what a fiduciary is today were hoping that we are going to be doing it demonstration of what is that mean practically and man oh man, I think you can be just blessed to see how that can benefit you to understand these processes right on when you look up the word dictionary on my YouTube video but it really is no such thing anymore. I googled it read generically what he could find fiduciary units that a person who acts on behalf of another. You could add another disk definition of investment media is saying, usually in financial matters. One person is looking after somebody at the position across and fiduciary uses prudence, which I thought was kind of an interesting word and I look that up and it says caution that makes sense. It prudence, caution and loyalty so why are we talking about so my business I been fiduciary for a long time don't have to date I and all the matters that involve financial planning.

I acted this year and that's because on the CFP a certified financial planner which is voluntary and very difficult to achieve that CFP organization self-regulatory organization. They watch out our community. CFP B. Treat your clients as a fiduciary and all financial planning to do so. I've been that and then also in the investment management business.

I'm also required to be a fiduciary on all financial transactions that involve investment so with the Department of Labor doesn't really regulate people like me and other folks put in a new regulation that is approved by the SEC, started on February 1, 2022 requires any time amid the simple way to explain it any time a person or a salesperson or a bank salesperson or any insurance agent or a financial planner or a stockbroker touches IRA money or 401(k) money or moved from where it is into something new.

They are now deemed fiduciaries and not the institution at the institution Merrill Lynch that were talking about Merrill Lynch is not a fiduciary and whole.

The actual person that works at Merrill Lynch, stockbroker, whatever.

We went to some other company known insurance company and its nationwide insurance company and not the nationwide that healthy annuity that is the fiduciary of the actual person who made the recommendation that you take this IRA money is 401(k) money and move it into an annuity with nationwide.

That person is deemed to be here that's new. That's very months and so there a lot of people scurrying around the figure out what that means, which is all the more timely that we have this information right on and so I decided I would talk to my radio talk to my YouTube drivers and did the best they can to explain this issue and when you go to any of these organizations like the SEC or the North Carolina Department of Insurance go to the insurance companies who are under North Carolina Department of Insurance, or any other state or you go to the regulatory firms I can't find a really good definition of a fiduciary. That's what I had to go look it up myself.

Everybody talks about likely know all you have here. Yeah, and if you want to act on behalf of another.

I can't really find a definition, nor can it really find some guidance very well so I came up with it on my own and that we talked about video. That's what were talking about this effect, like 401(k), and in fact if you're going to somebody that they come to you and they're talking about taking the money within the 401(k) and rolling it into an IRA different station or anybody got an IRA you talking to somebody like me and we can decide there's a better place for your IRA is to move into XYZ company that undermine management. So anytime you're messing with retirement money this point forward, the salesperson or the customer facing person is deemed fiduciary and they're going to need to be able to prove somebody there regulatory organization or you customer that they acted in your best. They put your interests ahead of their own. Practically speaking, I'm looking at this from the beginning. I said well I need to. I need to get ready to make this defense may want to somebody two years from now suddenly passes away or they have a stroke analysis of their kids are getting in the matters in a meeting with now which I seldom have this done� Permits only look what you do this, why did you like to recommend a somebody start questioning what I'm doing.

I wanted to make sure that I got really good documentation of that I acted as a fiduciary, acted in their interests over my what I did is I just went through in the two parts of my business. This is to come up with either my managing money or managing investments and managing a portfolio or you're buying insurance from me and that insurance is nonqualified money. Most of the time annuities. I want to be able to demonstrate improved anybody that wants to ask that I'm a fiduciary. So I came up with a system which is really evaluating what's going on in my heart all along. Now I just brought it to words and practice check. She got checkboxes to go to this. We did this we did this and so you kinda got that structure force.

I do so on the investment management side of the RIA that I work with. They made it easy this law, they just came out of the And which we were doing all this stuff already and so it just so what are what benefit of the thing I'm putting them into managed money. How is that possibly better solution than where the money is sitting now and so we can go through that start ongoing investment management and monitoring people have money in the 401(k) or they have a self managed IRA that nobody's really looking at is when they come to me my team and I were were looking at this thing constantly and watching, outperforming, like what was going on in the markets now and were making recommendations: ask questions we call them and so somebody watching that benefit fiduciary dies from people the ability to act quickly, and I had a lady called me a couple days ago. The client I talked to her throughout January and into February. She just wanted to significantly reduce your exposure to the stock market and she wanted do it like now and then she slept on it overnight and then yesterday we talked during the end of the day and removed $300,000 out of the market. I'm not saying I'm not given advice to everybody out there everybody you need to move out of stock for and a lot of this had to do with her emotional well-being because but in any case, we know we did that and we can do it very quickly, whereas if you had to go do that yourself or in your 401(k) is not can happen now were also able to reallocate an investment in a managed account were able to move you from one, stocks to another, stocks or from stock to bond as part of the we could do all that without a commission so you can buy and sell things you're working to do that for you at your request and you not having to pay a commission on every sale because we have a fee-based account so that's an advantage that is something that a fiduciary has done something here because we got to go to a break in and a second, we just want to remind you that so much. This information is found in Hans's book the complete carnal guide to planning for and living in retirement cells that is websites cardinal guide.com cardinal guide.com and course YouTube channel where you got this whole video with the board that the straits of his talk about today. Cardinal advisors on YouTube so when we come back more on the application know how is that Sherry actually can benefit through our financial processing to finish what right back. Hans and I would love to take our show on the road to your church and Sunday school Christian or civic room. There's a chance for you to advance the kingdom through financial resources by leveraging Hans expertise and qualified charitable contributions veterans aid and attendance IRA Social Security care and long-term care.

Just go to cardinal guide.com and contact Tom to schedule a live recording of finishing well, your church, Sunday school civic contact on cardinal guide back that's cardinal guide.com welcome back to finishing well certified financial planner Hans silent today show.

What is a fiduciary generally want to remind you this is brought to you by cardinal guide.com so Hans take his back yet. We were talking about the practical side played out in my practice and we talked about the two pieces of my business, the investment management side of my business work generally were taking part of people's money. Sometimes all their money other than with Vicki back in the bank and were managing and then the other side of our business which is working to take part of their money many times and put it into annuities to Pamela lifetime income so whenever I'm handling qualified money now and I benefit you share all along but everybody that handles qualified or IRA money money under ERISA. We need to be held.

Be prepared to and that were shared so I'm just in preparation for that I just created a checklist on the investment management side and we've gone over doesn't mean that every client gets all these things on the checklist. This is just the things we check off that our ways that this is in the best interest of the person to move the money under our management.

One of those is they got us to manage money, we can act quickly. Then we also can reallocate among securities without having to pay a commission each time we have more investment options typically knowledge but then where the money sitting now so that a lot of times that the reason people move money is there limited where it was. They want to go into other things along that line is I listed talk about it on the video you mentioned three or four investments I never heard of in my life and someone advantages of they know about this stuff that you might not have any idea of some of these different investments right Hans sure world is permitted.

Company product security very large universe of those available to investors and typically end up 401(k) or an IRA you're going to have limited investment options. This is one of the big reasons that people moved to somebody like me because it just opens up a whole other world think they may not even know about. We know about him and so that's the case this is working to check this box in our documentation and then the missing element.

A lot of times people don't really see until he needed the financial planning services that we offer around the investment management to rollover their 401(k) into an IRA and then maybe doing that abilities reasons. We also offer financial planning services, like I did for your father, Robbie and I did for you and that's kind of in the background and it's something that just comes along with the package without, we can count that at least I do as that's a fiduciary acting in somebody's back best interest is that you become and you get all this other stuff that you don't even know because you're letting you know what the outcomes of the best things about my favorite goat in the world's is he likes to ask that question.

What's this for you and so that's a big part of having a financial plan is like and I cannot just watch you grow in a goody.

I have money, but actually in a looking at at the purposes behind this and what you know, being a good steward has everything to do with having a vision and and so it's wonderful to me. Just absolutely wonderful to have somebody that you know is working in your best interest that helps you with your vision for what you really want to accomplish with with your stewardship, calculating minimum attributions at age 72 required minimum conditions in men showing how you can aggregate your IRAs and you can take it all out of one of the other one is a bunch of stuff about financial planners know so benefit to the client to have a faint financial planner doing their investment management as well. You know, if they choose to go that route we know retirement tax planning and so when whenever we take money under our custody we hear. I require people we need to put together a tax plan. We need to say when we can pay the taxes on. It's not okay to me.

Let people have money just accumulating so that their areas pay taxes on just to do nothing about the tax side of it and we can actually do the planning. We know what future taxation release, we can guess what taxation can be put together a plan so that's something that just comes along for the ride with our plan and we get to the area. Please so when we charge you a fee which we have to make a living as fiduciaries, we disclose the fees you share them with you. That's how we mitigate the conflict of interest because you when you pay me money to do a service. It's hard for me to say you paying the money is in your best interest community. I get espresso in the area. I just got three boxes you can check your either going to pay more for my services in your band now pay less or I just have a box similar because I never want to put exact just because it is impossible to match things up in the gist of it is is somebody pays more in fee than there are now paying. I just need to justify it, and I need that's in the investment management side just shared with everyone. Checklist of how I am a fiduciary. When people move money under my management and then on the insurance side.

It's a little bit different is that I got same check with how can I take 401(k) money retirement money money you haven't paid taxes on how can I be a fiduciary and then recommend insurance and there might be some people that would question so I'm doing it for and I can tell you exactly. So now my checklist. The first thing is when I'm recommending an annuity.

Most of the time they have a guaranteed lifetime income option on the annuity so that's something that their 401(k) or their disinvestment account doesn't have the annuity has can tell you exactly you start your income at 70 you will get this amount per month, then this amount per month will come in the rest of your life even if you live hundred and 10 T unique to the insurance product to me is another place like oh my goodness, someone to have some real icons on your site consists there are 40 Brazilian from I can see different kinds of annuities and and once again you know there's no way without just an amazing amount of research that you never have good experience. For one thing right because you've had a chance to see what happens with these things from people that did it that started out 20 years ago. And here they are today probably not what you want to buy the consumer regulation consumer don't really have about and then they get it they don't know the person coming to see them.

Picture this thing and try to make a big commission of now they can't do that anymore. A qualified money. They have to be up here so I'm just going over the first point of the annuity either have a guaranteed lifetime income or not, but I minute the first thing I bring up. That's what that word and check that box and that is the way I carry on my fiduciary duties get you some so you not run out of money when you're 85, then the next box is a guarantee of principal. That's the thing that an annuity offers is you can make money off the performance of the stock market is currently limited money. In other words, you can't make as much money in an annuity could just directly investing in the stock market, but the thing about it is you can never go back. In other words, if the stock market like what it's doing right now.

Annuities have been real popular over the last six weeks. They offer a guarantee of principal. Once the money then there is never going to go back and that's another fiduciary, then we have to disclose now the commission to the agent used to be there if there now on insurance products we have to disclose the consumer and have them sign a how much we get paid selling you this policy doesn't mean it makes is not a fiduciary just means that the conflict of interest we have to disclose a selection from a choice of products so what I do is I live to other products that I chose from at least three some time we go to as many as five or six different annuity products.

Generally, with different companies that are offering something similar. And so we've chosen this is the best of the bunch for this client say that it reminds me my father was the greatest car salesman ever saw a really lots and with any customer he ever had, even though we'd spend hours and hours and hours with them. They always had to drive three cars because he would never let them just bought drive a car, and by you needed some to compare it to. And this is the same kind of thing like really something is really looking out for your best interest. Kind of gives you an opportunity to look at the selection process right yeah and reacting. The night thing for a lot of our client. I don't show them these other two or three or four products only go to one of recommending when I'm in the business of proving that I'm up. I can go back two years from now and say I considered the byproduct of the three product and I chose this one.

For this reason for this person that I'm a fiduciary and pretty cool actually. And so I'm I'm glad I went through this exercise and we just implemented in our thing and it'll be in the notes going forward. We didn't document what we just nonactive. And we been acting as if for years but now are not allowing we ran out of his shell when another checklist that you can see the rest of it. If you got a Cardinal advisors on YouTube writing you got the whole chart there and they're gonna get us the chance to see the things that we were unable to cover yet today, but I think we get the point that this thing is is really really helpful when you are entering into this process of trying to finish well and we want to point you to Cardinal guide.com Cardinal guy.com is his conscious website where you can email him get his book call him get all his contact information. It's all right there as well as Cardinal advisors on YouTube. Thanks again Hans, thank you finishing well is a general discussion and education of the issues facing retirees Cardinal guide.com Cardinal advisors upon child CFP some insurance this show does not offer investment products more investment and we hope you enjoyed finishing well brought you by Cardinal guy.com visit Cardinal guy.com for free downloads of the show previous shows on topics such as Social Security, Medicare and IRAs, long-term care, life insurance, investments and taxes as well as ponds best-selling book, the complete Cardinal guide to planning for and living in retirement and the workbook once again for dozens of free resources past shows again. Hans will go to Cardinal guy.com if you have a question, comment or suggestion for future shows.

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