If you sit down with the wrong kind of financial advisor, you might not find out that you’re getting bad advice until it’s too late to fix. Today, we’re breaking down the four types of people who call themselves financial advisors, and only one of them is legally required to put your interests first I’m Anthony Saccaro.

Welcome to today’s Providence Financial Retirement Show. We are your retirement income source, and this is the place where retirees come for income. Really glad that you’re joining us today, wherever you might be. We’ve got a wonderful show lined up for you today because our entire show is gonna be one topic front to back, the differences between the people and the platforms that are giving you financial advice.

Broker-dealer reps, life insurance agents, registered investment advisors, robo-advisors, and do it yourself investing, along with AI chatbots, all of those are gonna be covered through the Providence Financial Retirement Show today. The reason that this is such an important topic is because the title on someone’s business card tells you almost nothing about who they legally have to work for, you or their firm.

By hanging with us, though, for the next hour, you’re gonna know that difference once this show is done. And as always, we have several good listener questions that probably a lot of you are gonna have as well, so we’ll knock off those as they come up. As we start rolling though, let’s take a few minutes and talk about this term financial advisor.

It’s a term that’s frequently used, and almost anyone can call themselves a financial advisor. It’s not a protected, regulated title. What matters, though, is not whether someone calls themselves an advisor or a consultant or a wealth manager or a financial planner. What matters is how they’re licensed, how they’re paid, and what legal standards govern their advice.

There are four different types of advisors that we’re gonna break down for you in today’s Providence Financial Retirement Show. There’s a broker-dealer, there’s registered representatives, there are life insurance agents, and there are registered investment advisors. And of course, we can’t forget about the do it yourselfer or robo-advisor, and we’re gonna spend some time talking about AI, artificial intelligence and financial planning.

Can you really count on AI to set up a financial plan for you? The common thread through this entire show is who is legally required to act in your best interest and who isn’t. That might sound foreign to a lot of you. Aren’t all financial advisors required to act in your best interest? The answer is surprisingly no.

When you combine that with the fact that the term financial advisor can be used almost unanimously by almost anybody, it starts to become obvious why there’s a lot of confusion out there, and you have to be really cautious if you’re setting up a financial plan based on what your, quote unquote, financial advisor tells you.

There are real dollars at stake here. The wrong recommendation at the wrong time by the wrong advisor, especially when you’re close to retirement or in retirement, can mean tens or hundreds of thousands of dollars in lost income or unnecessary fees over a lifetime, which is why it’s so critical to choose the right advisor the first time If you find out the hard way that you have the wrong advisor, it might be too late to fix, especially if you’re retired or close to it.

Our entire show today is not gonna be about villainizing one type of professional over another, or even having a preference. By the time you’re done listening to our show today, you’re gonna know what you’re actually getting before you hand over your retirement savings. I’m also gonna spend some time throughout our show weaving in who Providence Financial is and what we do different.

Providence Financial is a firm that I started way back in 1999, and our specialty is helping retirees enjoy the retirement that they deserve. Before we move on, though, I have an offer to make you. If you’d like to learn more about financial advisors to make sure that your advisor’s the right fit, or to make sure that you find the right advisor if you’re in that search, we’ve created an animated video that’s only five or six minutes long that talks about the different types of advisors.

It’s fun to watch ’cause it’s animated, but it’s pretty powerful because we pack a lot of information into that five or six-minute time period. If you want it, we’ll email it to you absolutely free of charge, and all you have to do is go to providencefinancialradio.com/video and leave us your information.

providencefinancialradio.com/video is the website you need to go to. But you’ll learn about the different types of advisors so that you can be armed when you start looking for advisors. One more time, go to providencefinancialradio.com/video and we’ll email it to you shortly. I’m Anthony Saccaro. Thank you for joining us today for the Providence Financial Retirement Show.

We’re just getting started, and we’re gonna spend our entire show talking about the four different types of financial advisors: broker-dealer registered representatives, life insurance agents, registered investment advisors, and we’re gonna talk about those of you who wanna do it yourself. We’ll touch on robo-advisors, and even have a discussion about artificial intelligence when it comes to financial advising.

Let’s continue our conversation by talking about broker-dealer registered representatives. These are your classic stockbroker types. They often work for large wirehouse firms or broker-dealers. They’re licensed through FINRA, and they usually have to take a couple of exams to be able to offer you any type of advice at all.

These exams used to be a lot easier, and over the years, because they were too easy, FINRA’s made them a little harder. And by the way, FINRA stands for the Financial Industry Regulatory Authority, just in case you’re curious. But that’s the governing body over registered representatives, and they’re the guys that make the rules.

Even though the exams have become harder than they used to be, anyone who studies thoroughly for four to six weeks really won’t have a problem passing them. As you can imagine, though, just passing an exam doesn’t make you an expert. It’s really just the entry point. It’s the license that a registered representative needs in order to be able to actually give any type of advice.

Most registered representatives get compensated through commission. They get paid when you buy or sell a product, not necessarily for ongoing advice. There’s also a legal standard that they operate under, and historically, this standard was a suitability standard. The investment just had to be suitable for you, not necessarily the best option available.

Significantly, the impact of this is that many of these investments pay different commissions, and as long as they’re all suitable, they could recommend the one that is best for them, the one that pays the highest commission, and they would be legally fulfilling the suitability requirement. Since two thousand twenty though, broker-dealers now operate under regulation best interest.

It’s an upgrade from the suitability standard, but it’s still not the same as a fiduciary standard, which we’re gonna unpack later. Registered representatives often work for large broker-dealers. And these broker-dealers oftentimes create proprietary products. These might be funds or other products that are created by their own firm, and this can create a conflict of interest because these agents might be incentivized to recommend these in-house options.

It’s also very common for these agents to recommend mutual funds. Why? Because they pay commissions, and the commissions come out of the fees that the fund is gonna charge you. There’s a lot of different types of fee structures. Some of the mutual funds charge you an upfront percentage, maybe like five percent.

Others might have a deferred sales charge, meaning that if you decide to liquidate it early, you’ll get penalized. And others even have higher ongoing fees. But regardless of the fee structure, the money is generally coming out of your pocket to compensate the commission that the agent’s gonna make when they recommend a product to you.

Because mutual funds are very lucrative, that’s often the product that they recommend. I’ll also point out that this doesn’t make mutual funds bad by any stretch of the imagination. Depending on your situation and your phase of life, though, it may not be the best thing for you, and you would never know that when a registered representative is recommending a mutual fund or a mutual fund portfolio.

Getting paid commission is also not inherently bad. Most registered representatives are skilled and ethical, but the compensation structure and the legal standards are different from what you might assume. And it’s important to know how they get paid. And a question that I would ask any registered representative is: how are you compensated on the specific recommendation that you’re making to me?

That’s an important fact that you should consider when deciding whether to accept their recommendation. If you’d like to learn more about registered representatives along with the legal standards of suitability versus fiduciary, and you wanna become better educated, well, in my book, More Life Than Money, I wrote an entire chapter about the differences between the various type of advisors, and I’ll send you a copy of More Life Than Money absolutely free of charge just for being a loyal listener.

If you’d like to get More Life Than Money, very easy to do. Just go to providencefinancialradio.com/book and give us your information, and we’ll send a brand-new hardcover copy of More Life Than Money right out to you. No questions asked, no obligation, just information. To get your free copy of More Life Than Money, go to providencefinancialradio.com/book.

Again, that’s providencefinancialradio.com/book, and you’ll have it in just a few days

Thank you for staying with us. I really hope you’re enjoying the show. I’m Anthony Saccaro. This is the Providence Financial Retirement Show. We are your retirement income source, and this is the place where retirees come for income. We’ve dedicated our entire show today to talking about the different types of financial advisors so that you can make the best decision for you as who you want to be advising you regarding your future.

We’ve already talked about registered representatives, and we’ve even uncovered the fact that that term financial advisor can be used by almost anybody. And there’s one type of advisor that really is not an advisor at all, but you may not know that. And this type of advisor is a life insurance agent. I have found that over my 27-year career of being a retirement advisor, that many times when someone speaks with a life insurance agent, they believe that they’re speaking with a full-fledged financial advisor.

That’s really not true, though. What they’re really dealing with is a product salesperson, someone that’s trying to sell some type of life insurance product Our first listener question of the day comes from someone it sounds like is dealing with this exact situation. This question comes from Marcus in Thousand Oaks, and he wrote in this: “I sat down with an advisor, and every single recommendation he made was some kind of annuity.

Is that normal, or is that a red flag?” Marcus, that’s the exact thing that we’re talking about right now here on the Providence Financial Retirement Show. In your question, you call him an advisor, but he might not actually be an advisor at all. He may be a life insurance agent. Well, how would you know?

Well, you have to ask him. Simply find out from him what he’s licensed to sell and recommend and what he’s not licensed to sell or recommend. Life insurance agents are governed by a completely different entity than securities representatives. If someone is only a life insurance agent, they can’t recommend mutual funds, they can’t recommend investments, stocks, bonds, nothing like that.

They’re not regulated by the SEC, they’re not regulated by FINRA or even the state administrators when it comes to securities. A life insurance agent has one license. It’s an insurance license. That’s it, and it gives them the legal ability to sell insurance. If, Marcus, you think that you’re dealing with an advisor who is legally licensed to sell everything, and yet he’s really only an insurance agent, then I think that your question, is this a red flag, probably deserves an answer of yes.

Once again, you can just ask him what he’s allowed to sell, and you’ll very quickly find out. You also mentioned that he seems to be recommending annuities for almost everything. What you might not know is that annuities are actually insurance products. There are some that are securities that are regulated by the SEC, but annuities like fixed annuities or indexed annuities are not even considered securities at all.

They’re purely insurance products, and the same life insurance license that a life insurance agent needs is the same license to sell you a term insurance policy or a life insurance policy or even an annuity. What’s really important to understand about life insurance agents is how they’re compensated.

All life insurance agents are compensated based on commission. Whatever they sell you, they’re going to get paid a commission, and that’s how they make their money. They can’t charge you a fee even if they wanted to. This makes them salespeople. And in your situation, it almost sounds like your, quote-unquote, “advisor” is really a salesperson trying to push a product, not a true advisor.

The legal standard that they operate under is the suitability standard They don’t have to act in your best interest. They just have to sell you a life insurance product or an annuity that is suitable for you, and that could very well mean the one that pays them the highest commission. And when you’re a life insurance agent regulated by the state that you operate in, that’s perfectly legal.

And I know that may sound weird and kind of counterintuitive, but it’s very legal. It’s the way the industry works. The red flag in your conversation and your question is not the annuity itself. Annuities do have a legitimate place in retirement planning, but they’re not a one-size-fits-all, and they’re certainly not right for everybody.

Considering that he seems to be recommending an annuity for every aspect of your situation, to me, would be a big red flag. In your situation, a good question to ask him directly might be something like this: “Are there other ways to accomplish this goal besides an annuity, and why did you land on this one?”

And a good advisor who’s licensed in all capacities can answer that question without getting defensive. I wanna thank you, Marcus, for taking the time to write in the question, and certainly hope that the answer I’ve given you helps not only you, but the rest of our listeners as well. If you wanna learn more about financial advisors, then I’ve got a resource that I know you’re gonna enjoy watching.

It’s a short animated video that talks about the difference between various types of advisors. We’ll email it to you absolutely free of charge just for the asking. All you need to do is go to providencefinancialradio.com/video. Again, it’s providencefinancialradio.com/video and you’ll have it in your inbox shortly.

And all you gotta do is press play and you’ll be able to watch this video. And it’s very entertaining because it is only five or six minutes, but it’s also very power-packed. If you’d like to get a complimentary copy of this video emailed to you, just go to providencefinancialradio.com/video and we’ll get it right out.

I’m Anthony Saccaro. Thank you for tuning in for today’s Providence Financial Retirement show. I’ve dedicated this entire show to talking about the different types of financial advisors so that you can be armed as you start to interview advisors that you might want to help you with your future. We’ve already covered registered representatives who work for large broker-dealers, and we also just talked about life insurance agents.

I wanna switch gears though and talk about a third category of advisor, which is the registered investment advisor. And we also have to talk about the fiduciary standard that they’re held to as well. Registered investment advisors, also known as RIAs, are registered with either the SEC or the state securities regulators, just depending on the size of their firm.

Individuals who work at an RIA typically hold a Series 65 license, or there are some other combination of licenses that they can hold as well. But these licenses or qualifications actually allow them to give investment advice for a fee. The defining feature of an RIA, though, and their representatives, are that they are held to a fiduciary standard.

This standard legally requires them to act in your best interest at all times, not just at the point of a single transaction. That’s different than registered representatives at a broker-dealer or life insurance agents, as we’ve already discussed When acting under the fiduciary standard, there are generally two core parts.

There’s a duty of loyalty, and there’s a duty of care. The duty of loyalty is to put your interests ahead of the firm’s or the advisor’s own interest. And the duty of care is that they have to give you advice based on your entire full financial picture, not just a narrow product match. And those two differences are significant, and neither the registered representative nor the life insurance agent have those duty of care or duty of loyalty.

There’s a couple of different compensation models that a lot of the RIA firms use. Some of them will charge you an hourly rate or some type of flat fee. Others will charge you a percentage of the assets that they’re managing on your behalf. But when it comes to securities, they cannot charge any commission at all.

It’s generally gonna be based on a fee that they charge you in one way, shape, or form. It’s generally this fee-only structure that I believe is the cleanest from a conflict of interest standpoint. There’s no product sales, no commissions. Your compensation that you’re paying the advisor is tied only to the advice and the ongoing management.

If you have an advisor and you’re not sure whether or not they are legally bound to the suitability standard or the regulation best interest standard or fiduciary, all you need to do is ask them. They can’t lie about that. They have to tell you. If they do lie, it could cost them their license, so chances are whatever they tell you is going to be the truth.

If you’d like to learn more about the difference between these various type of standards and even the difference between financial advisors, in my book, More Life Than Money, I dedicate an entire chapter to talking about the various types of advisors, so you’ll have the information that you need. I’ll send you More Life Than Money absolutely free of charge.

And in order to get it, all you need to do is go to providencefinancialradio.com/book. Again, it’s providencefinancialradio.com/book. Leave us your name, address, phone number, email, whatever other information we need, and we’ll get a brand-new copy of More Life Than Money right out to you. You’ll have it in a few days.

Getting it’s very easy. Just go to providencefinancialradio.com/book, and we’ll get it right out.

Thank you for joining us for today’s episode of the Providence Financial Retirement Show. We are your retirement income source, and this is the place where retirees come for income. I’m Anthony Saccaro, and we’re spending our entire show talking about the difference between financial advisors and the legal standards that they are held to.

We’ve already uncovered the fact that registered representatives that work for large broker-dealers are subject to a suitability or regulation best interest standard. We’ve discussed that life insurance agents are solely subject to the suitability standard, and that registered investment advisory firms are subject to the much stronger fiduciary standard.

What’s the difference between all three standards, though? It can be very confusing, so I wanna lay them out side by side so that you have a better picture. The fiduciary standard that registered investment advisors are required to adhere by means that they’re legally bound to act in your best interest at all times.

They have to avoid or fully disclose any conflicts of interest, and they have to place your interests above their own or their firm’s. And if they don’t do that, they can legally be held liable. Registered representatives at large brokerage firms are held to a different standard. In the industry, it’s called Reg BI, which is regulation best interest This went into effect in 2020, and it requires that a recommendation be in your best interest at all times at the time it was made.

And that’s a real improvement over the old suitability standard that registered representatives used to fall under. The key difference is this, though: Regulation BI is transaction-focused. Was this specific recommendation in your best interest right now? A fiduciary standard, on the other hand, is relationship-focused.

Is this advisor managing my entire financial picture in my best interest on an ongoing basis? A very significant difference between Reg BI and the fiduciary standard. Reg BI still allows conflicts of interest to exist as long as they’re disclosed. A broker can still earn more commission on one product over a similar one as long as the paperwork discloses that.

A fiduciary standard requires conflicts of interest to be eliminated where possible and only allows them if they’re fully disclosed and truly unavoidable. A real-world example might be something like this. You have two advisors, same client, same goal. Let’s say that that goal is generating retirement income.

A broker under Reg BI could recommend a higher commission annuity over a similar lower-cost option, and they would satisfy the standard as long as it’s disclosed and suitable at the moment. A fiduciary RIA is required to compare the options and recommend the one that’s actually best for you. The bottom line for you is that Regulation BI, best interest, sounds like fiduciary language, but it is legally different, and it’s a much lower bar than the fiduciary standard, and you need to know which one applies to the person that’s sitting across the table from you giving you advice.

Once again, the only way to know for sure is ask directly. And if you wanna double-check what they’re telling you, then a good place to go is BrokerCheck or the SEC’s Advisor Search Tool because that will tell you regardless of what they say. If you’d like to learn more about the different types of advisors and the legal standards that they’re held to, you’re gonna wanna get a commission report that we’ve created.

You’ll learn exactly what you need to know to choose the best type of advisor for you And I’m offering this report absolutely free of charge, a report that we’ll email to you shortly as long as you ask for it. And you can do that by going to providencefinancialradio.com/report. Again, it’s providencefinancialradio.com/report.

Leave us your information and an email will show up shortly with this report attached. You can open it up and read it. And it’s pretty extensive as well too, so you’ll get the information that you want, and you’ll certainly understand the differences between various types of advisors and the legal duty that they’re held to.

Just go to providencefinancialradio.com/report and you’ll have it shortly. I’m Anthony Saccaro. Thank you for taking time out of your day to join us here for the Providence Financial Retirement Show, where it truly is all about the income. We’re spending our entire show talking about financial advisors and the legal standard in which they’re held.

Up to this point, we’ve talked about registered representatives with broker-dealers. We’ve talked about registered investment advisory firms, and we’ve also talked about life insurance agents. There is one more category of advisor that you need to be aware of, and we’re gonna spend the rest of our show talking about this type of advisor, and that is you.

A lot of you have decided to do it yourself, and essentially this means that you’re acting as your own advisor. If that’s the direction that you’ve chosen to go, there are some tools and some considerations that you also need to be aware of, and I wanna spend some time talking about these. The first tool that we should discuss is the robo-advisor.

Robo-advisors, in short, are automated platforms that build and manage a portfolio using algorithms. It’s usually based on a questionnaire about your goals and your timeline and your risk tolerance. And the term robo-advisor is fairly new. Maybe it goes back a decade, I don’t know, but it hasn’t been around for all that long.

And it really is just more of a model portfolio than anything else. The one significant benefit of robo-advisors is the cost advantage. It’s real. The annual fees typically run a fraction of a percent compared to the 1% or so that are often charged by a traditional human advisor. And in the right situation, they could be a good fit.

If you’re a younger investor, you’ve got simple goals, smaller account balances, or maybe you just want low-cost, hands-off investing, then a robo-advisor could be the answer. The primary drawback with robo-advisors is they’re not gonna sit across the table from you and challenge your assumptions. Whatever you tell it to do, that’s what it’s going to do.

If you tell it that you’re 65 years old and you wanna be all in stocks, and you wanna take out 4 or 5% a year from your portfolio, it’s not gonna tell you that you’re nuts, because that probably wouldn’t be a good strategy for someone in that situation. It’s just going to do what you tell it to do, and yet what you’re telling it to do might be the wrong thing to do.

But you would never know that by working with a robo-advisor. Our next listener question of the show ties in nicely. Diane from Encinitas wrote in this: “I set up a robo-advisor for myself because it’s so much cheaper than paying a real person. Am I missing something by not having a human?” In my opinion, Diane, the answer is absolutely yes.

What you’re missing is that human touch. A robo-advisor’s a computer. It doesn’t have sympathy, it doesn’t have empathy, it doesn’t know your situation, and it doesn’t know how you feel about things. I’ve often said that sometimes the only difference between the advice that I give to one client versus another is how they feel about money.

If the advice I give to one client causes them to lose sleep at night even though the advice is good, it’s probably not the right advice for them, and a robo-advisor won’t tell you this. The right advice for you often depends on how you feel and the peace of mind or lack of peace of mind that you have as a result of the advice.

Oftentimes, there’s lots of ways to accomplish a goal, and yet the robo-advisor usually drills down into just one way, the way that it’s been taught. And it might be the right way for you, or it may not be. A robo-advisor will also not help you sequence your withdrawals. Oftentimes, people have questions like, “Do I draw down my retirement accounts and wait to collect Social Security until later?

Or do I collect Social Security earlier and let my retirement account grow?” Robo-advisors won’t help you answer that question, but a wrong decision could cost you hundreds of thousands of dollars over your lifetime. Because a robo-advisor won’t even bring it up, you might not even be aware that it’s a question that needs to be answered.

Robo-advisors also won’t talk you off a ledge. If the market has a 20% correction and you panic and you’re tempted to sell all your investments, which might be the very wrong thing to do, a robo-advisor won’t tell you that. It will just do what you tell it to do. It also will not help you with your more complicated life events as well.

An inheritance, a business sale, a spouse’s health event, estate planning coordination, or anything else, robo-advisors won’t do any of that. Thank you again, Diane, for submitting your question, and I hope that the answer I have provided you gives you some things to think about. But yes, you’re definitely missing that human touch for the reasons we’ve already discussed.

In my new book, More Life Than Money, I wrote extensively an entire chapter about the difference between various types of advisors and the legal standards that they’re held to. You might be wondering what type of advisor you have and what his or her legal standard is, and if you’d like to learn more, then you’re gonna wanna get a copy of More Life Than Money.

You can buy it on amazon.com for 25 bucks, or better yet, because you’re a loyal listener of the Providence Financial Retirement Show, how about I send you a copy absolutely free of charge? No cost, no obligation at all. You just have to let us know you want it, though, and you can do that by going to providencefinancialradio.com/book.

Again, it’s providencefinancialradio.com/book. Leave us your information, and we’ll get a brand-new copy of More Life Than Money right out to you. You’ll have it in a few days. One more time, just go to providencefinancialradio.com/book to claim your free copy.

I’m Anthony Saccaro. You’re listening to The Providence Financial Retirement Show. We are your retirement income source, and this is the place where retirees come for income. We’re spending our entire show talking about the different types of financial advisors and the legal duties that they are bound by.

We’re in the middle of talking about do-it-yourselfers, those of you who have decided to tackle retirement on your own without any type of advisor at all. DIY investing has never been easier to access, and for someone who’s disciplined and someone who is an engaged investor, it can absolutely work. The major drawback, though, has to do with behavioral risk.

They’re well documented. Panic selling during downturns, chasing last year’s winning fund or sector, and no one to provide a second opinion before making a big decision. Studies on investor behavior have consistently shown that the average do-it-yourself investor underperforms the very funds that they invest in, largely due to mistimed buying and selling, not bad fund selection.

Now, layer in artificial intelligence into this picture. A growing number of people are turning to AI chat bots for investment and retirement planning advice, and they can sound extremely confident while being flat-out wrong. They can hallucinate facts. They can cite outdated rules, or they can misapply general information to a specific personal situation.

AI is extremely smart, and it’s fantastic for research, but it can absolutely be wrong, especially when you’re asking it for personal investment advice. If you don’t think it can be wrong, just open up whatever ChatGPT or Claude or Grok or whatever other AI platform you use and read the disclaimer at the bottom.

They all say this can be wrong, and oftentimes they are. I’ve run various financial scenarios through AI just to see the kind of advice it would give, and oh my gosh, some of the advice that I’ve seen sounds good. It sounds confident. If you don’t know what you’re doing, it sounds reasonable, but it is absolutely dead wrong.

If you base your entire financial and retirement picture on this, unfortunately, you might not find out, though, that it’s wrong until it’s too late. AI is not required to have a license. There’s no fiduciary duty. There’s no regulatory oversight, and there’s no accountability if the advice leads to a bad outcome.

There’s no one to call. Unless you feed it everything, it has no visibility into your full financial picture. And just like with robo-advisors, if you’re about to make a bad decision, it may not tell you that. Even when you do tell it your full picture, it’s gonna take it at face value. It’s not gonna ask you any follow-up questions.

What about your health? Your other accounts? Your spouse’s situation? How you feel about money? Your actual risk tolerance? It’s gonna go off of what you feed it, whereas an advisor’s probably gonna push back. At least a good advisor will. Now that you know some of these very critical risks, if you want AI to design your entire retirement plan, the next twenty or thirty years of life, then go ahead.

But I know that most of you don’t wanna rely on a computer for your financial future, especially when there is no legal duty and no one to hold accountable if things don’t work out the way that you were told. If you’re a do-it-yourselfer or you’re thinking about firing your advisor and becoming a do-it-yourselfer and you wanna learn more about the different tools that are available to you, I’ve created an animated video that talks just about that.

I wanna email you this video absolutely free of charge, what you need to know to be a do-it-yourself investor. To get this video, just go to providencefinancialradio.com/video. Again, it’s providencefinancialradio.com/video, and you’ll have it in your inbox shortly. But you’ll learn about the tools that you can use, including AI and including robo-advisors, that might be able to help you.

But there’s more, and we just haven’t had a chance to talk about them here on the show. To claim your free video about these tools, just go to providencefinancialradio.com/video, and you’ll have it in your inbox shortly. Thank you for tuning in to today’s edition of the Providence Financial Retirement Show.

My name is Anthony Saccaro. Really glad that you’re here and certainly hope you’re enjoying the show. We’ve already covered a lot of ground, but I wanna take some time and talk about how to actually vet an advisor, and I wanna give you a practical checklist that you can use this week. And these are questions that you can ask an advisor that either is your current advisor or even a future advisor that you might be thinking about hiring.

And the first question that I would ask is: Are you a fiduciary at all times when advising me, and will you put that in writing? You should accept nothing less than a clear yes. At Providence Financial, we are fiduciaries at all times. And yes, we’ll put it in writing for you if you are a client of our firm.

Question number two: How exactly are you compensated on this recommendation and overall? Are you commission? Are you fee only? Are you fee based or some combination? That’s the second question that you should ask an advisor. This could get a little tricky though, because at my firm, Providence Financial, we are both fee-based and commission at the same time.

When it comes to securities, stocks, bonds, mutual funds, other income-producing investments, we are always fee-based. But when it comes to insurance products, life insurance or long-term care insurance or annuities, then we get paid commissions off of those because that’s the only way we can get paid. There is no such thing as a fee-only insurance agent.

It doesn’t exist It’s also important to discuss the fact that some firms describe themselves as not receiving any commissions at all. And while that sounds good, it means that there are some products that they’re not going to tell you about, like annuities or like long-term care insurance. But long-term care insurance and annuities could be a critical part of your portfolio, and if they don’t sell them, they’re not gonna talk about them.

What they’re really doing is eliminating some of the products that might be beneficial from their repertoire, and you don’t even know they exist. At Providence Financial, though, if we are gonna get paid a commission on something, not only will we tell you that, but we will also let you know the amount of commission that we’re getting paid.

You can then decide whether or not it makes sense to move forward. So it’s all disclosed up front. Let me also direct your attention to a couple of red flags that you probably wanna be aware of in dealing with a financial advisor. The first red flag is that every recommendation seems to funnel towards one type of product with no discussion of alternatives or trade-offs.

That’s a red flag, and it might indicate that you’re really dealing with a salesperson, not a true advisor. Another red flag is if they are vague or if their answers are defensive when you ask directly how they’re paid. A true advisor has no problem answering those questions. A third red flag to consider is if you’re feeling pressure to decide quickly, especially on anything with surrender charges or long lock-up periods.

You need time to think about these things, and if you’re under pressure, it may indicate that you’re dealing with a salesperson who needs to earn a commission to pay the rent next month. At Providence Financial, we never put anyone under pressure, and we are not salespeople. Because we have a fiduciary responsibility, we are truly acting in your best interest.

And not only is that a legal standard that we have to abide by, but it’s also good for business. When you act in someone’s best interest, you get a lot of referrals. And at Providence Financial, we do get a lot of referrals. We also recognize that not everyone is a good fit for our firm, and there are people who come to us that think they’re a good fit, that wanna do business with us, but if we don’t feel like we can help them or serve them, unfortunately, we just can’t take them on.

If you’re wondering whether or not you might be a good fit for Providence Financial, why don’t you start by getting my book, More Life Than Money? Not only do I talk about all the different types of advisors and legal responsibilities that they’re held to, but you’ll learn about the most common mistakes that I’ve identified in my twenty-seven-year career of being a retirement advisor and what you need to do to avoid them.

We’ll send you a copy of More Life Than Money absolutely free. You just have to go to providencefinancialradio.com/book to give us your information so we can send it out. Again, go to providencefinancialradio.com/book, and a free copy of More Life Than Money will show up on your doorstep in just a few days. One final time, go to providencefinancialradio.com/book to request a free copy of More Life Than Money, and I know you’re gonna learn something by reading it.

And if you decide that you wanna have a call with one of our advisors, the book will give you that information so you know how to get in touch with us. I certainly hope you’ve enjoyed the Providence Financial Retirement Show today, where we’ve been talking all about the different types of financial advisors, and I trust you’ve learned something that you didn’t know before.

Our goal at Providence Financial is to help you have the peace of mind and the confidence and security that you deserve in retirement. Thank you for joining us today. Really glad that you’ve been here. I’m Anthony Saccaro. You’ve been listening to the Providence Financial Retirement Show. Have a great week, everyone.

God bless.