Is It Time To Breakup With Your Broker?

DANO WEIR: Daren knows I like to start the episode with like a little joke or something funny. I want to try it carefully here because I have a couple of friends who work in this business, but I want you both to imagine that you're at a car dealership.

CHRIS SIPES CFP®: Okay.

DANO WEIR: And when you've gone- Sounds miserable.

DAREN BLONSKI CFP®: Okay. Okay. Yeah.

DANO WEIR: When you've gone into this car dealership, the purpose of the dealership, the sole goal of that business and that office and that building is to sell you that. Car, those cars, any pick any brand you want in your brain. But when you as a customer walk in the door of that car dealership, they're only going to keep their doors open if they're selling you those cars.

DANO WEIR: And that's the only thing that they want to do. Kind of no matter what you tell them, even if as you're sitting there, you're like, Oh, I can't really afford this car. Or I actually have too many cars or I keep breaking cars. They kind of just to keep their own lights on. That's their business. They're like, great. So can I sell you this car today?

DANO WEIR: Is that a broker?

CHRIS SIPES CFP®: Maybe.

DAREN BLONSKI CFP®: Maybe.

CHRIS SIPES CFP®: Possibly.

DANO WEIR: Welcome to It's All Money. Hosts are right here in front of you. We're checking out It's All Money.

DANO WEIR: Welcome inside the Sonoma Wealth Conference Room. My name is Dan O'Weir. I am the Marketing Director for Sonoma Wealth, and I'm also a podcast host, former radio personality. And I'm joined, as I am most weeks, by the Managing Principals of the firm, Chris Sipes, CFP, Daren Blonski, CFP. And today we are talking about brokers and fiduciaries because we've got Valentine's Day coming up.

DANO WEIR: We're also in the month of January as we record this. And this is, I don't know if you know this or not, but some people, they call this the divorce month. And so people are assessing their life. And so we're thinking, you know what, maybe people are assessing their financial relationships as well. And we might be asking the question, is it time to break up with your broker?

DANO WEIR: But you might not even know that you have a broker. So we're talking today about what is a broker, what is a fiduciary, and what are those relationships, which of those relationships make sense for you and your wealth building? So I want to start with the positives here. I want to start with what we're about. So Daren, let's start with you. Please tell me what is a fiduciary of which I think you are.

DAREN BLONSKI CFP®: That's correct. So fiduciary is very simple. A fiduciary means you're acting at all times in the best interest of the client. Now, when I say that, you're like, well, isn't everybody acting in the best interest of me all the time?

DANO WEIR: A financial advisor who is acting in their best interest.

DAREN BLONSKI CFP®: So a fiduciary is a financial advisor that has a legal commitment. To act in the best interest of their client in all matters, period. There's no squishiness there. Act in the best interest.

CHRIS SIPES CFP®: It's a relationship type, right? Because it can be a financial advisor, it can be an attorney. There are fiduciaries that help people handling their bills and such when they're incapacitated or can't do it on their own. So it's a fiduciary relationship, which just means that you act in the best interest of your client. Okay.

DANO WEIR: Well, Daren, your question just asked a moment ago. Isn't everybody, wouldn't a financial advisor always be acting in the best interest of the client?

DAREN BLONSKI CFP®: You would think, but there's really powerful lobbies in the United States, right? So one of the really powerful lobbies is the brokerage industry and the insurance industry.

DANO WEIR: And the lobby being an industry that is spending money politically to get their viewpoint considered.

DAREN BLONSKI CFP®: That's right. And in fact, the... There was going to be a new law in the books where all advisors were required to act in the best interest of clients. And last September in 2024, that was set aside by Texas court. This is second, multiple times this has happened.

DAREN BLONSKI CFP®: But there's a reason that every time we get really close to saying advisors need to act in the best interest of their clients, that it gets set aside by some court. It's really kind of odd when you think about it. Like why? Why wouldn't an advisor be acting in the best interest of the client?

DAREN BLONSKI CFP®: And it's confusing, and they make it confusing on purpose. And so what a broker has to operate on is the standard of suitability. So think of two different phrases, suitability standard and best interest standard.

DAREN BLONSKI CFP®: A fiduciary is on best interest, a broker is on suitability. Now, the language between those two phrases is subtle, but the difference in outcome is vast because suitable investments are very different than best interest investments.

DAREN BLONSKI CFP®: I can make a suitable argument based upon propensity to invest, risk, understanding of investments, time horizon.

DAREN BLONSKI CFP®: I can say, well, it's suitable to that client. Here you go. Versus is this in my best interest? And often suitable investments come in the form of big commission checks to the brokers. So that's how the industry skirts it, right? So it's like, well, this investment's suitable, but it's going to pay me 5% versus this investment that's going to pay me a set fee over a period of time. That's disclosed.

CHRIS SIPES CFP®: Back to the car dealership example. Dano, you're a family man, kids. You come into the dealership.

CHRIS SIPES CFP®: What's in your best interest? You're looking for a minivan, a hybrid.

CHRIS SIPES CFP®: This is in your best interest, right? Right, right. I, the salesperson, realize I don't really make a whole lot on minivans. So you walk out with a brand new 350 truck, crew cab, 4x4 diesel, just in case you need to.

CHRIS SIPES CFP®: Pull that big trailer yes with the highest trim package yes you know your budget speakers was for a minivan but hey honey babe it'll work for us i know we're going to be paying for this for the next 14 years i got you a step to actually get into it yes yeah look how cool this is that was arguably suitable for you because he came in he said he needed transportation yes he's got a couple of kids sports car yeah transportation never mind that The guy selling the truck gets an extra $1,000 incentives because the manufacturer hasn't moved enough trucks this month.

DAREN BLONSKI CFP®: Right. And the same is true in the financial world, right? Hey, we got to move some more annuity products that's create incentive to that advisor. So they'll say this annuity over that annuity, this real estate deal over that real estate deal. Who's going to pay the highest to the broker?

DANO WEIR: Having a financial advisor, it's for lack of a better word, intimate. It's a. It's vulnerable. It's a vulnerable situation. You're laying out your whole financial life to someone. And that person isn't necessarily 100% looking out for you because they're also looking out for them.

DAREN BLONSKI CFP®: Now, Chris is here today. And one of Chris's heroes is a guy by the name of Charlie Munger. This is true. And Charlie Munger has a quote about incentives. You remember that quote?

CHRIS SIPES CFP®: It goes something like, show me the incentives and I'll show you the likely outcomes.

DAREN BLONSKI CFP®: That's right. So if we understand incentives, we understand outcomes and behavior.

CHRIS SIPES CFP®: Incentive structure is set up so that it can create perverse incentives. So throw in, if somebody works for a bank, that's also a broker, a lot of times there's lending incentives that they need to make.

CHRIS SIPES CFP®: So if you get a mortgage from us or a credit card or borrow money from us in some way, that's also better for us. So rather than for us, we- want our clients to be out of debt for the most part, right? There's certain situations outside of that, but we don't have the incentive to sell a credit card to you, right?

DANO WEIR: Okay.

DAREN BLONSKI CFP®: So I would consider myself, Dan, so I'm clear, a recovering broker. So I'm fairly opinionated about this because I started my career in the brokerage. And I remember the particular brokerage I worked for, they came out with two incentives. They were really close to each other, but one is all of a sudden the brokerage was going to offer mortgages.

DAREN BLONSKI CFP®: In addition to the managing the wealth, but they were also going to offer credit cards. And we, as the brokers, would actually get, at this time, extra points for going on a vacation if we moved enough credit cards and or mortgage products. That's since changed, fortunately.

DANO WEIR: And that's when you knew it was time to leave? That's when you're like.

DAREN BLONSKI CFP®: What is going on?

DANO WEIR: We're doing what now?

DAREN BLONSKI CFP®: Yeah. And those are the things that happen, right? I have a buddy who came from a big life insurance agency.

DAREN BLONSKI CFP®: Shameless plug, our book, Broken Dealer, is all about this. But he came from a life insurance company. And the life insurance company would literally call him up and say, this month, you need to sell triple or double of this particular product, or you're not meeting standard.

DAREN BLONSKI CFP®: So think about that. Dan, you come into me. Daren, here's my whole life. My significant other just passed away. I don't know what to do with my money. I don't know how to manage it. She did all the management of the money before she passed away. Can you help me?

DANO WEIR: Oh yeah, totally. Actually, I got to meet a quota this month. So how many annuities do you want?

DAREN BLONSKI CFP®: Right. And oh, this type of annuity because the insurance fund is my favorite.

DANO WEIR: That's right. It'll work.

DAREN BLONSKI CFP®: That's right. And that's the spirit of it. And I don't think it's done in a conniving way, but go back to Charlie Munger. Show me the incentives. I'll show you the outcome. It's that simple. Humans are humans.

DAREN BLONSKI CFP®: And if Dan's going to put food on his table this month. Or not put food on his table, and it comes down to selling that product because the incentives are aligned to sell that product, what's Dan going to do? Dan's going to sell the product.

CHRIS SIPES CFP®: And to be clear, we still have those resources for our clients. So a client says, hey, I need a mortgage. Well, good. We've got bank A, B, C broker relationship here, there, that we can help you find that. But there's no financial incentive for us to steer you towards a mortgage broker relationship. Yes.

DAREN BLONSKI CFP®: Or help you make that decision between brokers.

DANO WEIR: Right.

CHRIS SIPES CFP®: Right. Like, you know, evaluating the product, because there's no, there's no money coming back to us, whether you go with this bank or that bank.

DANO WEIR: It's so difficult in financial services because broker and specifically that word is used and just thrown around and some like there are different types of brokers versus like a mortgage broker would be different than the broker that we're talking about. So it's like, and they're just tossed around and you're like, it's a, you know, if you've not don't work in financial services, it's hard to know.

CHRIS SIPES CFP®: Right.

DANO WEIR: It's hard to know.

CHRIS SIPES CFP®: Lingo.

DAREN BLONSKI CFP®: In a lot of other services, like a broker is a completely acceptable, okay thing.

DANO WEIR: That's what I mean.

DAREN BLONSKI CFP®: Right? And like you think real estate, like I have a lot of friends who are real estate brokers, right? And I always get a little nervous about being too aggressive on the broker word because of that. But in this industry and in this circumstance where you're completely vulnerable with your money, your values, your family, often we know more about what's going on in our clients' lives than their own family does.

DAREN BLONSKI CFP®: And for me... To not have an aligned incentive. It's all about aligning incentives. There's always going to be incentives. The question, are they disclosed and are they aligned? That's what's important.

DANO WEIR: So let's make that clear then. So we've defined that broker payment, how they're compensated, is they're incentivized to sell products, to sell whatever product it is they're told to sell, annuity, mutual fund, fill in the blank.

DANO WEIR: Sunoma Wealth Advisor is different than that. We're a fiduciary. We have fiduciaries on staff. How is a fiduciary compensated?

DAREN BLONSKI CFP®: So there's generally two ways. It could be a fee for service. So we have some clients that come into us and say, I need help planning for retirement. I don't know what to do. There's a set fee they pay us. We do all the planning, all the advice. And then they go do what we call self-implementation, where they implement the plan that we provide for them.

DAREN BLONSKI CFP®: Whether it's taxes, whether it's financial planning, or whether it's an investment asset allocation, we have some clients that say, I need my allocation based upon my plan. Here it is self-implement. That's a fee for service. More traditional, it's been assets under management is what it's called, and we take a percentage of assets.

DAREN BLONSKI CFP®: And there's a big controversy amongst brokers and fiduciaries because brokers will be like, well, you guys charge a fee over time. And we say, well, right, but the incentives are aligned. So if we're not improving their life, then they're not actually benefiting from the fee and they shouldn't work with us, whereas a broker is going to get the payed all up front and say la vie.

DANO WEIR: Because the broker gets paid every time you do a transaction with them.

DAREN BLONSKI CFP®: Often. Now, that's changed a lot. And we kind of have to go another level because it's got even more squishy and gray now. There's what's most brokers now are what are called hybrids. And so what a hybrid is, in one moment, they're brokerizing you. And then they'll pivot the next minute. And they're like, you're paying me a fee for the assets I'm managing. And you never really know, right? Wow.

DAREN BLONSKI CFP®: And the only way you can truly tell if that... Yeah. Brokers, a fiduciary or a broker to you is ask what their licensing is. And the question you need to ask is, is this individual a series seven license? If they're series seven, it really doesn't matter what comes out of their mouth after that, because they're a broker. And most hybrids are that, they're brokerized. So there are hybrids then kind of pivot on you.

DANO WEIR: Well, speaking of licensing, so I mentioned at the top of the episode that you are both CFP Certified Financial Planner. So CFP means that you're a fiduciary and everyone is not. CFP is a fiduciary.

CHRIS SIPES CFP®: I think we've got to tread lightly with it.

DAREN BLONSKI CFP®: We do have to tread lightly. There's a lot of opinion about this one, Dan. I'm careful.

DANO WEIR: Sometimes I ask questions. I know the answer.

CHRIS SIPES CFP®: And the CFP board, you know, registered trademark, they are extremely vigilant about their reputation and their standards and everything. So you have to tread. We have to tread very lightly. But you do commit to, to acting as a fiduciary for your client, even if you're not technically a fiduciary because of your role in your company.

CHRIS SIPES CFP®: As an example, like if you're working for a brokerage, you may or may not be able to act as a fiduciary for your client, but as a CFP, you're committing to a higher standard saying that I will act as a fiduciary to my client. I will disclose conflicts and, and you have duties of loyalty and care. To your clients.

DANO WEIR: So are there CFPs who work for brokers?

DAREN BLONSKI CFP®: Many, many. Actually, there's more CFPs that work for brokerages than fiduciaries.

DANO WEIR: So just because somebody has CFP after their name doesn't necessarily mean... That they're fiduciary.

DAREN BLONSKI CFP®: Yes, that's where it's squishy, right? And that's that pivot thing I was talking about.

DANO WEIR: Who are you loyal to? Are you loyal to the CFP board or are you loyal to the company that's written your checks? Or which is the two.

CHRIS SIPES CFP®: CFP board you can contact Dan? That's correct.

DANO WEIR: Registered trademark. I get that in there every time for you.

CHRIS SIPES CFP®: Yeah. Yeah. So it does get squishy, I think, in that way. But it stands for Certified Financial Planner and it gives you knowledge. I think it's... I thought it was very helpful. This is great.

DAREN BLONSKI CFP®: I think every advisor should have to do it.

CHRIS SIPES CFP®: It takes forever to study for. I think about 400 hours is what you told me to bank on. And you go into all these different areas, insurance and ethics and estate and tax, and just get enough to know the lay of the land.

CHRIS SIPES CFP®: You're not necessarily an expert in any one of those areas, but you're meant to be able to recognize when you need to bring in an expert. Where there's an opportunity to help the client in one of those areas that you might not know had you not gone through that program.

DANO WEIR: So if you're new to financial services, we have thrown around a few of the certifications. You can kind of think about it like being the various levels of belts in karate, the colors in karate. It's a little simplistic, but basically these are challenges and these are tests and this is coursework.

DANO WEIR: A financial advisor who's just a financial advisor, someone says I'm a financial advisor, is not the same as a CFP. That's someone who was a financial advisor who said, I'm leveling up. That's right. And I'm taking this class and I had to pass a test just like you were going to pass the bar to become a lawyer.

DAREN BLONSKI CFP®: One way I like to think about the CFP, CFA, getting licensed to be a financial advisor is not hard, right? It's one or two, three, maybe tests. That's it. And the tests are- generally around law and ethics. And you just pass that and you go, but it really doesn't say anything about that person's ability to actually advise a client and actually advise them appropriately.

DAREN BLONSKI CFP®: But they don't necessarily set the bar for licensing for financial advisors all that high, right? Because you need a lot more of them than with all the baby boomers retiring, you need a heck of a lot more of them. There's a shortage of them actually.

DAREN BLONSKI CFP®: So if you set that bar too high, it's somewhat what we're seeing in the CPA world where there's just a flat shortage of CPAs because the tests are so difficult. People aren't going into that industry. It's just so brutal. Yeah.

CHRIS SIPES CFP®: I feel like a lot of the test is people are going to trust you with their life savings. Don't commit fraud. Don't steal. Yeah. Yeah.

DANO WEIR: You know, are you going to commit fraud? No.

CHRIS SIPES CFP®: Here's all the ways that we know that people have committed fraud in the past. You know, that's a large part of the test. That is. Thankfully, you know, you don't want people out there doing things like, oh, this sounds like a great idea that you can make money. And it's like, no, actually, that's been tried before. And it's, you know, fraud.

DANO WEIR: So that's fraud. So that's fraud.

CHRIS SIPES CFP®: Don't try that, rookie.

DAREN BLONSKI CFP®: And then so if you have like the licensing requirement, which is like you have the right legally to act and give advice to people, that's the licensing. Right. And so then you say, OK, I'm licensed. Now what? Now I got to go find people to advise, right? So I have to game up. I have to learn. I have to study. I have to understand things.

CHRIS SIPES CFP®: It's really difficult. There's like a huge failure rate. What is it? Eight and 10 or something like that?

DAREN BLONSKI CFP®: On CFPs?

CHRIS SIPES CFP®: No, just financial advisors in general. Oh yeah. Go into the business. That's right. Don't make it.

DAREN BLONSKI CFP®: In the brokerage I started with, if a hundred started, there was maybe 20 left after a year. It's just really difficult.

CHRIS SIPES CFP®: Yeah. It's tough.

DAREN BLONSKI CFP®: So the idea is that the bar to entry is low, but the bar to survive is hard.

CHRIS SIPES CFP®: Yeah. That's a great way.

DAREN BLONSKI CFP®: And so then you educate so you can survive, right? So you can actually be good for anything. And that's like the CFP. And there's a whole ton of other certifications out there.

DAREN BLONSKI CFP®: And it's constantly changing. So even after you get your CFP, you got to get more and more and more. Because if you're not, like, you're getting rusty, man. Things change. A lot of what we do is the intersection of tax law and investments and... Lifestyle and trying to figure out all those pieces and other government regulations.

DAREN BLONSKI CFP®: I think there's some I heard recently that the tax code has 300 changes per year on average going into this inauguration coming up with President Trump coming back in. We're expecting a lot of changes. So that means that Chris and I and the other advisors at this firm, we got to go back to school and take classes and classes and classes to understand what are the changes now and how what are the impacts.

DAREN BLONSKI CFP®: On level one, but then what are the level two, three misunderstood impacts? Because any law that's created by Congress, I've got news for you. A lot of the impacts down the road are not understood. And then we have advisors have to figure out what the real impacts in Dan's life is and then give him the best advice because of that.

DANO WEIR: One thing that's great about Sonoma Wealth Advisors is that Darren is all about choosing a diverse team that is able to help support a client in various ways based on their skill sets and their certifications. So we've got CFPs on staff. We have a CPA on staff.

DANO WEIR: So you can get that team approach working with our firm. Versus say, as you like to say, one man in a truck. That's right. You've got a whole team. You've got client service to be able to support you, answer the everyday questions about your account, and people who are ready to help serve you.

CHRIS SIPES CFP®: And we're trying to do things like working with you, Dano, to help us filter, you know, financial speak to everyone.

CHRIS SIPES CFP®: Like we had recently the changes with the pensions and the Social Security. And I said, Dan, this is huge. How do I tell everybody?

CHRIS SIPES CFP®: Okay.

DANO WEIR: Because the analysis part of us.

CHRIS SIPES CFP®: Or if you take a CFA who's very good at the maths, they're probably not so great at, you know, relaying that to the client in an e-blast, right? So you had, you had a background that was conducive to helping us, you know, get the information out. Because if people don't understand. What's going on and we're not communicating it well, then it doesn't matter if we know it or not.

DANO WEIR: Darren, let's go back to broker versus fiduciary again. Can you talk to me about share classes? I learned a little bit about that previously and it was kind of mind-blowing to me. I wasn't familiar with it. Depending on who you buy a mutual fund from, it can cost different. It seemed like it should be the same price from every person. What are share classes?

DAREN BLONSKI CFP®: Man, you really want to go down the rabbit hole. All right. So The first thing you need to understand about Wall Street, the very first thing, and that's called Wall Street, I mean, by the financial services industry, that's banks, that's brokerages, that's institutions, that's RAs, whatever. The first thing you need to understand about that world is it's a manufacturing business.

DAREN BLONSKI CFP®: Financial service is fundamentally a manufacturing business. So let's break that down. What does manufacture means? Manufacture means we create products and services. To sell to individual clients and groups of clients. If we can understand and frame everything in that frame, it gets much more clear about how the incentives work and how things are structured.

DAREN BLONSKI CFP®: So now Costco, let's take for example, when you go into Costco, many, many of the products are Kirkland products. Many, many of the products on Costco shelves were made specifically for Costco. They were made for distribution at Costco and meet a certain standard of quality.

DAREN BLONSKI CFP®: And Costco does that to maintain its brand. We want the batteries that we sell to be good batteries. So we're going to have the best batteries. They might even relabel them to be called, quote unquote, Kirkland batteries, but they maybe were made by Duracell, right? The same happens in the brokerage world, right?

DAREN BLONSKI CFP®: So when you look at brokers and you look at investment advisors, they're in the manufacturing business, but brokerages and registered investment advisors are in what we call the distribution side of the business. So there's the manufacturing where we create product, and then advisors and brokers are in distribution.

DAREN BLONSKI CFP®: So we're all distributing. Client A comes in. They say, here's my financial problem. And the broker or the advisor says, here's the solution.

DAREN BLONSKI CFP®: Now, how those advisors or brokers, or I should say those registered investment advisors or fiduciaries distribute is different than how that broker will distribute. Because the broker is going to distribute and they'll be told, hey, we need to move this, this, and this, and this.

DAREN BLONSKI CFP®: And then the fiduciary, they have no other incentive to move. They simply have to say, well, of the whole universe of manufactured products, here's the best one to fit your need. You're going to pay me a fee to tell you which one to get.

DAREN BLONSKI CFP®: Whereas the broker might be getting paid a fee from the client, but also might be getting kicked back from the Duracell battery. Say, if you sell and move more Duracells for us, we're going to give you an incentive. And often that happens more in the insurance world, right? There's better incentives underneath the hood.

DANO WEIR: So in working with a broker, if they were to sell you mutual funds, the list of funds would be smaller than if you or the list of funds that they're telling you would be a good fit would because they're suitable. Would be smaller list of availability than if you worked with a fiduciary.

CHRIS SIPES CFP®: They're on the company's rack. They're in the inventory.

DANO WEIR: Here's what we have in stock now.

CHRIS SIPES CFP®: Here's what we have. Yeah.

DANO WEIR: But I wanted something different. Oh, you don't need that. I got this.

CHRIS SIPES CFP®: Right.

DAREN BLONSKI CFP®: There's actually a couple different stories. There's one brokerage out there and we call it the happy meal. Because any client that goes into that brokerage is going to get three things. They're going to get a fee-based account where their assets are going to be managed. They're going to get...

DAREN BLONSKI CFP®: A long-term care policy sold to them and they're going to get a proprietary annuity sold at them and we call that the happy meal it's almost predictable almost the majority of clients have ever seen come in that are currently clients of that brokerage who then come in for a second opinion that's the lineup we see they got annuity long-term care and a fee managed account it's another famous Charlie Munger quote to a man with a hammer everything looks like a nail exactly if you haven't like Often what happens is client comes into money, they reach out to their trusted friends, their circle and says, hey, who do you work with?

DAREN BLONSKI CFP®: I need help. Fair, right? Because you're trusted. They go, well, I work with this person.

DAREN BLONSKI CFP®: He's great or she's great. I love them. And then you start peeling back the hood and you're like, oh, dude, this guy is like straight out broker, but this guy likes him. So he must be a really nice guy or gal. Symmetrical in all ways and really great personality. And so.

DAREN BLONSKI CFP®: This should be good, right? That's, I think, where it gets a little bit difficult to say, well, this person's going to do good by my friend. This person will do good by me. He's not going to steer my friend astray. He won't steer me astray. But the reality is the incentives are still not aligned with you.

DANO WEIR: And could you have done better? Was there someone who was my best interest and not just suitable?

DAREN BLONSKI CFP®: Well, and that's the opportunity cost, right? Like it's...

CHRIS SIPES CFP®: Could have walked out with that minivan instead of that. That's right.

DANO WEIR: Optimized. Fully optimized.

CHRIS SIPES CFP®: My life took a turn at that point.

DAREN BLONSKI CFP®: Dan, what do you...

DANO WEIR: Did you say my life took a turn or my wife took a turn? Possibly both. She might do that if you got that truck.

DAREN BLONSKI CFP®: That's right. Well, and think about that hundred extra dollars you spend on gas every month to have that really cool looking truck and feel really special in your truck. And you compound the investment of that over time. It's pretty significant. Right? And I think that's the point, right?

DAREN BLONSKI CFP®: Like I had someone recently asked me like, hey, well, what's, if I sign up with this brokerage, like what's the worst that can happen to me? Well, it compounds over time, right? Initially you're probably fine, but if they're dinging you every single year and they're selling you products every single year, that's a lot of money over time and has a massive financial impact on your family.

DANO WEIR: Yeah, what's the worst that could happen for you is that life is coming for you from all angles, no matter what. Inflation's coming for you, your job's coming for you, things are going to pop up, life events are going to happen. You need to be as optimized at all times. There is no margin to be like, he's a good guy, that's why I get low-class service from that guy.

DAREN BLONSKI CFP®: If I have the option, if I can hire someone who is going to only offer me suitable... Products and someone who's going to work in my best interest. And in fact, most of the time, you're actually going to pay less to the person working in your best interest because they've cut out the middleman, the big brokerage.

DAREN BLONSKI CFP®: Why?

DAREN BLONSKI CFP®: Because they're more symmetrical? Because they're talk smoother? What is it, right? And the truth of the matter is often they talk smoother and often they're more symmetrical. And that's why people go with them because that feels safer for them. Oh, they come with a big institution that must be safe. But it's not true. It's institutionalized destruction of your wealth.

DAREN BLONSKI CFP®: And it's normalized through a process of, like I talked about early, lobbying and allowed because of lobbying. And so you need to be an informed consumer.

DANO WEIR: So it's up to you. Are you ready to break up with your broker?

DANO WEIR: What do you think of what you heard today?

DANO WEIR: We've asked and answered some key questions. And for someone who wants to know, maybe they have an existing relationship with an advisor or an advisor in mind, if they're wondering about who they are, what should they ask them, Darren? What's the first thing that someone who's working with someone should ask if they're wondering? Should they just say, are you a broker? Are you a fiduciary? What should they say?

DAREN BLONSKI CFP®: I think the only way you can really do it, unfortunately, is ask them if they're Series 7 licensed or not. If they say, yes, I'm a Series 7 licensee, they are a broker. It absolutely does not matter what comes out of their mouth after that.

DANO WEIR: Are you Series 7?

DAREN BLONSKI CFP®: I am not Series 7 licensed.

DANO WEIR: Chris, are you Series 7?

CHRIS SIPES CFP®: Formerly.

DANO WEIR: Formally in another life. Yeah. Yeah. Yeah.

CHRIS SIPES CFP®: I think, I think it's fair to ask, how are you getting paid? Right. You know, recently I, I stayed at a hotel and they're like, you want to listen to an offer for extra bonus points? And sure. So they're going to offer me to stay in, in a place and in one of their hotels for an entire week for $200. So immediately alarm bells are going off in my head. How does that work?

CHRIS SIPES CFP®: You know, how are you getting paid?

DANO WEIR: Right.

CHRIS SIPES CFP®: So we all need to always be asking, how are you getting paid? What are your incentives? Right. And so, I think that's a fair question for anybody to ask an advisor.

DAREN BLONSKI CFP®: And it's not that there shouldn't be incentives. There will always be incentives in life. It's are the incentives aligned? Correct. Period.

DANO WEIR: For me, the client.

DAREN BLONSKI CFP®: That's right. And not for the advisor in the brokerage that you're hiring to sell you products.

DANO WEIR: We hope you've enjoyed the show today. We are Sonoma Wealth Advisors. If you're examining your broker relationship, if perhaps you don't like the answer to that series seven question, we'd love to talk to you. Sonomawealth.com. You can also call our front desk, which is 707-938-7414. Darren Blonsky, Chris Sipes. My name is Dan O'Weir. Thanks for checking out the show.

DANO WEIR: This content was produced by Fermata Advisors, LLC, an SEC-registered investment advisor. DBA, Sonoma Wealth Advisors. The opinions expressed by Fermata Advisors LLC on this show are their own. All statements and opinions expressed are based upon information considered reliable, although it should not be relied upon as such.

DANO WEIR: Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of Thank you for listening to the Investor's Guide to the Future.

DANO WEIR: Past performance is non-indicative of future performance.