This week, Jamie Hopkins talks with Rick Ferri, a CFA who is rethinking the way we charge clients and how we provide service as financial professionals.

Rick went from the military to Wall Street, into an investment management firm, and now to a flat-fee planning firm. It’s a unique business model, and Rick is challenging the status quo about what it means to be a fiduciary.

Working his way through different companies with various positions, Rick found that the system was flawed and wasn’t producing for clients the way it should. He turned to the work of John Bogle around low-cost index funds and never looked back.

Currently, Rick is writing a new book and doing hourly consultations with clients who need help on the investment side of their portfolio.

In this episode, we talk about the difference between advisors and fiduciaries, changing business models, and how to educate clients on fees and investing. We also discuss what it’s like trying to get good Italian food in Texas!

“Educate your clients as to what they should be paying. If you’re using the excuse, ‘Oh, you know, the clients are paying this and so, therefore, it must be right’, that’s nonsense. It’s no more right than letting the clients trade triple-leveraged ETFs. ~ @Rick_Ferri

Main Takeaways

  • The best-laid plans don’t do much good if clients don’t implement and follow through with the changes you recommend. This is one of the challenges of an hourly business model.
  • Advisors should align their fees with the work they do. If they can do that, then they’re acting as a fiduciary. Being upfront and transparent about the work and the cost of the work is critical.
  • Technology and innovation are going to disrupt fees and fiduciary standards. In the near future, we’re likely to see a push to drive down fees and enforce the responsibilities of a fiduciary.

Links and Important Mentions

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Framework 006 – Episode Summary for RSS Feed

This week, Jamie Hopkins talks with Rick Ferri, about advisors and fiduciaries, changing business models, and how to educate clients on fees and investing. Rick is a CFA rethinking the way we charge and service clients.

You can find show notes and other information at CarsonGroup.com/Framework.

AUTHOR

Jamie Hopkins

Managing Director, Carson Coaching
ESQ., MBA, CFP®, LLM, CLU®, ChFC®, RICP®
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