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What is a fiduciary and why is it important in financial planning? - YouTube
Channel: KGUN9
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now I may be alone on this but I don't
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think I am I didn't really know what a
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fiduciary was I'm so happy my friend
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Jeff Vogon brought it up last time he
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was here to visit me but I want to learn
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more now that I know how important it is
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so Jeff is actually back with me because
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this is actually something that's in the
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headlines I think a lot of people are
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hearing this word being thrown around
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but do we really know what it is why
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it's important are you why in essence
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yes in our industry in the financial
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business we're supposed to hold a
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fiduciary standard in many of our
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aspects of our business in fact it's
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kind of implied that everybody is
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looking out for the client first and
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what fiduciary really means is somebody
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that is holding up or owning up to a
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fiduciary standard puts the clients
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interest first before his own okay and I
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think it also includes things like full
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disclosure the things that are in the
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news lately are about the Department of
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Labor has tried to enforce some laws or
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tried to pass laws that are going to
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make everybody in the financial industry
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have to be fiduciaries and there's a lot
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of pushback from it in fact the the law
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has been the enforcement of the law has
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been delayed another 18 months they're
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talking about now delaying it 24 months
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and there's along the table right now to
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disown it or to not fund it or basically
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make it go away completely I think the
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main reason for that is is it's just too
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hard to define that or to force that
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upon an industry which for years has
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been operated under operating under
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what's called a suitability standard in
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other words if you're a stockbroker and
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you have stocks it doesn't matter what
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stock you have sell to somebody as long
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as stocks are okay for that person a
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fiduciary would say okay well if this
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person wants that portfolio of stocks
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bonds mutual funds or whatever then they
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have to do a certain amount of due
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diligence to make sure that those that
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that portfolio is in fact more fit for
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that client in other words it's a higher
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level of scrutiny as a higher level of
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regulation and I know the last time I
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looked at a statistic less than right
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around 5% of our industry is actually
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licensed and held to a fiduciary
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standard while the majority of our
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industry is held only to a suitability
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standard meaning they can sell suit
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proprietary products maybe or things
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that they might
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make a little bit more Commission on and
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things like that that may not always be
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in the best interest of the client and
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you were saying that so people were
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hearing this in the news and they were
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saying Jeff is this is this gonna affect
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you and you said no no you've already
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been there done that and that and that
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is a true some of my clients like oh my
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gosh I heard about this everybody's
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pushing back on the fiduciary role
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you're gonna have to do so many things
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different I said actually no since 2001
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I think it was that we actually got our
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license under the platform of the
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registered investment advisory which is
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a different license it's also regulated
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differently and they hold us to a
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fiduciary standard which means you have
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to disclose things like all your fees
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and commissions any conflicts of
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interest whether you you know own the
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company you're trying to sell stock in
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to that person and those things that
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might make you more prone to sell or
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provide a certain product or service to
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that client anything that might be a
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conflict of interest needs to be
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disclosed and those things aren't
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disclosed by much of our industry
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unfortunately well and I think me being
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on the other side being the person
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coming in I want that I want that to be
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very transparent I like hearing there's
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a standard you're held to it and you've
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already been you know all of these years
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you've been doing help for clients here
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in Tucson 25 years you've already been
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held to that standard you've already
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been like here this is what's on the
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table and I'm here for you I'm here to
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do what's best for you right I think the
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independent nature of our business the
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way we're set up is helps us hold up to
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that fiduciary standard a lot better and
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I think it's real I can't understand how
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some of these bigger firms are going to
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make that transition it's gonna be
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difficult honestly because many of the
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big firms have proprietary products for
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example some broker-dealer firms
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actually own mutual fund families well
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if they sell their own mutual fund
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family is that a conflict of interest if
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they don't disclose the fact that
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they're getting some sort of extra
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transaction fees on the back end or 12
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b1 fees which is a fee sometimes nobody
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knows about but they're getting paid
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from some other source or from the
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mutual fund itself those I think are
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conflicts of interest that need to be
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disclosed and I think the Department of
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Labor is right in the fact that they're
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trying to regulate the industry to to
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help everybody kind of know what's going
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on I think my clients our
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they appreciate the fact that I get paid
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they want me to be here
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of course but I think it's also nice
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that they know if I quote them a certain
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percentage of a fee-based the fees that
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I'm going to charge them the presenters
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fee it that should be it it shouldn't be
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oh by the way I'm not telling you about
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the three other ways being paid and I
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think that's kind of what's rocking the
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industry right now and why there's a
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little bit of pushback on it well there
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like I said there's so much out there's
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so much information we're seeing
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headlines and buzzwords and stuff like
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that I've already felt I feel like you
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have a great way of kind of explaining
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it I understand and I'm kind of like oh
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that makes complete sense do you do more
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of this where you do like education and
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and help others like myself what they
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may not know everything you know I think
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education is the biggest part is just
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kind of understand a lot of people don't
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know what they don't know until they get
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it explained to them you know and that
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is education if you don't take it upon
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yourself to get educated how are you
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going to know you're just going to go
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and blindly and take advice from an
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advisor who hopefully will have your
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interests in mind but not it's
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unfortunate that in our industry it's
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not always so so where we start is
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educating the people we let them know
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what questions to ask if you can ask
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better questions you're going to end up
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getting better answers and I think
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that's really where it should start and
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then it it it's a lot easier to make the
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right decision and feel more comfortable
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with the relationship that you have as
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an investor or as a you know somebody
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who's planning for retirement with their
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advisor if they understand more about
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how it all works it really is a
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relationship so I'm gonna remind
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everybody how they can start that
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relationship with somebody that we know
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has our back - thank you so much for
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coming in and really breaking this down
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into a things that I can understand
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thank you for having it's a complicated
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to learn more about premier retirement
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planning and wealth management and their
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