Stacking Benjamins Part Two

Summary

Podcast Summary: "Stacking Benjamins Part Two" – Jill on Money with Jill Schlesinger

Episode Details:

• Title: Stacking Benjamins Part Two
• Host: Jill Schlesinger, CFP®
• Guest: Joe Saul Sehi, Podcaster and Author of Stacking Benjamins
• Release Date: December 29, 2024
• Platform: Audacy

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Introduction

In the second installment of "Stacking Benjamins," host Jill Schlesinger engages in an insightful discussion with Joe Saul Sehi, the creative mind behind the popular podcast Stacking Benjamins. This episode delves into the intricacies of financial planning services offered by major financial firms and explores alternative advisory models that cater to a broader range of clients.

Big Financial Firms and Their Advisory Services

Timestamp: 02:31 – 04:24

Jill initiates the conversation by questioning the efficacy of advisory services provided by industry giants such as Vanguard, Fidelity, and Schwab. She asks Joe about his perspective on these services, especially concerning their high fees and substantial minimum investment requirements.

Notable Quote:

Jill Schlesinger (02:31): "What do you think of those advisory services offered through the big guns? Like 30 bips, 30 basis points from Vanguard or the Fidelity whatever they do for their Fidelity Advisor or the Schwab one. You're not into it?"

Joe responds by acknowledging that while these services can be a good starting point, they often fall short in providing personalized and meaningful financial advice for clients who don't meet their high asset thresholds.

Notable Quote:

Joe Saul Sehi (02:32): "I like it. I think... it's a place to start. But let me tell you what I'm looking for."

The Challenges for Mid-Size Clients

Timestamp: 04:24 – 07:36

The discussion highlights a significant gap in the financial advisory market: clients with substantial, yet not exorbitant, assets (e.g., $150,000 in a brokerage account and $500,000 in a 401(k)) often find themselves overlooked by major firms. Jill shares an anecdote about a high-earning individual struggling to find an advisor willing to manage their portfolio due to inability to meet hefty minimums.

Notable Quote:

Jill Schlesinger (04:00): "We have a gap in the people who really would like advice that's affordable and that kind of customized fiduciary relationship advice that people want."

The Rise of Fee-Only Hourly Advisors

Timestamp: 07:36 – 11:02

Joe introduces the concept of fee-only hourly advisors as a viable alternative for mid-size clients. Unlike traditional advisors who charge high percentages or require large minimum investments, these advisors offer services on an hourly basis, typically ranging from $250 to $500 per hour. This model provides flexibility and affordability, allowing clients to pay for financial advice as needed without committing to long-term, expensive contracts.

Notable Quote:

Joe Saul Sehi (04:43): "I think that is where those people need to be. Pay me a set fee x amount per hour. I can come back and see you a couple years from now, you know, or if six months from now, something comes up, like, I can just pay you by the hour."

Role-Playing: Client-Advisor Interaction

Timestamp: 05:58 – 11:02

To illustrate the benefits of a personalized advisory approach, Jill and Joe engage in a role-play scenario. Jill portrays a client overwhelmed by financial responsibilities, including managing a sizeable 401(k), a brokerage account, post-divorce financial concerns, and planning for her children's education. Joe demonstrates how a fee-only advisor would approach her situation by focusing on her unique financial goals and building a tailored plan without immediately pushing products or services.

Notable Quote:

Joe Saul Sehi (07:13): "Another cool thing I started doing with clients is putting out their goals visually... putting them on a timeline and seeing where they intersect."

This exercise underscores the importance of process over product, emphasizing relationship-building and customized planning over generic financial solutions.

The Role of Technology and AI in Financial Planning

Timestamp: 12:35 – 15:23

The conversation shifts to the integration of technology and artificial intelligence (AI) in financial planning. Jill expresses optimism about AI's potential to streamline data processing and plan creation. However, both hosts concede that AI currently falls short in replicating the nuanced understanding and personal connection that human advisors provide.

Notable Quote:

Jill Schlesinger (12:35): "Maybe AI can help us take in client information, create the plan. But then what we're paying for is this relationship, this understanding of who I am."

Joe echoes this sentiment, highlighting that while AI efficiently handles mundane tasks, it struggles with tasks requiring emotional intelligence and personalized interaction.

Notable Quote:

Joe Saul Sehi (13:06): "AI does something really well... but when I ask it for the exact title of my show, it's horrible."

They caution listeners about the current limitations of AI, especially in areas requiring critical thinking and personalized service, such as financial advising.

Addressing AI's Shortcomings

Timestamp: 15:03 – 16:36

The discussion touches on recent challenges with AI, such as misinformation stemming from untrained models. Joe references an incident where AI provided outdated IRS rules, emphasizing the need for human oversight in financial advising.

Notable Quote:

Joe Saul Sehi (15:02): "We're not in the profession, but the profession can do a better job kind of getting some of the granular information out without the actual hourly firepower you need."

Jill concurs, reinforcing the idea that while AI can assist, it cannot replace the intrinsic value of human relationships in financial planning.

Conclusion and Key Takeaways

Timestamp: 16:36 – End

In closing, Jill encourages listeners to reach out for personalized financial advice tailored to their unique situations. She emphasizes the evolving landscape of financial planning, where flexible, fee-only advisory models are becoming increasingly relevant for clients who seek affordable and customized support.

Notable Quote:

Jill Schlesinger (16:27): "Change your work. Change your wealth. Change your life."

Key Takeaways:

1. Major Financial Firms' Limitations: High fees and large minimums make personalized advice inaccessible for many mid-size clients.
2. Fee-Only Hourly Advisors: Offer a flexible and affordable alternative, focusing on personalized service without long-term commitments.
3. Process Over Product: Effective financial advising prioritizes understanding client goals and building tailored plans rather than selling predefined products.
4. Technology as a Tool, Not a Replacement: While AI can enhance efficiency, it cannot substitute the essential human element in financial planning.
5. Evolving Advisory Landscape: The financial advisory industry is moving towards more inclusive models that cater to a broader range of clients’ needs.

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This episode of "Jill on Money" provides a comprehensive exploration of the current challenges and emerging solutions in the financial advisory space. By highlighting the importance of personalized relationships and the potential of alternative advisory models, Jill and Joe offer valuable insights for listeners seeking to optimize their financial planning strategies.

Transcript

[Jill Schlesinger]

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[Joe Saul Sehi]

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[Jill Schlesinger]

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[Joe Saul Sehi]

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[Jill Schlesinger]

The Jill on Money Show. It's Sunday, December 29th and we are here talking about you and your money and your financial goals. And we are trying to help you figure out different ways to achieve those goals. But you can only figure that out if you get in touch with us. Go to our website jillonmoney.com click the contact Us button and of course check the box if you'd like to join us on the air live. And as a reminder, this is our final Sunday broadcast. Unless there is some crazy breaking news over a weekend. Mark and I have decided to conclude our weekend episodes unless again, there's something wacky going on. So we really appreciate you guys hanging in with us. Seven days a week. We're going to five days a week. You know, like normal people. Today we are airing the second part of our interview with Joe Saul Sehi. He is a podcaster. He is an author. His podcast is called Stacking Benjamins. Really great should check that out. And we are going to talk about how different kinds of big financial firms are offering planning services and whether or not they're worth it. Here is the second part of our interview with Joe Saul Cehai. What do you think of those advisory services offered through the big guns? Like 30 bips, 30 basis points from Vanguard or the Fidelity whatever they do for their Fidelity Advisor or the Schwab one. You're not into it?

[Joe Saul Sehi]

I like it. I think.

[Jill Schlesinger]

No, no. You did this.

[Joe Saul Sehi]

Yeah, well I think it's a place to start. But let me tell you what I'm Looking for. Rather than answer that question, let me answer the question I want to answer.

[Jill Schlesinger]

Oh, hello, political person. Which is, hello, Senator.

[Joe Saul Sehi]

How do I get advice that works for me? And the thing that I think works for me before any of this stuff is how do I mesh with that person? Do they really have my back? Like, for me? Jill, I like working with a Gordon Ramsay personality. I want you to fight with me. I want to know that you love me and you're on my team. But I want you to look at me and go, joe, why are you stepping in it? Really? How am I stepping in it? Well, because you're doing this and this. Like that. Why would you do that? And I think for that, you need more of a relationship. This is the only thing that I don't like is that if I call a Vanguard or a Fidelity, it's very difficult for me. They're servicing a lot of people. It's very difficult for me to have that relationship where I call Jill Schlesinger and she knows exactly who I am.

[Jill Schlesinger]

But that's an expensive product. It is an expensive product, but I.

[Joe Saul Sehi]

Want to work toward that if I can.

[Jill Schlesinger]

Okay, but if you're okay, if you're starting out and you're using the robo and you're just doing what you need to do, and then there's people who are listening to our shows call us and ask us, and they say, I think I'm ready to now graduate into financial planning.

[Joe Saul Sehi]

Right.

[Jill Schlesinger]

This happened to me just recently at work. And this is somebody who has, let's call it half a million dollars in a 401k and like 150 grand in another account. And guess what? Nobody wants that client.

[Joe Saul Sehi]

Right? Right.

[Jill Schlesinger]

And that person's make. And, like, this person's making good money. So what is that? You know, we have a gap in the people who really would like advice that's affordable and that kind of customized fiduciary relationship advice that people want. Those people cannot afford to take the client who only has 150 grand to manage.

[Joe Saul Sehi]

They can't. It doesn't work out for them. I think this burgeoning new fee only hourly advice is really what you're looking for. Pay me a set fee x amount per hour. I can come back and see you a couple years from now, you know, or if six months from now, something comes up, like, I can just pay you by the hour.

[Jill Schlesinger]

Yeah.

[Joe Saul Sehi]

I think that is where those people need to be.

[Jill Schlesinger]

Okay, so let's talk about that person. So now I have this person who's got, let's call it again, half a million in retirement, 150 in a brokerage account, making a half a million dollars a year in a big city like this, which by the way, is like the working rich of New York City. A half a million dollars. Everyone complains, ah, I don't make enough money.

[Joe Saul Sehi]

That's cause your rent is through the.

[Jill Schlesinger]

Yeah, exactly. So that person, what should that person be paying for? Let's say a financial plan. Now when you talk to a fee only planner who's going to take that client on, they're like, minimum 10 grand or okay, I'm going to do a financial plan. It's great.

[Joe Saul Sehi]

I don't start here. I don't start here. I start with, does this person mesh with me?

[Jill Schlesinger]

Okay, let's say you find the person who meshes with you.

[Joe Saul Sehi]

But then number two, but you're not.

[Jill Schlesinger]

Even going to do it.

[Joe Saul Sehi]

Number two, then Jill is, what do I get if I hire you? Because as you know, you got advisor over here, you've got advisor over here. For people just listening to the audio of this, I just have my arms really wide. When you have that. It's impossible. Because the first question we've all been trained to ask is, what do you charge? And that's not the first thing. If I walk into a car dealership and I'm like, how much is the car? And I haven't looked at a car. Well, you think that's ridiculous. The first thing I need to know is, what are you going to do for me?

[Jill Schlesinger]

Okay.

[Joe Saul Sehi]

Then I calculate the roi.

[Jill Schlesinger]

Okay, let's just play this out. I'm the client. I'm the. I'm your person. I've got my. Again, I make a half a million dollars a year. I have $150,000 in a brokerage account at name the company, Fidelity, Schwab, whatever, Vanguard. And I have a half a million dollars in my work. 401k that nobody can manage. I can get advice on it, but no one's gonna touch it. Right? And now I want someone to help me create a financial plan. I'm the client, you're the prospective advisor.

[Joe Saul Sehi]

Gotcha.

[Jill Schlesinger]

All right, Ready?

[Joe Saul Sehi]

Yes.

[Jill Schlesinger]

So I really, I need financial advice. This is getting too much for me. I have two kids. I just got divorced. I am like, I'm hitting the wall and I just need somebody to put me on the right track.

[Joe Saul Sehi]

This is fabulous. I love this game. Because the first thing is if they begin with product and not process, you need to run. Okay, so the first thing you're looking for, Jill, is somebody sitting across the table from you that's gonna talk about process. And to know anything about process, they can't start off with what they're going to sell you. They have to ask more probing questions. So the first thing I'm looking for is. So, Jill, tell me more about that. Exactly. Where's it gone off the rails for you?

[Jill Schlesinger]

Okay, so I'm gonna just say I just feel overwhelmed. I'm working really hard and I got my hands full. I got these two kids, I have an ex, we have an amicable divorce. But now I'm worried about putting the kids through college. My own retirement. I just can't. I have got to hand the reins over. I cannot do this myself. And I just went to talk to another advisor and they had a 2 million dol dollar minimum and I can't meet that minimum.

[Joe Saul Sehi]

Sure. And if they say, oh, you've less than $2 million, I'm out of here. Obviously, the conversation's over. But what I'm looking for next, this is actually something really cool that I started doing back when I was an advisor that really worked. I did it for my own stuff. And then I realized it worked so well, I started doing it with clients. I would say, Jill, you know what? You've so many priorities that are competing right now. I don't know how you're not overwhelmed. So the fact that you are. I mean, just look at all these things you told me are going on. It helps a lot if we put this out visually. So let's draw up a timeline of when all these different goals you have are gonna take place. So here you are. And I'll take a just piece of regular typing paper. Draw a stick person on one end, that's Jill. Draw a long line across that paper. And on the other end, hopefully a long, long time from now, Jill passes away. And then I start putting these milestones. Okay, kids, college. Tell me about those. Those are gonna happen here. How do you wanna handle that? Do you wanna pay for all their college? How do you feel about college? How's that work in your family? And then we Dr. There. Now, you talked about saving for retirement. When do you see yourself retiring? What does that look like? I draw another big, huge bag of money further toward, you know, or maybe they're at the same time. What's amazing that happens is when I timeline these out against each other, I start seeing these circles intersect and I go, there's your friction. Look it. And maybe you, maybe you've thought about it. But most of the time, my client hadn't thought about it. They're like, oh, my. I never realized that I want to retire when my kid's a junior in college.

[Jill Schlesinger]

Right.

[Joe Saul Sehi]

There's a lot there. And then we go to cash flow today, where it feels like it's really tight. So my next question, I get all these goals out. I get the thing going on with your ex out right here. We look at your cash flow now. And then I start drawing lines back to today. And then I ask you, have you ever looked at what do we need to do today to make this goal a reality? This goal a reality, and this goal a reality. And what's cool is when we bake all these together. Well, I don't even like the baking analogy. Let's do a different one. I like better. We throw them in an MMA arena like it's a cage match.

[Jill Schlesinger]

I liked the baking better, to be honest with you.

[Joe Saul Sehi]

I like the MMA better. Let me tell you why. Because all these goals often don't survive. And we have these wonderful discussions about values. If I had been thinking about the money in financial planning and not thinking about my life and what I value, I'd still be a financial planner today because the money was really starting to get good.

[Jill Schlesinger]

Right. The money would be better in that. But if you're in this situation where you're the client, I'm the would be client. At some point, you're going to make the turn, right? Sure. We're going to have a conversation and I'm going to feel like I'm falling in love with you. Because everyone falls in love with you, Joe.

[Joe Saul Sehi]

Thank you.

[Jill Schlesinger]

You know that what happens when you say to me, I'd love to help you out, I would like to charge you by the hour, because it doesn't feel like you're gonna. This is like a relay. You just need. I wanna get you on track.

[Joe Saul Sehi]

Yeah.

[Jill Schlesinger]

And I think people feel like they would love to have that, but there aren't that many people who are doing hourly financial planning.

[Joe Saul Sehi]

There's not.

[Jill Schlesinger]

So how so? This is so. I think this is actually the friction in people getting the start because they feel like everybody who wants me and who I really like, those are the people, the joes, who have $2 million minimums. And when you tell me, I don't know, what do financial planners charge by the hour now? 500 bucks an hour?

[Joe Saul Sehi]

Yeah, between 250 and 500 usually.

[Jill Schlesinger]

Okay, so, you know, so if we say 375 an hour, it's gonna be 10 hours of work to do a real financial plan and meet up. And. Right. Am I going to pay the four grand or not?

[Joe Saul Sehi]

Well, here's the deal. We get to sales and go back to our sales discussion we had. I know as a prospective advisor at that point, whether they can afford it or not and where the money comes from. And it's my job with superior sales skills to tell you, go, Jill. I charge X amount of money per hour, 375 an hour. I think this is going to take 10 hours. And I know you're doing the math right now. That's $3,750. That's not. Not a little bit of money.

[Jill Schlesinger]

Right. You're freaking.

[Joe Saul Sehi]

Here's how I think, number one, we make that back. And then I show you on paper. I think there is fat in this area. I think we can trim this. I think we can take care of this. So I think you're kind of finding.

[Jill Schlesinger]

The money to justify the expense in the mind of the person who's sitting here.

[Joe Saul Sehi]

And I want to justify to myself too, because I don't want to be an anchor. That would always suck.

[Jill Schlesinger]

Right. It's also like that. It's always a little bit weird, like when you talk to somebody who's in an hourly kind of profession, like a legal profession. Right. And you're like, don't. And you're like, oh, my God, I don't want to hang on the phone too long with this person. And you want to build a relationship. But I think that that is where I think that that's a really tough thing. I'm kind of hopeful that with the advent of more technology that we. Well, we're not in the profession, but the profession can do a better job kind of getting some of the granular information out without the actual hourly firepower you need. Like, it used to be when we did a financial plan, it really did take 10 hours.

[Joe Saul Sehi]

It did.

[Jill Schlesinger]

Right, right. And you were sitting there with your HP12C, banging out the calculations yourself. And then, you know, then we have formulas and then we have programs, and now we have AI Maybe that can help us take in client information, create the plan. But then what we're paying for is this relationship, is this understanding of who I am.

[Joe Saul Sehi]

Right.

[Jill Schlesinger]

And I think that we are not there yet. That's my fear, is that we're not there yet.

[Joe Saul Sehi]

The cool news is, I don't know about. For you, but in my job, we were just talking about this last week in my job, just planning out shows, planning out stacking Benjamins. I use AI a ton more than I used to. Tell me how I use it to help me with what should we title this? How should my show notes look? So AI does something really well and it does something very poorly. If I ask it for. If I ask it for the exact title of my show as an example. It's horrible. I have to give it a lot of parameters. I've already fed it. This is the stacking Benjamin's avatar. This is what we're after. I want to appeal to these people and what would they like from all this stuff that's in the trans about my show? Give me 10 of them.

[Jill Schlesinger]

You know, I think that using that is kind of cool. I think. Listen, I know people who I work with at CBS who are trying to do it with scripts where they're trying to sort of give me a basic outline of a script, but I don't think it works very well on that level yet.

[Joe Saul Sehi]

I totally agree.

[Jill Schlesinger]

But I mean, look, it is. I think the part of the job that you and I have that is so much fun is that we're voyeurs. We like people. We just do. And that is the magic that occurs on a podcast where you feel like if somebody is talking to another person and they actually enjoy talking to that person and they're trying to give you guardrails and guidelines and they're talking to interesting people and bringing those people to you. That is the beauty of what we do. And thank God. I don't think AI can replace us just yet. They may for you long term. I mean, I'm closer to the end.

[Joe Saul Sehi]

Thank you.

[Jill Schlesinger]

Yeah.

[Joe Saul Sehi]

Your show's so wooden, Joe.

[Jill Schlesinger]

Yeah.

[Joe Saul Sehi]

No, clearly replace.

[Jill Schlesinger]

No, but more like that it'll be better.

[Joe Saul Sehi]

The place that I really works is to save me time in areas that it just doesn't matter. Not in the front end stuff.

[Jill Schlesinger]

Yeah.

[Joe Saul Sehi]

In fact, we did a story a couple of weeks ago about how Google and Bing are now volunteering the wrong information. Up top. You know how up top now and with finance especially, it's giving you the wrong thing. And the reason is for people out there that don't know this is that especially with the new law that passed. Let's say there's a new IRS rule that passed.

[Jill Schlesinger]

Yep.

[Joe Saul Sehi]

And so the new IRS rule, brand new. What AI is doing.

[Sharon McMahon]

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[Unknown]

Hey friends, I'm Sharon McMahon, host of here's Where It Gets Interesting. Each week I speak with authors, experts and thought leaders on everything from American history and democracy to how to be a better person on the Internet. And don't miss my extremely popular Docu series which educate you on things you never learned in history class. Follow and listen to here's Where It Gets interesting on the free Odyssey app or wherever you get your podcasts.

[Joe Saul Sehi]

Is this just looking at the entire Internet and going okay? Probability? 90% of the Internet says it's this number, which is the old number.

[Jill Schlesinger]

Yep.

[Joe Saul Sehi]

And only a little bit says the new number. So it hasn't been trained enough. It says it's a jagged edge and it'll very confidently tell you something that's 100% wrong.

[Jill Schlesinger]

If you've got a financial question about whether you should be using a financial advisor or a robo or something else, maybe you just want to do it yourself. Give us a Holler. Go to jillonmoney.com, click the contact Us button and complete the form. If you want to join us live, check the box Mark does everything else. Don't forget to sign up for the free weekly newsletter and you can subscribe to us on the Odysee app or wherever you find your favorite podcasts. Don't forget to do something nice for someone else today. Change your work. Change your wealth. Change your life. Thank you for listening and we'll talk to you tomorrow.