Matt ran across an interesting statistic recently, that only about five percent of financial advisors operate on a fee-only basis. This is not an official SEC or FINRA statistic, but it does highlight something important about the industry of financial advice. Most advisors are getting paid fees for assets under management and commissions from selling certain products like mutual funds, annuities, or insurance policies. While there is nothing inherently wrong with this business model, it does create different incentives for the advisor, and that is what Matt focuses on in this episode.

Broadly speaking, there are two ways that advisors get paid. "Fee-based" advisors charge a fee for the money they manage, usually a small annual percentage. This fee is paid by the client. They may also collect commissions from investing a client in certain investment products. Commissions are paid by the companies selling the financial products. "Fee-only" advisors, on the other hand, charge a fee for their planning and advice services, and may charge a fee for the assets under management. They do not receive kickbacks or compensation for steering their clients toward certain investments.

Then there's the term fiduciary, which does not describe compensation but the responsibility an advisor has to his client. A fiduciary is legally bound to always act in the best interest of their client, regardless of which investment products they choose.

It's not hard to see that commission based advisors have an incentive to push certain products. They may be good products, or may not, but the incentive to sell them is there, and it's important to be aware of, especially given that the majority of the industry is still compensated in this way. Fee-only fiduciaries also have incentives -- they make more money if you invest more money with them, versus using your money to pay off debt, for instance -- so it's not about making a moral judgment of which business model is right. It's about understanding what the incentives are, so that you know where the biases of your advisor lies, and how you can choose the best advisor for your needs.

Follow Matt Murphy

Web: https://www.benetaswealth.com

Newsletter: http://eepurl.com/jb7SNc

LinkedIn: https://www.linkedin.com/in/mattmurphycfp

Advisory services offered through Commonwealth Financial Network®, a Registered Investment Adviser.

This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Investments are subject to risk, including the loss of principal. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Past performance is no guarantee of future results.

All indices are unmanaged and investors cannot invest directly into an index.

Investments in target-date funds are subject to the risks of their underlying holdings. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative investments based on its respective target date. The performance of an investment in a target-date fund is not guaranteed at any time, including on or after the target date. Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.

Exchange-traded funds (ETFs) are subject to market volatility, including the risks of their underlying investments. They are not individually redeemable from the fund and are bought and sold at the current market price, which may be above or below their net asset value.

Matt reflects on a question Warren Buffet posed in a talk from the early 2000's: if you could own 10% of any person's lifetime earnings, who would you pick? And why? Conversely, if you had to short any one person's lifetime earnings -- that is, you had to pay out 10% of their earnings -- who would you pick? Buffet set out a few rules: it has to be someone you know, and it has to be their earnings, not money they stand to inherit.

Matt points out that, in the long run, it's the people with integrity, humility, and willingness to learn that make the cut for whose earnings you'd like to own. In the world of financial planning, there is much discussion of investments -- stocks and bonds, funds, etc -- but even more importantly, about the investment managers. Behind every investment is a person making decisions, and ultimately you want people with integrity, that make more good than bad decisions consistently over the long run, to help you allocate capital and build your savings for retirement

Follow Matt Murphy

Web: https://www.benetaswealth.com

Newsletter: http://eepurl.com/jb7SNc

LinkedIn: https://www.linkedin.com/in/mattmurphycfp

Advisory services offered through Commonwealth Financial Network®, a Registered Investment Adviser.

This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Investments are subject to risk, including the loss of principal. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Past performance is no guarantee of future results.

All indices are unmanaged and investors cannot invest directly into an index.

Investments in target-date funds are subject to the risks of their underlying holdings. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative investments based on its respective target date. The performance of an investment in a target-date fund is not guaranteed at any time, including on or after the target date. Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.

Exchange-traded funds (ETFs) are subject to market volatility, including the risks of their underlying investments. They are not individually redeemable from the fund and are bought and sold at the current market price, which may be above or below their net asset value.

Follow Matt Murphy

Web: https://www.benetaswealth.com

Newsletter: http://eepurl.com/jb7SNc

LinkedIn: https://www.linkedin.com/in/mattmurphycfp

Advisory services offered through Commonwealth Financial Network®, a Registered Investment Adviser.

This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Investments are subject to risk, including the loss of principal. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Past performance is no guarantee of future results.

All indices are unmanaged and investors cannot invest directly into an index.

Investments in target-date funds are subject to the risks of their underlying holdings. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative investments based on its respective target date. The performance of an investment in a target-date fund is not guaranteed at any time, including on or after the target date. Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.

Exchange-traded funds (ETFs) are subject to market volatility, including the risks of their underlying investments. They are not individually redeemable from the fund and are bought and sold at the current market price, which may be above or below their net asset value.

Matt breaks down the mechanics of the new Trump Accounts, which are savings vehicles for kids. He discusses the tax deferred status of the accounts, what the funds can be used for, how they can be invested, who owns the account, and how the account can be divested, spent, or tranferred into an invidividual retirement account (IRA) when the child turns 18. Matt also discusses how these accounts differ from 529 accounts, and why you might choose one or the other.

And don't forget, children born between 1/1/2025 and 12/31/2028 receive $1,000 in seed money in their Trump Accounts, but you have to claim it!

Follow Matt Murphy

Web: https://www.benetaswealth.com

Newsletter: http://eepurl.com/jb7SNc

LinkedIn: https://www.linkedin.com/in/mattmurphycfp

Advisory services offered through Commonwealth Financial Network®, a Registered Investment Adviser.

This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Investments are subject to risk, including the loss of principal. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Past performance is no guarantee of future results.

All indices are unmanaged and investors cannot invest directly into an index.

Investments in target-date funds are subject to the risks of their underlying holdings. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative investments based on its respective target date. The performance of an investment in a target-date fund is not guaranteed at any time, including on or after the target date. Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.

Exchange-traded funds (ETFs) are subject to market volatility, including the risks of their underlying investments. They are not individually redeemable from the fund and are bought and sold at the current market price, which may be above or below their net asset value.

Follow Matt Murphy

Web: https://www.benetaswealth.com

Newsletter: http://eepurl.com/jb7SNc

LinkedIn: https://www.linkedin.com/in/mattmurphycfp

Advisory services offered through Commonwealth Financial Network®, a Registered Investment Adviser.

This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Investments are subject to risk, including the loss of principal. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Past performance is no guarantee of future results.

All indices are unmanaged and investors cannot invest directly into an index.

Investments in target-date funds are subject to the risks of their underlying holdings. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative investments based on its respective target date. The performance of an investment in a target-date fund is not guaranteed at any time, including on or after the target date. Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.

Exchange-traded funds (ETFs) are subject to market volatility, including the risks of their underlying investments. They are not individually redeemable from the fund and are bought and sold at the current market price, which may be above or below their net asset value.

Matt recently returned from a family trip to Pinehurst, an iconic golf resort in North Carolina and the home of US Kids Golf World Championship, which his daughters have competed in, and as always with such trips, with a fresh point of view. In today's episode, Matt shares his perspective on life, memories, and the moments and phases that we often don't appreciate until they are in the rear view mirror. Life is a journey of change, and serving as a financial planner is an honor and witness to the changes and moments and memories of everyone that walks through the doors of Benetas Wealth.

Follow Matt Murphy

Web: https://www.benetaswealth.com

Newsletter: http://eepurl.com/jb7SNc

LinkedIn: https://www.linkedin.com/in/mattmurphycfp

Advisory services offered through Commonwealth Financial Network®, a Registered Investment Adviser.

This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Investments are subject to risk, including the loss of principal. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Past performance is no guarantee of future results.

All indices are unmanaged and investors cannot invest directly into an index.

Investments in target-date funds are subject to the risks of their underlying holdings. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative investments based on its respective target date. The performance of an investment in a target-date fund is not guaranteed at any time, including on or after the target date. Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.

Exchange-traded funds (ETFs) are subject to market volatility, including the risks of their underlying investments. They are not individually redeemable from the fund and are bought and sold at the current market price, which may be above or below their net asset value.

Most people when they think about investment portfolios and retirement are concerned with the rate of return of the portfolio. How much does it earn every year, how much will it grow over time, is it matching or beating the market (i.e. the performance of a broad stock market index)? While these are reasonable questions to ask, they miss an important point. What matters is not how much your portfolio is returning against the market, or abstractly in a vacuum, but how much your portfolio returns compared to how much income you need it to generate in retirement. This number will vary, because each person's lifestyle, goals, and unique family, tax, and legal situations are different. It is known as the withdrawal burden.

You can also look at this concept as a question of how much pressure you are putting on your investments to achieve your required rate of return. Imagine two investors with the exact same $2 million portfolio, invested in exactly the same way. One investor needs to withdraw $40,000 per year, however, while the other investor needs $180,000 per year. Who's taking more risk in this situation? Remember, the investments are identical. However the second investor is placing a much higher burden on his portfolio and is more likely to draw down the value of his portfolio more quickly, especially in years where market returns are soft.

This example highligths an important point about investing. As Matt says, it's not about the account balances, it's about the demands placed on those account balances. Looking at retirement investing through this lens helps you better understand what job your portfolio needs to do for you. In some cases, you may need to be more conservative with your investment choices; however, you may discover that you can, and should, be more aggressive with your investments so that you can capture more growth over your investment horizon.

Follow Matt Murphy

Web: https://www.benetaswealth.com

Newsletter: http://eepurl.com/jb7SNc

LinkedIn: https://www.linkedin.com/in/mattmurphycfp

Advisory services offered through Commonwealth Financial Network®, a Registered Investment Adviser.

This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Investments are subject to risk, including the loss of principal. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Past performance is no guarantee of future results.

All indices are unmanaged and investors cannot invest directly into an index.

Investments in target-date funds are subject to the risks of their underlying holdings. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative investments based on its respective target date. The performance of an investment in a target-date fund is not guaranteed at any time, including on or after the target date. Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.

Exchange-traded funds (ETFs) are subject to market volatility, including the risks of their underlying investments. They are not individually redeemable from the fund and are bought and sold at the current market price, which may be above or below their net asset value.

Before you sit down at the conference table to with Matt, many hours of work go into your financial plan -- gathering information, reviewing your accounts, optimizing your tax situation, coordinating with accountants and attorneys, and much more. In today's episode, Matt Murphy invites the newest advisor at Benetas Wealth, Matt Reynolds, to talk through everything he's learned in his first year about how Benetas helps clients put together a financial plan. Matt Reynolds is deeply involved in the back office operations, combing through all the facts and details that get considered long before a client meeting happens. Take a look behind the scenes at everything that happens in the planning room before you sit down with Matt Murphy and Matt Reynolds to discuss your vision for retirement and the road map to get there -- it's a lot more than just managing investments!

Follow Matt Murphy

Web: https://www.benetaswealth.com

Newsletter: http://eepurl.com/jb7SNc

LinkedIn: https://www.linkedin.com/in/mattmurphycfp

Advisory services offered through Commonwealth Financial Network®, a Registered Investment Adviser.

This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Investments are subject to risk, including the loss of principal. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Past performance is no guarantee of future results.

All indices are unmanaged and investors cannot invest directly into an index.

Investments in target-date funds are subject to the risks of their underlying holdings. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative investments based on its respective target date. The performance of an investment in a target-date fund is not guaranteed at any time, including on or after the target date. Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.

Exchange-traded funds (ETFs) are subject to market volatility, including the risks of their underlying investments. They are not individually redeemable from the fund and are bought and sold at the current market price, which may be above or below their net asset value.

Life moves through seasons, and one characteristic of a season is you often don't realize you're in it until it has passed. You grow up, start working, kids come along, all of a sudden you're in the thick of parenting. Then, as children grow the nature of parenting changes, along with your schedule. And then, they're gone, and you are supporting them from afar. At each stage of the process, there are new challenges and new problems to solve. As Matt points out, one of the easiest traps to fall into is solving yesterday's problems and failing to recognize and adapt to the new phases of life.

There's a clear analogy to retirement planning. Retirement is, after all, another season of life. People often focus on the wrong questions and problems of retirement -- accumulating long after their portfolio is sufficient, rather than visualizing life in retirement and what kinds of things they want to do or roles they'd like to take on. Or perhaps they are worried about working longer, when planning for taxes may be more impactful to their retirement.

A good financial plan has seasons, just like life... because it is your life.

Follow Matt Murphy

Web: https://www.benetaswealth.com

Newsletter: http://eepurl.com/jb7SNc

LinkedIn: https://www.linkedin.com/in/mattmurphycfp

Advisory services offered through Commonwealth Financial Network®, a Registered Investment Adviser.

This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Investments are subject to risk, including the loss of principal. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Past performance is no guarantee of future results.

All indices are unmanaged and investors cannot invest directly into an index.

Investments in target-date funds are subject to the risks of their underlying holdings. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative investments based on its respective target date. The performance of an investment in a target-date fund is not guaranteed at any time, including on or after the target date. Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.

Exchange-traded funds (ETFs) are subject to market volatility, including the risks of their underlying investments. They are not individually redeemable from the fund and are bought and sold at the current market price, which may be above or below their net asset value.

Matt draws an analogy between the movie Man on Fire and the character of Crecy, who teaches a young protege how to think under pressure -- to solve a puzzle, not react emotionally -- and the process of investing. One of the most dangerous things an investor can do is get emotionally invested (pardon the pun) in the securities they are evaluating, looking for ways to confirm why they should buy them rather than reasons to not buy them. A good investor understands the risks of what he is buying, how an investment fits into his or her unique portoflio needs, and what the investment horizon is.

Stock market turmoil often leads to emotional turmoil, and when emotion enters into the picture, we stop asking questions. Instead of looking for a puzzle to solve, we start believing in certain approaches and, inevitably, drifting from our original investment plan.

Follow Matt Murphy

Web: https://www.benetaswealth.com

Newsletter: http://eepurl.com/jb7SNc

LinkedIn: https://www.linkedin.com/in/mattmurphycfp

Advisory services offered through Commonwealth Financial Network®, a Registered Investment Adviser.

This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Investments are subject to risk, including the loss of principal. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Past performance is no guarantee of future results.

All indices are unmanaged and investors cannot invest directly into an index.

Investments in target-date funds are subject to the risks of their underlying holdings. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative investments based on its respective target date. The performance of an investment in a target-date fund is not guaranteed at any time, including on or after the target date. Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.

Exchange-traded funds (ETFs) are subject to market volatility, including the risks of their underlying investments. They are not individually redeemable from the fund and are bought and sold at the current market price, which may be above or below their net asset value.

Follow Matt Murphy

Web: https://www.benetaswealth.com

Newsletter: http://eepurl.com/jb7SNc

LinkedIn: https://www.linkedin.com/in/mattmurphycfp

Advisory services offered through Commonwealth Financial Network®, a Registered Investment Adviser.

This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Investments are subject to risk, including the loss of principal. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Past performance is no guarantee of future results.

All indices are unmanaged and investors cannot invest directly into an index.

Investments in target-date funds are subject to the risks of their underlying holdings. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative investments based on its respective target date. The performance of an investment in a target-date fund is not guaranteed at any time, including on or after the target date. Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.

Exchange-traded funds (ETFs) are subject to market volatility, including the risks of their underlying investments. They are not individually redeemable from the fund and are bought and sold at the current market price, which may be above or below their net asset value.

Your life's journey is full of wins and losses, and however lumpy, it is a journey, a movement toward something, which means it is also full of gains. One common trait of successful people is they set goals and, having achieved them, move onto the a new goal, the next thing. Wherever they perceive a gap -- in their knowledge, experience, their financial position, etc. -- they seek to close that gap. Along the way they generate great gains, but their focus remains mostly on the gaps.

It's easy for investors to get caught in this line of thinking too. Matt reminds us that in the journey toward retirement, we often see the gaps in our preparation and fail to appreciate how far we've come.

This episode was inspired by the book The Gap and the Gain: The High Achievers' Guide to Happiness, Confidence, and Success

Follow Matt Murphy

Web: https://www.benetaswealth.com

Newsletter: http://eepurl.com/jb7SNc

LinkedIn: https://www.linkedin.com/in/mattmurphycfp

Advisory services offered through Commonwealth Financial Network®, a Registered Investment Adviser.

This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Investments are subject to risk, including the loss of principal. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Past performance is no guarantee of future results.

All indices are unmanaged and investors cannot invest directly into an index.

Investments in target-date funds are subject to the risks of their underlying holdings. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative investments based on its respective target date. The performance of an investment in a target-date fund is not guaranteed at any time, including on or after the target date. Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.

Exchange-traded funds (ETFs) are subject to market volatility, including the risks of their underlying investments. They are not individually redeemable from the fund and are bought and sold at the current market price, which may be above or below their net asset value.