Ep 67: Can a Fiduciary Mindset Improve Society? Featuring George Kinder (Ep 67)

Episode 67 of Rethink Financial Advice, co-hosted by Derek Notman, CFP® (Founder & CEO, Couplr AI) and H. Adam Holt, CFP® (Founder & CEO, Asset-Map). (53:53)

Episode 67 of Rethink Financial Advice, co-hosted by Derek Notman, CFP® (Founder & CEO, Couplr AI) and H. Adam Holt, CFP® (Founder & CEO, Asset-Map). Listen on Apple Podcasts, Spotify, YouTube, or Acast.

Episode Summary

George Kinder returns, having first appeared in episode 15, for a deliberately larger question: what happens if fiduciary duty is treated as a mindset for living rather than a regulatory requirement for advising. Kinder’s argument reduces to time horizon. Short-term incentives, whether profitability, a commission, a fee, or product alignment, all encode a willingness to trade the future for the present, and a fiduciary mindset is simply the refusal to make that trade. He notes that financial planners already think this way about investments and insurance, and asks why the habit tends to stop at the office door. Holt offers a more cynical enforcement mechanism, arguing that online transparency and public reviews now do some of the work regulation and conscience were meant to, because a damaged reputation is very hard to rebuild.

What this episode covers

• Fiduciary duty reframed as a mindset rather than a compliance requirement
• Time horizon as the thing that actually distinguishes the two
• Why planners think long term about investments and rarely about anything else
• Public reviews and transparency as a market-based accountability mechanism
• Extending self-interest to the next generation, and where that argument leads

Full Transcript

Machine-generated transcript of this episode.

Welcome to Rethink, the financial advisor podcast. My name is Adam Holtz. And this is Derek Notman. We are your hosts, both veteran advisors and FinTech CEOs who challenge the status quo, question everything and have fun doing it. Hear honest commentary on the challenges facing advisors today. And be part of a community where we can all rethink the profession. Now on to our episode. Derek, can a fiduciary mindset improve society? That’s not a big question at all, is it? Gotta ask big questions, man. Gotta ask the big questions. Rethink. Rethinking it on a global scale. Yeah. Are you asking me to apply the fiduciary standard to civilization?

I’m asking you and our audience to think about what does fiduciary really mean if it’s adopted as a mindset as opposed to a business requirement of financial advice. I like your twang there, man. Like it? That was great. Yeah, you should just, you just need a cowboy hat on right now. You got a partner. I think it can improve society. I do. We can see the benefits in our industry and profession and we probably see it more than most. We talk about it all the time and there’s a lot of regulation conversation around it. Confusion, maybe. But what is fiduciary? It’s being a good person.

It’s trying to remove self-interest. It’s trying to do right by your clients, trying to have good morality and transparency and all of the things we talk about in our profession, how would that be bad if we applied that to society on a whole? It’s an interesting question because it came up in an interview with our good friend, George Kinder, who many of you know from the industry, also a prior guest on one of our early episodes several years ago. Episode 15, just in case you’re wondering. Number 15, got it. There you go. Where he talked a little bit about fiduciary and really was trying to open people’s eyes to what is a fiduciary standard, especially when the DOL was coming out with it and it was quite controversial and all of a sudden some of the personal liabilities were being exposed, which we tend to enjoy, which I think George brings up.

And I think this is a really interesting question. Just remind us who George is and let’s jump into this conversation because this is very intellectual. So I’m excited for you all to have an opportunity to rethink this topic. George has been doing what you could call financial planning probably longer than most of us, if not all of us in the profession. So you can maybe call him the father, the grandfather, the OG financial planner, something like that. World Redound has coached and trained thousands of advisors, written multiple books on life planning, having deeper, more engaging conversations with clients. I could go on and on and on.

We’ll leave links for all this stuff. The guy is extremely well known. His reputation precedes him, no question about it. So it’s gonna be super fun to have a conversation with him today and dig in on what he’s been up to and what his thoughts are on the fiduciary standard. All right, let’s hear from George. George, thank you so much for taking the time to join us again on Rethink Podcast. It’s been some time since you were on here past and we’re sure that you’re up to some amazing work in supporting advisors around the world. Tell us, what have you been up to of late?

I think the really biggest thing that I’ve been up to is publishing this new book, which in a way it’s a, I mean, I can show it to you visually. It’s- What is the title? It’s easy to read. It’s called The Three Domains of Freedom. But the secret is in the subtitle, right? The truth is in the subtitle. What are those three domains? Each moment is yours, your life is yours. That’s life planning. And civilization is yours. That’s where we got to last time about fiduciary. How do we make that so that’s real? Cause we don’t believe it, right? We’re in this time of, you know, where we’re even questioning democracy people.

And so civilization is yours. What do you mean by that? So it’s been really interesting. I’ve been doing a lot of interviews across cultures, across Europe, some in Asia and here in America. That’s been what’s exciting for me is, and I’m trying to stir this up, right? I’m trying to see, can we actually, I mean, what I believe in is a fiduciary culture if you’ve got a global culture, how can you not be fiduciary? Because we all know that what happens with our incredible system is that there are these negative externalities, right? And they come up all the time. They talk about like 5% of what’s developed in corporate growth is negative.

Okay, so, but when you’re global and you’re scalable, does that mean that we’re making an efficient market for negative stuff like polarized news or like global warming or like challenges to democracy? I mean, these are really interesting questions. What is an efficient market if there are, if it’s a global market and it’s, and you’ve got negative externalities, what’s efficient? And I think if it isn’t working for us, how can it be efficient? Has it ever been efficient? Yeah, good question. Probably not. But as long as we were small, we didn’t notice that much. A little bit of where I grew up in Ohio, we had, it was rust-belled and we had coal and everything.

And we had streams that turned orange because of the mining, the strip mining that was happening there. So we’ve always had pollution, but it never caused what some of us are terrified about right now. I think I mentioned to you guys last time, the Scientific American a couple of years ago where they did a whole survey on, of scientists who said, we’re gonna go extinct in the next 100 years. It’s crazy. Yeah, well, that’s interesting. So you’re connecting this idea of efficient market to possibly sustainable market to really sustainable ecosystem and how the fiduciary mindset of looking out for the greater good and those people for whom we are responsible, maybe our children, our legacy, our grandchildren society is not something that is inane to us.

In other words, we have not been operating from a sustainable perspective. I’m trying to reframe what you’re saying in a way that could be contextualized on this idea of being a fiduciary for someone’s money goes much further. Yeah, you’ve nailed it, man. You’ve nailed it. And we can come back and talk about the fiduciary for someone’s money and how that relates to all this. It really does. I mean, it’s one of the cool things about our industry is that we know more about what fiduciary means, but we’re thinking about it. We’re wrestling with it. We’re debating it. But when you go to the larger system, how would a corporation be fiduciary?

And I think you have to look at what our most fundamental values are, what if you break some things systemically, what would be disastrous? So for instance, how can we have corporations that can place the truth, even in subtle advertising things, place their own self-concern ahead of the truth? How could their own self-interest ahead of the truth? How could we do that? How can civilization be sustainable with that when you’ve got huge corporations? Same thing with, you gotta put the planet first. You gotta put democracy first. And if you don’t do those things, man, with a global culture, you’re in trouble. So what’s cool about our, I think what’s really cool about our industry right now is we’re kind of at the cutting edge of exploring what fiduciary is for us individually and debating it and struggling over it.

And we’ve got an opportunity to take that as we understand it. And as you say, contextualize it into the larger societal frames that… Yeah, you can project that back out into society. I’m curious though, George, maybe we’re at the cutting edge of this fiduciary culture, as you call it, but why is there such a divide even within our own industry between what is a fiduciary, should we be one, shouldn’t we be one? And I think you mentioned something like this earlier is that there almost seems like there’s this disconnect between the companies and the sales forces. Like, okay, the sales force has to be a fiduciary, but the company doesn’t.

Right, exactly. And that’s partly driven by the fact that as human beings, we naturally wanna be fiduciary. We wanna care about our clients, whether you’re a salesperson or you’re way over on the fiduciary side, you want to. And so that movement has been suddenly happening, but large institutions, you don’t see them moving toward being fiduciary, not in any way. And that’s why what I’m arguing, just take ESG, look at ESG, right? I mean, ESG is kind of this voluntary standard and we look at, would it help our investing if this company was more ESG? But ESG is kind of an early attempt at what is it to be corporate and be fiduciary?

More than to our shareholders. So what I’m arguing here is we need to take ESG and make sure that it really holds the most important values, truth, planet, democracy. Make sure it holds the most important values and then make it as much of a requirement as limited liability as a benefit. But that’s just how it is. And then I think we find that we trust the news, we trust each other. I mean, what a shame it is. This is incredible. How is it that we find ourselves not even being able to talk about our differences with our neighbors? And if we just had a standard where the news media, including Axe and all the rest, had to tell the truth, the whole truth and nothing but the truth, there’s a bell curve around the truth.

We all know that. So they can have a bell curve to it. But then you and I could talk, even if you’re on this network and I’m on this network, we could talk about our differences. Can’t do that now. And you ask about why? I think it’s because the institutions haven’t bit the bullet and gone, no, this is a matter of pride. I wanna be proud of being a fiduciary to this culture, to democracy, to the planet, to the people. That would be a pretty good point. It would be fantastic, but why haven’t they? Obviously, I’m asking you to speculate, but why? Yeah, so we think a lot of times I get into this kind of debate and people go, yeah, it all comes down to human nature.

And we’re greedy, and we are. Each of us has, we don’t like to be a human being. But when you become as large as we have and really take over the planet and have systems, as I said, that are scalable, what you’ve got suddenly is a combination of the human nature and systems. And our human nature can be as human as it is, but if our systems fail us, civilization won’t survive. And civilization is who the species is. Civilization is homo sapiens. That’s what it means to be a human being. It’s interesting. I’m wondering though, because really you’re going into values and you’re going into priorities culturally and misaligned incentives where probably for the first time in humanity at scale, we can be entirely self-interested.

And we are incentivized to be self-interested, to create, to be an individual, to own and deserve an outcome associated with maybe work effort or not and protect it. And I really wonder whether it’s possible to get to an altruistic behavior when we are supporting such a level of individualism that goes beyond what’s in the greater good. And will we ever be able to get there? Aren’t the two at odds with each other? Seems to me. Yeah, they are at odds with each other, and yet we have been having this massive social experiment since the introduction of limited liability to incorporation. And so from that point on, that’s where that self-interest gets kind of systemically placed in there.

Well, what if you, I mean, yeah, yeah, yeah, there’ll be people who exaggerate this way and that way and all this, take advantage one way or another, but what if you also have systemically the requirement of corporations that they put the truth ahead of their own self-interest? Doesn’t that make sense? I mean, why would you ever have these huge, powerful organizations that don’t have to put the truth ahead of their own self-interest or democracy ahead of their own self-interest or the planet? So I think if you introduce that, it might take a generation to kind of work it out, but we’re in this, that only began a couple hundred years ago, less than that, it began in the 19th century.

So we’re in this massive experimentation, time of experimentation, but what’s different now is we’ve gone global and we have global negative externalities that can really break us apart. So we have no choice but to try to shift it. I’m with you, you’re not gonna change human nature that quickly, but I think you could change a lot of systems, a lot of inclination this way or that way with your systems. You’ve got me thinking here about the only way to change the fiduciary mindset is to make everyone recognize that the long-term is more important than the short-term. The short-term benefit, profitability, commission, fee, product alignment, whatever it is that got you to this situation in finance or in life is a focus that in the short-term, it’s okay to sacrifice the future.

And as long as you don’t care about the future more than you care about the present, this will always be a construct. So the question is, can society start paying attention to downstream, the impact, the traditional financial planners thinking long-term, this investment is long-term, this insurance is long-term, does it serve you long-term? And I think that that’s really an important point for the short-term pain, long-term gain question. Excellent. Really, I couldn’t agree more. And how do you do that? And my approach is to write a book that’s simple. You can get on the beach and read it. It’s inspiring, it’s kind of fun. And it gets us thinking like you guys are thinking.

The more people that are thinking this way and going, I think it makes sense to try to shift that. How would we do it? The more that you build a kind of a grassroots kind of movement. And if we can get a conference going, there you go, that’s what I’m looking for. If we get a conference going where we can debate this because it should be debated by economists. It should be debated, politicians, lawyers, everybody should get involved and think, how would we do this? How could we make this happen? But your short-term, long-term, that’s the media, isn’t it? I mean, without kind of beginning to get the media under control, where they’re actually committed to the truth, the whole truth and nothing but the truth.

We’ve faced this terrible confusion with media right now. Guys are seeing it, I’m seeing it. Where is it the free press or free speech? And a billionaire or a gazillionaire has, free speech, right? But he controls the press. I mean, there’s something there that needs to be really addressed because the media should be delivering to us the information we need to make decisions in a democracy. That’s what it’s there for really. And to make decisions about our own life, how to do our own life in the best way we can. But that’s not profitable, George, and that’s not investable. Yeah, that’s thinking today instead of tomorrow, right?

Is that in my shareholder’s best interest to tell the truth? Yeah. My goodness, my bottom line’s gonna go down. The stock price is struggling and I gotta bring it up, right? That’s right, we need some buzz on the media, right? We need to talk about something controversial. In fact, George, talk about something controversial. This is just way too ethereal. We can’t profit on this. I don’t know how far you guys go back. I’m joking. I can see Derek’s white hair, but. But he’s younger than I am. Ah, ah, nice, thanks, George. That’s right, I have a few generations ahead of you, I think, but. Now I’m older than you.

Just kidding. You go back to the 80s, 70s and 80s, we had. I was there. Yeah, we had a fairness standard in the media. There was a fairness standard. And so back then, yeah, and you had, I mean, what was the conservative network? It wasn’t like these wild social medias. It was ABC, you know? And then you had the liberal. Well, maybe it was CBS. Well, PBS was a little off the charts over a little further to the left. But they were all basically telling the same story. So we could sit together and talk. We had a fairness doctrine. That’s easy to go back to that.

That’s not a problem. So, and particularly if we recognize that the world’s in trouble. So, you know, that’s the question is, as you were saying, long-term versus short-term, is there enough news coming out saying, hey, you know, we got a problem here. But everybody I talk with knows that this polarization is crazy. They know it’s unsustainable. It’s inhumane. They know it. So. You know, it’s tough. This is, fiduciary standard is a moral standard. Right on. Right? And I don’t, and I think in the 70s and 80s, you had a moral police. It was called God. And if you didn’t do what was right by people, it didn’t matter if other people knew it.

God knew. And I think there’s an interesting construct right now because, and this is not to say that religion is required in order to have a fiduciary standard, but accountability is. And I think that that’s the interesting thing is that who’s being the accountability police? Is it gonna be the SEC? Is it gonna be the DOL? Or we can just, can we just do it as a people? Cause it’s the right thing. And that’s gonna be an interesting thing for all of us in our decisions going forward. Huge. That’s a huge, huge question. And again, it’s part of why I wrote the book. And we’ve talked about kind of the fiduciary aspect, but the first two domains of freedom are really about us personally.

So the first one is moment is yours. And you could take that as for someone who’s religious, you could take that as that’s God right there. I’m accountable. And, or if you’re more secular, you could take it as virtue or values or mindfulness, which is where I go with it. And how do we make equal in ours so that in fact, cause it’s not ours that we feel really lousy about ourselves. That’s just, that just don’t work. And so it’s very important that we do the work on ourselves. And I think we are, I think that’s one of the very slow things that is happening in the financial world is we’re slowly moving toward more of an understanding of what fiduciary actually means out there.

So I think we need to do both, but I think without addressing the structural thing and raising it and freaking people out around it, cause you’re gonna have the people with the power are gonna be really freaked out about it. But without doing that, it’s just moving too fast for the earth. Look at AI. I mean, we’ve got earth and democracy, but AI is the newest thing. And there’s gonna be something else biological within a decade, maybe within less than that. And how do we handle that if our structures are totally geared towards self-interest and not toward the truth or towards humanity? We have a lot to unpack from George.

This is what I should say. So many interesting comments and thoughts and ideas. At the end though, I wonder, he drops this bomb on us at the end that how do we fix this thing where our structures are not aligned with truth and humanity on a global scale? But remember structures, whether it’s an LLC, corporations, all the things, media, politics, blah, blah, blah, blah, blah. They are human constructs. Humans are self-interested. So he’s talking about this interesting dichotomy where we have this major problem because our structures are not helping us with really getting to truth and taking care of humanity. But if humans are self-interested, if humans are selfish, because essentially that’s what we are, how do we get out of this cycle if we’re creating things that are causing problems, but we’re creating them because inherently in the things we create is part of ourselves, part of our humanity?

You know, it’s interesting that you bring that up because there’s a bit of a challenge in the whole discussion. And it’s clearly understandable why this becomes a debate that is sitting in the background because what I think he’s really talking about, Derek, is an attitude of looking out for the greater good. And it’s true, all of the constructs that we have built. I mean, think about this, educational institutions, that helps the greater good, but it also helps an individual elevate their potential station in life by becoming more educated. And is that self-interest or social interest? Or the internet, the creation of the internet was it the self-interest of attempting to communicate easier and that’s helped now the entire globe, but it also hurts because of the, but it helped, but it hurts.

And so I think these negative externalities, these impacts as a result of our social and larger infrastructure choices, I think what he’s saying is that not having a greater good mindset in some fashion ones the risk of us basically cannibalizing or destroying or allowing a single actor to come in and basically polarize the whole thing. And I think that’s what I think he’s really saying. And of course, we’re gonna have to read the book to find out. Yeah, got it right here. I would venture to say that it’s not just posing a risk. I think we’re living it right now. I mean, he talks about the polarization of things and you and I were both around in the eighties and according to George, I’ve been around a little bit longer.

Yeah, that’s right. You were more mature, I think, not likely. But what did he call it? A fairness doctrine. We could have conversations and they weren’t polarized. We could disagree and it was okay, it was fine. And now we find ourselves in this place where you can’t disagree at all. And people just aren’t talking or when they do talk, they’re just like at complete odds with each other. It’s weird. That’s true. I’m sorry. Don’t you remember those times when we could literally, you could have a full out argument at the dining room table and then hug afterwards. It never affected the friendship or the family role.

And now we go family members unfriending each other in social media. They’re like, I don’t talk to you anymore. I see this literally with my own family. It’s scary and he’s definitely touched upon it. And I like how he ties it. So for all of you listening, you’re like, what the heck does this have to do with insurance and wealth management? Well, it does. Cause he’s tying the fiduciary mindset to all of this. And I don’t know if Pete would refer to the fiduciary mindset as a silver bullet or the magic pill, but he eludes, like it gets pretty close. And how does that connect to us?

Well, geez, out of almost all the industries out there or professions, we probably talk about the fiduciary mindset and what it means more than almost anybody. Yeah. It’s funny why that fiduciary standard has such a mixed, we’ll call it opinion, I think in the spaces we run in, right? And I don’t know whether it’s because those people who say, no, I operate under a fiduciary standard almost at a higher level, right? Like I’m in the moral high ground in all cases. And I’ve eliminated anything that has to do with the perception or connotation that I have any interest that is beyond my client’s interest. And then you have it in another group of people saying, how I get paid doesn’t matter whether I have a moral standard.

Like, hey, I go to church twice a week. You don’t even go. I got a bigger moral standard. I got a bigger personality. What a great analogy. But hey, I make a million dollars in commissions. I’m not, you know, I’m taking care of my families. It’s very much perspective driven. And I think there’s an interesting thing that’s going on here, which is how should the moral standard be policed? Does it mean that government, with all its wonders, is going to create the standard that we all have to live by and have personal, now personal liability and risk to? Because unlike the limited liabilities of these corporations that I think was really interesting we have to talk about.

In the fiduciary standard on our self-regulatory organizations and the SEC, the advisor has personal responsibility again for a breach of fiduciary role to a client potentially. But that’s the way this is going to be written. And it’s an interesting thing is should the government have that? And that feels like, oh, no, big brother. So wait, I don’t want that in its kind of roots. I don’t really like that. I like a less regulation environment and we should do what’s right. But I think there’s an interesting challenge of who’s going to be the moral police anymore and what is the stick? Well, as you said, is it God?

That’s a whole nother conversation, right? People get away with all kinds of stuff all the time. That’s it. I don’t know if there can be a moral police other than what’s between your two ears. And we know that some people just make bad choices and they do it consciously regardless if there’s the police around or not. But wait a minute, isn’t the construct, the modern construct of the internet, transparency and reviews socially, the actual feedback of society to say we can destroy your business by giving you enough bad reviews, right? The risk to the advisor not acting in the best interest anymore, whether there’s a government regulatory organization or God, whatever you want to look at it.

It’s business, right? Capitalism has figured out that basically if you don’t serve the customer or if you don’t do right by the customer, customer is going to know eventually. And now you have that transparency of wow, you have 15 one stars that say you take advantage of people. You don’t act in my best interest. That can be game ending for most companies. So my reputation is actually the moral standard. That’s what’s in it for me by taking care of my clients, maybe. No, I think you’re really onto something because you have this behemoth that you can’t control, but in some ways you can. What if you aren’t online?

Let’s face it, a lot of folks in our industry or profession, they’re not exactly digital marketing ninjas, right? They’re just, and that’s due to maybe comfort levels, compliance, blah, blah, blah. But if you don’t exist online, how can you have bad reviews online? Well, I don’t know. Someone could start writing reviews about you in general. Let’s say if you wanted to do business with me and you typed Adam Holt, you’re going to find whatever exists out there. Some I’ve curated, some I didn’t. Yeah, I suppose, but okay. Let me give you an example. So a couple of years ago, I was getting a mortgage, found an online broker that had a ton of great reviews.

Like, okay, doing some fact-checking, this seems legit, had an introductory call. Okay, cool, let’s go through the process. Ended up being the worst experience I’ve ever had getting a mortgage. Okay. The guy would read us, even the different brokerage companies he was going out to, like the Riot Act, totally rude, swore, like yelling, swearing, like terrible. So I called him out on it online, did a review. He threatened to sue me if I didn’t change my star rating and what I said on my review. And I didn’t even want to go down that whole rabbit hole. So I left it at one star, but I took the comments out and that was enough to put them away.

But so even that, so there are fallacies, I think is what I’m trying to illustrate, that even though that’s out there, it’s possible to manipulate. 9% sure that the hundreds of five-star reviews he had were all fake. Right, now after I did some really deep digging. So anyways, I don’t know what, I mean, the internet’s there, it helps, but unless I’m sitting belly-to-belly with you and I’ve got 10 of your clients that are telling me you’re good, that’s really tough. There’s ways to manipulate. And I think George even talks about that and some of the issues where we’re at now, again, he called it the fairness doctrine about how media back then tended just report.

Yeah. And that was it. And now we don’t have that anymore. We know what kind of debacle we have nowadays. Total. Well, gosh, you know, what’s more interesting on a news report is to have a guest person that’s got an opinion. Now it’s all editorial, it’s not facts. That’s it, right? What’s gonna get me the most ratings? A snippet. Right, it’s almost controversy sells. I mean, that’s more interesting from the news. I think the news has learned that’s why those systems like don’t even exist anymore. I mean, why the newspapers that heralded themselves on fact-checking are basically, that’s not even profitable anymore. Nobody wants to know the facts.

No. Well, this maybe goes to George’s point about limited liability companies and the fiduciary standard not being applied at a corporate level as it is to, let’s call it for an advisor level, which we touched upon too. They can get away with stuff that you and I or any other advisor who’s a fiduciary or not a technical fiduciary could never get away with. Yeah. And so it’s interesting. So I didn’t even think about it this way, but are financial planners with a fiduciary standard more aligned with the greater world wellbeing than any other profession? Dude, I don’t know that. Maybe that’s what he’s saying. I mean, cause I’m trying to think besides let’s say medicine, maybe medicine, right?

The Hippocratic oath. Yep. But you see that violated. Yeah, I guess so. There’s malpractice there as well. Malpractice insurance is what one of the most expensive insurances. That’s true, right? But you know what someone told me once, there was a study and unfortunately I can’t name it cause I remember it was an anecdote. So I don’t need to be factual anymore because who needs facts anymore? So I’ll just tell you the story. Well, something made up. Whatever, it’s a good enough story. It was on Reddit. It said that the malpractice claims was directly proportionate to bedside manner satisfaction. That’s interesting. So if, in other words, if someone had a poor bedside manner and the surgery went wrong, they were significantly higher to be sued because there was a schmuck, I don’t like that guy.

Oh, and it didn’t go right. It’s cause he’s clearly a jerk. Let’s sue him. But if you had a great bedside manner and it’s like, oh, Dr. Bob, Dr. Susan, she’s awesome. I know it didn’t go well, it’s really not her fault. We judge people and make decisions based upon how much we like them of whether they’re actually looking out for us. And any financial advisors are really good at building relationships. So I think there’s a good number of get away with a lot of crap that may not be always in the best interest of the client. Trying to think about where are there other standards of care that are built in?

I don’t know. Well, religion. Okay. If we’re talking about moral standards of care and connecting that to fiduciary, I mean, ultimately that’s what we’re kind of saying, isn’t it? Are you being a good person when no one else is looking? Are you doing the right thing when no one else is looking? Are you putting your self interests aside when no one else is looking? This is a dilemma of the comments though, isn’t it? What’s in the best interest versus what’s in the greater goods interest? Which is why we say best interest because we’ve got this whole best interest thing in our industry too. For who?

Well, that’s what I’m saying, but for who? I’m wondering what we’re saying because George is obviously a very evolved thought leader. Some people consider him the grandfather of financial planning, bringing in this idea now of life planning and holistic planning and comprehensive planning that’s getting thrown around from a marketing perspective versus what’s actually being delivered for clients. And I think it’s still evolving, Derek. I think it’s still, we’re still figuring it out. And I know for us at Acidbap, we’ve been thinking all about how do we reimagine financial planning? Is it really just what the technology spits out and to make big report and okay, your retirement is on track and kind of within this proportion?

Or is it really about how do I make decisions for the greatest good of all the things I’m going to impact? Not just can I retire, but can I leave a legacy? Can I make a social impact? Can I pay my fair share of taxes as opposed to more than my fair share? Can I write all of these bigger questions that are greater good enabled, but tend to lose out relative to, hey, should we buy Nvidia stock this week or? Well, can I get the cheapest insurance? George talks about that. Human beings, I think, inherently are short-term thinkers. And I wonder, so I’ve got my anthropology, archeology background for how many, many millions of years were we hunter-gatherers, literally hand-to-mouth, day-to-day, had to think short-term.

I wasn’t thinking about putting a farm in, right? I’m thinking if I can feed my wife and kids tomorrow. That’s right. And so I don’t know if it’s partly just in who we are, but I think we are short-term thinkers and it’s tough to do long-term thinking for the greater good when I don’t know if I can pay rent tomorrow or feed the kids next week or if my job is stable. We have a lot of short-term pressures on us that tend to get in the way of the long-term greater good that we try to go for. Not that we shouldn’t, but it’s a challenge.

Don’t talk to me about saving for my kids’ college in 15 years where I don’t know if I can get that rent check cleared this week. You know what I mean? That’s tough. That’s a great point. We take it for granted. I think sometimes when you’ve created some level of financial success, you have the luxury of thinking from a self-actualized pinnacle, right? Most of the planet is in survival mode. It really is. It really is. If it takes feeding my kids this week and I can make money by dumping that toxic waste in the waterway, like, all right, where’s the bucket? Yeah, I can’t look at my kids starving.

Yeah, I’m not gonna worry about greenhouse gases. I’m not gonna worry about like, okay, I just took advantage of child labor. I’m like, we gotta survive, right? And of course, that becomes a question of at what point is we’ve created these systems, basically, that are gonna start supporting just greater degradation of this entire planet? Like, how is it reasonable to say someone, don’t think about your family right now? Think about the greater good. You’re right. There’s gotta be a balance. I think that’s where he’s, maybe upset’s not the right word, but he’s pointing out the fallacies of LLCs, for example, where now the companies can afford to think short or long-term or whatever, because there’s some protection there.

And I’m not saying that every LLC or company is bad, but I can see where he’s coming from, that there’s some struggle, and especially when the rest can’t think or act that way. Well, you eliminate the downside. I mean, look, if I told you, listen, you could- How? You can make unlimited upside, but your downside is limited. Sign me up. Or buy me an annuity. That’s what it sounds like. I bought 500- Cash by life insurance, you’re set. That’s right. Give me unlimited upside. Limit my downside to only what I’ve got at risk. I’ve got a deal for you, but it’s- That’s right. It’s not a zero-sum game, is it?

Get rid of the product at the end of the month, so you better buy it today. Interesting. That’s funny. You know, although he did say that it’s gonna take probably a generation to truly get closer, and what I take solace in is that at least it’s a conversation, and I like his idea that it’s, there’s a, like, put a conference together. It’d be kind of cool to talk about it. Yeah, to force the conversation. Get the C-suites there. Get some politicians there, and just kind of see what comes of it. Because at the end of the day, how can you argue against what it means to be a fiduciary and have good morals and be a good human and all of those things?

Why is that bad, and why wouldn’t I strive to try to do, be a little bit better in all of those? I don’t know. Because somehow I have to realign it back to my own self-interest. In other words, that being the steward of other people’s self-interest, or maybe even next-generation self-interest, is in my best interest. But don’t, okay, we’ve got this Rebel Dads thing. Don’t us as parents, don’t we sacrifice every day so our kids can have a slightly better tomorrow than we did? Okay, so we’re fiduciaries for our kids. Maybe that’s the shining example that’s out there. And by the way, there’s no standard on that one either.

There’s very little policing on that one. But maybe that’s it, because I’m happy to take money out of my pocket to go do something for my kid that I didn’t have. That’s long-term thinking. Short-term sacrifice. That is true. How do we apply that across civilization, as George says? I don’t know, have more kids? Have more kids. Maybe, I don’t know. It’s interesting though, because we care about our kids generally. We care about our kids’ journey more than we care about someone else’s kids. And investing in a greater society or civilization sometimes is hard to connect that back to my personal interests. Although I think the environmental one becomes a really big one because there ain’t gonna be no country, no infrastructure, no whatever.

That impacts every single person. We really don’t pay attention. And I got his comment about not being here as a civilization in 100 years. Look, if you did a Monte Carlo on whether the civilization exists or not, that’s gonna be on the chart, right? There is a failure possibility. It’s a possibility. I think small, but I think it’s a possibility. Right, right, right, but that’s the thing. We just don’t even know. You don’t even know. But it’s okay. You’re still self-interested. Yes, we’re self-interested in our kids, but isn’t civilization just a bunch of kids that get old? Yeah, that’s true. And if we teach more kids to be at least self-interested in the next of kin, doesn’t that help civilization now?

We’re always trying to improve the next generation. Well, I don’t know, I’m just spitballing here, but maybe that helps. I don’t know. I know we teach our son about just being a good neighbor and being good in the community and helping others and manners and holding the door open for somebody when you walk into a business or whatever. Those are all little things, little nuggets, and then trying to give him experiences that were better than my experiences. Doesn’t that have almost a cascading or is it exponential effect? I don’t know. I hope so. I tend to think on the environmental and the overpopulation question and the massive famine and disease and all that stuff is that it’s just gonna become so much more prevalent for our kids that it is gonna be their present.

It’s not gonna be their future, right? It’s just gonna be more real than ever before. I think I just, you know, everything I’ve read and kind of experienced in my 50 years has said that- 50 years. Yeah, I know, sorry. But it’s just revealed myself. Half a century. Yeah, I was totally awake for that entire time too. It just says to me that they’re just gonna have bigger challenges because there’s more people. Yes, there’s more money, there’s more technology, there’s more infrastructure, but it’s just more people. And that’s gonna cause stress on the house. You know, the house can only hold so many people. Let’s go.

You don’t have to figure it out. Let’s get the Mars here. That’s right. We need some expansion, right? We need a bigger backyard. Yeah, but who knows? Who knows what’s gonna happen there? But I think kind of bring this full circle. Let’s talk about what advisors can do. What can they do or what can they rethink in their practice today that might set them on a path that making a difference, even locally or even societally in terms of how they interact with the world? I would add one thing that we should, for those in our audience that are C-Sweets, I think there’s some, even though you might have the LLC arrangement, there’s some, maybe some things that as a leader of a larger company that you might be able to do as well.

Even if that’s just a trickle down to your advisors. For me, Adam, I think the biggest thing that I always did as an advisor from day one, which I found a lot of success in that I think other advisors could too, was that although I wasn’t a fiduciary or a CFP or a financial planner for many years, my number earlier, I was a life insurance agent slash registered rep. That’s it. I always had the mentality of do what’s right for the customer and eventually I’ll get paid. Yeah. And if you live by that, when you’re driving home at nine o’clock at night, after a long days of sales meetings, are you looking back at, did you write the right business for your clients or is it the right business for you?

Because as you said earlier, those clients will tell their friends if they felt like they got sold or not. That’s true. That’s true. That’s a moral standard. That’s a moral standard. That’s a moral standard. And it’s hard to define that, because that’s open to how you define morals. Well, it’s true. And the moral standard is your accountability to yourself and how you treat people and sleeping at night. If that’s that strong to you, like it’s in your core, like I can’t sleep at night, I got to fix it if it’s not right or I got to communicate it if I didn’t. 100%. But I think it’s very challenging to scale that, especially without a religious underculture or kind of like as we’ve gone away from that kind of standard.

Well, we don’t have to scale. We don’t have to fix this problem on this podcast. Each of us listening need to decide what our specific contributions to a moral standard is gonna be. And whether we’re gonna subscribe to a governmental one or a personal one, it just is in the greater good. And the thing I think about it is that there’s an opportunity to differentiate and what’s in it for me personally. And I like to bring it back to like, okay, I’m gonna have a moral fiduciary standard. What’s in it for me? We think that this is actually going to be attractive to individuals who wanna work with advisors who are clearly known and espoused to be a fiduciary and working for their client’s business.

Not just tongue in cheek, but they actually talk about it. They write about it. They live it. They walk that talk. Well, consumers are looking for this more and more. They’re more attuned to it. Even the World Economic Forum just published a report in July about the future of financial advice and what customers are really looking for. So it’s there. And I almost would equate it like a gut check. They have a gut check. They know if you’re actually have morals and you’re trying to do the right thing or not. And if you aren’t, they’re probably gonna figure it out eventually. Yeah, although financial planning and financial advice is a long-term feedback game, right?

We don’t get that feedback for multiple years, the relationship is working, let alone our guidance is working. But that is only true if you don’t tell the client, right? And we need to probably talk about what we’ve done for the client in this calendar year that served them, even though it didn’t always feel comfortable and make difficult decisions. And I think we have to stay on that plane as well. So communication is probably in a really important part of fiduciary because the clients don’t really understand what’s going on in the back kitchen, right? And most don’t wanna know. Yeah, that’s right. But they kinda wanna know that you’re making decisions, some of them are gonna work, some are not, and you have to be honest about it and show why you did those decisions to validate why you still need to be on this team.

And I think that’s, I think advisors are gonna see a lot of pressure from lower cost options, from digital solutions, AI enabled robo, and what’s gonna keep the relationship currency strong. It’s gonna be really showing that you are looking out for the client best interests and you can prove it. But that means you need to continually prove your value proposition. So that’s what I think advisors can do. That’s a tactical takeaway, sir. There’s communication when things are good and bad. Hey, you’re down this month or this quarter, here’s why I think it happened, here’s how it impacts things, or you know what? I made a mistake, or sorry, I didn’t get back to you in time, or whatever.

Just having that open dialogue, not always, man, I remember the early days, you could never do anything wrong. Always had to have the right answer at the right moment and no, this will take care of all your problems and it cures cancer. And it’s free. And it’s free, yeah, yeah. That’s right, exactly. No, I think that’s it. I mean, maybe that’s it. Is be transparent and be honest and maybe be vulnerable, but also be prepared to say, well, if it didn’t go right, or didn’t go in your favor client, here’s what we did about it and here’s how we fixed it. To show that you’re on top of it.

Because I think one of the bigger fears that a lot of consumers have, especially with technology only, solutions and financial advice is that there’s just no transparency. These are black boxes and there is no throat to choke, right? Like, what are you gonna curse the bot out? I mean, what are you gonna do? So there’s the reality is that, who’s correcting when the auto drive took you off the road into a ditch? Like who’s getting up there, getting a shovel and say, let’s go. I got your back. So I think that’s gonna be important for us to communicate again and again and again, to prove that when things get tough.

And I think they will at some point in this journey, tougher, we’ll call it. They usually do? Yeah, that they’ll be like, no, no, no, I want Derek on my team. Cause Derek, when times are tough, Derek is upstanding and he’s like on my back. Yeah, yeah. It’s that humanity, it’s the trust, it’s the, it’s on their moral radar, if you wanna call it that. Yeah, that’s true. Well, you know what, actually that’s a really important thing. And I think we should probably close with this. One of the things that you’re doing with Coupler, it’d be really interesting for lead generation. If you can actually do a morals alignment component, like this is what I care about.

This is what we value. This is how I wanna be communicated in good times and bad times. And try to find a way to connect advisors and customers with an alignment of like how we approach things. That would be really different, wouldn’t it? It is, well, we’re already doing that. We ask a lot of very interesting questions and it’ll evolve, but we’re starting to gain insights into that human psyche and how important is morality and transparency is huge. That’s probably one of the biggest things. The way, like we’ve flipped the script on the way that a consumer advisor connect and that transparency has been really well received on all sides.

So we know that that goes right back to your point. That’s extremely important. Awesome. But this isn’t a sales pitch, so don’t worry. Yeah, no, look, this was like our, probably our most off-piste conversation in a long time, but I think it was interesting to explore this topic that George brings up so passionately. So we wanna thank George Kinder for taking time to actually join us. The only person we’ve had on twice, I think maybe we’ve had a couple other people, but I think that it was really cool to hear his very evolved thinking and I hope that this caused you some reason to rethink what you’re doing or your approach, Derek.

I appreciate your time as well on this. Yeah, it was a really good chat, my man. Really interesting. Definitely thought-provoking. Would love to get comments from folks. If you’re listening to this or on social or whatever, hit us up, let us know how this resonated with you. Were we way off base? Kind of on base. Yeah, I’m a link for George. I mean, it’s awesome having, I love George. We’ll have a link to his new book and other resources in the show notes for everybody. But yeah, what’s the next topic? We’ve got an interesting one coming up around life insurance? Yeah, well, I think one of the interesting things that comes up around fiduciary more than any other topics is life and annuity.

So we actually asked a fee-based advisor consultant who does insurance to join us and that’ll be an interesting discussion because coming off of this, we might have a huge moral high ground that we can bring in and complicate the whole issue of what’s acting in your client’s best interests around insurance. So I think that’ll be fun. Awesome. Well, great chat with you, buddy. And thanks everyone for listening. We appreciate it. And we’ll see you on the next one. Absolutely. Take care, guys. Thank you for listening to Rethink, the financial advisor podcast with Holt and Notman. Be sure to subscribe now and join the ongoing conversation.

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