Ed and Chuck talk about the role of the investment adviser. What happened to the term “stock brokers”? Life insurance products and salesmen. They walk a thin line. Financial planners, investment advisers, investment managers. Same? Different? Exploitative? You win they win. You loose they win. Quants of the World.
Welcome to our listener-supported podcast, Money Talk, uncompromised absolute financial truths behind financial perceptions with host, Ed Sutkowski and Chuck LeFebvre. Let’s listen in.
Chuck LeFebvre: Hello. I’m, Chuck.
Ed Sutkowski: Hi. I’m Ed.
Chuck: Today a couple of things. First of all, we’re recording in the middle of a thunderstorm. If you happen to hear some thunderclaps in the background, that’s the reason. We’re excited enough about the topic that we’re going to plow ahead, despite the risk to our safety. We’re talking about the accumulation process and particularly we’re talking about the role of the advisor, and by this word we’re really referring to investment advisors. Now, this is an industry that is hard to ignore the existence of and the people who fall under what, I’m just going to use this term, investment advisor, as a very general term for the category. There’s a lot of different, more specific roles that they can fall under. I’m thinking about these in terms of maybe the historical– how the industry has developed over the years. Starting with we used to use the term broker and more specifically people used to use the term stockbroker all the time. It’s a term that really the industry itself has moved strongly away from just because of the negative connotations that that term has taken on. When I use the term broker, what I’m referring to is somebody whose function is really that of linking up one investor who wants to buy or sell a security with another investor who’s going to be on the other side of that transaction. Then typically that service will also involve providing some type of research or analysis that’s available from the brokers firm regarding what would be considered to be a good security. Typically, we’re talking about stocks and other securities, what would be considered to be a good security versus a bad security to either buy or sell. Again, because this is a transactional relationship, typically compensation is paid on a transactional basis. In other words, a broker will typically charge a fee that’s either a flat fee for a transaction or some fee that’s based on the number of shares of something being sold or a fee that’s based on a percentage of the value of what’s being sold. That’s what we’re talking about when we talk about a broker. Somewhere along the way, the life insurance salesman got into the business of selling life insurance products as investments rather than simply being contracts that are designed to pay out money after your death to pay for final expenses and that sort of thing. That I know that this is something that’s near and dear to your heart, this particular, let’s say, evolution in terms of how the life insurance market came away from selling life insurance as a pure insurance product to more of an investment product. What comments do you have about that?
Ed: Well, there’s always the buy term and invest the difference, which by the way, if you’re going to invest the difference in low cost index funds, you’re always going to win until age 65. Age 65, the term annual premiums quadruple at least, you’re dissuaded from keeping the policy. I understand that only 20% nationwide, industry-wide, 20% of the term policies ever are cashed in. It’s a great investment for the insurance company, and on the cash value products, just remember the friction costs there. 100% of the first-year premiums are commissions 55% year one and then five years– I’m sorry nine years at 5% so we have 45 plus 55 is 100%, and bear that in mind in terms of friction costs. If that works for you that’s fine with everyone bearing in mind you can’t detect premiums and the amounts come in at death income-tax-free. However, if you’d have cash policy out, you’re going to have income on the equal to the excess of the amount received over the amounts you paid in. It’s designed to force you to keep the policy.
Chuck: Yes, and somewhere along the line these life insurance products started to look an awful lot like an investment account. I mean if you get these things that are– They have all these bells and whistles where the policyholder gets to select investments inside the policy which is just a very confusing concept. Maybe at some point, we may dedicate an episode of talking about exactly how those products work.
Ed: The variable.
Chuck: The variable life policies and the variable annuities which is just kind of a different version of the same animal but they’re kind of designed where they really give the impression to the investor like they’re investing in the stock market, when in fact what they’re doing is buying an insurance policy. Because of that, a lot of people think of their life insurance salesman as their investment adviser because they’re selling. In fact, you need the securities licenses to sell some of these insurance policies.
Ed: That would mean by insurance a license, we’re not sure they have sent–
Chuck: These variable life insurance policies, these variable annuity policies that have features in them that are designed to mirror or they’re essentially marketed as an investment in the stock market or in securities. For instance, I could be an agent for XYZ life insurance company, and I can say, “Yes, I’m going to sell you this universal variable life policy and you pay me a premium of, let’s say, $50,000 a year for this policy.” The death benefit’s $1,000,000, but that’s not what I’m here to talk to you about. What I’m here to talk to you about is the way that $50,000 of premium is going to be invested inside the policy in order to build up a cash value that potentially someday you could pull back out of the policy and you can invest in the is this mutual fund or you can invest in that mutual fund or you can invest in this other thing, all inside this life insurance policy. Because those are being marketed as investments in securities, what would otherwise be in publicly traded securities that only someone with a license that’s issued by the securities regulators, like a series six license or a series seven license that a broker would have. You need to have that same license in order to sell some of these insurance products, versus if all I’m going to do is say, “Yes, I’ve got a life insurance policy here, the premium is $12,000 a year, and that’s a level premium for the next 20 years and the death benefit is $1,000,000.” I don’t need a securities license. I need an insurance license to sell you that, but I don’t need a securities license.
Ed: It’s kind of a recognition that this is a security and that isn’t suggesting that because you pass those exams, you are devoid of conflicts and you’re not necessarily acting in the best interest of the proposed insured which we’ll get into later with Chuck, the differences between an investment adviser and an investment manager.
Chuck: Yes. This term investment advisor, first of all, seems to be what’s kind of have been adopted now industry wide as the preferred job title. Even someone who’s serving the function what I described before as a broker, their business card is probably going to say investment advisor, and many insurance salesmen their business card is going to say investment adviser on them.
Ed: Or a financial planner.
Chuck: Financial planner is another widely used term in this industry, but when I use this phrase, investment advisor, what I’m referring to is someone who’s operating as a registered investment advisor. By that, I mean a firm or person who is providing advice on a non-commission basis. This is advice that typically involves charging a fee based on the value of the assets under management. People who serve as a registered investment advisor will often refer to themselves as fiduciaries. Part of their marketing conversation that they have with potential clients is that they’ll say, “Unlike these other people, I am a fiduciary.” What that means is that under the regulations that apply to them that they’re required not simply to recommend investments that are “suitable” for the investor, but that they are supposed to recommend investments that are in the best interest of the investor. I think the theory behind the way the fees are charged and the way the regulation applies to these folks is that by charging a fee that’s simply based on the value of the assets under management, rather than a transactional fee, they’ve taken a step back from, for instance, recommending a particular investment because the commission associated with that sale is a little higher or a little lower than other products that might be available. In that sense, there’s a little bit of a detachment. The important thing, in my mind, in getting back to your question about the different between an investment advisor and an investment manager, at least for the purposes of our conversation, is that this investment advisor is regardless of what’s legal authority is being granted to them by the investor, their role is primarily advisory in a sense that they are having conversations with the individual investor about what they think are recommended investments, and the individual investor is participating in helping with those selections and the strategy and so forth. In my mind, for the purposes of our conversation, when I talk about an investment manager, what I’m really referring to there is someone who– You could be a coma and completely checked out, and they’re still going to manage your investments. There are certain types of investment strategies that are very complicated or happen at a very high speed and require a great deal of discretion on the part of the person who’s executing it. An investment manager would be someone who is making trades and making decisions on an ongoing basis and might sit down with a client once a month or once a quarter. Or, a couple of times a year and say, “Okay, now, let’s review these 40 decisions I made without even telling you, and look at what happened here.” Typically, when you’re talking about someone who’s engaging in hedging-type strategies or strategies that involve buying and selling options, or getting into esoteric-types of investment vehicles, really the only practical way to do that is to have someone where you’ve just released the authority for them to make decisions on your behalf, and you’re not going to get a call or yes for approval. That’s just going to happen more or less without your advice or consent. Then, you’re just going to be holding them accountable for nothing other than the results.
Ed: Chuck, thinking about all these various roles. In my mind, I come up with a continuum. On the left-hand side is the teacher. The teacher has no exploitation involved and, by the way, is typically undercompensated. That person doesn’t exploit the students, is doing it with you toward creating intellectual value and is completely free of conflicts. Then you go from there to the investment advisor and the life insurance agent , sound like their producers with your best interest in mind but really, have their own best interest in terms of the percentage of the assets involved, which I think is atrocious as the contrast with a time-based, perhaps on performance but they will not share on the downside. I recall discussing this with one investment advisor this percentage, “Why is that? Just Why? Well, I feel like I’m a partner with you? Well, then you share the downside a partner shares the upside down?” “No, that’s not the way that industry works. That’s the question, is how should the industry work rather than how it does work?” We start with the teacher and we go then to the life insurance salesman and the investment advisor then we have the investment manager, who is charging typically a percentage, but is involved in some things that you couldn’t do.
Chuck: Right, exactly. Or, if you were going to do it yourself, you would really have to devote such an extremely large chunk of your time to it. That, effectively you would be a professional investor yourself.
Ed: These are the quants of the world.
Chuck: Yes, these are the quants of the world. These are the people who, in my mind, they might be running a strategy for individual investors but their day-to-day activity is very much like what, for instance, an investment manager working at a mutual fund company would do in the sense that they’re not spending a lot of their time glad handing clients and taking people out to dinner. What they’re really doing is they’re staring at computer screens and looking at numbers and making decisions about what to buy and what to sell. No one who I described in my list here is someone who would be on the continuum that you just described in the place where you said you find a teacher. Now, of course, if any of these people are listening to our podcast, 100% of them will be offended by the fact that I just said that, because many of them market themselves and probably even think of themselves very much as being in that same spot on the continuum, meaning that of a teacher. The truth of the matter is, no matter how hard they try, no matter how hard they attempt to distance themselves from any type of conflict of interest, it’s just a negatively part of the relationship that any of these players have with their clients. It’s very easy to spot that and understand why a conflict would exist, if you’re working with somebody who is in a commission-based relationship with you.
Ed: I think the real estate broker. I know, as these podcasts continue, I’ve got to watch out for bombs in my car. We’re not going to have any friends, which is okay. I feel good about what I’m doing, but the real estate broker represents both sides. It’s just beyond my comprehension, how you can possibly do that, versus a buyer’s representative and a seller’s representative, but that’s for another day and then excuse me, Chuck.
Chuck: Well, in the context of somebody who and now I’m talking about I’m going to this category they previously described as a broker, they’re not representing the buyer and the seller necessarily, they’re just representing you, but like the real estate broker and the real estate agent, there’s always going to be a strong bias towards a trade happening because they don’t get paid unless there’s some kind of a transaction that will generate a commission. That’s conflict of interest, number one. Conflict of interest, number two is that certain investments will generate higher commissions and other investments. No matter how hard they try or maybe even convinced themselves that they’re not letting the level of commission affect what they recommend, it’s just human nature. That’s the people who are designing those commission structures are doing it because they know that it’s impossible for a real live human being to ignore the difference between a 4% commission on something and a 7% commission on something, and they’re trying to entice those brokers into making recommendations that are not necessarily in the best interest of the client.
Ed: I recall reading an article in The Economist that suggests anyone can denigrate the real estate broker. The fact of the matter is 85% of the transactions involve a real estate broker, and it’s an industry that seems to operate only with friction costs, but although there’s some residential area, there’s some changes in the offing, but whether that’ll really result in a lower net cost, everyone is a different question.
Chuck: Well, there’s some parallels there because the changes that you’re finding in the real estate market is the availability of essentially automated brokerage type arrangements.
Chuck: Right. You go on Zillow and some of these other websites where they’re replacing the function of your traditional real estate agent, but they are still in fact performing that brokerage function, they’re still an intermediary, they’re just an intermediary that’s charging a much lower fee. You do see the same thing happening in the securities trading world where no matter how far up the ladder you go in terms of getting into these investment houses and these institutional investors that are trading gigantic blocks of stock and enormous amounts of money changing hands on a daily basis, those are still brokered transactions, there’s still a brokerage function that somebody is doing and there’s a friction cost that is now in that context extremely low but it’s still there, you don’t you never eliminate it completely. Yes, this industry, just like the real estate industry, is one where automation is allowing those transaction costs to drop quite a bit, but just like the real estate industry what you’re finding is that most individuals most retail people really do not take advantage of that technology, and they’re still primarily because of the need or the desire to have some a personal interaction with somebody as they step through a transaction, they’re still in one form or another paying a fee that’s the equivalent to those old-fashioned brokerage fees.
Ed: It’s the Levin default to the truth, you really want to get someone to handle it, I can use my time in a more productive fashion if I have Peter handle this. Well, that friction cost is substantial. We want to believe Charlie, Pete, the broker.
Chuck: Right, exactly. Anyway, one conflict of interest that you just– that at least the people are getting commissions just can’t avoid is the conflict that arises out of the fact that the only way to get paid is by earning a commission, but even for people have removed themselves from that when you’re talking about like a registered investment advisor who is operating on a percentage fee or even somebody who was going to charge if you know that rare bird who would charge a flat fee or an hourly charge to provide investment advice, they still have conflicts that they just can’t quite no matter how hard they try they’re just going to be stuck with these things. One of them is that, there’s what I refer to as the referral dependence or referral relationships which is that you’re talking about people who typically part of their interaction with you is they’re engaged in – we’ll talk about this in a little bit – they’re talking about more than just selecting investments but they get into a quote unquote financial planning type conversation with you, and that necessarily implicates the work that’s being done by your attorneys, your accountants, all sorts of other people that are in in your financial life, and typically there’s a network type relationship between the financial advisor and some of these other professionals and they don’t want to rock that boat, and so it’s very hard for them to buy independent advice with respect to that.
Ed: I was thinking locally years ago there was an estate planning council comprised of life insurance salesmen, lawyers and accountants. Now that has been expanded, I think. The large part has gone away, but the point is back-scratching.
Chuck: Well, yes, and that happens all the time. I don’t think it’s realistic for any of us to expect that not to be the case. It’s just that you need to be aware of the fact that those relationships do exist, and they do impede someone from being able to provide true independence when they’re giving advice. Then the third thing is more of an operational aspect, which is that any of the people who are working in this industry have some back office system in place where they’re running software or they’re working with particular custodians or they need certain things to operate in order to do investment analysis and performance analysis. Their ability to exercise independence is largely dependent on the flow of information that they can get from these vendors that they’re relying on. Quite often. Well, I’ll give you an example. There’s an investment advisor, registered investment advisor who I’m very familiar with, who likes to recommend and use and essentially set up or clients’ accounts at TD Ameritrade. Then when these statements are generated by TD Ameritrade, those statements are– For instance, if you buy or sell a mutual fund, TD Ameritrade will charge a transaction fee for that trade, and they do not put the transaction fee on the statement. It’s simply you have to do the math and look at the purchase price or the sale price of the trade and figure out that, “Hey, wait a minute, I paid a little bit more for this mutual fund than what the per share rate is that’s disclosed on this transaction.” The difference turns out to be a fee, that’s simply hidden. There’s no other way of putting it. When you talk to this investment advisor about, “Hey, you know what? This is a disservice to your clients to have them on this platform where these fees are being hidden.” That advisor has become a dependent in some sense on that relationship, and so those fees just continued to not be disclosed to that particular advisors’ client because the relationship with TD Ameritrade at the end of the day ends up being more important than the relationship with the client.
Ed: I’m getting back to my continuum, starting with the teacher, which is as far as I’m concerned, the most undercompensated person in the world provides the greatest benefit in the world. We’ve talked about the investment advisor, the investment manager of life insurance, et cetera. We’re now seeing the CPAs. I know we don’t get referrals from CPAs; we don’t get referrals from anyone except existing clients, which works out fairly well, and I’m pleased to be able to say that, but the CPAs are looking to increase revenue. I understand that everyone’s got to make a living, but they’re handling investments, which is they cloak it by saying it’s a different relationship, different platform, different company. Well, it’s owned by the firm and the profits in order to the benefit of the firm. What I’m saying is I find that not outrageous, but very difficult to understand. The accounting firms does the text returns for the individuals or business organizations. They have inside knowledge. Next, they’re going to be handling it, they’re going to be acting as perhaps trustees, but handling the investments on a percentage. We’re really talking about a fiduciary relationship. By that I mean someone who’s acting in your best interest and they’re not making a zillion dollars over on a percentage basis. That leads me to what we do every day as lawyers, we are fiduciaries. That is to say we’ve got to express our views that are in the best interest of the client, not us, which means everything, unless the client wants it another way. It’s an hourly charge subject to audit. Now you are not going to make a fortune practicing law unless you’re in a some percentage basis with personal injury or charging percentage on the workers’ comp or whatever, because there aren’t enough hours in a day to make a significant part of gold, if you will.
Chuck: Well, isn’t that the reason why? I mean, I think that what you just said about lawyers is what most CPA’s would say about their core service of providing accounting advise, and yet isn’t that sort of the reason why they’ve branched off into providing all these other financial services because of the fact that it was hourly charges are not, such that–? Look, accountants and lawyers can make comfortable living just simply staying in their lane and providing that core service, but it seems like in this day and age everybody is looking to become fantastically wealthy. We talked about this in one of our earlier podcast that that chase is happening, people believe that all they need to do is somehow get a higher income out of their work life and that’s the key to becoming fantastically wealthy. Frankly, when I see these accounting firms and it seems like almost all of them are now doing this where they are offering investment management services as sort of a add-on to their accounting services. First of all there’s a couple of things I’m always immediately struck with and one of which is you’ve got to be frankly kind of greedy to not be happy to just being an accountant and provide those services and need to have this sort of add-on business that’s being added to this. The second is they’re not offering these services at any kind of a discount versus what someone would pay anywhere else, and so where is the evidence they’re as good or better than the other offerings in the community? To me it just seems like just coming out of the gate you’re acknowledging that you’ve given up your independence in offering advice, if you can’t even express an independent advice about who would be a good investment adviser for your client.
Ed: Stay away from the backscratching. I must say that in the accounting area, let’s assume the firm is doing your tax returns, they have access to inside information and so they can focus their marketing on a particular individual with a lot of money.
Chuck: That’s exactly true. The other thing that I’ve personally witness them do is to apply what sometimes turns out to be a fairly uncomfortable level of pressure on their accounting clients to bring the investment business over to them. I’ve had clients of my own who’ve expressed that discomfort about the way the relationship with their accountant has changed because they’re constantly being marketed to in these meetings that are supposed to simply be about the core accounting functions, and so it’s a real shame to see that that’s happening to that particular industry, and frankly, yet we had acknowledge there’s plenty of lawyers out there that– I mean our industry is not exactly innocent.
Ed: Oh, to say the least.
Chuck: I mean, it seems to be happening in virtually every industry where somebody arguably can make a pitch that they would be a good investment manager, that suddenly there out there doing investment management, investment advise.
Ed: The real issue with all this it gets back to tax. All this rewards our ordinary income, the tax confiscates a significant amount of that return.
Chuck: Yes, that’s the real shame. We’re talking about this from the perspective of the accountant or other adviser that-
Ed: The lawyer, the contingent fee.
Chuck: – the person who’s trying to boast their income by providing these extra services, that at the end of the day, they’re chasing a unicorn that they’re not actually going to catch. It’s going to be a disappointing experience for them and at the same time they’re doing a disservice to their clients. I think that that’s– We can really say is to the potential clients out there is “Just avoid those traps to the extent you can find someone who’s uncompromised. That’s who you should be working with. Each of your various advisors probably ought to have the integrity to stay in their own lane.”
Ed: Yes, and if you fear driving a Ford in to see your advisor or driving multiple BMWs, one for the advisor, the spouse and all the kids, the multiple vacation homes, I don’t get that, there are some indications that, how do you measure a relationship. The point is it’s got to be objective. Yes, the lawyers are making a lot of money in a contingency basis, but I don’t think they’re free from doubt here. They’re not going to take a case, unless they know it’s close to a slam dunk, whether it’s malpractice, legal malpractice, accounting malpractice, whatever it is. They will not take a case unless they see there’s a return on the investment here and the investment, the time investment. We are very much opposed, I think, on contingent fees and percentage charges. I’m not sure that we’re the exception, but I do know that I’m not getting a whole bunch of many referrals from some of the folks that we’ve castigated. That’s overstating it. We’re suggesting know what’s coming to you from the other side, and that could be a good thing. You may want a relationship, you may need the psychological help, and it may work for you. That is not to say that these people are all individuals who should be avoided. It is know what’s going on before you make a decision.
Chuck: Well, I’d like to take that thought and use it to circle back and maybe be a little more explicit about why it’s troubling to see accounting firms will just pick on the accounting profession for a while. Why it’s troubling to see these accounting firms offer investment advisory services, and there are law firms that are engaged in investment management too?
Ed: And acting as trustee.
Chuck: Acting as trustees and engaged in active investment, and in that function too. In fact, there are law firms that do that they’re actually getting the majority of their revenue off of that type of activity these days. With that caveat that the accounting business is not the only industry out there with issues, I’d like to pick on them for a little while longer, and make sure that we’re being clear about why that’s an issue. Specifically, why it should be an issue for a client. Tell me if you disagree with this, but I think that one of the nice things about having if you’re going to work with an investment advisor, to have an investment advisor, and then have a separate attorney and have a separate accountant, is that these people, at least in theory should be operating independently from each other, and to a certain extent looking over each other’s shoulders. When you’re an accountant is also the person who’s your investment advisor, then there really who is it who’s going to tell you that your investment advisor, for instance, is charging a fee that is unusually high in relation to what other advisors in your locality are charging? Who’s going to tell you that “Gee, it’s interesting that we see all the losses that you’re reporting on your taxes this year, all our other clients have had a pretty significant year”? If your accountant is also the person who’s providing that investment advice, in summary, it’s who’s going to provide you with the information that you need in in order to develop your own expertise to be able to gauge the performance of your advisor, of your investment advisor, or your investment manager? Let’s face facts here. One of the things that’s a threat to anybody who’s providing investment advice is the client’s level of sophistication or the client’s level of expertise and the client’s ability to be able to recalculate or second guess or push back on the advice that they’re getting from their investment advisor, and to the extent what you’re doing by offering if you’re an accounting firm and you’re offering this whole menu of services that fold everything under one roof, you’re in a way preventing or slowing the process by which a client might become a better consumer of investment advisory services and be able to push back. Am I saying too much there?
Ed: No, no, maybe by way of a summary, we want to make sure you develop your personal expertise. If you’re looking at advisor, ask the advisor for a copy of the advisors last three year in balance sheets, let’s see their investment performance before you decide to go with another. If they say that’s not relevant, and speaking of the smaller organizations, the large organizations, the Schwab’s and Fidelity and the Vanguard, will not be in that same category because all the information is available, and those advisors are compensated in W2. They don’t have skin in the game essentially, these other folks, there’s no percentage charge for those people. Up your expertise, ask for the last three years balance sheets, let’s see how you’ve done with your assets, if they typically say, “No, it’s not relevant.” Be careful, don’t go there. Avoid a percentage charge irrespective of performance. Make sure you have benchmarking. You’re looking at the S&P total return index fund. That’s your benchmark, and see how the investment advisor handles that, how do they compare with the benchmarking, and they can provide that information, be reluctant too. The holistic approach is really a curiosity in this whole industry. “We will not only help your investments, we’ll help in your estate planning, educational opportunities for your descendants or grandchildren. We’re going to do everything possible.” Now, that is just silly. Are you going to go to a surgeon and ask that surgeon for dental advice? No, you’re going to go to the surgeon for a specific reason. Make sure that these holistic approaches are not simply a cover for excess fees and costs and expenses. Make sure you have a full disclosure, all fees, costs, expenses, including from lawyers, “What is this going to cost? I had one engagement just recently on a very complicated situation. This professional happens to be a licensed professional. Ed, what is this going to cost?” My response is, “What is it you want me to do?” I can’t control this negotiating with the other side of this buying into this business. There you can’t possibly come up with a quote, but there are some finite things that you can come up with a quote should not to exceed. Avoid family. Avoid friends. These folks are not your friends. Avoid accountants. Avoid attorneys. In short, forget about percentage charges, if it’s advertised, don’t eat it and don’t use it. Make sure you unbundle the activities and be your own person. Chuck, any other observations there that I’ve missed?
Chuck: No, I think you’ve run through a pretty good list, there are things that are pretty important for people to consider when they’re thinking about entering into a relationship of this type. Now, I think just for clarification, there’s a difference between using someone or firm as an investment advisor, investment manager versus merely a custodian. That’s a completely different thing. For instance, now, I guess I shouldn’t say it’s completely different because that custodial arrangement for a retail investor always involves some type of contract that involves an investment advisory function. It’s just that you can do that and really just use the custodial aspect of the relationship. For instance, Schwab is a great example of this. Schwab is a brokerage house; they’ll charge commissions for buying and selling things. You can set up that relationship where you are not being sold advice, you’re not being told what to do, by somebody who’s earning commissions. You can simply open up a Schwab account, and use it as a custodial account to hold the various investments that you select on your own
Ed: In the platform. Now, I must tell you, neither of us own any shares the Schwab. I’ve had Schwab as my custodian for over 30 years. Why? Their platform is just fantastic. The information that we can glean, I can glean from that is really over the top. That is not to denigrate Fidelity, nor Vanguard. What I’m saying is the platform is critical to the self-education process.
Chuck: Yes, I think that there’s a couple of things that are nice about pickings, a brokerage house, essentially a Schwab, Vanguard, brokerage, a Fidelity, a TD Ameritrade, E-Trade, whoever it is you want to use, and using them as the platform for doing you’re investing part of it is that these websites that they give you– there’s all kinds of research and materials, analytics of what you’ve bought and what you’ve sold, it’s all available there. The other thing is that when it comes time to do accounting and tax reporting, it’s all in one place. There’s a lot to be said for that convenience as well. The point being that not to denigrate everybody in the entire industry, but know what services that you need–
Chuck: Unbundled, purchase those services, pay a reasonable fee for those services and don’t be larding up your life with offerings, services that you don’t really need or don’t really want and turn out to be fairly expensive.
Ed: Remember, no one can make pigs or cows fly. My favorite. Of course, again, you got to watch out for crossing streets. We can have a lot of people after us, but you know what? That’s okay, I sleep well. Thank you. Next time, we’ll hope to proceed on the same lines. Best regards.
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