August 4, 2023 • 54 mins
In today’s RISA® in Action entry, Wade and Alex speak with Bob Bove and David Meler from the 4:8 Group. Bob and David discuss their stewardship approach to wealth management and how the RISA® successfully helps them service clients with their values in mind. Bob and David break down their discovery meeting process and how they achieve a balance between the technical competence expected from an advisor while also fostering a deep personal connection. Listen now to learn more!
Links
Learn more about the 4:8 Group here: https://the48group.com/
Join our Retirement Income Masterclass to learn about the RISA® and how to use it and market it within your practice. Sign up here: www.risaprofile.com/advisors
This episode is sponsored by Retirement Researcher https://retirementresearcher.com/. Download their free eBook, 8 Tips to Becoming A Retirement Income Investor at retirementresearcher.com/8tips
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Bob French (00:00):
The purpose of Retire with Style is to help you discover the retirement income plan that is right for you. The first step is to discover your retirement income personality. Start by going to Risaprofile.com/Style and sign up to take the industry's first financial personality tool for retirement planning. Well, it was bound to happen. Alex came back from his family vacation. Norway's loss is our gain, I guess.
Alex Murguia (00:48):
Hey, everyone, Alex here. Welcome to Retire With Style. And I'm here with my trusted companion, Wade Pfau. Wade, how are you doing? Great.
Wade Pfau (01:00):
Great. Hi, everyone.
Alex Murguia (01:02):
Wade, did you miss me?
Wade Pfau (01:04):
I did, yeah. You are off swimming in the fjords of Norway.
Alex Murguia (01:08):
Tried to hold down the port in your tough. There you go. There you go. And there's some stories behind that. But I'd like to welcome two very special guests on this episode of Blossom Now. Two very special guests. Here. We have Bob Bove and David Meler from the Four Eight group. Hey, guys. How are you doing?
Bob Bove (01:34):
Awesome. Good to be with you guys.
Alex Murguia (01:36):
Thank you for joining us. Really appreciate it. I know it's always touch and go, right when you get an email from me saying, hey.
Bob Bove (01:45):
Yeah, we're excited to talk to you guys.
Alex Murguia (01:49):
All right, before we get going, you want to give everyone your origin story. That way they can contextualize the stuff that we're going to be talking about.
Bob Bove (02:00):
Well, it's a story that goes back about close to 24 years ago and wasn't really too sure what I wanted to do with the rest of my life at the age of 43, and had an opportunity to work with a friend of mine that was actually in the mortgage business. And back in the day, he was with a broker dealer called Financial Investment Network Corporation. He seemed to hit me up at the right time because I had just come out of a 401K meeting with a company that I was working for and didn't understand a word the guy was saying. And I felt speaking German, there needed to be some simplicity and stewardship and advocacy brought to this industry that I'm now in. And that's the long story short, coming up to a 24 year career.
Alex Murguia (02:50):
All right. And you said a word that I think will reverberate during this interview. Stewardship. I think this is just if you can take a moment to maybe a little bit of a current call with regards to your firm. How do you view stewardship from the wealth management perspective as part of the Four A Group? Because I think you guys embody that.
Bob Bove (03:12):
It goes back to remember Sully, the gentleman that landed the plane. And this goes so much in line with what we're about to talk about. Sully tells a story on after he got a bunch of boxes of water soaked, still water soaked items from the plane, he saw a fortune cookie. And I forget exactly what the fortune cookie said, but it said something about stewardship and he was sharing this with his daughter and his daughter said, dad, what is stewardship? And Sully said, well, stewardship is doing the right thing even when it seems to be inconvenient. And we've been utilizing annuities for our clients a long time ago, way before it seemed convenient and when it was out of flavor, basically. So just being a good steward of our clients money and doing the right thing, that's going to help know in their own unique we're we're trusted advisors and that's the way I view.
Alex Murguia (04:20):
All right. And and interesting story, Bob, because I can relate to that. Whenever something is inconvenient for me, I just ask Wade to do.
Wade Pfau (04:30):
Paper.
Alex Murguia (04:31):
That's my form of stewardship, not Ocam's razor, Wade's.
Bob Bove (04:37):
Razor.
Alex Murguia (04:42):
David, why don't you chime in here, man? Number one, tell me how many times you've heard Bob's story about stewardship and the fortune cookie.
David Meler (04:53):
Right?
Alex Murguia (04:55):
No, but how do you come into the yeah, definitely.
David Meler (04:59):
So, you know, really kind of like typing in my journey into how I got with the Four A Group as well was In a big firm and was looking for another firm out there that matched my values and that value truly is putting the client first. And that, unfortunately, was hard for me to find until I did find the Four Eight Group. And driving that and explaining that every day in every meeting that you have, even if it's the client that's been with the firm for all the 24 years, is really reminding them and resonating with them of what our mission is and how stewardship really gears every single decision that we're making for the betterment of not only them, their families, but also all the causes they care about. So we really had that strong belief that we bring to every meeting that is so needed in this industry.
(05:50):
And I think especially what you guys see as well and why Risa even came to fruition was there was a gap, there was a need, and you guys took up the flag and said, we can do this, we can make this better. We can make, eventually many thousands, millions of lives better.
Alex Murguia (06:10):
That's good. I have two questions from that and we'll get into the Risa. But when we get into firms, one of the reasons we wanted to do the Voices of Advisors is because I love just bringing to light advisors that don't make a business of being on every TV show and stuff like that. Because I think the real advisors are folks like you, not someone like myself that's in the trenches and loves doing what they're doing. Two questions why was it hard for you to find somebody, David, that sort of aligned with your values in this industry? And if you don't mind, Bob, maybe taking the second part, which is what does that mean, the Four Eight Group? Because it's a podcast and people may not know that it's four semicolon eight, that kind of thing. Or is it 48? And I'm just deconstructing the number, whatever.
(07:00):
Right. So, dude, why don't you take it away and Bob, take it home?
Bob Bove (07:04):
Sure.
David Meler (07:04):
Yeah. So why it was hard like anything, especially when you're making a decision, in my experience, of where I want to have an impact and a strong impact in your career is finding a place where you can actually feel and see a mission statement of a company every day. And so going from a big company, I knew I wanted to go smaller to be able to see if that characteristic was drawn out and not just, all right, the lead advisor of the firm, but everybody buys into. And you can't really get that automatically from just going and interviewing at places and looking people up on LinkedIn and having quick conversations or coffees. And there really aren't many coincidences in life. And meeting the Fourier group, meeting Bob Bove, a lot of things just you start to pick up a notice and lined up, as you could say.
(08:02):
And it really came then to fruition when I discovered why and how you should invest clients money using evidence based investing in our firm's belief and having a philosophy that you're going to stick to no matter if it's rain, sunshine, snow, the best days and the worst days. There's a foundation there. And that's what I was really looking for, especially early on and young in my career as I was, I wanted to have something to believe in when I was speaking with people about their most important financial matters. So that's why it was Alex, as you can imagine. Hard to find that because there's so many different types of advisors out there, and I was trying to find a very particular foundation.
Alex Murguia (08:46):
I think it's a great answer. And then, Bob, how did the four.
Bob Bove (08:50):
Eight yeah, so four eight is Bible passage from Philippians four eight that says, finally, brothers and sisters, focus on things that are pure, praiseworthy, loving, admirable, noble, true, excellent and real. And it's sort of funny. When the firm started to grow back in the day, I needed to come up with a name. I was with a pretty big broker dealer in town here, or a pretty big firm. Everybody knew who the firm was, but then, you know, they know who Bob Bove is. They don't know who the firm is. So I wanted to come up with a name and reading a book by Tommy Newberry, who we have this thing called Return On, meaning speaker series. He's actually going to be speaking at one of our speaker series this year in October, and his book was 40 Days to a Joy Filled Life the Four Eight Principle.
(09:36):
I started reading it, and as David says, we're evidence based advisors. And this is sort of silly. I started thinking, well, there's a couple Nobel Prize winners at DFA. I happen to think it's excellent. I know it's true. And I just happened to come up with the name the Four Eight Group. And back in the day, when were trying to brand it and come up with some things, the marketing gentleman says, so what do you really do? And I said, well, it's more than money and what we do, and of course, being the marketer that he was, he said, okay, it's beyond wealth. Is that what you're telling me? And I'm like, yeah, that's exactly what I'm telling you. So that's how we came up with the name the Four Eight Group.
Alex Murguia (10:20):
I think it's fantastic, and I think I commend you for it simply because it goes beyond money. There's that sort of existential piece to it, as opposed to calling yourself, like, Harbor Capital Management. Not that there's anything wrong with any firm called Harbor Capital Management or even McLean Asset Management. That's a pretty crappy name. You really take a step back. And that's our mean. It's McLean, Virginia. We were in a hurry, I guess. But no, I think it's good, and I think you are ahead of the curve because I do think the industry is really moving beyond maximizing or optimizing stuff on an Excel sheet and optimizing stuff on your personal sort of belief system and how money contextualizes it and accommodates that. So I think it's great.
Bob Bove (11:13):
Thank you.
Alex Murguia (11:13):
Yeah. Wade, any risa questions?
Wade Pfau (11:18):
Yeah, we definitely want to talk about that, too. We did for the listeners. We first met Robert about a year ago at a DFA conference and that's Dimensional Fund Advisors, which yeah, eugene Fama, Nobel Laureate. Do they have other yeah, there's others.
Alex Murguia (11:37):
Rex on DFA or on University?
Bob Bove (11:43):
Bob Markovich, right?
David Meler (11:45):
Yeah.
Bob Bove (11:45):
Robert Markovich or Markowitz? Markowitz. Harry Markowitz. Right. Yeah. It was very interesting to see you at the DFA conference again. When I saw on the agenda that you guys are going to be talking about income and using annuities, this is something that we've been using for a long time and I think it just shows where the industry has gone. I mean, we followed many years and guys like Moshe and really smart guys that I think the biggest thing that I get out of it is that you all wonder why aren't more people using annuities? Right? And so it was a pleasure to see you both there. And Alex is one of a kind and it was very nice to meet.
Alex Murguia (12:38):
You. I hear you often imitated, never duplicate. But what was your since we got you here, it's an agency piece. What was your first take when you heard the craziness? When Wade and I are on stage talking about this, which I think probably was the first time you and I, Wade, were together on a stage, at least for Finance Now, where we're discussing stuff. Right. Because I think it was a relatively new concept at that time, first and.
Bob Bove (13:11):
Foremost, and confirmation to what I've believed for a very long time. Look, I mean, being a DFA advisor, an evidence based advisor, wasn't very popular 18 years ago. No one was talking about fees. No one was talking about all the data that was out there and how these data nerds back in the day, basically close to 50 years ago, had all this evidence at the Chicago School of Business where they could call bullshit on our industry, right? I'm sure as heck not a pioneer, but we always wanted to do things, I guess, just what's right for the client. And I knew in my heart of hearts, and I can tell you so many stories, how I would do a discovery meeting and one of the spouse would say, oh, my husband's never going to do annuity. He's totally against annuities. And at first I had a but not for long.
(14:05):
For a moment I'm like, well, do I really want this client? This is a pretty big client. Maybe I shouldn't bring up annuity. But I'm like, no, we're doing this for the client. And sure enough, that guy is one of my biggest advocates now. And I stuck to my guns because I knew this was the right thing to do. And so to see you guys up there on stage, like I said, it was just yeah, man, I was excited. I think I was texting all kinds of people. I can't believe at a DFA conference talking about annuities and stuff yeah.
Alex Murguia (14:33):
For DFA to do that and look, we share a similar thing over at McLean. Look, I got into this business in one, like a few months before 911, and right about when 911 hit, maybe really right around that time, I got into the industry thinking, oh, I'm going to be like the next Warren Buffett. I'm going to figure things out. But then you start researching and you realize, listen, investments are not that hard. At the end of the day, it is what it is. You capture returns, you capture them across certain premiums and blah, blah. Right?
Bob Bove (15:05):
Well, what's Warren Buffett say, Alex, in.
Alex Murguia (15:07):
Almost every one of his letters to his index?
Bob Bove (15:11):
What about the bet that he had?
Alex Murguia (15:12):
Right, yeah, with the hedge funds and stuff like that? No, 100%.
Bob Bove (15:15):
So you asked for your Warren Buffett.
Alex Murguia (15:21):
But the idea was you had to just eat with your beliefs. And data is data, right? And so we switched everything at that point because the easiest thing to sell is magic. Honestly, it's to say someone that you have some sort of value and bring them some charts in the back and say, look what a genius I am, and look at these returns. Right? The hardest thing to do is to sell humility. Right. And to a large extent, hand over my heart, we had to go that route simply because we just couldn't live with ourselves over the next 20, 30, 40 years selling the bullshit since he was the first one that way.
Bob Bove (16:08):
Remind me of a great saying about our industry, basically, is complexity is easy to charge for, but hard to understand. Simplicity is easy to understand, but hard to charge for.
Alex Murguia (16:21):
Yeah. No. And remember when people were getting into DFA, a lot of the things was, if you do indexing, how are you going to charge blah, and they don't realize it's? Wealth management, et cetera. But the point was hand over the heart. And the similar experience was when Wade joined us. The reality is and Wade had we.
Bob Bove (16:44):
Had this conversation, remember Wade?
Alex Murguia (16:46):
We were heading towards, like, the Christmas holiday party, and I think you brought up, hey, but McLean is fee only. We're going to start talking about annuities and their usefulness. Does that matter? I think I was like, whatever. It is what it is. You know what I mean? If research shows that's what it shows, then we move forward and don't look back. And we don't carry these marketing truisms about fee only or any of that crap. It's what's good for the client.
Bob Bove (17:18):
Amen.
Alex Murguia (17:18):
And that's that, full stop.
Bob Bove (17:22):
Definitely.
Alex Murguia (17:23):
And if you don't believe it, then I think you need to go to the eye doctor, because there's plenty of stuff to read. That's pretty obvious, right?
Bob Bove (17:33):
Amen.
Alex Murguia (17:34):
But that's where that is. And David, did you get the text from Bob or no, he didn't text you?
David Meler (17:41):
No, not that one.
Alex Murguia (17:45):
Or is it one of those when Bob comes back for a conference, it's like, hey, guys, let's have a lunch. Let's have a lunch meeting. And he shoots off 20 things that he wants to do next. And everyone's like, oh, my goodness. Everyone's like, give him a week. He'll forget about all of this.
David Meler (18:01):
Hey, and there's a rattle off of everything.
Alex Murguia (18:05):
Well, don't worry, because once Bob I don't know, you remember you called me once, like, on a Saturday? Yeah, you called me once on a Saturday. I was like, doing a cold plunge. I got in the cold plunge, and my phone rings. I'm like, who the hell is that who's calling me on Saturday? And it was Bob. And I was like, look at this guy. I have to pick up. Because I'm like, what the hell is this guy going to tell me on a Saturday?
Bob Bove (18:26):
I can't wait till Monday.
Alex Murguia (18:28):
Yeah, it was something like that. But I was like, I got to pick up. I mean, I cannot let it just ring.
Bob Bove (18:36):
That's me.
Alex Murguia (18:37):
No, I don't care. I'm the same way.
Bob Bove (18:39):
Always tell people, be yourself because everybody else is taken. Right?
Alex Murguia (18:42):
Yeah, right. And look, it's what you signed up for when we took this gig. It doesn't bother me in the slightest. Now, bringing it back to the Risa, right? What is your take on the role besides saying, oh, wow, this is kind of cool? What do you think the role that it plays in the whole discovery process?
Bob Bove (19:07):
Yeah, I think what it does in the discovery process is we have a saying here that we want to take our clients from wondering and worrying to living and dreaming and to help them identify on their own, not just what we think they should know. How do they really want to create their standard of living? Because I think it was you, Alex, that said a measure of someone's standard of living is not their net worth at this phase of their investing career, it's their income stream. Right. So how are you going to go from wondering and worrying to living and dreaming? Because we believe more than anything else that our clients deserve to win. After 30 years, 40 years of blood, sweat and tears, sacrificing, getting knocked down, picking themselves back up, they deserve to live an amazing life of significance and just turning on as much stuff as they can on autopilot.
(20:07):
And so we let them through that Risa dictate. How much of their income stream do they want, as the four quadrants say? And it's just a wonderful tool to use. And from a compliance standpoint it's awesome because this is them telling us and it's been really good. It has.
Bob French (20:30):
Are you a financial professional looking to learn more about the Risa and retirement income best practices? Well, if you are, you should join our retirement income masterclass on Monday, August 28 and Tuesday, August 29, you can sign up at risaprofile.com/advisors that's Risaprofile.com/advisors.
Alex Murguia (20:51):
No. Thank you for that. And just to bring to light, how does this fit in? Or does it in the current way that you're practicing sort of your Discover meetings and the like? And I think something that would be interesting for both in this podcast we have consumers and advisors that listen in. And so I think it's interesting for consumers simply because there's a process to discover meetings that really good advisors follow. It's semi structured, albeit, but still there's a process there. And I'd love your thoughts on just the discovery process that good advisors really utilize and how if the Risa fits into that workflow.
Wade Pfau (21:35):
And we should probably define discovery meetings in case anyone listening doesn't.
Bob Bove (21:41):
I'll talk about it in the concept of a prospect coming in. Then I'll let David talk about it. As far as we always like to have these conversations on income, anywhere from I would say at a minimum five to ten years out. So sort of like a rediscovery meeting when we're putting together the income plan. But discovery meeting for us, we learned this from CEG and again, it goes beyond wealth. It's more than just the assets. So we'll have a discovery meeting. We'll share with them that this is going to be a long term relationship. So we want to know things like we center around seven different areas. I think your value, your relationships that are important to you? What goals or transitions are you looking to accomplish? What are your interests? How involved are you? Do you want to be in the process of working with us?
(22:37):
Who are some of your other financial advisors and trusted advisors, besides just financial advisors, CPAs attorneys and that type of thing? Because we have this beautiful thing called a virtual family office that we can get into at a later time, if we have time, and then we talk about the assets because it is so far beyond wealth. A good question that we always like to ask our clients before we get to know them is like, what's the first recollection you had of money? What was money like growing up for you? And so we get to find out, are our clients these prospects? Do they fit into the four eight group set of values? We really like working with family stewards and so we really don't get into the Risa that much when we have a prospect. But if that prospect is a little bit older and he's getting ready to turn on some income, we will incorporate that and I can turn it over to David here on how we incorporate the Risa inside that discovery meeting.
Alex Murguia (23:41):
David far away, man.
David Meler (23:43):
Yeah. And again, as Bob was saying, starting off with those values as the first thing that you ask somebody, especially when they're joining you in a meeting and asking them where their origin story starts with money. Ends up being a really good indicator for us as advisors who are sitting there saying, all right, they could land anywhere from time segmentation here total return risk wrap or protected income. But by them telling those original stories, we have a pretty good idea. All right, they're going to probably want this, but that enhancement of actually having them tell us through a RISA after that first connection meeting really plainly states out, oh, well, this is why they want protected income because for some reason their history in their past, money wasn't talked about. Money was always gone. The other month, dad was laid off, he was a laborer, so they remember Christmas was just socks and underwear.
(24:44):
That's all they got. Right. It's those type of things that you get in a discovery meeting by asking the values first that make that reason make a little bit more sense and have a little bit more backbone to it. That really helps our discovery process be more productive and emphasize on the client, giving us more information about them rather than, oh, here's all the things about the four A group.
Alex Murguia (25:08):
No, that's great.
Bob Bove (25:09):
So we've incorporated that Risa like in the end of our discovery meeting, especially for those clients that are getting ready to retire and they want some guidance there. And then the next meeting that they come to is what we call our investment plan meeting or possibilities meeting. And then that's where we'll lay out have we seen gaps where you're at? Can we better? And here's how we plan on producing income for you based off of everything that you told us during that discovery meeting.
Alex Murguia (25:39):
Here's a side question, and it's just something that I feel very candid with you folks, and if I'm a prospect, I'm curious what your answer is, because this is me with my kind of sob head on. If I'm a prospect and I walk in and you ask me, hey, what are your first recollections of money? I'm like, what the hell did I just get into? I'm getting hell out of here. I don't have time for this. You know what I mean? I got to think there's some people that are thinking the same thing, listening, and like, what is this bullshit? You know what I mean? This is here about managing my assets. All of a sudden, you want to be my psychiatrist or psychologist or my best friend? I don't need this. What would you do to that? Because I think I would be in that camp a little bit, at least in the hands of somebody that doesn't have a lot of acumen in terms of these meetings.
(26:33):
You know what I mean?
Bob Bove (26:36):
Well, probably if it was back in the day, we would probably say that's, okay, we'll just go right to the assets back in the day. We take anybody that could fog a mirror. But we truly believe that we want to have I mean, what are we all here on Earth for? We're here to have a positive impact on people. And there's some people that come in here that we're not going to have a positive impact that are not going to see the value that we bring, and that's okay. And because one of the things that we tell them during that discovery meet I'm glad you brought this up, because it's important, is like, look, the only decision that you're going to have to make today is, do you want to come back to see us? But at the same time, we're going to share with you.
(27:16):
Do we think that we can be of value? In actuality? Do we really want to have you as a client? Because if I don't think I can be of value or we're going to have an impact on them or they don't appreciate what we do, then that's okay. It truly is, and it's good to see that up front before they become a client. Right?
Alex Murguia (27:39):
Wade, that reminds did you see what a smooth operator Bob is with that answer? What's that meme? What's that cartoon where they take my money and he's throwing the money at Futurama? That Futurama Meme, where he's like, take my money. That's a great no, I hear you, but you know why I'm making fun a little bit. I'm not making fun of you. I mean, you're really good, but there's this sort of vibe where everyone just are not as competent as you would like them to be with financial planning, and they just lean into becoming your best friend and it's like, dude, where are you going with this?
Bob Bove (28:16):
Well, Alex, that all goes back to being what I truly believe that one of the things that differentiates our group here is that we're not advisors, right? Advisors basically inform, leaders, transform. We've been transforming clients before I even knew it, just with respects to how to invest the money in evidence based way. Right. We've been transforming clients the way they think about how they're going to turn on income streams. We've been transforming clients on that. There's more to life than just money. It's about meaning, it's about having purpose. We talk about what is your unique desirement, not retirement, right? And we explain this is Mitch Anthony man from back in the day. Mitch Anthony's definition of desirement is having enough wealth to sleep at night and enough purpose to get your butt out of bed in the morning. So that's really some people maybe, oh, that's a bunch of BS.
(29:15):
You just want to accumulate assets, whatever. Well, if that's what you want to believe, fine. But that's not what we're about. And we built a very good business here over 24 years. That's what we're known for. That's exactly what we're known for.
Alex Murguia (29:26):
And Bob, I'm pushing the buttons a little bit just so people kind know, listen to what a real advisor they really view these. So thank you for humoring me there a little bit. Although sometimes I'm like what when I hear other advisors.
Bob Bove (29:45):
Yeah.
Alex Murguia (29:46):
David in terms of, like, okay, you've done the discovery, you're in the possibilities meeting and the like. Does the risa if someone's total return or if someone is income protection or what have you, does that begin to serve as a nice starting point for potential opportunities that you may bring up to the prospect or a client in a review meeting or not really.
David Meler (30:16):
No, I would definitely say it brings up a lot of those opportunities, especially depending on where they're coming from and in a lot of cases, if they even have a philosophy to begin with. But what I think the Risa does such an amazing job of is makes you make a decision every single question. Whereas your typical risk tolerance questionnaire that we give to clients to say, all right, here's how your allocation is going to be. I often will get an email or phone call. I don't really know how to answer this one question you guys have on here. Whereas the reset is saying you have to choose left or right. There's no middle, get out of jail free card here. What that really does also for us is we're building these possibilities for what their whole entire investment plan should be, is saying, this is what you've told us.
(31:11):
This is how you want to receive a paycheck when you're done working. And it's also telling us this probably isn't going to change. This is your behavior. Wade's done such a great job in rooting this in so many different ways and stress testing it that this really won't change a bunch unless all of a sudden you win the lottery and you're like, all right, let's do whatever we want. And that's such a beautiful thing for advisors and for us and Bob and I to be able to make a plan for somebody to say, this is in your essence, what you want. And that allows us to do our job even better as educators and leaders to them to say, here's what you want, and here's the evidence of why this is going to work best for you based off of these results and.
Bob Bove (31:58):
Give you the highest probability of success.
Alex Murguia (32:01):
No, sure, I think a couple of thoughts. Yeah. The way the questions are formed, you have to pick a side. It's like six options. There's no middle bubble, if you will. You have to sort of make that Solomon's decision. There's no splitting of the baby, if you will. You kind of have to pick. So and you do that enough times, an intrinsic sort of personalities will come out. Now, mind you, it's not a hard science. As we've always said, results vary, but for the most part, these are more intrinsic preferences that you're seeing. David something we haven't spoke much about because by the time we're done with Risa, we're kind of at the hour or whatever. The implementation matrix, something that we include in the Risa is for those that don't know what that is, we kind of try to develop a persona of who the person is as a client.
(33:01):
As many of you know, the reset self identifies strategies income protection, time segmentation, risk graph, what have you. But we also go bring in two factors where we bring in self efficacy, retirement income, self efficacy, and advisor usefulness. I e cost effectiveness. Really? And by getting your views on that, we can identify personas. If someone's a delegator, if someone's a collaborator, if someone is a self directed investor, or if someone is a validator, real quick self directed investor, they will do things themselves. They think they're as smart as an advisor or can read a book and be right where that advisor left off. And they don't think an advisor is cost effective. Fine. Delegator is somebody that low self efficacy, thinks an advisor is cost effective and wants an advisor to help guide them. But they're more outsourcing it. They just want to know what time it is.
(34:01):
They don't necessarily want to know how the clock works. Collaborator, high self efficacy, high advisor usefulness. They want to be part of the team. They want to help direct, but they realize the wisdom that an advisor brings to the table and validator, hey, look, I know I need help during certain points, but I don't want an ongoing relationship with an advisor because it's not worth it to me for whatever reason. And they just kind of like a tide comes in and comes out, comes in and that kind of thing. Has that informed your client base or your prospect base in any way, shape or form?
David Meler (34:36):
Yeah, definitely with Alex, it's a great part of it, especially as we keep talking about these potential people that we have to choose, decide if they want to be a good fit for us. It's like when were first sending out our reasons, it was a requirement that we had that and the way that you can customize how much you want in the research questionnaire. It was a requirement because we wanted to know where is this person coming from and are they going to be a good fit for us? And when you look at those type of results, it's pretty clear for us to say yes or no. And up front you can be able to address it and say, hey, let's talk a little bit more about this and you can delve in a little bit deeper. And you also, for a lot of the reasons, find out that personality is going to match, usually also tied into where that behavior is coming from, whether it's just the type of professional environment that they're in, whether it's just how they've been brought up.
(35:36):
But it gives us a very good sense going into that first meeting or that second meeting, how we also think we could work well or not works or work together with that person, if you want to elaborate on that.
Bob Bove (35:46):
No, that's an awesome tool. And again, it's not our opinion on are they a delegator or are they collaborator or self director? Boom. They are telling us that and everybody that is probably going to listen to this podcast we've all taken on clients that we shouldn't take it on. We knew it from the beginning, really, right. And again, this is just more evidence that helps us again make the right decision on whether or not we want to work with this family.
Bob French (36:21):
Let's take a moment to let the audience know that this show is sponsored by Retirement Researcher. You can learn more about Retirement Researcher at retirementresearcher.com and subscribe to our newsletter where you'll receive weekly actionable information for your retirement planning benefit. Retirement Researcher is an online community devoted to helping you create the Retirement income plan geared towards your goals.
Alex Murguia (36:45):
Yeah, and it's a little different even than and these are personas that are kind of everyone knows about it. We didn't discover it's just we kind of quantified it. But it's a different take on the personas. You had mentioned CEG. I think CEG breaks them down by like VIPs stewards, high net worth, personalities, whatever. Right. I think this is kind of more brass text. What's? Walking through the door.
Bob Bove (37:11):
Know, we all have preconceived notions when someone comes walking in, like someone says, Well, I'm an engineer. Like, we're all shit, but sometimes they'll come out different.
Alex Murguia (37:22):
Yeah, I agree.
Wade Pfau (37:25):
Engineers like spreadsheets usually.
Bob Bove (37:28):
Yeah.
Alex Murguia (37:31):
Oh, my goodness.
Wade Pfau (37:34):
With the collaborator type environment, it sounds.
Alex Murguia (37:37):
Like yeah, it's tricky, right? Validators and collaborators. Validators are kind of you think they leave you alone and they're easy, but I prefer collaborators.
Bob Bove (37:51):
I do, too. Yeah, I totally agree.
David Meler (37:55):
It's always interesting, too, when you get sorry, Wade.
Wade Pfau (37:58):
Go ahead.
David Meler (37:58):
You get a couple and they differ so much on those as well. And you see that a lot in couples, where one wants to handle all the money issues, one doesn't. And for us, we really want them both to be involved because it's that important first meeting that you start to see those personalities on the implementation matrix clash just in front of us in a meeting, like, okay, it's a little awkward points, but you get through it. And it's a good thing to have. Also, though, as informing you as how you're going to be able to work with these people together.
Wade Pfau (38:33):
Yeah. In that regard, do you have any interesting examples of maybe a case study that you could walk us through a little bit in terms of how you achieve that sort of balance if it's a couple or just interesting examples from your experience with the Risa?
Bob Bove (38:49):
Yeah, I could think of well, it's happened quite a bit in the last couple of months, but we usually just one is definitely afraid of running out of money, the other one doesn't really care. I mean, it varies from, hey, I think we should have a mortgage, to I don't think we should have a mortgage. And a lot of times we let them talk it know, the best thing to do is just be, as Dan Solan says, an active listener, and they'll come to their own agreement together on things. But we really encourage them to talk it out and to look at this together as a team, not only just with us, but with their CPA, with their state planning attorney, because granted, most of the time the spouses really don't know what's going on, and we really want them to be involved. You've been in the business as long as I have, and you're as old as I am.
(39:47):
You see what happens when the spouse passes if the wife in the relationship wasn't on board with everything that was going on, it's just on top of everything else that they're going through. It just becomes an extremely difficult situation for the surviving spouse. So we encourage it. We let them talk it out. And again, what this does is, just like with DFA, we always say the accumulation of assets is extremely easy if you follow the evidence to have a simple path that, you know, x percent of your income is coming from some guaranteed sources, whether it's a pension plan, Social Security, and annuity. It's all about simplicity. All about simplicity.
Alex Murguia (40:36):
I agree. How can people find out more before we get to the end without even doing this before? And how do people find out more about the 48 group? Let's do a little infomercial. Here infomercial on phonics. Wade.
Bob Bove (40:55):
Of course, we're at WW. .the48group.com. You can learn more about us. David and I, every Friday, do something that's called A Message from the Founder, and that's usually on Facebook and LinkedIn. And we talk a lot. We give a little bit of a market perspective, and then we give a little bit of what we call return on meaning perspective. So that's how you can find out more about us. Check out the videos, because they'll really tell you who we are and what we're about and what we believe in.
Alex Murguia (41:27):
And why we do LinkedIn Live. Or you just record the video and then upload it.
Bob Bove (41:30):
Record the video and upload it. David does it. The guy that's never seen a rotary phone in my office, he does all that.
Alex Murguia (41:38):
David. You should try LinkedIn Live. Wade and I have been, like, kicking that around a little bit lately. Not bad. Yeah, well, I mean, we're not as buttoned up as probably we should be, so we just we're like one take and it is what it is kind of thing. You feel comfortable enough with that? Run it. Yeah, let her at the end of.
Bob Bove (41:57):
The day, what difference is it going to make, right?
Alex Murguia (41:59):
Yeah, exactly. And what's the Japanese phrase? Wabisabi. Is that what it is? Wabisabi? Something like that. There's a perfect amount of the perfect amount of imperfection, I think it's called. Something like that.
Bob Bove (42:11):
Okay.
Alex Murguia (42:13):
There's something about not being too polished. It's always good to have a little bit of rawness in it. I don't know.
Bob Bove (42:20):
I thought you were going to say, what did the bee say to the sushi?
Alex Murguia (42:25):
Wait, I know this one. Yeah.
Wade Pfau (42:28):
You got it, Alex.
Alex Murguia (42:28):
Oh, what's up, B? Got you. I got you. Wade, who does he think he's talking to? Who does this guy think he's talking to? Right, David? David, what do you think? David?
David Meler (42:45):
Impressive. I love it.
Alex Murguia (42:46):
Love it.
Bob Bove (42:50):
That's great.
Alex Murguia (42:52):
Had to go into my Rolodex there. Yeah, that's awesome. Let's bring it back home.
David Meler (43:00):
Right?
Alex Murguia (43:00):
What's question here? All right, since you were talking about disagreements in terms of implementation, somebody's a delegator. Let's say the wife's a delegator, the husband's a collaborator, et cetera, what happens if you give them the reset and they differ in strategies? How do you reconcile that? How do you go about reconciling that or just even elucidating to them? Hey, you guys have two different methods of how you want to source retirement income. Let's unpack that.
Bob Bove (43:27):
So you're talking about if one is in agreement with time segmenting and the other exactly.
Alex Murguia (43:33):
Yeah. And the other is, whatever, total return.
Bob Bove (43:37):
We've never had that situation, have we, David?
David Meler (43:42):
Not really, because they usually, again, are coming back on the same page of, all right, we have to work together as a team. And in the rare cases that they do, we can tell there's enough of a difference, but it doesn't really come out in the results because they're filling it out usually together.
Bob Bove (43:59):
Yeah, a lot of times they're filling us out together.
Alex Murguia (44:02):
You may want to try that could work, but you may want to try separately as well, simply because there's always somebody that's a little more like they're going to brow beat them while they're I mean, I'm exaggerating to make the point. Right. But they could be looking over their shoulder as they're taking it. And you know what I mean?
Bob Bove (44:21):
Yeah.
Alex Murguia (44:22):
If Wade and I were married, I'd be like, whatever Wade answers, I'll answer it.
Bob Bove (44:27):
Right. How have you guys handled that at McLean? That's a very interesting question. What do you do when that happens?
Alex Murguia (44:33):
I would do it separately, just as a going forward matter. How do we handle that at McLean? They do it separately and then they come back. And there's two ways to go about doing can. Let's say if someone is at its most extreme case to make the reconciliation easy, if someone is highly time segmentation, high on optionality, high on safety first, that's effectively someone that just wants to hold cash, really think about it.
Bob Bove (45:02):
Right.
Alex Murguia (45:03):
And then you have someone that's at an extreme of I want a lifetime income stream in perpetuity maximizing mortality credits right. A SPEA and call it a day. Right. So how do you do that? Right. There's two ways you can earmark assets. Some goes to each person and split the assets so that they go evenly among both of them and kind of cookie jar it like that. Some advisors have done that. And again, the example is a little extreme. So just bear with me the other way that I gravitate towards personally and Wade and I think Wade does simply because we've always used this example. So I'm assuming Wade has never said, that's crazy. Yeah, right. The other way is kind of like, okay, if someone wants extreme optionality and the other person wants extreme commitment orientation, perhaps a bond ladder, let's say, of five to seven years could work because then both of them are compromising a little bit in their themes.
(46:07):
And so essentially you put together a five, seven year ladder, whether it's bonds or MYGAs or whatever, it doesn't matter, that kind of thing. And that way you kind of compromise for both of them in a manner that still has strong echoes of their style. It's just they're relaxing some of their things in order to compromise. Now, I think that's a far better way to go about it than if somebody you give them a risk questionnaire, which I think is complete BS, really amen. But you give somebody a risk questionnaire and someone comes in at 100% equity, 0% fixed income and 60% equity 40% fixed income. And they just literally split the baby and say, okay, we're just going to do an 80 20 portfolio. Or the tie goes to the runner. The runner being the least the most conservative person, they just do 60 40.
(47:00):
I think that's stupid because all you're doing there is just still total return approach. You didn't really do anything. And so I think this helps you take out your advisor's hat a little bit more. Not a little bit. It helps you take out your advisor's hat in a major way and really come up with a creative solution, which is what you get paid for to help accommodate both parties in a meaningful way. I think you get that ability when you give it to them separately. Did that answer?
Bob Bove (47:32):
That's a good point. Yeah, we need to start doing yep.
Alex Murguia (47:37):
Wade, anything to add to that?
Bob Bove (47:41):
No.
Wade Pfau (47:41):
Well, also sometimes you can kind of think about by building that protected floor to help the person who is more safety first, commitment oriented. You really can frame that as now with the other assets. You can go ahead and go wild.
Alex Murguia (47:57):
With whatever you're wanting to do return guy.
Wade Pfau (48:00):
And that is also a way to satisfy both individuals.
Bob Bove (48:04):
Yeah, that's a very good point. Yeah.
Alex Murguia (48:07):
And why don't we end up with this question here? How has the risa affected your own planning, if at all? Maybe you said no, it's just confirming what I'm already doing or whatnot to me it has. I came out income protection, of all things. And you come to realize that yeah, I kind of in the process of going through the machinations of what I need to do from that vantage point. What about you guys? Any AHA moments from actually taking it and doing that self discovery?
Bob Bove (48:38):
I wouldn't say any AHA moments for me because, you know, always a proponent, Lori, and have taken a lot of our assets. Again, being your own business owner and working with people that have teachers, retirement or a pension plan from the government, it's always something, obviously that we don't have as business owners. And I always wanted that. And so having I'm going back today's Pacific Life 10% credit when there was that arms race on living benefits. So we've always had that. Like I said, if anything, it's reinforced me. But Alex, I had a client the other day ask me what would I do differently looking back over 24 years. The fact now that I have equity or that I have annuities, I understand the resiliency of capitalism. Right. And I've just recently changed because of the fact that I've got a lot of protection. And we call annuities guardrails.
(49:35):
I've got a lot of guardrails. I was a 60 40 investor for the longest time, Lori. And I have become now an 80 20 because I can look back and see 50 years of data. I can look back and see 24 years of data, what 100% equity portfolio has done for me or would have done for me, versus a 60 40. And I think now that I have these guardrails, I'm even more confident that I can be more aggressive to the point that Wade made a little earlier. So, like I said, I've always been a proponent, but I feel more comfortable becoming a lot more aggressive than what I used to be.
Alex Murguia (50:13):
No, that's great. David, anything on your end?
David Meler (50:17):
Yeah, on my end, really just going through it myself. You really put yourself in those fine shoes. The first time I took my own, like, I was like, how many more pages am I going to have this? At first, that's what I thought. I was like, oh, I don't know how long this is. And then I was like, this is great, though, because every time I got to a new page, I was like, this is reinforcing my original beliefs of where I would end up. And I was close total return. Like, right on the edge of total Return and Time segmentation and everything. That being a young investor. That's all I'm thinking about is a long term time horizon, if I'm lucky. And it really did, though. Set in my shoes.
Alex Murguia (51:03):
Yes.
David Meler (51:04):
Confident that these answers that they give me back are exactly what I feel towards my own individual investor plan.
Alex Murguia (51:12):
No, dude, that's fantastic. I think we're good. Wade, any more stuff to add? I mean, I could talk to you guys mean, you can tell. Our firms are very similar, so there's this kindred sort of spirit that I kind of dig.
Bob Bove (51:33):
Yeah, and you like dad jokes, too, so that's even better.
Alex Murguia (51:42):
Yes. Well, I mean, look, it's been great. I really appreciate all the support you've given us, and I'm very excited to give you guys a little standard to tell your story. I think it's a story worth telling, and everyone should know about the Four Eight group. I think you guys are fantastic.
Bob Bove (52:04):
Well, look, we appreciate all the work that you've done and the impact that you two are having on this industry and more importantly, our clients and stuff. Thank you so much. We really enjoy working with you guys and know, hanging out and sharing ideas with each other. It's the best.
Alex Murguia (52:22):
No, I think it's great. And incidentally, I'll take this off here, but I'll put here. I think I'm going to be in Chicago within the next month or so. I'll give you a hauler.
Bob Bove (52:31):
Okay.
Alex Murguia (52:32):
If that does turn out all right.
Bob Bove (52:34):
Sounds good. Sounds good.
Alex Murguia (52:36):
All right. Well, hey, thanks, everyone. Wade, do you want to do our infomercial? You're much better at it than I am.
Wade Pfau (52:41):
Well, on the Risa side, so we will be having the Risa Master Class. It's a three day, 90 minutes per day opportunity to learn how the Risa works and how you can use it in your firm. It is going to be August 20, Eigth through 30th, starting at, I believe 01:00 p.m. Eastern time each of those days, and so we'll have a link to that in the show notes for the episode, and also we'll have a link to the 48 group, your website as well. Thank you Bob, thank you David, for being part of the show today and for sharing your experiences. Thanks everyone for and we'll catch you next.
Bob Bove (53:17):
Thanks guys, we'll see you.
Alex Murguia (53:18):
Hey, no worries and stay on for a second. All right guys, take care everyone.
Bob French (53:24):
Wade and Alex are both principals of McLean Asset Management and retirement researcher. Both are SEC registered investment advisors located in Tysons, Virginia. The opinions expressed in this program are for general informational and educational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific securities. To determine which investments may be appropriate for you, consult your financial advisor. All investing comes with a risk, including risk of loss. Past performance does not guarantee future results.
The purpose of Retire with Style is to help you discover the retirement income plan that is right for you. The first step is to discover your retirement income personality. Start by going to Risaprofile.com/Style and sign up to take the industry's first financial personality tool for retirement planning. Well, it was bound to happen. Alex came back from his family vacation. Norway's loss is our gain, I guess.
Alex Murguia (00:48):
Hey, everyone, Alex here. Welcome to Retire With Style. And I'm here with my trusted companion, Wade Pfau. Wade, how are you doing? Great.
Wade Pfau (01:00):
Great. Hi, everyone.
Alex Murguia (01:02):
Wade, did you miss me?
Wade Pfau (01:04):
I did, yeah. You are off swimming in the fjords of Norway.
Alex Murguia (01:08):
Tried to hold down the port in your tough. There you go. There you go. And there's some stories behind that. But I'd like to welcome two very special guests on this episode of Blossom Now. Two very special guests. Here. We have Bob Bove and David Meler from the Four Eight group. Hey, guys. How are you doing?
Bob Bove (01:34):
Awesome. Good to be with you guys.
Alex Murguia (01:36):
Thank you for joining us. Really appreciate it. I know it's always touch and go, right when you get an email from me saying, hey.
Bob Bove (01:45):
Yeah, we're excited to talk to you guys.
Alex Murguia (01:49):
All right, before we get going, you want to give everyone your origin story. That way they can contextualize the stuff that we're going to be talking about.
Bob Bove (02:00):
Well, it's a story that goes back about close to 24 years ago and wasn't really too sure what I wanted to do with the rest of my life at the age of 43, and had an opportunity to work with a friend of mine that was actually in the mortgage business. And back in the day, he was with a broker dealer called Financial Investment Network Corporation. He seemed to hit me up at the right time because I had just come out of a 401K meeting with a company that I was working for and didn't understand a word the guy was saying. And I felt speaking German, there needed to be some simplicity and stewardship and advocacy brought to this industry that I'm now in. And that's the long story short, coming up to a 24 year career.
Alex Murguia (02:50):
All right. And you said a word that I think will reverberate during this interview. Stewardship. I think this is just if you can take a moment to maybe a little bit of a current call with regards to your firm. How do you view stewardship from the wealth management perspective as part of the Four A Group? Because I think you guys embody that.
Bob Bove (03:12):
It goes back to remember Sully, the gentleman that landed the plane. And this goes so much in line with what we're about to talk about. Sully tells a story on after he got a bunch of boxes of water soaked, still water soaked items from the plane, he saw a fortune cookie. And I forget exactly what the fortune cookie said, but it said something about stewardship and he was sharing this with his daughter and his daughter said, dad, what is stewardship? And Sully said, well, stewardship is doing the right thing even when it seems to be inconvenient. And we've been utilizing annuities for our clients a long time ago, way before it seemed convenient and when it was out of flavor, basically. So just being a good steward of our clients money and doing the right thing, that's going to help know in their own unique we're we're trusted advisors and that's the way I view.
Alex Murguia (04:20):
All right. And and interesting story, Bob, because I can relate to that. Whenever something is inconvenient for me, I just ask Wade to do.
Wade Pfau (04:30):
Paper.
Alex Murguia (04:31):
That's my form of stewardship, not Ocam's razor, Wade's.
Bob Bove (04:37):
Razor.
Alex Murguia (04:42):
David, why don't you chime in here, man? Number one, tell me how many times you've heard Bob's story about stewardship and the fortune cookie.
David Meler (04:53):
Right?
Alex Murguia (04:55):
No, but how do you come into the yeah, definitely.
David Meler (04:59):
So, you know, really kind of like typing in my journey into how I got with the Four A Group as well was In a big firm and was looking for another firm out there that matched my values and that value truly is putting the client first. And that, unfortunately, was hard for me to find until I did find the Four Eight Group. And driving that and explaining that every day in every meeting that you have, even if it's the client that's been with the firm for all the 24 years, is really reminding them and resonating with them of what our mission is and how stewardship really gears every single decision that we're making for the betterment of not only them, their families, but also all the causes they care about. So we really had that strong belief that we bring to every meeting that is so needed in this industry.
(05:50):
And I think especially what you guys see as well and why Risa even came to fruition was there was a gap, there was a need, and you guys took up the flag and said, we can do this, we can make this better. We can make, eventually many thousands, millions of lives better.
Alex Murguia (06:10):
That's good. I have two questions from that and we'll get into the Risa. But when we get into firms, one of the reasons we wanted to do the Voices of Advisors is because I love just bringing to light advisors that don't make a business of being on every TV show and stuff like that. Because I think the real advisors are folks like you, not someone like myself that's in the trenches and loves doing what they're doing. Two questions why was it hard for you to find somebody, David, that sort of aligned with your values in this industry? And if you don't mind, Bob, maybe taking the second part, which is what does that mean, the Four Eight Group? Because it's a podcast and people may not know that it's four semicolon eight, that kind of thing. Or is it 48? And I'm just deconstructing the number, whatever.
(07:00):
Right. So, dude, why don't you take it away and Bob, take it home?
Bob Bove (07:04):
Sure.
David Meler (07:04):
Yeah. So why it was hard like anything, especially when you're making a decision, in my experience, of where I want to have an impact and a strong impact in your career is finding a place where you can actually feel and see a mission statement of a company every day. And so going from a big company, I knew I wanted to go smaller to be able to see if that characteristic was drawn out and not just, all right, the lead advisor of the firm, but everybody buys into. And you can't really get that automatically from just going and interviewing at places and looking people up on LinkedIn and having quick conversations or coffees. And there really aren't many coincidences in life. And meeting the Fourier group, meeting Bob Bove, a lot of things just you start to pick up a notice and lined up, as you could say.
(08:02):
And it really came then to fruition when I discovered why and how you should invest clients money using evidence based investing in our firm's belief and having a philosophy that you're going to stick to no matter if it's rain, sunshine, snow, the best days and the worst days. There's a foundation there. And that's what I was really looking for, especially early on and young in my career as I was, I wanted to have something to believe in when I was speaking with people about their most important financial matters. So that's why it was Alex, as you can imagine. Hard to find that because there's so many different types of advisors out there, and I was trying to find a very particular foundation.
Alex Murguia (08:46):
I think it's a great answer. And then, Bob, how did the four.
Bob Bove (08:50):
Eight yeah, so four eight is Bible passage from Philippians four eight that says, finally, brothers and sisters, focus on things that are pure, praiseworthy, loving, admirable, noble, true, excellent and real. And it's sort of funny. When the firm started to grow back in the day, I needed to come up with a name. I was with a pretty big broker dealer in town here, or a pretty big firm. Everybody knew who the firm was, but then, you know, they know who Bob Bove is. They don't know who the firm is. So I wanted to come up with a name and reading a book by Tommy Newberry, who we have this thing called Return On, meaning speaker series. He's actually going to be speaking at one of our speaker series this year in October, and his book was 40 Days to a Joy Filled Life the Four Eight Principle.
(09:36):
I started reading it, and as David says, we're evidence based advisors. And this is sort of silly. I started thinking, well, there's a couple Nobel Prize winners at DFA. I happen to think it's excellent. I know it's true. And I just happened to come up with the name the Four Eight Group. And back in the day, when were trying to brand it and come up with some things, the marketing gentleman says, so what do you really do? And I said, well, it's more than money and what we do, and of course, being the marketer that he was, he said, okay, it's beyond wealth. Is that what you're telling me? And I'm like, yeah, that's exactly what I'm telling you. So that's how we came up with the name the Four Eight Group.
Alex Murguia (10:20):
I think it's fantastic, and I think I commend you for it simply because it goes beyond money. There's that sort of existential piece to it, as opposed to calling yourself, like, Harbor Capital Management. Not that there's anything wrong with any firm called Harbor Capital Management or even McLean Asset Management. That's a pretty crappy name. You really take a step back. And that's our mean. It's McLean, Virginia. We were in a hurry, I guess. But no, I think it's good, and I think you are ahead of the curve because I do think the industry is really moving beyond maximizing or optimizing stuff on an Excel sheet and optimizing stuff on your personal sort of belief system and how money contextualizes it and accommodates that. So I think it's great.
Bob Bove (11:13):
Thank you.
Alex Murguia (11:13):
Yeah. Wade, any risa questions?
Wade Pfau (11:18):
Yeah, we definitely want to talk about that, too. We did for the listeners. We first met Robert about a year ago at a DFA conference and that's Dimensional Fund Advisors, which yeah, eugene Fama, Nobel Laureate. Do they have other yeah, there's others.
Alex Murguia (11:37):
Rex on DFA or on University?
Bob Bove (11:43):
Bob Markovich, right?
David Meler (11:45):
Yeah.
Bob Bove (11:45):
Robert Markovich or Markowitz? Markowitz. Harry Markowitz. Right. Yeah. It was very interesting to see you at the DFA conference again. When I saw on the agenda that you guys are going to be talking about income and using annuities, this is something that we've been using for a long time and I think it just shows where the industry has gone. I mean, we followed many years and guys like Moshe and really smart guys that I think the biggest thing that I get out of it is that you all wonder why aren't more people using annuities? Right? And so it was a pleasure to see you both there. And Alex is one of a kind and it was very nice to meet.
Alex Murguia (12:38):
You. I hear you often imitated, never duplicate. But what was your since we got you here, it's an agency piece. What was your first take when you heard the craziness? When Wade and I are on stage talking about this, which I think probably was the first time you and I, Wade, were together on a stage, at least for Finance Now, where we're discussing stuff. Right. Because I think it was a relatively new concept at that time, first and.
Bob Bove (13:11):
Foremost, and confirmation to what I've believed for a very long time. Look, I mean, being a DFA advisor, an evidence based advisor, wasn't very popular 18 years ago. No one was talking about fees. No one was talking about all the data that was out there and how these data nerds back in the day, basically close to 50 years ago, had all this evidence at the Chicago School of Business where they could call bullshit on our industry, right? I'm sure as heck not a pioneer, but we always wanted to do things, I guess, just what's right for the client. And I knew in my heart of hearts, and I can tell you so many stories, how I would do a discovery meeting and one of the spouse would say, oh, my husband's never going to do annuity. He's totally against annuities. And at first I had a but not for long.
(14:05):
For a moment I'm like, well, do I really want this client? This is a pretty big client. Maybe I shouldn't bring up annuity. But I'm like, no, we're doing this for the client. And sure enough, that guy is one of my biggest advocates now. And I stuck to my guns because I knew this was the right thing to do. And so to see you guys up there on stage, like I said, it was just yeah, man, I was excited. I think I was texting all kinds of people. I can't believe at a DFA conference talking about annuities and stuff yeah.
Alex Murguia (14:33):
For DFA to do that and look, we share a similar thing over at McLean. Look, I got into this business in one, like a few months before 911, and right about when 911 hit, maybe really right around that time, I got into the industry thinking, oh, I'm going to be like the next Warren Buffett. I'm going to figure things out. But then you start researching and you realize, listen, investments are not that hard. At the end of the day, it is what it is. You capture returns, you capture them across certain premiums and blah, blah. Right?
Bob Bove (15:05):
Well, what's Warren Buffett say, Alex, in.
Alex Murguia (15:07):
Almost every one of his letters to his index?
Bob Bove (15:11):
What about the bet that he had?
Alex Murguia (15:12):
Right, yeah, with the hedge funds and stuff like that? No, 100%.
Bob Bove (15:15):
So you asked for your Warren Buffett.
Alex Murguia (15:21):
But the idea was you had to just eat with your beliefs. And data is data, right? And so we switched everything at that point because the easiest thing to sell is magic. Honestly, it's to say someone that you have some sort of value and bring them some charts in the back and say, look what a genius I am, and look at these returns. Right? The hardest thing to do is to sell humility. Right. And to a large extent, hand over my heart, we had to go that route simply because we just couldn't live with ourselves over the next 20, 30, 40 years selling the bullshit since he was the first one that way.
Bob Bove (16:08):
Remind me of a great saying about our industry, basically, is complexity is easy to charge for, but hard to understand. Simplicity is easy to understand, but hard to charge for.
Alex Murguia (16:21):
Yeah. No. And remember when people were getting into DFA, a lot of the things was, if you do indexing, how are you going to charge blah, and they don't realize it's? Wealth management, et cetera. But the point was hand over the heart. And the similar experience was when Wade joined us. The reality is and Wade had we.
Bob Bove (16:44):
Had this conversation, remember Wade?
Alex Murguia (16:46):
We were heading towards, like, the Christmas holiday party, and I think you brought up, hey, but McLean is fee only. We're going to start talking about annuities and their usefulness. Does that matter? I think I was like, whatever. It is what it is. You know what I mean? If research shows that's what it shows, then we move forward and don't look back. And we don't carry these marketing truisms about fee only or any of that crap. It's what's good for the client.
Bob Bove (17:18):
Amen.
Alex Murguia (17:18):
And that's that, full stop.
Bob Bove (17:22):
Definitely.
Alex Murguia (17:23):
And if you don't believe it, then I think you need to go to the eye doctor, because there's plenty of stuff to read. That's pretty obvious, right?
Bob Bove (17:33):
Amen.
Alex Murguia (17:34):
But that's where that is. And David, did you get the text from Bob or no, he didn't text you?
David Meler (17:41):
No, not that one.
Alex Murguia (17:45):
Or is it one of those when Bob comes back for a conference, it's like, hey, guys, let's have a lunch. Let's have a lunch meeting. And he shoots off 20 things that he wants to do next. And everyone's like, oh, my goodness. Everyone's like, give him a week. He'll forget about all of this.
David Meler (18:01):
Hey, and there's a rattle off of everything.
Alex Murguia (18:05):
Well, don't worry, because once Bob I don't know, you remember you called me once, like, on a Saturday? Yeah, you called me once on a Saturday. I was like, doing a cold plunge. I got in the cold plunge, and my phone rings. I'm like, who the hell is that who's calling me on Saturday? And it was Bob. And I was like, look at this guy. I have to pick up. Because I'm like, what the hell is this guy going to tell me on a Saturday?
Bob Bove (18:26):
I can't wait till Monday.
Alex Murguia (18:28):
Yeah, it was something like that. But I was like, I got to pick up. I mean, I cannot let it just ring.
Bob Bove (18:36):
That's me.
Alex Murguia (18:37):
No, I don't care. I'm the same way.
Bob Bove (18:39):
Always tell people, be yourself because everybody else is taken. Right?
Alex Murguia (18:42):
Yeah, right. And look, it's what you signed up for when we took this gig. It doesn't bother me in the slightest. Now, bringing it back to the Risa, right? What is your take on the role besides saying, oh, wow, this is kind of cool? What do you think the role that it plays in the whole discovery process?
Bob Bove (19:07):
Yeah, I think what it does in the discovery process is we have a saying here that we want to take our clients from wondering and worrying to living and dreaming and to help them identify on their own, not just what we think they should know. How do they really want to create their standard of living? Because I think it was you, Alex, that said a measure of someone's standard of living is not their net worth at this phase of their investing career, it's their income stream. Right. So how are you going to go from wondering and worrying to living and dreaming? Because we believe more than anything else that our clients deserve to win. After 30 years, 40 years of blood, sweat and tears, sacrificing, getting knocked down, picking themselves back up, they deserve to live an amazing life of significance and just turning on as much stuff as they can on autopilot.
(20:07):
And so we let them through that Risa dictate. How much of their income stream do they want, as the four quadrants say? And it's just a wonderful tool to use. And from a compliance standpoint it's awesome because this is them telling us and it's been really good. It has.
Bob French (20:30):
Are you a financial professional looking to learn more about the Risa and retirement income best practices? Well, if you are, you should join our retirement income masterclass on Monday, August 28 and Tuesday, August 29, you can sign up at risaprofile.com/advisors that's Risaprofile.com/advisors.
Alex Murguia (20:51):
No. Thank you for that. And just to bring to light, how does this fit in? Or does it in the current way that you're practicing sort of your Discover meetings and the like? And I think something that would be interesting for both in this podcast we have consumers and advisors that listen in. And so I think it's interesting for consumers simply because there's a process to discover meetings that really good advisors follow. It's semi structured, albeit, but still there's a process there. And I'd love your thoughts on just the discovery process that good advisors really utilize and how if the Risa fits into that workflow.
Wade Pfau (21:35):
And we should probably define discovery meetings in case anyone listening doesn't.
Bob Bove (21:41):
I'll talk about it in the concept of a prospect coming in. Then I'll let David talk about it. As far as we always like to have these conversations on income, anywhere from I would say at a minimum five to ten years out. So sort of like a rediscovery meeting when we're putting together the income plan. But discovery meeting for us, we learned this from CEG and again, it goes beyond wealth. It's more than just the assets. So we'll have a discovery meeting. We'll share with them that this is going to be a long term relationship. So we want to know things like we center around seven different areas. I think your value, your relationships that are important to you? What goals or transitions are you looking to accomplish? What are your interests? How involved are you? Do you want to be in the process of working with us?
(22:37):
Who are some of your other financial advisors and trusted advisors, besides just financial advisors, CPAs attorneys and that type of thing? Because we have this beautiful thing called a virtual family office that we can get into at a later time, if we have time, and then we talk about the assets because it is so far beyond wealth. A good question that we always like to ask our clients before we get to know them is like, what's the first recollection you had of money? What was money like growing up for you? And so we get to find out, are our clients these prospects? Do they fit into the four eight group set of values? We really like working with family stewards and so we really don't get into the Risa that much when we have a prospect. But if that prospect is a little bit older and he's getting ready to turn on some income, we will incorporate that and I can turn it over to David here on how we incorporate the Risa inside that discovery meeting.
Alex Murguia (23:41):
David far away, man.
David Meler (23:43):
Yeah. And again, as Bob was saying, starting off with those values as the first thing that you ask somebody, especially when they're joining you in a meeting and asking them where their origin story starts with money. Ends up being a really good indicator for us as advisors who are sitting there saying, all right, they could land anywhere from time segmentation here total return risk wrap or protected income. But by them telling those original stories, we have a pretty good idea. All right, they're going to probably want this, but that enhancement of actually having them tell us through a RISA after that first connection meeting really plainly states out, oh, well, this is why they want protected income because for some reason their history in their past, money wasn't talked about. Money was always gone. The other month, dad was laid off, he was a laborer, so they remember Christmas was just socks and underwear.
(24:44):
That's all they got. Right. It's those type of things that you get in a discovery meeting by asking the values first that make that reason make a little bit more sense and have a little bit more backbone to it. That really helps our discovery process be more productive and emphasize on the client, giving us more information about them rather than, oh, here's all the things about the four A group.
Alex Murguia (25:08):
No, that's great.
Bob Bove (25:09):
So we've incorporated that Risa like in the end of our discovery meeting, especially for those clients that are getting ready to retire and they want some guidance there. And then the next meeting that they come to is what we call our investment plan meeting or possibilities meeting. And then that's where we'll lay out have we seen gaps where you're at? Can we better? And here's how we plan on producing income for you based off of everything that you told us during that discovery meeting.
Alex Murguia (25:39):
Here's a side question, and it's just something that I feel very candid with you folks, and if I'm a prospect, I'm curious what your answer is, because this is me with my kind of sob head on. If I'm a prospect and I walk in and you ask me, hey, what are your first recollections of money? I'm like, what the hell did I just get into? I'm getting hell out of here. I don't have time for this. You know what I mean? I got to think there's some people that are thinking the same thing, listening, and like, what is this bullshit? You know what I mean? This is here about managing my assets. All of a sudden, you want to be my psychiatrist or psychologist or my best friend? I don't need this. What would you do to that? Because I think I would be in that camp a little bit, at least in the hands of somebody that doesn't have a lot of acumen in terms of these meetings.
(26:33):
You know what I mean?
Bob Bove (26:36):
Well, probably if it was back in the day, we would probably say that's, okay, we'll just go right to the assets back in the day. We take anybody that could fog a mirror. But we truly believe that we want to have I mean, what are we all here on Earth for? We're here to have a positive impact on people. And there's some people that come in here that we're not going to have a positive impact that are not going to see the value that we bring, and that's okay. And because one of the things that we tell them during that discovery meet I'm glad you brought this up, because it's important, is like, look, the only decision that you're going to have to make today is, do you want to come back to see us? But at the same time, we're going to share with you.
(27:16):
Do we think that we can be of value? In actuality? Do we really want to have you as a client? Because if I don't think I can be of value or we're going to have an impact on them or they don't appreciate what we do, then that's okay. It truly is, and it's good to see that up front before they become a client. Right?
Alex Murguia (27:39):
Wade, that reminds did you see what a smooth operator Bob is with that answer? What's that meme? What's that cartoon where they take my money and he's throwing the money at Futurama? That Futurama Meme, where he's like, take my money. That's a great no, I hear you, but you know why I'm making fun a little bit. I'm not making fun of you. I mean, you're really good, but there's this sort of vibe where everyone just are not as competent as you would like them to be with financial planning, and they just lean into becoming your best friend and it's like, dude, where are you going with this?
Bob Bove (28:16):
Well, Alex, that all goes back to being what I truly believe that one of the things that differentiates our group here is that we're not advisors, right? Advisors basically inform, leaders, transform. We've been transforming clients before I even knew it, just with respects to how to invest the money in evidence based way. Right. We've been transforming clients the way they think about how they're going to turn on income streams. We've been transforming clients on that. There's more to life than just money. It's about meaning, it's about having purpose. We talk about what is your unique desirement, not retirement, right? And we explain this is Mitch Anthony man from back in the day. Mitch Anthony's definition of desirement is having enough wealth to sleep at night and enough purpose to get your butt out of bed in the morning. So that's really some people maybe, oh, that's a bunch of BS.
(29:15):
You just want to accumulate assets, whatever. Well, if that's what you want to believe, fine. But that's not what we're about. And we built a very good business here over 24 years. That's what we're known for. That's exactly what we're known for.
Alex Murguia (29:26):
And Bob, I'm pushing the buttons a little bit just so people kind know, listen to what a real advisor they really view these. So thank you for humoring me there a little bit. Although sometimes I'm like what when I hear other advisors.
Bob Bove (29:45):
Yeah.
Alex Murguia (29:46):
David in terms of, like, okay, you've done the discovery, you're in the possibilities meeting and the like. Does the risa if someone's total return or if someone is income protection or what have you, does that begin to serve as a nice starting point for potential opportunities that you may bring up to the prospect or a client in a review meeting or not really.
David Meler (30:16):
No, I would definitely say it brings up a lot of those opportunities, especially depending on where they're coming from and in a lot of cases, if they even have a philosophy to begin with. But what I think the Risa does such an amazing job of is makes you make a decision every single question. Whereas your typical risk tolerance questionnaire that we give to clients to say, all right, here's how your allocation is going to be. I often will get an email or phone call. I don't really know how to answer this one question you guys have on here. Whereas the reset is saying you have to choose left or right. There's no middle, get out of jail free card here. What that really does also for us is we're building these possibilities for what their whole entire investment plan should be, is saying, this is what you've told us.
(31:11):
This is how you want to receive a paycheck when you're done working. And it's also telling us this probably isn't going to change. This is your behavior. Wade's done such a great job in rooting this in so many different ways and stress testing it that this really won't change a bunch unless all of a sudden you win the lottery and you're like, all right, let's do whatever we want. And that's such a beautiful thing for advisors and for us and Bob and I to be able to make a plan for somebody to say, this is in your essence, what you want. And that allows us to do our job even better as educators and leaders to them to say, here's what you want, and here's the evidence of why this is going to work best for you based off of these results and.
Bob Bove (31:58):
Give you the highest probability of success.
Alex Murguia (32:01):
No, sure, I think a couple of thoughts. Yeah. The way the questions are formed, you have to pick a side. It's like six options. There's no middle bubble, if you will. You have to sort of make that Solomon's decision. There's no splitting of the baby, if you will. You kind of have to pick. So and you do that enough times, an intrinsic sort of personalities will come out. Now, mind you, it's not a hard science. As we've always said, results vary, but for the most part, these are more intrinsic preferences that you're seeing. David something we haven't spoke much about because by the time we're done with Risa, we're kind of at the hour or whatever. The implementation matrix, something that we include in the Risa is for those that don't know what that is, we kind of try to develop a persona of who the person is as a client.
(33:01):
As many of you know, the reset self identifies strategies income protection, time segmentation, risk graph, what have you. But we also go bring in two factors where we bring in self efficacy, retirement income, self efficacy, and advisor usefulness. I e cost effectiveness. Really? And by getting your views on that, we can identify personas. If someone's a delegator, if someone's a collaborator, if someone is a self directed investor, or if someone is a validator, real quick self directed investor, they will do things themselves. They think they're as smart as an advisor or can read a book and be right where that advisor left off. And they don't think an advisor is cost effective. Fine. Delegator is somebody that low self efficacy, thinks an advisor is cost effective and wants an advisor to help guide them. But they're more outsourcing it. They just want to know what time it is.
(34:01):
They don't necessarily want to know how the clock works. Collaborator, high self efficacy, high advisor usefulness. They want to be part of the team. They want to help direct, but they realize the wisdom that an advisor brings to the table and validator, hey, look, I know I need help during certain points, but I don't want an ongoing relationship with an advisor because it's not worth it to me for whatever reason. And they just kind of like a tide comes in and comes out, comes in and that kind of thing. Has that informed your client base or your prospect base in any way, shape or form?
David Meler (34:36):
Yeah, definitely with Alex, it's a great part of it, especially as we keep talking about these potential people that we have to choose, decide if they want to be a good fit for us. It's like when were first sending out our reasons, it was a requirement that we had that and the way that you can customize how much you want in the research questionnaire. It was a requirement because we wanted to know where is this person coming from and are they going to be a good fit for us? And when you look at those type of results, it's pretty clear for us to say yes or no. And up front you can be able to address it and say, hey, let's talk a little bit more about this and you can delve in a little bit deeper. And you also, for a lot of the reasons, find out that personality is going to match, usually also tied into where that behavior is coming from, whether it's just the type of professional environment that they're in, whether it's just how they've been brought up.
(35:36):
But it gives us a very good sense going into that first meeting or that second meeting, how we also think we could work well or not works or work together with that person, if you want to elaborate on that.
Bob Bove (35:46):
No, that's an awesome tool. And again, it's not our opinion on are they a delegator or are they collaborator or self director? Boom. They are telling us that and everybody that is probably going to listen to this podcast we've all taken on clients that we shouldn't take it on. We knew it from the beginning, really, right. And again, this is just more evidence that helps us again make the right decision on whether or not we want to work with this family.
Bob French (36:21):
Let's take a moment to let the audience know that this show is sponsored by Retirement Researcher. You can learn more about Retirement Researcher at retirementresearcher.com and subscribe to our newsletter where you'll receive weekly actionable information for your retirement planning benefit. Retirement Researcher is an online community devoted to helping you create the Retirement income plan geared towards your goals.
Alex Murguia (36:45):
Yeah, and it's a little different even than and these are personas that are kind of everyone knows about it. We didn't discover it's just we kind of quantified it. But it's a different take on the personas. You had mentioned CEG. I think CEG breaks them down by like VIPs stewards, high net worth, personalities, whatever. Right. I think this is kind of more brass text. What's? Walking through the door.
Bob Bove (37:11):
Know, we all have preconceived notions when someone comes walking in, like someone says, Well, I'm an engineer. Like, we're all shit, but sometimes they'll come out different.
Alex Murguia (37:22):
Yeah, I agree.
Wade Pfau (37:25):
Engineers like spreadsheets usually.
Bob Bove (37:28):
Yeah.
Alex Murguia (37:31):
Oh, my goodness.
Wade Pfau (37:34):
With the collaborator type environment, it sounds.
Alex Murguia (37:37):
Like yeah, it's tricky, right? Validators and collaborators. Validators are kind of you think they leave you alone and they're easy, but I prefer collaborators.
Bob Bove (37:51):
I do, too. Yeah, I totally agree.
David Meler (37:55):
It's always interesting, too, when you get sorry, Wade.
Wade Pfau (37:58):
Go ahead.
David Meler (37:58):
You get a couple and they differ so much on those as well. And you see that a lot in couples, where one wants to handle all the money issues, one doesn't. And for us, we really want them both to be involved because it's that important first meeting that you start to see those personalities on the implementation matrix clash just in front of us in a meeting, like, okay, it's a little awkward points, but you get through it. And it's a good thing to have. Also, though, as informing you as how you're going to be able to work with these people together.
Wade Pfau (38:33):
Yeah. In that regard, do you have any interesting examples of maybe a case study that you could walk us through a little bit in terms of how you achieve that sort of balance if it's a couple or just interesting examples from your experience with the Risa?
Bob Bove (38:49):
Yeah, I could think of well, it's happened quite a bit in the last couple of months, but we usually just one is definitely afraid of running out of money, the other one doesn't really care. I mean, it varies from, hey, I think we should have a mortgage, to I don't think we should have a mortgage. And a lot of times we let them talk it know, the best thing to do is just be, as Dan Solan says, an active listener, and they'll come to their own agreement together on things. But we really encourage them to talk it out and to look at this together as a team, not only just with us, but with their CPA, with their state planning attorney, because granted, most of the time the spouses really don't know what's going on, and we really want them to be involved. You've been in the business as long as I have, and you're as old as I am.
(39:47):
You see what happens when the spouse passes if the wife in the relationship wasn't on board with everything that was going on, it's just on top of everything else that they're going through. It just becomes an extremely difficult situation for the surviving spouse. So we encourage it. We let them talk it out. And again, what this does is, just like with DFA, we always say the accumulation of assets is extremely easy if you follow the evidence to have a simple path that, you know, x percent of your income is coming from some guaranteed sources, whether it's a pension plan, Social Security, and annuity. It's all about simplicity. All about simplicity.
Alex Murguia (40:36):
I agree. How can people find out more before we get to the end without even doing this before? And how do people find out more about the 48 group? Let's do a little infomercial. Here infomercial on phonics. Wade.
Bob Bove (40:55):
Of course, we're at WW. .the48group.com. You can learn more about us. David and I, every Friday, do something that's called A Message from the Founder, and that's usually on Facebook and LinkedIn. And we talk a lot. We give a little bit of a market perspective, and then we give a little bit of what we call return on meaning perspective. So that's how you can find out more about us. Check out the videos, because they'll really tell you who we are and what we're about and what we believe in.
Alex Murguia (41:27):
And why we do LinkedIn Live. Or you just record the video and then upload it.
Bob Bove (41:30):
Record the video and upload it. David does it. The guy that's never seen a rotary phone in my office, he does all that.
Alex Murguia (41:38):
David. You should try LinkedIn Live. Wade and I have been, like, kicking that around a little bit lately. Not bad. Yeah, well, I mean, we're not as buttoned up as probably we should be, so we just we're like one take and it is what it is kind of thing. You feel comfortable enough with that? Run it. Yeah, let her at the end of.
Bob Bove (41:57):
The day, what difference is it going to make, right?
Alex Murguia (41:59):
Yeah, exactly. And what's the Japanese phrase? Wabisabi. Is that what it is? Wabisabi? Something like that. There's a perfect amount of the perfect amount of imperfection, I think it's called. Something like that.
Bob Bove (42:11):
Okay.
Alex Murguia (42:13):
There's something about not being too polished. It's always good to have a little bit of rawness in it. I don't know.
Bob Bove (42:20):
I thought you were going to say, what did the bee say to the sushi?
Alex Murguia (42:25):
Wait, I know this one. Yeah.
Wade Pfau (42:28):
You got it, Alex.
Alex Murguia (42:28):
Oh, what's up, B? Got you. I got you. Wade, who does he think he's talking to? Who does this guy think he's talking to? Right, David? David, what do you think? David?
David Meler (42:45):
Impressive. I love it.
Alex Murguia (42:46):
Love it.
Bob Bove (42:50):
That's great.
Alex Murguia (42:52):
Had to go into my Rolodex there. Yeah, that's awesome. Let's bring it back home.
David Meler (43:00):
Right?
Alex Murguia (43:00):
What's question here? All right, since you were talking about disagreements in terms of implementation, somebody's a delegator. Let's say the wife's a delegator, the husband's a collaborator, et cetera, what happens if you give them the reset and they differ in strategies? How do you reconcile that? How do you go about reconciling that or just even elucidating to them? Hey, you guys have two different methods of how you want to source retirement income. Let's unpack that.
Bob Bove (43:27):
So you're talking about if one is in agreement with time segmenting and the other exactly.
Alex Murguia (43:33):
Yeah. And the other is, whatever, total return.
Bob Bove (43:37):
We've never had that situation, have we, David?
David Meler (43:42):
Not really, because they usually, again, are coming back on the same page of, all right, we have to work together as a team. And in the rare cases that they do, we can tell there's enough of a difference, but it doesn't really come out in the results because they're filling it out usually together.
Bob Bove (43:59):
Yeah, a lot of times they're filling us out together.
Alex Murguia (44:02):
You may want to try that could work, but you may want to try separately as well, simply because there's always somebody that's a little more like they're going to brow beat them while they're I mean, I'm exaggerating to make the point. Right. But they could be looking over their shoulder as they're taking it. And you know what I mean?
Bob Bove (44:21):
Yeah.
Alex Murguia (44:22):
If Wade and I were married, I'd be like, whatever Wade answers, I'll answer it.
Bob Bove (44:27):
Right. How have you guys handled that at McLean? That's a very interesting question. What do you do when that happens?
Alex Murguia (44:33):
I would do it separately, just as a going forward matter. How do we handle that at McLean? They do it separately and then they come back. And there's two ways to go about doing can. Let's say if someone is at its most extreme case to make the reconciliation easy, if someone is highly time segmentation, high on optionality, high on safety first, that's effectively someone that just wants to hold cash, really think about it.
Bob Bove (45:02):
Right.
Alex Murguia (45:03):
And then you have someone that's at an extreme of I want a lifetime income stream in perpetuity maximizing mortality credits right. A SPEA and call it a day. Right. So how do you do that? Right. There's two ways you can earmark assets. Some goes to each person and split the assets so that they go evenly among both of them and kind of cookie jar it like that. Some advisors have done that. And again, the example is a little extreme. So just bear with me the other way that I gravitate towards personally and Wade and I think Wade does simply because we've always used this example. So I'm assuming Wade has never said, that's crazy. Yeah, right. The other way is kind of like, okay, if someone wants extreme optionality and the other person wants extreme commitment orientation, perhaps a bond ladder, let's say, of five to seven years could work because then both of them are compromising a little bit in their themes.
(46:07):
And so essentially you put together a five, seven year ladder, whether it's bonds or MYGAs or whatever, it doesn't matter, that kind of thing. And that way you kind of compromise for both of them in a manner that still has strong echoes of their style. It's just they're relaxing some of their things in order to compromise. Now, I think that's a far better way to go about it than if somebody you give them a risk questionnaire, which I think is complete BS, really amen. But you give somebody a risk questionnaire and someone comes in at 100% equity, 0% fixed income and 60% equity 40% fixed income. And they just literally split the baby and say, okay, we're just going to do an 80 20 portfolio. Or the tie goes to the runner. The runner being the least the most conservative person, they just do 60 40.
(47:00):
I think that's stupid because all you're doing there is just still total return approach. You didn't really do anything. And so I think this helps you take out your advisor's hat a little bit more. Not a little bit. It helps you take out your advisor's hat in a major way and really come up with a creative solution, which is what you get paid for to help accommodate both parties in a meaningful way. I think you get that ability when you give it to them separately. Did that answer?
Bob Bove (47:32):
That's a good point. Yeah, we need to start doing yep.
Alex Murguia (47:37):
Wade, anything to add to that?
Bob Bove (47:41):
No.
Wade Pfau (47:41):
Well, also sometimes you can kind of think about by building that protected floor to help the person who is more safety first, commitment oriented. You really can frame that as now with the other assets. You can go ahead and go wild.
Alex Murguia (47:57):
With whatever you're wanting to do return guy.
Wade Pfau (48:00):
And that is also a way to satisfy both individuals.
Bob Bove (48:04):
Yeah, that's a very good point. Yeah.
Alex Murguia (48:07):
And why don't we end up with this question here? How has the risa affected your own planning, if at all? Maybe you said no, it's just confirming what I'm already doing or whatnot to me it has. I came out income protection, of all things. And you come to realize that yeah, I kind of in the process of going through the machinations of what I need to do from that vantage point. What about you guys? Any AHA moments from actually taking it and doing that self discovery?
Bob Bove (48:38):
I wouldn't say any AHA moments for me because, you know, always a proponent, Lori, and have taken a lot of our assets. Again, being your own business owner and working with people that have teachers, retirement or a pension plan from the government, it's always something, obviously that we don't have as business owners. And I always wanted that. And so having I'm going back today's Pacific Life 10% credit when there was that arms race on living benefits. So we've always had that. Like I said, if anything, it's reinforced me. But Alex, I had a client the other day ask me what would I do differently looking back over 24 years. The fact now that I have equity or that I have annuities, I understand the resiliency of capitalism. Right. And I've just recently changed because of the fact that I've got a lot of protection. And we call annuities guardrails.
(49:35):
I've got a lot of guardrails. I was a 60 40 investor for the longest time, Lori. And I have become now an 80 20 because I can look back and see 50 years of data. I can look back and see 24 years of data, what 100% equity portfolio has done for me or would have done for me, versus a 60 40. And I think now that I have these guardrails, I'm even more confident that I can be more aggressive to the point that Wade made a little earlier. So, like I said, I've always been a proponent, but I feel more comfortable becoming a lot more aggressive than what I used to be.
Alex Murguia (50:13):
No, that's great. David, anything on your end?
David Meler (50:17):
Yeah, on my end, really just going through it myself. You really put yourself in those fine shoes. The first time I took my own, like, I was like, how many more pages am I going to have this? At first, that's what I thought. I was like, oh, I don't know how long this is. And then I was like, this is great, though, because every time I got to a new page, I was like, this is reinforcing my original beliefs of where I would end up. And I was close total return. Like, right on the edge of total Return and Time segmentation and everything. That being a young investor. That's all I'm thinking about is a long term time horizon, if I'm lucky. And it really did, though. Set in my shoes.
Alex Murguia (51:03):
Yes.
David Meler (51:04):
Confident that these answers that they give me back are exactly what I feel towards my own individual investor plan.
Alex Murguia (51:12):
No, dude, that's fantastic. I think we're good. Wade, any more stuff to add? I mean, I could talk to you guys mean, you can tell. Our firms are very similar, so there's this kindred sort of spirit that I kind of dig.
Bob Bove (51:33):
Yeah, and you like dad jokes, too, so that's even better.
Alex Murguia (51:42):
Yes. Well, I mean, look, it's been great. I really appreciate all the support you've given us, and I'm very excited to give you guys a little standard to tell your story. I think it's a story worth telling, and everyone should know about the Four Eight group. I think you guys are fantastic.
Bob Bove (52:04):
Well, look, we appreciate all the work that you've done and the impact that you two are having on this industry and more importantly, our clients and stuff. Thank you so much. We really enjoy working with you guys and know, hanging out and sharing ideas with each other. It's the best.
Alex Murguia (52:22):
No, I think it's great. And incidentally, I'll take this off here, but I'll put here. I think I'm going to be in Chicago within the next month or so. I'll give you a hauler.
Bob Bove (52:31):
Okay.
Alex Murguia (52:32):
If that does turn out all right.
Bob Bove (52:34):
Sounds good. Sounds good.
Alex Murguia (52:36):
All right. Well, hey, thanks, everyone. Wade, do you want to do our infomercial? You're much better at it than I am.
Wade Pfau (52:41):
Well, on the Risa side, so we will be having the Risa Master Class. It's a three day, 90 minutes per day opportunity to learn how the Risa works and how you can use it in your firm. It is going to be August 20, Eigth through 30th, starting at, I believe 01:00 p.m. Eastern time each of those days, and so we'll have a link to that in the show notes for the episode, and also we'll have a link to the 48 group, your website as well. Thank you Bob, thank you David, for being part of the show today and for sharing your experiences. Thanks everyone for and we'll catch you next.
Bob Bove (53:17):
Thanks guys, we'll see you.
Alex Murguia (53:18):
Hey, no worries and stay on for a second. All right guys, take care everyone.
Bob French (53:24):
Wade and Alex are both principals of McLean Asset Management and retirement researcher. Both are SEC registered investment advisors located in Tysons, Virginia. The opinions expressed in this program are for general informational and educational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific securities. To determine which investments may be appropriate for you, consult your financial advisor. All investing comes with a risk, including risk of loss. Past performance does not guarantee future results.
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