August 19, 2025 • 21 mins
In this episode of Ask The Experts with Wisconsin Capital Management, Shawn is joined by Tom and Nate to break down the often confusing world of financial advisors and investment strategies. They explore key factors that influence investment success—like asset allocation, compounding, time, and risk vs. return—and emphasize the importance of evaluating whether your investments are delivering expected returns.The conversation dives into the differences between commission-based and fee-based advisors, highlighting how compensation structures can impact your overall investment performance. They discuss fiduciary duty, SEC regulations, and the importance of transparency in advisor-client relationships.Listeners will learn:
- How to identify if your advisor is a fiduciary
- What internal fees and expense ratios mean for your portfolio
- The pros and cons of annuities, mutual funds, and ETFs
- Why understanding your total cost of advice is critical to achieving your financial goals
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:03):
Thirteen ten WIBA and ask the experts with Wisconsin Capital
Management online whizcap dot com that's wys cap dot com.
Hope you've had a chance to stop on by the
website if you haven't been there, today's a great day
to stop on it when you get to the office.
Punching on your computer at wiscap, learn a little bit
more about Wisconsin Capital Management. Also opportunity there to dig
(00:27):
in if you want to make contact, give them a
call and set up an appoyment. Again, just head on
over to wizcap dot com. That's wys cap dot com.
Joining us week are Tom and Nate Plum of course
of Wisconsin Capital Management.
Speaker 2 (00:38):
Tom, how are you doing this morning?
Speaker 3 (00:40):
Oh, we're doing just great. It's still sad to see
the summer start to turn the autumn here, or at
least get a little taste of it in the weather.
But it's a wonderful day in Madison, Wisconsin.
Speaker 1 (00:51):
It's sure as days are getting a little shorter, starting
to notice that. And Nate, how have you been.
Speaker 2 (00:56):
Great?
Speaker 4 (00:57):
Excited to be on the show and with my dad again.
Speaker 1 (00:59):
So yeah, it's really exciting to have both of you
along and as we as we're going to break down
this week a really important question, which is understanding how
your financial advisor, how they're getting paid, Who's where's that
money coming from, and why you know what what that
matters and what does that mean for you. Before we
get to this week's conversational Tom, let's actually look back
at some of the previous shows. We've really covered a
(01:22):
lot of great important topics for folks. They can definitely
listen back at whiz cap dot com as well as
at the radio station website. But let's talk about some
of those some of those previous topics, and let's also
talk about what brought along this week's topic.
Speaker 3 (01:35):
Well, e Sean, we've talked about how your total return
and how it influences your ability to meet your financial
goals can be a factor of your asset allocation. It's
also the time and the compounding, which again we call
the eighth wonder of the world. And basically, if you're
(01:57):
going to meet your financial goals, you have to have
a plan. And when you have that type of plan,
a lot of things can work for you, including how
much money you've set aside for short term needs, mid
term needs, and then allowing that compounding to work. Especially
for your long term needs.
Speaker 1 (02:18):
And you know, Tom, one of the one of the
little tidbits you shared with me before this week's show
was a really interesting study from Northwestern Mutual.
Speaker 2 (02:25):
What did that What did that find when they.
Speaker 1 (02:27):
Looked into two folks that are that work with advisors.
Speaker 3 (02:31):
Well, I think we've seen a number of studies over
the years that show that a lot of people have
difficulty matching up their total return with the actual types
of investments they're investing, and that's primarily because sometimes it
becomes an emotional decision. But on Northwestern Mutual educated that
(02:51):
in their study that most people seem to be well
served when they have a financial advisor that's working on
their behalf and it gives them serenity, it gives them
some confidence that their money is being used the way
they wanted to to meet those financial goals.
Speaker 1 (03:11):
Talking this morning with Tom and Nate Plum, they come
to us from Wisconsin Capital Management. The website whizcap dot com.
That's Wi s cap dot com. All one word whizcap
dot com. Ob David stop by check out the website
this morning again, that's w I s c ap dot com.
Speaker 2 (03:27):
Natean and the conversation in just a moment.
Speaker 1 (03:28):
But first one final thing, Tom, let's talk about there's
all these different terms as far as wealth managers, those
type of things. Kind of explain some of that and
really what they what they are, and a little bit
more about about about some of those terms there.
Speaker 3 (03:44):
Tom Well, I think a lot of people have been
using these terms since the right, mixing them up when
they talk about that they have a wealth manager or
a financial planner or an investment advisor. There's also, of
course people who are additional stockbrokers or asurch agents. Most
of them are very reputable and trying to find the
(04:07):
best plans to make their clients successful. But there is
a real difference when you start talking about someone being
a registered investment advisor, because the SEC finally determined that
to say that about yourself and what you're doing, you
need to be fiduciary. And I know that's a term
(04:30):
that sometimes is confusing, but a fiduciary is someone who
puts your interests as a client above their own and
acts that way. And that's very very important for determining
whether or not that person is going to be working
exclusively on your behalf or if they're working in a
(04:53):
way that might be okay for you, but is very
beneficial to them as the advisor.
Speaker 2 (05:00):
Hey, this stuff can get can get pretty confusing, can't it.
Speaker 3 (05:03):
Yeah, it definitely can.
Speaker 4 (05:05):
And then sometimes even financial advisors are confused themselves because
the terms have changed. They're back in twenty sixteen, there
was some legislation from the Department of Labor. They tried
to make some new rules and those got enacted, and
then the next president delayed them. In the Fifth District Court,
(05:28):
which is Texas, Mississippi, and I believe Louisiana, they said
the Department of Labor overreached Congress's abilities. So for an analogy,
it's like with the football season coming up for the Badgers.
So essentially, the SEC is the coach coach fickle, and
(05:49):
the Department of Labor is the referee, and this time
they was kind of ruled. The referee decided to add
some of the plays to the coaching book, which to
make the better, but they said that was an overreach.
So that was a kind of analogy what happened. And
then as my dad mentioned, there was after that kind
of failed the Fifth District then they made the best
(06:12):
interest rule. So essentially if you work regularly by the
sec the Securities Exchange, that that you are essentially a
financial advisor and you should keep your your fiducier, you
should keep your h the client's best interest at heart.
But a lot of products are sold in different ways.
So usually what advisors is most populars called the fee
(06:35):
for service. So essentially, if you have if your money
grows there fee grows, and so usually people bill bill
you quarterly for that. That's the most common structure you
see out there. But there's also things that are bought
on commission, and those are usually insurance products, so like
life insurance, whole life insurance, different annuities, and they're the
(07:00):
person selling you who gets this cut, which is could
be up to one or seven percent right away, and
they get a check as soon as it clears, the
agent does, and then they get to spend it. So
sometimes that's okay, but usually, as you find in life,
if if someone is getting paid more to sell you something,
(07:20):
they kind of want to upsell you and overseell you,
and there's sometimes a trap into that. But so that's
why you have to kind of be careful and figure
out and ask good questions about how it's actually the
financial advisor gets paid, and I'm sure that they'll talk
a very you know, salesmany terms, but make sure that
(07:40):
you understand and not just out your head.
Speaker 1 (07:43):
And with that they should they should be upfront and
be able to very clearly explain to you how they're
getting paid.
Speaker 4 (07:49):
Shouldn't they Yes, exactly, so they know how they're getting paid,
and they should be with articulate that very well for
you and ninety percent of the time that you shouldn't
have an issue with it.
Speaker 1 (08:00):
Talking this morning with Naton Tom tom Plum of Wisconsin
Capital Management the website whizcap dot com.
Speaker 2 (08:05):
That's wiscap dot com.
Speaker 1 (08:08):
This is asked the experts with Wisconsin Capital Management right
here on thirteen ten Wi b A talking this week
about exactly how your advisors are getting paid and asking
those questions and how much you're paying your for that
advice and of course the products that you invest in.
And Tom, what is the you know when it comes
to a registered investment advisor?
Speaker 2 (08:29):
What exactly is that designation? What does that mean? Then?
Speaker 3 (08:33):
That is a specific license that the SECCU to practice
and call yourself an investment advisor. So prior to that,
it was becoming almost a generic term where people said, oh,
this is my advisor, this is my financial advisor. But
the SEC required that anyone putting that in their title
(08:57):
that they have to be registered, and they could be
register with the state of Wisconsin under certain rules, but
they have to be registered with the federal government or
with the Security and Exchange Commission, and there are certain
rules that they have to have. As we said, they
have to be putting your interests as a client above theirs.
(09:19):
So we've seen that as being something that once you
match up people's goals with the people's compensation who are
helping you meet those goals, you're much more likely to
meet them.
Speaker 2 (09:34):
Is there something to tom with this?
Speaker 1 (09:35):
And you know, we had a chance to talk with
you and Nate each and every week, and of course
your your role as a chartered financial analyst and kind
of understanding this, It seems to me like and and
this is just a kind of a layperson's observation, there
seems to be a level of commitment and education and
kind of another level to it is again there's there's
(09:56):
a role for everybody, and I know people that are
that do a variety of you know, approach helping folks
when it comes to saving and helping them grow their portfolios.
Most of them are really good at heart, just have
different approaches. There does seem to be us and for
what you guys do at Wisconsin Capital Management, there does
seem to be another level of commitment to that craft,
(10:17):
to that trade. Am I am I understanding that correctly?
Speaker 3 (10:21):
Well, again, the SEC has various tests that they require
you to pass to get a license to then put
that title on your business card and to represent it
that you are a financial advisor. So there's specific tests
that you have to take and those will determine how
(10:43):
you can interact with clients.
Speaker 1 (10:45):
Well, that's really good stuff, really interesting. As we talked
this morning with Tom Plumb and Nate Plumb of course
from Wisconsin Capital Management. The website wizcap dot com. That's
wiscap dot com. Great website to learn more about Nate,
Tom and the whole team at Wisconsin Capital Management. You
can also learn about Wisconsin Capital Management itself and make
an appointment and start that conversation right at the website
(11:05):
wizcap dot com.
Speaker 2 (11:06):
That's wiscap dot com.
Speaker 1 (11:09):
Or gets to you our conversation with Tom and Nate
we'll talk a little bit about mutual funds where they
fit into all of this, and of course ETFs and
other things as well. We'll get the details from Tom
and Nate. We will do that next as Ask the
Experts with Wisconsin Capital Management continues right here on thirteen
ten Wi BI thirteen ten Wi B A and Ask
(11:35):
the Experts hanging out with Tom and Nate Plumb of
Wisconsin Capital Management online whizcap dot com. That's wiscap dot com.
Hope you had a chance during the break to check
out their website, get to know the guys. If you
haven't done that, head on in there this morning when
we get into the office, it's wizcap dot com. That's
wiscap dot com. Gets no, Nate gets no. Tom also
(11:55):
learn more about Wisconsin Capital Management as well, talking this
week about understanding how much and how your your advisors
getting paid in the importance of you as a as
a client fully understanding that as well. And Nate, what
are these wire based advisors and kind of the understanding there,
What is their role and things like annuities and insured products.
Speaker 2 (12:16):
Where do they fit into all of this?
Speaker 4 (12:18):
Yeah, they put in the usually there you as a
financial advisor. You're usually contracted with a larger broker dealer
like Coleman Sachs or Morgan Stanley, or you're contracted through
insurance company like Northwestern Mutual or Lincoln Financials or something
like that, and that way you have a kind of
(12:42):
a product pipeline. You can use their products and sell
them as as you get educated and trained on those.
There is so many products they these. Wall Street is
one very good at doing one thing very very well,
and that is creating new financial products. So that is
the genius of Wall Street, which can be good or bad.
(13:04):
So you get to kind of get navigate through that.
A lot of those products are admission based. So as
I said that, so if you, for example, by a
class mutual front fund, someone the salesman is going to
take like four and a half percent right away and
then you go on your merry way. Some of them,
(13:26):
but some of them are confused. The commission structures are
very confusing. There's B shares where you get the advisory
gets a little bit at the beginning, a little bit
at the end. Then there's a class C shares where
you get you kind of nicked at the just at
the end. And so but usually in the world that
we navigated, we prefer the no load mutual funds, so
(13:48):
there's no commission up front. So if you put in
one hundred dollars, one hundred dollars investment is working for
you right away. So that's usually mathematically the best way
that we feel that we can help people.
Speaker 1 (14:00):
I want to dig into that a little bit more
in just a moment as we talk with Nan and
Tom and Nate. The one thing too, is when you
were talking about about, you know, working with with some
of these some of these other providers out there, some
of these products, is that is is there like a
uniform disclosure for us? I'm trying to figure out what
am I paying one percent or seven percent? I mean,
is there is is that universal? Or how does how
(14:23):
do I as a as a as a consumer, as
a potential client, how would I know that? Like what
the what that rate is or is is it? Is
it very clear or sometimes going to get a little confusing.
Speaker 4 (14:33):
Maybe both ways. So you are required when I think
the buy to see what the expense ratio is. So
sometimes it's kind of clear. The device can tell you,
it can and show you it's in a summary form,
So you should should be getting a prospectus or some
kind of contract that shows that very very clearly, and
if you don't see anything like that, you probably shouldn't
(14:54):
buy it. The uh sometimes it is kind of stuck
in the eagle ees. So but if they're going to
email to you in like a PDF form, just control
f and then try to you know, put in fees
and then hopefully search it after. You know, sometimes those
legalise documents can be over one hundred pages, but it's
(15:15):
important to know what your fees. And sometimes these insurance
products kind of lock you in, and they'll lock you
in term they use as a surrender period. So sometimes
you have these annuities and you're stuck in there and
can't change or you know, I've seen some seven nine
years it's just up to the contract, especially with these
insurance companies. So you need to be lyrics. So my
(15:36):
dad and I are the philosophies that your finance has changed,
life events change, so you've got to be flexible. So
we're very leary usually over things that anything that gets
you stuck in, it's something that you can't change. And
so that's how we kind of think of the world
at Wisconsin Capital Management.
Speaker 2 (15:53):
That's great perspective.
Speaker 1 (15:54):
As we talked this morning with Nate Plumb and Tom Plumb,
not only are we getting a little financial tips, we're
also getting some computer tricks as well.
Speaker 2 (15:59):
The control left for folks that don't know.
Speaker 1 (16:00):
If you ever have a big document you want to
find specific words, control an efnity and type out the word,
it'll find it for you throughout the document. And a
really great, really great powerful thing there.
Speaker 2 (16:10):
As we talk with.
Speaker 1 (16:11):
Naton Tom Plumb of Wisconsin Capital Management Online wiz CAAP
dot com that's wiscap dot com. Of course Wisconsin Capital
Mansion brings you ask the experts right here. I'm thirteen
ten WIBA and Tom. I heard Nate there mention mutual
funds load no load funds. What exactly is the difference
there and can that be, for example, a no load
(16:32):
or a load fund be the same type of investment
or what are some of the distinctions and differentiations there?
Speaker 4 (16:38):
Well?
Speaker 3 (16:38):
As Nathan mentioned, Wall Street comes up with some great
ways that they can make money. Yes, so they can
actually have the same mutual fund with the same name,
but it'll have a different class of shares and sometimes
those class of shares will determine whether or not there's
going to be a commission paid upfront or behind, or
(16:58):
what type of expense ratio is going to be within
the mutual fund. So some funds, typically the most inexpensive
class is called the institutional class, and that one has
a lower expense ratio and doesn't have a commission, but
you still could have a transaction fee. If you buy
(17:20):
those funds through Fidelity or even a no load type
brokerage firm, they will charge a transaction fee for the
lowest cost mutual fund. So it's very important to know
how the funds themselves are charged and those who can
be hidden. As Nathan said, you may have to search
(17:42):
to find out exactly what the total expense ratio within
the investment that you're looking at, especially right now we're
talking about mutual funds. But then, as they mentioned, the
other thing is you're paying someone to advise you to
go into these different types of investments, and that's usually
the fee that you see or don't see when someone
(18:04):
says we charge a management fee, and it maybe quarterly,
like Nate said, typically we've seen across the country that
runs from abouto point six percent to about one point
two percent for the actual management fee to determine what
products you're going to be invested in to beat your
(18:25):
investment goals. So again you look at that aspect as
being a very important part of what your expense ratio is.
But then the other part is what the investments are
and is there an internal fee that you don't see.
So when we say no load, that means no commission
(18:48):
is paid to buy those mutual funds. And some mutual
funds have a number of no load classes with different expenses,
and of course they're meant for different types of investors.
Speaker 1 (19:00):
And Tom, you know when we talk about and people
hear about different commissions, those type of things. You know,
we've talked on previous shows about about compounding. You talk
about you know, a couple of percent different difference in
fees compounding when it ultimately you know, as a reduction
in your in your return there you know, ultimately then
start compounding, it can actually have a quite substantial impact
(19:22):
on the overall on your overall portfolio. Before we wrap,
then I do want to ask you, ask you, Tom
a little bit about you know, as we as we summarize,
you know, know, what you're getting paid for. Let's talk
about understanding the cost of advice. Should you be asking,
for example, is somebody a fiduciary? And let's kind of
talk a little bit about Wisconsin Capital Management and how
that conversation goes when folks meet with you guys.
Speaker 3 (19:46):
So again, when you talk about being a fiduciary on
that means that that does not mean that you don't
have any conflicts of interest. It means that you address
those conflicts of interest in the fit of your client.
And so what we think is very important is that
you when you're meeting with your investment advisor or your
(20:08):
meeting with Nathan and I or anyone at Wisconsin Capital Management,
you ask one, are you a fiduciary? What does that
mean to you? How do you address fiduciary for your clients?
And how do you address conflicts of interest? And if
there are any, and they're almost all is going to
(20:29):
be some type of conflict of interest because people are
getting paid to give you advice, So you want to
know how they can identify those conflicts of interests and
then how do they deal with them. Your total expense
ratio is going to be very important and it dramatically
impacts ther total return and the probability of meeting your success.
(20:50):
So it's very important that you're comfortable with the people
you're working with. You've defined what their role is, how
they're compensated, and what the expense of the investments are
to you, and then you can put that together and
make sure that you make an intelligent decision about the
advice you're getting.
Speaker 1 (21:10):
It's a really important decision and it's a great day
to learn more about Tom Nate and the whole team
at Wisconsin Capital Management. If you head on over to
the website whizcap dot com. That's wiscap dot com. Nice
button there it says contact us. It's a great place
to reach out and start that conversation. Get to know
the guys and the team at Wisconsin Capital Management. While
you're there, of course I can ask all of those questions.
(21:31):
They would love to share with you what they're able
to do for you. Again, a great starting point is
that website whizcap dot com. That's wis cap, that's wi
scap dot com, wizcap dot com for Wisconsin Capital Management.
Tom Nate, It's always great seeing both of you guys.
Have a great day, and we'll do it all again
in a week. Take care, guys, and of course that
(21:53):
website whizcap dot com News comes your way.
Speaker 2 (21:55):
Next right here thirteen ten wuib A
Thirteen ten WIBA and ask the experts with Wisconsin Capital
Management online whizcap dot com that's wys cap dot com.
Hope you've had a chance to stop on by the
website if you haven't been there, today's a great day
to stop on it when you get to the office.
Punching on your computer at wiscap, learn a little bit
more about Wisconsin Capital Management. Also opportunity there to dig
(00:27):
in if you want to make contact, give them a
call and set up an appoyment. Again, just head on
over to wizcap dot com. That's wys cap dot com.
Joining us week are Tom and Nate Plum of course
of Wisconsin Capital Management.
Speaker 2 (00:38):
Tom, how are you doing this morning?
Speaker 3 (00:40):
Oh, we're doing just great. It's still sad to see
the summer start to turn the autumn here, or at
least get a little taste of it in the weather.
But it's a wonderful day in Madison, Wisconsin.
Speaker 1 (00:51):
It's sure as days are getting a little shorter, starting
to notice that. And Nate, how have you been.
Speaker 2 (00:56):
Great?
Speaker 4 (00:57):
Excited to be on the show and with my dad again.
Speaker 1 (00:59):
So yeah, it's really exciting to have both of you
along and as we as we're going to break down
this week a really important question, which is understanding how
your financial advisor, how they're getting paid, Who's where's that
money coming from, and why you know what what that
matters and what does that mean for you. Before we
get to this week's conversational Tom, let's actually look back
at some of the previous shows. We've really covered a
(01:22):
lot of great important topics for folks. They can definitely
listen back at whiz cap dot com as well as
at the radio station website. But let's talk about some
of those some of those previous topics, and let's also
talk about what brought along this week's topic.
Speaker 3 (01:35):
Well, e Sean, we've talked about how your total return
and how it influences your ability to meet your financial
goals can be a factor of your asset allocation. It's
also the time and the compounding, which again we call
the eighth wonder of the world. And basically, if you're
(01:57):
going to meet your financial goals, you have to have
a plan. And when you have that type of plan,
a lot of things can work for you, including how
much money you've set aside for short term needs, mid
term needs, and then allowing that compounding to work. Especially
for your long term needs.
Speaker 1 (02:18):
And you know, Tom, one of the one of the
little tidbits you shared with me before this week's show
was a really interesting study from Northwestern Mutual.
Speaker 2 (02:25):
What did that What did that find when they.
Speaker 1 (02:27):
Looked into two folks that are that work with advisors.
Speaker 3 (02:31):
Well, I think we've seen a number of studies over
the years that show that a lot of people have
difficulty matching up their total return with the actual types
of investments they're investing, and that's primarily because sometimes it
becomes an emotional decision. But on Northwestern Mutual educated that
(02:51):
in their study that most people seem to be well
served when they have a financial advisor that's working on
their behalf and it gives them serenity, it gives them
some confidence that their money is being used the way
they wanted to to meet those financial goals.
Speaker 1 (03:11):
Talking this morning with Tom and Nate Plum, they come
to us from Wisconsin Capital Management. The website whizcap dot com.
That's Wi s cap dot com. All one word whizcap
dot com. Ob David stop by check out the website
this morning again, that's w I s c ap dot com.
Speaker 2 (03:27):
Natean and the conversation in just a moment.
Speaker 1 (03:28):
But first one final thing, Tom, let's talk about there's
all these different terms as far as wealth managers, those
type of things. Kind of explain some of that and
really what they what they are, and a little bit
more about about about some of those terms there.
Speaker 3 (03:44):
Tom Well, I think a lot of people have been
using these terms since the right, mixing them up when
they talk about that they have a wealth manager or
a financial planner or an investment advisor. There's also, of
course people who are additional stockbrokers or asurch agents. Most
of them are very reputable and trying to find the
(04:07):
best plans to make their clients successful. But there is
a real difference when you start talking about someone being
a registered investment advisor, because the SEC finally determined that
to say that about yourself and what you're doing, you
need to be fiduciary. And I know that's a term
(04:30):
that sometimes is confusing, but a fiduciary is someone who
puts your interests as a client above their own and
acts that way. And that's very very important for determining
whether or not that person is going to be working
exclusively on your behalf or if they're working in a
(04:53):
way that might be okay for you, but is very
beneficial to them as the advisor.
Speaker 2 (05:00):
Hey, this stuff can get can get pretty confusing, can't it.
Speaker 3 (05:03):
Yeah, it definitely can.
Speaker 4 (05:05):
And then sometimes even financial advisors are confused themselves because
the terms have changed. They're back in twenty sixteen, there
was some legislation from the Department of Labor. They tried
to make some new rules and those got enacted, and
then the next president delayed them. In the Fifth District Court,
(05:28):
which is Texas, Mississippi, and I believe Louisiana, they said
the Department of Labor overreached Congress's abilities. So for an analogy,
it's like with the football season coming up for the Badgers.
So essentially, the SEC is the coach coach fickle, and
(05:49):
the Department of Labor is the referee, and this time
they was kind of ruled. The referee decided to add
some of the plays to the coaching book, which to
make the better, but they said that was an overreach.
So that was a kind of analogy what happened. And
then as my dad mentioned, there was after that kind
of failed the Fifth District then they made the best
(06:12):
interest rule. So essentially if you work regularly by the
sec the Securities Exchange, that that you are essentially a
financial advisor and you should keep your your fiducier, you
should keep your h the client's best interest at heart.
But a lot of products are sold in different ways.
So usually what advisors is most populars called the fee
(06:35):
for service. So essentially, if you have if your money
grows there fee grows, and so usually people bill bill
you quarterly for that. That's the most common structure you
see out there. But there's also things that are bought
on commission, and those are usually insurance products, so like
life insurance, whole life insurance, different annuities, and they're the
(07:00):
person selling you who gets this cut, which is could
be up to one or seven percent right away, and
they get a check as soon as it clears, the
agent does, and then they get to spend it. So
sometimes that's okay, but usually, as you find in life,
if if someone is getting paid more to sell you something,
(07:20):
they kind of want to upsell you and overseell you,
and there's sometimes a trap into that. But so that's
why you have to kind of be careful and figure
out and ask good questions about how it's actually the
financial advisor gets paid, and I'm sure that they'll talk
a very you know, salesmany terms, but make sure that
(07:40):
you understand and not just out your head.
Speaker 1 (07:43):
And with that they should they should be upfront and
be able to very clearly explain to you how they're
getting paid.
Speaker 4 (07:49):
Shouldn't they Yes, exactly, so they know how they're getting paid,
and they should be with articulate that very well for
you and ninety percent of the time that you shouldn't
have an issue with it.
Speaker 1 (08:00):
Talking this morning with Naton Tom tom Plum of Wisconsin
Capital Management the website whizcap dot com.
Speaker 2 (08:05):
That's wiscap dot com.
Speaker 1 (08:08):
This is asked the experts with Wisconsin Capital Management right
here on thirteen ten Wi b A talking this week
about exactly how your advisors are getting paid and asking
those questions and how much you're paying your for that
advice and of course the products that you invest in.
And Tom, what is the you know when it comes
to a registered investment advisor?
Speaker 2 (08:29):
What exactly is that designation? What does that mean? Then?
Speaker 3 (08:33):
That is a specific license that the SECCU to practice
and call yourself an investment advisor. So prior to that,
it was becoming almost a generic term where people said, oh,
this is my advisor, this is my financial advisor. But
the SEC required that anyone putting that in their title
(08:57):
that they have to be registered, and they could be
register with the state of Wisconsin under certain rules, but
they have to be registered with the federal government or
with the Security and Exchange Commission, and there are certain
rules that they have to have. As we said, they
have to be putting your interests as a client above theirs.
(09:19):
So we've seen that as being something that once you
match up people's goals with the people's compensation who are
helping you meet those goals, you're much more likely to
meet them.
Speaker 2 (09:34):
Is there something to tom with this?
Speaker 1 (09:35):
And you know, we had a chance to talk with
you and Nate each and every week, and of course
your your role as a chartered financial analyst and kind
of understanding this, It seems to me like and and
this is just a kind of a layperson's observation, there
seems to be a level of commitment and education and
kind of another level to it is again there's there's
(09:56):
a role for everybody, and I know people that are
that do a variety of you know, approach helping folks
when it comes to saving and helping them grow their portfolios.
Most of them are really good at heart, just have
different approaches. There does seem to be us and for
what you guys do at Wisconsin Capital Management, there does
seem to be another level of commitment to that craft,
(10:17):
to that trade. Am I am I understanding that correctly?
Speaker 3 (10:21):
Well, again, the SEC has various tests that they require
you to pass to get a license to then put
that title on your business card and to represent it
that you are a financial advisor. So there's specific tests
that you have to take and those will determine how
(10:43):
you can interact with clients.
Speaker 1 (10:45):
Well, that's really good stuff, really interesting. As we talked
this morning with Tom Plumb and Nate Plumb of course
from Wisconsin Capital Management. The website wizcap dot com. That's
wiscap dot com. Great website to learn more about Nate,
Tom and the whole team at Wisconsin Capital Management. You
can also learn about Wisconsin Capital Management itself and make
an appointment and start that conversation right at the website
(11:05):
wizcap dot com.
Speaker 2 (11:06):
That's wiscap dot com.
Speaker 1 (11:09):
Or gets to you our conversation with Tom and Nate
we'll talk a little bit about mutual funds where they
fit into all of this, and of course ETFs and
other things as well. We'll get the details from Tom
and Nate. We will do that next as Ask the
Experts with Wisconsin Capital Management continues right here on thirteen
ten Wi BI thirteen ten Wi B A and Ask
(11:35):
the Experts hanging out with Tom and Nate Plumb of
Wisconsin Capital Management online whizcap dot com. That's wiscap dot com.
Hope you had a chance during the break to check
out their website, get to know the guys. If you
haven't done that, head on in there this morning when
we get into the office, it's wizcap dot com. That's
wiscap dot com. Gets no, Nate gets no. Tom also
(11:55):
learn more about Wisconsin Capital Management as well, talking this
week about understanding how much and how your your advisors
getting paid in the importance of you as a as
a client fully understanding that as well. And Nate, what
are these wire based advisors and kind of the understanding there,
What is their role and things like annuities and insured products.
Speaker 2 (12:16):
Where do they fit into all of this?
Speaker 4 (12:18):
Yeah, they put in the usually there you as a
financial advisor. You're usually contracted with a larger broker dealer
like Coleman Sachs or Morgan Stanley, or you're contracted through
insurance company like Northwestern Mutual or Lincoln Financials or something
like that, and that way you have a kind of
(12:42):
a product pipeline. You can use their products and sell
them as as you get educated and trained on those.
There is so many products they these. Wall Street is
one very good at doing one thing very very well,
and that is creating new financial products. So that is
the genius of Wall Street, which can be good or bad.
(13:04):
So you get to kind of get navigate through that.
A lot of those products are admission based. So as
I said that, so if you, for example, by a
class mutual front fund, someone the salesman is going to
take like four and a half percent right away and
then you go on your merry way. Some of them,
(13:26):
but some of them are confused. The commission structures are
very confusing. There's B shares where you get the advisory
gets a little bit at the beginning, a little bit
at the end. Then there's a class C shares where
you get you kind of nicked at the just at
the end. And so but usually in the world that
we navigated, we prefer the no load mutual funds, so
(13:48):
there's no commission up front. So if you put in
one hundred dollars, one hundred dollars investment is working for
you right away. So that's usually mathematically the best way
that we feel that we can help people.
Speaker 1 (14:00):
I want to dig into that a little bit more
in just a moment as we talk with Nan and
Tom and Nate. The one thing too, is when you
were talking about about, you know, working with with some
of these some of these other providers out there, some
of these products, is that is is there like a
uniform disclosure for us? I'm trying to figure out what
am I paying one percent or seven percent? I mean,
is there is is that universal? Or how does how
(14:23):
do I as a as a as a consumer, as
a potential client, how would I know that? Like what
the what that rate is or is is it? Is
it very clear or sometimes going to get a little confusing.
Speaker 4 (14:33):
Maybe both ways. So you are required when I think
the buy to see what the expense ratio is. So
sometimes it's kind of clear. The device can tell you,
it can and show you it's in a summary form,
So you should should be getting a prospectus or some
kind of contract that shows that very very clearly, and
if you don't see anything like that, you probably shouldn't
(14:54):
buy it. The uh sometimes it is kind of stuck
in the eagle ees. So but if they're going to
email to you in like a PDF form, just control
f and then try to you know, put in fees
and then hopefully search it after. You know, sometimes those
legalise documents can be over one hundred pages, but it's
(15:15):
important to know what your fees. And sometimes these insurance
products kind of lock you in, and they'll lock you
in term they use as a surrender period. So sometimes
you have these annuities and you're stuck in there and
can't change or you know, I've seen some seven nine
years it's just up to the contract, especially with these
insurance companies. So you need to be lyrics. So my
(15:36):
dad and I are the philosophies that your finance has changed,
life events change, so you've got to be flexible. So
we're very leary usually over things that anything that gets
you stuck in, it's something that you can't change. And
so that's how we kind of think of the world
at Wisconsin Capital Management.
Speaker 2 (15:53):
That's great perspective.
Speaker 1 (15:54):
As we talked this morning with Nate Plumb and Tom Plumb,
not only are we getting a little financial tips, we're
also getting some computer tricks as well.
Speaker 2 (15:59):
The control left for folks that don't know.
Speaker 1 (16:00):
If you ever have a big document you want to
find specific words, control an efnity and type out the word,
it'll find it for you throughout the document. And a
really great, really great powerful thing there.
Speaker 2 (16:10):
As we talk with.
Speaker 1 (16:11):
Naton Tom Plumb of Wisconsin Capital Management Online wiz CAAP
dot com that's wiscap dot com. Of course Wisconsin Capital
Mansion brings you ask the experts right here. I'm thirteen
ten WIBA and Tom. I heard Nate there mention mutual
funds load no load funds. What exactly is the difference
there and can that be, for example, a no load
(16:32):
or a load fund be the same type of investment
or what are some of the distinctions and differentiations there?
Speaker 4 (16:38):
Well?
Speaker 3 (16:38):
As Nathan mentioned, Wall Street comes up with some great
ways that they can make money. Yes, so they can
actually have the same mutual fund with the same name,
but it'll have a different class of shares and sometimes
those class of shares will determine whether or not there's
going to be a commission paid upfront or behind, or
(16:58):
what type of expense ratio is going to be within
the mutual fund. So some funds, typically the most inexpensive
class is called the institutional class, and that one has
a lower expense ratio and doesn't have a commission, but
you still could have a transaction fee. If you buy
(17:20):
those funds through Fidelity or even a no load type
brokerage firm, they will charge a transaction fee for the
lowest cost mutual fund. So it's very important to know
how the funds themselves are charged and those who can
be hidden. As Nathan said, you may have to search
(17:42):
to find out exactly what the total expense ratio within
the investment that you're looking at, especially right now we're
talking about mutual funds. But then, as they mentioned, the
other thing is you're paying someone to advise you to
go into these different types of investments, and that's usually
the fee that you see or don't see when someone
(18:04):
says we charge a management fee, and it maybe quarterly,
like Nate said, typically we've seen across the country that
runs from abouto point six percent to about one point
two percent for the actual management fee to determine what
products you're going to be invested in to beat your
(18:25):
investment goals. So again you look at that aspect as
being a very important part of what your expense ratio is.
But then the other part is what the investments are
and is there an internal fee that you don't see.
So when we say no load, that means no commission
(18:48):
is paid to buy those mutual funds. And some mutual
funds have a number of no load classes with different expenses,
and of course they're meant for different types of investors.
Speaker 1 (19:00):
And Tom, you know when we talk about and people
hear about different commissions, those type of things. You know,
we've talked on previous shows about about compounding. You talk
about you know, a couple of percent different difference in
fees compounding when it ultimately you know, as a reduction
in your in your return there you know, ultimately then
start compounding, it can actually have a quite substantial impact
(19:22):
on the overall on your overall portfolio. Before we wrap,
then I do want to ask you, ask you, Tom
a little bit about you know, as we as we summarize,
you know, know, what you're getting paid for. Let's talk
about understanding the cost of advice. Should you be asking,
for example, is somebody a fiduciary? And let's kind of
talk a little bit about Wisconsin Capital Management and how
that conversation goes when folks meet with you guys.
Speaker 3 (19:46):
So again, when you talk about being a fiduciary on
that means that that does not mean that you don't
have any conflicts of interest. It means that you address
those conflicts of interest in the fit of your client.
And so what we think is very important is that
you when you're meeting with your investment advisor or your
(20:08):
meeting with Nathan and I or anyone at Wisconsin Capital Management,
you ask one, are you a fiduciary? What does that
mean to you? How do you address fiduciary for your clients?
And how do you address conflicts of interest? And if
there are any, and they're almost all is going to
(20:29):
be some type of conflict of interest because people are
getting paid to give you advice, So you want to
know how they can identify those conflicts of interests and
then how do they deal with them. Your total expense
ratio is going to be very important and it dramatically
impacts ther total return and the probability of meeting your success.
(20:50):
So it's very important that you're comfortable with the people
you're working with. You've defined what their role is, how
they're compensated, and what the expense of the investments are
to you, and then you can put that together and
make sure that you make an intelligent decision about the
advice you're getting.
Speaker 1 (21:10):
It's a really important decision and it's a great day
to learn more about Tom Nate and the whole team
at Wisconsin Capital Management. If you head on over to
the website whizcap dot com. That's wiscap dot com. Nice
button there it says contact us. It's a great place
to reach out and start that conversation. Get to know
the guys and the team at Wisconsin Capital Management. While
you're there, of course I can ask all of those questions.
(21:31):
They would love to share with you what they're able
to do for you. Again, a great starting point is
that website whizcap dot com. That's wis cap, that's wi
scap dot com, wizcap dot com for Wisconsin Capital Management.
Tom Nate, It's always great seeing both of you guys.
Have a great day, and we'll do it all again
in a week. Take care, guys, and of course that
(21:53):
website whizcap dot com News comes your way.
Speaker 2 (21:55):
Next right here thirteen ten wuib A
Popular Podcasts
NFL Daily with Gregg Rosenthal
Gregg Rosenthal and a rotating crew of elite NFL Media co-hosts, including Patrick Claybon, Colleen Wolfe, Steve Wyche, Nick Shook and Jourdan Rodrigue of The Athletic get you caught up daily on all the NFL news and analysis you need to be smarter and funnier than your friends.
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com