The Fiduciary Aha Moment: Clarity, Costs, and Rational Wealth Management
Rough Draft - Notes
DISCLAIMER
Due to our extensive holdings and our clients, you should assume that we have a position in all companies discussed and that a conflict of interest exists. Past performance is not a guaratee of future performance. By listening, reading, or using this document, video, podcast, or website in any manner, you understand the information presented is provided for informational purposes only and agree to our Terms of Use and Privacy Policy. Public and group informational items should never be considered professional advice. Nothing said, written, or otherwise communicated should be construed as an offer, recommendation, or solicitation to buy or sell a security. And lastly, we do not provide tax, legal, or psychological advice. Also: For your own safety and sanity, please do not listen to this podcast while:
1. Balancing on the top step of a ladder during a hurricane.
2. Attempting to deep-fry a turkey indoors with the smoke alarms disabled.
3. Speed-reading your investment statements while driving on the interstate.
4. Walking backwards on a treadmill while juggling kitchen knives.
5. Holding a metal umbrella in a thunderstorm while shouting "lightning never strikes
twice."
If you choose to do any of the above, what you need is far beyond our capabilities.
ROUGH NOTES
Mathematics is not just a subject from school. It is the foundation of how we make sense of everyday decisions. Yet every single day I see people experience what I call a brain lock. It is not bad, it is not good, it simply is. For years I tried to fix it. I explained, I simplified, I drew diagrams. I would sit across from people and try every angle possible. But more often than not, it was a waste of precious time. These days, I walk away. I have learned that not everyone can or will engage in clarifying questions. And without clarification, mathematics gets distorted.
My firm, Truesdell Wealth Incorporated, was originally called Fixed Cost Financial. I own and copyrighted the phrase Fixed Cost Investing. I built that idea because it made sense. A flat fee for guided advice is clean, predictable, and honest. But when I first rolled it out in large urban areas, I failed spectacularly. I thought successful, rising professionals would understand. They did not. The few who signed up were obsessed with cryptocurrency, gold, or the latest meme stock. They wanted shortcuts. They wanted something for nothing. That has never been my style. Those clients are long gone, and I have never regretted it.
But the issue is not limited to younger speculators. Retirees fall into the same trap when they rely on children or grandchildren for advice. Well-meaning family members can be the worst advisors in the world. They speak with confidence, but without clarity. And so the retirees end up confused, paralyzed, or misled. That is why I often begin with a simple mathematical test.
The test is this: which is larger, one or three hundred? Everyone says three hundred. And everyone is wrong. The correct answer is, “It depends.” One what? Three hundred what? What is the baseline? Is one a percent? Is three hundred a dollar amount? Without clarification, the numbers are meaningless.
This is where most people struggle. They take information at face value without asking who, what, where, when, why, how, and which. In my background in investigations, I learned the power of clarifying questions. Think of Columbo with his famous line, “Just one more question.” Those extra questions make the difference between being fooled and being informed.
So let us return to the numbers. Suppose an advisor charges you a flat $300 a month for all-inclusive investment and wealth advice. Most people react with shock. “Three hundred a month? That is a lot of money.” But then another advisor steps in and says, “My fee is only one percent.” He adds the reminder: a basis point is just one-hundredth of one percent. The word “only” is his weapon. The simplicity of one percent sounds harmless.
But mathematics demands clarification. One percent of what? A million dollars? That is $10,000 every year. Two percent is $20,000 every year. Compare that to $300 a month. Say it out loud: three hundred dollars! Even $700 a month—say it loudly—is far less than $10,000 or $20,000. The math is simple. The psychology is not.
Here is the break-even point. At one percent, $360,000 in assets makes $300 a month the better deal. At two percent, the break-even drops to $180,000. Yet most advisors charging under a million dollars do not stop at one percent. They often charge one and a half, plus trading costs, plus mutual fund or ETF expenses, plus third-party management fees. Add it all up, and total costs of two percent are common. That is why many retirees bleed thousands of dollars each year without realizing it.
So why do people resist fixed cost models? Psychology. First, people prefer ruts. Ruts feel safe. If they have always paid by percentage, they stay with it. Second, embarrassment. It takes maturity to admit you have been paying too much for too long. Third, manipulation. Sales professionals know how to frame the discussion with words like “only,” “just,” or “included.” They present two percent as if it were a tip on a restaurant check instead of thousands of dollars siphoned off annually.
Consider everyday comparisons. One percent of your grocery bill is nothing. One percent off at the store is pocket change. But one percent of your life savings every year is not trivial. That is why people suffer from cost blindness. They hear one versus three hundred, or one versus seven hundred, and they stop thinking. They do not ask clarifying questions. They let the industry define the terms.
The difference between immature and mature clients is striking. Immature clients cling to the rut. They rationalize fees with phrases like, “Well, it is only one percent,” or “Everyone does it this way.” Mature clients pause, do the math, and admit the obvious. They are not afraid to say, “I made a mistake,” or “I did not know this existed.” Those are the moments that make me proud. Because those clients demonstrate rationality. They demonstrate forward thinking. They understand that a true fiduciary charges fairly, not endlessly.
And here is the real truth: people with serious wealth do not sign up for percentage-based commissions. They hire talent. They pay salaries. They want results, not percentages. They want a job done correctly at the lowest reasonable cost. They do not reward someone more just because they themselves have more. That is logic. That is maturity.
This brings us back to the aha moment. The question I ask, and the one you should ask yourself, is simple: why should you pay more just because you have more? That question cuts through the fog. Those without money understand it immediately. Those with money sometimes never do. Habit, pride, and salesmanship get in the way. But once you see it, you cannot unsee it.
So let us summarize with the same clarity we started with. Which is larger, one or three hundred? It depends. One percent of your life savings is not the same as three hundred dollars a month. Ten thousand dollars a year is not the same as three hundred dollars a month. Twenty thousand dollars a year is not the same as seven hundred dollars a month. Say those numbers out loud. Three hundred! Seven hundred! The sound alone should wake you up.
Mathematics is simple. Psychology is complicated. Salesmanship is manipulative. But maturity, rationality, and fiduciary duty are straightforward. Fixed costs protect you. Percentage-based fees bleed you. The industry thrives on keeping you confused. I thrive on keeping you clear.
So here is the final question: are you ready for your aha moment? Are you mature enough to ask clarifying questions, break free of the rut, and protect what you have built? Because when we run the math in front of you, when we analyze costs, when we guarantee income for life, the logic is undeniable. Less cost means more gain. Less bleed means more income. And if that makes sense, then it is time for a conversation.
Paul Grant Truesdell, J.D., AIF, CLU, ChFC, RFC
Truesdell Wealth, Inc.
DISCLAIMER
Due to our extensive holdings and our clients, you should assume that we have a position in all companies discussed and that a conflict of interest exists. Past performance is not a guaratee of future performance. By listening, reading, or using this document, video, podcast, or website in any manner, you understand the information presented is provided for informational purposes only and agree to our Terms of Use and Privacy Policy. Public and group informational items should never be considered professional advice. Nothing said, written, or otherwise communicated should be construed as an offer, recommendation, or solicitation to buy or sell a security. And lastly, we do not provide tax, legal, or psychological advice. Also: For your own safety and sanity, please do not listen to this podcast while:
1. Balancing on the top step of a ladder during a hurricane.
2. Attempting to deep-fry a turkey indoors with the smoke alarms disabled.
3. Speed-reading your investment statements while driving on the interstate.
4. Walking backwards on a treadmill while juggling kitchen knives.
5. Holding a metal umbrella in a thunderstorm while shouting "lightning never strikes
twice."
If you choose to do any of the above, what you need is far beyond our capabilities.
ROUGH NOTES
Mathematics is not just a subject from school. It is the foundation of how we make sense of everyday decisions. Yet every single day I see people experience what I call a brain lock. It is not bad, it is not good, it simply is. For years I tried to fix it. I explained, I simplified, I drew diagrams. I would sit across from people and try every angle possible. But more often than not, it was a waste of precious time. These days, I walk away. I have learned that not everyone can or will engage in clarifying questions. And without clarification, mathematics gets distorted.
My firm, Truesdell Wealth Incorporated, was originally called Fixed Cost Financial. I own and copyrighted the phrase Fixed Cost Investing. I built that idea because it made sense. A flat fee for guided advice is clean, predictable, and honest. But when I first rolled it out in large urban areas, I failed spectacularly. I thought successful, rising professionals would understand. They did not. The few who signed up were obsessed with cryptocurrency, gold, or the latest meme stock. They wanted shortcuts. They wanted something for nothing. That has never been my style. Those clients are long gone, and I have never regretted it.
But the issue is not limited to younger speculators. Retirees fall into the same trap when they rely on children or grandchildren for advice. Well-meaning family members can be the worst advisors in the world. They speak with confidence, but without clarity. And so the retirees end up confused, paralyzed, or misled. That is why I often begin with a simple mathematical test.
The test is this: which is larger, one or three hundred? Everyone says three hundred. And everyone is wrong. The correct answer is, “It depends.” One what? Three hundred what? What is the baseline? Is one a percent? Is three hundred a dollar amount? Without clarification, the numbers are meaningless.
This is where most people struggle. They take information at face value without asking who, what, where, when, why, how, and which. In my background in investigations, I learned the power of clarifying questions. Think of Columbo with his famous line, “Just one more question.” Those extra questions make the difference between being fooled and being informed.
So let us return to the numbers. Suppose an advisor charges you a flat $300 a month for all-inclusive investment and wealth advice. Most people react with shock. “Three hundred a month? That is a lot of money.” But then another advisor steps in and says, “My fee is only one percent.” He adds the reminder: a basis point is just one-hundredth of one percent. The word “only” is his weapon. The simplicity of one percent sounds harmless.
But mathematics demands clarification. One percent of what? A million dollars? That is $10,000 every year. Two percent is $20,000 every year. Compare that to $300 a month. Say it out loud: three hundred dollars! Even $700 a month—say it loudly—is far less than $10,000 or $20,000. The math is simple. The psychology is not.
Here is the break-even point. At one percent, $360,000 in assets makes $300 a month the better deal. At two percent, the break-even drops to $180,000. Yet most advisors charging under a million dollars do not stop at one percent. They often charge one and a half, plus trading costs, plus mutual fund or ETF expenses, plus third-party management fees. Add it all up, and total costs of two percent are common. That is why many retirees bleed thousands of dollars each year without realizing it.
So why do people resist fixed cost models? Psychology. First, people prefer ruts. Ruts feel safe. If they have always paid by percentage, they stay with it. Second, embarrassment. It takes maturity to admit you have been paying too much for too long. Third, manipulation. Sales professionals know how to frame the discussion with words like “only,” “just,” or “included.” They present two percent as if it were a tip on a restaurant check instead of thousands of dollars siphoned off annually.
Consider everyday comparisons. One percent of your grocery bill is nothing. One percent off at the store is pocket change. But one percent of your life savings every year is not trivial. That is why people suffer from cost blindness. They hear one versus three hundred, or one versus seven hundred, and they stop thinking. They do not ask clarifying questions. They let the industry define the terms.
The difference between immature and mature clients is striking. Immature clients cling to the rut. They rationalize fees with phrases like, “Well, it is only one percent,” or “Everyone does it this way.” Mature clients pause, do the math, and admit the obvious. They are not afraid to say, “I made a mistake,” or “I did not know this existed.” Those are the moments that make me proud. Because those clients demonstrate rationality. They demonstrate forward thinking. They understand that a true fiduciary charges fairly, not endlessly.
And here is the real truth: people with serious wealth do not sign up for percentage-based commissions. They hire talent. They pay salaries. They want results, not percentages. They want a job done correctly at the lowest reasonable cost. They do not reward someone more just because they themselves have more. That is logic. That is maturity.
This brings us back to the aha moment. The question I ask, and the one you should ask yourself, is simple: why should you pay more just because you have more? That question cuts through the fog. Those without money understand it immediately. Those with money sometimes never do. Habit, pride, and salesmanship get in the way. But once you see it, you cannot unsee it.
So let us summarize with the same clarity we started with. Which is larger, one or three hundred? It depends. One percent of your life savings is not the same as three hundred dollars a month. Ten thousand dollars a year is not the same as three hundred dollars a month. Twenty thousand dollars a year is not the same as seven hundred dollars a month. Say those numbers out loud. Three hundred! Seven hundred! The sound alone should wake you up.
Mathematics is simple. Psychology is complicated. Salesmanship is manipulative. But maturity, rationality, and fiduciary duty are straightforward. Fixed costs protect you. Percentage-based fees bleed you. The industry thrives on keeping you confused. I thrive on keeping you clear.
So here is the final question: are you ready for your aha moment? Are you mature enough to ask clarifying questions, break free of the rut, and protect what you have built? Because when we run the math in front of you, when we analyze costs, when we guarantee income for life, the logic is undeniable. Less cost means more gain. Less bleed means more income. And if that makes sense, then it is time for a conversation.
Paul Grant Truesdell, J.D., AIF, CLU, ChFC, RFC
Truesdell Wealth, Inc.