Episode 70: Why Your Broker is a Dinosaur
Segment 1:
HELLO Lower Alabama! Hello Gulf Coast! Welcome in. Welcome to Coasting in Retirement! Thanks for joining us today, Josh Null here, joined by the one and only Michelle Lee Melton…Michelle, how are you doing? We’ve got a brand-new show coming your way, we are back once again in Coastal College’s recording studio, beautiful downtown Fairhope, ready to put together another great show for those of you tuning in!
Listeners: Michelle and I are here to discuss financial topics relevant to those of you in or near retirement, living your best life along our part of the gulf coast. Here’s what we’ve got in store for you today: First segment – deep dive on our topic of the day. 2nd segment - at about 30 minutes past the hour - “Michelle with the Headlines of the Week”. Then at roughly 50 minutes past the hour, stick around for our 3rd segment, we call it” Josh’s Crystal Ball and Big Mouth”. So buckle up, we’ve got a lot to get to!
Quick background on me for those new to the show. Again, my name is Josh Null, I am a fee-based financial advisor, I hold my FINRA Series 65 securities license, and I am the owner of Gulf Coast Financial Advisors, that’s a 100% locally owned, 100% independent investment management and financial planning firm with offices in Fairhope, Orange Beach, and Mobile! You can find more information on me and the team at Gulf Coast Financial Advisors by visiting our website gulfcoastfa.com, or feel free to give us a call at 251-327-2124. If you missed that contact info, get a pen and pad ready because we will repeat our contact info several times throughout the show!
Alright, on to the show. In case you haven’t noticed Michelle, I’ve been a little grouchy this week. And it’s mostly not your fault. Mostly. So I thought about building this episode around things that irritated me, but then I thought better of this because I’ve done enough…this week. But that did lead me to a specific situation that, while it irritated me for the client, it actual benefited my firm. And this topic allows me to take some shots at my industry, which maybe will let me work off some anger and feel better.
Anyway, let me set the scene for context. I picked up a great client this week because they were unhappy with their current advisor. It happens. This advisor didn’t necessarily do a bad job on their investments, per se, I’ve seen much worse, but he made 2 critical errors: first, while he put some of this clients’ investments in advisory accounts like we do at GCFA, he also carved out a part of their assets into an annuity without a lot of explanation as to why…I know why, he received a nice commission…but he locked up a decent chunk of money for 10 years and just told the client to “trust him”, and #2, and just as important, this advisor thought that just serving as a broker and/or an investment manager was enough, that he didn’t need to provide financial planning services to the client, or even in this case, call this client back in a timely manner.
Which leads us to our topic of the day: for those of you listening that still work with an old school broker, or unfortunately for you brokers actually listening in, you won’t like this, because today we're going to explain why your broker is a dinosaur, and why, if your financial advisor isn’t leading with financial planning, and only handling your investments, they are go the way of the do-do bird in our business. Which I guess technically is a dinosaur too, right Michelle?
Let’s first broadly define a broker and do a quick compare and contract to a financial advisor and/or a financial planner:
This is a crucial comparison for anyone seeking financial help, as the difference between a Broker and a Financial Advisor/Planner is profound, primarily rooted in their legal duty and compensation model.
The title of "Financial Advisor" is broad, but when contrasted with a "Broker," it usually refers to a professional who operates under a higher standard, often as a Registered Investment Advisor (RIA) or a Certified Financial Planner (CFP®)
Ok, this description obviously favors the financial advisor / planner model, but why are brokers becoming obsolete?
1. The Core Function is Obsolete (The Technology Killer)
The primary, original role of a broker was to act as an intermediary, facilitating the buying and selling of securities (a "brokered" transaction) for a commission.
- The Dinosaur: The broker’s value was in access and execution.
- The Meteor: Zero-commission online trading and robo-advisors. Today, any client can execute trades instantly, at a cost of $0, using their phone. This democratization of market access renders the basic transactional role of the broker commercially obsolete for the retail investor. The need for a human intermediary to call in a trade has vanished.
2. The Standard of Care is Inferior (The Fiduciary Divide)
The single most significant difference separating the old model from the new is the standard of care required.
Clients are increasingly educated about the Fiduciary Standard and demand it. Operating under a lower standard of care (Suitability) makes the broker model look inherently conflicted and ethically antiquated compared to the transparent, client-first model of a fiduciary advisor.
3. The Value Proposition is Too Narrow (The Holistic Gap)
The modern financial consumer needs comprehensive guidance, not just investment products. The broker's focus is too limited for today's complex financial lives.
Conclusion
The dinosaur status of the broker stems from three forces that have fundamentally changed the industry:
1. Technology eliminated their core transactional value.
2.Regulation and consumer demand elevated the Fiduciary Standard over the less-stringent Suitability Standard.
3. Competition from planners proved that clients value holistic advice and behavioral coaching far more than they value product sales.
The firms that once employed "brokers" have recognized this and have largely pivoted, re-branding them as "financial advisors" or "wealth managers" and encouraging them to adopt a planning and fee-based model to survive the extinction-level event. The job title of a pure commission-based broker is rapidly disappearing from the modern financial landscape.
OK, fine Josh, my guy or gal says he is a financial advisor, but all he or she really does is manage my investments. Should they be doing more than that?
The short answer is an emphatic Yes, your financial advisor absolutely needs to do more than just investment management to provide the highest level of value. In the modern financial landscape, investment management is considered a commodity, while comprehensive financial planning is the true professional service.
Here is why an advisor must look beyond the portfolio:
1. Investment Management is Only the Engine, Not the Map
Investment management is the process of selecting and monitoring the stocks, bonds, and funds in your accounts.2 It is the vehicle used to get to your destination.
Financial planning is the roadmap that defines the destination (retirement, college, buying a business) and sets the speed and direction of the vehicle.3
- Investment-Only Focus: An advisor who only manages your investments is focused purely on rate of return, which is often outside of their control (it’s market-dependent).
- Planning-First Focus: A true advisor focuses on goals attainment and risk mitigation, which they can control through strategic planning. They use the portfolio to fund the goals you defined.
2. The Greatest Value is Found Outside the Portfolio
The biggest opportunities for increasing your wealth and security often lie in areas that have nothing to do with what stocks you own.
Why Financial Advisors Should Lead with Planning First
Leading with financial planning establishes the advisor as a holistic life coach and fiduciary partner, rather than just a salesperson for investment products. This approach builds deep trust and creates a relationship that is far more valuable and durable than one focused solely on managing assets.
1. The Planning Process Creates the "Why"
2. Differentiates the Value Proposition
In today's market, where low-cost index funds and robo-advisors have commoditized investment management, the advisor's competitive edge must be something that technology cannot replicate.
- Beyond AUM: Leading with planning shifts the value proposition from a focus on Assets Under Management (AUM)—a fee tied only to investment returns—to a fee tied to advice, strategy, and behavior coaching. This justifies fees regardless of short-term market performance.
- The Holistic View: A comprehensive plan covers all "sleeves" of the client's financial life (tax optimization, risk management, estate planning, cash flow). This broad scope makes the advisor indispensable and distinguishes them from a pure portfolio manager.
- Fiduciary Trust: The act of building a plan first—an impartial roadmap designed solely for the client's benefit—instantly communicates a commitment to the fiduciary standard (putting the client's best interest first).
Alright, for those of you listening that would like to expand the conversation beyond just what fund manager is fractionally better than the other, and into how a comprehensive financial plan can help take your financial anxiety way down, we encourage you to reach out. You can call us at 251-327-2124, or find us on our website gulfcoastfa.com. One our site, click on the blue button in the upper right-hand corner to set up a meeting on my calendar. We have several meeting choices for your convenience – it can be as simple as a 15-minute introductory phone call, a 30 minute zoom, or my preference, an in-person meeting at any of our 3 office locations: Downtwon Fairhope, Orange Beach just down the road from the Wharf, or in Mobile off Dauphin St and I-65. Reach out to us - we would love to meet you!
Alright folks, coming up next - There’s always a lot going on in the world! Particularly the world of finance, investments and money. Every week we scour the internet for financial articles related to our topic of the day, especially articles that pertain to those in or near retirement. Join us after the break to hear Michelle and I discuss this week’s relevant headlines in our “Michelle with the Headline of the Week” segment. Stay tuned!
Segment 2 - News of the Week:
Welcome back to Coasting in Retirement, your host Josh Null here! As we discussed before the break, every week we scour what Michelle calls the Interwebs for financial articles related to our topic of the day, especially articles that pertain to those of you in or near retirement. Our job, or at least we tell ourselves it is, is to help you all understand how these headlines impact you, especially when it comes to your money! Note – if you want to read our referenced articles yourself, we also include the links in our show transcript, which you can find on our website gulfcoastfa.com under the podcast tab. Now without further adieu, here’s Michelle with the Headlines of the Week!
1. Alright Josh, our first article of the day comes from the Social Security Administration itself, and it’s a big one for retirees: it's titled, “Social Security Announces 2.8 Percent Benefit Increase for 2026.” The article confirms that the Cost-of-Living Adjustment, or COLA, for 2026 will be 2.8%, translating to an average increase of about $56 per month for the typical retiree, bringing the average monthly check up to around $2,071. This COLA is based on inflation data captured in the third quarter of this year, which is why it comes out in October or November. While any increase is good, the article notes that this is among the smallest COLA increases since 2020. Is a 2.8% COLA enough for retirees to keep up with the actual rising costs they face, especially when we talk about things like healthcare and prescription drugs, which often seem to increase at a much higher rate?
https://www.ssa.gov/news/en/press/releases/2025-10-24.html
2. Our next article addresses one of the biggest hurdles for most people seeking professional guidance: the belief that a financial advisor is only for the wealthy. The article is from U.S. News & World Report and is titled, “How to Find a Financial Advisor if You’re Not Rich.” It immediately shifts the focus away from asset minimums and toward finding advice that is accessible and affordable. The piece strongly advocates for fee-only planners who charge by the hour, a fixed project cost, or a monthly subscription/retainer, making comprehensive planning available to those who don't have a large investment portfolio. Josh, given this variety of affordable options, what is the single most important first step a non-rich client should take before starting any search for an advisor?
https://money.usnews.com/investing/articles/how-to-find-a-financial-advisor-if-youre-not-rich
3. Our third article is a necessary one for anyone questioning their current financial partnership. The headline is, “7 Signs It’s Time to Fire Your Financial Adviser.” This piece from MarketWatch breaks down common but unacceptable scenarios, such as when your advisor is not a fiduciary for ALL advice, is impossible to reach, or stuck you in an expensive investment strategy, such as an annuity, without a full explanation. Most critically, the article points to situations where the advisor fails to update your financial plan despite major life changes, like a marriage, new job, or inheritance. Josh, given that an investor's relationship with an advisor should evolve, what's the single clearest, non-performance-based signal that a financial advisor has checked out of their duty to the client?
https://www.marketwatch.com/picks/7-signs-its-time-to-fire-your-financial-adviser-cda6b981?gaa_at=eafs&gaa_n=AWEtsqfIasSnCkh_G-QOddMCuwdaXG7wFKhnUHMXo_43KgCvcYsplR4Oxusx&gaa_ts=691f4657&gaa_sig=Gm_MQaGwGu5Q3g2-J1JoUlcHscGsy1i7OWV3BjAx90dRU1cz51xYPMq5yek1eXYTuxTy8IOOg6yw58hrNz0k2A%3D%3D
4. Our final headline of the day addresses a topic that has caused massive confusion and anxiety for beneficiaries over the last few years, all thanks to the SECURE Act of 2019. This article from Kiplinger is titled, “The IRS 10-Year Rule For Inherited IRAs: What Beneficiaries Need to Know.” The article clarifies the difference between two groups: those who inherited an IRA from someone who died before their required minimum distribution (RMD) age, and those who inherited one from someone who died after their RMD age. The former may not need annual RMDs during the 10-year clean-out period, but the latter does. Josh, why has the IRS created such confusion with this 10-year rule, and what's the single most important action a non-spouse beneficiary needs to take right now to avoid a hefty $25\%$ penalty on a missed distribution?
https://www.kiplinger.com/taxes/irs-10-year-rule-for-inherited-iras-kiplinger-tax-letter
Listeners, if you’ve liked what you’ve heard and want to discuss your own personal retirement dreams and goals, then us a call at 251-327-2124, or find us through our website gulfcoastfa.com. One our site, click on the blue button in the upper right-hand corner to set up a meeting on my calendar. We have several meeting choices for your convenience – it can be as simple as a 15-minute introductory phone call, all the way to an in-person meeting at any of our 3 office locations: Downtown Fairhope, Orange Beach, or Mobile, near the intersection of Dauphin St and I-65. Reach out to us - we would love to meet you!
Alright folks, coming up next: Josh’s Crystal Ball and Big Mouth. What have been some of my predictions? Have I been right? Was I ever wrong? How wrong? What do I think is going to affect investors in the near future, or maybe the distant future? We talk about all of these things and poke a little fun at my big mouth. Stay tuned!
Segment 3 – Josh’s Crystal Ball and Big Mouth:
Welcome back! Your host Josh Null here, alongside co-host Michelle Lee Melton. So, I am opinionated, I have strong opinions at times, I would say a radio show host that isn’t probably wouldn’t be very interesting to listen to. And I am paid in my profession to offer professional guidance and opinions to my clients, otherwise what use am I? Just replace me with AI. I like making predictions, and while I usually proved right, there are times I swing and I miss. Want to hear me eat a little crow? Then let’s get at with Josh’s Crystal Ball and Big Mouth.
Alright Josh, you predicted that with President’s Trump’s pivot to being a pro-cryptocurrency president, that the so called “asset-class” would experience a broad resonance in 2026, especially compared to the “crypto winter” of 2022. So, fine, that’s a pretty easy prediction to make. However, you said that most of the investing news around the most famous cryptocurrency, Bitcoin, would once again be off the mark. For example, you’ve been consistent that Bitcoin is NOT digital gold, because it isn’t a reliable store of value, and that it’s practically worthless as a digital currency because it fluctuates too much in value and is still hard for the average person to use. What has been proven true is that Bitcoin seems to be more correlated with the Nasdaq composite index than crypto bro wants to admit. Did you foresee this stock market correlation, and if so, what does it mean for investors that are crypto curious?
Well, listeners, I hope you enjoyed a little peek into how we form our opinions and make predictions. We invite you one last time, if you would like to have a no-pressure, no-obligation conversation about your investing goals and retirement dreams, you can call us at 251-327-2124, or find us through our website gulfcoastfa.com. One our site, click on the blue button in the upper right-hand corner to set up a meeting on my calendar. We have several meeting choices for your convenience – it can be as simple as a 15-minute introductory phone call, all the way to an in-person meeting at any of our 3 office locations. You can find GCFA offices in downtown Fairhope, or Orange Beach off Canal Road, or in Mobile off Dauphin St and I-65. Reach out to us - we would love to meet you!
That’s our show for this week! I want to give a huge thank you to my lovely co-host, Michelle Lee Melton, thank you to our show sponsor, Providence Partners and Jay Stubbs, thank you to our two awesome radio stations, FM Talk 106.5 out of Mobile and WHEP 92.5 FM & 1310 AM out of Foley, many thanks to the provider of our show music, local band Sloth Racer, huge thank to the show producer, my son Payton Null, and as always my sincere appreciation for all of your out there that have been listening and joining us on this journey. We would love to be a part of your journey as well! Remember – votenappies.com! Until we talk again, have a wonderful and productive week. This has been Coasting in Retirement with Josh Null!
GCFA Disclosure:
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