Do you know if your broker is a bully?

What makes a bully

We can all remember a time during our formative years when a bully used their position, power or sheer physical presence to push around someone who seemed like an easy target.

At 5’1″ my sophomore year of high school, I was the short fat kid who wanted to “change the world” — not a popular thought at that stage of life. Although wrapped in a temporarily small package (I am now 6’7″), I was fiercely protective of anyone who was suffering under the tyranny of these kind of kids.

The nose guard of our football team was one such buffoon. He was 6’2″ and almost 300 pounds. During lunch one afternoon, I witnessed him pouring chocolate milk over the head of my helpless friend while he laughed to the applause of his band of letterman-jacket cronies. Without missing a beat, I got in his face. After a barrage of colorful language that caught him by surprise, I threw the hardest punch I could and ran like hell. Unfortunately, I wasn’t very fast!

Decades later, I still do not tolerate bullies. The bullies of the financial services industry are those who extract as much value for themselves to the detriment of others. I don’t think there is an educated person in America who doesn’t think that the system feels set up for those in the know. The rest are left out in the cold.

In 2008, while watching many of my friends and clients lose half of their nest egg to the market crash and real estate crises, it struck a deep chord. Having grown up with very little, I was reminded of the pain. These weren’t just statistics to me. I was reminded of nights where my own family went with little or no food. That fearless high school kid in me was kicked into gear. I knew I had to take action.

For decades now, I have been blessed with the incredible gift of access: access to some of the most brilliant minds and peak performers in their own fields. For instance, I’ve had the privilege of coaching Paul Tudor Jones, one of the top 10 traders in financial history, for 22 straight years now. He hasn’t lost money in any of those 22 years. As his coach, I have been inside the ropes, and what I have learned from him has been invaluable to my own situation. In early 2009, I sat down with him to ask if the game is still winnable for the average person. Then I asked 50 of the top financial minds the same questions and wrote my #1 New York Times best-seller Money: Master the Game with the answers.

Winning the game of money

The foundation of winning the game of money is that you MUST know the rules of the game before you blindly throw your money at a bunch of mutual funds your brother-in-law wants to sell you. Or before you trust your 401(k) to get you through your golden years. For example, 67% of investors think they pay no fees in their 401(k), when in fact it’s a gravy train for the brokers, plan providers, and mutual funds that are on your plan menu. Heck, the 401(k) industry didn’t have to disclose their fees for over 30 years! Now they offer you 30-50 page disclosures that you and 99.9% of people have never seen nor read. They are opaque at best, predatory at worst.

I had one singular outcome when I set out to write the book — to help people become the chess player, and stop being the chess piece.

One of the foundational lessons to becoming the chess player is to find a highly qualified advisor who doesn’t have conflicts of interest. It’s common sense that’s not so common. You wouldn’t believe the level of abuse and the lengths the major firms go to in order to mask these conflicts in the multi-trillion industry of wealth management.

I have educated millions of people now on the difference between a fiduciary (also called a registered investment advisor, or RIA for short) and a broker. A broker sells and receives compensation for products or funds, while a fiduciary is required by law to put your interests first. I am a firm believer that the advice you receive should be separated from the products or funds you buy. Would you go to a doctor who manufactured and sold his own medicine? Of course not! But the vast majority of the financial industry isn’t legally obligated to put your interests first like a doctor. You heard me right. Well over 90% of financial advisors in this industry are brokers. They don’t call themselves brokers, of course. Their titles are financial advisors, wealth managers, etc.

The vast majority of people I meet, both the sophisticated and unsophisticated, are still unaware of the difference, or they wrongfully assume their advisor is a fiduciary (hint: nearly all name-brand firms are brokers in disguise). If your financial advisor is with a firm that has their name on a sports stadium, blimp or race car, there is a high probability that they are a broker. They are master marketers, and they make it feel or sound like they are giving unbiased advice, but we would be naïve to think that their own pockets aren’t the priority.

To be sure, many advisors are wonderful and committed people who truly believe they are doing what’s best. This is by no means an assault on their character or good intentions. But one can be sincere and sincerely wrong. Most advisors are trained by and work in a system that is hardwired to make money for the “house” and reward those who produce sales. Compensation drives behavior, so they certainly don’t wake up each day seeing the conflicts as an issue. As Upton Sinclair famously said, ‘It’s hard to get a man to understand something when his salary depends on him not understanding it.”

Over the past couple years I went on countless talk shows, radio shows, wrote articles and created videos, all with the intent of educating Americans on the damage caused by this broken model where the person you trust with your financial future is rewarded for selling high-commission products, proprietary funds, while layers of hidden fees go unnoticed.

And although we’ve come a long way in sharing the truth, I’ve recently learned we have a new problem. And it’s even worse! Many “fiduciaries” were exploiting a legal loophole to make additional revenue off unsuspecting clients. Read part two here – The problem of financial services and dual registration – for what that means for you as an investor.

Header image © Damir Khabirov/shutterstock


Avoid common investing mistakes

What’s the biggest thing successful people have in common? They are obsessed with not losing money. How do they do it? One big way is by investing smart. They don’t necessarily take big risks. They learn from their mistakes and avoid making stock investing mistakes and other common errors. Investing mistake 1: Wrong asset allocation […]


Become a money master today

Money: There’s nothing quite like it. Money has the power to create or destroy. It can be a blessing that turns your dreams into reality or a burden you always carry. One thing is for sure: you must become a money master, or it will master you. As Tony Robbins says, “When you lack confidence […]


6 things all successful people do

Usually when we hear stories of the behavior of the super-rich it involves shopping sprees, trips to Monaco or perhaps the occasional lifestyle productivity hack. But how did the American ultra-wealthy become the top 0.01%? Is there a secret formula to obtaining and maintaining wealth? What do all rich people have in common? For four […]


The power of passive income

Ready for a truth most people won’t tell you? No matter the state of the economy, current politics or world events, you control the amount of money you make. Current job not creating enough income? It’s time to get serious about passive income. Tony says, “If you want to change your life you have to […]


How much do I need for retirement?

Much like stepping on the scale after the holidays, the amount of money you’ll need to comfortably retire is the number many Americans aren’t sure they want to know. In fact, half of Americans haven’t even tried to calculate how much money they’ll need to retire. However, just like those extra pounds, ignoring the problem […]


How to build a money-making machine

Do you find yourself wondering how you’ll make enough money to achieve your financial goals? Are you dreaming of retirement but can’t imagine how you’ll find the money to do so? Is traveling or another large goal at the forefront of your mind? Don’t be discouraged if you’re unsure of how you’ll achieve these goals […]

  • Change your story

    Master Tony’s proven strategies to create endless momentum and change the trajectory of your life.

    View upcoming events
  • Become the best version of yourself

    Connect with like-minded individuals and start living the life of your dreams.

    View all programs