About 18 months ago, life coach and business strategy guru Tony Robbins insisted that he wasn’t planning to enter the retail financial services industry.

Why should he? This is the man who counsels the likes of Bill Clinton, Oprah Winfrey and Serena Williams. He already collects many millions of dollars a year in coaching fees.

That’s on top of the success of his 2014 book, “Money: Master the Game” (Simon & Schuster), in which Robbins is a vocal proponent of a fiduciary standard. The book is a how-to for achieving “financial freedom.” It shot to the top of The New York Times business bestseller list even as it set many a detractor astir.Tony Robbins seen at Netflix original documentary "Tony Robbins: I Am Not Your Guru" Premiere at 2016 SXSW Film Festival on Monday, March 14, 2016, in Austin, TX. (Photo by Eric Charbonneau/Invision for Netflix/AP Images)

Some see Robbins as a financial services interloper, and sneeringly speculated that the book was a platform to launch his own financial advisory. They further razzed that his 656-page tome was laced with inaccurate or biased information about investing.

Robbins retorted publicly that such critics were “taking pot shots” at him, and that the notion that he’d open a financial practice was “the biggest bulls— on the planet!”

Then, about two months ago, Robbins did what he once said he wouldn’t: He joined an investment firm. He has been named chief of investor psychology for Creative Planning, the nation’s No. 1 wealth management firm, according to CNBC. Now 56, Robins has begun training the firm’s team of roughly 140 financial planners, and has designed and funded interactive online prospecting tools to attract an expanded clientele. His market: investors with modest liquid assets as low as $50,000.

As an independent contractor to Creative Planning, Robbins is compensated as a member of the Board of Directors and, separately, for generating new business. He says he plans to donate all of that salary to the charity Feeding America.

Speaking recently from his home in Palm Beach, Florida, Robbins discussed his new role, the DOL’s new fiduciary standard rule, and more.

PHOTO: Robbins appears at a screening of his Netflix original documentary “Tony Robbins: I Am Not Your Guru” at the 2016 SXSW Film Festival in Austin, TX. (Photo by Eric Charbonneau/Invision for Netflix/AP Images)

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Tony Robbins slams critics, says he’s not a financial advisor

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ony Robbins appears at the Salvation Army for Feeding America to promote his 100 Million Meals Challenge on Tuesday, Dec. 2, 2014 in Burbank, CA. Tony Robbins, #1 New York Times Bestseller of Money: Master the Game, is donating profits towards the 100 Million Meals Challenge. (Jeff Lewis/AP Images for Tony Robbins Feeding America)

Question: You’ve said that “brokers are selling for the house and that the house always wins” because brokers are looking out for themselves first and the client second. Why do you hold brokers in such low esteem?

Tony Robbins: I have nothing against brokers. Most of them sincerely care. But they do what they’re trained to do: they’re working for the house. The wirehouses are big corporations; and it’s their shareholders they want to take care of first, not the customer.

How does that impact clients, then?

Robbins: They have no clue what they’re being pushed into. They’re taught to give up control to somebody who doesn’t necessarily have their best interest in mind. Products and advice should be separate. That’s why I’m promoting the fiduciary standard.

Your new title, Chief of Investor Psychology, implies that you’re an expert in investments and/or that you’re a trained psychologist. What qualifies you for this role?

Robbins: I’m not trying to be a financial advisor. I’m an educator. But when it comes to psychology, I don’t think anybody who knows anything about my work for the last 39 years in 100 countries and with 50 million people would argue that I don’t have the chops to  give anyone advice. I’m trying to add value in a way that the average financial advisor can’t because they don’t have my experience.

Do you keep an office at Creative Planning in Leawood, Kansas?

Robbins: No, no. I have 18 companies! We do $5 billion a year in sales. This is one of many ventures that I’m involved in.

What sort of education are you providing to Creative’s financial planners?

Robbins: How to figure out what people’s deepest psychological needs are so they’re not just getting a financial plan but that their individual emotional needs are being met

PHOTO: Tony Robbins appears at the Salvation Army for Feeding America to promote his 100 Million Meals Challenge in December 2014. (Jeff Lewis/AP Images for Tony Robbins Feeding America)

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Tony Robbins, motivational speaker, personal finance instructor, and self-help author, is interviewed by host Anthony Scaramucci and Maria Bartiromo during the taping of "Wall Street Week," on the Fox Business Network, in New York, Thursday, March 17, 2016. The original "Wall Street Week" aired on PBS for more than 30 years. (AP Photo/Richard Drew)Less than two years ago, you told me you had no plans to enter the financial services industry. But here you are!

Robbins: Yes, I am. [Creative Planning] reached out to me and said, “I know you’re a big supporter of the fiduciary standard, but there are some gray areas I’m sure you’re not aware of.” We met…

Describe these gray areas.

Robbins: Some advisors are duly registered: one moment they’re wearing a hat saying, “I’m a fiduciary”; but in the middle of the conversation, they can flip hats and they’re a broker. I was dumbfounded that the law has that loophole. Then Peter shared what’s going on with proprietary products. The combination of those two pieces pushed me over the edge

What do you mean?

Robbins: After talking in more depth, I said, “If you’d be interested in partnering with me, I’d love to bring people to your world. But I want you to [serve] individuals that don’t have a million dollars. Would you be willing to create a division to provide a free [service], where anyone could get a second opinion on their portfolio?” I got him to agree, and I said, “I’m all in.”

What’s the main reason that your deal with Elliot Weissbluth (HighTower founder-CEO) fell apart? You and he promoted the original edition of your book together.

Robbins: We never had a deal. We were just great friends and still are. He really helped educate me about the fiduciary space. But I never committed to having a partnership with his firm specifically

What are the most troubling behavioral biases that investors should overcome?

Robbins: The biggest is that they get fearful and greedy. So they sell when they should buy and buy when they should sell. The average person has no clue what’s really going on in the marketplace. My goal is to increase transparency. Where else on the face of the earth is there so little transparency about something that people are so confused about?

You’re a partner in America’s Best 401K, which, you write, is “…a revolutionary company that…create[s] an unparalleled and cost-effective solution.”  Given your new role, and as an educator, isn’t owning that firm something of a conflict of interest?

Robbins: I’m totally transparent. I tell people I’m an owner of the company and a board member. There’s nothing hidden in what I’m doing in that area whatsoever.

PHOTO: Tony Robbins is interviewed by host Anthony Scaramucci and Maria Bartiromo during the taping of “Wall Street Week,” on the Fox Business Network, in New York earlier this year. (AP Photo/Richard Drew)

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PHOTO: Tony Robbins is interviewed by host Anthony Scaramucci and Maria Bartiromo during the taping of "Wall Street Week," on the Fox Business Network, in New York earlier this year. (AP Photo/Richard Drew)In your book, you make the point that “there’s clearly a place for effective annuities in many people’s financial plans” and later state that you’ve partnered with Advisors Excel “to build and promote additional products and services that will help create a guaranteed lifetime income plan for…millions of Americans…” So, you’re educating…and you’re selling?

Robbins: Advisors Excel is doing fixed annuities, which can be a useful tool provided someone’s asset allocation is at a certain stage in life.

Advisors Excel offers, among others, fixed index annuities, vehicles known for their high fees and commissions. FINRA issued an investor alert explaining fixed index annuities’ complexity and the possibility of losing money in them. In your book’s first edition, you wrote that they were “an elevator that can only go up.” Now you write: they [have] “the upside without the downside.”

Robbins: They aren’t expensive if you go with the right ones. You’ve got to know what your real costs are; otherwise, you’re going to get hurt, as with anything else you invest in in the financial area. That’s why you should have these annuities analyzed.

How will the DOL fiduciary standard rule affect advisors who sell variable annuities?

Robbins: Salesmen can say to customers, “The government is taking away your choices; but if you sign this document [BICE], I can offer you these additional choices.” A lot of people are going to fall for that, unfortunately.

What’s the “unfortunate” part?

Robbins: Variable annuities don’t make sense for the vast majority of people because they’re paying the insurance cost plus the brokerage cost.

I thought you were in favor of annuities?

Robbins: Annuities are valuable tools. But the idea of selling someone a variable annuity, with all those fees and tying up so much money, doesn’t make an ounce of sense. And the Department of Labor has no real enforcement for the fiduciary rule. So you’d have to sue [for example] Morgan Stanley yourself. Good luck!

Tony, in the paperback, you criticize Fisher Investment’s advertising campaign, ‘I Hate Annuities…and So Should You! [now headlined, “What Your Annuity Salesman Doesn’t Want You to Know”]. You say that Ken Fisher’s “recommended alternative is a portfolio of his stock picks” and that these — though you indicate only one mutual fund that he manages — “have underperformed the market in dramatic fashion.” What’s your point?

Robbins: I was dumbfounded that Mr. Fisher is promoting at the level he has when he’s been underperforming the market. All I’m suggesting is that you’ve got to look under the hood and know what your real costs and real risks are.

PHOTO: Tony Robbins is interviewed by host Anthony Scaramucci and Maria Bartiromo during the taping of “Wall Street Week,” on the Fox Business Network, in New York earlier this year. (AP Photo/Richard Drew)

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PHOTO: Tony Robbins is interviewed by host Anthony Scaramucci and Maria Bartiromo during the taping of "Wall Street Week," on the Fox Business Network, in New York earlier this year. (AP Photo/Richard Drew)Tony, you grew up poor; had an abusive childhood and were homeless at 17. Not long thereafter, you had $13 to your name. Then you became successful, rich and famous. Any effects of those early years that show up today?

Robbins: When I see somebody hurting, I act. I suffered so much that when I see suffering, I’m compelled by a tremendous hunger to do something to help.

Who have you helped most recently?

Robbins: I gave a group of French nuns in San Francisco who were going to be evicted [from their soup kitchen] $50,000 to take care of them for the next year. Then I bought them a homeless shelter for $800,000 so they don’t have to worry for as long as they live. And I’m paying the rent for the next two years at least for a 100-year-old woman in Palm Springs who was being evicted.

So you step in where you see someone in straits.

Robbins: It’s not a promotional tool. It’s part of who I am. You don’t have to trust how my lips move; all you have to do is watch how my feet have moved for the last 39 years, and you know who Tony Robbins is. I don’t want to wait till I die to make a difference.

What do you do to kick back and relax?

Robbins: I spend two weeks a year at the resort I own in Fiji. I go scuba diving, snorkeling, hiking, and I play squash. I also like to snowboard. I do a lot of crazy things. I’m an active guy.

PHOTO: Tony Robbins is interviewed by host Anthony Scaramucci and Maria Bartiromo during the taping of “Wall Street Week,” on the Fox Business Network, in New York earlier this year. (AP Photo/Richard Drew)

 

See also:

The new fiduciary challenges

Insurers work to implement new fiduciary rule

What if Dave Ramsey were held to a fiduciary standard?

 

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