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June 14, 2016 at 02:30 PM
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.
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)
See also:
Tony Robbins slams critics, says he’s not a financial advisor
Why the Motley Fool needs to be schooled on retirement incomes
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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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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
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?
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?