David Bach. David Bach.

(Editor’s note: This story first appeared in Human Capital, a briefing by Washington Bureau Chief Melanie Waddell about the people who shape the financial services regulatory space.)

Welcome back to Human Capital, where we’re getting a jolt of advice from celebrity advisor and New York Times bestselling author David Bach, who’s set to release on May 7 his 13th personal finance book, “The Latte Factor.” The book, by the way, “is not about the coffee,” he quips but how the “small amounts of money you spend can add up to a fortune.”

While not a traditional commentator on financial regulation, as a practicing advisor who co-founded AE Wealth Management – which has a healthy $6.4 billion on its platform, and over 500 advisors – Bach is no stranger to advisors’ daily compliance chores.

Since my chat with him in 2017 about his “Business in a Box” program for advisors and the now-defunct Labor Department fiduciary rule, Bach continues to keep his eyes peeled on the regulatory landscape. “I don’t think anything’s changed” since the death of Labor’s fiduciary rule, he told Human Capital. “Compliance costs are going to continue to increase, and I think regulation is going to continue to get tighter.”

Founder of Finishrich.com, Bach has written 12 books, including the Finish Rich Book Series and Automatic Millionaire Series, and has appeared on numerous TV programs.

Human Capital caught up with Bach as he was creating a “Latte Factor” online master class in partnership with CreativeLive, “the biggest online school,” possibly worldwide, he says, and prepping for the “big pre-launch” of the book, which will also include a live, virtual world-wide book signing.

With the tagline “Why you don’t have to be rich to live rich,” “The Latte Factor” was written “specifically to reach young people,” Bach says, “to inspire the 100 million millennials and Generation Z and Gen Y that there’s still plenty of time for them” to save money, “because we all know that when you start when you’re young, it’s much easier.”

What’s the book about? Bach says, “The book tells the story of Zoey, a twenty-something woman living and working in New York City. Like many young professionals, Zoey is struggling to make ends meet under a growing burden of credit card and student loan debt, working crazy hours at her dream job but still not earning enough to provide a comfortable financial situation. At her boss’ suggestion, she makes friends with Henry, the elderly barista at her favorite Brooklyn coffee shop.”

A quick read, Bach says “The Latte Factor” “is really about life, less about money” and teaches that “money is a tool to free you.” He’s counting on baby boomers to buy it and give it to their kids. “I just had my 15-year-old son read this book,” Bach relayed. “It’s the first time he’s read one of my books. He turned to me after reading it for two hours and said, ‘Wow, Dad, this book is life changing.’”

The book shows “you that $5 a day can save your life. You need to pay yourself first, and use your 401(k) at work,” Bach counsels.

The good thing: “We have a lot of millennials that are saving. I’m an investor in Acorns, and Acorns is up to 5 million accounts now; it’s one of the fastest growing companies in America.”

Bach’s warning to advisors: “If you don’t get in front of your millennial clients in the next five years, you’re going to lose your assets within less than 20, because when your 60, 65 or 70-year-old client dies, if you haven’t been in front of the millennial kids, and they opened an account somewhere else, they’re not going to keep those assets with you. They’re going to click a button and move mom and dad’s assets to where they are.”

On the regulatory front, “unfortunately people need to be regulated, but all these rules that have come forward are rules to try to force advisors to do what’s right by the client,” Bach says. “If you’re running your business based on regulatory issues, instead of doing what’s right for the client, you’re doing something wrong in the first place.”

The first three rules about the advisory business Bach says he learned from his dad, who was in the business when he started, “No. 1: Put your client first. No. 2: Put your client first. No. 3: Put your client first.”

As to the Securities and Exchange Commission’s proposed Regulation Best Interest, which would require broker-dealers to act in the best interest of retail customers when recommending securities transactions, “We just see more and more people are leaving the brokerage side of the business,” Bach said. “I think the movement away from the brokerage side of the business is just going to continue to escalate. We have a lot of advisors that are hybrid advisors; the movement from the hybrid advisor to RIA continues.”