Just as a personal trainer can keep you physically fit, a good fiduciary not only can keep you fiscally fit, but also mentally fit. (Photo: Shutterstock)

What do you think would cost more money: the membership fee for a high-tech gym with all the latest exercise gadgets or a personal trainer on-call 24/7? Which of these do you think would do a better job of keeping you in shape to remain healthy?

That, my friends, is the difference between a product-oriented service model and a fiduciary-oriented service model.

It's also the difference between a robo-advisor and a human adviser (N.B.: the difference in spelling). If you want the greatest value, you're going to have to be willing to pay a little more.

Said another way, the “race to zero” in fees will ultimately leave you wanting “more,” not “less.” You might think you want to pay “less” fees, but when you realize you'll also be “less” satisfied, you'll go out of your way to find “more” value, even it if means paying “more” in fees.

Consider this example: You might think you're cruising along just fine in a no-frills (i.e., low cost) service environment when – BAM! – change happens. The unexpected occurs. You discover your previous assumptions prove invalid. Now you need help you didn't plan on.

Unfortunately, this is precisely the situation that occurs when people are least inclined to deal with it: retirement (see “New Fiduciary Role: What Happens When the Retirement Honeymoon is Over?” FiduciaryNews.com, October 9, 2018).

All's fine and dandy with the robo-advisor mechanically allocating your assets while you approach retirement and even as you enter retirement. What happens though, when you've swung on that hammock for the umpteenth time?

You realize what many others have realized. After spending a lifetime waking up every morning to an alarm that first tells you to go to school, then later tells you to go to work, how do you feel when the alarm finally tells you nothing?

That's the downside of retirement. Far too many discover their original purpose in life no longer abides. The rules have changed: There are no rules.

I believe this is particularly vexing for non-entrepreneurs, people who have spent their entire career working for someone else, following someone else's orders, obeying someone else's rules. They aren't accustomed to being their own manager. And they're beyond the stage in life where they want to learn new tricks.

That's where the fiduciary comes in. That's where the fiduciary can add value.

Just as a personal trainer can keep you physically fit, a good fiduciary not only can keep you fiscally fit, but also mentally fit. A good fiduciary, therefore, becomes not merely a life coach, but a life manager.

For those of you not familiar with those terms as they apply to baseball, a coach teaches tactical skills and offers suggestions  that will make you more effective. A manager, on the other hand, though he may often inspire strategically (“Win one for the Gipper, boys,”), ultimately, he's the general responsible for making all the important decisions.

Similarly, a personal trainer is like a life coach. He's the expert in one small niche of your life. Though he pushes you to take the action you need to take to remain healthy, it's up to you to decide to act upon his recommendations.

A life manager, on the other hand, takes a comprehensive view. A life manager assesses where you are, compares it to where you want to go, then develops a strategy for closing that gap. It's easy to see how this works when retirement is the goal (or any other monetary goal).

Purpose isn't monetary. It's spiritual. It's philosophical. It's mental. During one's working life, for many, one's immediate supervisor acts as a life manager.

I'm not suggesting that's good or bad, I'm just saying that's a reality for many people who are comfortable treating work as any other mercenary would.

The trouble is, when they retire, the person who managed their life doesn't come with them. They're now on their own. And, too frequently, without purpose.

Unless, of course, they've spent those extra pennies to keep a good fiduciary adviser on their team.

That's a value they can't afford to be without.

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Crossing the fiduciary Rubicon — Carosa

Fiduciary rule worth more dead than alive — Carosa

Great fiduciaries must meet the empathy challenge — Carosa