Finding Your Fit in the Financial Planning Profession

Eric Roberge, owner and founder of Beyond Your Hammock, had a long journey in the financial planning profession. He shares his story and how he doesn’t regret testing out several different roles before finding the one that fit his lifestyle best.

The financial planning profession is expansive – and there are so many opportunities out there for new CFPs to experience. Eric encourages everyone who is just starting out to find the role that allows them to live the life they’ve always dreamed of. He is living proof that there isn’t a single cookie-cutter model of financial planning career – and that that’s a good thing!

hannah's signature

“Showing what all the possibilities are in that it doesn’t have to be a cookie cutter approach to create a career and a business for yourself that actually is both gratifying because you’re helping people, but also gratifying because you get to live the life that you have dreamed of along the way.”

In this episode you’ll learn:

  • Different roles that Eric worked throughout his career as a financial planner (even before he took his CFP® exam).
  • How he decided what motivated him – and how he applied that to his career choices.
  • What he did to become more involved with the profession.
  • How he has been growing his career and his practice.
  • How he evaluated his own values and how they impact his work as well as his clients’ lives.

 

The Wall Street Journal

FPA NexGen Gathering

Mary Beth Storjohann, CFP®

Sophia Bera, CFP®

Beyond Your Hammock

Creative Advisor Marketing

 

Show Transcript

Ep63 Transcript


Hannah:               Well thanks for joining us today, Eric.

Eric:                        Oh, you’re welcome. This is, like I said to you before, this is gonna be a great conversation with a fellow planner, so I’m excited.

Hannah:               Yes, absolutely. So for the listeners who don’t know, Eric is the owner and founder of Beyond Your Hammock, and we’ll get to more of that story of how that firm came to be, but I wanted to first learn, how did you get into financial planning? What was your first entry point into, I guess the investment world, or financial planning?

Eric:                        College. The Wall Street Journal, specifically. In college, that was, I got a free Wall Street Journal in my dorm room every week. So I was started to read that and I became very interested in the trading world. Didn’t actually end up being a trader out of school, I ended up going into a couple larger banks, like State Street Bank, and JP Morgan, the first part of my career. So I stayed in financial services, but it wasn’t until 2007 when I actually dove into financial planning, as we know it, so then there was another journey from thereon.

Hannah:               So what sparked, so you’re working at these big banks, what sparked the interest in financial planning?

Eric:                        I think the … it’s really weird because I’d like to look back and say, well it was this thing that sparked it, and then I made this move because I’m so motivated and focused that I know exactly which steps to take next, and it wasn’t like that. I think it was more about, I wanted an opportunity, outside of JP Morgan because I didn’t want the corporate culture anymore. I was getting sick of that. And there was an opportunity that popped up with a friend of mine who said, “Well if you want to leave there, you can still stay in financial services, become a financial planner.”, because I was doing more analysis than planning at JP Morgan, and he said, “I will sponsor you for your Series Seven, and your Series 66, and your life insurance license, and we’ll see how it goes.”

So it was just a void in not knowing where to go, this opportunity coming up, and me saying, well, I like finance, I like personal finance. Let me just give it a try, and a worst case scenario, I leave and it doesn’t work out. So that was the impetus for me to go into personal financial planning.

Hannah:               So when you made this transition, was there a pay cut, or what was it like financially for you to make that transition?

Eric:                        I don’t know if there’s a word, ’cause certainly pay cut doesn’t give meaning to what actually happened to my finances. It was more like an avalanche of just in tune emptiness, ’cause I had no money coming in. When I left JP Morgan, my salary stopped, and then it was all based on commission and fees at my new financial planning job, and I was not very good at it and I didn’t make any money.

Hannah:               And so while you were at JP Morgan, what were your expectations of what it would be like when you moved to becoming a financial advisor?

Eric:                        Yeah, that a good question, because I guess that was the reason I finally left JP Morgan. I didn’t know what to expect, there were a few things though that actually had me go. One of them being the roof was taken off my income potential, right? So at JP Morgan, and at State Street Bank, I was constantly feeling like I had to convince my boss about why I deserved more money. And as a financial advisor, the way it was gonna be set up, it was if I produced, I would get more money, so I could do good things and really make an impact, and have my income be reflected in that impact. So that was cool to have that ceiling removed.

One of the other things that was there for me was, I didn’t really like the whole cubicle environment. So finally, after five years, or … yeah, five years in cubicles, I was going to be able to create my own schedule, and do my own thing on a daily basis. So that freedom, that thought of freedom was something that was very enticing to me. And the third thing was just being able to finally be removed from the corporate environment. Being client facing and being able to work with people one on one, to be able to help them with their finances and see the impact of my skills and my experience with a client, helping them see things they didn’t see before, and then enjoying the fruits of that. So that was the icing on the cake for all of the, all of it.

Hannah:               Is that when you started looking into getting your CFP®?

Eric:                        I didn’t really know what a CFP® was at that point. I was just learning about what a Series Seven was, and what a Series 66 was, and I was moving into a hybrid broker dealer model, so I was able to sell insurance, I was able to manage assets. So I needed a Series Seven, a Series 66, and my life insurance license. It wasn’t until a little, a few years down the road that I actually started to look at the CFP®.

Hannah:               So we talked about what your expectation was of this, stepping into this financial advisor role, so what actually happened when you … You’re at that new job now, what was that like?

Eric:                        Oh man. That was an eye opener for me, because I didn’t, so I didn’t know what to expect, so I couldn’t say that it really fit my expectations or it didn’t, I was just there now. So I did have an office space that I was using in this new company’s office. I was basically renting space from them, which is basically giving them part of my revenues that I brought them in. But we’d have meetings and just kind of … Actually, you know what the first thing that happened, which was very exciting, too, I left JP Morgan and I was telling people that I was working with that I’m moving to this new company, and the first thing that we’re gonna do is head out to California and we’re gonna go to an insurance seminar.

So people were like, “Oh, I want a job like that. I want a job where I can actually travel and do things.” And I said yeah, this sounds really great. So I flew out to California for a weekend with a friends of mine, with the guy I was working with, and we went to this life insurance seminar. So that was really cool, but overall it was very tough, because I soon realized that it wasn’t as easy as just talking to somebody that’s interesting in financial planning, and then doing work with them. I had to go find the people, and then convince them, or so I thought, that I was the person that could help them. And then they would say yes, and then I would do the work. That way, it was a really, really tough process. And, mind you, this was the end of 2007, so if anybody’s familiar with the stock market, and the crash of 2008, this was when it started to crash.

So I fell into this world in the middle of the worst recession since the Great Depression. And it was a huge learning experience for me. Not all good stuff, but great experience.

Hannah:               And so were you able to build up a book at that location?

Eric:                        No. I was not. I was really not. What I did was, they had some connections to teachers and firefighters, and a lot of the municipalities in town, so I was initially going to middle schools and sitting in the cafeteria, hoping that a teacher would come up to me and ask me about 403 B Plans. I didn’t want to be the guy walking around interrupting lunch, ’cause I wasn’t rude, yet sitting around waiting for something to walk up to me was not actually working. ‘Cause they didn’t really …

Hannah:               People didn’t want to …

Eric:                        They don’t know. Teachers don’t know about retirement, most of the time, they’re busy teaching their kids. So they’re like, oh, the 403 B guy’s here, great. I’m not gonna talk to him. One of the other things, too, that … this was like more of a cool story, not a cool story at the time, but cool story looking back. We had sent out flyers to, or postcard to a bunch of people that fits the, I don’t know, they were probably like 65 years old or more, taking social security, and the postcard said, we can help you save taxes on social security. So, really looking back, what it was, the door opener to try to get in and sell an annuity.

And so all these mailings went out, and then it was my job to follow up with these people by phone, and try to set up a meeting. And I am the worst, I am the worst cold caller you will ever meet. So this was the most stressful part of my job, trying to call this list. I would probably end up after a day of looking at the list, I would call five people. I remember one night, I was in the basement where I had my, I had a desk in the basement of this building, and it was six o’clock PM, nobody was there anymore, and I had to finish this list. So I was doing push-ups to sike myself up, jumping on the call to try to get somebody on the phone, holding my breath while I was talking, and trying to get a meeting, and hanging up the phone.

And I would do this, just to try to get myself siked up to do the phone calls. It was really, really awful.

Hannah:               And that was really the … I mean, that’s how they teach people how to do it. Obviously, probably not the push up part, but the … you send out a mailer, you make the phone calls, you get the appointments, and then you work your close right, and that’s how you get clients.

Eric:                        That was it. That was the broker model. That’s what you see on TV, the Wolf of Wall Street and these people that are just making calls and closing deals. Always be closing, right?

Hannah:               As you’re going through this, what was the point where you were like, this isn’t working?

Eric:                        I don’t know that I ever said, well, this I guess, defining this. This as a career move, I never said that it wasn’t working. This as in, well this company may not be working out for me, just the set up doesn’t fit, that started to happen pretty soon, maybe six months in when I was not making any money. I was making very little money. Certainly not enough to support myself. I had just before I left JP Morgan, coincidentally, I had to move out of my, the place I was staying. And my friend was getting married, so he was like, you have to move out because my fiancé’s moving in. And, very selfish of him, but that’s what he said, so I moved up back to my parent’s house, at 27, just thinking that it was gonna be a short stint. Like two months, and I was gonna go buy a place. And that’s when I made the move, and suddenly I realized that I couldn’t move out of my parent’s place ’cause I didn’t have any income, so I was stuck.

So six months in, not making any income, now still at my parent’s place, something had to change.

Hannah:               And so what changed?

Eric:                        I started to do a lot of research on … ’cause again, most people, even beginner financial planners, don’t understand the full breadth of this industry. The many types of people, the positions, the job requirements, the way you make money. It’s so vastly different, depending on who you work for. I was just starting to realize that, after, you know, right? I had a degree in finance. I worked for State Street Bank, JP Morgan Chase, and then became a financial planner. And only then did I start to realize how crazy the industry was, because it was so desperate. Right? There was so many different types in there. So I started to do research about what I might want to do, and I came across a firm that, and so when I was working at this first firm, there was no real marketing funnel. Which means that, there was no way for me to consistently get prospects and bring them in and then create clients out of that prospect list, other than doing these manual things about calling people.

So I found a company that did seminars. So what they would do is they would send out similar mailings to people and then the people would opt in to a seminar, like a free dinner, and you would be there in front of the advisors, and the advisors would give you a presentation and then the idea would be to get them interested enough to have a meeting with you and then they become clients from there. So they had a successful process for doing this, and I wanted that. ‘Cause I said, well I can remove the marketing stress for me, because they have the marketing already. All I have to do is go over there and do my job. So I found that and I moved over to that firm in 2009, very early in 2009.

Hannah:               I’m always interested when broker dealers promote marketing as this is why you should come work with us. Was that successful?

Eric:                        It … well, for them, it was successful until 2009. So, my luck was running out, very quickly because 2008 was a horrible year for the market. By 2009, this seminar thing was no longer working. People were scared to death of anybody. Banks were crashing, so talking to a financial advisor was even worse. And no one would come to these seminars, so the company before, actually, saw this happening by the turnout of the seminars, they stopped. They said, I’m gonna not do this anymore, we’re gonna do back to our old marketing, which as basically what I was doing before I came to this company, so one month into this new company, they changed the reason I came over … I came there for a reason. They changed their marketing, and I was back to square one. So it was not working.

Hannah:               And so were you able to bring clients from your last broker dealer to your new one?

Eric:                        I think I could, although I didn’t have that many. I think, there were a few that I brought, but I think there were others that I got through the 403 B program, which I had to leave that behind me. So I really didn’t have any clients. I was starting over again, at this new company. And it was not, I mean, they pitched themselves as a financial planning firm. I mean, they had financial planning software, so they had to be a financial planning firm. And really what it was, is was a glorified sales technique to sell more annuities. So, I didn’t love that either. So now I was getting no clients and I was in a place where, they weren’t really doing what I thought was best for the clients. Because it was a lot of commissions being had by annuity sales.

Hannah:               So did you stay there long, or what was your tenure there?

Eric:                        Back then, it was a long time. It was about nine months.

Hannah:               The longest nine months of your life.

Eric:                        Yes. In that nine months though, again, I was learning so much. See, I would never change any of it, any of this, because it gave me so much experience, so much understanding. Making mistakes, finding opportunities, that I would never change any of it. But, in that nine months, I did realize that well maybe I can go out and find a small advisory firm that has one advisor, who is older, because I came to realize that the average age of a financial planner was somewhere in the 50’s, in their 50’s. So I could make a relationship with a single advisor, in their 50’s, build up my own clients, because they might have some sort of prospect funner, or some marketing technique to bring in new clients. And then, potentially, if all worked out, take over that business down the road.

So I was seeking that out, and because I was seeking that out, something came across my desk, and I make my next move in 2009 to a small broker dealer firm, under Commonwealth Financial Network. An amazing broker dealer, by the way.

Hannah:               Yes, very good one. Do you … So, you found an advisor. Did you go into it, were there conversations about being a succession plan, or was it just something you assumed with the age, that that conversation would eventually happen?

Eric:                        I think a little of both. I was clear in that, ’cause it, at this point, this was my third financial planning job, so I knew what I didn’t want. And I made sure that I expressed what I ideally did want. And it wasn’t … So the positive was that I did express it. And he did say yes, that seems like a good idea. The negative was that there was nothing on paper that said that that would actually happen, but I was okay with that, because it was just an opportunity for me. Going back, I may have approached it a little differently, ’cause of course, it didn’t work out, but that was the goal. And we both understood that that could happen, maybe, down the road.

Hannah:               What did you learn at that firm?

Eric:                        That is probably where I learned the most about what a financial planning job could really be. Because it wasn’t about selling annuities or life insurance. It was about doing planning for clients. Using financial planning software to actually help clients understand how much money they would need to retire and live throughout retirement without running out of money. So we focused on people that were 55 or older, that had at least several hundred thousand dollars of investible assets, but they were really looking to understand how to make the transition from working years to retirement. And as you know, that’s a big transition, and there’s a lot of planning that goes along with that. So I was really able to understand how to communicate with clients. How to do real planning for clients. And how to really run a business. ‘Cause I was the back office, running this business. And I got a lot of really good experience.

That’s also when I was exposed to the CFP® … Well, no, I take that back. I did start taking my CFP® classes in 2008, but I put it on hold, because I’d made so many transitions that I didn’t know where I was gonna be. That’s when it came back up, and he said you should really get your CFP®, ’cause he had his. He had had his since the ’90’s. He said it’s a good thing to get, so he sponsored me, or paid for my CFP® program, as long as I passed the test.

Hannah:               So your employer really encouraged this CFP® program and building that out.

Eric:                        Yes. He understood that that education, you’re gonna get nowhere else, and it’s the exact education that you need to be able to do comprehensive planning.

Hannah:               So were you building your own book at this point, or were you just like a straight employee, working with his clients?

Eric:                        That was a point of contention. I was not actually building my own book. I think at some point in my working years with him, there was a non-solicit agreement that I signed, which meant that any client that I brought on board, I could not take with me for a year after I left. So it really did mentally block me from freely bringing on potential clients. ‘Cause I was like, if I bring on a friend, what if I bring on a friend and then I leave? And then he’s stuck there for a year? He’s gonna hate me. So I didn’t want to do that, so I was really limiting myself to bringing on people that I didn’t know at all, potentially bringing them on, and then … Because if I didn’t know them, and I brought them on, then it wasn’t all that big a deal if I left. So I had one foot out the door a lot of the time, because it wasn’t like a clear path to move forward, which is very common in this industry.

Hannah:               People talk about you’re either an employee or you’re an entrepreneur. Did you identify yourself as an entrepreneur throughout this process for the last several years?

Eric:                        No. I would say that I was not that at all. I was, I felt more like a mouse in a maze than an entrepreneur. I was just trying to make it. I was trying to survive. I was trying to get to a point where my income was sufficient enough for me to live the life that I wanted to live. And that was not a place to do that. I was not in a position to do that. So even though I went to Babson College, which is known for entrepreneurship, so I think I always say that it was like osmosis, that I had the entrepreneurship bug leaked into my pores when I was there, and then it came out while I was at this firm, and I realized what I needed to do to get to what I needed to be, to be an entrepreneur, and to run the business the way I saw fit.

Hannah:               So that’s interesting. So you said you figured out what you needed to do, so can you talk about that?

Eric:                        At this point, so I worked for several different firms, with several different business models. Working with clients, different types of clients. I realized that I wanted the comprehensive planning position. I didn’t want to be the salesperson and … But I didn’t want to be focusing on older individuals. I was 30, 30 ish at the time, so I wanted to work with younger people. People that were more my age. People that I was naturally networking with when I went out to networking events. So that was what I … that was in my sights. I needed to do comprehensive planning for younger people. And how I did that was a question. Because that was not really done in this industry at the time. People weren’t just working with younger people. There might be clients kids that they worked with because their client was paying them enough money to make sense, to have that make sense, but for the most part, certainly, nobody was going out there and working with younger people unless you were trying to sell them a life insurance product.

Hannah:               And so you just wanted to do a straight financial planning fee for these young clients.

Eric:                        Yeah. I wanted to be honest. I wanted to be objective, and I wanted to help younger people.

Hannah:               Did you have conversations with your boss at that point about this vision that you had?

Eric:                        I don’t really remember if there were specific conversations about that vision, ’cause I think that was slowly starting to grow as a vision inside of my brain. I didn’t know it exactly what it looked like yet, ’cause we were tying at the time to acquire other businesses, to … It wasn’t … We had no surefire way to bring on new clients consistently. The amount of clients we needed to expand as quickly as we wanted to, so we were looking at buying another firm, and we did come across a firm to buy, but that actually didn’t work out. There’s a lot of details there that probably aren’t relevant for this conversation, but it didn’t work out, and it really pissed me off, the end result of it. So I wasn’t all that open about that I wanted to do, because I didn’t trust that it would be met by somebody that would support my vision.

Hannah:               Yeah. You judge people by their actions, not what they say.

Eric:                        Yeah.

Hannah:               In this business, yeah. You have to.

Eric:                        Yeah, at that point I was three years into this new company and I’d learned so much. I am very grateful for the experience that I had with this firm and the owner of the firm, and how much time and effort he put into teaching me what he knew. But it was not a place for me to be long-term, so that’s when I was like, alright, I am here for three years, there’s no succession plan on paper yet, there’s no … I have no clients of my own. So it’s more risky for me to stay at this firm and have the owner change his mind about what he saw my path being, than it was for me leave and start over again. So for the third time I started over again, in 2013.

Hannah:               And so this is the Beyond Your Hammock, right?

Eric:                        There was a short stint of a six month period where I was leaving his firm. I wanted a fee-only firm to work with. I didn’t know if I wanted to start my own, ’cause I wasn’t really confident that I could build a book of clients from scratch, so I worked with a friend of mine who had a structure, he had an RIA, a registered advisor company, and he was an investment guy. He was a really small RIA. He probably had five million dollars under management at the time and he said, “I’m the investment guy. You have your CFP®, why don’t you come on board and do the financial planning, and maybe we can support each other and grow this business.” So I said that sounds great. So, basically I was working from home, and for six months, I was trying to do what I didn’t realize I was eventually going to do. Working with younger people, doing financial planning, but I was selling financial plans, basically. So I would say, alright, eighteen hundred bucks, I’ll give you a financial plan, and then, hopefully, thinking in my head that that financial plan would push them in the right direction, so eventually they would have assets, and then I can manage those assets.

But after six months I realized it was just a transactional type of setup, where I had to keep selling financial plans to make any money. And it just wasn’t working. And at that point, in June of 2013 is when I … Actually, when I met you, because I went to the Next Gen gathering out in … What was it, Minnesota? Is that where we were?

Hannah:               Yeah. St. Johns. Yup.

Eric:                        Yeah. Which was awesome.

Hannah:               I remember that.

Eric:                        And that experience from the Next Gen group was just like mind altering for me, because not only did it show me that other people were out there on their own islands, thinking about this, like that they were by themselves, I’m the only one that’s young and in this business, and that wants to do financial planning and I can’t get there. There were many people thinking that way and we all came together at the next gen gathering, and it gave me the confidence to realize that I could actually start my own registered investment advisor company. ‘Cause at the time, Sophia Bera, and Mary Beth Storjohann were both at the Next Gen gathering and I had met them, and they were both starting their own companies and I said, I want to do that. I can do that if they can do that. So I left in June, came back, told the guy I was working with that I wanted to start my own company.

He was a friend too, so he was cool with that. And by August of that year, I had launched my own RIA called Beyond Your Hammock.

Hannah:               How did you get the name Beyond Your Hammock?

Eric:                        That is a good question, because everybody asks that one. And I love when people ask it, because that’s why it’s there, right? I didn’t name it Beyond Your Hammock so it could just be like a white elephant in the room. It’s called Beyond Your Hammock because, number one, I needed to have a name that didn’t have people assume what I did. So Roberge Wealth Management, or Roberge Financial Planning, that was right out. That did not work because people would come in to me and yeah, “Oh yeah, I know five or six people that do what you do, they work with North Western Mutual, and New York Life, and bla, bla, bla …” and then, suddenly you’re down a path that you don’t want to be down, and you have to backtrack before you can actually build a story about what you do and why you’re different.

So Beyond Your Hammock, a name that was different, would start off from a blank slate. So people say, “What do you do?”, ’cause they don’t even realize that I’m in the finance industry with Beyond Your Hammock, right? So, that gives me the ability to, with a blank canvas, build the story about what I actually do and why it’s different. So I can say that, I’m a financial planner, or I don’t say that, actually. I take that back. I say I help people in their 20’s and in their 30’s, use their money as a tool to live a life that they love. So basically, I’m a certified financial planner, so I use that experience to do things a lot differently than financial planners do it. And now they’re interested. They’re like, okay. It’s different. Now, what does that mean? And then I get to build that story from there.

The second piece of it was making sure the name had an impact in a meeting. And for most people, Beyond Your Hammock has a standalone name, does not have a meaning. But, for me, Beyond was a key word, because I always wanted to look beyond society, beyond the every day. Doing things differently than the crowds. So that beyond really gave me a tingly feeling in my neck, to say yes, outside of the norm. The hammock part just fell into place as a cool word, because relaxing, who doesn’t like to lay in a hammock? So, the best part about this, and this is what really cinched the deal for me is when I put the words together and said Beyond Your Hammock, I didn’t really love it at the time, but I texted my brother-in-law, and I’ve told this story a bunch of times.

But I texted my brother-in-law, and I said what do you think about this name as a business name? And he said, “Well, coincidentally, I was out in my backyard the other day, and I was looking at the hammock that I have out there, and it’s tied between two trees, and I was looking to carve two sayings, one on each tree. And on the first tree I wanted to carve ‘Work Whenever’, and on the second tree, ‘Relax Forever’.” And I just sat there for a second, and I’m like that is so cool. That is the message that I want, whether it’s subliminal or direct. For all of my clients to understand that they have a choice as to whether they want to work or don’t, and that they can always relax. That is just such a cool place to be. So that sealed the deal. And that’s why I went with Beyond Your Hammock.

Hannah:               So you opened the doors for Beyond Your Hammock. You’ve had the struggles of trying to find new clients. You have this marketing message that’s different and unique now. Did that resonate right away with clients? Or what was that journey like to build your business?

Eric:                        I think there’s a piece that’s missing here, too, that really, really, really helped me gain the confidence I needed to launch the business, and then create a message that I wanted to use as a marketing message. And that was doing some personal growth training and development. So I was very much, like when I left JP Morgan, I was in a, I would say a dark place. Now, people have all kinds of definitions of what dark means. I wasn’t in a basement dissecting mice with a blindfold, I was just in a place where I was questioning what the future looked like, where I was going. And I was a lost soul, so as I was becoming a financial advisor, I just felt like I still hadn’t found myself.

It was like a quarter life crisis. So I was reading all kinds of books, self-development books and just anything I could get my hands on, I was trying to learn from. And it wasn’t all financial planning. It was actually very few financial planning books, and mostly, growth books, business books, personal reflection books. Think and Grow Rich was one of the ones that I read, which was an awesome book to get me to see things in a way that people didn’t normally look at their lives. And that led me to work, to find some programs that I could go to and work on myself. So for a couple years, as I was switching out of the employee to employer role, or at least employee to entrepreneur role, I was going through these programs, and reflecting on myself, doing a lot of work on myself. Seeing where I came from, why I do certain things, why I think certain ways. And really completing that past, and moving forward with again, an open canvas, and trying to create something new, because I could do that. Why would I not be able to do that? Every day, every moment, you have the ability to choose what you do next, and how you react to certain things, and how you proactively go out and build something.

So that was where my mind was when I started this business. And it was all about, it was all positive. It was like, what can we create here? So I just started to share, and this is one thing that I think is key. I was not selling at this point, in the past I had sold, I tried to sell things. In this case, all I was doing was sharing what I was doing ’cause I was so proud. I was so motivated to do this thing that was different to help younger people use their money as a tool that it just was like a wildfire going on inside me. So I would just tell people what I’m up to, and I think a lot of people miss an opportunity when they, when someone says, hey what’s going on? What’ve you been up to? To say, nothing, or not much, just totally, just lose so much in that conversation. Because what I would do is say, you know what actually what I’m doing is starting a business, and I’m working to build this new type of financial planning firm that’s actually helping younger people understand how to use their money now and in the future.

And it just, my own way of being in that conversation, and what I was saying, with such a different perspective than the normal person was used to when it comes to the financial planning industry, that it gave me so much room to have a good conversation, that I just kept having those conversations. And it slowly spread, and I started to develop a clientele. It wasn’t quick, but it was building one after another, after another.

Hannah:               Well, I love that. It’s like you let your passion show through to your prospects, and they felt that. They wanted to be part of that.

Eric:                        Yeah. That’s one key, I think that starting your own business, I think, can give you that. Because, and it’s not the only way. But for me it was the way that allowed me to really look at my business as part of me, and I’m very proud of who I am, so I wanted to make sure that what I was doing for my business, made me proud as well. So it was just this one big, I don’t know, circle. It was … I was my business, my business was me, and I had my life, and it was just … I was my brand. So it was very motivating to go out into the world feeling that way and sharing with everybody what I was up to.

Hannah:               Just following your story up to this point, was the business not sustainable for you?

Eric:                        No. No. Actually, when I left the employer, so the advisory firm with Commonwealth Financial Network, when I left at the end of 2012, I knew that I needed to find some income replacement, ’cause they had actually started to pay me a salary over there. Because in the past I hadn’t found income, I knew that that wouldn’t work, so I actually got a job, for the first time in my life, at the age of 33, as a waiter at a restaurant. And although I was going into that thinking that I would be the next Tom Cruise in, you know, be a bartender, and be like yeah this is great, I’m making money on the side, and I’m starting my business. And this is awesome. I slowly realized that, I quickly realized that I didn’t have any experience as a waiter or a bartender so nobody wanted to hire me. But I did find a job as a waiter in February of 2013. And I worked as a waiter for 10 months to give me some sort of income to survive as I was trying to figure things out. And that is a very key factor in allowing me to think through, even though it was stressful, think through without completely being stressed out of my mind, how to actually build a business effectively, and not just because I needed money.

Hannah:               Yeah, I think it’s so admirable when people do these side gigs, if you would, to really be able to build up their dreams. I also think it’s really interesting ’cause you were just talking about how you reached this place where you were just like oh my gosh, everything is firing on all cylinders, everything is going go great, and you were a waiter at that time, too. So it’s … usually when you hear the waiter, you tie that do negative thoughts of being like, oh they’re down on their luck. But for you, I don’t know if that was maybe the case.

Eric:                        Yeah. And this is a good point to bring up, because it’s all about perspective. Circumstances don’t run our lives, so we can’t let them do that, right? If we let them, they will run our lives, but they don’t need to run our lives. So when I looked at being a waiter, I said, yeah, I am a waiter now after a college degree, and working at big banks and really being successful in those positions, and now after 11 years I’m a waiter? For the first time in my life? This in itself is not right. It was a big hit to the ego, but I was looking at it from, as a stepping stone. I was not going to be a lifelong waiter, and I mean, nothing wrong with being a waiter, if you can do it well and that’s what you want to do, go for it. But that was not what I wanted to do.

So I wanted to use that as a stepping stone to be able to create income short term to allow me to get to that next level. And I always had the end goal in mind, which allowed me to work Thursday, Friday, Saturday and Sunday as a waiter, and then start, and launch my business Monday, Tuesday, and Wednesday every single week.

Hannah:               That’s such a great story, and I think such a great lesson for anybody who’s listening, myself included. You do what needs to get done in order to achieve your dreams.

Eric:                        Yeah. It’s always … Everything’s possible. It’s just a matter of how much you want to commit to it and how much hard work you want to put in, and how long you can do that before you see results that is going to make or break you.

Hannah:               So you have had Beyond Your Hammock now for, is it three years?

Eric:                        No, I had my fourth birthday in August.

Hannah:               Fourth birthday. Congratulations.

Eric:                        Thank you.

Hannah:               In the four years that you’ve had your own firm, what have you learned about your clients?

Eric:                        I’ve learned that my clients don’t know much about money. And that’s not their fault, it’s the fault of our education system, not actually having anything to do with financial planning, personal finance, or learning about how, what makes a dollar, a dollar, and what makes it grow. And how negative debt can be to someone’s life. I’ve learned that … so I’ve also learned that they are hungry, my clients, again, right now my client, my average age of my clients probably 35 to 38 years old. People in their 30’s are transitioning from like a … Their first part of their career in their 20’s, and now they’re hitting a point where they’re making good money, they’re getting married, they’re having kids, they’re starting businesses. There’s a lot of transitions happening and they just don’t know where to go to get objective advice.

‘Cause everywhere they’re turned, they’re getting sold a life insurance or disability insurance product, and not being given financial planning advice. So they are just ready to meet somebody to provide them with some direction, some clarity, some education around what they can do for themselves. And what’s the best thing for them to do for their situation based on their goals and their financial situation.

Hannah:               There’s a lot of talk and I know you’ve heard it more than I’ve heard it, about how it’s not possible to have a financial planning firm that targets people who don’t have assets, or who have limited assets. So from your experience, what you would say to that objection that I … that we hear often in our profession.

Eric:                        I’d say that is completely wrong to say that you can’t do it, because I’ve done it. Now there’s a lot of nuance to that answer, the details anyway. And that depends on what you need to do. What you are looking to do, who you’re trying to target, what are their needs? And then you can build a revenue model that supports their needs. And that’s just like any business, right? You find a need, you build a business to meet that need, and you create revenue by meeting that need. There’s no difference, it’s not different, it’s just different in our industry. So all you have to do is figure out what their revenue’s gonna be. The revenues can be a monthly … So I have a monthly subscription model, and this isn’t something I created, it’s been around, but I think it was never used for younger people, and never used as the sole way to do business before… for younger people anyway.

So I just developed it out of need, out of my own need. And lined up with how I was giving my advice to clients, like an ongoing, a personal trainer for your finances is what I call myself. So I was lining up with the way I provided my services, and it also allowed me to build a consistent income stream for myself, working with people that didn’t have a bunch of money to give me. And if you don’t have any money to give me, I can’t charge one percent and make any money. Right? It doesn’t take a financial planner to figure that out. So whether it’s a monthly subscription, an hourly service, or half of it’s under management or commissions, those are all ways to make money in this business. You just have to figure out who you’re going to target, what they need, and how you can align your revenue stream to your advice.

Hannah:               You make that decision based on your clients. The client situation is really what dictates how you build your business.

Eric:                        Yeah. Exactly. Right, ’cause it’s not the age. ‘Cause what if I was just working with 30 something millionaires? I could manage money just like anybody else does, and charge one percent, and make a great living. But if I’m working with somebody who has all of their money tied up in a 401K plan, I can’t manage that money, but I want to work with them, and they need my help, so what else can I do to create a revenue stream that works?

Hannah:               From looking back over your, well I guess it’s more than just four years of being a business owner, what have you learned as a business owner?

Eric:                        I’ve learned that my business is a business. And I think that doesn’t necessarily make sense until you’ve actually walked the walk, because a lot of times people just come from the world of being a financial planner or producer or whatever else you want to call yourself in this business. And you are a person, and you are a person that delivers a product, or a service, and that product or service creates an income, but there’s never a separation between you and the business. So when you start a business, suddenly there’s Beyond Your Hammock, and there’s Eric Roberge. Certainly I am the founded of Beyond Your Hammock, but I am not Beyond Your Hammock. And that’s a big differentiation between my mindset before, when I started the firm, and now. I have a business, that business is not me. I have the ability to maintain and grow that business, but I need to make sure that I am separate. I have my own personality, I have my own life to live, and my business will still run. So keeping those things separate is a key factor in having success, not only in business, but in life. That’s one big thing I learned in these years running a business.

Hannah:               So is that just having healthy boundaries in business of saying this business can’t consume my life, I still have to live my life?

Eric:                        Well, yes, that’s part of it. And it’s certainly one that I focused on this summer. Really saying that I do have a life outside of this business, and I don’t want the business to consume me because it could totally fill up my schedule if I let it. So blocking out time for me, to be able to spend time with my fiancé, my family, and travel is important. So that in itself is one piece of it, but I think there’s something bigger and looking at your business as a business allows you to put some structure in the business. Whether it’s looking at the entity type and saying, well I started off as the sole proprietor, it doesn’t make sense to be a sole proprietor anymore, I should be an LLC or an S Corp. And then, also being able to look at it as a revenue generator on its own.

How can this business generate revenue without me lifting a pen or making a phone call? So there’s the, there’s just the business running on its own, there’s … I don’t even know how to explain that any more than that, but the gears are in motion, the business is running, because I’ve built a structure. I’ve built the process, I have software, all these things are the heart and soul of my business, but those are things that I just added to the business. And … Does that make any sense, or am I just talking in circles?

Hannah:               No, I think it does. Well, I think it’s … there’s … I mean, I look at my role, I have two different roles, I’m the business owner and I’m also a financial planner. And those are very distinctive roles and distinctive mindsets that I have to have as I approach whatever problem it is that I’m approaching.

Eric:                        Yeah. Exactly. That’s … and that’s really tough to express, ’cause I don’t think I would have grasped that if I didn’t experience it first.

Hannah:               Mm-hmm (affirmative). Yeah. And making that transition between them, it’s not a seamless transition. It can be a hard mental shift to make.

Eric:                        Oh yeah. For sure, and many people don’t ever make it.

Hannah:               Do you have staff that help you with your business?

Eric:                        I don’t have staff. I started to look for interns and then some outsourced financial planning help for a stint, and I used some people to do some back office planning, like doing, putting my … the client data into a financial planning software and running reports for me. And that was fine, but I think what I realized it was a Band-Aid on me not being as efficient as I possibly could be, and my processes not being as tight as they could be. ‘Cause I was talking to somebody and they were a president of a large registered investment advisor company, and they said, you really shouldn’t be considering hiring anybody, especially full time until you have $300,000 in revenues coming into the business. And I thought that was an extreme number, but that wasn’t the point. I think the point was to have me look at things differently and see where I could maintain efficiency and maintain that single person company, and do it so well that I could expand my revenues and still do what I needed to do for my clients and new clients before actually expanding from an employee standpoint.

So that’s where I walked up a couple steps, and then took a couple steps back when I had that conversation, and right now it’s me and I also am lucky enough to be engaged to an amazing online marketer, Kelly Hock, who is doing a lot of my online marketing and writing and blogs and social media posts, so that’s a huge part of the business, and it’s as you probably know, it’s a huge time suck, so it’s nice to be able to have that support, because then I can focus on running the business and managing my clients.

Hannah:               Well that’s great, your interests are completely aligned on that.

Eric:                        Yeah. It is perfect.

Hannah:               Oh the advantage of working with a significant other.

Eric:                        Bingo, yeah.

Hannah:               As we wrap up, what would be your advice to yourself back in the day, if you would?

Eric:                        I think it’s the same advice that I give to myself today. And it’s that you gotta focus on what you can control. There is so much noise out there, and so many things that impact you that you really have no control over. And we can either choose to spend our time worrying about those things, or cut them back and focus on the things that you actually can do, that can make a difference. So taking baby steps, and doing what you need to do. Especially, so as an example, you’re starting a business, and when you start a business, as a financial advisor you need to register that business with the state or with the SCC. You need to get some compliance structure and you need to have the documents you need, and you need to be able to have the website and your software, and if you start to look at all these things before you start any of them, you’re gonna feel overwhelmed and crawl into a hole.

All you can do is make a list of all the things that need to get done, and then go after them one at a time. And as you complete one task, you check it off the list. And you move to the next. So that’s the type of thing that I do in my business now, always understand what the priority is, and then do that thing and then move on to the next thing.

Hannah:               That’s great advice. And it’s so any point where you’re at, whether you’re always gonna be an employee, or if you want to start your own firm, I think that’s so great.

Eric:                        Yeah.

Hannah:               What are you looking forward to in terms of your business, or even the profession as a whole?

Eric:                        I think there’s so much opportunity and I thought this, coming into this business, there’s just so much opportunity for me at a personal level, but now that I’ve been in the business really since 2007 and have my own business, I think there’s so much opportunity as an industry to be able to create ourselves newly as objective guides to your personal finance. And being able to grow this industry to a way that we can help more than just the rich people, more than people that are just retiring, but also be able to educate the masses to understand the value of your money. And what you can do to put yourself in the best position possible. So there’s so much to go there, I think for me, personally, I’ve been focusing, and this is something that I’m doing with Kailey, is really focusing on showing how I follow my own advice.

So the things that I teach my clients are not things that I teach my clients because that’s what I have to teach them. It’s things that I believe in based on my experience, based on my education and based on my own personal situation. So I do the things that I tell my clients to do. So I’m trying to bring in the experiences that I have in my life, and associate them with good money management. So being able to go on a trip that actually doesn’t cost me an arm and a leg, and to be able to enjoy myself because the values that I have for my life exist in that trip. So rather than going to Punta Cana for seven days, where I’ve done in the past, and didn’t really give me all that much gratification, I now might take Kailey up to Maine and we’ll go hiking for three days. And it’s probably a third of the price, and it gives us so much more satisfaction than it ever did before. And then I’ll take pictures, and create stories behind that, and show people how they can too to that thing.

Use their money to support their life and not the other way around.

Hannah:               Well it’s that whole marketing, you want to show, not tell.

Eric:                        Yeah.

Hannah:               And that’s exactly what you’re doing.

Eric:                        And I want to tie that, so the, my purpose of even saying that was to, I want to use that kind of thought to create a book. ‘Cause it’s been, there’s so many financial planning books out there, and money books. And I don’t want to be just another money book, so I want to bring in my own personality and my own life to it, so to tell stories about how money was a problem, how it’s been a solution along the way, and have that be a lesson, or an education for people who want to read the book, so they can get that basic money knowledge, but they have it done through my own personal perspective. So that’s the next thing I really want to do, and that’s gonna happen, at least start to happen, this fall.

Hannah:               Well is there anything else, Eric? Any other thoughts, anything that we missed that you want to be sure that we touch on?

Eric:                        I just think that we need to continue to have these conversations. Whether it’s to help people that are in the industry, or people that are looking in to the industry wondering if it’s a career for them. Showing what all the possibilities are in that it doesn’t have to be a cookie cutter approach to create a career and a business for yourself that actually is both gratifying because you’re helping people, but also gratifying because you get to live the life that you have dreamed of along the way. So this is, there’s such a great opportunity here, and I always want to keep these conversations going. So thank you for allowing me to have this conversation with you.

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A Wealth of Opportunity

In this week’s episode we get to talk with Blair duQuesnay, CFA, CFP®,  who has transitioned several times in her career. Blair highlights the wealth of opportunity that is in financial planning, whether you are interested in being a Chief Investment Officer, a financial planner, or being one of the architects of a new SMA (separately managed account).

Today, Blair tackles the ambiguous question of what is financial planning and shares her tips for lifelong learning and developing as a professional.

hannah's signature

“Be patient and give it time. Give your career time. Because to become a financial planner you need to learn from others… and sometimes you might have to learn from others on what is not the best team.”

 

CFP® Exam

Wealthstream Advisors

CFA Exam

ThirtyNorth Investments, LLC

 

Show Transcript

Ep62 Transcript


Hannah: Well, thanks so much for joining us today, Blair.

Blair: Thank you for having me.

Hannah: How did you get started in financial planning?

Blair: I first started in investments and about five and a half years into my career at a brokerage firm, it was 2009, and I was laid off. I was introduced to a financial planning firm by a mutual fund wholesaler who covered both the brokerage firm and the RIA, and that introduction led to a position. I was finishing my CFA charter at the time and learning financial planning from this firm and quickly took the CFP and have been a financial planner ever since. That was in 2010.

Hannah: Let’s talk about the brokerage firm that you were at. For a lot of the listeners who might not know what that means, can you tell them like what is a brokerage firm and what was your day to day like?

Blair: Sure. Brokerage firm, the biggest ones, the warehouses I was at UBS. Merrill Lynch is another one, Morgan Stanley, they’ve all merged. There used to be a lot more names. But a brokerage firm is a firm where advisors are registered representatives, and they are licensed to sell investment products to their clients. On the surface, it may look a lot like an RIA in that they’re giving advice to their clients, and they’re implementing potentially financial plans. There are CFPs who work in brokerage firms, but it is a business model that is based on commissions and production of fees from their clients.

Hannah: So you worked at UBS for those years, for almost five, you said five years?

Blair: Five and a half, yeah.

Hannah: Five and a half years, and so then you started working … So you’re laid off, you’re working at a financial planning firm. Were you looking for financial planning or did you kind of stumble upon it?

Blair: I stumbled upon it. It was a wonderful happenstance that I was introduced to Wealthstream Advisors, which is an RIA in Manhattan, and joined on with them and started learning financial planning. In my time at UBS, I had run financial plans through an early iteration of MoneyGuidePro, which the brokers at UBS had access to. I had some understanding of what financial planning was, but I would say it was on a very superficial level. So the happenstance of being introduced through this mutual fund wholesaler to this firm is really how I became a financial planner.

Hannah: When did you notice the difference between the two firms? Like after you started working for this new financial planner, what tipped you off that there was something different?

Blair: The first tip was in the interview process when they told me that I was going to lose my Series 7 license. That was a big shocker at first. I didn’t understand what that meant or why I wasn’t able to keep my license. Series 7 was a difficult test. It took me, it’s a six hour all day test, and I couldn’t fathom the fact that I would be giving that up by joining this firm.

That was the first tip off. Then from day one of joining the firm, I knew that it was not going to be a problem for me. I knew that I never wanted to go back to being a licensed registered rep, that I really enjoyed the process of being on the same side of the table as the client, and not looking at the client as a way to increase production or fees, but looking at the client as someone who I’m being paid to give advice to.

While on the surface for the client, it looks very similar from one business model to the other, I immediately felt the difference from the moment I walked in the door. Even in the interview process, I could tell that this was a completely different business model. I had never heard of the term RIA. I didn’t even know what it meant, so it was very interesting that all this sort of happened to me by luck and chance. I’m very glad that it did, because my career has only been on an upward trajectory since that day.

Hannah: You are at Wealthstream Advisors, and so that’s where you got introduced to the CFP exam and kind of that world. That’s where you got introduced to the CFP exam, right?

Blair: Correct. They quickly asked me to take the CFP. I joined Wealthstream in July of 2009. I had just finished level three of the CFA exam that June, and they said, “What do you think about taking the CFP?” I said, “Wow, I just finished all three levels of the CFA exam,” taking level three twice, by the way. I said, “Okay, I think I can do it.”

Luckily, I was able to be exempt from the education requirement for CFP, so I was able to just study for the exam and take it. That’s what I did. I took a few months off, and I ended up studying for the exam and taking it in March of 2010 and luckily passed, and I’ve been a CFP certificate ever since.

Hannah: Did you feel like the CFP exam gave you what you needed, or did you feel like you already had a lot of that information already with the CFA and kind of your previous background?

Blair: No. The CFA only covers investment related topics, and so while I had a huge leg-up on any of the investment related portion of the CFP exam, I had to learn a much broader array of information about financial planning. The hardest parts for me were insurance. I don’t come from an insurance background. It’s still confusing for me. Tax was also very hard.

I always say that the CFA exam is very deep and difficult from an investment standpoint, and the CFP exam is difficult because it’s so broad and it may not go as deep as the CFA, but the difficulty is having to study such a broad array of topics. Of course, I would still say that the CFA exam is much more difficult and rigorous process, but the CFP really does give you that broad array of topics that you need to be a financial planner.

Hannah: I worked at a brokerage dealer for a while, and they said they did financial planning, like it was kind of like back of the envelope type stuff, where they just have the conversations about insurance or about whatever it may be. Did you find that at UBS? Were you having … Were clients gravitating towards financial planning conversations?

Blair: The way that I used financial planning software at UBS was a way to sell the asset allocation recommendation. We would put in a minimum amount of information about the client, and the whole purpose of it was as sort of a back tool to confirm the asset allocation that was being recommended. I was really fortunate to always work with advisors at UBS who were creating asset allocation models of different managers for their clients.

They weren’t necessarily doing one-off stock picking or bond sales. They really were looking at full portfolio asset allocation. The financial plan was sort of a superficial, is almost not fair because we are talking about 2005, far back as that. But it was a simple way to confirm the investment allocation that was being sold to the client.

Hannah: Thank you for kind of going into all of that. I know sometimes defining what is financial planning and what is not financial planning I think is a really important conversation, and one that’s hard to define if you haven’t kind of lived in both worlds.

Blair: I agree.

Hannah: Yeah. You’re at Wealthstream Advisors, what was your next professional step?

Blair: I would still be at Wealthstream Advisors today if I had not met my husband, so it was sort of a life event. My husband is a native New Orleanian and lives in New Orleans, and after we met I made the decision to move down because although it was not an easy transition for me, it was easier for me to move to New Orleans than for him to try to move to New York. That is really the only reason I’m not still at Wealthstream Advisors.

I moved to New Orleans in January of 2011, and did not immediately have a job. In fact, surveyed the landscape of registered investment advisory firms in New Orleans, talked to what I thought was almost all of them and didn’t find a spot for myself. So I made the decision to go out on my own and try to build a book of clients from scratch. I wanted to replicate the Wealthstream model where I was doing both asset management and financial planning.

I partnered with a very small fee-only RIA in New Orleans at first because I was afraid of the setup of a firm. I didn’t understand what it took to register an RIA, and so I partnered first with a small RIA and then eventually went out and ended up creating my own firm a couple of years later.

Hannah: Can you tell me more of that process and what that looked like for you? Was it something that you … Did you know you wanted to be on your own, like be the entrepreneur or was it more of just there weren’t jobs to be had?

Blair: It was more there weren’t jobs to be had. I really prefer working with a team, and we can explain how I ended up at ThirtyNorth Investments later, but it was really that I wasn’t finding a home in New Orleans for what I wanted to do, which was to provide investment and financial planning advice for a fee. I just didn’t find a firm.

Most of the firms here are lifestyle practices or practices where there’s multiple family members, and they’re really just looking for support staff. So the reason I ended up founding my own firm was because I just wasn’t finding other opportunities in New Orleans. The process of registering my RIA, which was called Ignite Investments and Planning, and it was back in 2013 the only financial planning and investment advisory firm focused specifically on Gen X and Gen Y clients.

That process was … I mean, the paperwork was really easy. The hard part is acquiring clients. I am not a natural salesperson. I’m an introvert, and so my real challenge was trying to get from zero revenue up to a revenue that actually paid me any sort of salary at all.

Hannah: Were you able to find success like with the finding clients and developing that out?

Blair: I did have a small amount of success. I didn’t give it enough time, and the only reason for that is because not too long after I finally set up Ignite Investments and Planning and was kind of moving along with the digital marketing strategy, ThirtyNorth Investments called me. Their founder and CIO was leaving the firm, and they were looking for a new CIO and it was an opportunity with a team that I really respected. So it was almost too good to be true, and so I ended up taking my clients and moving to ThirtyNorth Investments.

That’s been four years now. I kind of went through two and a half years of a slog, never really got over the hump, but I just don’t think I had been doing it long enough to know if I was going to succeed or fail, and this opportunity to join ThirtyNorth came along. I’m very glad it did, because I really like working in a team environment.

Hannah: Did you work in team environments in the past?

Blair: Yes. At UBS, I was always on teams and of course at Wealthstream it was a one firm, one team solution so absolutely, I’ve always worked in teams. That was really a couple of years there where I was working on my own. It was sometimes working out of my home, which was not for me and then other times working out of co-working spaces, which was a little better but I was still working alone. I didn’t prefer it. It wasn’t for me.

Since I’ve been at ThirtyNorth, I’ve become a better planner, a better investor, a better … I’m a chief compliance officer, all because of the team environment and my team members asking questions and pushing me to go further and stretch the limits of my comfort zone and abilities. That’s where I really prefer to work is in a team environment.

Hannah: I talk with a lot of young planners, and some of them, there’s a lot of tension and conflict within their teams and where they’re working. What specifically about your teams or kind of how you approach your teams has made that a really successful place for you?

Blair: It’s really about getting in the right team. Team dynamics, it’s very important to understand that you have diversity of skillset, diversity of thought. Then you need buy-in from your team members of what you’re trying to accomplish, that you’re all on board with wanting to accomplish the same things, that you have the same values. That’s extremely important.

I think when people are feeling tension within a team, it’s probably that they’re on the wrong team. I’ve been in that situation. It’s not fun. It doesn’t mean that everything is utopia when you’re on the right team. You’re still going to have differences of opinion and situations that come up where you’re not always on agreement with each other, and that’s a good thing. You’re not supposed to have group think.

But I would just say to be patient and give it time and give your career time, because one of the things that to become a financial planner you need to do is to learn from others. Sometimes you might have to learn from others on not the best team. So I would just not spend too much of your effort worrying about the tensions of who you’re working with, especially if you’re a young planner.

Hannah: You talked about making sure that you had the same values and the same vision as your team. Did you have that sense throughout your entire career path or was that obvious? I mean, we assume it’s going to evolve, but kind of where did you start or what were the places that you went to, to really identify that vision and the values that you had as a planner?

Blair: I think I didn’t give a lot of thought to values when I first started my career. I have said in other forums and I’m embarrassed to say that what interested me about a career in finance was the kind of rah-rah competitive, go make money nature that was sometimes personified in movies. I didn’t enter this business necessarily with the right intentions and over time, I’ve just come to see I’ve been inside the sausage factory, I know what the wrong incentives can do, the client situations that can arise from being in a high sales based environment.

It was really my transition out of the brokerage firm into an RIA firm where I started to think about values and what mattered to me, an integrity and dedication to lifelong learning and all the things that the team at ThirtyNorth were all in agreement on. I would just say that that sort of evolved over time.

I graduated college. I was a magna cum laude with honors. I thought this is great. I’m ready to go out in the world and run things, and then boom, my first job is sales assistant at a brokerage firm where I’m taking messages and binding presentations. That was a real hard stop for me to start like that. So I really wasn’t thinking at that time about what my values were. I think that really came with time and with maturity into becoming a professional.

Hannah: One of the things you talked about is this idea of lifelong learning. What does that look like for you? What have been … Obviously you got the CFA, the CFP, is it just like the continuing education for those elements or where do you find yourself continuing to learn?

Blair: Yeah. If I didn’t need to be out in the world making money and earning a living for my family and myself, I would just basically go to school all the time. I love learning. Once I was done with the CFA and the CFP I said, okay I don’t have to prove to anyone else that I can take tests. I don’t need to take any more tests, but the investment profession, the financial planning profession, they’re not stopping with what I learned in my textbooks.

New textbooks are being written. New research is being done. So in order to keep up my skills as a financial planner and an investment advisor, I have to keep learning. Part of that is continuing education, another part of it though right now is I’m pursuing a master’s in financial planning. You would think that the CFP was enough. I just decided I wanted to get a master’s in financial planning. If I had all the time in the world, I would love to do a PhD in finance.

I enjoy learning. One of my personal goals is also at some point to become bilingual. We’ll see if I ever get around to that. A couple of us here at the CFA Society Louisiana were also interested in taking the sommelier exam, which is the one the people at the restaurant that recommend wines. The sommelier exam is probably the only exam in the world that has a lower pass rate than the CFA, so we’re kind of Type A in that way.

Hannah: Yeah.

Blair: But I just love learning, and so it’s a huge part of my dedication to being a professional and making sure that I keep up with the subjects as people continue to write papers and add to the knowledge base.

Hannah: Do you find yourself writing a lot?

Blair: I wish I had more time to write. Writing is an excellent way to learn. I have committed to writing our quarterly letter here at the firm, so once a quarter I write a market commentary. I’m also committed to writing one blog post a month, which sounds really sad but when you think that there are four of us doing it, we are blogging on our website at least once a week it’s not enough. I wish I wrote more.

I enjoy it. I sometimes have to force it though because I can really easily find myself trying to write something and then looking over at whatever the latest news is on Twitter or getting distracted in some other way. I really do have to force myself to write. I think it is a skill. I’ve talked to some of the more prolific writers out there and they say once you just get used to writing something every day or multiple times a day, you get better at it. So I would love to increase my skills in that way, so maybe next year.

Hannah: Let’s talk about Twitter, because you’re really active on Twitter. How did you get started in that space?

Blair: When I moved to New Orleans and I was out on my own for the first time with zero clients, and had never really sold before. I was always in a support capacity at the brokerage firm and at Wealthstream, I was looking for ways to basically confirm that I knew what I was talking about. I was also still under 30 at that time. I thought no one is ever going to give me the benefit of the doubt because of my age. I couldn’t wait to turn 30 so at least I would be 30 so that might seem a little more confirming to people.

I really struggled with what I called reverse ageism when I was younger, which really I just needed to be more patient. Anyway, in 2011 when I moved to New Orleans, I was blogging and so I had heard about Twitter and opened a Twitter account and started sharing when I was writing and then realized that Twitter was so much more than just a place to post your own information.

It was a way to connect with other advisors. It was a way to follow news more efficiently because you can follow the actual reporters instead of the publications that they work for, and just started connecting into a community there and really started using Twitter as a tool to be my morning newsfeed. It’s amazing the things that I’ve done on Twitter.

I always tell this story. I was back in New York visiting a friend one weekend and I wanted to go to a concert and I just kind of put it out on Twitter, “Hey, this concert is sold out. Does anybody know anybody who has tickets?” I linked this ticket account and they reposted it, and within like 30 minutes I had somebody saying, “I’m going to meet you out front and I’m just going to give you three tickets.”

So I ended up getting free tickets to a sold out concert because of Twitter. So Twitter is the most amazing communication tool, a way to really connect with so many different types of communities. I call myself a little bit of a Twitter evangelist because of that, because not only has it helped me meet other people, I’ve been asked to speak at conferences. I’ve been asked to be quoted in publications. I’ve created relationships with reporters, where I can be experts for them. It’s really opened doors for me in such an amazing way that I can’t suggest more to people to just give it a try, because it’s amazing.

Hannah: That’s really neat. It’s so funny to me, but advisors really love Twitter. It’s one of the most active places that I found.

Blair: Yeah, they do. I think there’s probably all these other pockets of Twitter, which are really even more amazing and other communities that we don’t even know of, because we’re not looking there. I suspect that there’s probably some really unbelievable things going on, on Twitter if you’re in different communities. But yeah, the advisor community is one of those sub-communities which is just really amazing.

Hannah: That’s great. It’s obviously helped with kind of building those relationships with reporters and things like that, but from a career standpoint, you’re speaking in conferences and I guess that does help your career. Have you found it helped with your relationship with clients and kind of the actual product of financial planning?

Blair: People always ask me do you ever get clients from Twitter? I would always say not directly. My experience with client lead generation and referrals has always been introductions through networks. Any time I’ve ever had somebody call me just off the internet and come in and want to meet, they just don’t become clients. I don’t know what it is. I know other planners and advisors have tremendous success, I just haven’t seen it as sort of a lead generation tool.

But what it is, what your online presence is, is a confirmation because most clients today are going to Google you before they even pick up the phone to call you or schedule a meeting. All of this online presence is a way to confirm to prospects that you are legitimate and that you are a thought leader really. I don’t have any way of connecting it with the business, but I will tell you that I’ve had some really interesting just anecdotal situations.

There’s an individual who works in my office building who is a prospect right now, and I’ve been walking out of the office and had a comment, “Oh, have fun in Denver.” I look up and I’m like, “Okay, thank you. How do you know about that?” That’s because of Twitter, because I had just wrote, “I’m out of here, going on vacation,” and tweeted that. I know people are following me, and so I think it’s added there, but I just don’t have a way of quantifying it in a way that maybe some other planners and advisors do.

Hannah: So building your presence online, so you started when you were kind of out on your own looking for a job, but you have been able to continue it while you’re working for somebody else. Have there been compliance issues or kind of what from the employer, employee relationship has that been like?

Blair: I’m really lucky in that I’m at a small firm. We don’t have entrenched ideas about many things at all. We have a social media policy that we all adhere to. We review every year what our policy is and what we’re agreeing to not put on the internet. There’s a leniency there that may not exist at a larger, more not established is not the right word, but a firm that already has a lot of processes in place.

If we grow and add more people, we will probably have to think about what our social media policy is. But right now it just happens to work. We haven’t had any issues with employees posting inappropriate things on social media. So it’s working for now, and hopefully it will continue to work that way.

Hannah: You don’t have like a personal website or anything that you’re kind of building up outside of your firm?

Blair: I don’t. I did shut down my website when I rolled into ThirtyNorth because we really just wanted to keep a one firm, one brand sort of website out there, and so that was just a decision that we made.

Hannah: From your perspective, obviously you’re with a firm that you really enjoy working with and is successful, do you think that there’s a place for advisors to maintain outside web presence outside of their firm?

Blair: Oh yes, I’ve seen it work really well with other advisors. It may be something that we would revisit again, because I think that there are so many things going on out there with digital marketing or having a presence, whether it’s advisors that are on television. There’s all sorts of business models where having separate websites is absolutely working for people. So I don’t think that just because we’ve decided not to do that, that it’s a bad decision.

Hannah: Before we get to kind of talking more about what does your day to day look like and what is your job function right now, you mentioned this reverse ageism, and I think that’s a really big issues for young advisors of feeling like if only I can get to 30, like you said, so I can say I’m in my 30s when clients ask how old you are. What are your thoughts on that, especially speaking to the young advisor who may be in their early 20s working in this profession?

Blair: Yeah. I would just say that careers are long and the time is going to pass so much quicker than you would ever imagine. I know it seems like a lot of time when you’re in it, but afterwards, you’re going to come out the other side and you’re going to wish that you were still 23 years old. So be patient.

I remember talking with someone, a colleague at UBS and saying, “I’m never going to get anywhere. It’s taking too long. I’ve been an assistant for four years. My career is going nowhere.” He looked at me and he said, “Aren’t you taking level three of the CFA? You’re going to be a CFA charter holder by the time you’re 27. Do you realize how amazing that is?”

At the time, it just seemed like it would be forever till anything was going to happen, but it does eventually happen. While you’re in that learning phase, that new professional phase, take the time to learn from others. Experience is worth something. Even though you may have new and better ideas, that doesn’t replace the fact that the people that you may be working for or working with have had real life experiences that you can learn from.

Don’t be afraid to learn other things. I mean, there are so many skills that I learned in other jobs that I thought were completely useless. When I went out on my own, I had to know those things. I had to know all the paperwork required to open different types of accounts. I had to understand operations. I had to understand compliance, and I did because that’s what I did in the brokerage firm in my first job. I did all the groundwork and luckily I knew how to do it and it wasn’t an issue for me.

I would just say be patient, try to soak up as much knowledge as you can while you’re in that situation, and enjoy it because once you kind of break out of that and you become a senior advisor or a senior planner or partner in your firm, there’s going to be a lot of big decisions with a lot of weight that you’re going to have to make. That responsibility is going to come and those aren’t always fun decisions, so just enjoy not being burdened with those kind of things right now while you’re young.

Hannah: Such good advice. Can you tell me more about ThirtyNorth and how it’s structured? How many team members are there? Yeah, general structure.

Blair: ThirtyNorth Investments, we are a firm that has a genesis from 1997. We are 20 years old. The current management kind of purchased the firm from the founder back in 2010, and we had a name change and so that’s when the name ThirtyNorth came around. We’re located in New Orleans. We have another office in Baton Rouge.

There are five people total at the firm, three partners, which are myself, Suzanne Mestayer, and Fritz Gomila, and then we have another advisor and a client service manager. So very small. We have basically three areas of business, wealth management, which is where we work with individuals on investment management and financial planning. We have retirement plan advisory, where we working with plan sponsors and even sometimes plan participants on 401(k) plan design and investment lineups, and a whole other slew of retirement plan consulting services.

Then we have a newer area of our business, which is asset management. That stems from a project that Suzanne and I started working on over two years ago, looking at buying the stocks of companies that have more women in leadership. We did a lot of research on this and so we ended up launching a separately managed account called the Women Impact Strategy back in April 2016. So we are building up our assets in that strategy now that we have a one year track record, which is still too short for a lot of institutional money, but that’s a new and smaller part of our business.

Hannah: On your day to day, how much of your time is spent between the wealth management, retirement plan, and asset management?

Blair: That is a good question. Every day is very different. I wear a lot of hats, as do we all. I mean, when you’re in a small firm, we always laugh, like somebody has got to unload the dishwasher. Our coffee cups keep getting used and somebody has got to eventually unload the dishwasher every day. So there’s just a whole lot going on.

My typical day, there’s really not one. So maybe it’s a typical week, I might be working on finishing a financial plan for the morning and then scheduling client meetings in the middle of the day, trying to figure out when I’m going to do client reviews or plan presentation meetings or 401(k) plan review meetings. Then as the head of the investment committee, we have quarterly investment committee meetings, and so I might be working on a research project to present at the next quarterly meeting.

I might be having conference calls with investment managers to sort of learn more about the strategies that are finalist that we may be considering. I might be writing the quarterly letters. I’m on the Bureau of Labor and Statistics website downloading spreadsheets of all sorts of data trying to create charts and figure out what I want to say about something like that.

So it’s a very wide variety, and on top of all that, I’m also the compliance officer, so I may have to be reviewing our cyber security policy or on boarding a new employee who has to sign all of our paperwork. So it is really all over the place. I’d say 40% of my time is in client meetings or talking to clients. It should probably be more than that, but I do hold down a lot of the operational aspects of the firm because I’m one of the ones that’s not out there trying to do business development, so I have to do a lot of the operational work as well.

Hannah: So many interesting things here. Okay, so you’re not out there going and finding new clients, but you have ownership in the firm and I think that’s kind of a unique element, if you would. How did those ownership conversations happen and how did that kind of unfold?

Blair: I think it naturally happened because I had a very small book of business to bring to the firm, and it only made sense to sort of compensate me for that. But in addition to that, the original founder ended up selling 100% of the business and so we had one owner, and it was not her intention to be 100% owner and so she wanted to make sure that there was a strategy in place to sort of start to begin to bring in other partners. I think it was in 2014 when I became a partner, and so over time, hopefully I will be acquiring more of a percentage ownership in the firm.

Hannah: I guess you buy into the firm, but how would that … So going forward in the future ownership, obviously it’s not through bringing in business. So will it just be buying more shares or kind of taking on more of a leadership role?

Blair: Yeah. It would be purchasing more shares, and there’s many ways to do this. It can be financed by the company, so it doesn’t necessarily have to be a cash upfront, although it could be. I could offer cash. But yeah, it’s a purchasing process to bring in more partners.

Hannah: Are you the only CFA on staff?

Blair: I am, yes.

Hannah: You are? Okay. Let’s talk about this Women Impact Strategy, because I think it’s so interesting. How did you even get interested in this? How did this get started?

Blair: Yeah. This is kind of what I alluded to, one of the things I alluded to, when I said being on a team has stretched me to do things that I never would have imagined. I was really ingrained in. I am an investment advisor and financial planner. I do asset allocation. I do holistic investment management advice. I pick whether it’s indexes or active managers to implement my asset allocation strategy. It’s long-term. It’s strategic, and of course I don’t pick stocks.

But we started reading some research about women in corporate leadership, particularly a Credit Suisse report that looked at over 3,000 companies globally and they’ve issued three different reports. Every two years they come out with another report, and they kept looking at stock performance of companies with more than zero women, right? Unfortunately, there’s not a whole bunch of companies that are like 75% women. We’re talking about having one woman on the board versus zero or 25% of the board being women instead of zero.

The stock performance was better, and I’m very skeptical. I believe that there are certain maybe tilts that you can take in a portfolio, but in general I’m pretty skeptical of active management. So we did our own research to try to confirm what we were reading, and we looked at the S&P 500, we pulled the board composition of the companies in the S&P 500 10 years ago, so at the time that was 2005. We looked at how many women were on the board and then we created hypothetical portfolios of companies with zero women on the board, companies with at least one woman on the board, and then another portfolio of companies with at least 25% women on the board.

We ran the numbers and found that the companies with more women outperformed. We’re also looking at that now from an executive standpoint, because the Women Impact Strategy, which eventually came out of all this research, looks at both the board and executives. So we’re working on that whitepaper now, but we ended up writing a whitepaper about it and then we sort of started coming up with a methodology for, if we wanted to do this as a separately managed account or any other kind of product, what would it look like?

So we started building the rules of the portfolio. We didn’t want to be a market cap-weighted index offering, so we decided to take a value tilt and a small-cap tilt, and also look at profitability of the companies and ended up coming up with a methodology and launching the Women Impact Strategy with seed money in April of 2016. Then we began marketing it in April of this year to individual investors, institutional investors, family offices. We’ve really just begun.

Another thing we probably need to do is market it to other advisors. The performance hasn’t been bad. At the one year anniversary, it was quite strong. We do have a small-cap tilt and small-caps have underperformed this year, so you might expect that it isn’t beating the benchmark net of fees this year, but it’s not trailing by too much.

Now I’m a portfolio manager in addition to everything else, but it’s a role play strategy. It’s an evidence-based strategy. I’m not trying to meet with management or make any … I’m not creating models at what target stock prices would be. It’s really just looking at fundamentals of a company and the gender makeup of their leadership and building a portfolio around that.

Hannah: Using that very kind of like evidence-based, when people build out their portfolios, what portion of their portfolio would this Women Impact Strategy kind of fit into?

Blair: The portfolio is an all-cap core. We have small, mid, and large companies. There’s 50 stocks in the portfolio. It depends on the client. We do have some international holding, so it’s majority U.S. but some developed international companies are in there. We look at it as an investment manager and say, yes, it’s sort of a concentrated portfolio, at least more concentrated than what we’re using with the ETFs and the mutual funds that we invest in.

So it should only be a portion of the stock portfolio for clients allocation. So it just depends on the client, but it is a core holding. It is not a satellite holding. It can really fit into that stock portion of a client’s portfolio pretty nicely. We benchmark it to the Russell 3000, because it’s all-cap.

It’s had an R-Squared to the benchmark of about 72%. So it’s not acting like the benchmark, and it really just depends individually. I mean, we can’t do it for less than a certain amount of money so certain clients can’t invest in at all. That’s really on a case by case basis.

Hannah: That’s so interesting. Have you found that people are really open and receptive to this?

Blair: Yes. All kinds of clients and potential clients have been interested in it. People are assuming that we’re only talking to women, but men are interested too. Because anecdotally a lot of men will start telling us these stories, whether it was their mother who was a professional or they have a very successful wife or even a daughter. So it really resonates with all people. We’ve had a lot of excitement. It’s one of those things that you know you’re onto something when you don’t really get very much pushback at all, even when you talk to 100 people about it. There’s been a very warm reception so we’re very excited about it.

Hannah: Yeah. It’s such a great way to implement a lot of the socially responsible investing in a really kind of thoughtful and unique way.

Blair: It is. It’s a different slice. When I first started investing, socially responsible investing was a place where investors went. They were willing to accept a lower return to align their investments with their values. Today, it’s been rebranded as ESG investing, and what we’re seeing is that looking at ESG characteristics is really a risk tool, and it’s not about accepting a guaranteed lower rate of return. It’s really that some of these metrics are ways to identify ways to reduce risk in a portfolio and potentially even add alpha.

Hannah: As you kind of look forward, what’s next for you? Kind of in your evolving career, what are you working on that you’re really excited about?

Blair: Yeah. What’s next is we need to grow this firm, and it needs to get bigger. We want to grow all three areas, wealth management, doing more financial planning. We’re always looking at technology. I mean, that’s a huge, huge thing in our business. How do we make it easier for clients to do business with it? How do we make it more efficient or just more beneficial through technology?

So we want to grow wealth management and financial planning. We also want to grow our retirement consulting business and advisory business has really taken off. We have recently begun offering to be 3(38) fiduciaries for plans, which really just means we’re taking discretion. Rather than just going to a plan sponsor and saying, “Here’s the fund lineup that we recommend,” we have discretion over that.

So that’s a new offering for us that I don’t think a lot of firms in this area are offering. Then of course the Women Impact Strategy, the sky is the limit there. We’re full speed ahead on PR and marketing for that, so we really want all three of these areas to grow and hopefully become a much bigger firm.

Hannah: Looking back on your career, are there any changes or anything that you wish you would have done differently?

Blair: I wish that I had been more patient and more optimistic early in my career. When I started working at Wealthstream, I really learned from the founder there, Michael Goodman, about this concept of the power of positivity. I was kind of a pessimist before then. I always kind of tended to see the negatives in all the aspects. The day that I sort of flipped and became an optimist is sort of the day that everything just got better in life. So, if I could have been an optimist from the beginning, I think that that would have been a wonderful change to have made.

Hannah: Is there a book or any resource specifically that people could go look for if they kind of want to explore that idea more?

Blair: I don’t remember off the top of my head. I definitely saw an amazing speaker once that it is just not coming to mind the name who spoke about happiness. It was really fascinating. But I’m sure if you Google happiness and the power of positivity, something good will come up.

Hannah: It’s so great to be in the internet age.

Blair: It really is.

Hannah: As we kind of wrap up here, is there any … Looking back and knowing audiences being newer planners, whether they be new to the profession straight out of college or even career changers, what advice would you have for them?

Blair: Be hungry, be seeking of information, take it all in, read books, spend time on the things that matter, spend less time on the things that don’t, and get excited because the demographics of our industry are such that there’s just not going to be enough planners and advisors around to take on the business once the Baby Boomer generation retires.

Just by sheer numbers, we should be excited because a lot of business is going to come our way and if you’re just set up in a way that you know which kind of clients you want to service, and you have a good offering for them, it’s going to be a really wonderful career and opportunity. When I first started, when I graduated college, I so badly wanted to be an investment banker.

I just thought I wanted to be an investment banker and work 100 hours a week and I interviewed with all of them. If you’re familiar with that process, I went on these super Saturdays where they make you do 20 interviews after they take you out the night before and try to get you to drink too much alcohol and I really thought that that was the thing for me, and I was so depressed because none of them offered me a job.

I had to go into retail, which I thought was just not exciting and nobody was going into retail and the pay wasn’t as good. Lo and behold, I wake up 10 years later, we’ve had a financial crisis and retail, what I now call wealth management, is the place that everyone wants to be because all of a sudden now it’s a great career. It’s a work-life balance that is just so much better. I would just say be excited about the future, because it’s going to be a really exciting time.

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Stumbling Into Financial Planning

Amy Hubble stumbled into financial planning accidentally – and she’s never looked back. In this episode, Amy shares how she got started in financial planning as a trust officer, and what her path to founding her own RIA looked like. If you’re thinking of making the leap into launching your own RIA, taking the CFP® exam, Amy’s advice on what credentials to get and how to fearlessly take on big challenges will inspire you.

In addition to her practice, Amy focuses a lot of her effort on charitable giving. Specifically, she has founded Heartbeat for Hope, a charity that provides small capital to maintain education centers in Africa for impoverished women. This is a big part of both her life and her business, and we love seeing a financial planner incorporate giving into her organization.

Amy has been named one of Investment News’ 40 Under 40, and has been a long-time advocate for fiduciary planning.

We hope you enjoy her story and embrace some of the wisdom she shares here!

hannah's signature

Get in meetings with as many people as you can. That is absolutely what I think was the most valuable thing to me is that I was able to be in meetings with people who I consider to be the very, very best at taking care of clients in the world.

 

Radix Financial

 

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Ep61 Transcript


Hannah:               Well, thank you, Amy, for joining us.

Amy:                     Yeah, absolutely. I’m glad to be here, Monday.

Hannah:               Yeah. Can you tell us, how did you get into financial planning?

Amy:                     Well, like I told you, I kind of fell into it completely by accident and didn’t even trip and fall into it. Maybe I was pushed, I don’t know. I got a business degree and I had no kind of background in financial planning, didn’t know what a financial planner was, didn’t really have any direct desire to go into money business at all. Maybe I did, but I really had no idea when I graduated from college what I wanted to do, and I got very, very lucky in that I had worked as an intern for Evan Energy, which Oklahoma City, much like Texas, very oil and gas heavy, so you either go to the oil and gas industry or move somewhere else. I had decided that I didn’t really feel like that was the right move for me and I was about to graduate with no job, and a guy that I’d actually, it was very interesting.

It was just one of those universal things is that I’d gone on a mission trip over spring break with the president of Heritage Trust Company’s son just randomly, and I guess he, when we had the roundup of that mission trip, he had come to that and he just randomly handed me his card. This is after spring break by senior year. I’m about to move back in with my parents and be a bank teller or something, and he just hands me his card and he’s like, “I don’t know what you’re looking for or if we’re even hiring, but if you even just need some practice interviewing or would want to talk to me, here’s my card. Give me a call.”

I had no idea what a trust company was. He had credentials. He had a CTFA and he had a CPA and I was like, “I’m not an accountant,” but just on a whim I went to talk to him because I didn’t have a job and they basically created a position for me, which was basically the receptionist, but I was the marketing assistant and was kind of helping getting some of their president and the chairman and the marketing guy all organized, so they hired me, and I went to work for a trust company. Eight years later, I was basically the head of trust and head of relationship management and then a portfolio manager and they’d done a lot of great things for me, and so that’s kind of how I accidentally became a financial planner.

Hannah:               Oh, that’s great. For the listeners who are listening to this and may have heard of a trust officer or a trust company or maybe they even haven’t heard of that, can you just tell them what is a trust company and what do you do as a trust officer?

Amy:                     Yeah, exactly. I had no idea what that was either, and so I went to work there in 2007 in the good days, you know? I had sat at my reception desk and I just started googling what a trust was basically, which is very embarrassing to admit, but I just didn’t have any background in it. I don’t have a trust fund of my own, unfortunately. A trust company is basically an asset management company that can take in assets and not just monetary assets or stocks and bonds or things like that, but they can manage real estate, they can manage oil and gas interest. They can manage priceless artwork, they can manage cars. They can honestly act as you in whatever situation that you might find yourself. Maybe it’s a situation where you don’t have any family and you need to go into a nursing home and you need somebody to make sure that your bills are paid. Maybe after you’re gone, you think that your children might fight and so you want to go ahead and put in a third party to kind of be the referee in a lot of those situations.

In honesty the most of what we work with is high net worth financial planning is really what it is. You don’t have to name a trust company as trustee. You don’t have to hand it over to them. They can be your agent. They can pay your bills for you. They can manage your assets. They can really do anything that a person could do for you or that a financial planner could do for you. It’s actually a bank. It is a bank. They are the custodian, and so it’s kind of a different model than the traditional RA route or the traditional financial planning situation.

You do things for people that you would never believe. I at one point had to push a car, a Corvette, out of somebody’s driveway and jump it in my heels and then drive it to CarMax and get it appraised and everything else. I’ve had to pull up in little old ladies’ cabinets and get their 16 guns that they’re hiding in there. I’ve had to actually purchase underwear for a client that was in a nursing home, did not have any family and was struggling being able to get to the store. It really is the whole gamut. It’s a very interesting business and very, I think, fulfilling business, but that is definitely my background and what I still really enjoy doing.

Hannah:               As a trust officer, those are pretty intimate things to be involved in a client’s life with. Was that to you, it’s beyond just the money side of it. It’s really into the day to day taking care of somebody?

Amy:                     Very much so. You think about what it takes to take care of somebody. If that means paying their taxes, if that means making sure that they have home healthcare coming in and you’re paying them, that you’re paying the bills. Whatever that means of taking care of somebody, that’s the service that we offer.

Hannah:               That sounds more high touch than some RAs I know.

Amy:                     Very high touch, very high touch.

Hannah:               Then how does the trust company get paid?

Amy:                     Trust company gets paid, number one, assets under management. That’s how they got paid. It’s fee only. There’s certainly no commissions. There’s no insurance sales or anything like that. It is the definition of family. It’s the original fiduciary. We’ve just now kind of heard this fiduciary word coming across the pike, and obviously RAs have been fiduciaries forever too, but trust companies are kind of like, “How come this was never an issue that we were driving this?” That’s kind of the drive. Trust companies really should’ve been pushing that fiduciary push all along because they’ve always been trust companies.

Hannah:               Tell me what it was like to be coming straight out of college and basically be working at the receptionist’s desk. What was that experience like?

Amy:                     Like I said, I got lucky. This company, it started actually in 1998, and a big bank had come in and purchased another smaller bank that use to be very local, and they just didn’t really like the way that their customers were being treated, the fee structure that was coming in, the big bank push for additional products and additional proprietary pushes, so one of the major families partnered with several of the trust officers from that particular bank, and they started this company, and so I came in about within 10 years after they got started, and I was really the first hire that they had under 40, for sure. I was the most interesting thing. Regardless of what I did, I was the most interesting thing that was going on, which was kind of fun. I actually, I got several dads out of the situation, especially you think about coming in and working for a company who at the time only had about 13 employees, and guys that knew exactly what they were doing, have been doing this for decades, and the opportunity to spend time with them, the opportunity to learn from them.

It really, the situation that I was in and being very, very lucky and just being the first kind of young person to come in really, really benefited me. Now, that company has a beautiful downtown office and they employ 45 people, so it’s definitely a different and probably at least now 30% of those people, maybe more, are younger people now.

Hannah:               Oh, that’s great. You started there. Did you start studying for your CFP® exam right away? Is that something that you pursued or what were the designations or exams that you took?

Amy:                     Yeah, I obviously have a love for designations and education I guess. I hopefully am coming to the end of is my goal. Somebody tried to ask me about a new designation the other day and I was like, “No, no more.” I had never really heard of the CFP® exam in general. Again, I hadn’t ever thought about financial planning as a profession or as a job or as something that I would want to go into. I obviously knew kind of what stockbrokers did, but that wasn’t even kind of the idea that I had in my mind of what a stock broker even was. I thought investment bankers were the same as stockbrokers.

Again I was not at all learned in this area, but that what kind of got me was the reason I started pursing designations is because I was … Yeah, obviously in a unique position to be able to see how the entire business was working because it was so small at that time, and I didn’t know what I was doing, and so I had moved out of the, I was promoted, I guess, out of the receptionist job pretty quickly and I went to be a trust officer’s assistant basically, and I was assisting three of them, and so I was in a lot of those meetings, and I really just felt uncomfortable with myself of not knowing what the rules were or what they were talking about or what solutions that we could give, so again, I got on Google and started looking and seeing what educational programs might help me with that.

I came across the CFP® exam and brought it to my bosses and I said, “This might just be,” they had sent me to trust school, which ultimately took the CTFA exam, which was through the Institute of Certified Bankers, but ultimately I went and I said, “Can I start taking these CFP® classes? I just think that they’d be a good educational background for me personally so I can feel confident in these meetings, so I can eel like I know what I’m doing, and I’m really enjoying this business. I really am on board with what you guys are doing and I like this. I think that it is something that I’d like to invest in if you’ll invest in me.” They said, “Yeah, absolutely. We’re very excited that you want to learn more about our business and that you want to be educated.” My employer was very, very glad to support me in the CFP® courses, which I took online and then ultimately took the CFP® exam in fall of 2008.

Hannah:               Very nice. Did you feel like the CFP® exam gave you that confidence that you were looking for?

Amy:                     Yes, absolutely, and that’s what I tell people all the time is I know sometimes, especially as a younger person, especially as a woman, you are in those meetings and you’re just, whether or not you know your stuff or not, I think the CFP® designation does a lot to boost your own knowledge, to boost your own self-confidence there, even if you’re handing a card to somebody. I don’t know what age I look, even today, I don’t know what age I look. I was at the gym last week and talking to somebody, and of course I’m in my early thirties, and they were saying, “Oh, well I thought you were in college in at UGA, like as an undergrad.” Which, I’m at the gym so I probably don’t look great, but at this point in my life, that’s a compliment, but I think even when I was 22.

I had braces when I was 22. I probably looked about eight when I was 22, and so even kind of getting that confidence through at least myself knowing what I was knowing, that I knew was talking about felt like I could then expand and make the people that I was talking to feel like that I knew what they were talking about because that’s ultimately, especially as a trust company, you’re talking with people that have millions and millions of dollars and expect that level of service and expect that level of expertise, so it is a little scary if you go in, especially in a meeting by yourself where you may not have that self-confidence right off the bat.

Hannah:               Oh, that’s great. You have more credentials.

Amy:                     Yes.

Hannah:               And more exams. Can you kind of walk through on a timeline the various, because you have your MBA and your PhD, you’re in progress for that, and you’re actually teaching a course right now, so can you walk through what inspired you to go back and get your MBA?

Amy:                     An MBA, regardless of that I didn’t exactly know what I wanted to do, an MBA was always just kind of one of those things where I was like, “Well, I’ll have an MBA.” I just felt in my mind that I was an MBA type of person. I didn’t know exactly what in business I wanted to be in, but I knew that I wanted to be in business and I knew that I wanted an MBA. I looked around when I had, I think I had finished the CFP®. I must have finished the CFP®. I’d even applied, you’re making me think here on my timeline, but I had applied for an MBA program, a couple MBA programs right out of college because again, I had no idea what I was doing or where I wanted to go work, so I thought I’d just keep going to school because I’m pretty good at school. The programs that I’d really wanted to hadn’t worked out.

My GMAT score was not super stellar, so I’d kind of put that on the back burner anyway, and then once I guess I’m just a sucker for feeling like if I’m sitting still for a second that I need to go and look and see what other educational endeavors I can pursue. Yeah, once I had taken the CTFA and the CFP®, I think the MBA was just my next conquest, so I again, talked to my employers, and I had thought about going full-time at first and then they said, “We’ll help you with the MBA process if you want to continue working here and do the MBA at night.” That ended up working really, really well. I got an MBA through the University of Oklahoma and did classes at night and gained a lot of friendships and gained a lot of relationships through that and feel really, really good about that process and how that worked, and again, was able to keep working and keep getting better at what I was doing at my employer too.

Hannah:               With that MBA, do you feel like it helped you in your relationship with clients and beyond just the confidence level or knowledge, I guess, working with clients?

Amy:                     I don’t know. The MBA was a little bit different because it’s not as focused on exact … The CFP®’s so practical. You learn the rules as they are at that time, and you’re able to honestly apply whatever you’re learning at the rules at the very beginning, whereas an MBA is much broader on the technical side or the business strategy side, so I got a lot more expertise in accounting practices, got a lot more expertise in negotiation. Again, made some amazing relationships with people that were also working at the same time and also wanted to be there in school, which was a completely different, not that people don’t want to be there as an undergraduate, but in a master’s degree where everyone else is working full time during the day, you just really get a caliber of people that do want to be there and so you get to make those relationships and understand their industries better and understand your own industries better and see how other people’s business trajectories have gone, and so that’s really the most value that I got out of it.

Hannah:               You knock out your MBA, and so the next logical choice is a CFA?

Amy:                     Of course. That was the next logical choice. At the time, I was a portfolio manager for my employer, and so that was kind of an understanding is that they were hoping to get all the portfolio managers at the trust company to be CFA charter holders. I graduated my MBA in 2012, and took level one of the CFA that same month and just by accident passed that very first level, which is very, very difficult. Then went on through the process of the CFA program, which was, I will tell you, the most difficult thing I have ever done and probably will ever do. In all of my educational pursuits, the CFA program is certainly the hardest.

Hannah:               At this point with the trust company, you are a portfolio manager. Could you talk about what does a portfolio manager do and kind of what is that job function?

Amy:                     Yeah. Portfolio management is, I was not necessarily on the side that was buying underwear at this point. I was on the side that I was buying stocks, I was buying bonds. I was actively on the investment committee. I was contributing to stock selection committee. I was looking at stocks on a much deeper level. I was actively talking to bond brokers every single day looking for, and these were in the good days where we could buy bonds with yields. I was actively talking with clients. In our firm we had, every client was assigned a portfolio manager and a relationship manager, so any time that there was a quarterly review or any kind of performance review, an investment officer would be brought in obviously to speak to that. Some clients need more of that. Some clients need less of that.

Some clients, it goes the gamut of whichever side is needed, and obviously a lot of clients don’t necessarily need a portfolio manager in the room if that’s not the main focus of the meeting, but a lot of our clients were much more focused on the portfolio management side. That was working through the CFA program, being a CFP®, coming out of the MBA, that was a new challenge that I was very excited about, and then ultimately I had moved back over to the trust side after a couple years of great investments.

Hannah:               Those are really two separate job functions within that trust company. Those were two very different roles.

Amy:                     Completely. Same clients, but definitely different roles. Different day to day, different expectation level.

Hannah:               You were at the trust company for eight years, is that right?

Amy:                     Eight, yeah, eight years.

Hannah:               What kind of prompted you to want to make a move?

Amy:                     Yeah, I would not have said that right off the bat that it was something that it was my goal to own my own business someday, but after I had become a CFPN and gotten involved in FPA and especially been involved in Next Gen, which I know a lot of our friends and a lot of listeners are very involved in Next Gen. That’s how we all kind of met and that’s how we all built our businesses was just talking to people who knew what they were doing, talking to people that were using other softwares, and ultimately just getting to the point where I was working a lot for the trust company at the time, and it was an issue that was causing some negative feelings in my life, just from an issue of time that I was spending there and just from the level of stress that I was experiencing, and I was 30, almost 30 years old at this point.

I really had some good advice from a good friend that told me if it was something that I did want to do, which was ultimately run my own business, that I should quit before I couldn’t afford to not quit. I certainly have wonderful feelings for that company and everything they did for me, continue to have wonderful friends there, continue to think that they are doing exactly what they need to be doing, but at that time, it was really an issue that I did need to go ahead and step away and try to get some flexibility in my life and trying to just have a new adventure at that point. We, I think, parted on pretty good ways and I was able to go ahead and start my own business and ultimately add, get a PhD as one of my hobbies.

Hannah:               I feel embarrassed of my hobbies now.

Amy:                     Well, when people have to ask me what my hobbies are, I’m like, “Well, working and sleeping, and that’s it.”

Hannah:               Okay, so let’s talk about your PhD. There’s so much here. Your PhD, and it’s in consumer economics. Is that right?

Amy:                     Yeah, it’s in consumer economics and financial planning.

Hannah:               From University of Georgia?

Amy:                     Yeah.

Hannah:               You live in Oklahoma, right? Are you doing this virtually, or how is this working?

Amy:                     Yeah, I live in both. I’m actually in Georgia right now, and I’m in Georgia for the majority of the school year, but I go back and forth pretty often. I try to be in Oklahoma at least a couple days a month in the office working and seeing people, but most of my business during the school year is digitally done, which is not very difficult in today’s environment, honestly, and just the sheer numbers of clients that I have is just nothing like the number of clients that I had working at a trust company. You’re able to do that a lot easier. Yeah, going back and forth. I’m in Georgia today. It’s the eclipse day. It got really dark, but I dragged my feet on getting those glasses, so I couldn’t actually see it.

Hannah:               Me too. You’re in Georgia. You’re going to school for the PhD program, and you’re also teaching a course.

Amy:                     Yeah, I’m co teaching a seminar course, and we were talking about this a little before we started, but Georgia has a clinic here. It’s called the Aspire Clinic, and they actually offer pro bono financial counseling, financial planning services to the community, and so anyone from the community or teachers or students or graduate students can come in and they can sit down with one of our students, undergraduate students or graduate students. Then every week, these students hold a seminar, and so I kind of help facilitate this seminar in that they’re bringing their cases or the issues that the people that they’re seeing in their financial counseling meetings, they’re bringing the issues that they’re having and then together all of us, there’s about 10 students in the seminar.

We’re coming up with creative ideas. We’re coming up with people that’ll know a good resource to reach out to. If one person’s kind of weaker on what to recommend or what might be a good strategy, we all work together to come up with that strategy, and obviously I’m able to bring a little more knowledge to the table as far as what strategies are and hopefully disseminate that knowledge throughout the students. It’s really rewarding. I really enjoy it, and actually it’s stretched me quite a bit too because the people who are coming in for pro bono counseling are really coming in with different issues than say people that are coming into a trust company are coming into, so I’ve actually learned a lot through the process too, so I really enjoy it.

Hannah:               That’s really neat. With your PhD program, are you doing research? Are you contributing in the research world?

Amy:                     Yeah. We’re doing a lot of really exciting research. Through the clinic even, it’s a research clinic and we’re able to collect a lot of data from people that are coming in and getting the financial planning services, so it’s kind of a dual situation. I’m involved in a lot of the research projects that are going through there, and then hopefully in the spring, I’ll be starting my own writing my dissertation process. I’m finishing up my coursework this semester and then I’ll be full time dissertation in the spring and hopefully graduate in May.

Hannah:               Can you share what your dissertation is about or what you want to study?

Amy:                     I don’t actually have it finalized, no, but there’s a lot of good questions that are being asked out there. There’s a lot of issues that I’m especially close to. HSAs are one of them. Investments biases. A lot of the behavioral things that come into investment portfolio choice, risk tolerance. I can’t say exactly what it will be on exactly, but it’s starting to come together on some of those questions that I find interesting and that I think that I can dig a little bit deeper through.

Hannah:               One of the things I’m also harping on is if we really want to become a profession, we have to figure out how to integrate this research with our day to day practices, and so my question for you would be as a practitioner and as a researcher, for the people listening to this podcast, maybe newer in their careers or just starting out or just starting their own firm, where can they go or how can they start getting exposed to a lot of this research that’s happening right now?

Amy:                     It’s so hard, and I actually harp on these guys all the time because academic research is not fun to read. It’s not fun to write either. It’s very hard when, especially in the academic research realm or in the academics research literature where a lot of these solutions are basically written in math. That’s really difficult or be able to take away. I have been trying to contribute to as much even writing process as I can in the literature that I’m being asked to look over or some of the implications for financial planners that I can look over and trying to at least point out some of the issues that are coming up and some of the findings that we’re finding. The research is really, it’s a very slow moving process. It takes one step at a time and one researcher bouncing off of another researcher and then another idea coming off of another idea.

I look at journals like the Journal of Financial Planning that does a really good job of at least presenting it really well in a nice colorful magazine that’s a little bit easier to read and I think is much more pushed towards the practitioner standpoint, without being too overwhelming. Make sure that the graphs are readable and things like that, and I think that’s hopefully what journals would move towards. That would be my desire. I don’t know that that’s the desire of the academic world, but I’m one vote if I ever get to do it. I have the same problem. That stuff is hard to read and it’s hard to especially make time in your day to weed through it.

Hannah:               Yeah, absolutely. You start eight years at a trust company and you start your own firm. What was that experience like?

Amy:                     You learn a lot about yourself, what you know.

Hannah:               Isn’t that the truth?

Amy:                     Yeah, I always considered myself to be an introverted worker and especially when I worked with so many people around me, I would go to work and obviously do my work and then sometimes I would go to the gym and then I would come back to the office after I went to the gym when everybody was gone, and that’s when I would actually get my work done, so I always thought that I’d be really good at that. Then it turns out that when you actually just have an entire day stretching in front of you that you really have to set some traps for yourself to kind of understand how you work and how you understand in that I did learn that I do not work very well alone, that I actually need somebody to monitor me and know that even setting an expectation that you’re going to see somebody, setting an expectation that you’re going to be at the office in a certain time, that you’re even going to take a shower and not wear yoga pants to the office is one of those things that you’re going to change.

I had to do a lot of shuffling and trial and error on how my office situation was going to be set up and how I was going to spend my day and when I was going to be in the office and how I was going to conduct myself to find that sweet spot of how I work best. That, I think, is the most important thing to realize because you do, once you’re on your own, you are responsible 100% for how you’re going to eat that day. You do have to hustle and you got to get it done, but there’s nothing necessarily, you don’t have to report to anybody. There’s nobody reporting to you. There’s no accountability beyond the goals that you’re setting for yourself, so you do have to be, or at least get good at that and find a way to push yourself that way. I don’t know if it was the same for you, but that was a big challenge for me.

Hannah:               Oh, a huge transition. Absolutely huge transition, and I think compounding, I don’t know if people who start out who don’t have the revenue, it’s just stress on stress on stress that you don’t really know. Did you bring clients from the trust company to your own practice or did you really start from zero?

Amy:                     Yeah, some of the clients did come over with me, so I was lucky in that manner. It wasn’t even, and this is my own perspective. It wasn’t necessarily the revenue that I was most worried about, but it was just kind of a personal vendetta that I wanted to make sure that I did not fail at this, and that was probably a bigger driver for me in that yeah, revenue was happening, but I also knew that I had enough money saved that I was not going to starve necessarily, even if I was just able to get even half the clients that maybe I thought might come over. That wasn’t too big of an issue for me, but the issue of I am going to be able to do this and that I’m not going to fail at this was probably a bigger driver than even the dollars and cents issue.

Hannah:               When you brought the clients over, did you have to pay for them or you were just able to do that and they just changed advisors?

Amy:                     They changed advisors and I really was very careful because there were certainly non-competes in place, and I also wanted to stay in good graces with my former employer. I did not want to just light those bridges on fire as I walked away. Oklahoma City is a small wealth management community and I, again, had so much respect for the company that I worked for that I did not want to do it the wrong way. I probably could have hammered harder maybe, but I also wanted to make sure that the clients were going to be in the best place for them too, and so I do think that was a little bit unique of a situation in that there’s a lot of clients that I couldn’t bring.

A lot of them were trust clients and I don’t have trust powers, and I didn’t really want to partner with a no name somebody that was renting me their trust powers. Really, if they needed trust work, they needed to be at a trust company. I tried to keep that as a driver of when I was creating my clients. Yes, clients did come over and I certainly answered the phone when they called and encouraged them to come over, but I did try to at least do that as delicately as possible because I have a lot of respect for that former employer.

Hannah:               Yeah, it’s such an interesting transition when you move companies and we’re in such a unique field where you can take revenue, some places you have the opportunity to possibly take revenue, but how do you do that well?

Amy:                     It’s hard and it was an issue of that firm is actually purchased by a large kind of regional bank, and so a lot of the people that I’d kind of grown up working with were retiring, so when that transaction happened, it was actually a good breaking point for me to go ahead and cut ties, not 100%, but at least cut my employment ties and feel like I at least left them in a place where they were going to be in a good place and I was going to be in a good place, and it was going to be better for me, and I think a lot of people understood that too.

Hannah:               Are all of your clients in Oklahoma City?

Amy:                     Majority are in Oklahoma. Especially at first, they were all in Oklahoma. I do have a few scattered about, but they all for the most part either have a connection with me personally or in Oklahoma in some way.

Hannah:               Your client base, are they more that high net worth client like you had at the trust company?

Amy:                     At first, they were because all the clients that came over were really the trust company side, but I also wanted to make sure that I was able to serve really anybody that was going to be willing to do what it took or willing to do it right, and I think that was the breaking point is at the trust company, you’re mostly working with people who had already made their money and were kind of in the distribution stage of their life or of their financial situation versus I did want to start working with people who maybe hadn’t made their money yet but were dedicated to saving. Really, the RAA model uniquely, I think, gives you the opportunity now with technology to be able to work with people who are willing to save a certain amount every month, even if they don’t necessarily have a big pot of money already just waiting to hand you and to cash a million dollars.

That’s always great when you can get one of those, but I also wanted to work with people that were my age. I wanted to work with people who were just trying to do the right thing, who were excited about their future, that wanted to really collaborate with me on a longterm plan. That was very a pillar of what I wanted to start the firm to do too.

Hannah:               With clients like that, how do you service them and how do they pay you and what’s your structure for that?

Amy:                     Yeah, I have developed a little mini robo. It’s a robo that I kind of run, but it’s I say bare bones, but it is trying to eliminate any of that customization that I run with a lot of the bigger portfolios, whereas a lot of the bigger portfolios, I do run a stock portfolio. I will purchase individual bonds. I will individually look at your tax loss harvest situation versus I run now what I called the Accelerator Program, and the minimum deposit every month is $500, so I’m able to keep up there as far as being able to grow the account in addition to if there’s not necessarily any money there, and so it’s automatic rebalancing. I work through TD Ameritrade and I use ETFs that are commission free. I use iRebal and automatic rebalancing, automatic ACH payment pools, and then anything beyond that asset management side I do hourly consulting.

Hannah:               Very nice. Do you do for what these younger people who have that $500 to invest, is it a flat fee that you charge them? Do you do the monthly retainer model or what does that look like?

Amy:                     It’s AUM, and it’s for any asset level under 180,000. It’s 1.1% and it’s deducted just like all the rest of my AUM clienteles.

Hannah:               Interesting. Do you do a financial plan for them?

Amy:                     Not typically. I will do a little bit of just right off the bat starting off what type of accounts we need to open, but if they are really looking for a full financial plan, then that’s hourly on top of that.

Hannah:               Very interesting. What’s so exciting to me is how you can really design whatever service model fits the client and really fits you in this business.

Amy:                     Yeah, and that’s exactly what I hear from a lot of people. A lot of people focus more on the financial planning side. I tend to focus more on the investment side just because that’s my background. Would like to get back into more financial planning, but that’s just not possible when I’m living in two states right now, but hopefully next year when I’m a little more centralized, I’ll be able to focus a little bit more on the planning side, but in the investment, the investment side is really my bread and butter and building in models and making sure that asset allocation is correct and specifically asset placement. What type of accounts are we investing in? I’m able to do it very cheaply, for me and for them.

Hannah:               Right, by using the iRebal and various software.

Amy:                     Yeah, I try to take as much of that out of the equation as possible. I don’t want to spend my day, as you know, spend my day doing unnecessary paperwork or trying to mess with something that is not going to be either in my best interest or their best interest. I want to use my time well, and I think I’ve developed a good pipeline to be able to do that.

Hannah:               One of the things that I find so interesting about you, especially being in your early thirties is the Heartbeat for Hope. Can you tell people what this is about and how it got started?

Amy:                     Absolutely. Heartbeat for Hope is a nonprofit 501-C3 organization that I got involved with. Through college and then after college, I actually had a friend who had moved to Ghana to work in an orphanage called The Village of Hope, and she had been over there for a couple years, and I love to travel, and so an opportunity came up, and this was when I was young and poor that somebody had donated to her two Delta buddy passes to be able to come to Africa. Me and another friend who had been supporting her with as much money as we had every month or so in her work over there, we were able to go and visit her. Seeing what the need was there and what the situation with the orphanage was was really a eyeopening experience for me.

I’d never been to Africa and certainly never been involved in any kind of business transaction that was outside of the United States, but when she actually came back, there was some opportunities for us to get involved with vocational training for women, which has really been a big push to be able to try to empower women, to be able to pay the school fees for their children, and then ultimately create sustainable models of living, and there’s just not, the infrastructure doesn’t exist over there in Ghana where they can just graduate from high school and then go get a job. That’s just not a thing. There’s not huge companies that have come in and invested in factories or manufacturing Ghana like there is here or even in some of the other developing countries, so it’s really a very entrepreneurial workspace.

Trying to offer training to especially people that were not necessarily going to have the opportunity to then goes into empowering them forever. Then we were able to partner with Heartbeat for Hope to try to get more structure and get more ability to raise money and now we do some work with another vocational training school that actually takes teenagers off of the street and gives them a two year basically training program in textiles, in auto mechanics. They choose a major. In catering, in skills that are able to market and skills that they’re going to be able to make a living at. That is money that you’re basically putting in one, as an investment, and then the training center is able to continue going on its own because they can make the products, sell the products, and then that can be re recycled.

That’s been a big issue for me is always trying to keep centralized the money that we’re putting in there. We don’t try to take over a lot of things. If we’re purchasing things, we want to purchase things over there, help another person who’s in entrepreneurial and just let that wheel round. That is a big part of my life. I’m going again in January, I think, so I’m very excited to go again and see where we are on that stuff.

Hannah:               Is this a microloan program?

Amy:                     Yeah, we’ve done a little bit of microloans. I won’t say that we have perfected it yet, but we have made some microloans to people that we know and to people that have provided us with very well-written business plans that we can track and we can follow and we really feel like we can be involved in the microloans that we’re making. We’ve made some microloans for somebody buying a taxi. A taxi driver over there has to rent their taxi every single day, and some days they’ll make enough money to pay for the rental of their taxi that day and some days they won’t, but you not ever really get ahead that way, so by making a loan, they can buy the taxi. Then they’re paying the taxi back. Now they own the taxi and they can actually use it to make money over time and to build up, but it’s very different cultural mindset, I guess. Over there, saving is really not anything that’s valued like it is here. It’s not necessarily something that’s like, “Oh, they’re a good saver.”

They’re very socialistic and environmental, so if you’re saving, you’re really almost thought of as selfish because you most likely have a family member or a friend who’s in the hospital or may need your help, and so it would not necessarily be socially smiled upon for you to just be hoarding money, so a lot of times their savings goes into building a house and they, because the loan situation doesn’t work like it is over here, you’re literally building a house brick by brick as you can afford it. You can afford a brick, you go buy a brick and you put it on. It’s almost as simple as that, but trying to integrate that savings culture that we have over there just doesn’t work, so a lot of trial and error as far as what works and what can ultimately make the most difference has been the biggest learning experience for me. I won’t say that I have it figured out yet.

Hannah:               I find this so, I think it’s such a good example where you just had this passion and you just kept following it. Has this, not that this is why you do any of this, but has this helped your business and your relationship with clients?

Amy:                     A lot of my clients know that I’m involved with Heartbeat for Hope. I have certainly not hidden that, and then I also, I make a pledge for any of my clients that 10% of the gross investment management fees that I collect actually goes back into basically a nonprofit of their choice, and that serves a couple good reasons. One, it’s a great marketing technique and people really love to partner with a company who’s also involved in the community, and then people, I want to know what my clients are interested in. I want to know what they’re passionate about, and so it allows me to connect with my clients on another level and it allows me to offer some guidance on a charitable giving standpoint. Then it also allows me to partner with another charity either in Oklahoma community or another charity that my clients might be interested in, and so that’s a good partnership for me, that we’re able to build that local community too.

Then any time that there isn’t necessarily a charity that somebody’s passionate about, I let them know that for me, my passion is Heartbeat for Hope and this is what I’m doing and so any time anybody doesn’t necessarily have a charity that they are passionate about, that 10% goes to Heartbeat for Hope too. I try to be as open about when I’m going and what I’m doing and what the needs are and what the support level is with my clients too.

Hannah:               Oh, that’s really neat. As we’re wrapping up, what’s next for you? I feel like you have so many different interests. What are you working on that you’re really excited about or what’s coming up for you?

Amy:                     Well, my number one goal this year is to finish my dissertation, and so that is a lot of people asking me what’s next for me, and I know that I am not going back to school, and that is 100% what I can say, but I do think that I would like to do a couple new things with my business. I’ve got a couple ideas on the consulting side, and I think I would like to even partner with other financial planners that may need some help on the investment side, knowing that working with somebody who has the same mindset as them and that has the same values as them and has the same passions as them, maybe bringing someone to do my planing for me that has more passions for financial planning and doing more partnerships like that, I’m really excited about.

Hannah:               Oh, that’s great. For the listener who is just starting out, whether they are studying for the CFP® exam or kind of within those first couple years of their career, what advice would you have for them?

Amy:                     Get in meetings with as many people as you can. That is absolutely what I think was the most valuable thing to me is that I was able to be in meetings with people who I consider to be the very, very best at taking care of clients in the world. I was able to go and be in meetings and hear how other people approached situations, hear how other people kind of not spin, but can approach a certain problem in a way that can make a client feel very much taken care of, very comfortable, what even body language you need to pay attention to.

There’s just so much that you can’t read about in a book that you need to get as much exposure as you can possibly ask to, even if you’re just going up to somebody that you know is a rainmaker or that you know takes care of their clients or know does things well. Just say, “Hey, if you ever have a meeting, would you mind me just sitting in? I would really like to learn from you,” and just soak that in as much as you possibly can.

Hannah:               Where did you go for this? You had other advisors outside of your firm that were letting you sit on meetings?

Amy:                     No, within my firm, so if you work for a smaller firm, that’s harder, but within your firm. Even if it’s not your direct report, if you do have the time, if your employer will allow that, just see if you can get as much exposure to what works well and who works well and that will pay dividends certainly.

Hannah:               Well, is there anything else as we wrap up, Amy?

Amy:                     Yeah. Get educated and get that experience, and this is an amazing career. I’m extremely happy that I tripped and fell into it.

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The Future of Financial Planning – FPA DFW Seminar

2017 Quarter page flyer

Casey Kupper, CFP®  and Hannah Moore, CFP® are back with another in-person FPA DFW #YAFPNW series session recording. This time they discuss The Future of Financial Planning.

Be sure to join us for the next You’re a Financial Planner, Now What? seminar series! Each seminar covers a different topic that’s of particular interest to those who are looking to fast track their careers and have a passion for financial planning. No reservations are needed, drop in and join the discussion.

Thanks again to everyone that came out and many thanks to the kind folks at The Milestone Group and Bank of Texas Private Bank for hosting us!

“Ten years ago it would have been extremely difficult to communicate the way you do with clients… to communicate what you do and live up to the duties you have to clients by being flexible and able to deliver no matter when or where  you are.”

Show Transcript

Ep60 Transcript


Hannah:               The topic we had was future financial planning. I am curious to hear what your thoughts are Casey, on that.

Casey:                   So, to me … starting with what is financial planning to me. Might help frame my comments. I view financial planning as simply being able to provide services to clients for compensation. Provide what they need. It can be many different forms. No two advisors necessarily deliver advice the same way or about the same topics or with the same level of expertise, nor do different clients have the same needs or receive that information and advice the same way. There’s a very broad breath of ways that the advice can be delivered or received. It’s up to all of us to find where we fit into that mold.

When we start thinking about the future of financial planning and whenever I think about that in a context of what we need to do for our own practice in business, I’m trying to figure out, are the changes we need to make gonna help our clients? Are they going to help us stay competitive so that we can continue to help our clients, or is there just some opportunity for us to just morph? When I think about that concept over time, generally it tends to center around the flexibility of what we do increasing. We could focus more on a niche. We could know who our top clients are very narrowly and go very deep in that, but things could change. We could pivot away from the world being able to deliver advice to that niche in the future, and I don’t want that risk.

Instead, I would rather be able to do a lot of different things for generally wealthy clients, and pivot and change as any business owner would. The future I see with Robo Advice and trends within the millennial subset is that online advice or the ability to give advice any time, anywhere will become increasingly important. How that manifesting for ourselves is currently in staffing, making sure we have flexibility to manage our client base to make sure we have the depth of experience we need for our clients’ needs, and making certain that we have the capacity when clients need things to jump on it, whenever that is.

I know that will change over time because not everyone, especially younger generations, will want to receive things by phone call. We have world role constraints of compliance and how we do things digitally and can’t text message with clients or things of that nature, but we need to continue to push the boundaries to make sure we understand where our lines are today, and where we think it’ll be in the future, try to move that direction.  Just to bottom line my high-level thoughts, it is flexibility, flexible advice, being paramount for the future of a financial planner in delivering advice as the direction I’m trying to push our firm and myself.

Hannah:               Mm-hmm (affirmative). I kind of went with that same idea. What is the core of what we do? Throughout all the change, that’s what’s going to remain.

Casey:                   Mm-hmm (affirmative).

Hannah:               I went back to Wagner’s 1990 article about what it is like to think like a CFP. That’s this huge article that I think changed the profession, basically calling financial planners to become professional. How do we think like a CFP? How do we become a profession? I went back and I looked at kind of what you’re saying, looking at … I’m just going to read a couple of things in here. Looking at the classic professions, law, medicine, theology. Additional ones would be journalism, teaching, nursing, architecture. All of the characteristics of these professions are working with ambiguity. Whatever the future holds for financial planning, we’re still going to be in that space of managing that ambiguity. Of managing that constant change that our clients are in.

You look at what are the elements of what we do. I don’t think that insurance sales or investment management has the ambiguity that financial planning does. Those are two separate things. We can technically analyze these arms of financial planning, but financial planning as a whole, I think that’ll always be there. I think looking for what’s the future of the profession … my hope is that the future is that it actually becomes a profession. One that’s not so … just a couple just quick thoughts on that. I think the public needs to view financial planning as a profession. I know when the CFP came out with their marketing campaign a couple years ago, they kind of met a lot of resistance, but just the awareness that it’s brought, I think is a huge deal and a huge step forward for us. We have to act like a profession. Some of the elements … there’s an esoteric body of knowledge, so you have to be skilled. The average person doesn’t just get to be a financial planner.

I know whenever I say I’m a financial planner, they either stop the conversation, or try to provide advice on something. Here’s what I would say, and the reality is good financial advice isn’t just given off the cuff. It’s not just common rules of thumb that we can just apply everywhere. It’s not … doctor’s don’t just say, eat an apple a day and it keeps the doctor away. It’s much deeper than that.

I think the minimal education curriculum was part of this article, what he was saying. I think the work that college professors are doing is so incredibly important to our field. Then, advisors have to read that. One of my other pet peeves is how do we incorporate research and all this great work that’s being done out there into our practices? I think that’s … we need to figure out a better way to do that, and I’m sure we’ll get into that conversation more. A sense of altruism. People become a doctor because they want to help people. People become ministers because they want to help people. Once we really start ingraining this idea of financial planning, I want young kids to say, “I want to go become a financial planner because I want to help people with their money.”

Casey:                   Mm-hmm (affirmative).

Hannah:               I think … again, that’s a lofty idea that’s maybe not quite so tangible, but I do think it’s important. Then, a code of ethics, which obviously is very much in the news and things like that. We have a long ways to go before we figure that out. The other sense of calling goes back to this, “I want to help people.” Then, to be a profession, it affects every single person. Whether you have no money, you’re in a mountain of credit card debt, or you have ten million dollars, financial planners should be able to speak to you. Not every financial planner should be able to speak to every group, but we need to figure out how do we serve people who don’t have seven figures? I don’t think that we’ll ever become a profession until we do that.

What’s exciting for me when I think of the future of financial planning is the people who are trying to figure that out. Trying to figure out how to provide financial planning to the middle class and to the lower socioeconomic groups, because only until that happens … only then will we be a true profession.

Casey:                   Yeah. One of the common challenges that I see whenever I’m communicating with clients or just a random person out and about town is they have a limited experience in viewing others finances. Certainly they have a view of their own, however biased it may or may not be.

Hannah:               I’m sure they do.

Casey:                   They may have a view into parents or a few close friends, but it’s a pretty narrow subset. We have a unique advantage in that we get to see many different ways of doing things. Generally speaking, no, there’s not just one way that applies to everyone. Someone that’s successful in life that would be a potential client, they haven’t generally seen other ways to have success. They may not appreciate the risks that they’ve taken to have that success, and they want to apply their experience to others. I did this, it worked. You, your friend, their friend should do the same thing. Conversely, those that are in debt, they don’t have the seven figures, and maybe aren’t the pure target for every single advisor, they’re dealing with such different issues of how do they get out of debt, and they could go with the Dave Ramsey approaches. There’s many other ways you could do it from a math perspective would be better, but maybe behaviorally aren’t. Maybe getting out of debt worked for them. That doesn’t mean it’s going to work for the next person.

That’s a giant frustration for me is that the public in general sees their path to success or out of a problem as the solution, and to be able to accept that there are many different ways is an element of public education or awareness that I hope we see in the future, because that education process stalls the point of either getting the opportunity to give advice, or delays the process of that advice being taken.

Hannah:               Yeah. With that point, one of my other big pet peeves is it’s so easy as a society to measure financial success because there’s dollar signs. There’s numbers. It’s like, an account mind. I can say, “I have a million dollars. I am therefore successful,” but if you look at two people who are graduating, and one chooses to work at a nonprofit versus go into corporate America, they’re going to be on two different financial paths. Which one is more successful? That’s a very hard thing to weigh, and a lot of financial advice only centers around the numbers, and not these bigger conversations. I think that goes back into the ambiguity of it’s not just one direct answer.

Casey:                   Yeah. An area I’m really excited about is that we are now a profession. I’ll call us a profession. We’re certainly an emerging profession, but nonetheless one. We’re one that now has a PhD program.

Hannah:               Yep.

Casey:                   We’re now subjecting financial planning concepts to true research, and we’re vetting it and seeing what the outcomes are, and things that we’ve probably known to be true, some of it won’t be, or it won’t be the best idea or it won’t be the best application. It may take us a decade or decades to get most of the financial planning concepts tested and vetted through PhD type programs, but nonetheless it’s coming. Then, hopefully we’ll be more like the investment world where it’s disciplined, generally people who need and are willing to accept help. Then on the financial planning concepts, it’ll be more tools where we as advisors will be able to stand on the shoulders of those that came before us, rather than having to feel our way around the edges and figure it out ourselves as much as we do today.

Hannah:               Trust our intuition and our instincts.

Casey:                   Yes. Yes.

Hannah:               There’s so much of that going on. Yeah. I think that’s what’s so cool. You look at the future of financial planning, the people who stared it … they went into insurance and investments, and then became financial planners. They went from almost a specialized to this broader … and a lot of it was sales based. I know sometimes that gets a negative connotation, which it is what it is, and I don’t think it’s always negative, but we’re getting a whole new … I mean, I’m one of them where I graduated from a college program where I have an educational background, and that provides me a different perspective. A lot of these new planners are coming up, and they have more foundational understanding of financial planning than their bosses do, and that’s a very hard dynamic to work through at a firm, but it’s … I think that’s going to be what kind of leads some of the shifts and leads financial planning into the future.

Casey:                   Yeah. Absolutely. Another challenge that I see with the future of financial planning … it’s not unique to financial planning or investment advice, is fee compression. Cost. That could take any number of forms, and again, every business faces that. There’s always going to be someone that does what you do cheaper. The process of financial planning being viewed as a profession will also be coupled with known value that that profession provides. I hope that that will ameliorate some of the focus on cost, and instead turn to advisor A versus B. What kind of value they bring to the table. Certainly we try to do a good job of communicating that on our own, but I fear that it comes across as a sales pitch because we’re just saying it. It’s not easily demonstrated.

If I look for tax saving opportunities, well we don’t know what’s going to happen. You may be able to do that better than I as a CPA, but it’s hard to say, “If you work with us, we will be tax sensitive, and that should lead to blank, in terms of better return.” I don’t mean better as in higher, just risk adjusted or after tax and risk adjusted, it will be more appropriate for you. Those are hard concepts to sell a client on. Nonetheless, Van Guard studies, Morning Star studies have suggested they are very real, and where most of the using their terms advisors, alpha and Gamma, where we’re truly bringing value to clients in general. Yeah. It’s a long process to get there. Very long.

Hannah:               Yeah. One of the … at an FP retreat this year, they did a lot on the age of acceleration and looking at how much change our society and our world is going through, and they had … obviously, they’re not going to hear the audio, but this graph where it curves up. It’s such a dramatic and steep curve, and that’s where we are. It’s not that long ago we only had horse and buggies, and now we’re looking at … just the technology that we have and what we’re able to do. I mean, we’re looking at self-driving cars now. That’s crazy. How did humans process change? A lot of what the conclusions were is that humans can’t process change as fast as we’re getting it. We are finding coping mechanisms and we’re not responding as we should, as psychologists would say that we should.

For some people, it’s really terrifying because they’re like, “Financial planning … that just means that all of my services are going to be outsourced. That means that somebody is going to be able to do it for 15 basis points. That means that somebody is going to be able to do it for cheaper,” and all these things, but I think it’s a really interesting idea. Who’s going to help our clients navigate this change?

Casey:                   There was an interesting article that Michael Kitces produced recently or contributed to, but it used the concept of chess to illustrate why robo advisors or technology isn’t really the competition of an advisor. To quickly take you through the main point of the article, you take your average chess player. There’s a scoring system … they’re not very good. As you go to internationally competitive, they’re much better. Then when you start talking about the best chess players in the world on this scale, they’re way off to the far right end. They’re the best that there is.

Now, if you take the best computer programmer there is for it, it’s another 10% better than the best human is at this point. The humans stand virtually no chance at this stage. Some elements of what we do can be done better by a computer than we can do on our own. The repetitive task, considering multiple variables that we or programmers build into algorithms. They can do it quicker, more efficiently, more error free. To suggest that we can compete on everything with technology is just incorrect.

However, if you take really good chess players. Not the best, not even internationally competitive and you pair them with that best computer, they’re about 20 to 25% better than the best chess player in the world. They’re better than any chess computer in the world. It’s focusing the humans efforts around the areas that technology doesn’t consider, recognizing where the traps are with whatever financial planning software we use, what it’s blind spots are. If you use multiple softwares, not just for financial planning but across all the things we do, understanding when to apply one software versus another. Those are the tasks that humans will always have … I say always. This article postulated we’ll always have an advantage over technology because it’s dealing in that world of ambiguity that Hannah was referencing. It’s the thought where we start to take in emotions and behavior and judgment calls that can’t be foreseen be programmed, and you do have to rely on intuition.

Charlie:                 Also, there’s not a winning scenario you could program.

Casey:                   Yes.

Charlie:                 That’s easy with chess. There’s even an AI that beat players at another game where it just learned by playing itself over and over again, but it knew what winning was. This area, that ambiguity, there’s no one winning. You can’t just say, get the client to this number because that’d be it.

Casey:                   That’s a great point.

Hannah:               Really good point. I think there’s a lot of factors. We’re talking about this really big level … like, what is financial planning and … maybe we should stay there. One of the other, looking at age of acceleration kind of ideas is, is WebMD for doctors. That certainly hasn’t taken away the need for doctors, or turbo tax for accountants. We still use that, or legal zoom for attorneys. Maybe we need something like this to help service the demographics that I can’t sit across the table from them profitably and do that. I think there’s a lot of interesting parallels looking at other places of change. Bob Veres came out with an article. Did you see that article? The youth led rebellion brewing in financial planning.

Casey:                   I haven’t read that one.

Hannah:               I thought it was a really good article. I think he brought some really good points on it, so I’m just going to read a couple sections of it. One of his points was, “Today the financial planning has simultaneously reached a point of rapid evolution and managerial stagnation.” As with anything, there’s so much change, and there’s the people that are resistant to change, and there’s always going to be tension there. I think we’re coming into that tension.

He leads the article out by talking about how, first sentence, “I’m a bit horrified by what I hear from younger planners today. They say they want to take the next steps in their firm’s evolution. They say they want to bring financial planning to the blue ocean of younger, not yet wealthy individuals, who were ironically the same type of people that their firm’s founders worked with in their early days. They want to implement Robo Advisor technology and change their companies fee structure from the old AMU model to something that matches, but with more precision that fee charge for services, but that’s not what I’m horrified by. I’m horrified by what happens when they propose these ideas to their firm’s founding planner. Too often the answer is a variation of, ‘You can make all of these changes after I retire.'”

I know I’ve seen that. Huge trend. What do you do with that? That tension is going to bring a lot of change. I think it already is bringing change. I think we’re already … I think we’re past the bleeding edge of it. I think we’re more in the … people are adapting this. I think there’s a lot of interesting changes that the profession is going through.

Casey:                   Yeah, and one area where the future is now is the Department of Labor’s fiduciary rule. While we may get another delay on the final implementation or may not, it has brought to the forefront of the public the concept of, is my advisor a fiduciary? What is a fiduciary? I’m sure many didn’t even know, but I’m happy that that conversation is now in the public awareness, and not just because it was being talked about at the law level, but because we’re in implementation. As a certified financial planner, and Susan as well, and Hannah … I guess you will be with the experience. We all have in this room a fiduciary capacity, but not everyone in the profession did prior to the OL. Now, it’s virtually unavoidable unless someone is very, very, very narrow in what they’re doing. To build the public confidence in what we’re doing, that truly we’re looking out for their best interests in some scale, some form, is a critical element to building the profession of financial planning. It’s exciting that now it is happening.

Hannah:               Yeah. I think like … I know a member of NAPFA, so I’m fee only, and I think that that was kind of held out as this holy grail. If you could be fee only, then everybody is going to trust you. The public knows … I’m in several large Facebook groups where it’s like the public talking about financial issues, and PR has some good ones, and there’s some other places out there, so I would definitely recommend just getting in there and just listening. Not that you’re contributing, but just hearing what people are saying and the questions that they’re asking, but it’s always … you can’t trust financial advisors. You just need to find a fee only advisor. I think when we look at the future of financial planning, if we do things right, that’s going to change to where it’s not going to, “Get a fee only financial planner,” it’s going to be, “Get a CFP.”

I think we still have a lot of room to grow. I think that’s for a lot of the discussions and the CFP board’s new proposed rules of expanding that fiduciary responsibility for CFPs. I think those are all really good steps. I think there’s … we still have to see how it plays out, because implementation is hard. They’re not auditing us. They’re not … people who are not acting in their clients best interests right now who are CFPs, are they going to change their behavior? Most likely not. The reality is, the majority of them won’t. How does the CFP board handle that? How do we as a profession handle that? I think we have a lot to prove, but my hope is that in the next decade or two or however many, it’s not, “Go to a fee only financial planner.” It’s, “Go to a CFP.”

Casey:                   Yeah, and the concerns we heard, or I heard leading up to the very stages of DOL … generally it was the older advisor that had their way. The way that they did business. The way that they preferred to. The way their clients were accustomed to receiving investment or planning advise. They were more worried about DOL than younger advisors. Certainly I want to make sure that it doesn’t compromise what I’m trying to do, but I’m still relatively young. I can adapt. As long as the vision behind that is positive for consumers, I’m happy with it. There’s nuances that cause headaches. There’s nuances that, in my opinion, are not in the best interest of clients, but a little bit of bad that comes with the overall good is just something that I’ll have to deal with and happens with every tax law change, every estate planning change, and most anything else that impacts us as a business.

The, “You can deal with it after I retire.” That notion … I suspect that’s where a lot of the clamoring for DOL being bad comes from, because we are an older profession in general. It seems we’re getting younger because there’s new advisors coming straight into the business as opposed to as a career change. Still happens both ways as our room represents, but there still is a very heavy skew toward the older male advisor. It’s going to take 10 years before that turns itself over, and DOL may- may- accelerate that greatly. At which point the profession can start to move forward on the concepts, Hannah, that you positioned earlier. It remains to be seen if that will happen. It was certainly speculated that it would be a strong push to create that, but I haven’t seen any data that says it’s actually happening post June 9th.

Hannah:               Yeah. Well, and it’s such a … there’s so many elements here, and I think as we were talking about financial planners coming into business with already this foundation, this educational foundation, I think that we’re starting to see a lot of businesses being run as businesses. For a lot of financial planning firms before, it was just, “I’m a great sales … I’m the rainmaker. I can bring them in, and I’m kind building up people underneath me.” But financial planners … it’s just like doctors. Doctors make some of the worst business owners. It’s just their skill sets are in two different places. I think what I’m starting to see a trend as well is financial planning firms that are having a business manager. That are having … really approaching it more structurally that way, rather than just depending upon one person or one personality in their firm.

Casey:                   Absolutely, and I suspect a lot of that has to do with the increased compliance … I don’t want to say burden, but certainly it is in some ways. Increased compliance requirements that the industry has experienced over the last decade plus, and as that happens, it becomes essentially a fixed cost with a variable component, and thus the bigger the firm is, the more that you can share that burden, the more effectively you can address it at a reasonable cost. We’re seeing this greatly in all of the RIA aggregation across the industry. Clearly, scale is working. It’s a pitch that advisors are accepting, especially those that are leaving. The Morgan Stanley, the Meryls of the world. There’s a lot of firms, not to pick them out specifically, but there have been a lot of examples where teams are carving out of large broker dealers, bank owned firms, and going to the RA world. It gives them the flexibility to offer clients what they need in a way that’s not restricted as much, certainly by the companies they were with.

Hannah:               I think that’s a huge trend. Moving away from the broker dealer to the RA. I think I’ve had a number of conversations with people at broker dealers where like, “Okay, so why … what’s the value the broker dealer adds?” And I think that there is value. I do think that there is, but I think the trend is going to be the RA route. I’ve had some conversations with people who are never going to leave their broker dealer, but they’re just like, “We’re not going to leave because we’ve been here for so long, and all of our clients are here,” but with all these new rules, aren’t I just operating like an RA but having to jump through all these other hoops that I shouldn’t have to jump through? I think that’s going to be a huge trend going forward.

Casey:                   Absolutely. When I started, the concept of the largest firms versus going to a smaller firm or starting my own practice or whatever, the entire spectrum, the draw of the larger firms was purely marketing. If I affiliate with someone, it’s the most well established brand in financial services, does that make it easier for conversation of whatever perspective client I’m talking to, does it make that conversation to client easier? The concept wasn’t, is their product better? Is their service to me as an advisor better? It was simply, does it make it easier for me to do business? What we’re seeing now is that in a lot of ways, it makes doing business harder because you can’t get clients what they want, the way they want necessarily. Not always the case, but certainly a trend we’re seeing.

Hannah:               Yeah. I do think … there’s some interesting trends. You’re talking about the merging of our larger RA practices and RAs buying out other RAs. I think that goes into a lot of that business side of it, but I’m a small RIA … I think I’m classified as a lifestyle practice right now. I think that’s a growing trend, too. Just with technology and the resources that are out there right now for new firms that want to start up, it’s never been easier, and it’s never been easier to do that and ramp it up at a quick pace. There’s so much I think that’s in favor of that model right now, too.

I know I’ve seen articles saying that that model is going to go away because of all these increased regulatory things, but it’s like, if you make the business decisions knowing the regulatory landscape, you can make business decisions on how to run your firm so that it blends really well with that, and it’s not a really burdensome … everybody is going to have compliance, but it’s not … I think people try to … understanding people’s motives I think is really important. I think a lot of times some of the stuff that I’ve heard about how, oh, you never want to do that because of the compliance burden. It’s like, well you have a very clear motive of wanting to keep people on the broker dealer side, when I don’t think that may be is … it hasn’t been the reality that I’ve experience.

Casey:                   I think you’re living another example of the future is now with at least somewhat a lifestyle practice. Ten years ago, it would have been extremely difficult to communicate the way you do with clients, to communicate what you do, and live up to the duties you have to clients by being flexible and able to deliver, no matter when or where you are. Certainly, there are other examples where they’re truly a lifestyle practice and will pack up the RV and drive around the country all the time, so maybe I’m speaking a bit more to them, but we really are living in an environment now where we can find where we’re unique, where we provide unique value, communicate that, and have it resonate with perspective clients or your current ones in ways that would have been extremely difficult just a few years ago. To conceptualize that and embrace it and come up with my story or our firm’s story, and then put it out there, that’s a process. It’s one that you’ve embraced remarkable well and communicated extremely well, but it is a challenge.

Hannah:               Yeah. In so much the small RIA space, it’s you’ve got to be just confident enough in a lot of things just to get it rolling, and then you can start outsourcing what you’re not good at. There’s so many resources now.

Casey:                   Do you see all of those resources that are available continuing to grow at a quick pace, and do you find that … do you think that the small RIAs will take more advantage of those earlier in the future?

Hannah:               I think that they’ll definitely take advantage of them earlier. I mean, when I look at the XI planning that works in the things they are doing, when I’m talking to people who are thinking about starting their own firm, they are … they know exactly where they’re going and what they want to do. There’s just so much … when I started in 2009, I remember you could hardly find anything online. It was like, let me get the magazines in the mail. Let me read through those, because there just wasn’t anything out there. Now, there’s so much … there’s a lot more out there. I still think there’s missing elements, but …

Casey:                   The concept that brings to mind is completion. In the investment world, we’ve got virtually every choice. Every way that you could want to invest available and that makes it a complete market, and so the advice spectrum that’s becoming available to the advisors, the consultants that are available, in a way that makes it a complete offering to us so that we can pick and choose what we want and when we need it. I’m certain that there will be more bundled options available as well than maybe there are today, just further completing that marketplace to us as a toolkit. Certainly not on a landscape that I’m very familiar with at this stage in my career, but clearly will place significant roles going forward.

Hannah:               We’re still trying to figure out, what is financial planning? I mean, there’s still these big questions out there. There’s so much … I would say this. It’s like we’re in almost a wild west. If you’re drawn to that, if you’re drawn to that entrepreneur creating something, there is so much opportunity out there right now to really build, I think, the career of your dreams, but I’m a little biased.

Speaker 4:           What are some of the big questions out there?

Hannah:               About financial planning? What is it? Is it the process? Is it the services? How do you deliver it? Do you need to have a six step process?

Casey:                   To me, I don’t even know if I care about those things, other than the public needs to be aware. All I care about is, can I help clients and make a reasonable living doing so?

Hannah:               Yeah.

Casey:                   Can I be there for them over time so that they can continue to achieve their dreams? In some ways, what I do isn’t necessarily financial planning. It happens to be financial planning.

Hannah:               Yeah, and the CFP board just came out with their new … they came out with a new definition. Let me see if I can pull it up here … of what they’re saying financial planning is.

Casey:                   Delivering on two of the six foundational topics?

Hannah:               Well, now it’s expanded though with the new … with their new standards that they came … okay. I have it at home. I’ll put this in the show notes, for the people who are wondering, but it’s like 30 words. They really trimmed it down substantially, but there’s still so much ambiguity about it. We can’t … it’s hard to say this is what financial planning is, how I define it, how Casey defines it, how a Merrill Lynch broker defines it, how Edward Jones defines it… there’s still so much I think undiscovered.

Casey:                   Mm-hmm (affirmative).

Hannah:               Dick Wagner, before he passed away, wrote a book, Financial Planning 3.0, and he wrote … a lot of my thinking here with it … to think like a CFP, he wrote that in 1990 basically calling financial planning into a profession, and then he wrote this financial planning 3.0 of what he sees as a new evolution of financial planning. Financial planning 1.0 was creating the profession, if you would. To think like a CFP. Financial planning 2.0 is like a lot of the life planning that kinder … some of the stuff set in money is doing, money quotient, things like that.

Then, financial planning 3.0 is … I don’t even know if I can do it justice trying to summarize it, but it’s the idea of he has a chart that he would do of psychology and sociology. How they map to each other. Sociology is the broader understanding of how groups of people work. Psychology is more understanding of how one person works. If we tie those down to money, we have sociology ties to economics, right? It’s how do a group of people operate around their money? We don’t really have anything from the psychology to the money. If you think of a two by two chart, there’s nothing in that space. What he proposed is that finology he coined the term, finology would fit in that term of how do we operate and relate to our money?

Casey:                   How does that relate to behavioral finance? To me, that feels like that box.

Hannah:               There is … okay. A couple of things. Some of the critiques that I’ve heard of using the term behavioral finance is we … if a client is sitting across from me … okay. I’m going to say this. I don’t think behavioral finance is a bad term, so I don’t necessarily subscribe to all these ideas, but the critique of it is it’s manipulative. It’s saying, I want you to pick option number two, so I’m going to put option one, two, and three, and then you’re going to … because I know how psychology works. I know how to drive your decision. Where I think finology would be more, how do you approach money? What are the money narratives that we follow, and how do we understand those? Then, once we kind of have an understanding of that, then we’re going to be able to help people more on their timeline versus what I would impose on that. That’s kind of I think …

Casey:                   The difference is the use of the tool set?

Hannah:               Yeah. Behavioral finance I think is all part of that picture, but I don’t think it’s the complete picture. I think this is where a lot of the research and things that are really developing in this field are so exciting for me. One of the things … I will pitch this. At the end … Dick passed away earlier this year, but one of the things he had done was he had proposed, for him, finology would be another major. It would be the study of how money interacts with people. At the end of his book, he has an outline of a course how he envisioned, so Dave Yeske challenged him and said, you want to make this as a curriculum? The intro class, write out the curriculum. So he did. He wrote out the course, so they’re actually at Golden Gate University this fall are going to be … Elizabeth is putting together this course using his outline with some of the … their lineup of guest speakers is pretty incredible.

Casey:                   That’s a wonderful tribute and legacy.

Hannah:               Isn’t that? Yeah. Really neat way of doing that. They’ve started a Financial Life Planning Masters or PhD program. I can’t remember, at Golden Gate and this is the intro course to it. If you’re interested in this, you can go audit it, or look at their program even more. I mean, it’s … I’m tempted to take the class, because it’s like the all stars of financial planning are the ones who are doing it.

Speaker 4:           Is it only live, or can you do it online?

Hannah:               It’s all online.

Speaker 4:           Oh, it is online. Okay.

Hannah:               Yeah. It’s online. The registration is open now. I know they’re sending out emails trying to get people to sign up for it. A really interesting dive into this … I don’t know, I think a lot of the future of financial planning is going to head that way. I think it’ll inform planners significantly with how we interact with clients on a personal level.

Casey:                   Mm-hmm (affirmative).

Charlie:                 It’s an academic discipline.

Hannah:               Yeah, an academic discipline.

Charlie:                 From Psychologists to counselors … there’s overlap. One’s going to be working more towards trying to help you change something about what you’re doing, and the other person might be diagnosing. Both are useful. Both sides are very useful to each other, but here at the finology would be a discipline of study and not just looking for outcomes.

Casey:                   Right.

Hannah:               Yeah.

Casey:                   We probably all do elements of both sides of it, just as you announced it. All based on intuition and learned experience, which doesn’t get us there as fast and probably not as well.

Hannah:               Yep, but … yeah. I don’t know. I see that a lot as the future.

Casey:                   Mm-hmm (affirmative).

Speaker 4:           What about single practices versus ensemble? Will there always be those, or is one going to dominate in the future? Does it even matter?

Casey:                   I would imagine that comes and goes over time, depending on how much regulation there is and generational trends, but like with investments, there’s room for stocks, bonds, alternatives. You name it, there’s a way to invest in it, down into derivatives, because individuals are at different stations in life, at different ages with different career paths with different goals, it stands to reason that there will be different types of firms that are more appropriately structured to serve those clients. I think that manifests itself in room for the entire spectrum of firm models or practice models.

Hannah:               Yeah, I tend to agree with that, and I think there is going to be a pretty heavy weeding out process that we’re going to see in the next five, maybe even sooner years. I think a lot of it is going to go back to, what’s your value proposition to clients? I think that … number one, I don’t think most advisors can articulate that. I know I struggle with that sometimes, but if we can figure out what that value proposition is … it’s a value proposition like we were saying earlier. It’s investments or all of these other things, those are the people who I think are in danger, and I think those are solo planners. I think those are ensembles. I think those are some of the big firms out there. I think to me, that’s the difference of who will be able to stand at the end.

Casey:                   Yeah, and those that will be able to stand at the end, like any industry or profession, the businesses that can reasonably see what’s coming, whether it’s proactive or reactive, realistically assess where they’re at and what they’re trying to accomplish, pivot change, take advantage of the landscape, or just take the necessary steps to survive … those are the ones that make it. The ones that can just look at a situation, assess it, and react, whether it’s proactive or not.

Hannah:               I think so much of it goes back to … a lot of people I listen to … the people I know and have conversations with, they’re either starting out their firms or they’re probably ten years into the profession, and they’re still trying to figure everything out. They’re highly adaptable to change, and wanting to pivot and do these things. Now that I have an established practice that’s successful and paying my bills and I can kind of sit back a little bit, I find myself … I’m very adaptive on certain elements of it, but there’s some level where I don’t have to adapt. I mean, I don’t have to be on that cutting edge of it.

Speaker 4:           If it’s not broken, don’t fix it.

Hannah:               A little bit of it’s not broken don’t fix it I think, but what I’ve realized is I think the key is listening to your clients. Engaging with your clients of, what’s invaluable? Having those ongoing conversations I think is what separates the firms who are going to be successful from those who are not, because there are some clients … some of my clients have … I don’t think they care how they pay for me. They have to have me. That’s a different relationship, and it’s making sure that I’m in tune with them and with, “Would this make more sense?” And then asking them.

Casey:                   Yeah, I think that’s absolutely brilliant. One thing that’s common in our industry is that clients are sharing intimate things with us, maybe things they don’t share with anyone else other than hopefully their spouse if they have one. They are putting great trust and confidence in us, but it’s fairly one sided. If we can turn that around and put some value in their opinion … true value. Not just asking because we want to appear like we care what they think, but truly probing and asking, “As this firm changes over time, what would be helpful? What would you want from us?” What Hannah suggested, “What do you find valuable now?” To help understand over time is what I think is valuable, what the client thinks is valuable. Involving them in that discussion in some way could be critically important to developing the relationship so it’s not just take, take, take, it’s a true two sided relationship.

Hannah:               Mm-hmm (affirmative). I think people have client advisor boards. I haven’t done that yet. I feel like it’s something that I should do, but I haven’t done it yet. That’s a risky thing because they could say things I don’t want to hear.

Casey:                   Right.

Hannah:               That’s part of it, but I had a client who … she just transitioned beautifully from selling her home to an advance retirement community. I mean, I was like, how did you do it? I called her up and I asked if I could interview her, and just talk to her about what that was and can you walk me through what that experience was for you? She was thrilled. When we were talking, she talked a lot about the idea of legacy and she was like, “Even you asking me to do this, I realized is part of the legacy. Something that I can give back.” It was such a neat experience, and what was even better for me is I got to hear how she reflected on her relationship with me throughout the process, and I learned so much about what she valued, what I thought was important that she didn’t, and it just opened up this really … I learned so much by just asking. I don’t know. I always say my clients are my greatest teachers, and I think we can really take much more advantage of that than we do.

Casey:                   Yeah, and can and should. It’s something I think about all the time and rarely do. It’s just on that long list of things in my mind or on paper that I know I want to accomplish and want to do, but we have to pick and choose where we spend our time. It’s real world allocation of our time resource, but aspirationally, it’s very, very high on my list. I just haven’t taken that step.

Hannah:               Yeah. Do y’all have any thoughts? I know we’ve been talking a long time.

Speaker 4:           No, I found it very interesting. I guess I am curious what more specifically what you found your clients appreciate the most? What surprised you about what they think is relevant and important versus what you would have thought?

Hannah:               On my website, the guiding wealth website, I actually did a series of blogs about that conversation. I don’t tell my clients this, but when clients engage with me, I want them to think and operate around money differently when they leave my financial planning process. I don’t say that to them, because I think that’s kind of a weird thing to say, but that’s what she reflected a lot on. She’s like, “I used to think about money this way, and now I think about it this way. I used to do this, and now I do this.” I was able to see a lot of things that worked, and how she paraphrased some of the advice that I gave her. I’m like, “You picked up on that!” A lot of the number stuff, the projections, the things like that, she found them valuable, but it was not … it was almost an afterthought to her.

Casey:                   Mm-hmm (affirmative).

Hannah:               It was all of the other things. Another thing I thought was very interesting, if you do a lot of the life planning stuff, they’re like, “Ask about their family.” I’m always like, that’s kind of cheesy, but she started out the conversation by walking through how her grandmother handled the transition, how her mother handled the transition, and how she’s like, “I don’t want my granddaughter to handle the transition that way, so I’m going to change this.” It really brought in this idea of legacy that I had never thought of before. Obviously, I think about it in estate planning. You know, legacy in that traditional sense, but the work we do as financial planners, it changes clients lives, but it literally changes generations of families.

Casey:                   Mm-hmm (affirmative).

Hannah:               I think that’s a very, very powerful idea. You don’t get outsourced for that. That’s something that’s very fundamental.

Speaker 4:           You don’t outsource empathy. That’s a big thing in financial planning.

Hannah:               Yeah.

Casey:                   True.

Speaker 4:           I think that’s what’s bringing more women into the profession or making women more valuable.

Hannah:               Yeah.

Casey:                   No doubt.

Speaker 4:           The soft skills.

Hannah:               Yep. Yeah. That’s a whole other topic about women in the profession, getting them in and how do we keep them in. Yeah.

Casey:                   I would imagine that part of the future of financial planning, as every model or firm has it’s increased role with public awareness heightened, I would imagine the flexible arrangements could solve some of the challenges that women face in the industry. If there is the ability for a segment of women, you don’t have to step out of the profession for X number of years if you want to raise a family and be there, if you can scale back what you’re doing and have a flexible arrangement. That makes sense. We have the technology now to allow that to happen. That would be positive for the impacted employee. It will positive for the families. It will be positive for the employer to have that continuity and not have to have the turnover. It will be positive for clients. It’s a no brainer in my mind, but again, it’s like most things because technology has progressed, it’s more possible now than it was a few years ago to be done well. That will only be enhanced in my mind.

Hannah:               Yeah.

Casey:                   All of these things are contingent on creativity and willingness. We will have tools at an ever increasing rate that solve our problems. How we choose to deal with them and how we choose to use them is limited by our creativity more than anything.

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What We Wish We Knew Before Starting Over

We are excited to have Bill, Katie, and Dave back to continue our conversation we started in last week’s episode. This week we discuss what we learned starting over at a new firm and even starting out on our own.

Each advisor shares their perspective on what helped make them successful in starting over – from mentors to study groups to professional organizations. Even if you aren’t thinking of starting over, this episode is filled with tips on how to continue your professional development.

We hope you enjoy this podcast and this new format! Be sure to connect with us on Twitter, LinkedIn or via email.

Your career matters and we are here to help you be exceptional financial planners.

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I think that’s the point of having mentors in the industry and having peers that are doing something similar to what you’re doing or ideally a couple of years ahead of you… because you don’t have to figure it out all by yourself.

Simonet Financial Group

Your Richest Life

Retirement Matters

Guiding Wealth Management

Become a CFP® Professional

Toastmasters International

The Financial Planning Association®

Sophia Bera, CFP®

XY Planning Network

The National Association of Personal Financial Advisors

NAPFA Genesis

Alan Moore

Sudden Money

Fox Financial Planning Network

 

Show Transcript

Ep59 Transcript


Hannah:               Let’s first talk … I think most of us have worked as employees. Bill, maybe … I guess you have too.

Bill:                         Mm-hmm (affirmative).

Hannah:               Let’s talk about what we wish we would’ve known before we started as employees for somebody else, and then we can go into what we wish we had known starting out on our own.

Bill:                         Okay. I’ll go first. What I wish I would’ve known as an employee, it’s how structured things may have been and I think really how the relationship worked. Through all the tools, and the resources, and the education that my employer was providing me, I used those to service and help my clients and really take them to where I thought it was most appropriate for them, guiding them through whatever the products or whatever the services were that we were talking about. I really wish we could’ve understood how the relationship was between me and my employer. Who was I ultimately beholden to and why? I think that would’ve been nice to know from the onset.

Hannah:               So who’s paying your paycheck?

Bill:                         Yeah, exactly. Working at the insurance company, the culture there is very in-depth. You gotta believe in the product, you gotta believe in the structure, you gotta believe in your district manager all the way up to the corporate office. The incentives to go on the annual trips are always great, but that tends to come first, and then we start talking about the clients. When I came into the position really understanding that it was a sales position and that at the end of the day I was doing everything that I could primarily for the company, that would’ve been good to know on the onset. I think it would’ve changed my expectations about working there, and it may have helped me better assimilate into that culture, at least for that time, versus thinking that everything was about the client and then when I ended up transitioning, it turned into more of a conflict than anything else.

Hannah:               Mm-hmm (affirmative). Yeah. Dave, how about you? Before you started working as an employee, I know you’ve worked at a handful of firms, what do you wish you would’ve known walking into those firms?

Dave:                    I think I’d have loved to have told myself just to slow down, appreciate everything that people are trying to impart to you in terms of knowledge or skills, and really understand why they’re telling you that. There’s a reason why you’re given someone who is maybe five, 10 years your senior because they’ve been through everything you’ve been through. If you get a good quality person who’s training you, you need to spend as much time as you can with them because they are going to make you the better advisor than what you are now.

I was in a support role for six years. I looked back and I sometimes think, was that long enough? Now I’m on the front lines and I’m dealing with client fires all the time. Could I have learned some other skills and maybe spent a little bit more time training and understanding how other people would’ve dealt with this who’ve been through it five to 10 years ahead of me? I don’t think that’s typically our generation. Our Gen Y generation is typically the on demand generation. They want things now because we can, but I don’t think that’s the right way to develop into this career. You gotta take some time.

Bill:                         You bring up a really good point, Dave. I think maybe not necessarily going straight into client facing is the right approach when coming into this industry. Maybe spending some time in operations and underwriting and client servicing, things like that, would be really good for an advisor to understand what the inner workings of a financial planning or investment advisory firm actually is. That would’ve been a nice progression into this field.

Dave:                    Yeah. It’s definitely frustrating when you go through it because you want to get to the end goal. You want to be that client facing person, but even if you jump forward five years, if you think you’re gonna be starting your firm at any point in the future, if you don’t know how to open an account with a custodian, you’re not serving your client well. You need to be able to learn all of that back office stuff before you can have an adequate conversation and follow through with it in the future.

Bill:                         Or decide whether or not you’re gonna hire someone, right?

Dave:                    Yeah. Oh yeah.

Hannah:               But even when you have somebody, it’s like the buck stops with me. I review the paperwork before it goes out to my client. I still have to know that.

Katie:                    I agree. It’s the same thing I tell my clients in financial planning. I’m like, “You, as a client, have to know enough to be able to call BS if somebody pitches you something and it feels funny.” I feel like it’s the same way as a firm owner. I have to know enough to be able to oversee somebody else because, like Hannah said, the buck stops with me. If something goes out wrong, I can’t be like, “It was this person that works with me, la la.” That excuse works once, maybe, and then after that they’re like, “Hm, are you really very organized back there?”

Bill:                         That’s a great point. Yeah. Am I doing this right? Is this the right form? How many documents does it actually take to complete a rollover?

Hannah:               Or promising things to client in the meeting that … I know when a client’s going to have to sign off on something in the meeting, so I can just prep them for that. Be like, “Okay, we can do this, but I need you to sign this form,” is a lot better at setting client expectations than, “Oh by the way, I forgot to tell you.”

Bill:                         That’s one aspect that I missed from my previous employer or having an employer being with the company. Having the back office support, that’s one of the benefits of working for a larger organization or being with a company. The back office support and the structure is already there. I don’t have to go back and recreate it and figure out what pieces need to go where. How did you guys tackle that when you guys started your firm? Was it you do your client meetings and then immediately after the client meetings you’re going through your paperwork, and then you’re contacting your custodian? What did you do to tackle the workflow issue of being, let’s say, a single-person shop?

Katie:                    I let everybody else go independent before I did, and then I asked them a million questions. Thanks, everybody else that went independent before me. I appreciate it.

Bill:                         Smart.

Katie:                    I didn’t say it was the right way to do it, but that’s kind of how I tackled it.

Bill:                         Yeah. Go ahead, Dave.

Dave:                    As you’re going back to one thing I mentioned, I think I actually just record exactly what I did in a support role and actually tried to replicate that as much as I could, and weed out the bad things I didn’t like, and incorporate the good things that I thought worked well, and then try and fill in the gaps where I could. I think that’s why I’m gonna harp on about this whole support role first because that’s the mainframe of the business. If you can find a good way to do it, then it’s easy to copy.

Hannah:               I worked for a solo advisor. When you’re the assistant to a solo advisor, you’re doing everything from washing the dishes to presenting plans to a client. Because I had such a wide variety of experience working with her, it was just natural. I was like, “Oh, I’ve already been doing all of this.” It’s just she’s just not in the picture anymore.

Bill:                         Did you feel weird when you had to take on that full responsibility on your own?

Hannah:               I think I had been prepared for it. I say that now. I always joke about how when … I tell this story. I got married and then 10 weeks later, I bought the business, so we had zero money. I would just pace. I think there was a high level of stress, but I think it was just everything, so much change all at once. I do think that it affected me, but I do think I had these logical processes and everything kind of already mapped out.

Dave:                    Yeah. I would say if you don’t have that or if you haven’t spent enough time mapping out, what am I gonna do when a client opens an account, what’s my process gonna be, it adds another layer of, what am I doing? If the client comes to you and says, “Okay, I’ve got my 401(k) to go, and I’m gonna move it to you,” and you’re not 100% sure exactly what’s gonna happen, you don’t want to be sowing those little seeds of doubt in your mind and also theirs. You want to be able to just jump on the ball and say, “Okay, let’s do this, this, and this.” As much as you can keep that client in your court and don’t have them doubt you at all, it just makes for a strong relationship. By doing that homework anytime you can, whether it’s another company or on your own downtime, that is gonna serve you in the future.

Katie:                    That’s also the point of having mentors in the industry and having peers that are maybe doing something similar to what you’re doing or that are, ideally, a couple of years ahead of you in opening their own firm. It’s because you don’t have to figure it all out by yourself. This industry is pretty open. If you have those relationships going into it … There are a lot of people that are a year or two behind where I was opening my firm that will call or text or email with questions. They’ll be like, “This is a silly question, but,” and I’m always happy to help them out with those questions because they might be trying to figure some stuff out on the fly and I already was there. Why not help them kind of get ahead of the curve?

Dave:                    Katie, your phone number is?

Katie:                    555, 555.

Bill:                         1234

Hannah:               I think one of the other really cool things about starting over is you get to do it your way. Like Dave was saying, you get to create what you want. It’s this really cool opportunity to really … For me, the firm that I took over, they kind of said they did financial planning, but it was all back of the envelope like, yeah, we’ll have those conversations with you but nothing was ever really … It’s in the gray area of what financial planning was. When I bought the practice and really took it over as my own, it was like this is my chance to actually do financial planning. It was a really cool opportunity. For me, starting at your own firm is really exciting because of all the possibilities that it brings.

Bill:                         Absolutely.

Dave:                    Agreed.

Bill:                         That might be part of that transition as well. What type of services are you gonna offer when you become an independent or when you break out to do your own thing? Are you gonna start primarily as investment management? Is that your strength or your core offering? How comfortable are you with actually providing or producing plans, and will they be written? What’s your business model gonna actually look like? That took some time for me to figure out. As a matter of fact, that took me almost a little bit over a year and a half after going independent, to really figure out and hone in on my business model, almost two years really, before I got it down to a system that I thought was best for the type of client I wanted to work with.

Katie:                    This is my second go around of leaving a firm to go start my own firm. I did the first generation and fell on my butt, and then decided a couple of years later to try it out again, and it worked a lot better the second time around.

Hannah:               What made the second time around be more successful?

Katie:                    I think the first time around I kind of took people at their word. I didn’t do as much research as I should have. I joined a group that was affiliated with an independent broker dealer thinking that they would be outsourcing a lot of their planning work to me and so that would be my kind of work that I could do, my side hustle essentially, that would bring the money in. Then I was excited to be able to work with them because I could bring them in on meetings and kind of learn along the way a little bit better with sales. It didn’t work very well because at the end of the day, they were still pretty annuity heavy even though they were with an independent broker dealer.

It’s something where I didn’t ask enough questions at the beginning to know that was how they ran their business model. After the first or second client that we worked with together, and I was like, “This is not how I envisioned running the relationship with clients or the products that are being offered,” they didn’t quite have enough financial planning business to have me doing outsourced plans to begin with. It didn’t work on a lot of different fronts, but I’m gonna take 99% of that responsibility for not asking enough questions before I jumped in.

Bill:                         Yeah, that’s a good point. What questions do we ask?

Dave:                    Or do you even know what questions to ask? I think that’s something that you only know with experience, right? Katie, I’ll ask you that. Did you know what questions to ask on your first time around?

Katie:                    I guess not. I had worked alongside these people, so I guess I kind of thought that I knew how their business was being run. It was kind of a, “Oh, well I know them, they know me, we’re good,” without actually sitting down and being like, “What is the breakdown of the revenue that comes into this firm,” which is the question I should’ve asked, in hindsight.

Dave:                    I think that comes with experience, right? I think if you’re a career changer, you’re almost at a disadvantage starting off starting your own firm right away because there’s so much you don’t know, no matter how much research you can do, because you’ve not been in the trenches yet. Whenever someone starts off as a career changer, I can give them a lot of credit because it’s just a steeper learning curve, not one that can’t be overcome, but I give them an extra pat on the back and a lot of support as they go through it. I think as you are in other roles in other companies, whether they’re support or client facing, the more you’re around, the more you know what’s going on, and the more good questions you can ask if you want to transition.

Hannah:               I bought the practice. Recently, I found a handwritten budget sheet that I had written out for the business side of it. I looked at it and I was like, oh my God, what was I thinking? This is insane for various reasons. Just looking at that, I was like … It was about two years prior to when I actually bought the business and it was like, if I would have bought the business at that time, it would have failed because the numbers just weren’t there for a variety of reasons. I didn’t have the experience or really knew what was going on to really have that perspective.

Bill:                         I think for me, figuring out what questions to ask came primarily from what questions were my previous employer not asking or not answering. If I was asking them why we’re doing planning in this direction or why I have to pass off certain clients to other advisors in the office, why were we doing that and not getting an answer to that really made me hungry for more knowledge and figuring out how I needed to do this on my own. What answers were they not giving me or why were they not giving me the answers in that space? As I went about finding out what those answers were for me, it became a stronger and stronger motivator for me to move out and do things on my own.

Katie:                    Because that’s the way we just do it, Bill. That’s the way it’s always been done.

Bill:                         Yeah, exactly. Just follow this system and you’ll be okay. That’s all you need to know. Yeah, I get that, but it might not necessarily fit for all clients. That’s okay. If it doesn’t fit, then you just show them how it can fit. Oh, okay. We can always fit a square peg in a round hole somehow.

Dave:                    Katie, I give you a lot of credit for doing this twice. Why did you come back and do it again?

Katie:                    Oh, because I’m the world’s most stubborn person. Plus, I realized the first time that I was trying to do it kind of the easy way. I was trying to just go tag along with somebody else who had already started their business, who already had a broker dealer affiliation. I realized that I was trying to just, instead of roll up my sleeves and do it the way it should’ve been done, I was trying to kind of do more of the easy way, but the easy way wasn’t in line with my values and the way that I wanted to be working with clients. I kind of realized that later on and that’s kind of what gave me, I guess, the courage to try it again. Plus, I’m really stubborn.

Hannah:               Katie, one of the things I really admire … Because I knew you both times that you started, and the second time you started you’re like, “These are my clients. I know my clients and this is what they need. I know these clients, who I want to serve, I know what they need and they’re not being served somewhere else.” I love that client centered … That’s what I think really started your firm and what has made you successful, is because it all started and ended with the client experience.

Katie:                    Yeah. Dave, to kind of put a little bit more on that, the first time around I was kind of going with everybody says you need to work with 65-year-olds that are selling their business and have a whole lot of money. That was my target client because that’s what everybody else said that my target client should be. That’s not necessarily who I work with now that I’ve restarted my business. I work a lot with 30 and 40-year-olds, very rarely with 65 and 70-year-olds. It was just a very different … I was kind of trying to go the easy route, do what everybody else told me I needed to be doing, and it didn’t work for me.

Bill:                         You know, I’m sorry. Go ahead.

Hannah:               Go ahead, Bill.

Bill:                         That brings a thought to me. There are a lot of students now, a lot of people who are going to college and coming right out of college and going into the financial planning business. What are your thoughts on that? Do you think that there should be some level of experience prior to if someone is coming out of college, or do you think maybe jumping right into that private or solo practice is a good path to go?

Katie:                    It all depends on how many people you know and how many people your mom or dad knows. I remember when I very first got in this industry, and I would call up my dad and be like, “Why didn’t you decide to go into financial planning so I could just take over your practice like all of these other young 20-something-year-olds in my industry?” He was like, “Sorry, I went into law. I don’t think you should go into that.” I was like, “Okay, just wondering.”

Hannah:               I think it also depends on, who do you want to serve? Somebody coming straight out of college with financial planning education and they’re like, “I want to service people who are a year behind me.” I think that makes sense to me because it’s like you’re close to it, you know the situations, you can compensate through mentoring, through a lot of other ways for the places that you don’t know, but somebody coming out and wanting to give advice on maybe some more really complicated financial planning stuff, I may be hesitant. At the same time, people always surprise me.

Bill:                         Talent can come from anywhere. I wish I would’ve had that more direct path, not necessarily going financial planning and then straight into a financial planning private practice, but having that formal education and the financial planning process before I got into the business to begin with, I think, would’ve been a tremendous help at building my business, at least being more confident in the advice I was providing.

Hannah:               One of the themes that I’ve been hearing from people, whether that’s students or people who are new or have several years of experience is this lack of confidence new advisors have. What, from your perspective, helped give you confidence? Do you still lack confidence? What are your thoughts on it?

Katie:                    Bill definitely needs to go first on confidence.

Bill:                         Obviously it’s something I have problems with.

Katie:                    We can totally cut this part out.

Bill:                         My confidence was in pricing and determining the value of my service. I knew I was valuable, I just didn’t know how much. I had issues there, figuring out how to price my service. I never had any issues with going out and meeting people, I didn’t have any confidence issues in talking to them and sharing that I had value, I just didn’t know how to price it. That was hard to figure out. Integrating what level of services I was gonna offer, especially when I delivered my first financial plan, I think I charged $800 for it. It was with an engineer. I originally priced it at $1600. It was just a number that I kind of pulled out of my hat based on how much time I thought this thing was gonna take. He ended up talking me down to $800 because he said, “A lot of this stuff I can do myself. I just needed someone else who had the time to do it.” I was like, “Aw, how sweet. How nice.”

Katie:                    Yeah, I bet he did it himself on his own spreadsheets that he sent you. What is this?

Bill:                         Yeah, so that’s where my issue came in. I struggled for a while, and then I developed a pricing model that was scalable and repeatable. Now, that doesn’t balk me at all. That was where my issue was. I don’t have that issue at all anymore.

Dave:                    I’ll give the flip side to Bill. I had a lot of confidence issues. I have all the way through growing up. The only way I counteracted it was through two ways. One was just by being someone who I wasn’t, which worked in the short-term and didn’t really work long-term, but time just actually helped get over myself. It was a case of A, I understand what I’m doing, but why would anyone want to hire me? I’m just me. That doesn’t make any sense. You’ve got that hurdle to get over. Then it’s that once people start working with you and you actually need to charge more, then you’re like, why would people want to pay more to work with me? That doesn’t make any sense. Then you have to go through that hurdle of explaining why your price is going up.

Now I’m getting to a point of saying to people, “You’re not my ideal fit client.” Why on Earth would I insult someone like that? That’s kind of where my mentality is coming from, but you just go to plow through it. You gotta go through and say, “I’m not the best person for you, but let me give you someone who is.” It’s just those mental blocks. For me, it was time, just going through various different scenarios again and again, whether it’s real or in my head, which is way worse, and just pushing through. The more times you go through that situation, the more comfortable you feel, and you actually understand, I’m good at this. I can charge for it. Let’s just keep going.

Katie:                    Yep. I like that. I think I realized a couple of years into it that the CFP, as much as I really appreciate the credential and all of the background education, it teaches you essentially how to be a financial engineer. It does not teach you how to actually have conversations with clients when they inevitably always throw a curve ball at you. It always comes out of left field, and you’re always like, “Well, I didn’t anticipate that.” I liken it to dancing. If you’re dancing and you have a dance partner, you cannot plan everything out beforehand. For the first couple of years in this industry, I was essentially trying to plan everything out beforehand. I would say this, maybe the client would say this, but it would drove me insane when they would come out of left field with that curve ball. It was frustrating, and I finally realized I can be prepared as much as I can be prepared, but I also have to learn the skill of being light on my feet.

I think that’s something where … Personally, I enrolled for Toastmasters, which is speaking. It has nothing to do with financial planning. They do a lot of exercises in there where they do a round table where you have to be really fast on your feet, and think of answers to stuff, and still have them structured and sound really good. I think that type of business training could really help a whole lot of financial planners to be financial engineers that actually have a good bedside manner instead of financial engineers with a really horrible bedside manner.

Hannah:               To add onto all of this, I remember being in one of these You’re A Financial Planner; Now What? seminars several years ago. Patrick and Trudy were talking about how when clients work with you, they’re paying for you. They want to work with you. What’s different? Obviously, I like to think that there is different elements of my process that make it more attractive for my ideal client, like yes, but at the end of the day, people are working with me for me. I remember just about having a panic attack as I was sitting there listening to it because I’m this 26-year-old kid, and I’m just like, oh my God, all of these people are here for me. Don’t they see who I am? Don’t they see how little I have to offer? That was, I think, a really big hurdle for me.

Elizabeth Gilbert has this saying with fear of like, once you recognize it, fear’s a good thing. What I’ve started to do is when I sense that fear, it’s just like you name it. You say, “Okay, I’m afraid. Now I have to take it, and I have to set this aside and keep going. I still face that. Even in the last several weeks there have been times where I’m just like, oh my God, this is terrifying. Don’t they know? Don’t they see what a fraud I am? Not a fraud, but like, they shouldn’t be doing this with me. They should be talking to another advisor who’d be better and more qualified and all of these things. It’s like, okay, there’s that fear. Set it aside and move on. It’s kind of how I’ve had to process some of that. I think that’s pretty …

Dave:                    I think this actually ties back into the question that you’re asking, Bill, about what should you be … Damn, I forgot the question now. All about should you be doing the support role, should you be solo? A lot of that comes into self-awareness. Are you aware of how confident you are? Is it something you need to work on? If you’re not as confident as you think you should be, if you don’t think you can close a sale, don’t open your firm next week. Maybe you should be in a support role to actually gain confidence and actually understand how a client meeting works. How does an initial prospect meeting work? Then you can take that into your own firm and say, “I’ve seen this work before. Now let me do it.” I think gaining that confidence by watching it and practicing it actually will help your firm grow faster.

Bill:                         I absolutely agree. One of the most interesting things that … This past Friday, I participated with another firm in just doing what we called an information sharing session. I had the operations manager come in and sit down with me and my assistant and an assistant that we’re bringing on soon, just kind of walked through their systems. We swapped ideas, we swapped planning processes, we swapped technologies in terms of how we work with some of the tools that we share. It was incredibly valuable. I was able to show them how some of the integrations that they have and we have in common, how they can work together, and they were able to show me some of the documents that they used and that they created in house to simplify their processes. Being able to have that partnership and working with another firm to build our own individual businesses is incredibly valuable.

Hannah:               I’ll say if you’re listening to this and you’re like, oh my God, I wish I had that, and I’m looking for that and I can’t find it, keep looking because those people are out there who want to share that information and be that collaborative with you. Sometimes we’re just in the wrong circles and we need to just keep looking until we find those people.

Katie:                    I’ll add to that. Don’t be afraid to … This is hard stuff. It takes a while to hone it. If you’re starting from scratch and you don’t have any of this stuff, don’t be afraid to pay for it. Please put that in your budget. If you need to tap into a network to be able to start your firm up, don’t be afraid to do that. If you need to pay for initial processes, don’t be afraid to do that.

Hannah:               Yep.

Katie:                    There are great resources out there that may not cost any money, but then again, there are things that might accelerate your progress that do cost money. As long as you’ve factored it in on the front end, that’s less time that you’re going to go around trying to figure it out.

Bill:                         I will say one caveat to that. I absolutely do not believe in paying for leads. There are a lot of things you can pay for, definitely systems, processes, but I would, and you guys may disagree with me on this, but I would definitely tell you that in this business, paying for leads is probably worse than literally taking money, throwing it into a trashcan, filling it with gasoline, and setting it on fire.

Dave:                    Sounds like you’re talking from experience, Bill.

Katie:                    Darn. I can’t sell you my list of closely honed prospects that I have in the Austin area for you?

Bill:                         Well, you can give me introductions. How about that? We’ll do the introductions and I’ll take you to lunch.

Katie:                    Yeah. I think it depends on how generic or non-generic that your firm is. I know for me, if I were to pay for leads, I would get a bunch of people that weren’t a good fit for my firm in the first place. I would’ve just paid for prospects where I wasted their time and emotional energy, and I wasted my time and emotional energy, and I had to pay for it.

Dave:                    An interesting thing that goes along with that is if someone is working at a firm or they’re thinking about starting their own, it is really valuable to do some market research on who you want to be working with. I know there’s a lot of firm owners who say, “Yes, we work with doctors who have student loan debt,” and all of this, but I was actually turned off when I started my firm about working with pre-retirees or retirees rolling money over. I was like, everyone’s doing that. Why would I do that? You actually realize why you do that, because they pay money.

Bill:                         They have a unique ability to pay.

Katie:                    Mind blown.

Dave:                    It’s crazy. Yeah. My initial niche was teachers in Illinois. I still have a passion for them, but they are slightly less willing to pay than someone who is going through a retirement transition who has a boatload of questions. I probably should’ve done a lot more market research on that niche first, and I actually did and ignored it because I was stubborn, but there are reasons why planners have opened firms and served that market first. If you try and buck against that, you can do and be successful, it just may be a little harder because you’re trying to do something that either has been done and hasn’t worked before, or you’re trying to do something that hasn’t been done before-

Bill:                         Pick up, going back to pricing as well-

Dave:                    And you’re gonna be a trailblazer.

Bill:                         Certain clients are comfortable paying in certain ways. Some clients would rather write a check and pay a project-based fee and be done with it. Other people don’t want to see the money coming out. They don’t necessarily want to write a check or pay a bill on a month-to-month basis. Other clients want an audited tracked report for every single dollar that they spend with you. Your business model and the clients that you serve should fit with how you want to operate, how you want to charge, who you want to work with, what types of services that you want to offer, and how you plan on growing the business from that point forward.

Hannah:               I love that mentality. It’s so client focused. We start and end with the client. That’s why we do the business. These businesses, yes, I hope that I benefit from my business, but at the end of the day, the clients are what’s important.

Bill:                         Right.

Hannah:               That’s what I love about what you’re saying. The business model centers around the client, not what can I get from it?

Bill:                         Oh, I’m sorry. Go ahead. I was gonna ask if everyone’s identified a niche specifically that they work with-

Hannah:               So … No, go for it.

Bill:                         And how they got to that point. That’s just to piggyback off of what Dave was talking about.

Dave:                    Oh Bill, how long do you have? Katie, I’m gonna let you go first.

Katie:                    Whenever I started my firm at that point, I had about 10 years of experience under my belt in the financial services industry. It was funny because I actually had a preconceived notion of who I did not want to be working with, which has changed over the last three years since I’ve opened my firm. Just from previous experience at a wealth management firm, I was about 99% sure that I did not want to be working with any doctors because I had doctor clients before, and they were a hot mess, and they were always very stressful. I actually now work with probably about 30% of my practice is doctors, either women physicians or couples that both work in the medical industry. Three years ago I would’ve been very adamant about there’s no way that I’m working with doctors. I feel like the niche was something when I started, and I kind of experimented with it. I gave myself a deadline of about a year and a half to figure out if that was gonna work or not, and I had to reiterate and then reiterate again.

I do have clients that are mostly in their 30s and 40s. For the most part, both spouses are working, but not all of them. A lot of the times, they work in either medicine, finance, law, and I do have a couple of architects and creatives as well. That’s my not super defined niche, but also I really like being able to work with people that I like. I think that’s the qualifier that I usually have is, am I gonna have a good experience or are they gonna have a good experience? Do I like working with these people, and talking with them, and are they gonna value my advice?

Hannah:               Katie, I’ll jump off of that. One of my biggest things is I only work with nice people now. I worked with some not very nice people in the past. When I started my RA, I was like, I’m only bringing nice people. One of the advantages of working with so many clients before is I really got to find who I worked best with and who worked best with me. I had two client personas written up. I call them my Successful Sallies and Retiring Ricardos. I have very specific elements about them. Not all of my clients, but most of my clients kind of fit in either one of those camps.

When I’m having conversations with clients, and they say something, and I’m like, oh my God, that’s so on point with what other people like you are saying, I’ll come home and actually just pull out my document that I have, just a running of characteristics of my groups, and just add those quotes in at the bottom. I feel like I’ve gotten a really good picture of who my ideal clients are just from conversations and just having it be a continual running document that I keep adding to. The only way I found that out was working with clients and seeing where was the natural fit. A lot of my characteristics, they are demographic, but it’s more like psychographic of how they view the world, what are some common traits about them.

Bill:                         I find it very interesting that you have that written down in terms of statements that they may make that appeals them to you or endears them to you and you’re looking at emotional responses versus a career path, or financial status, or anything along those lines. That’s a very interesting way of building out your practice. Then the documentation is really where the strength lies there. You have it written down, here’s the type of person I want to work with.

Hannah:               Mm-hmm (affirmative). Yeah.

Dave:                    I actually think our industry has done a disservice to the word “niche” in the last five years because when we’re saying, “You need to work with a niche,” it’s like, “Okay, great. I’ll pick dentists.” Okay. Yes, you’ll streamline your practices, but you could be working with a group of people you really don’t like. What have you gained there? You’ve gained a streamlined practice, but you hate your job. You’re worse off than when you were before just being a generalist. I really think “niche” needs to move into the way that you’ve just described it. It has to be psychographics and emotional responses versus, where do you live, what do you do for a job, and how much do you make? That is not a niche, and that’s how we’ve been portraying it for the last X years.

Hannah:               Dave, just to jump off of that, I keep harping on this idea when you talk about the niche, what’s your motivation behind doing it? Is it for you? I think if we don’t have successful businesses, obviously we can’t service our clients, or is it truly client-centered, I know my clients better than anybody else out there and this is what they need, or is it about us? I think what I’m hearing from you is kind of that divide of saying where we’ve done a disservice is we’ve made it about us and our business instead of, how do we service our clients best?

Dave:                    I don’t know about that. I’m taking it to the extreme because I’ve lived the worst case scenario of what a niche is. I’ll give you the backstory. I was a generalist support advisor and then moving into client facing for six years. Then I threw all my eggs in a basket and opened a practice that focused on teachers. Was that focused on me? In part because it made my practice easier because my clients were all the same and had the same benefit plans, but I really had a passion for teachers, and I could not find anyone who was adequately servicing them that I wanted to join their practice. So I did it myself. The resounding feedback I got from that community is, where have you been? We have a lot of snakes in our field and now you’re just giving us pure advice. The disconnect was, we can’t pay for it the way you’re laying it out, but it was the way I had to lay it out if I actually wanted to get paid, and not accept commissions, and actually not work with 1,000 clients to make a decent income.

However, I’ve now transitioned into … I would say I straddle now. I still have that passion for teachers and work with them, but my practice is more focused on the retiree market. I haven’t niched down to say, “If you’re retiring from X company and you make X dollars, you’re my ideal client.” My meetings very much go, “If you’re in that retirement head space, let’s talk,” and then I will understand what type of person you are, and if I want to work with you, and if we’re a good fit because I don’t want you saying, “I’m in retirement, that means you’re a good advisor for me,” because I’m really not a good advisor for some people who are in retirement. I really enjoyed what all of you said about it needs to be a certain psychographic emotional response head space that prospect is in for it to be a good space versus where they’re working at and that’s my niche, or what profession they have. I’ll get off my soapbox now.

Katie:                    I will say it does make it easier for marketing purposes the more defined that you have who you’re working with. I think that’s a lot of times why people kind of bang on the drum of, you have to have a niche going into this. It’s really just because of word of mouth. If you work with a particular school district, the teachers probably all know each other, the principals all know each other. It’s easier for you to leverage that and having a niche being able to work with teachers. It does make it easier if you have a well-defined niche, but I always tell people that just because you have a niche does not mean that you can’t work with people outside of that, it’s just really the way that you go about your marketing and kind of showing who you are and who you want to be working with. It doesn’t mean that if somebody shows up on your door and says, “I want to work with you,” that you have to turn them away. You don’t have to turn them away. It’s just a niche is a way of identifying who you’re trying to attract.

Dave:                    Yeah.

Hannah:               I think we have to be adaptive. If something’s not working or if you’re hearing common themes, it just like you said, light on your feet, Katie.

Dave:                    Even having a niche doesn’t mean you’ll have a successful business. Let’s take it to the extreme here. You may pick the wrong niche, that niche may not be ready for you, you may be an ineffective marketer. There’s all these things that yes, a niche makes things easier, but it may not work out. Would it be easier for you to be a generalist because your circle is so big that you can just pick up a client pool like that? That may be the best way to do business. I think, going back to being self-aware of your situation, where are you? And is in your situation that makes it best for your business?

Bill:                         Yeah, I would agree with that. I like the idea of specialization versus saying, “I have a niche practice.” I can work with anyone, generally speaking, but I can specialize in business owners who are three to five years into their business making X amount of dollars and are looking to integrate corporate retirement plans. That provides a specialization, but it’s not a niche. It’s saying, “Here’s an area where I have some specialized expertise in, but generally speaking, I can work with anyone that needs concrete and solidified high quality financial advice.” I think that’s where the industry needs to go. That’s the way the conversation really should be structured, in my opinion.

Dave:                    I agree with you, Bill, 100%.

Katie:                    All right, let me start that over again. I always think of it as if I had a friend who was starting a law practice and they said, “Do you know anybody who needs any legal advice?” that would bring to mind no people, zero, or even worse, it would bring to mind somebody who really needs advice because they’re in a poor situation, which may or may not be a good fit for that business owner. If somebody was a friend, and they were starting a legal practice, and they said, “Hey, I’m looking for couples in their 50s that have kids from different marriages and they got remarried and I specialize in helping them out with all of the complexities of having a mixed family,” I would immediately think, who do I know that kind of fits into that that I could introduce you to?

I kind of feel like it should be the same way in financial planning as well. A niche is just a way for you to explain to people who you like to work with that might actually prompt them to think of a specific person and not just a big sea of, I have no idea who actually fits into this broad categorization.

Dave:                    I think we’ve been using the word wrong as a profession. If you go outside of our profession and you’re a niche doctor, a niche doctor is an ear, nose, and whatever specialist. They’re not gonna help fix your knee, which means that they aren’t a generalist with a specialization, they’re actually niche. They have a specific skillset and they do not deviate from that. If we take that into our profession and say we’re a niche professional, that means that we only work with a set specific number of people with a set situation. Should we be using the word “niche”? Should we be using the word “specialist” like Bill said? It’s interesting. I think maybe it’s time to back away from that word a little bit.

Bill:                         Yeah.

Katie:                    What I really want to know, is it niche or is it niche? Because it drives me-

Bill:                         I think it depends on what part of the country you’re in. If you’re in the south, it’s niche. I’m kidding.

Katie:                    Yeah.

Dave:                    Being British, I have that problem with about half the words I say.

Bill:                         That’s a conversation for the next day. Is it ER advisor or is it OR advisor? Which one is it really? No, go ahead.

Hannah:               So … Oh, sorry. Go ahead.

Dave:                    I was just gonna make a stupid comment, so you’re fine.

Hannah:               I was about to change the topic a little bit, so I’ll let you go ahead. Oh. Kind of pulling this conversation together, one of the things that seemed to be a theme earlier on was this idea of reaching out for help when you needed it. I think what I’d like to post to y’all is when did you reach out for help, and who did you reach out for, and what are the resources-

Bill:                         I’ll go first.

Hannah:               That you relied on that other people can tap into?

Bill:                         I joined the FPA first. I joined the Financial Planning Association. That provided me with a wealth of advisors who had either transitioned or came into the financial planning space. That was very helpful. I used the internet and YouTube and listening to what other advisors were doing. I sent an email to Michael Kitces early on when I was still at my insurance company to talk to him about what the transition would look like. Then I talked to a couple of other advisors that are fairly well-known now in the industry.

I actually brought on a mentor. I talked to a guy who, at this point in time when I was making my transition, he had been three years removed from selling his practice of 10 or 15 years for three to four million dollars. He was a wealth of knowledge to talk to when I was making my transition because he said, “Think with the exit in mind.” Think with the ending in mind or start with the ending in mind. It was incredibly helpful to think, how do I want this to grow, and progress, and where do I see it ending up? That’s what I did. Go ahead.

Hannah:               Did you pay for it? Did you have to pay for that mentoring or was it all free?

Bill:                         It was beer, and pizza, and sandwiches, and lunches, and lots of dinners. Hey come on, let’s go grab a quick drink. By the way, while we’re out, I might ask you a few questions. Don’t mind me, just keep on eating. That worked. So no, not directly.

Katie:                    I think the first time around, I mentioned that I tried to start my own practice the first time around, I didn’t have a network or I didn’t know who to reach out to. I think one of the things that I maybe would’ve done differently was I only had the two people where I was trying to join their practice. Obviously, they have a conflict of interest in me asking them questions about what’s right or what they did because it’s their practice. The second time around, I mentioned that I had other people that had started their own practices that I kind of leaned on and asked questions of. Sophia Bera was really helpful to me. Hannah, you are always really helpful to me. We’re pretty sure that Hannah’s brain is hardwired exactly opposite of how my brain is hardwired, but it’s good because it means that she can call me up when she needs me to remember some random detail about continuing education, and I can call her up when I’m locked in my little think box and can’t get out of it.

I was part of the Financial Planning Association for about 10 years, or maybe it was about eight years, before I launched my own firm. It wasn’t like I joined the FPA because I needed to go latch onto people to give me business advice. I kind of had been in there for a while. I had volunteered with some people, gotten to know some people really well. From that, there were people that were willing to answer questions that I had when I emailed them or called them up. That was really helpful to me, to be able to kind of lean on people. I feel like this time around, I’ve leaned on a lot more people. I also joined XY Planning Network when it was kind of in its infant baby phases just because I figured it was easier for me to be a part of a group that was trying to figure it all out together as opposed to just being my one lone person on a rock. I have used a lot of the resources and templates and whatnot and conversations that go on there to help out with my business.

Dave:                    I think when I launched, my mental process started about four years beforehand. It would go in ebbs and flows of, I don’t really like the CRM we’re using at my office. What other options are there out there? Then finding the best one and saying, “Maybe I’ll use this one when I launch.” Then just doing that with different pieces of the process. The same with deliverables. I have a problem with deliverables because they’re never the way I want them. Then I started my own at home. I’m like, “You’re such a dork, just watch the TV. What’s wrong with you?”

Going through that process and then launching, I had kind of an okay idea of what I wanted things to look like. I was heavily involved with Nafa before I launched my own firm. Took about 18 months before I launched my own firm. I started Nafa Genesis. There were some younger firm owners in there, and I just asked them any question I could under the sun just to get their perspective on what their firm looked like. I worked with Alan Moore on the board, and he launched six months before me, and would call me while I was at work. He was saying, “I’ve got some down time. Let me tell you exactly what I’m doing.” I was like, “This is not the best time, but I can’t hang up the phone because I want to learn everything that you’re doing.” Just hearing people’s stories.

As I then launched my firm, I actually had an informal mentor that was helping me with marketing. She had actually opened her firm as well. She was about three years on from where I was. As I was going through various transitions in what I was doing inside the firm, I would try to find people three years removed from the position I was in because I wanted their experience to be really fresh. I know that contrasts to what Bill says. I don’t think that takes away from the value of what you’ve gone through, Bill, because I’m sure you’ve gained someone who has a lot of experience.

The thing I had when I went through Genesis was when I was asking people, “What do you do in your career?” if they were 20 years removed from that, I didn’t feel like their answers were as fresh as someone who was three years removed and could give me a great story behind exactly what they’ve gone through. I think having someone who is closer to the experience helped me more because I knew they’ve actually recently gone through this. Now I can understand exactly what they did, and it’s actually, not still relevant because I think a lot of people who are further along in their career, everything is still relevant, but it just meant a little bit more to me. I’ve tried to find people, as I’ve gone through various transition points in my firm, a couple years out just to see what they’ve done and take experience from that.

Katie:                    I feel like I learned something from a lot of different people. I’ve had mentors, kind of informal, but mentors that are probably 20 years older than me that have been in this industry for a really long time. I feel like I learned something from them. I had a study group where everybody’s kind of in probably about the same place in their business, and I learned a whole lot from them. I’ve also kind of latched onto advisors that are two to three years further along in the business. I do always make sure I can bring something of value to them, and then I’m not just holding onto their ankle while they’re trying to run with their business. Even people that I mentor, I feel like I learn stuff from them because they have a fresh perspective that maybe I had years ago but maybe I don’t have now. It’s kind of great to be able to see it through a lot of different people’s eyes, and then kind of put that together into what works for you.

Dave:                    I’d agree. I went through the first year of my firm without a study group. I think what you just said there is important. That was a lonely time. Ever since being in that study group now, and just finding the good people that are in that group, again, very similar situations to me professionally, it really helps. The amount you can learn from those people is incredible. Likewise, you’ve got to provide value into that group as well. It’s a case of these are your people. They’re right with you in the trenches. They are doing the same thing you’re doing. You’re not an island, you’re really not. In my eyes, a study group is essential. You have to do that if you’re starting out because it is lonely at times. Being in that study group is essential.

Hannah:               Yeah. I would say when I first started, my story’s a little bit unique because from day one I knew that I was the succession plan. I think that added a lot of pressure, but I went through the local FPA. They did a mentor match, and I just remember being devastated when I missed the opening. I had to wait nine months before I could get matched, but when I did, it was an advisor who had probably 20, 25 years of experience on me, very successful. She ran one of the most successful financial planning companies here in Dallas. I think what that did for me, we went over business plans and everything, but it gave me so much confidence. I think it really hit at that issue of, do I have anything of value to offer my clients? She was really like, “Are you joking? Yes. You have no idea how much value you have to your clients.” That was really valuable to me.

Where I was at, the broker dealer where I was at, a lot of the firms were run the same way. I realized that was not how I wanted to run my firm, but that was the only thing that I was exposed to. It was to the level of people’s business checking accounts were with their personal accounts and they thought I was crazy for wanting to set up a separate business account. That’s the level that we’re talking about. It was a lot of the local, a lot of the national FPA stuff, but I was able to find Patrick Dougherty. I saw how he ran his business and I was like, that’s what I want, Bill, kind of to your point of the end in mind. For me, I was like, that’s the business I want. I don’t see that anywhere else, so I’m gonna latch onto him and learn as much as I can from him. I did, and I think a lot of how I run my business is mirrored after how he did his practice.

I’m so grateful, but I would agree with all of you, it’s so many sources. My study group has been incredibly valuable to me. National conferences meeting up, having those conversations. I’ve done Sudden Money, some of their processes. The Fox Financial Planning Network, those have been some of the resources. I’ve also paid for coaches when I’ve needed them, and that’s been really helpful. Sometimes it’s just a one-off thing, and it just kind of helps me get past my mental block. Other times I’ve done it more extensively, but I think it goes back to a little bit of that self-awareness of what you need and where you can get it.

Bill:                         Yeah, I would agree with that. You have to have a good sense about you to say, “I need help and I want help.” This business can be very lonely, to Dave’s point, if you’re working in your own office by yourself. Some days I get stir crazy, and I have someone in the office with me. Some days I’m like, “Jerry, let’s just get out of the office. Let’s go grab a cup of coffee, or let’s go grab lunch and we’ll work remotely,” because then it allows me to kind of get out of my head, get out of my space, and work on growing and taking this to the next level. I absolutely believe in working with other advisors and other planners, much like everyone here on the stage, because this is how ideas get shared, and this is how growth happens. In order for us to become truly a profession, we’re gonna have to collaborate in this regard more and more.

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Coming Soon: FPA’s September Journal in the Round

Today we are excited to announce that we will be a part of the FPA‘s next monthly roundtable: Journal in the Round and we’ll be sharing it with You’re a Financial Planner, Now What? listeners here!

The Journal in the Round brings together writers and contributors in the current issue of the Journal of Financial Planning, and other experts, to discuss, illuminate and even debate the ideas in their article and the issue.  The topic for September is The Next Generation (of Planners and Clients), which couldn’t be a better fit for this podcast!

That episode will “air” here on September 26th for everyone and will be available later on their website. Stay tuned for the episode and a coupon for a free CE from the FPA’s website as well!

 

In the meantime, be sure to listen to past episodes and subscribe to the podcast on iTunes, Stitcher, or your podcast player of choice!

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While you’re here, be sure to check out some of past episodes:

Reinventing the Firm of the Future

What We Wish We Knew Before We Left

Behind the Scenes Look at the DOL Fiduciary Ruling with Ed Gjertsen II

What We Wish We Knew Before We Left

Today’s episode is one of the most important topics we’ve had on the podcast. I hear stories all the time from planners about mistakes they’ve made when they’ve left their firm that have huge negative impacts on their career. After hearing  “if only I would have known!” far too many times, we put this episode together. It’s a topic that affects just about everyone who is listening to this podcast but is rarely, if ever, talked about in a public way.

We are excited to have Bill Simonet, CFP®, Katie Brewer, CFP®, and Dave Grant, CFP® return for a curated discussion with me, Hannah Moore, CFP®,  where everyone shares what they wish they knew before leaving a firm. Our stories are all different and hopefully you have already had a chance to listen to them on #YAFPNW. (If you haven’t you can find their episodes below).

If you enjoy this episode and this topic, please let us know by dropping us a line, sending a tweet, or giving us a review on iTunes or your podcast player of choice.

Also, if you are interested in learning more about the FPA Residency program, be sure to check it out here:  onefpa.org/professional-development/residency or send an email to info@onefpa.org. If you are able to attend Residency, you’ll want to go!

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“Start dreaming. Start designing what you want it to look like. The more of that you can get out of the way the easier it is to pull the trigger because you know what you’re leaving for.”

 

Mr. Tall, Dark, and Handsome

Episode 16 – Katie Brewer

The Backstory and the Numbers

 

Athlete, Rebel, and Financial Coach

Lauryn Williams, MBA shares her journey as an athlete and three-time Olympic medalist including the advice she wishes she received when she started out when she was 20 and had endorsement deals to starting her own firm. Using her personal experience, Lauryn knew there had to be a better way to provide financial advice. After getting her MBA and passing the CFP® exam, Lauryn was able to find people who were willing to approach financial planning differently and build on those experiences.

Using her personal experience, Lauryn knew there had to be a way to provide services to people who were like her, both in terms of being an athlete and not growing up in an affluent home. She started her own financial coaching program and is exploring what it means to serve the mass market and those who don’t have the income or assets to pay for a traditional financial planner.

The work Lauryn is doing is so important to financial planning and I am excited for you to hear this episode!

hannah's signature

“If you find that rebel, lets say a college student fresh out of school, who has zero experience… don’t shame them when you bump into them. Instead, be the person to take them under your wing. We’re better when everyone in this industry is better.”

Worth Winning

The National Association of Personal Financial Advisors

Briaud Financial Advisors

Katie Brewer, CFP®

Financial Planning Association of Dallas/Fort Worth

XYPN Conference

WeWork Coworking and Office Space

PUBLIC SCHOOL 972

 

Cost Matters

We’re excited to have Jon Luskin, CFP® of Define Financial on #YAFPNW. From his Master’s Thesis (years ago) to his practice today, Jon is passionate about sound investing with lower costs and he’s willing to support that passion with his own research. Jon’s passion around investments and research is contagious and I’m excited for you to hear his story.

His latest submission was inspired by a twitter exchange so be sure to follow him @JonLuskin!

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“It was consistent results across all eight case studies. Better risk adjusted returns for the lower cost model. So after that experience it was pretty clear to me that cost was the number one indicator of returns.”

Uncle D Money

#XYPNRadio

Unconventional Success: A Fundamental Approach to Personal Investment

Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment, Fully Revised and Updated

The Little Book of Common Sense Investing

Journal of Financial Planning

#FinCon17

FPA of Minnesota

JonLuskin.com

Michael Kitces

Jack Bogle

Mr. Tall, Dark, and Handsome

I’m so excited to have Bill Simonet, CFP® of Simonet Financial Group on the podcast with us today. Bill shares his career path from a captive insurance agent to an independent broker dealer to now a fee-only RIA. Not only does Bill dive into the differences of each, he shares what he has done to be successful as a business owner.

This is a great episode, you’re going to enjoy it!

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“Simply having the education isn’t enough but it’s implementation and exposure from a young age and consistency that matters… If it’s ingrained in you it’s something that’s important and then it’s something you’re going to do. You have to see it and practice and you have to know that it works!”

The Art of Finance

FPA of Austin