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.

hannah's signature

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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