You're A Financial Planner; Now What? https://financialplannerpodcast.com Exploring the world of financial planning Thu, 13 Dec 2018 19:50:48 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.9 https://financialplannerpodcast.com/wp-content/uploads/2017/11/cropped-Site_Icon-32x32.png You're A Financial Planner; Now What? https://financialplannerpodcast.com 32 32 Hannah Moore, CFP® interviews influential financial planners and explores topics relevant to those starting out as financial planners. From designations, to business models to the history of financial planning, find the resources and knowledge that you need to be a successful financial planner. Join Hannah as she explores the world of financial planning and finds resources and tools to help you become the best financial planner you can be. Hannah Moore clean Hannah Moore hannah@guidingwealth.com hannah@guidingwealth.com (Hannah Moore) 2016 - 2018 Exploring the world of financial planning You're A Financial Planner; Now What? http://fpaactivate.org/wp-content/uploads/powerpress/YAFPNW_2017_Album_Art_large-757.png https://financialplannerpodcast.com hannah@guidingwealth.com Weekly A Conversation with the “Dean of Financial Planning” https://financialplannerpodcast.com/yafpnw-conversation-with-the-dean/ Tue, 11 Dec 2018 18:14:47 +0000 https://fpaactivate.org/?p=11837 https://financialplannerpodcast.com/yafpnw-conversation-with-the-dean/#respond https://financialplannerpodcast.com/yafpnw-conversation-with-the-dean/feed/ 0 Harold Evensky, sometimes called The “Dean” of Financial Planning, loves this profession. This year, he was awarded with the P. Kemp Fain, Jr. Award - which is often equated to the lifetime achievement award for financial planners. It was an honor to have him on this episode of #YAFPNW! Harold Evensky, sometimes called The “Dean” of Financial Planning, loves this profession. This year, he was awarded with the P. Kemp Fain, Jr. Award – which is often equated to the lifetime achievement award for financial planners.

The most amazing thing about this conversation with Harold is that he has a history that’s deeply connected to progress and forward-thinking in the financial planning profession. This background provides him with an unparalleled view of where this profession could evolve in the next 40 years, and what the biggest issues we’re facing today.

Talking to Harold was eye opening in so many ways. He covers everything from the future of index funds, to the way he views the fiduciary rule evolving and becoming more prevalent in the profession in the next several years. You won’t want to miss this episode that’s chock-full of insights from The “Dean”!

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The work itself, the planning process, and the investment universe is fascinating and interesting. There’s always something new. – Harold Evensky on #YAFPNW

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What You’ll Learn:

  • How Harold got to where he is today
  • What he loves about the financial planning profession
  • Who has influenced him
  • What he believes the biggest issues financial planners face today as individuals and as a profession
  • Where he sees the profession going in the next 40 years
  • The importance of education in the financial planning profession
  • Reduce the focus on analytics and statistics in academia and instead focus on practical studies that can be used in the field
  • Where Harold believes advisors and students can provide value
  • How to expand your interest as a financial planning student
  • His opinions on investing and the future of index funds

 

Evensky Katz Foldes Financial Wealth Management

Personal Financial Planning at Texas Tech University

Hello Harold: A Veteran Financial Advisor Shares Stories to Help Make You Be a Better Investor

 

Show Transcript

Episode Transcript


Hannah: Well, today we are so honored to have Harold Evensky here with us on the podcast. Harold, you have been named the Dean of Financial Planning. I’ve seen that name thrown out about you. You are regularly recognized as one of the top fee-only financial planners in the country. You have said on multiple boards, the ICFP, the IAFP, the CFP board, various functions. You’ve won the Heart of Financial Planning Award. You’ve written books. You’ve pushed our profession forward. You’ve pretty much done it all.

Hannah: This year you were awarded with the P. Kemp Fain, Jr. Award, which is really the lifetime achievement award for financial planners. I was there when you got the award and it was so neat seeing you up there getting the standing ovation. What did that feel like, getting that recognition from the financial planning profession?

Harold Evensky: It was quite extraordinary. Given all the ones before me, it was most humbling. All I can say is there were a whole lot of other people who helped me get there. It was fun, I have to admit that. I did enjoy it.

Hannah: In your speech you mentioned how much you love this profession and how fortunate you feel, but why do you love this profession so much?

Harold Evensky: I guess the answer is what’s not to love? The work itself and the planning process and particularly for me the investment universe is fascinating and interesting. There’s always something new. The best part is working with individuals, with the clients, and helping them enjoy their life in a way in which they decide they want to enjoy it.

Harold Evensky: And then the other participants, my staff, my associates, my partners, and the other practitioners, it’s just a very … I don’t know how to say it. I guess a nice, comforting, wonderful universe of people.

Harold Evensky: I’m often asked, “Gee, how come you write these books and you do these talks and you tell your competitors everything you’re doing?” That’s just not what our profession is all about. We don’t see each other as competitors. We see each other as friends and associates. It’s a great environment with fun things to do.

Hannah: That connects so much when I talk to these young planners about why they’re getting into this profession is that they just want to be able to help people, so it’s so cool to see that that’s a theme that can be there your whole career.

Harold Evensky: Oh, absolutely. The reality is it’s also a very good career path, simply from a business and financial standpoint. The opportunities are quite extraordinary. I don’t know how many hundreds of thousands of graduates there are from MBA programs and law schools and they scramble for jobs. As my partner, my wife, Dina, says, “When we graduate someone, they walk out with a diploma in one hand and three job offers in the other.” The opportunity, just the personal career opportunity, is extraordinary.

Harold Evensky: Unlike pretty much any other profession I know of the likelihood of someone ultimately becoming an owner of a firm is extremely high because we’re selling off interest to our next gen. Pretty much everyone in our firm has some ownership interest. They in turn need to sell to someone else, which is going to be the younger associates that we’re hiring now. It’s a fun business, it’s financially rewarding, and it’s very entrepreneurial.

Hannah: You mentioned that, when you got the award, there were so many other people that helped you get to where you are now. Who’s really influenced you as a professional?

Harold Evensky: There have been so many. We’ve been involved in a small group called the Alpha Group for … good Lord, we’re probably going on 20 years.

Harold Evensky: So it’s a lot of those members. Some are practitioners, like Peggy Ruhlin and John Ueleke from Memphis and Don Phillips. Don was the one who, many years ago, before he was the dean, which has been joyful all these years. David Dugan, Ross Levin, Mark Palazzo, Mark Tibergien. I can go on and on. Then one of my very closest friends, my BFF, Patty Houlihan, who followed me as chair of the CFP board. Non-practitioners, Tucker Hughes, and as I said, Don. Then there’s our fiduciary committee, Skip Schweiss, Ron Rogé.

Harold Evensky: There’s so many. I’m leaving out so many I feel guilty, but there are just so many that been major influences for me along the way.

Hannah: Yeah. When you got started in your career, what could you have never imagined that’s actually happened?

Harold Evensky: Being where I am today.

Harold Evensky: I grew up in the building business. My undergraduate and graduate was in civil engineering and business. I started off working for a family firm and ultimately started my own. It’s called Production Home Building. You put up a number of models and then build houses from there and have a fairly large business. One of the larger ones in South Florida, but the ups and downs of the economy convinced me that either need to be one or two, or number two thousand, but being midsize was a non-starter.

Harold Evensky: I looked around for something and investing in the market looked interesting. Ended up getting a job with … the time it was Bache & Co., now Prudential. After a few months of training a month in New York they sat me down at the telephone and said start calling.

Harold Evensky: The first lady I got sounded like my grandmother and she hung up on me. I said whoa, this is going to be a short career. I happened to see an ad for something called the College of Financial Planning said well gee, that looks interesting. I enrolled in the program and started doing what we call the yellow pad planning, which literally was what we did back in those days. I gave seminars six days a week. Sat people down at the secretary’s desk and talked about Tax Act. There was always a new tax act.

Harold Evensky: That’s how I built my business, was through the planning process. It took a lot of time, but it was successful. I was BP Investments at Bage and decided I wanted to work in a little more sophisticated universe, so I joined Drexel Burnham downtown in Miami. It was a good experience. About three years at Bache and about three years at Bexel and left before they had their problems. The only issue was they never understood what I wanted to do. It was always here’s a good bond, here’s a good that. So I said, “Well, I need to do my own thing.” So I started my practice on my dining room table and grew the business from there.

Harold Evensky: We were in business. I had one other partner and a year or so later I met Deena Katz who subsequently became my partner and my wife. We became professional friends. This is … went way back … Famous story. She was in Chicago, had her own practice and we were talking one day and she said “Well, I’m thinking of moving down to Florida. My Mom’s retiring and I’d like to be down near her.” I said why don’t you come join us. At the time I had one partner and not much of a business. She said “Let me think about it.” and she called back a few days later and said “I’m interested, but I have 2 conditions.” I said okay. She said ” I’ve always owned my own business so I want to be an equal partner. I know you have one other. Whatever is fair price, I’ll pay it.” I said okay. Since we weren’t much at the time, that wasn’t a big issue. What’s the other one? She said “I’ve always run my own business. If I come down, I want to be president.”

Harold Evensky: So I went to my partner, who was supposedly running the business, said what do you think. He said “How fast can she get here?” Dina came down and said “You know. You guys are terrific, you do wonderful stuff, but you haven’t billed some people in forever.” I said we’re not real comfortable with that. Long and short is we had our own what’s called a broker-dealer. She said “We’re selling that off. We’re going fee only.” She’s the one that really built the business and made us a financial success.

Harold Evensky: It was a fun trip. I still shake my head when I see how big we are, how many people we have. I still can’t believe that but it has been a fun ride.

Hannah: In your firm, how many people do you have?

Harold Evensky: In Miami, there are about 25. We have about 5 in our Lubbock office. I think in Miami, we have 7 graduates of our financial planning program at Texas tech. We have 3 in our Texas office.

Harold Evensky: One of the nice things about Dean and I both teaching there is we have the opportunity to cherry pick what we think are the very best. We have some extraordinary young people, young professionals.

Hannah: You’re a professor, so academia has always been important to you. How did you get into that world and into the world of researching and really contributing to the knowledge base of the profession?

Harold Evensky: Once again, that was really Dina, for a variety of reasons. Going back to some heaLth issues, she decided she needed to make a change. We had been friendly with a couple of people that really established the program at tech over 20 years ago. She told them. She said “Well, I’d like a job.” And they said “Come teach anytime you want.” She said “No. I want a tenure tracked opportunity.” They said “Well, come on.” So, she went to tech and became a professor. I shuttled back and forth from Miami for a number of years. Then after quite a few years moved here. And since I was coming here, I got a role as an associate professor, and adjunct professor, that’s the word I’m looking for.

Harold Evensky: But then after a number of years the opportunity came to become a full professor, what’s called a professor of practice. So I had a half-time appointment as a full professor, but only taught one class a semester. The wealth management class, which was masters and doctoral students. That’s what I taught for many, many years until I retired last semester.

Hannah: Going from a practitioners’ perspective to a professor perspective, what changed for you? How did your perspective about the profession change with that change in role?

Harold Evensky: It really didn’t. What I was trying to change was the academic orientation. Trying to relate the two somewhat more. Probably the best example was at the end of the semester student would write a critique or notes about the professor. One of the students wrote, in a very negative and pejorative manner, “He treats us like we work for his firm.” My reaction was “Fantastic. He got it.” So that went into my syllabus, I said “I am going to treat you like you work for my firm.”

Harold Evensky: The difference being, in acidemia today, there’s something called rubrics, which are sort of guidelines that students are used to getting. So if you give them assignments, you give the rubrics, which are the steps you expect them to follow. Except they never made sense to me so one of my major assignments would be, you’re boss just called you into the office and said “The firm needs to replace its small cap domestic value manager. Come back and make a recommendation to the investment committee.” And that was it, that was all I told them. Everyone said “What’s the rubric?” And I said “Boss isn’t going to get you a rubric. If you got a question, I’m your boss, come back and ask me.”

Harold Evensky: That was the orientation, or the nature of the way I taught the class, and I got some interesting responses. But all in all, my students were ultimately happy with it, and subsequently I would get nice notes. But my point was, I said “I want you to go, when you join a practice, I want you to blow the socks off your boss about how much you know, and how valuable you can be day one.” For me that was the difference. Try to encourage the doctoral students to do research that I as a practitioner would find useful. In acidemia today, I guess is been this way forever, its publish or perish. The problem with that is to publish you need to write papers that are interesting to the publications that have prestige.

Harold Evensky: Typically, that means a lot of analytics and data and statistics. That requires a whole lot of numbers. Most of the research is what I call “sociological research”. For example, women are more conservative than men, and I believe that’s probably very true, and, if I were setting policy, that would probably be important to know. As a practitioner, if I follow that as kind of a rule of thumb, that may be a disaster if I’m sitting with a couple whose wife may be far more less tolerant than the husband. The problem is doing research on individual issues doesn’t lend itself to … on a statistical analysis.

Harold Evensky: One of my soapboxes has been to try and get some students to focus on, again, research that a practitioner can use.

Hannah: You talked a lot about helping students be very valuable day one working with their new bosses and within their new roles. What are the other pieces of advice for people who are listening to this and they’re like “Hey. I want to be valuable. What do I need to be doing? How do I need to be thinking differently about my work and what I’m doing?”

Harold Evensky: One, don’t just focus on the academics, attend or become an associate member of your local FPA chapter. Read the publications. Financial Advisor, Financial Planning, and Journal of financial planning. Read what the profession is reading. Read what your client are going to be reading. Read Money magazine. You may want to pay attention, read the Wall Street Journal, but Money magazine and Kiplinger are going to probably be more useful to get a feeling for what your clients are really reading and paying attention to.

Harold Evensky: Get involved. We have a program at tech called “red to black”, where the students provide counseling to members of the university community. That’s a great experience. Some are involved in a program that assists people in doing their tax planning. And anything like that, that provides some, really, client interaction experience, is going to be just terrific.

Harold Evensky: The other is, don’t just limit your interests to the firms like ours. There’s great opportunities in firms like through the wirehouses like the Merrills, the UBSs. They have training programs. The institutions, for good reasons, often get some bad publicity. But the individuals working there, they are a lot of really terrific professionals. So that can be great experience.

Hannah: There’s so much opportunity in the profession right now for new planners. It’s quite remarkable.

Harold Evensky: It’s unbelievable, you know. We had one or two people come down to what we call “career day”, which is where the students do interviews. I tell my partners, when you’re interviewing, if you have someone that you think is really terrific, make a job offer on the spot because if you wait until the end of the day, you probably won’t get them. I mean it’s that competitive.

Hannah: Wow. That’s impressive.

Harold Evensky: It is impressive.

Hannah: So what are the things that your known for in … especially in the investment field? In a lot of your research, you were one of the people to bring the investment strategy of “core and satellite”. How did that come about?

Harold Evensky: Quite a few years ago, and as any practitioner, financial planner, should be doing. Looking ahead. What I thought the long term future was going to be, and my conclusion was that returns across the board, stocks, bonds were likely to be extraordinarily modest compared to the historical returns that we had been used to. And so, I was trying to think of what’s that mean? What are the consequences of that? And my process for doing that is, I guess an academic, crunching some numbers.

Harold Evensky: I wrote a couple of articles, I did a paper, for The Journal of Financial Planning. My conclusion was , we needed to be hypersensitive to expenses and taxes. We had always talked about risk and return but didn’t really pay a lot of attention to that third element. Because when you’re running 12, 14 percent it wasn’t all that critical. But when I did my analysis, I concluded that just saving a half a percent by managing expenses and taxes could make a huge difference in the, what I call, “net net net”. After taxes, after expenses, and after inflation, which was really the killer.

Harold Evensky: And then, trying to figure out what do we do about it. Nothing changed in my investment philosophy. Diversification, large and small cap, domestic international value, et cetera. Looking around at what strategies or approaches were out there, I came across, at the time it was primarily an institutional strategy. It wasn’t something I invented, which was corrin satellite. The idea being you take the bulk of your investments, and invest them in a very cost and tax efficient manner.

Harold Evensky: So instead of taking little pieces of extra risk throughout the portfolio, you take that whole risk budget and you can concentrate it on what’s referred to as the satellite. It’s really a fairly simple idea. In our case it became 80 percent of the investments, and this is the equity, this core. Very diversified, very traditional large cap, small cap, with an international because we believe in Fama–French. Slide over weighted value. That pretty much was all allocated to index funds, ETFs. But then we had that whole, quote, risk budget, we could focus on the satellite, which in our case is about 20 percent, so that was the change we made.

Hannah: You’ve spent your career dedicated to the financial planning profession. What do you think are the most important issues in financial planning today?

Harold Evensky: Certainly one is the whole fiduciary debate. What is the relationship between client and who they’re working with? Who, either is providing, or purport to provide advice. What are the relative responsibilities. To me that is at the very tippy top of issues. Next would be realistic forward looking returns and markets. What can people reasonably and realistically count on. I’m afraid there’s a massive amount of unwarranted optimism, or naive ism on the part of the investing public. And then, actually I should put at the top, real planning.

Harold Evensky: There’s way too much, in my opinion, either no planning, or pseudo planning being offered out there. Planning is not necessarily easy, each individual has pretty complex lives and issues. It requires a lot of effort to do a good job. But to plan the quality of the rest of your life by rules of thumb and simplistic planning, I think is dangerous. To say that if someone doesn’t have much money or resources they can do simpler planning. I think that’s absurd. I think they need better planning.

Harold Evensky: The reality is for most of my clients, if I did a lousy job, their grandkids might get less money, but they are not likely to miss a meal. If someone has limited resources, and the planning is not very good, the quality of their life might be significantly negatively impacted. I guess those would be my list.

Hannah: I’m really interested in this idea of real planning, and what is real planning. Especially for the people who are new to the profession, and they’re working for somebody right now, how do they know if they are in those, what you called, the pseudo planning versus the real planning?

Harold Evensky: The distinguishing differences are how detailed is the process. In other words if you’re using the typical robo-planning that has 2 built-in assumptions that, in many cases, you have no idea what they are. A number of my academic associates and I did a paper, it’s now in submission for publication, or the advocacy of public retirement planning software. Our original premise was, it might not be very good but it would be a good useful guideline or educational tool.

Harold Evensky: Our final conclusion was its not very good and its potentially very dangerous because you come up with, depending on which of these softwares you use, radically different conclusions. And many of them, for example, they ask a question trying to figure out how long you need the money. And there’s nothing about if you’re a smoker or a non smoker. Something as simple as that makes a huge difference in expected mortality.

Harold Evensky: And that’s a simple example of the kind of information that you would need to make a reasonable suggestions or plans for yourself if you’re doing planning. And then, even those who were using the very powerful institutional software such as money guide which is what we use. Often they may have one or two goals. You can’t do much planning if you don’t break down what someone’s needs are in a whole lot more detail than one or two goals.

Harold Evensky: Or if you’re doing planning and you assume “Well gee, you’re spending $50,000 now, and you extrapolate that by inflation, 8,000 of that is a mortgage. A mortgage isn’t going to inflate. It’s going to disappear. So not taking those fairly simple and obvious things into account, you’re likely to end up with nonsense as a result.

Hannah: Looking in the broad sense, the future really is planning. Would you agree?

Harold Evensky: Absolutely. We have no control over markets, but we have a great deal of control over the planning process.

Hannah: I always remember, and I’ve said this a number of times on the podcast. I remember pitching financial planning to a client that we had had at this … where I had worked for several years. And their response was “Oh my gosh. This is what we’ve been looking for, but we never knew what it was.” And it was like yes. Planning is very critical.

Harold Evensky: I think any good planner has heard that on more than one occasion. Our job isn’t to make our clients rich. Hopefully its to see they don’t get poor. But to help them enjoy their lives in a manner in which they define it.

Harold Evensky: One of my very favorite stories, and it’s true, it’s probably 20 years old now. I had an elderly physician, he was in his 80s, and he was still practicing, and I did a plan for him. But when I say practicing, you know, he would go in maybe one or two days a week for a few hours, and when I did the plan and he came back in, I said “Doctor, you need to sit down. I’ve done the analysis and my conclusion is, if you keep working it’s going to cost you” … I don’t remember today but Let’s say $30,000 or $40,000 a year because your overhead and your insurance and everything is far more than you’re making from an income. And he just deflated like somebody popped a balloon.

Harold Evensky: And I said “I’m not finished yet.” And he said okay. I said “My recommendation is that you keep working.” He said “Harold, that makes no sense whatsoever. You just told me id lose money if I keep working.” I said “Doctor, you have substantial resources. If you don’t keep working it’s going to probably cost you three times as much in psychiatric bills. And your kids and grandkids will never know the difference between $30,000 or $40,000 a year of extra cost. No question, you ought to keep working. He said “That’s the best news I’ve ever heard.” So that’s what planning is all about, to tell someone to keep working when its costing him $30,000 to $40,000 per year. That’s the difference between what we do and someone who’s trying to tell you how to beat the market.

Hannah: What are we selling clients? Are we selling them on planning or are we selling them on some investment strategy?

Harold Evensky: Right. And that is the difference between brokers and planning. And there’s a rule for both, again, it’s not to say one is good and one is bad. They are just different professions and different goals.

Hannah: If you were starting over fresh, if you were a 22 year old coming out of school. What would you do differently in your career?

Harold Evensky: Good question. I don’t know that I’d do anything differently. Admittedly, I bumbled through the whole process but I was lucky in my bumbling I guess. I would say in addition to just trying to do a really good job of your job, get involved in the profession. Get involved in whether it’s the FPA or NALFA or the AICPA, or for that matter, all of the above. I’m members of all of them. Because it’s not just working with your clients, its working with your peers and paying back to the profession. You’ll get far more in return than you can ever put into it.

Hannah: Where do you see financial planning in the next 40 years?

Harold Evensky: In 40 years I see it ultimately becoming a profession. It may take 40 years to get there. I think it will continue to be a slow growth, but I believe that, what I think is going to be, a low return environment, it is going to move it along a little faster pace because people who today may not realize how important good planning is are going to learn the hard way. We always found that bear markets were the best time for us form a business standpoint because when the market is going straight up, everyone looks brilliant, and no ones really interested in hearing our story about planning.

Harold Evensky: When things turn around, it’s kind of a wake up call. It’s not uncommon. I had, years ago, someone come in and I did a plan and said I think you can earn whatever percent. And he turned beat red, slammed his fist down and said “Well my barber can do better than that.” And he walked out. But about a year later, we went through a serious bear market. He came back in and said “Harold, I think I am ready to listen.” If indeed markets are kind of rough, I think that will expedite the public’s awareness and interest in planning and help us move towards a profession faster. Plus we have the growth of the academic programs, so I think we’re on a really good path right now.

Hannah: Mm-hmm (affirmative) what would be your hope for the students you taught or these new planners who are coming into the profession?

Harold Evensky: I would hope that, if they do join and stay in the profession but do more than just their job. I would hope that, like a lot of my friends and the ones before me, that they get actively involved in building it as a profession. Not just building their business practice.

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Harold Evensky, sometimes called The “Dean” of Financial Planning, loves this profession. This year, he was awarded with the P. Kemp Fain, Jr. Award - which is often equated to the lifetime achievement award for financial planners. Harold Evensky, sometimes called The “Dean” of Financial Planning, loves this profession. This year, he was awarded with the P. Kemp Fain, Jr. Award – which is often equated to the lifetime achievement award for financial planners.
The most amazing thing about this conversation with Harold is that he has a history that’s deeply connected to progress and forward-thinking in the financial planning profession. This background provides him with an unparalleled view of where this profession could evolve in the next 40 years, and what the biggest issues we’re facing today.
Talking to Harold was eye opening in so many ways. He covers everything from the future of index funds, to the way he views the fiduciary rule evolving and becoming more prevalent in the profession in the next several years. You won’t want to miss this episode that’s chock-full of insights from The “Dean”!


 
What You’ll Learn:

How Harold got to where he is today
What he loves about the financial planning profession
Who has influenced him
What he believes the biggest issues financial planners face today as individuals and as a profession
Where he sees the profession going in the next 40 years
The importance of education in the financial planning profession
Reduce the focus on analytics and statistics in academia and instead focus on practical studies that can be used in the field
Where Harold believes advisors and students can provide value
How to expand your interest as a financial planning student
His opinions on investing and the future of index funds

 
Evensky Katz Foldes Financial Wealth Management
Personal Financial Planning at Texas Tech University
Hello Harold: A Veteran Financial Advisor Shares Stories to Help Make You Be a Better Investor
 
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Hannah Moore clean 32:45
Reinventing Wealth Management https://financialplannerpodcast.com/yafpnw-reinventing-wealth-management/ Tue, 04 Dec 2018 19:28:02 +0000 https://fpaactivate.org/?p=11781 https://financialplannerpodcast.com/yafpnw-reinventing-wealth-management/#respond https://financialplannerpodcast.com/yafpnw-reinventing-wealth-management/feed/ 0 This episode is a must-listen to for financial planners who relate to Larry’s statement that the current model of wealth management is outdated. Larry tackles how to adopt revolutionary planning practices for your business, and where you can connect with like-minded advisors who all want to grow and make this profession the best it can be. Now is a great time to be entering the financial planning profession. There is so much change happening, and it’s giving advisors the opportunity to be disruptors.

Larry Miles, a Principal at AdvicePeriod, firmly believes that, to build a business, you have to be open to change. Unfortunately, many aspects of the wealth management profession are growing increasingly outdated. Through his work, Larry explores how advisors can focus on what really matters to clients – more planning, less investing and technology.

So many advisors are passionate about helping their clients. That’s the reason they’ve gotten into the financial planning business in the first place. However, when it comes to actually running their practice, they fall down. They aren’t adopting new technology, or updated ways of structuring their services.

They aren’t streamlining in a way that makes their lives easier and helps their work to shine. Larry wants to help change that by facilitating a conversation around disrupting the profession and growing advisors as financial planning professionals and business owners.

This episode is a must-listen for all RIA owners (or advisors who are feeling “stuck” in the antiquated practices of the RIA they contribute to). Larry tackles how to adopt revolutionary planning practices for your business, and where you can connect with like-minded advisors who all want to grow and make this profession the best it can be.

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Tell the world what you believe in and like-minded clients and advisors will find you. – Larry Miles on #YAFPNW

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What You’ll Learn:

  • What really matters to clients and how you can position yourself to deliver that to clients
  • How technology impacts Larry’s view of financial planning – and how it could continue to grow the profession in the future
  • Why Larry believes that AUM is an outdated pricing structure – and what he thinks advisors should do differently
  • How to market yourself in a way that shares your passion and attracts your ideal clients and advisors who have shared values
  • Where to find a community of advisors who are like minded and interested in being part of the next iteration of financial planning
  • What it means to build enterprise value and how to do so

 

Larry Miles on Investment News 40 Under 40

 

Show Transcript

Ep127 Transcript


Hannah: Well thanks for joining us today, Larry.

Larry: Hannah, thanks for having me. I really appreciate it.

Hannah: Yeah. So I am so excited to have you on the podcast and you know, when I go to your website, the first thing that pops out to me is how the current model is totally outdated. And presumably this is the investment in advice business. What do you mean by that?

Larry: My partners and I have worked together for most of the last 20 years and in building out AdvicePeriod, we wanted to take a fresh look at the industry. We thought a lot had changed since we first got into the business from the technology that was available to advisors, to what really mattered to clients, to how we could charge our clients a fair fee for the services that we’re offering. And so it was really with a blank sheet of paper. And so the things that we saw, the big themes were we feel like clients are best served with more planning, less investments, and better technology.

Hannah: And were there any specific conversations that you had with clients or any specific stories that really kind of gave you this Aha moment that something needed to change?

Larry: Our first business was very much investment consulting, open architecture, manager of managers. We could invest in any investment manager that our clients were interested in or that we thought made sense for them. And over the years, what we found was despite we have having this infinite universe of investment options, finding managers that could outperform a benchmark, net of fees, let alone net of taxes, was really difficult.

At first, we thought it was just us, maybe we just weren’t very good. But as we looked around and talked to our peers, we found that most folks were struggling to find investments that really outperformed. And at the same time, we were having success helping our families with planning, financial planning for clients that were saving, estate planning for those who had taxable estates. And we quickly realized that those numbers were much more significant to our families, to our clients, than whether or not we could make them a few extra basis points in the market or in their portfolios.

The numbers are just so much bigger if you can save in taxes, the estate tax, income tax, et cetera, capital gains tax. So that was, it wasn’t one Aha moment so much as a series of them over the years that really led us in this direction. And I think that coincided with the general commoditization of investment management and the advent of the robo advisors and the massive flows of dollars towards index funds. And so that was what really got us thinking about, gosh, if you want to be a financial advisor over the next 10, 20, 30 years, you can’t just do things the way that you’ve always done them.

You can’t just charge the one percent, gather as much assets as you can. Clients aren’t going to go for that because it’s just not valuable to them. They’re going to really seek out results. They’re going to demand something more. So financial advisors can either decide they’re going to go out of business because they don’t have a business anymore, they’re going to have to dramatically reduce their fees, or they’re going to have to add value in other ways. And that was the path that we chose, was we wanted to add value in other ways.

Hannah: One of my favorite saying is you’re either the disrupted or the disrupter, and it sounds like you were firmly wanting to be on the disrupter side of the side of the business.

Larry: We definitely want to focus on what really matters to our clients. We can learn a lot from the status quo, but ultimately, yeah, I agree. You’re either getting ahead or falling behind. There really is no status quo and I think that’s the amazing opportunity that financial advisors have right now, is that I think we’re at a bit of an inflection point, whether it’s the convergence of technology, planning, shifting demographics in our client base, those that are looking for something new and different. I don’t think clients are going to just accept the old model and so I think that’s a huge opportunity for advisors who want to take advantage of it.

Hannah: And so what does this new model look like?

Larry: I’ll give you one example. One of the more traditional aspects of our industry that we think is completely outdated is the focus on AUM. For us, AUM is an irrelevant statistic, irrelevant in terms of being a horrible indicator of whether or not you’re a good financial advisor. I know great financial advisors whose clients truly benefit from their advice who don’t have big businesses.

And at the other end of the spectrum, I know advisors who have tremendous assets under management but focus, at least in our opinion, on all the wrong things. And I don’t think their clients are well served. So to us, AUM is a horrific indicator of whether or not a client is well served. And I think our industry would be greatly benefited from shifting away from that as the kind of defacto indicator of whether or not you’re successful.

Related to that, we think that charging based on assets under management is likewise a relic of the past, that advisors whose business was just to gather as many assets as they possibly could, cram them under a one percent fee, and go about their merry way and play golf half the day, four days a week, that business just shouldn’t exist. And so eventually, it won’t exist.

Instead, advisors who charge a fair fee for the value that they’re adding. Sure, there’s some correlation between the value that you can add for a family and their assets, but ultimately, I don’t think the correlation is one. I think it’s far less than that and I think the savviest advisors are figuring out a way to charge a fair fee for the value that they add.

Hannah: You said you just charge a retainer fee, monthly subscription. What is the fee that you’re charging your clients?

Larry: So what we’ve done is we’ve looked at the different ways we think we can add value to clients. Everything from the fairly low value added of asset allocation and investment selection to the higher value add for financial planning or estate planning. And we’ve built a calculator that we share with all of our clients and pull up in client meetings and say, “Look, here are the facts and figures of your situation.”

Here’s your investments that we’re going to manage. Here’s your family’s net worth that incorporates maybe a family business, maybe real estate. Here’s the complexity. We’re going to help you with financial planning or estate planning and these are all options. And so based on what the client’s looking for and how we can help them, we’ve calculated a fee. And it’s like a Monte Carlo. It gets you in the right neighborhood. It may not be exactly the right fee, might be a little bit high, might be a little bit low, but it allows us to have a conversation with clients where they’re truly going to understand how we’re going to help them.

And it’s not just, well, we’re their investment person. We manage their money and I’m not really sure what I pay them or what I’m getting for it. We just think there’s a huge opportunity for transparency. And then yes, we bill quarterly in advance. So you can think of that as a bit of a retainer model. To us, it’s just better business. It’s better for the client because it’s more transparent. They understand what they’re going to pay.

And it’s better for us. Look, when the market’s down, the AUM based advisor is taking a pay cut at exactly the time where they’re going to be working their hardest to keep their clients focused and on course. And we just don’t think that makes any sense. And so our advisors are really thankful that, I think it’s over over 80 or 90, maybe 85 percent of our revenue is fixed flat fee. It goes up each year with inflation, but it’s just a better way to run a business. And I think that too is a theme that a lot of advisors miss out on and that translates into lack of enterprise value is that they’re not building a business.

Hannah: How have clients responded from moving away from the AUM model to more of a retainer model? I know when I’ve talked to … One percent is such a simple concept to grasp.

Larry: Our experience has been that the advisors, and I think this is true systemically with anything new, that advisors are much more reluctant than their clients. Advisors are moving from an AUM based pricing model to a fixed fee model. They’re very pragmatic and reluctant, and they have a lot of questions, and they’re nervous. Clients who hear about it, love it. And so once the advisor gets a couple of those conversations under their belt, and she sees that yes, my clients react well to this, they appreciate the transparency, then the advisors embrace it fully.

But it’s like so many things that are new, it can be a little bit scary. And I think that’s where we can help a lot of … That’s where we help our advisors get comfortable with things and say, “Well, this has been our experience moving away from a model based on assets under management, to active management, to something more passive and fixed fee.” They can benefit from our experience because it’s something new, but clients have really appreciated it and I think that’s a trend.

And whether we think of that as the millennials coming of age and what they’re looking for just as consumers, I think they’re going to focus on value. They’re not going to accept a system just because it’s been there and it’s what their parents used. I don’t think they’re going to just pay a fee because it’s always been paid. I think they’re going to look for value, demonstrable value, and they’ll be willing to pay for it, but they’re not just going to blindly send you one percent every month or every quarter every year and hope that it works out. They’re going to want to see more evidence that you’re helping them.

Hannah: And so do you manage investments for clients?

Larry: Yes, absolutely. It’s one of the services that we provide. I’ll say we offer it to all of our clients. We have about 800 families that we work with and about 2,500 lives that we impact. That’s one of our key measures of success is just how many lives we’re impacting. And investment services is something that we offer to all of them. A lot of our clients, most of our clients, we manage money, but for some clients, their net worth, the vast majority of their net worth is tied up in illiquid assets. And so we’ll advise them on how to structure it, we’ll help them get the right estate planning and tax advice. We’re the overall quarterback.

Hannah: And then do you have like a minimum fee? I guess maybe a better way of asking this is, what do your clients look like? Do you have a specific demographic? Or what’s the minimum fee for somebody to work with?

Larry: Something that we wanted to try when we started AdvicePeriod was not having a minimum fee. We had always felt, ourselves included, that most businesses, most financial advisory businesses, have minimums based more on their own business metrics and the smallest client where they can be profitable. They’ll couch it as well. We really focus on clients between X and Y or over, but we just think that’s all a bunch of marketing and PR. So we wanted to start with, there’s no minimum investment size.

I’m sure we have minimum fees because of the time and the help that we provide our clients, but we have 800 clients. 100 of them are over $100 million in net worth. Probably half of those are over a billion. And then we have 700 clients that are call it anywhere from $500,000 to $10 million in assets or below taxable state levels. So we have a pretty broad cross section of clients and we think that having that diversity helps all of our clients.

The thing they have in common is that they are looking for more planning than investment advice. If they’re looking for stock pickers, we’re not their firm. But if they’re looking for good investment advice, they’re looking for planning, and honestly, that’s where we came up with the name AdvicePeriod, was we just wanted to offer our clients advice, period. And that’s what we found was most helpful and most valued by our families. And that was the business we wanted to be in.

Hannah: I think it’s really interesting looking at kind of that just range of clients that you have because a $500,000 client is a lot different than a $500 million client. So do you have the same business model set up for all those? How do you operate that? And I know you have a bunch of offices, so maybe perhaps it’s different offices focused on different things.

Larry: The group, and it’s largely my partner, Steve Lockshin, who focuses on those $100 million dollar plus families. We have a team based in Los Angeles that we call The Lab. The Lab’s sole focus is on those centi-millionaires, those $100 million plus type of families and all of the issues from business management where we handle the bill pay and financial statements for these families, to coordinating the estate planning, to obviously managing their investments, and everything else that comes up in the often very complex lives of those types of families.

So that’s their deep expertise and we call them The Lab because, to your point earlier about innovating, you have to innovate for these families. The tax laws are always changing. Technology that’s available that helps these families is always adapting. And so The Lab is constantly experimenting, researching, looking at new things before rolling them out to those families.

And then to your point, some of those strategies certainly wouldn’t make sense for a family with a million dollars, but some of the technology might. So when we first started using Betterment, for example, we were using it with some of our largest families. And then as we got more familiar with it and we saw that the benefits would be great for all families, families of all sizes, it’s something that’s now available. Not all of our clients use it, but it’s something that’s available to all of our clients.

And that’s true of lots of the different pieces of our tech stack. We’ll try it in The Lab and then if it makes sense, we can roll it out to, like you said, our 14 offices across the country.

Hannah: That’s really interesting, of starting with the higher net worth and having it filtered down, especially the technology side of it.

Larry: Yeah. It’s interesting because sometimes, again, we have these misconceptions of who would be interested in using technology. And so I think that the general stereotype is well, if you’re going to try something that’s more technology enabled, it’s going to make sense for lower net worth clients and/or younger clients. Those were our own biases when we started more heavily using Betterment and Advisor and Quovo and some of the pieces of our technology.

Even going mobile and having these things available on your phone, we thought, oh, this is going to skew in a certain direction. And we couldn’t have been more wrong. If you look at the demographic studies of the percentage of those over 60 that have iPhones, you start to realize that, again, these are our own filters and what are our blind spots? What opportunities are advisors missing because they’re projecting their own values or their own blind spots onto others?

I think it’s pretty significant. And as I mentioned, I think that really impacts an advisor’s ability to grow, both in how they’re helping their current clients as well as growing their practices and including additional families. And ultimately, that impacts their enterprise value or lack thereof.

Hannah: We talk a lot about change and how fast things are changing. We have to always be challenging those assumptions.

Larry: Very true, because at least in our opinion and our experience, if you’re not challenging them, if we’re not challenging them together, someone else is going to and that’s how you’re going to lose your business. Because if you’re not innovating, somebody else will. And I think having that, we call it healthy paranoia, of are we doing everything we can, are we challenging assumptions? Are we trying new things?

One of our newest advisors to join us has a great business. He was part of a regional RIA and the latest technology that was rolled out at his firm in the 12 months prior to him joining AdvicePeriod was Excel. They had to finally decided to move off of Lotus Notes and take the plunge into Microsoft Excel. And it’s just indicative of the outdated technology and a lot of advisors and advisory firms focusing on things that don’t matter.

I’m sure that firm spent an awful lot of time thinking about investment management and how they could beat the market. Sure, making some good decisions, but probably a lot of bad decisions, and ultimately neglecting the business, and advisors and their clients need better than that, deserve better than that.

Hannah: It just makes my skin crawl.

Larry: Yeah. I didn’t know Lotus Notes was still out there, but apparently it is.

Hannah: Looking across the industry and across the profession, what are the other assumptions that you see being challenged right now? Like where do you expect to see our industry grow and develop in the next 10 years?

Larry: I think thematically, and 10 years is a great timeframe to think about it because it’s so hard to imagine a world 10 years from now because of the rapid pace of change that we’ve experienced in the past 10 years. And just think about all the things that have happened in the past decade and try to push that forward at even a steeper trajectory. So we believe that thematically, technology automation, you may think of that as a artificial intelligence or machine learning, is going to do things that the vast majority of advisors today just can’t possibly fathom.

We hear from advisors all the time that say, “Yeah, technology is great, but it can never do what I do. I’m an advisor.” And I try to caution advisors from putting up those barriers. Don’t underestimate change. Don’t underestimate technology. Because I think every time we’ve done that, we’ve been wrong. Maybe it happens a little bit later than we think, maybe it’s a little bit sooner, but change is not polite. Change is not just going to give you a heads up and says, “Hey listen, Hannah. In about a year, if you don’t make this change to your business, I’m going to disrupt you and it’s going to be a big problem for you.”

Change kind of smacks you in the face sometimes and I think a lot of advisors are in the market for a rude awakening when that happens. When they start to think technology can’t automate financial planning, technology can’t automate estate planning, technology can’t do what I do, I think they’re going to lose that bet.

Hannah: It’s so interesting. Especially talking a lot to new planners who are just starting their career into financial planning, how do new planers kind of position themselves in this changing world?

Larry: Well, I think in some respects, new advisors are the best suited to drive the change forward and that’s why I think they have this amazing opportunity and why there’s probably never been a better time to be a financial planner than right now. So many firms, ourselves included, you can become beholden to the way you’ve always done things. You become a victim of your own success.

And that’s why for us, it was such a blessing to start from scratch five years ago where we had no systems. We had no technology or the way things had always been done. We also had no clients. So we had to build and find them, but that was a great benefit to us. We didn’t have to change a CRM system that we had used for 20 years. We didn’t have to adopt a policy or change a policy that had been in place for a decade.

So I think advisors that are starting out, it’s a blessing and a curse. Obviously the curse is you don’t have the resources, you’re focused on building your practice, but we’re really inspired and encouraged when we talk to advisors all over the country who have bought into this notion that clients deserve better, that there’s a way to focus on what really matters, that there are tools and opportunities that exist today that didn’t exist previously.

And I think if a new advisor today goes in with an open and curious mindset, they’re going to find opportunities and ways to help their clients and build their practice that is going to just supercharge their business and allow them to build great practices. And then their challenge will be, can they turn that into a real business? Something that has enterprise value more than just a solo practice.

Hannah: And let’s talk about that. When you say turn it into a business that has enterprise value, what specifically do you mean?

Larry: We’re fortunate enough to talk with, every year, hundreds, thousand advisors across the country. And when it comes to enterprise value, there are two types of folks we talk to. There are those that have never tried to sell their practice and sell their business, and those folks typically have an inflated sense of what their business is worth. They know someone who sold their business for X times revenue or Y times earnings, and they think their business is worth that too.

Then we talk to other folks who have actually tried to sell their business and they’re typically a little bit more reasonable. So it can be a hard thing for advisors to get a grasp of, what is my business worth, if anything, and then how do I increase it? And what we’ve seen is a couple of missed opportunities, that the biggest missed opportunity is that a lot of advisors don’t have real businesses. They have lifestyle companies. They’ve set up a lifestyle business, they’ll work with their clients, do what they’re passionate about, but they are the key person.

The business wouldn’t exist if not for them. They’ve not built out the infrastructure to handle operations. Now, there’s no scale that’s associated with it and as a result, their business plateaus. The business grows to the size that one financial advisor can handle and then that’s it. And who’s going to buy that business? I wouldn’t pay very much for that. We’re not in the market of buying businesses, but that’s not an enterprise, that’s a solo practice.

And there’s nothing wrong with that at all. I know tons of great advisors where that’s their business and they love it and their clients are greatly helped by them, but when it comes time to sell the business, it’s just not going to be worth very much. And so I think the opportunity that they have is to build a real business, build something that is larger than one person. Either build it yourself or join another company, join a company where they have that infrastructure.

Advisors who have their own practices, when they join AdvicePeriod or the join another business, their practice automatically becomes worth two to three times what it is on their own because they have the infrastructure. At least in our case, our advisors keep owning 100 percent of their business so they get to keep all of that upside. So I think that’s the opportunity for advisors, is build a real company, a real enterprise. It’s not easy, but I think that’s the opportunity.

Hannah: I remember when I first started working for a woman and realizing that it is a business, but it wasn’t that enterprise value that you’re talking about. For the people who are working at firms right now, what are signs or indicators that they’re not working inside, I don’t want to say a business business, but more of that lifestyle practice?

Larry: I think, and this is hard for a lot of advisors to hear, it’s just my opinion, people can disagree with it, but I firmly believe that many, many great advisors are horrible business people.

Hannah: Yep.

Larry: That’s just not their passion. Their passion is helping people. I think some of the best advisors get into this business because they truly like helping people and they’re able to live that passion by being a financial advisor. And I think that’s a great calling. But the fact of the matter is they’re not great business people. They’re not thinking about the culture of their business. They’re not thinking about the operational infrastructure. They’re not thinking about, how do I scale this business?

You see it in everything from what a company is called. How many wealth management firms are named after the last name of the founder or the last names of the founder? Again, I know plenty of good firms that are named that way, but that firm is about that person. It’s not an enterprise, oftentimes. Is there someone that runs the business who isn’t a financial advisor? Is there that chief operating officer or that president of the firm who certainly knows enough about financial advisory to be dangerous, but whose primary focus isn’t taking care of clients, it’s taking care of the business and the teammates and the employees that work there.

Those would be, I think, some high level indicators as to whether or not you’re working for a lifestyle business or a true company that would grow beyond just the founder. And I think that’s the ultimate test. If that founder got hit by that bus that’s out there circling the streets, looking for all of us, if that founder went away, is there still a business? And if the answer’s yes, then you’ve made it. You’ve crossed that threshold into an enterprise.

Look, every business has key people. I don’t want anything to happen to me or one of my partners, but I think if it did, the business would carry on, and I think that’s a good hurdle to get over for growing businesses.

Hannah: And so how do you identify yourself? Do you view yourself as that business owner or the financial planner?

Larry: I’m still trying to find out what I’m good at. I’m hoping I’ll get there eventually. I love helping my fairly limited client base. Largely, my friends, the folks I’ve met through business, but I’m much more passionate about helping my team be successful. I think I got into this business because I enjoyed helping people and I do enjoy helping my clients.

But I get much more enthusiastic seeing my teammates, my partners, our interns grow and accomplish all the things that they want to in their careers. That gives me an awful lot of fulfillment and that’s what gets me really fired up. And if I can help in some small way, they’ll put our team and our partners together in a position where they can be successful and impact more people’s lives. That makes me really happy.

Hannah: So speaking of helping people, you just came out with a book called, It’s That Simple: How to Build a Professional Service Firm of the Future. What motivated you to write this book?

Larry: Fair question. I think it was really two things. Personally, I was curious about the challenge. Would I be able to stick with a process that was going to take a year or more? Would I be able to come up with enough things that at least I thought were interesting enough to share with other people? But I just enjoyed the challenge of it to see if I could do it. And then I guess professionally but also overlaps with personal, like I said, I like to help folks. And if there’s some things that we’re doing at AdvicePeriod that can help other financial advisors or other professional service providers, lawyers, doctors, accountants, attorneys, again, that would make me really happy.

I’m really enthusiastic about what we’re doing at AdvicePeriod, not because we have it all figured out by any means, we’re still learning every day, but I’m really excited about it. And again, I love the idea of being able to help others. And if there’s some good nuggets in that book, which I certainly think there are, that helps someone, it helps a professional service provider take better care of their clients and their customers, then that would make me really happy.

Hannah: And so looking at kind of that book and kind of what’s in it, and for anybody listening, you can go to Amazon and find it or you can go to the show notes in there and the link is in the show notes for the book as well. But you talk about the importance of attracting great clients and how to do it. Can you talk a little bit more about … I often hear people talk about you need to attract the right clients. And so I guess how do you know who the right clients are and how do you attract them?

Larry: In my personal experience, our experience with AdvicePeriod, it’s one of the most difficult things to stay disciplined enough to say no to an existing client or to say no to a prospective client if they’re not right fit for you. It’s so difficult, especially as I know a lot of your audience is, they’re building a business. Every new dollar of revenue will be put to good use, but to your point, you want the right clients, not there right now clients.

As difficult as that can be, over the intermediate term, over the long term, that’s really going to separate a great business from an okay business. And so if your question is, how do you identify what makes a good client or a great client? A great client is someone that you can help and is someone that values your services. Honestly, it’s not more complicated than that. Someone that you can help means that they fit what services you offer.

For us, that’s going to be someone that values planning, someone that is interested and open to advice and to being coached. It’s not going to be someone that wants us to pick the hottest stock or to trade crypto. That’s not what we do. And so someone who’s interested in us doing that for them, no matter what they’re going to pay us, isn’t gonna be a great client because that’s just not what we do.

And then the other side of that equation is someone that values what we do. So if someone’s only willing to pay us a dollar for our services, we don’t think that’s fair. And so we value one of the best pieces of advice I got from one of my many mentors I’ve had, Andy Putterman, said, “Listen, when you present your bill to your client, do it with a lot of pride. Provide that bill promptly, provide it accurately, and expect the client to pay it. Be proud of what you’re doing. And if you’re not, if you don’t value your services, your clients certainly aren’t.”

And so if your clients don’t value your services, if they don’t appreciate you either because they treat you or your team poorly, that’s a situation you need to fix or it’s going to sink your business very, very quickly. So find clients that you can help and that value and appreciate what you’re doing for them.

Hannah: There’s a lot of buzz around this idea of niche marketing. What are your thoughts on that?

Larry: Our approach and something I believe in personally is that the more clear you are on who you want to work with, the easier it’s going to be for those clients to find you. And so when you think of marketing or PR, tell the world what you believe in and like-minded clients, like-minded advisors will find you. So if you believe in the power of passive investing, write a lot on passive investing, blog on it, speak on it. Put that out there in the world, and people who share your beliefs will find you.

It’s much easier to sign up a client who is already looking for what you provide than trying to convince a client or a prospective client who isn’t looking for what you have, that what you have is what they really want. I’d rather talk to folks that are already looking for a planning first technology enabled advisor than try to convince someone who’s at a big wire house that what their broker is doing for them is costing them money and is of no value. I’d like to be able to do that. It’s just really, really difficult.

So if you have that niche, if you have a target that you want to go after, yeah, define it, put that out there in the world, be known for something, and it’s gonna make it a lot easier for you to find clients that are interested in what you’re doing.

Hannah: Looking at your book and kind of what you were talking about, you talk about the critical impact of a shared mission.

Larry: Yep.

Hannah: Can you talk about that more? Because I feel like it does overlap with what you’re talking about with clients and attracting the right clients.

Larry: No question. What we distinguish when we’re looking to attract a teammates, but I think to your point, it definitely applies to clients as well, we want to attract missionaries, not mercenaries. So a missionary to us is someone who believes in our mission, who believes in our vision for the future, who is working with us for something more than a paycheck, but they’re passionate about what we’re doing, about the lives that were impacting, the business that we’re building, and our company mission of reinventing wealth management.

I think if you asked most anyone on the AdvicePeriod team from California to Atlanta to Rhode Island to anywhere in Texas, in between, they’d be able to tell you that our mission is reinventing wealth management. Versus a mercenary, a mercenary is working because you’re paying them the most. They’re interested in a signing bonus, they’re interested in the title, they’re interested in what’s in it for them. And listen, we’re all a for-profit business. We need to pay our folks fairly, but ultimately, we think our clients will be best served if we have a team full of missionaries who aren’t looking at the clock as to when they should get out of the office, but they’re focused on getting the job done and they don’t stop until it’s done.

And so we attract those missionaries, or we try to attract those missionaries, again, by telling the world what we believe in, by writing a lot, by being very open and transparent with everything that we’re doing in the business. We think that attracts and retains a team of missionaries and we think ultimately that’s going to benefit our clients and our business.

Hannah: Hearing you say this, and I’m just connecting with all of these younger planners and new planners that I talk with who are so passionate about financial planning, and it’s just so cool to be like, these people who are so passionate, there are passionate firms that you want to get paired with. And it’s about finding that right fit, especially for new planners.

Larry: Couldn’t agree more. Life’s too short to not love what you’re doing and who you’re doing it with. Again, I think especially in our industry, which right now is called wealth management, but I think over those next 10 years that we were talking about earlier, I think over the next 10 years, our services will expand to be not just investments and planning, but it’ll expand to include legal services, tax services, all aspects of a client’s financial lives where one advisor or one advisory firm will be able to answer and address all of those clients needs.

Yeah. Those people are passionate about helping their clients and making their lives more simple. And it’s been a lot of fun over the past couple of years to talk with these thousands of advisors, just like you do, across the country who have that same passion and that desire to do things even better than they’re currently being done. I think that’s what’s gonna make a lot of fun.

Hannah: For new planners who are entering the financial planning profession right now, what is your advice to them?

Larry: I think now’s a great time to be entering the business. I think now’s a great time to be a growing a business. I think embrace the change, be open and curious, be looking to do things differently. And like you were saying about finding other advisors out there who believe what you believe, you don’t need to go it alone. I think you can find the right combination where you have all of the benefits and financial and other flexibility of owning your own business, but do it inside of a construct where you can learn from other folks.

Again, I think there’s a great community of advisors out there. Find it. Find those advisors who you can learn from, who you can challenge, and who can challenge you. They’re out there and through communities like yours and the FPA, AdvicePeriod, we’re trying to do in our own way as well. I think you can find other like-minded advisors out there and you can do a lot more together than I think we could do apart. And I think that’s the opportunity for the broader independent advisor community and financial planning community, is we’re a very fragmented market right now.

The more we come together and work together, the more we’ll be able to change the industry for the better and ultimately, that benefits clients, it’s going to benefit us, and we can really change. I think we can change the entire country’s financial trajectory if the financial planning community comes together, works together, and focuses on what’s best for clients.

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This episode is a must-listen to for financial planners who relate to Larry’s statement that the current model of wealth management is outdated. Larry tackles how to adopt revolutionary planning practices for your business, Larry Miles, a Principal at AdvicePeriod, firmly believes that, to build a business, you have to be open to change. Unfortunately, many aspects of the wealth management profession are growing increasingly outdated. Through his work, Larry explores how advisors can focus on what really matters to clients – more planning, less investing and technology.



So many advisors are passionate about helping their clients. That’s the reason they’ve gotten into the financial planning business in the first place. However, when it comes to actually running their practice, they fall down. They aren’t adopting new technology, or updated ways of structuring their services.
They aren’t streamlining in a way that makes their lives easier and helps their work to shine. Larry wants to help change that by facilitating a conversation around disrupting the profession and growing advisors as financial planning professionals and business owners.
This episode is a must-listen for all RIA owners (or advisors who are feeling “stuck” in the antiquated practices of the RIA they contribute to). Larry tackles how to adopt revolutionary planning practices for your business, and where you can connect with like-minded advisors who all want to grow and make this profession the best it can be.


 
What You’ll Learn:

What really matters to clients and how you can position yourself to deliver that to clients
How technology impacts Larry’s view of financial planning – and how it could continue to grow the profession in the future
Why Larry believes that AUM is an outdated pricing structure – and what he thinks advisors should do differently
How to market yourself in a way that shares your passion and attracts your ideal clients and advisors who have shared values
Where to find a community of advisors who are like minded and interested in being part of the next iteration of financial planning
What it means to build enterprise value and how to do so

 
Larry Miles on Investment News 40 Under 40
 
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Hannah Moore clean 39:48
From New Planner to Partner-Eligible in 5 Years https://financialplannerpodcast.com/yafpnw-from-new-planner-to-partner-eligible-in-5-years/ Tue, 27 Nov 2018 20:38:33 +0000 https://fpaactivate.org/?p=11772 https://financialplannerpodcast.com/yafpnw-from-new-planner-to-partner-eligible-in-5-years/#respond https://financialplannerpodcast.com/yafpnw-from-new-planner-to-partner-eligible-in-5-years/feed/ 0 Bryan Hasling, CFP ®, is passionate about building a network of financial planners who lift one another up. He’s focused on helping other financial planners learn how to foster community in their practices and with one another to thrive throughout his career, and as a previous San Francisco FPA NexGen Director. Bryan Hasling, CFP ®, has focused on building a network of financial planners who lift one another up. Early on in his college education, Bryan knew that finding a support system within the Texas Tech’s financial planning program would be key to growing a successful career in the financial planning profession.

He’s carried this mentality throughout his early career – he’s joined the FPA, won the FPA NexGen Gathering scholarship in 2015, and went on to be the San Francisco FPA NexGen Director for 2 years. Bryan has also participated in study groups, and has focused on helping other financial planners learn how to foster community in their practices and with one another to thrive.

Bryan started his career after Texas Tech with a small firm in the Bay area. Although it was the newest firm that had given him a job offer, and posed the highest risk as a new grad, he took the leap because it was the type of community he had been looking for in a financial planning practice. Now, less than 5 years later, he’s on track to become a partner. Bryan largely credits this to the community and network he’d built within FPA and the financial planning profession as a whole, and the amazing environment that his practice built when they originally hired him as their first employee.

Now, Bryan wants to help other financial planners learn how to build career paths within their practice that fosters the success of their new employees, grow a tribe that supports them, and grow together.

Hannah's signature

What is their personality? What are they excited about? What are they good at, what are they bad at? Then, find a place for them at their firm. – @bryanhasling on #YAFPNW

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What You’ll Learn:

  • How to find your “tribe” in financial planning
  • Why it’s more important to try than to find perfection
  • Why it’s important to surround yourself with people who you want to emulate, not people who exhibit behaviors you don’t want to be associated with
  • What he’s learned from FPA NexGen
  • How to weigh risk and reward when trying to pick a job after college
  • How NexGen planners can grow faster
  • Why he chose the Bay area out of college (when he went to college at Texas Tech)
  • Why many financial planning practices can’t keep their employees
  • How to “find your people” and why it’s key to success
  • How study groups can help to facilitate growth
  • How to bounce back from failing the CFP Exam

 

JW Harrison Financial Advisors

Millennial Planners

G2: Building the Next Generation (Bloomberg Financial) 1st Edition

Personal Financial Planning at Texas Tech University

 

Show Transcript

Ep126 Transcript


Hannah:               Well thanks for joining us today, Bryan.

Bryan:                   Happy to be here.

Hannah:               So you have seen a lot of success in your financial planning career, and we are going to dive into all of that, but how did you first get into financial planning?

Bryan:                   Yeah, so I was one of the lucky people who stumbled into this whole industry which turns out to be, at least if you’re in your early 20s, it seems to be a pretty common path. Because what happens … I was eighteen years old and I went to college, then I was supposed to pick a major. And I don’t know what I’m supposed to major in, maybe like accounting or something, and maybe some economics classes. And I take those and they don’t really work out. And I sort of dance around to the point where I happened to go to a college that actually formally taught financial planning. So I ended up getting recommended over there and I take it, and it starts to resonate with me.

Bryan:                   So I was basically years into college before I even found it. So I just kind of fumbled around until I found financial planning and then once you find it, it’s like, “What’s important is why you stick around.” I realize like, “Wait a second. I’ve seen some of this stuff before.” And it was kind of some of the stuff I was helping my own family with.

Bryan:                   So my parents went through a divorce, a few years prior to my first financial planning class. So I was basically helping some of my family out, mainly my mom, with financial planning topics, I guess you could say. In a divorce, money gets moved around, new accounts need to get opened, and you learn what a QDRO is for the first time. So just all that stuff, I had seen some of that stuff in my classes, in real life. And I was like, “I think this is … I think this is it.”

Bryan:                   So I ended up getting lucky into sort of stumbling into it, but no eighteen year old really goes into college wanting to be a financial planner because they don’t know what it is.

Hannah:               Hopefully we’re going to change that in our lifetime…

Bryan:                   Yes.

Hannah:               So you find this Financial Planning degree, and you’ve seen some of this in your own family, was that kind of the moment you were like, “This is what I’m gonna do”? Or was it kind of more gradual?

Bryan:                   Yeah, it was. That’s a really good question, so it was pretty gradual. When you’re in college and you’re just taking classes, and you’re trying to find your identity … like, “What am I doing? I found these classes, but am I going to do this? I don’t really know.” But I was familiar with some of the topics, and I was kind of good at it, so I was like, “Okay, I’ll just stick around here for a while and see what happens.”

Bryan:                   So it didn’t happen immediately, but I was interested enough to stick around. And then I stuck around and I ended up hanging around the program and all their fun groups and clubs and things, and I started getting really, really involved with those people. So the best thing I did was decide to be really, really involved with the program. It was kind of a small boutique program. It wasn’t even in the Business College, it was in the Human Sciences College because that was the only school that would take ’em. This really boutique feel to it. We had our own corner of the building. We had our own computer lab. And the teachers, there wasn’t that many of ’em, but because there’s not that many of ’em, you can talk to and make relationships with them.

Bryan:                   So I just started hanging around more. I ended up becoming an ambassador to the program, so I would give people tours or just be a face for the program. You just get to do a lot of things when you’re in a small program. I got to go to competitions and compete, and represent the school. I got to go to conferences and wear our red shirts, ’cause at Texas Tech you have to wear a blindingly red shirt when you go to a conference, so I got to be one of those people which was a ton of fun.

Bryan:                   So the smartest thing I did though was just allow myself to get involved with those people, and make those people my friends. I think a lot of people that were … a lot of my classmates, they went to class and then they checked out, and they went to go hangout with their other friends. Me, I decided to really commit and make these financial planning people my friends. So a lot of them are still my best friends to this day.

Bryan:                   We had this little community going on and you could be as involved or not as you wanted. So what ended up happening is that I basically, I don’t know, I just found a little tribe and we just nerded out on financial planning stuff all day long. And if you’re a financial planner, you know that you have little inside jokes that only other financial planners get. So I can make those jokes with these people and we can vent about classes together, and you spend every waking moment together. That’s when it clicked on, I was like, “This is my people. They get me, we get each other, and this is who I want to be a part of.”

Hannah:               Yep. Oh I love that and this idea of finding your people, like how important that is to a career, especially in the early stages of it.

Bryan:                   Yeah, ’cause I wasn’t … I wouldn’t consider myself a naturally, overly gifted student. So if I joined a community where it was very normal to do your homework and do really good on your projects, and present really cool stuff, like that was the normal. I joined that tribe. And so invariably, I just started being a little bit more impressive when I was on my own, probably not that impressive.

Hannah:               I love this, I don’t even know who said it, but somebody somewhere says, “Look at the five people you’re around the most, or the five types of people you would be around, and that’s who you are.” And it’s like, if you want to get better, surround yourself with people who are better than you or who are where you wanna be.

Bryan:                   Yeah. I definitely learned how that was important, I think, in those college years and I even more recently have expanded on that five closest people to you definition. I just bought this book, I haven’t read it yet, I’m like a chapter in. But I just got this book by this author named James Clear. He writes this really cool newsletter once or twice a week and he just writes about habits. The book is literally called “Atomic Habits”. ‘Atomic’ meaning like really, really small, like the smallest possible thing compounded over time results in really cool stuff.

Bryan:                   And if you want to make a habit, really, really easy and a part of you, the easiest thing to do is just join a group of people who are doing something and working towards a common goal that you are. But the more important part isn’t the common goal. The more important part is the behavior that is looked down upon in that little tribe, in that little culture.

Bryan:                   So like … what’s an example? I’ve joined a running club before ’cause I wanted to run more and exercise more. So I joined that little club and that was my tribe at the time. And yeah, we were all running far, but you didn’t need to be a fast runner. You just need to run. So the behavior that was accepted was you have to at least be trying. And the behavior that was looked down upon was somebody being lazy. So by definition, you didn’t want to be lazy or else you would be essentially shunned from the group. You didn’t have to be an amazing athlete or anything, you just need to try.

Bryan:                   So that’s a really simple example of what all these different tribes are doing. I think XY Planning Network, it’s a huge tribe and everybody moves at different speeds. Some people’s businesses are taking off. Some people’s businesses are forming way slower, and they’re kind of confused. But as long as they’re still trying, they’re in. And if they get lazy and stop being involved, that’s kind of looked down upon and nobody wants to be looked down upon.

Hannah:               So you’re in college, you graduate, what was it like looking for your first job? What were your thought processes in finding and accepting a job?

Bryan:                   When you go to an actual program, that actually teaches this new age, fee-only financial planning, it gets you on the track to CFP ASAP, there’s a lot of acronyms there … When you go through these programs, you start to realize like, “Whoa. I think I’m gonna have a job after college and I think I’m gonna have more than one offer.” At least that’s what they plague your mind with, they basically … You walk into a class and they tell you that you’re going to have a job. So that’s a really cool feeling.

Bryan:                   And so I realized, “Well, I’m in my twenties.” People in my family are not accustomed to the ‘go build a career’ life. This is not something we did, but I really wanted that. I really wanted to put my best foot forward and be a career person, and really get good at this and really just go all in. And I knew that if I wanted to do that, I had to create a little bit of separation from my home base and just get away from it all, and just go all in.

Bryan:                   So I’m from Texas. I’m from Dallas. There’s a ton of jobs in Dallas, honestly. There’s a lot of people who recruited from our school and all those firms were in Dallas, and that’s where most of the students go. And there’s some really great firms that are there. So there were options there, but I knew that if I took a job in Dallas or Fort Worth that I was gonna be around … like who’s there? My high school buddies. I have a lot of family around, but I don’t need to see my family to be close to my family. I’m actually closer with my family when I don’t live next to them. ‘Cause we just like … phone calls are so much more efficient for whatever reason.

Bryan:                   So I knew I didn’t need to be near and dear to my family just to be close with them. And my high school buddies, I don’t need to be close to them. We’re playing different ball games now. So I needed to … I basically wanted to go out of state at least for a little bit.

Bryan:                   So I started thinking about places I wanted to work and I really just started with geography. I asked myself, “Where do I want to go?” I ended up deciding that my criteria was, “I want to work in a cool, call it ‘metropolitan’ area, with a lot of like, call it ‘commerce’, a lot of business activity. Maybe a big city.” So I want that just because I knew there would be a lot of job opportunity there. But I also wanted to work for, preferably, with nice people.

Bryan:                   And I ended up landing on the Bay Area. I think I landed on … I don’t know where else I landed. Like maybe Southern California, like San Diego. I’m not sure what it was, but maybe … oh D.C. was up there. But then I talked to a recruiter guy and he was like, “You don’t want to work in D.C. They’re mean there.” So I ended up landing on the Bay Area.

Bryan:                   And I was like, “Well, where do I find these jobs at?” I didn’t have any luck when I was talking with people at conferences, ’cause that’s just like hit or miss. But I did happen to know the main recruiter in our industry, which is Caleb Brown, because he also went to Texas Tech and he was kind of a name that we all knew. And he had a couple jobs in the Bay Area.

Bryan:                   So I contacted him and I said, “Hey, I want to apply to this firm in San Francisco.” And he calls me thirty minutes later and was like, “Are you serious about this, Bryan? San Francisco? You’re from Dallas, be real with me.” I was like, “Caleb, I’m being serious. I want to do this.”

Bryan:                   So we did the full, formal process and he kind of vetted me, presented me to a few firms, ended up connecting with my current boss eventually, and I had a couple other offers at the time so I had to choose. Like, “Well, what do I choose?” I ended up choosing my current opportunity even though it was the opportunity with by far the greatest risk and the lowest amount of track record of success. ‘Cause the firm was three years old at the time. I think on the AUM scale, I think we managed 30 million at that point, and my boss had never hired anybody before. It was his three year old business and I was the first hire.

Bryan:                   So that was inherently risky for sure, but I still ended up choosing it. And I chose it because number one, I wanted to be on the ground floor of something. ‘Cause I wanted to be like … If I really went all in, I wanted to feel like I was important to the operation. So I was like, “Well, if I’m number two then I have to be important. So I’m gonna get a lot of work that way. So I want that.” But also, when I was in the interview, I got the sense that my current boss was a very experienced manager. And his former career was basically a manager of multiple levels at a corporation where his main job was to just oversee people and grow them, and make sure he was putting them in a great place to be happy, make good money, and just have work satisfaction. I could sense that. I could tell that was the kind of person he was, where he gave a lot of energy to the people he managed.

Bryan:                   So I could feel that. He made it very clear to me that this job would be highly tailored towards me and whatever I was wanting. And I had to take that opportunity.

Hannah:               So … so many questions. Okay.

Bryan:                   Sorry.

Hannah:               Number one, no, no, no. It’s so good. It’s so interesting. I think back to when I took my first job and the thought of the risk that was associated with accepting the jobs that I did accept, that didn’t even cross my radar of “Was this a risky place to go work?”

Hannah:               And so it’s really interesting to kind of hear that, from your perspective, of that’s how you evaluated your job offers.

Bryan:                   Well you did the same sort of leap, right?

Hannah:               Yeah.

Bryan:                   Like in your early twenties, right?

Hannah:               Yep, absolutely. And for me, I mean I’d love to say I had as much thought as you did, but it was really, “Oh, it’s a job. Sure, I’ll take it.” And so yeah, I love this kind of different lens in which to view these job offers through.

Bryan:                   It was definitely a risk. And my boss, I mean, my boss knew that. I mean, he knew that I was taking a risk. The other risk was I was moving from Texas to California. So there’s a flip right there already, from a culture standpoint. And I don’t have any … I didn’t have any friends, I didn’t have any family, I had nothing. So huge risk for me on that standpoint. And a huge risk for my boss at the same time because if somebody doesn’t have any support network, they don’t have any roots, they can up and leave you just as quickly as they joined you. So we both kind of have this calculated risk that we were taking on each other, but we did it.

Hannah:               What was next for you? So you’re working for this company, what did that look like or what was your next kind of progression in your career at that point?

Bryan:                   So immediately upon getting started, of course you’re learning the job and you’re getting introduced to some clients, maybe, maybe not, but then comes the question of licensing. So actually before I’d even started my first day, I decided to try and be that person who could knock out the CFP Exam before. So I said, “Hey, let me take” … I told my boss like, “Hey, thanks for the job offer. I accept. Also, I’d like to not start immediately. I’d like to study for the CFP Exam over the summer before I start. I’ll have plenty of free time.”

Bryan:                   So that’s what I did. So I studied, I took the CFP Exam, I moved to California like a week or two later, and then I got my results … ’cause this was the day were you had to wait for your results. I think it was like the last paper exam. So I’m two weeks into my new job, and I get an email from the CFP and they’re like, “Congratulations, Bryan. You failed the CFP Exam.”

Hannah:               Ouch.

Bryan:                   I was like, “No! I just moved across the country for this and I’m already failing.” So that sucked. Basically the boss told me, “This is bad, but just sign up. Give yourself a day to mope, sure, but sign up again and let’s do this.” So I signed up again, here I am. I spent the first three months of me living in sunshine in California, basically in the office studying for the CFP Exam. So that was kind of a bummer also while trying to learn the new job. So that was kind of a bummer, but then I took the exam again and I passed that time. That was way better.

Bryan:                   But then, even so passing, I didn’t have the designation yet because, as basically everyone knows, you have to have years of work experience to get the credentials. So I didn’t have that yet, right? I didn’t have enough. I had some, I didn’t have enough. But remember, I was hire number one, and we were getting a bunch of clients coming in and so I needed to be licensed to speak with them about financial stuff. So I ended up having to start studying again for this other exam called the ‘Series 65’. Series 65 is the one that allows you to give investment advice for a fee. Most people get this one if they don’t have the CFP yet. If you have the CFP and you actually have the designation, you don’t need to take the 65. But me, I needed to.

Bryan:                   So what happens there? I study for another month, I’m kind of trapped in, trapped in the office. But also, I just passed the CFP Exam and I’m pretty cocky about it. So I didn’t study that much and then I classically failed that exam, and that was terrible. That was terrible. This was all within a few months of moving here, so I’m just failing all over the place. And then I signed up again and I took that one and I passed it again, but that was the first several months and I think that’s probably the first several months for lots of new hires.

Hannah:               Yeah. It’s funny, some of the best planners I know have failed their CFP Exam. I do not think that’s an indicator, whatsoever, of whether or not you’re going to have a successful career. I mean, you do need to pass.

Bryan:                   Yeah.

Hannah:               It is good to pass your CFP!

Bryan:                   Please do.

Hannah:               But it’s encouraging to know that if people are failing their CFP Exam and in the middle of that, there will be a day where you can look back … I don’t know if maybe laugh at it, or laugh about it, but it’ll get better.

Bryan:                   Yeah, at first it was embarrassing. It’s just like, “Crap. I told all these people I was taking this thing, so now I have social shame.” But also there’s the internal failure like, “Crap. This is what I devoted my life to and I can’t pass this exam. Who am I?” Have this identity crisis. And then you just sign up again and you learn how to master these exams. I mean, they’re kind of strange. Exams are not real life. You just have to accept that as a part of life. It’s just not … it has nothing to do with the job, your ability to answer A, B, C, D. But it’s just a part of it. So it’s something we have to do.

Hannah:               As you’re doing this, the first time I knew about you I was online and I stumbled across this blog, the ‘Millennial Planners’ blog. Can you tell me what is this? And how did this get started?

Bryan:                   Yeah, Millennial Planners. So that started … I think it started right after all this exam stuff that I just described, ’cause finally I had free time. When you get done with your exam, you’re like, “Wow. What am I going to do with all of my free time?” You finally learn, “Wow, this is what time management looks like. This is amazing.” When before you thought you had no time.

Bryan:                   So I had free time and also what I had done is I had tried to replicate that tribe mentality, from back in college. I needed a new sort of tribe and I didn’t know who my people were yet. I wasn’t sure who was trying to get good at this job, in this industry, like I was. And I ended up finding a couple people and we made a study group. Our study group, we basically met up via video chat like once a month. One guy was down the street from me, but the other guy was in Connecticut. So we just did our video chat once a month where we sort of dove in, like, “What’s going on? How you feeling about work?” And it was kind of like a venting session, really. Not so much technical, just like, “How you feeling about work?” And “How’d you get over this?” And hard times and happy times.

Bryan:                   So that’s kind of what the study group was and we all ended up realizing that we liked to write. I think they actually had a blog together years prior, just for fun. So we wanted to write about this very specific financial planning industry stuff, so we started writing. One of the guys, he reads so much and he did like, “I read this book and here’s how it relates to financial planning.” And all this stuff. And me, I think my first post was basically speaking to college Bryan of how to get a job. If I was talking to former Bryan, trying to help him out, trying to help him give all the cheat codes basically. Like how could I help him find a job?

Bryan:                   So I wrote like “How to Find a Job in Financial Planning” and it was basically … what was the punchline of the article? It was like … Here’s how you interview. Here’s how you identify a firm. Here’s what a form ADD is and where you can find it. Here is why you don’t get the job offer sometimes even though you thought you were perfect. And all sorts of stuff.

Bryan:                   So just speaking to people who were just behind me, the cohort that’s just behind me who’s about the live the life I’m living right now. What advice could I give them? So I think the next article I wrote was “How to Pass the CFP Exam” and it was like a twelve week study guide. And I wrote that three or four years ago, and I still get people from across the country all the time that find it. ‘Cause I guess no one else is writing these things, so I’m just getting hits all the time from it. And people saying, “Thank you so much for writing this.”

Bryan:                   And yeah. You might have even saw that one from a long time ago. That was a pretty popular one.

Hannah:               Yeah. Well, I just … I mean, this is a lot of work that you guys are putting into this blog. What’s your motivation for it? Why were you guys doing this?

Bryan:                   I think we all had different motivations. One guy, Joe, he just likes to document his thoughts. He’s a very introspective person. He’s the one that reads and does book reports. He’s very introspective, he likes to think on paper basically. He’s a really big journaler. So it’s basically like, it was like his journal.

Bryan:                   Me, my thing was like, “I want to give advice to the people who are just behind me because I’m a big brother at heart. I have a little brother and I want to make his life as easy as possible with everything that I just went through. And interpreting all that and just making that life a little bit easier. And I want to do the same for people in this industry. It’s so similar to what this podcast is about.

Bryan:                   “Ah, great. I got a job. So what do I do now?” And “How is this supposed to feel? Is this normal?”

Bryan:                   And so it’s really just trying to let you know, “Hey, it’s normal. And by the way, here’s a couple tips on how you can get over that hump because I know it sucks.”

Hannah:               You have this blog and you’re working on this, and you became an enrolled agent as well. Is that right?

Bryan:                   Yeah, so I ended up pursuing the IRS Enrolled Agent, which is basically like the CPAs little tax cousin, basically. And I did that because number one, I had that free time again. Like, “What do I do? I need to sign up for another exam.” ‘Cause once you take the CFP exam, by the way, everything else … nothing is intimidating anymore. So I was like, “Nothing’s intimidating and I have all this free time.”

Bryan:                   And I kept noticing in client meetings and stuff … Stuff about tax came up every meeting and we didn’t know what to say sometimes. The most regurgitated response from a financial planner is like, “Oh, you should ask your task advisor about that” or “You should ask your tax preparer about that.” And I got really tired of saying that. I got really tired of hearing it.

Bryan:                   So I was like, “Well, I’d like to learn about tax so that in meetings we can just ask me.” Hopefully, that was at least the goal. Whether that ended up happening, that was at least my initial goal. So I was like, “Well, what is the most efficient way that I can learn about taxes? And be forced to learn it because I know I’m not going to learn this stuff on my own.”

Bryan:                   So there’s this designation called the IRS Enrolled Agent. You’ll see ‘EA’. Most tax preparers are either CPAs or EAs. The CPA is kind of inefficient because it actually covers four main areas, only one of them is tax. So most CPAs, they have all this knowledge that they never use and they only study tax a quarter of the time when they study for their exams. The EA is basically just the tax part stripped out. And in fact, it’s probably expanded upon a bit more than the CPA is, at least from the tax side.

Bryan:                   So it’s three exams. The first exam is individuals, the second exam is businesses, and the third exam is other regulatory stuff. The first exam most people can pass I’d say because we see it all the time at work. If you’ve done your own tax return, you’ve seen this stuff before. The business side was super hard because we never see it basically, not as common of stuff. So that was pretty hard. And then the third exam is hard, but passable.

Bryan:                   So I did the EA just to be the tax person here in-house. What did that really mean though? That means that whenever there’s some random tax question that a client has, my boss just says, “Well, oh. Well Bryan’s a tax guy, we’ll just have him look into it.” So that’s essentially all that happens now. And then just by simply wearing the tax hat, I now all of a sudden have all of these opportunities that are given to me to work through these things, when before I probably wouldn’t have these opportunities.

Hannah:               We were talking a little bit beforehand about finding where the firm’s interest lies and the employee’s interest lies. And so it seems like there’s a clear overlap there with what you wanted and what was good for your firm as well.

Bryan:                   I think the EA was just something that I proposed, something that I could sense that the firm needed. And I was like, “Well, this is my opportunity to sort of step up and have a deeper footprint into the firm and what it needs.” With when it comes to the firm’s interest and the employee’s interest, sometimes they are totally off though. I think when I first started though, I wanted to do this kind of random designation, which was a charitable planning degree, like a graduate certificate. And I only knew about it because Texas Tech did it and I had already taken a couple of graduate courses in it, so I was kind of halfway there.

Bryan:                   So I wanted to do it further, but then I would get the knowledge and it would have nothing to do with our clients. So I had to find like, “Okay, is this worth it? Is this totally a waste of time?” Just figuring that out. Sometimes it’s hard to make the case for the firm, but if the general consensus is like, “Okay, you can study for this designation and if 50 percent of it will help the firm, then it’s probably a good decision.”

Hannah:               Well let’s talk about this idea of management, ’cause I know this is something that you definitely care about a lot. Of what does it look like to be a good manager? And what does that mean for new planners?

Bryan:                   Yeah so management is like this thing, this idea in our industry that just isn’t talked about. It is, but it’s not like this deep science that it should be. If we look at other disciplines, like the legal field or the accounting field or basically any other field, it’s a thing. Management is a thing and it’s totally normal. Accounting firms have been in existence and you’ve got the monster big four now and they have all these partners, and they are continually cycling through next gen employees and building them up. And it’s like this full cycle thing, it’s very normal. Law firms are doing it too. And for some reason in the fee-only RA world, we’re having a hard time just letting go and accepting the fact that management is needed. And good management is needed. And it’s really just, “Well, okay. What is that?”

Bryan:                   Management to me is identifying a … You’ve got a new hire, great. What are we gonna do with them? And really figuring out who this person is, what is their personality, what are they excited about about this job, what are they good at, what are they bad at, and finding a place for them in the firm so that this new person that you hired and you placed is happy. Because you’re giving them projects that are exciting to them, they’re sticking around, you’re listening to them, and you’re finding a very thoughtful place in the firm for them. I say that because the more common path is an entrepreneur builds his business up … Yeah, they’ll build their business up. They will reach a point where they’re like, “Oh shoot. I have a need. I don’t like doing paperwork. I need to find somebody to do my paperwork.” And the job outline is already there for them. It is already predetermined. They just need to fill the spot, basically.

Bryan:                   And that’s kind of it. And I see it a lot. I see it with people who are just learning how to delegate for the first time what a solo advisors, which is a majority of our industry there … They’re trying to delegate because that’s what they’re told. Like, “If I want to be the next Tim Ferriss of our industry, I need to learn how to delegate and delegate everything.” That’s great because you’re giving somebody a job, which is cool, ’cause now you’re paying an employee. But are you developing that person? Is this person happy with that job that you gave them? Are they busy enough? And are you slowly stretching them out to become the best professional that they want to be?

Bryan:                   And it’s this wholly different mindset. Are you a delegator or are you a manager who’s truly developing somebody?

Hannah:               Well and just that experience for the employee, like are you just expected to get a list of tasks done? Or we talk about diversity and do you as a manager view the person that you hired as somebody who’s gonna make your team … they’re not just going to complete that task, but they’re going to make your team better, especially if you manage them well.

Bryan:                   Right, yeah. The ultimate hire, I’d say, is you wanna find somebody who … let’s say me. It’s me, who I’m a manager for the first time and I hire a new person. And they come in and they’re like, “All right. I’ll do whatever, what do you want me to do?” And then you give them a bunch of tasks and stuff, but the optimal hire for me is somebody that I can sit, I can close the door with, and I can say, “All right, I just gave you a bunch of tasks. What do you like and what do you not like?” And then they’ll tell me like, “I like this and I don’t like this.” And then I’ll say, “Well, okay. What do you want to do more of? Is there anything that we can be doing better?”

Bryan:                   And the optimal person has thought about it and will tell me a really open and vulnerable, honest answer. And every time I can get a vulnerable and honest answer from that person, then I can adapt and I can morph their experience and listen to what they’re saying, and basically make their experience better based on what they’ve just told me. And when somebody’s new, you want to be doing that like every couple weeks or every month because there’s so much raw data there that they can give you. All you have to do is listen. But then after you listen, you have to actually do what they’re requesting, which is a whole other thing. But the first step is just listening a lot to these new people because they will tell you, they will tell you what they want.

Hannah:               Yeah, so okay. So as a manager, when you’re saying all of this, how do you balance like what does the firm need? ‘Cause you need somebody to fill out the paperwork and get the client to sign it. That’s a need of it, you need somebody to … The classic example of like take out the trash, things like that.

Hannah:               How do you balance between what the firm needs and then what does the employee want to do?

Bryan:                   That’s a good question. So I went to Texas Tech, again, and in that program they preach a couple things. Number one, you’re going to get a job and it’s gonna be awesome. Number two, when you’re interviewing for jobs, make sure you’re going to be doing real planning work. You don’t get coffee, you don’t do the grunt work, you don’t do that. You’re trained to be a financial planner. You want a job to where you’re doing that.

Bryan:                   And I heard that and I was like, “Well that’s just baloney. Somebody’s got to take out the trash. Like if I don’t have a trash person, somebody’s gotta do those things.” And I knew full and well that if I’m being hired as the only employee of the entire business, I’m probably going to be doing those things. It’s probably going to be me. For years, I’d just be talking to other advisors, and they say, “Oh, how many people in your firm?” I was like, “Oh, there’s two of us.” They say, “Oh, there’s two of you? That’s it?” I was like, “Yep, I’m the first hire.” And they say, “Well you have like an admin person right?” And I was like, “Well, I’m pretty admin-y. I’m pretty good with that. I answer the phones, that’s me.” You should see me around holiday time. We’ll do Christmas presents, or holiday presents, and I literally drive in my car to clients houses and I drop it off like Santa’s Little Helper. I do all that stuff, but I fully knew that I was getting into that stuff.

Bryan:                   So the perfect hire comes in and knows that they’re going to be doing some of that stuff. In fact, they want to do that stuff because it’s just a task. Let’s just get it done. So the perfect person wants to do the dirty work, but they ask for the glamorous work. So I’ll say it again, I guess, ’cause that’s very tweet worthy. It’s like they will do the dirty work, but they’ll ask for the glamorous work. Which is kind of … I mean, I say this because it’s what I did, so it’s the only thing that I can speak to. But I knew that there was just so much stuff that needed to get done. Like somebody had to do the scans and the shredding, and somebody had to do the scheduling of meetings, and calling back people, and calling Schwab all day long. Somebody’s gotta do that and I figured it was gonna be me, but I want it to be me because now I know how a firm really works and I can do it all.

Hannah:               I very much had the same experience. And talking to some of my peers, it was a very … I had a different perspective because I knew the inner workings, where they didn’t know their paperwork process because they always had somebody else do it.

Bryan:                   Oh my gosh, yeah. It’s huge. I think … They’re like, “You’re not going to be a paperwork person.” And it’s like, “Well then I don’t know how to do paperwork. So why would I want to do that?”

Hannah:               Yep.

Bryan:                   There’s a lot of value to knowing how to do paperwork.

Hannah:               Tons of value. I still fall back on that skill, yeah. So you wrote an article, on your Millennial Planners blog, about managing people. A lot of people have read that article, I assume. I hope, I should say that. But you talk about expectations on that. So for new planners coming into this profession, into some of these smaller RAs, what are fair expectations for them to have?

Bryan:                   In that article, in that little section about expectations, I think the sub-bullet of that section is called ‘Fair Expectations’, that’s the first thing that needs to happen. The expectations need to be fair for the new hire that’s coming in. I gave a little story in that, it was a real story of one of my friends. Ironically, you’ve interviewed this person. I’m not gonna say who it is, but you’ve actually interviewed this person before. And she’s one of my friends. She’s a super … It’s a girl because I said ‘she’ already. But she’s a super smart cookie and she could have had so many jobs. And she had multiple job offers, I’m pretty sure. And so she had to choose, “Well okay, which job do I want?” And she chose the job that basically sold her on the biggest dream. It was like a … I want to say a national brand. It’s a firm you’ve probably heard of. They were opening a new office somewhere, I think they just acquired an office. So they needed her to go in and be the associate there. So that was probably a pretty exciting opportunity because it’s kind of like me. I’ll be a number two in the office and get to run this thing.

Bryan:                   That was the expectation, which was a lot different from reality. ‘Cause what happened when she got there … She got there and moved away from her family. She didn’t know anybody, no support system, kind of like me when I moved out here. Like totally on your own. She was basically like a … I don’t want to say like a glorified secretary. I think she just was treated as the secretary. That’s too far on the dirty work side, that’s a little too far. And she was just promised something that she didn’t get.

Bryan:                   In that case, her expectations weren’t met and she quit, and rightfully so. So that’s like the biggest lesson for me, just watching her, and she called me after and told me about it. And I just like … It’s not fair because she’s so good. I didn’t like what happened to her so it was just a big lesson for me. What I took from that is when we get people in here, I don’t want to oversell them on how glamorous this place is. When I talk to a new person, I want to tell them everything that would make them not want to take this job. And if they still want it then they’re the best person.

Bryan:                   I think we’ve got a lot of good things going on here, but there are some downsides. There’s downsides to every job. You’re going to come in here and you’re not going to have an office. And we share office space with an ad agency right now, so they are a lot of fun to share office space with, but sometimes they’re loud. Can you handle that? You’re going to be doing the paperwork and you’re going to be doing the scans. You’re doing the dirty work. Is that okay with you?

Bryan:                   Not so much underselling, but just letting it be real. This is what it’s really gonna be like and not this pie in the sky, please work for me desperately sort of … I don’t know. I don’t want to say lie, but that’s kind of what happened to my friend.

Hannah:               Yeah, well and I think there’s so many … Gosh. That’s far too common of a story and when you have those realistic expectations set out for you, or whatever your expectations are going into the job, if those aren’t being met then you have a decision point. Do you want to stay there or do you need to be looking for another job?

Bryan:                   It is common and it’s sad.

Hannah:               Yeah. And one of the things that … I mean, I have friends who they will say that they stayed at their job too long, not knowing when to move or when to do that. You really, I hate to be cynical about this, but you’re the person who’s going to care about your career the most and you kind of have to take ownership of that.

Bryan:                   Agree. At the same time, job hunting sucks. It is such a drag. So of course you can feel some dissonance there, when somebody doesn’t want to do it, I can feel for them too. It’s tough.

Hannah:               Absolutely, yep. You had mentioned that you hired somebody now. So how has your perspective changed, when you now have somebody who you’re managing?

Bryan:                   That is a great question. So when I first became a manager for the first time, we have this internship program that we’ve been doing for a couple years now. And my first year running the intern program, after like two weeks, like some really small amount of time, I just wanted to write my boss the longest handwritten letter and just say, “Dude, I am sorry.” Gosh, I’m just thinking about that time ’cause I just wanted to commend him for how much patience he had with me. And I know I was slow and I know I messed up, and I know I did all those things, and he never made me feel the way that I wanted to make this intern feel. Which was like, “What are you doing? I just told you this.” I never got chewed out like that when I totally could have and probably should have.

Bryan:                   So immediately what happened, becoming a manager for like two weeks, is I felt this immediate amount of empathy towards my current manager and just thankfulness. And I appreciated the patience that they have ’cause it’s a totally different perspective. I totally … Being a manager for the first time made me a better employee, which is mind blowing, but I finally got it. I finally understood why we would plan so many days in advance for x, y, z. I would understand why he wanted me to present things in a certain way as opposed to the other way. Just how to manage my time, how to manage my own calendar, and someone else’s calendar. It took an insanely short amount of time to appreciate what had been happening to me for like two or three years, all when I became a manager for the first time.

Bryan:                   So it was like, that perspective shift was huge. So I totally recommend, if you are in your first couple years of doing this job, and you’re finally getting your stride down, and you think, “I’m a good associate” and “I’m good at meeting preps and all”, I highly recommend that you make the case to your manager to like, “Can we do an internship program? And can I be the supervisor of that?” ‘Cause it will change your perspective on everything.

Hannah:               It’s like this natural progression of a career, right? You do the work and then you start managing people doing the work, and that’s a different perspective.

Bryan:                   Mm-hmm (affirmative).

Hannah:               Are you on partner track right now?

Bryan:                   Yeah, so let’s see. What happened in our firm? I think when I first got hired on, we were both thinking that calculated risk on each other. We kind of didn’t know what was about to happen or at least I didn’t know what was about to happen, but I had high hopes. I was going to make a leap for something long term or at least semi long term just to make it all worth it. And I don’t know what my boss’ plans were for me, but I know he’s a good manager. And when I say ‘good manager’, he put a lot of time and energy into developing me. So a lot of time making sure I understood things, giving me opportunities to run meetings, giving me opportunities to those first times when I were running meetings without him in there, all those things that I needed the opportunity to do so. He was giving me these opportunities to so do. So my career jumped way quicker than it probably should have.

Bryan:                   And he was doing it on purpose ’cause he had a high degree of faith in me, which was great. What eventually he kind of developed me into was this person who could invariably be a junior partner, basically at this point now and we’re four and a half years in. So I’m four and a half years in and I think even starting about six months ago, we just had our first conversations around potentially buying into this business, which is another word for partnership or equity ownership, if you will. So we just started those conversations like half a year ago and we’re pushing the envelope … we’re pushing forward on that right now. So it’s all kind of happening.

Hannah:               Well, it will be so interesting. You talked about the difference of being a manager, how that made you be a better employee, I’m wondering how the business owner will change your perspective yet again.

Bryan:                   Yeah, I’m sure that’s a conversation you’ve had a couple times with people here on this podcast. Oh yeah, with another Yeske Buie person, with Lauren. She’s probably pushing forward on that, on her partnership track, which she’s been on since she basically started. Yeah, she was hired on the ‘partnership track’ that they have there at Yeske Buie and I think a couple others are on there as well. But I think now that, especially with Yusuf and stuff, I think now it’s becoming more real, that partnership is happening.

Bryan:                   I talked to Yusuf right after that announcement and he said immediately there was this shift in his mind to where like, “Okay, this is my thing. This is my business.” I think we were on our way to something. We were managing or getting around near a conference. And I think they took an Uber and he was like, “It’s on the business.” And he was like, “Oh wait, it’s on me. Maybe we shouldn’t take this Uber.” Just like little things like that, it was immediate. It wasn’t even real yet. He hadn’t signed any papers yet, but it was immediate.

Bryan:                   So I’m looking forward to seeing how it happens too.

Hannah:               You talked a lot about finding your people and finding your tribe. So what are the other places you’ve gone to really find your people as you’ve continued in your career?

Bryan:                   The study group has been great. That was great, but study groups are kind of like bands. They form, they have a great run, and then they kind of fizzle out for whatever reason. It is what it is, that’s what study groups- So I was kind of looking for a new band, basically, and fortunately I’ve been around the FPA community for a while. And so FPA NextGen, this group has really been core for me, but there’s a few different ways you can go within the NextGen community. It’s grown that much.

Bryan:                   I first got exposed to the NextGen sort of movement like three or four years ago. I ended up winning a scholarship to the NextGen Gathering. And I’m so glad I did, ’cause if I didn’t get the scholarship I probably wouldn’t have gone. It wasn’t a cost I felt comfortable asking for, for me, because I didn’t really understand what it was. Like what is this? Is this a conference? Is this a pow wow? What is this?

Bryan:                   So I’m glad I won the scholarship ’cause then I got to go. It was in Dallas at the time, which is my hometown, so I got to see my dad around Father’s Day so that was perfect. So I got to go and when I was there, I was like, “Oh my gosh. This is my people. This is it. This is where everybody is who is just like me, trying to get the same things I’m trying to do. And this is where they all meet and just talk.” So NextGen Gathering kind of set it off for me.

Bryan:                   So if you’re on the cusp and you think you’ve got a great story, I recommend applying for that scholarship. And if you don’t get the scholarship, you can still go for super cheap, ’cause it’s a low budget thing. It’s totally tangible, honestly. So that was huge and there’s other FPA things that sort of happened for me.

Bryan:                   I ended up running the FPA in San Francisco next gen community for a couple years and I’m finally phased out now. But running that and being the face of that little group has been huge for me because I ended up being a person that people called on. I got to be a board member and go to those meetings. And just we would throw events and people would be thanking me for the event when really, I wasn’t the one putting it on, it was like our crew. And just being a person that people would ask, “How does this next gen thing work? What is it?” And just spreading the word on that. So being involved with that group was like a whole other tribe. And then I could meet other people who were on the partnership track and talk to them and just be fully immersed in this industry, and the best people who are doing it.

Hannah:               What I found, at that NextGen Community, it really is some of the best of the best. And again who do you surround yourself with? Who do you wanna be like?

Bryan:                   Totally.

Hannah:               Well, so as we wrap up, are there any other pieces of advice or things that you’d want new planners to know?

Bryan:                   Yeah, so I think when you’re new, and I can see it with our new hire here and I can see what he’s most interested in doing. It goes back to what are you trained for out of college? If you go to one of these financial planning programs, what have they been preaching to you this whole time? What do they say your job’s gonna be? What are you most looking forward to in the job?

Bryan:                   And what I’ve found is most people are taking these jobs and they want to be in client meetings and they want to be talking to clients, that’s the job title. It’s, “I want to be a financial advisor. I want to give advice to people.” So if you are a newbie and you just some face time with clients, you want to be seen, you don’t want to be in the background anymore running MoneyGuidePro data input. You want to be in the meeting. A couple of things.

Bryan:                   Number one, you need to learn how to run a meeting. This is like another blog post, I should have written like three years ago. You need to know how to run a meeting ’cause there’s an art form to it. It’s kind of like writing an email. There’s a format to running a meeting and it’s kind of the same format, you kind of just fill in the blanks in different ways.

Bryan:                   So here’s the advice. Here’s the format to running a meeting. It’s like the client walks in … Let’s say it’s an in-person meeting, just ’cause that’s what I’m more experienced with. So like in-person meeting … Client walks in, you greet ’em, you show them where they sit, you ask them if they want some water, and you sit down. And number one, step number one is ‘Catch Everybody Up’. So step one of the format is just get everybody caught up. Like, “Hey, what’s new? It’s been a few months since we’ve gotten together, what’s new?” And then you shut up and then you let the client talk. And they’ll tell you, “Oh, we’ve been doing this.” Or they say nothing. Say, “Oh, we haven’t done anything.” And you say, “Oh, okay.” And then you catch everybody up and you say, “Last time we got together, we touched on this and talked about this, and I remember you said that funny thing, ha ha. And everybody worked on this when we were done. And today, we’re gonna cover x, y, z. Is there anything else that you thought we were gonna cover today or would like to talk about?” And then you shut up, and then they’ll tell you, and that’s step one. It’s just setting the tone, getting everybody on the same page so that we can take the next step forward together.

Bryan:                   And then you should have … And then step two is just going through the body, so x, y, and z. What were those topics? Just segue into them and then go. And that’s kind of it. If you can run the meeting, if you can run the intro to it and then know what your body paragraphs are, that’s running a meeting. So that’s what I’m currently working on with my new guy, the new hire, just to get him … I want him to be able to run a meeting, him set the tone, and he’ll just have that much more face time and he’ll be like ‘the person’. So that’s a big one, running a meeting.

Bryan:                   The other thing is learning how to write an email. I think it’s the same thing. There’s a format and most of the conversation we do with the clients is over email. So how do you do that? So some people are better at it than others and right now, I find myself teaching how to write emails, ’cause I realize it’s not innate to everyone. So just going over that art form and how to do it. So I should write a … I need to write a blog post over that too. How does it go? Here’s how to write an email, I guess.

Bryan:                   So most of the time, whenever we’re talking with clients, we are rebounding. Most people have questions for us and we have to answer them, and just sort of rebound them. But every time they do that, a lot of times there’s some personal thing that they say just happened. Say, “Hey, we just did this.” Or “This just happened to me. What do you say about that?”

Bryan:                   So when you respond, you have to do a couple things. Just like when you’re writing a paper, there’s an intro, there’s a body, and there’s a third paragraph. The first line of any rebounding email is to do just that. The first line is the rebound, it’s the … I call it ‘catching the egg’. When I was in elementary school, we used to have field day, and we used to have to practice … We used to get a partner and you’d stand across from them, and you’d throw the egg back and forth, and try and see how far apart you could get. And if you’re really, really far, you throw the egg … when you catch it, you have to … you can’t just firmly, abrasively catch the egg. You have to let it come to you and softly catch it, and then nurture it or else the egg will break.

Bryan:                   So I call it ‘catching the egg’. And so like if someone says, “Hey. My car just broke down, sorry I can’t do this. This insurance guy said this. Do you know anything about this insurance thing?” So in the rebound, you have to catch the egg first. You have to say like, “Oh my gosh. That’s terrible about your car.” And you have to seem interested, you’re talking to a person. And then the next paragraph is addressing the technical stuff and giving them the punchline of what they need to do.

Bryan:                   I think when you’re a newbie, you’re so nervous about giving the right answer, that you could receive an email like that and jump right into the technical stuff. And just right into, “Yeah, I know this and I know this.” And really showing that you know stuff, when really they already know what you know stuff, that’s why they hired you. Focus on talking to the person and really just making a connection with that person, and then get into the technical stuff. So that’s the writing an email piece, I’d say.

Hannah:               Those are the simple things that … those are the foundation. If you have the solid foundation going into any professional job, it’s going to help you so much, build off of that.

Bryan:                   I agree.

 

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Bryan Hasling, CFP ®, is passionate about building a network of financial planners who lift one another up. He’s focused on helping other financial planners learn how to foster community in their practices and with one another to thrive throughout his ... Bryan Hasling, CFP ®, has focused on building a network of financial planners who lift one another up. Early on in his college education, Bryan knew that finding a support system within the Texas Tech’s financial planning program would be key to growing a successful career in the financial planning profession.
He’s carried this mentality throughout his early career – he’s joined the FPA, won the FPA NexGen Gathering scholarship in 2015, and went on to be the San Francisco FPA NexGen Director for 2 years. Bryan has also participated in study groups, and has focused on helping other financial planners learn how to foster community in their practices and with one another to thrive.
Bryan started his career after Texas Tech with a small firm in the Bay area. Although it was the newest firm that had given him a job offer, and posed the highest risk as a new grad, he took the leap because it was the type of community he had been looking for in a financial planning practice. Now, less than 5 years later, he’s on track to become a partner. Bryan largely credits this to the community and network he’d built within FPA and the financial planning profession as a whole, and the amazing environment that his practice built when they originally hired him as their first employee.
Now, Bryan wants to help other financial planners learn how to build career paths within their practice that fosters the success of their new employees, grow a tribe that supports them, and grow together.


 
What You’ll Learn:

How to find your “tribe” in financial planning
Why it’s more important to try than to find perfection
Why it’s important to surround yourself with people who you want to emulate, not people who exhibit behaviors you don’t want to be associated with
What he’s learned from FPA NexGen
How to weigh risk and reward when trying to pick a job after college
How NexGen planners can grow faster
Why he chose the Bay area out of college (when he went to college at Texas Tech)
Why many financial planning practices can’t keep their employees
How to “find your people” and why it’s key to success
How study groups can help to facilitate growth
How to bounce back from failing the CFP Exam

 
JW Harrison Financial Advisors
Millennial Planners
G2: Building the Next Generation (Bloomberg Financial) 1st Edition
Personal Financial Planning at Texas Tech University
 
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Hannah Moore clean 57:57
Growing in Confidence and Building a Practice https://financialplannerpodcast.com/yafpnw-growing-in-confidence-and-building-a-practice/ Tue, 20 Nov 2018 14:00:38 +0000 https://fpaactivate.org/?p=11765 https://financialplannerpodcast.com/yafpnw-growing-in-confidence-and-building-a-practice/#respond https://financialplannerpodcast.com/yafpnw-growing-in-confidence-and-building-a-practice/feed/ 0 Breanna believes in being yourself, and owning your knowledge and expertise as a business owner. She has so many fantastic insights on showing up, moving through difficult business decisions, and growing the practice you’ve always dreamed about. Breanna Reish, CFP®, founder of Wealth of Confidence, wants to build a financial planning practice that acts as a home for educators who want to feel confident and empowered when making money decisions. She’s a fee-only financial planner based in California, is incredibly involved with her family, and she’s here to tell you about how finding your own self-confidence as a financial planner is key to running a successful business.

Despite her practice’s awesome name, Breanna struggled with confidence when she first got started. She found herself apologizing to prospective and current clients alike when they’d come into her shared office space, or when she had to request afternoon appointments to work around her kids’ school schedule. She kept asking herself, “Why would anyone want to work with me?”

It took several months, but then it finally hit her:

Why wouldn’t someone want to work with me?

Breanna believes in being yourself, and owning your knowledge and expertise as a business owner. She has so many fantastic insights on showing up, moving through difficult business decisions, and growing the practice you’ve always dreamed about.

Hannah's signature

It’s exhausting to be fake. It’s exhausting to ‘put on’ something that’s not you. – @breannareish on #YAFPNW

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What You’ll Learn:

  • Why Breanna chose to break away from her broker-dealer to open Wealth of Confidence
  • How to be your authentic self
  • What to do when a niche “finds you”
  • How to make business decisions that bring you confidence (like choosing an office space)

 

Show Transcript

Ep125 Transcript


Hannah: Well thanks for joining us today, Breanna.

Breanna: Of course. I’m happy to do this with you.

Hannah: So, how did you first get into financial planning?

Breanna: Oh I feel like this story’s changed a million times because I remember things and then I forget and all that. But basically as I was growing up I just kinda had to figure out money and how it worked and you know it was exciting to figure out, in the nerdiest of senses, it was exciting to figure out how to navigate buying a car. And then having it under my name and knowing that I was the one paying it off. And all of that. So I worked closely with my mom’s credit union and worked through a lot of the little details of how to do money. So like I said getting the car loan, refinancing it, getting it lowered, doing all that stuff. I did all that on my own and I just loved it. Something made me excited when doing it.

And I was going to school for nursing, realized that was not for me. And thought, “What am I gonna do?” And so while in school I shifted over to financial planning because I realized I was kind of good at discussing that with people. It made me happy. And it was another way that I can help others whereas like nursing was kinda fulfilling that until I realized blood just wasn’t my gig. So yeah I just … I was … My boyfriend at the time who is now my husband, had a business and I was helping him work on the money part of his business. And it was just interesting. So I thought let’s just keep going with this and see how it goes.

Hannah: So you got your degree in a financial planning degree program.

Breanna: No, actually the college I was at had Business Administration. The track you could go was Business Administration and then financial planning as a concentration. Honestly that didn’t do much besides touch on financial planning. The professor was a financial planner who owned a firm, so you got some of that information about some of the nuances of planning. But at the end of the day still had to go and do all of the course work for the CFP and all of that stuff. So it wasn’t a heavy focused financial planning system at that time. And in my area it’s just not a big huge curriculum type of thing. People don’t focus on it so much here.

Hannah: So you graduated with a degree. Was your first job in financial planning then?

Breanna: Yes. When I was in college I went to my professor and … When I was in … I’m sorry, when I was at community college I wasn’t the best student. I was having fun in my life and everything, but when I went to four year to finish off, I was dead serious. And I really wanted to do this. And I got really good grades and everything, so I went in to my teacher and I said, “Listen, all these guys wanna go and get internships with you know some of the wirehouses and things like that. I wanna be here. I wanna be local. I wanna be hugging families and working with people through their financial strategies. And so I wanna work with a firm local. And can you help me out? I might not look fabulous on paper to start out but this is what I really wanna do.” And so he set me up with an internship and then I just kept working in planning.

Hannah: You’ve been at a number of different positions. So coming out, what was that role? Like what kind of role did you fill? Like you were client facing? Were you able to be hugging those local families? Or what did that look like?

Breanna: So, it was a very small firm. Two gentlemen and then myself. There was no receptionist. There was no back office, nothing like that. So I kind of played the role of you know paper, you know the person that filled out the paper, or the person that made the phone calls. I kinda did a lot of different things, but then got to sit in on meetings. And we did family meetings there, like family office style things. So I kinda got to do a little bit of it all. During that time I was doing my CFP course work. I started doing that right out of college.

And then, you didn’t ask me this but I’ll go on this a little bit and then I’ll stop because I know I can go on forever and ever, but I was working part-time for that firm and another firm needed somebody. And they just knew they needed help. And whether that be paperwork, whatever, they needed help. So I split my time between the two. One was an RA style, one was a broker dealer and tax planning firm … or tax preparation firm. And so I went between the two. Then they both said you need to make a decision and go full-time at one. And so I went off to the broker dealer tax preparation firm and it really had to do with who I was working for more than anything. I didn’t even understand really the differences between the two at the time. I was very naïve.

So it was really about the people. And just getting experience across the board. And I could go on and on and on with that. But that’s kind of how it started was splitting between the two, picking one, and then after that there was more that went with it.

Hannah: And you know it’s so interesting you talked about being naïve and not really knowing the difference between the broker dealer side versus the RA side versus, I mean, wirehouse there’s so many different like positions around it. From just … For the person listening to this who’s new in their career, how long did it take you to figure kind of all that out?

Breanna: To be honest, I don’t really remember how long it took me to figure out that there was you know, what the differences were between really, and this might sound dumb to some people, but when you’re working all the time and I was raising my family, I was getting married, I was having kids. I was doing all this stuff. I was so focused on getting all my series licensing, I didn’t really pay attention too much to the differences. And I started … And also the firm that I was working with was so genuine with people and yes had commission things that they could’ve sold and whatever, but just didn’t.

And so I didn’t realize the differences between much of anything because we weren’t doing that kind of work there. We did a lot of AUM, things like that, so I think when I got my CFP I think that might have been when my eyes were really opened to the types of planning and the different topics that you can be working on with people and things like that. And I realized, “Oh I don’t know if my broker dealer really touches on all of this stuff from these types of angles.” I don’t know if that makes sense, but it just started really opening my eyes. And at that same time my … I moved to another RA firm and they were Kitces fans and I didn’t even know about Kitces before that. And he’s not majorly talked about, at least not at our broker dealer he wasn’t, and so when I went to the RA and Kitces was brought up all of a sudden, that opened my eyes even more to the fee only world and XY and things like that.

So it just kinda happened. And it took awhile. It took awhile. I’ve been doing this for 10 years and I probably figured it out like three years ago, four years ago. So, yeah.

Hannah: Right. And there is some element of like it’s always changing. Like there’s never … you never really … as soon as you gotta figure one thing, at least I found, it’s there’s always something else.

Breanna: Yeah. Yeah. And it’s who you surround yourself with. So if you’re always surrounded with somebody that only knows the broker dealer world or whatever then that’s what you’re gonna know. And I don’t bash that world by the way, when I say any of this I’m not like finger pointing at anything specific, but yeah when you’re surrounded by that you only know what you know. Unless you start … Yeah, you pretty much know what you know. That’s …

Hannah: So you talked about starting to … You got married and started raising a family. I have been having so many conversations with other women, specifically, about what is it like to raise a family and be a financial planner. What has that experience been for you?

Breanna: It’s been very challenging. It’s doable, I’ve said this before a million times. So I don’t want anyone to feel discouraged like it’s not possible. First of all I kinda believe all things are possible. But it is challenging. I mean finding yourself in the right setting to … where people … I don’t wanna say okay with you, but I was working for somebody, so truthfully it had to be okay with them that I was going to go on maternity leave and take that time and feel like I wasn’t pressured to work myself to death or get a license by a specific date. Or things like that. So I had the luxury of being able to spread things out a little bit, work my kids around certain thing, work licenses around them.

I knew at some point that, in my mind that I would build up enough business to where I didn’t have to be out networking and busied to where I could be maintaining clients and then be soccer mom. That was my vision. Yet I didn’t have a clue how I was gonna get there, but that was my vision is I want to be in a space that by the time they’re second grade or whatever, I’m doing soccer mom duties, I’m doing these things. And I always thought that’s how it would be. It’s not exactly how it turned out. And so I, and yeah, so there’s more to that story, but it has been challenging. Constantly having to remember that you don’t have to be the top producer because you’re also producing like love and … what is that? Physical, you know you’re there for your kids. And so you have two areas where you need to find a balance of success. And that’s your family. And that’s at work. And you have to wrap your mind around being okay with that. And it’s hard.

Hannah: Yeah.

Breanna: So, yeah. Yeah I look at people all the time, even now as a firm owner, I look at people in you know like FPA in the XY Planning Network and things like that and I see them doing all these really cool marketing things and this stuff. And I go like, “I wanna be doing that. I feel like I’m failing sometimes, or I’m not doing enough.” And then I remember as I’m hanging out with my kids, no I am. But it’s hard to always remember that.

Hannah: Gosh, it’s so easy to fake stuff on the internet.

Breanna: Yeah, I always wonder where they get the time. I’m all, “Do you sleep? Do you ever sleep?” Because I’m running around so much with the kids and doing the business and stuff I’m like, “I need my sleep. I don’t know when people are getting all this done.” And you know, so it’s hard. We compare ourselves sometimes and stuff, but I … It takes a ton of self reflection to be a mom or a stay-at-home dad, or whoever, and put in a good amount of time with your family and own a business or work in someone’s business. It takes a ton of self reflection.

Hannah: You mentioned you owned your own business. We’re kinda jumping around a little bit, but did you know that’s that what you wanted to do? Like is that the direction, like did you know from an early point in your career that you wanted to be the business owner?

Breanna: Yeah. I don’t think that’s what I wanted to do to begin with. I always considered myself having clients, but that didn’t necessarily mean that I was going to be the one running the whole show. So I always figured that I would be taking care of my own clients in my own way, but that didn’t mean it had to be myself. It could’ve been somewhere else. Unfortunately I didn’t really find a fit to do that. And while I loved some of the people I worked with, so that’s not the problem, I loved some of the people I worked with, I didn’t always fit. And I was always struggling and I’m not a producer and I’m not this like go out and sell this and hit this quota. I’m just so bad at that. And so finally I got to the realization that I need to go do this on my own, run my own thing, and either succeed or run it into the ground and know that’s because my own problems, not because of the environments I’m in, or the people I’m working with.

It kind of was almost a last ditch effort in a sense. That might sound crazy, but … Yeah. I kinda felt like I was losing my sanity some working in other situations.

Hannah: And so, okay, let’s talk about, you talk about losing your sanity.

Breanna: Yeah.

Hannah: For people who aren’t quite understanding, or don’t quite see the difference, can you like talk about that a little bit more? Like where they not letting you talk about budgeting? Were they not letting you do some of the financial planning pieces? What was the disconnect?

Breanna: Well, you know, tiptoeing here.

Hannah: Yeah.

Breanna: Sometimes you know when you don’t necessarily pick the people we work with and things like that, sometimes there’s a struggle with sometime … And I’ve always felt like I do my best to get along with people. I’m the most non-confrontational person I can think of. Like I am almost to a fault, you know, and I’m always apologizing. And like, “Oh can you please do this, ooh.” You know I feel bad asking for help and things like that. So I kinda come from that angle and I felt like I was kind of in a somewhat of a position where it was difficult to find my place on the team.

The other thing was yes feeling semi-limited in marketing efforts, but I also wasn’t running out, and like I said networking like crazy. Like I just don’t know how to do that stuff. I don’t know how to market right. Like I was kinda hoping for more of that teamwork of we all market together type of thing. And it just wasn’t all there. I’m either like be on a team or be on your own type of person. Not like a mix of the two. I feel like if you’re gonna have a team you gotta have a community and a team. And you all gotta be on the same page and if you’re not then it’s frustrating. And so some of the sanity was just doing this for so long and not having people call me and … my clients. Like it was driving me crazy. And then here I am looking at my kids going, “By the way, I’ll pick you up at 6:00 tonight from after school care. I’ll never see you.”

So it was just driving me nuts. And I’m not an overly emotional person, but I was crying way too much. I was really not happy. And that was bleeding into my family life. I just never felt like I was gonna be able to hit the amount of clients coming in to actually bring in a normal paycheck.

Hannah: Yeah.

Breanna: And normal for me is probably a heck of a lot lower than what people really wanna make. You know, I mean, so I’m talking about it was difficult.

Hannah: So you make a decision to start out on your own firm, you’re building your own RAA. Did you have a pretty clear vision of what you wanted to do for your clients and how you wanted your firm to be established? Or is that something that you’ve kind of discovered along the way?

Breanna: Definitely it’s changed big time. I’ve always known, by the way my first interview … I trail all over the place, I apologize, but my first interview I sat in was a very tough individual and that was the first internship/job that I had. And “Why do you wanna do this?” “I wanna help people.” And I was told right away, “That’s not gonna happen.”

Hannah: Ooh.

Breanna: “You’re gonna help the people that come to you.” And that kinda knocked me down a minute, you know. So I realized that that is true, but I said, “I wanna help people.” I wanna have that high level approach where it was like the third party approach because, which I consider fee only and by the way I’m not like everyone has to be this way, it’s just for me that’s what made sense. Because I just always felt like I was like, “Oh you need this. No, no believe me, you need this.” Like that type of thing. And so it just … I was never good at making that sound like it was a real thing that they needed, when they truly did need it. And so I needed, for my own sanity, to go and do it that way.

So that was a vision. I really wanted to go fee only, that was a huge vision for me, personally. My own prerogative. And at the time I was working with a coach that works with people that wanna be a planner for women. And that was also somewhat of the vision as well is like, “Okay I’m gonna go open this firm that’s very female friendly, that’s going to be my touch on the decoration and environment and all this stuff to where it’s maybe not like every other firm where it’s very reflective of me and females and just feminine,” and things like that. Right. Just like hey come here, be yourself. We’re not suit and tie. Like, you know we’re just gonna be ourselves and that’s gonna be fine. If you like it, you like it. And if you don’t, you don’t.

And I think some of that came from my own biases of feeling different as a female in financial planning, so I felt like I needed to open a women’s friendly firm. And what I realized along the way, so you asked if it evolved, what I realized along the way is that a lot of people were coming to us and they were educators and they are city, county workers and things like that that had pensions and they have a hard time finding help because they kind of fall in this gap where AUM isn’t for them, commission is pretty much the only other thing. And a lot of them have people that were kinda predatory in their space. And so … And the come on campus. And just a lot of things. A lot of things.

So we kinda became the home for some of those people. And so then the evolution kind of came into we started saying we work with women, and really now we’re kind of advocated for educators. And we do employee financial wellness stuff and stuff. So now the vision has really turned in to we’re gonna help the people that maybe fall in a gap and we’re gonna figure out a way to do it because people keep looking at me and go, “There’s no way that’s gonna work,” and I go, “I don’t really care. We’re gonna make it work.” So that is kinda the vision now. It’s, I didn’t realize what it was when I started. I thought it was one way and then it kinda turned into crusade of we’re gonna help people that fall in this weird space. And somehow we’re gonna make that work. And let’s go. You know, and so it’s been, it’s been interesting.

Sorry, it was a very long answer there. But the vision is to find a way to help people in some capacity. And obviously we’re not a nonprofit right now, but it works.

Hannah: I like how you just fit that, “We’re not a nonprofit right now.”

Breanna: Yeah. We’re not. I’m not … I mean, we’re not … I don’t know. I don’t think we ever will be, but I mean we’re not. I mean we’re not a nonprofit, but at the same time like … So we are gonna charge for our services just like everyone else, you know, but we’re gonna try to figure out a way to do it and have it work for the people that come to us. And we’ll figure it out.

Hannah: You know, somebody told me this years ago, but sometimes your niche finds you.

Breanna: Yeah.

Hannah: And it almost sounds like that’s what’s happened with you. Like you started out being really women focused and realizing like yes you still are, but it’s … there’s other people that have been attracted to you.

Breanna: Yeah, and literally they just … they are looking for a certain type of planning. They go online, they find it, we get the call. We go, “Yeah.” And now we’ve almost kind of done our best to tailor pricing and fee structures to that. It’s not perfect, I don’t think anyone ever finds perfection in that, but it’s taken a year of figuring that out. And it’s been stressful. But we’re, I think we’re kind of on track and we’re trying to create the service for the people we work with. And we just keep trucking along.

Hannah: How long have you had your firm now?

Breanna: I opened it officially June of 2017.

Hannah: So just less than a year and a half.

Breanna: Yeah.

Hannah: And so … Okay tell me about like the first six months of you opening your firm.

Breanna: Oh.

Hannah: Were you able … Did you bring clients over with you? Or was this like starting from scratch?

Breanna: Okay so I brought over a handful. They were assets under management style and some of them were just people I helped open accounts for and literally they’re putting in like $50 a month. Like I would do that kind of stuff for people. So they came with me and stuff. So it was enough at the moment to keep my extremely, extremely small expenses going.

Hannah: Yep.

Breanna: But not pay myself a dime. So it wasn’t anything to write home about. But it wasn’t nothing. I know some people who start with nothing. I also, full disclosure, I tell everybody this, my husbands owns a business. I have always kept his books. We used to then send it out to a third party. And I said, “Well why don’t I just take it over again?” So I do that, but that is not a big chunk of my business whatsoever. And I hope to get rid of again someday because it’s actually distracting me. But yeah … You know so I do have a couple things like that, but it’s not anything to brag about, by any means.

Yeah, that first six months, I remember getting a phone call and going, “Oh my gosh, somebody called me that I don’t even know. Who is this person?” It was kinda scary, to be honest. Like, “Oh my gosh. Where did this person come from?” And I … Oh, I opened and realized, “Oh it’s summer. My kids are kind of around more. You know what? I’m going to chill, take care of my clients, get everyone settled. Take care of my kids. And then when they go back to school, then I’m gonna start networking. And like build my business.” And that time came and I went to a few networking things and I go, “Yeah, I’m not good at this.” So, and then people started kinda just calling me here and there. And I started just working with who was calling me.

And I remember this lady handed me my first check, in my own business that was not a client that came over. And in my head I’m looking at her and I’m thinking, “You sure?” Like are you sure, like this is happening. Someone’s actually paying me to do this. And it’s my own thing. And that was just like … It was a big deal. But it was scary too because then I had work to do.

Hannah: Right.

Breanna: I was like, “Yay. Oh I gotta do something now.” You know so, I was very much a kid, you know. Like starting this whole thing out going, “We’ll figure this out.” And yeah I thought I’ll have these processes ready and everything ready to go because I had time to do it while in registration. But no, everything has changed completely. Because in your mind it goes one way, and then when people start coming to you, you go, “Oh no. It needs to go this other way because it’s for them.”

Hannah: Mm-hmm (affirmative).

Breanna: You know it’s like … I need to tailor it to them, not do it the way my mind thinks it should work, you know type of thing. So everything’s changed. So, but it was … It’s been an experience for sure.

Hannah: How you talked about it makes it seem like so long ago. And I’m like, it really hasn’t been that long.

Breanna: I know.

Hannah: Just feels like years.

Breanna: It feels like a long time ago. Yeah, it does.

Hannah: Oh that’s funny.

Breanna: That is funny. When you said a year and a half I’m like, actually that doesn’t even sound like that long ago. But it does, it feels like a long time because we’ve just … there’s been changes. So, yeah.

Hannah: So you talked about, you know, getting that check and that perspective of are you sure? And just the confidence issues that come with any other first time, maybe it wasn’t your first time asking for something like that, but you know the first client or things like that. Have you found that, I mean obviously your confidence has grown since you first started. But what … Can you talk about the path, not to be cheesy when I say this, like but the path of like your confidence as a planner and as a business owner?

Breanna: Yeah and how crazy, right, my firm is called Wealth of Confidence, so you know I have a total complex about that because it’s like, “Oh yeah, hypocrite, you’re not ever confident about opening your business and here you are.” That’s always been sitting in the back of my mind, that’s for sure. Like, Breanna, get it together because you can’t have it both ways.

Yeah, in the beginning … Here’s the thing, when I opened my firm I knew that, one, I feel like passion isn’t enough, you have to have knowledge behind it, I know that might be harsh for some people, but I knew that my passion was like full tilt. Like I was off the charts with I wanna do this so bad, I have … I don’t know what else I’d do. And … But I also knew that I had spent a lot of time learning things. And so I know that I had a lot of knowledge behind me, not everything, because we never know everything, I knew I just knew enough. You know I’m like, “Okay I got this. I got this.” But yeah I never really had people like full on say, “Breanna, I’m coming to you. Your name is on the door. I’m gonna pay you,” and that’s where I went like, “Oh, are you sure?”

And then just as people started coming in I realized that I was just able to be extremely genuine, be myself, be honest. And I was getting nice little feedbacks from people, verbal, nonverbal. Just little things were happening where I was like … And then I’d find like little strategy things and I was like, “Man, I just saved somebody like,” … I had one case where we could’ve saved you know upwards to almost $50,000 in a tax strategy. And it was just like, “Wow. I’m doing that.” You know and under my own business in my own name. And I just knew that I’m not gonna know everything, but I’m gonna get really good at certain things for my, you know that whole niche concept. I’m gonna get really good at this stuff. And I just knew I’m like the person in town that knows this. And … Shoot, like why wouldn’t you come to me? I kinda almost got that mentality, I was like why wouldn’t you come here? Like I know this.

And so my head isn’t too big to walk through the door or anything, but I started like realizing that I do really have a lot of knowledge that’s pretty broad. And it just started feeling really good and I just … anyway, it just started building. And then as a business owner, you really take crash course in figuring out how to do this stuff. A lot of us in our network, like we are always asking a million questions. You literally learn something new every single day. You cannot stand still. And so I just … The amount that I’ve learned … I’ve been in this for 10 years, I’ve learned more in the last year and a half than I ever did over those 10 year period.

Hannah: Yep.

Breanna: So the confidence came with that. It’s like forced basically. And by the way, it’s not always there. Like two days ago, I was like, “What am I doing right now?” You know like I don’t like this thing or that thing. So it’s not always at 100%, that’s for sure. It definitely can dive sometimes. Yeah. It’s just, yeah, sorry. It is just … You feel crazy as a business owner sometimes, that’s for sure. You leave one kind of insanity trying to figure out how to navigate being an employee and building your own book of business, and then you jump into firm ownership, then it’s a whole other insanity.

Hannah: Do you feel like you have it down now? Like being the firm owner?

Breanna: Oh heck no. I don’t know if I’ll ever have it down. I hired somebody in May, it’s been fabulous, but I went from being by myself to now having someone else in there and just being aware of two people now. And, so no, I’m learning everyday. I mean, do I have the gist of what I need to be doing down? Sure. But, no, I don’t know if any of us feel like we ever like have it fully down down.

Hannah: Got it.

Breanna: And if we do, maybe we’re about to retire or something. I don’t know. I don’t know.

Hannah: So, you … Just watching you online and watching you from afar, like you can definitely tell that you’ve brought like your full personality. Like your full, like who you are to your firm. And I’m assuming that’s also to like your client relationships. How have clients responded to that? Like have they been expecting, like you said, like the suit and tie? The formal office, things like that? Or what have clients … How have clients responded?

Breanna: It has been awesome. Gosh here I go again off on a tangent here. When I first opened, I started my business in a little old house that was converted into like a shared office space. And it was fine at first and then someone moved out and took a lot of the furniture. It wasn’t super great anymore. And I was apologizing to everybody that walked in the door. Like I didn’t realize it, but I was like, “Oh, sorry, don’t mind this. Don’t mind that. Don’t mind this.” I moved into a space that I felt was more professional and then I could then decorate how I wanted to and everything. And that right there gave me more confidence and I stopped apologizing and then I realized I need to stop apologizing for a lot of stuff because I don’t wanna be fake about this. And you’re either gonna like me or you’re not. And if we’re gonna be hanging out for awhile we gotta like each other. And the real each other. Not the I’m on the clock off the clock type thing.

Because as you know I’m very into like the time I spend with my family and things like that. And so that needs to be brought to their attention, that you’re important, but I’m also … I pick up my kids from school, so hey if you need an evening appointment, let me know, but I just need to know a couple days ahead of time because I gotta make arrangements. No big deal. But they know that and I think that only came from me deciding that I’m gonna be myself. And I think there’s so many people out there that do this, that everyone’s gotta find somebody for them. And if people don’t like me, then do I really be wanting to be spending my hours and hours working on that stuff? Am I gonna be passionate about what they have going on if they … if we don’t get along? So I don’t know.

I just … Maybe it’s because I realized it kinda works out. That I think it maybe took that, like a couple people calling and like actually giving us business and I was able to be myself. And then like I said the feedback I received from that. And when I say feedback I mean it could be as little as someone taking off their shoes and doing criss-cross applesauce on my couch, knowing that they’re comfortable. And I maybe have made it that way just because we’re hanging out and we’re talking versus being fake about it. You know? I don’t know. It’s exhausting to be fake. It’s exhausting to put on something that is not you. It’s exhausting.

Hannah: Yep.

Breanna: Yeah. Exhausting doesn’t work for me anymore.

Hannah: It’s like take all that energy and put it towards something else.

Breanna: Yes.

Hannah: Yeah.

Breanna: Yes. It’s exhausting. I get drained by the end of the day if I’m not who I really am.

Hannah: You talked about employee benefits as a service offering that you have at your firm. What does that look like?

Breanna: So, truth be told, we haven’t done a ton of these things yet. I think it’s still, even though it’s talked about some and they’re saying it’s a big wave of what’s going on, we still find that I don’t think it’s very well understood or known. But we had a company call and say, “Hey, we wanna move to a less expensive 403B plan and with that might be lacking the full on education. And then we wanna also add additional education to our employees above and beyond what maybe you would even get about the retirement plan. Would you come and do this?” And I said, “Well sure.” Yeah because … Call me crazy, and again this is where the Breanna fits in the space that maybe no one else wants to really hang out in, a lot of people wanna manage the assets. Which is great. I don’t want to. I don’t want to manage 401K plans. I like doing the you know full one on ones with people that work for the company.

And so we find that you have to be really careful with that fiduciary responsibility sometimes of well are you managing the plan? Or are you telling them like, “Hey let’s talk about your debt and your budget and your personal stuff one on one.” And so I decided I wanted to go that route. Because it’s exciting for me. It’s a somewhat selfish situation. So I enjoy it. So yeah they came to me and I thought, “How the heck am I gonna price this? What are you even … Oh my gosh.” So I literally created it right then. And my husband, who also owns a business, we talk a lot, he said, “Price it to where you’re gonna wanna go and do it and see what happens.”

Hannah: Yep.

Breanna: And I did and they said, “Yes,” and we’ve been figuring it out this year. And I feel like it’s something that can be definitely repeated across the board. We’ve had another company reach out. It’s a pretty hefty expense for that particular company to do. So it’s tough. You have to find that right space and we’re trying to figure that out. But, with that, it’s fun because I take a third party approach where I get to look at all the benefits and all these people from all different companies come in and talk about their benefit. But how about how they all connect together in the big puzzle, right? So I get to look at them all and say, “Well check this one out. Check this one out. You told me specifically that this is your life and your family and da da da. Let’s look at what you have available and then let’s also talk about your student loan debt, your credit cards. Whatever.”

And sometimes it’s people that have a lot going on financially that literally come in and go, “I don’t even know why I’m sitting in here and talking to you about this because I don’t have a dollar to rub together. You know two dimes to rub together, whatever.” And they literally just unload. For an hour. And I just sit there. And then I go, “Okay. Well, let’s re approach this next year.” We try to come up with something positive that they can walk away with. And sometimes it’s just a moment to have somebody to talk to. So, it’s been very fulfilling in that aspect because this group of people are targeted by specific companies and because of their income level and things like that, and so they ask me, “Should I talk to this company? Should I do this? Should I do that?” And I go, “Don’t look at that. Go over here.” You know, so it’s kind of nice to be able to help navigate them down a good path.

It’s very fulfilling and it’s one on one. And it’s really cool.

Hannah: I like that you … I mean you’ve at least alluded to it, especially earlier in the conversation, about you’re not trying to get the sale. Like that’s not … You’ve already got the sale if they’re in front of you.

Breanna: Yeah. Yeah, I’ve had people say to me … When people ask me about it, they go, “Oh, it’s a great lead generator.” Like literally that’s almost every time. That’s what I hear. And I go, “Actually, I get what you’re saying, but I never ask them to do business with me. Ever.” Because to me I’m already getting paid to do this, and yes, they can come ask me questions after the fact. Yes, they could hire me. But the people that I’m meeting with work jobs that pay an average wage, that you know like some of them only work part-time and this company just happens to put a lot of money into their benefits. And so we’re not talking about people that make $200,000 a year here. I’m talking to people that otherwise wouldn’t walk into our office. And so I don’t consider it a lead generation situation at all. If it happens, it happens. But I like the fact that the company is doing this for their employees. They pay … I’m paid. Like, I’m not interested in anything else.

So that’s the way I look at it. But I understand how it could be seen that way. I just … I’ve never … I don’t think of it that way whatsoever. And again, someone might listen to this and cringe and go, “You’re missing out on a long term revenue generation, whatever, whatever.” But I’m okay with that. Because it’s very fulfilling.

Hannah: So we talked about financial planning as a career, and I would hope that it’s a very friendly career towards working moms. And what is … Obviously you get to control your schedule having your own firm, but have you seen that anything else really shift in your, like balancing your home life with your work life now that you own your own firm versus working for somebody else?

Breanna: Yeah, I mean, you know I was sitting in an office for, I don’t know if this makes any sense or answers the question, but I was sitting in an office from nine to five, you know feeling like, “Oh my gosh. You know they’re sick. Should I go pick them up? Should I go do these things?” You know. “Is it okay?” Or whatever. And now I can do whatever I want with the consequence of, “Yeah, but if you don’t do a good job you don’t have a business either.” So you know, so I have the ability to you know, “Oh, Mrs. Reish, your son just got sick, whatever.” I go, “Cool, be right there.” As long as, you know, I don’t … I might have to move things around or whatever.

But just that stress, that stuff, just kinda goes away. But you do have to constantly remember … I, every once in awhile, I’ll go like, “Oh shoot, you over did it.” Like you over … You took that one extra day to go camping with your kids. Maybe you should have thought about working. You know. Or something. So, it has taken me a little bit longer to grow maybe … Yeah, I just have time. Like I just have time to … If I … I’m not the perfect mom. Like I don’t do all the cookies and stuff for the classroom and all that stuff still just because I’m a firm owner. Like, but I can make a costume if I want to, if we want to. So I can do field trips if it works out. You know things like that. So, yeah, I think it is very friendly … Yeah, I don’t know.

But there’s still things that like I’m like I wanna do and I always say, and I think people need to be aware of like, I always say when my kids don’t call me cool anymore, they don’t wanna hang out as much anymore, then I can go do those things and grow this bigger or whatever. So I think it allows us the flexibility. We just have to allow it for ourselves sometimes.

Hannah: Yeah.

Breanna: I mean I just think the bigger thing is that flexibility for sure. It’s the time.

Hannah: Yeah.

Breanna: And, yeah.

Hannah: So I’ve loved following you online and I see all the stuff online. What are your kinda … How are you marketing your firm? How are you like getting the word out about the Wealth of Confidence?

Breanna: Okay. Not very well. We’re working on … This is a work in progress. I say to people, like I was just telling Lindsay, she’s my Operations Manager, I was just saying this to her the other day. I go, “We have to juggle taking care of our current clients, create processes, evolve those. You know CE compliance. And we’re supposed to market and get new people in the door. And then enroll them and do all this stuff.” I’m like, “Aah. We need 50 hours a day.” So she’s enabled the company to work on using social media a little bit more. It is somewhat of a passive situation for us at the moment, the social media stuff. Basically we’re working Buffer and things like that. Our goal is to fill up Buffer with a month in advance of posts, but have them themed by week. And things like that.

And basically our approach is we like the lighthearted part of talking about money. Sometimes, yes, sometimes there’s a serious and stuff like that, but we are just … we are just who we are. So if we find something interesting then we put it on there. Again we still have somewhat of that feminine feel so we do some of the quotes and the things like that. And we try to do some questions that you know get people thinking about their money or the things that they’re doing with their benefits. Or, you know just the different things that they’re doing actively each day. We do work with teachers. So every … Like right now we’re working on a YouTube channel that teaches teachers about money. And it’s separate from the business. Just because we’re gonna name it something and I wanna kinda put that barrier between so that they don’t feel like I’m trying to get them on the backend or something. So we’re working on that right now.

Other than that, we’re online. So we’re part of NAPFA. We’re part of a couple networks, things like that. So when people search for the company, we’re there. Or if they search for, not the company, they’re not gonna know us. If they search for fee only, we’re there. If they search for fiduciary, we’re there. Our SEO just happens to work out.

Hannah: Yeah.

Breanna: So it’s mostly that right now. I don’t really network just due to time. And I really love hanging out with my family in the afternoons and evenings and stuff. So I just don’t network and I wonder if I should be, you know, things. So we’re not doing anything massive right now. But we’re trying.

Hannah: Yeah.

Breanna: And we’re gonna keep working on it. We might do some events in the new year. We really wanna do those. So … Terrible person to ask about that.

Hannah: Well I just love the reality of it. You know like we always say … We always assume there has to be this some huge massive grand plan behind the scenes. And sometime it just works.

Breanna: Yeah.

Hannah: And what you do, what you offer, just works.

Breanna: I would say, I don’t wanna give off any false hope or whatever that you could just sit there and do nothing. Because I will tell you that I think the reason why it works is because we’re rare in the area. I also think because of, you know, we do have a web page, on our page we talk about exactly how we help teachers. So if you’re a single teacher or dual teacher household, or whatever, it’s on there. It says, “If you’re these people, this is how we help you. If you are in this career stage, this is how we help you.” Like we do pinpoint some of those things on there. So you know there’s certain things that speak to teachers. Things like that. So I think we’re easy to find because people are looking for that. And there’s not a million of us in a concentrated area.

If I were working at my old firm, I wouldn’t just have people calling me. Because I experienced that. People didn’t just call me. So we just kinda luck out because we fell in a certain space and structure. I got lucky with that.

Hannah: So what does the future hold for you and for Wealth of Confidence?

Breanna: You know everyone should have a five year and 10 year goal and a mind map, right? There’s a lot of thoughts. I … Because of loving the life balance, I still work a lot by the way. I feel like I’m sitting here going like, “I take every day off and I’m never around.” Because I like the balance and being able to do certain things, I don’t see myself having this massive firm. I guess maybe it would be considered more of a lifestyle practice, I guess. I didn’t think I was gonna hire anybody at all. I thought maybe I’d have a para planner when I first started, maybe. And I hired somebody within my first year. So I can’t say I know exactly what it’s gonna look like, but a part of me says, “Keep it chill. Keep it small. Be able to balance your life.” And you know get to a certain capacity and make a normal living and then add in more pro bono planning. And you know work on this passion project on YouTube and do the things that make you happy. And that’s the huge part of me.

But then I see all these other people that are doing this other things and I’m like, “Ooh, no. I wanna grow and then I wanna bring in like two people to teach them how to do this and show them there’s this type of planning and this and that.” So I go back and forth sometimes, but I think my heart still lies towards the first one where we kinda keep it chill. But we’ll see. I think if people keep coming to us, we’re gonna make it work. So I don’t know what that’ll look like. The non answer. The non answer. Like I just don’t know.

Hannah: Yeah. Well I love it. Because I don’t think we have to know. And you can look at how we work with clients, right? Like we’re helping clients navigate uncertainty. Like our financial plans are so certain in the numbers and what we put on the paper. But the reality is their life is like that too. You know it’s not … We don’t know for certain.

Breanna: Life changes.

Hannah: Yep.

Breanna: Life changes, yeah, we evolve. I’ve learned so much. Like this answer probably changes you know every six months because it’s like as you learn you go, “Oh, that was stupid. That was naïve. That was immature. Or whatever.” Like now I’m grown up and now I see it this way. And you know, or whatever. And so I think it just changes. And like I said I always say that when my kids don’t wanna hang out with me as much anymore, I always thought that maybe I’d go to the college and teach the classes that I took there.

Hannah: Yeah.

Breanna: And also teach them like here’s the different routes you can go. You know and kind of incorporate that in there and stuff. So I inquired into doing that already. And so I don’t … I don’t know. I didn’t think I’d be moving in the office I’m in. I didn’t think I’d have the overhead I have right now. Like I didn’t think that a year ago. Life changes. But it’s all been good. So I just kinda keep going on that path.

Hannah: Well what advice would you have for the new planners who are listening to this? And not quite sure if they wanna start on their own. Not quite sure, you know, where they wanna go with their career.

Breanna: Why do I hate this question so much, but love it? Okay. And then you know you get in … By the way, we’re gonna get off of this and then I’m gonna think of the most amazing like life altering changing answer ever.

Hannah: We’ll put it in the show notes if you come up the right answer.

Breanna: Okay, good. Okay good. If I … Watch now I feel like there’s pressure, I gotta remember that. No. I honestly, like, I wish from the beginning that someone would’ve been standing behind me and at every conference that I went to and someone balked at my thoughts said, “Remember you can be yourself and that’s fine.”

Hannah: Yeah.

Breanna: “And you don’t have to do it the way they’re saying you have to do it. You can make it work and you can figure it out.” I really wish somebody would’ve been there to really tell me that because I feel like there’s so many people, and even me included right now saying this, there’s so many people telling you how you should do it. The script you should say. The way you should run something. The process you should have. Like the way you should charge people. Like you’re not gonna make any money if you don’t do it this way. I think there’s something to listening to some of what people say and considering it, but then I think at the end of the day you truly have to listen to your heart and do it because I think a lot of things are possible. I think almost all things are possible. And if you find a way to make it work, good for you and you’ll be the one person sitting there going, “Everyone’s coming to me because I’m the one who made it work. And no one else is willing to do it.”

And so, I think when I was finally able to start being myself is when I found true happiness in this business. And my firm doesn’t maybe do the things that other people think are cool in their firms. And that’s cool. That’s what makes us different. And that what makes each of us unique and cool. Like you’re gonna get the people that wanna talk politics and economics all the time? Awesome. At my firm you’re gonna hang out on my couch. We’re gonna talk about your family. And we’re gonna do these other … you know so, just really, it’s so cliché, but just be yourself and really listen to your heart and do it.

I can’t stress that enough. I can’t.

Hannah: I love it.

Breanna: It’s … thanks. Yeah, but I … I just listened to too many people when they said like it has to be done a certain way. And I don’t know. Even today, i run into people like that at different things and I almost let it get to me. And then I walk away and go, “No. We’re gonna do it this way.” Like I almost defy it now. Like, “No.”

Hannah: I’ll show you.

Breanna: “I’m gonna call you up. Gimme your card so I can call you.” You know, I don’t know. Listen, but we’re not probably making the money they are, I don’t know. So maybe they’re … Maybe they’re right. Maybe they’re right. They’ll have the last laugh. I don’t know. But we’re having a good time. So I don’t … I don’t care.

Hannah: I love it.

Breanna: So, anyways. I mean I don’t know. There’s so many other things you can tell people and advise people on and everything. But I think just meet a lot of people in the industry, like reach, oh, reach out to people. Are you kidding me? I think … I think I’m where I’m at because of the people that I know. They’ve built me up. You know. Like they’ve done it. And they’ve helped me out so much build my business and get me to this spot and talk me into doing this or that. You know so it’s like I was myself, but I also listened to them. You know, but I think just knowing people and … Yeah, not being afraid to ask anything. I ask to a fault. Like I’m annoying about it.

Hannah: And the crazy thing is, people love it.

Breanna: Oh people are so, oh my gosh. When you’re a firm owner or when you’re like good at something or whatever, you can’t wait to just blab on about some kind of strategy or something that you figured out. Oh it’s so exciting. Yeah. It’s almost a sickness. So … When you find people that really love this, it’s like, “Oh let’s talk about it for like 24 hours.” And yeah. It’s crazy. It’s crazy. So …

Hannah: Well good stuff. And where can people find you if they wanna follow you online and everything that you’re doing.

Breanna: Oh gosh. If you wanna hear me rant and rave a little bit too much about certain things, Twitter. I might be a little interesting on there. You might not like me. No I’m just kidding. I mean listen I’m on Twitter, LinkedIn, Facebook. I don’t … To be honest, no offense to everybody, but I might as well just put this out, I don’t really connect with too many people on my personal Facebook. I don’t know, that’s … this way or that way. I don’t know. But it’s just … If I haven’t personally met people and such, just because I have my kids on there and stuff. Anyway, so but yeah, Facebook, Twitter, LinkedIn, email me. I even now have on my site like they can schedule a call and we can chat. But just because of like family and work I have to be careful about timing and stuff. But I’m always happy to chat with people about stuff. And spread this really bad knowledge that I have about like the ins and outs of doing this and all that.

So I’m the only Breanna Reish pretty much on the internet. So if you just look for me you’ll probably find me and just reach out anyway.

Hannah: Oh I love it.

Breanna: It’s a blessing and a curse. I’m just kidding. So …

Hannah: I’m on the exact opposite spectrum. But …

Breanna: Yeah, right. I know.

Hannah: Well thank you, Breanna.

Breanna: Thank you. I appreciate it. I enjoy doing this with you.

Hide Transcript

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Breanna believes in being yourself, and owning your knowledge and expertise as a business owner. She has so many fantastic insights on showing up, moving through difficult business decisions, and growing the practice you’ve always dreamed about. Breanna Reish, CFP®, founder of Wealth of Confidence, wants to build a financial planning practice that acts as a home for educators who want to feel confident and empowered when making money decisions. She’s a fee-only financial planner based in California, is incredibly involved with her family, and she’s here to tell you about how finding your own self-confidence as a financial planner is key to running a successful business.
Despite her practice’s awesome name, Breanna struggled with confidence when she first got started. She found herself apologizing to prospective and current clients alike when they’d come into her shared office space, or when she had to request afternoon appointments to work around her kids’ school schedule. She kept asking herself, “Why would anyone want to work with me?”
It took several months, but then it finally hit her:
Why wouldn’t someone want to work with me?
Breanna believes in being yourself, and owning your knowledge and expertise as a business owner. She has so many fantastic insights on showing up, moving through difficult business decisions, and growing the practice you’ve always dreamed about.


 
What You’ll Learn:

Why Breanna chose to break away from her broker-dealer to open Wealth of Confidence
How to be your authentic self
What to do when a niche “finds you”
How to make business decisions that bring you confidence (like choosing an office space)

 
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Hannah Moore clean 50:58
Living in Beta https://financialplannerpodcast.com/yafpnw-living-in-beta/ Tue, 13 Nov 2018 14:08:50 +0000 https://fpaactivate.org/?p=11755 https://financialplannerpodcast.com/yafpnw-living-in-beta/#respond https://financialplannerpodcast.com/yafpnw-living-in-beta/feed/ 0 In this episode Jonathon Cameron and Glenn Downing of Cameron-Downing show us how they are living their lives in “beta.” They believe this phrase means always being willing to grow, improve, and learn - never the “final” version of themselves as business owners or financial planners.

Have you ever thought about your life as constantly in “beta”?

This phrase, originally spoken by Stephanie Bogan, is one that Jonathan Cameron and Glenn Downing of Cameron-Downing live by.  They believe this phrase means always being willing to grow, improve, and learn –  never the “final” version of themselves as business owners or financial planners.

These two have grown an exceptionally unique financial planning practice. After conducting a recent focus group, they’ve determined that building a subscription financial planning model is the best way to continually serve their clients in a scalable way – and the way they’re structuring their practice as a result is fascinating.

Their practice is rooted in serving their clients and delivering an exceptional, custom experience to everyone who works with them. This shines through in everything they do from the ways they discuss client pain points (and the ways they solve them), and the experience they provide beyond “just” the financial planning work they do.

Even more interesting is the way that Jonathan and Glenn view their practice. They work to make their marketing fun and authentic, and they tag-team projects so that they’re equally represented as thought leaders in their areas of expertise. They also pride themselves in their age difference, believing firmly that their “baked in” succession plan is yet another added benefit for clients working with their firm.

Hannah's signature

Social media is a useful front window. – Jonathan Cameron and Glenn Downing on #YAFPNW

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What You’ll Learn:

  • How and why focus groups are critical to the growth and success if financial planning practices
  • How to build a financial planning practice with a built-in succession plan
  • Why embracing change and always improving is important
  • What a subscription model financial planning practice looks like – and how the numbers add up to a scalable business model
  • How to develop an ideal client experience
  • How to identify pain points and grow as a result

 

Show Transcript

Ep124 Transcript


Hannah: Well thank you guys for joining us today.

Jonathan: Yeah, thanks for having us! Appreciate it.

Hannah: Yeah.

Glenn: Yeah, glad to be here.

Hannah: Well I first, I think, met you … Jonathan, I met you online through the FPA Activate group, and saw a bunch of the videos and things that you guys were doing on Facebook, and I became so interested in, like, “What are these guys doing down in Florida?” And then I was at the FPA conference and got to meet both of you guys, and it’s like, “Oh, we have to have them on the podcast.” So I’m so glad that you guys are here with us today.

Glenn: Oh, great, thanks.

Jonathan: We’re excited, we’re excited.

Hannah: Jonathan, let me start with you. So how long have you been working with Glenn? And give us, not just how long have you been working together, but you guys are very unique in that there is a bit of an age difference, so can you talk about that difference, and then how long … How did you guys meet?

Jonathan: Yeah, absolutely.

Jonathan: Well, back into it, so I’d been in the business about 12 years, and then about six years ago … well actually, even further back, probably more like seven or eight years ago … Glenn and I met … we actually met in church originally. I was working at Morgan Keegan, which is now Raymond James, and he was working at his broker dealer, and also teaching the CFP curriculum he was teaching, and continues to do so for Zahn, all seven courses.

Jonathan: So of course, I knew about the CFP, and he convinced me to join him in classes, and then subsequently convinced me to join him at his firm at that time, so did that, and joined Glenn. We had our separate practices, and so we were building it up, and then at some point, we decided, “You know, we could do this better.” So we built into it, and about four and a half years ago or so, we launched CameronDowning, our RAA.

Jonathan: It’s been a fun ride, and we’re 50/50 partners in the firm.

Hannah: So Glenn, so you are more seasoned, is that the right way to say it?

Glenn: You can say it, Hannah: older.

Hannah: Okay, so you’re older. So you see this young up-and-comer outside of your daily work, at church … did you ever think that you were gonna be partners with him? I mean, was that ever in your mind?

Glenn: Way back, yeah, it sure was. You know, I had been with an insurance company broker dealer. I kind of came into financial planning, it was a mid-life transition, and that’s just kind of where I landed, and I was always a fish out of water there, because I wanted to always do the right thing for my clients and not just sell policies. So yeah, I had always been looking for just the right person to, with whom to partner, and when I invited Jonathan into the CFP courses, I didn’t know where it was gonna go. Initially, my thought there was just … he was working as a broker’s assistant, “Let’s help you build your own business,” and then we began to both see the opportunity to work together from there.

Glenn: So initially, it was that I was gonna help Jonathan build up his own work, but … little story here, I had been interviewed by a prospective client, and I had met her from here and there, and she told me, “I’m interviewing around, I’m looking for the best fit,” and so we met, we talked, and we got on very well.

Glenn: But a little while later, I got a call from her saying, “You know, Glenn, I’m not gonna work with you, and the reason being is you and I are the same age. What happens to me when you retire?” And that’s kind of when the penny dropped, and I said to Jonathan, “We’re looking at this the exact wrong way. The difference in ages is a selling point, it’s a plus. It’s not a work-around.”

Glenn: So from that point on, we kind of really began laying the groundwork for CameronDowning.

Hannah: And so Jonathan, what was it like to get that call from Glenn? Or that conversation with Glenn?

Jonathan: Sure.

Jonathan: Well, it’s really a process over time, so of course, we got to know each other, and then of course, going through the CFP courses … also having the mindset, “There’s gotta be a better way to serve clients,” and so learning, really, with him, and working together with him after that, really became a natural relationship. So it was really natural, it was a natural thing.

Jonathan: It wasn’t something that was overnight, and of course, another thing that was natural was, not only are we business partners, but we’re also good friends, and we both believe that that’s really important. If you’re gonna grow any business, it’s kind of important to like who you’re working with, right?

Jonathan: So we kind of think in similar ways, we’ve both taken the Myers-Briggs, we’re both ENTJs, so I don’t know if that’s a good thing or a bad thing, but what it does tell us is, in the future, we probably need to hire into different personalities. But we think of things certain ways, so we kind of drive in the same direction, and we finish each other’s thoughts in client meetings, so it’s just been a really natural progression as business has grown, and we’ve grown, not just in the company, but in our friendship, and I think that comes out with clients when we meet with people. It’s just a very natural conversation, because we’re all on the same page and thinking of things in similar ways.

Hannah: You know, one thing that’s interesting when you see people of different generations with an age difference like this, you usually think of succession planning as being the primary driver, but that’s really not the driver … I mean, I’m sure that is … I’m sure, Glenn, you don’t want to work forever in the field, but this isn’t really about succession planning. This is about running a business well together.

Jonathan: Right.

Glenn: Yeah. That’s right. Succession planning really doesn’t have much to do with it, Hannah. We’re just having a blast. I mean, this is fun. This is fun, building a business. We look and we see CameronDowning and see it succeeding and serving its clients well, where it wasn’t there four years ago. So this is just tremendous fun to us.

Glenn: I told Jonathan many times, my succession … you know, I certainly am, at some point, I’ll slow down and sell, maybe tranches of the business to other reps, but I keep telling Jonathan he’s gonna come in one morning and find me dead at my desk.

Jonathan: That’s the succession plan.

Jonathan: Yeah, and we’re both … I mean, of course, we wouldn’t be doing this if we didn’t love financial planning, but we also really love the process of building a company. So I think that also really drives us to … kind of what Glenn touched on is, this is something that did not exist a little over four years ago, and we’ve built this. We’ve built this, and we’ve done it together, and it’s just been a fun process.

Jonathan: So we keep coming back to that, and it spills over into the quality of our work. If we’re enjoying what we’re doing, we’re enjoying building something, it extends to our values and mission, and part of that is building a firm, and of course, ultimately, when we grow and add employees, building up the employees, and building up our community. And so that’s sort of a three-pronged building up, if you will.

Jonathan: In terms of the community, what we’re doing right now is we’re giving 5% of our gross revenue … not profit, revenue of CameronDowning to homeless assistance in Miami, Florida, which is where we’re based. So we feel like that’s an important part of who we are, so it’s part of an expression of that, and in time, that’s gonna be something that’s gonna attract people to work with us, and of course, clients appreciate that, ’cause they see the value.

Jonathan: ‘Cause, by and large, when you really get down to it, we’re doing financial planning. It’s gonna be for someone or a family or a couple that has at least some means, otherwise they probably wouldn’t have come to see us in the first place. That’s just what it is. So this is sort of our way of giving back to the community for those who don’t have, and we believe it’s important. It’s part of our culture.

Glenn: Absolutely.

Hannah: I love that. And yeah, it seems like you’re gonna attract the clients and future employees that that’s important to, as well.

Jonathan: That’s right.

Hannah: So, on the logistics of partnerships, ’cause I’m always interested in that … Did you guys start from zero, or were you guys bringing past client relationships in? How does that … I hate to use these terms, ’cause I think there’s a lot wrong with it … but who owns the clients?

Jonathan: Yeah, that’s a good question. So to answer the first part of the question, we had a little bit. We had some clients that … this was a broker dealer of an insurance company, work there focusing on planning, and it didn’t exactly mesh with the culture of the company, which is why we left. But yeah, we had a little bit to start with. We started at zero, of course, when we were approved by the state, but everyone we asked to come with us came with us, which was great. So we had a small base. Not enough to pay ourselves, but it was something, just to pay for some of the software that we needed, and that’s where it’s kind of come from.

Jonathan: So the clients were clients of the broker dealer where we were, and then we moved over to the custodian that we selected at the time to have the assets, so we don’t custody any assets. CameronDowning doesn’t have assets in that way, and that’s something we don’t want at all anyway.

Jonathan: But yeah, so we started from scratch, but there were a few relationships that we did have to start us off.

Hannah: Are you guys managing assets, or is that not at all what you do?

Glenn: Oh yeah.

Hannah: Okay.

Glenn: Sure. We lead with financial planning. Our promise to the client is, “Here is your financial plan, these are our recommendations. Go implement them wherever you want. If you have already a trusted advisor who’s managing your money, fine, bring him our findings and have a conversation. But if not, we’d love to do it for you.”

Jonathan: Right. We’ve actually received quite a few referrals from other advisors that they know we’re all good friends here, especially in the FPA of Miami, so they’ll send us clients that they manage the money for, but they know that we’ll do the planning, we’ll do maybe cashflow planning, so forth, so maybe they don’t do that.

Jonathan: So really our approach really is just like Glenn said. It’s fee for planning, we always start with a plan. We do charge for that. And then if recommendations entail investments then we could do that, but we set the stage early on to … and we have an idea of whether that’s something they even want, so we may not go there if it’s not the right fit for that particular client.

Glenn: Right. We’re really keen to fulfill our promise on unbiased financial advise. So that’s why we just always lead with fee-based financial planning, and if the relationship goes into something later, all well and good, but meanwhile, we have given our clients unconflicted advice that’s in their best interest … as much as we can, with no conflicts of interest.

Jonathan: Right, and just, if I may, I’ll jump in.

Jonathan: So what we’ve been doing that’s been very well received is offering these financial planning packages. So what does that mean? So we make it very clear on our website, we put the pricing up front there so people will self-select, and so it makes initial meetings that much easier, because nine out of 10 times, not 10 out of 10 times, they will have seen how much we charge for a plan, and we make it pretty straightforward on our website.

Jonathan: If you go to cameron-downing.com, we have three packages for young professionals, and three packages for those nearing retirement. So we make it very simple. Bronze, silver, gold for young pros.

Jonathan: Bronze … it’s more than this, but bottom line, you are getting into debt payoff and cash flow budgeting questions, and some review for just reviewing policies if they have it.

Jonathan: For the silver plan, we’ll actually talk about investments, whether it’s through your 401(k), 403(b), or if you needed to start wealth-building.

Jonathan: And then for the gold plan, is we’re actually getting you into your first home. So that’s getting into credit score, your credit report, and helping build up your down payment.

Jonathan: So those are the three places we’re seeing the biggest need for young professionals, is wealth-building as opposed to wealth preservation, getting into that first home, just getting financially organized, and then for a few, it’ll be their first experience … I think a big tax hit, and they don’t want that to happen again, and so they wanna plan ahead for that to be able to mitigate that, pay for it early, and that’s, again, it comes back to cashflow planning there.

Jonathan: And then for the retirees, we have similar packages. Bronze, silver, or gold. Of course, the needs are different. Different stage of life. We’re getting into …

Jonathan: For bronze, just general kind of complete tune-up, if you will.

Jonathan: For silver, we’re actually gonna plan your retirement income, and answering the question, “Will I have enough to live on?”

Jonathan: And then gold, we actually get into estate-planning reviews and so forth.

Jonathan: So I mean, the big difference between the young pros and those nearing retirement is, those nearing retirement, if you’re … unless if you’re a high net worth individual, it’s, generally speaking, not ultra complex. We have to answer their questions of making sure that you have enough in retirement. So of course, there’s a lot to talk about. Absolutely. Which is why there are so many in our business who focus there.

Jonathan: For the young pros, I would argue that it’s just a very dynamic stage of life. So maybe not in the traditional sense is it complex, but it’s very dynamic, meaning you’re getting married, you’re getting divorced, you’re having kids, you have a new job, you get fired from that job, you have to get a new job, new benefits, so there’s a lot of changes happening very quickly.

Jonathan: Of course, getting into your first home. Trying to pay off that student loan. So those are big, big areas where a lot of things, in terms of money, happen very quickly in a certain period of life, so that’s sort of how we’ve structured our firm to address that dynamism, as opposed to just thinking of it in the same way of, “Let’s plan your retirement,” if you’re 30 years old. It’s not the same conversation. That’s actually a secondary goal.

Hannah: I know I can say, as a young 30-something, I can’t even really wrap my head around retirement. So looking at a retirement plan for me, I’m like, “That doesn’t make sense.” I mean, it does, but it doesn’t feel real. Even though it is.

Glenn: Right.

Jonathan: Right.

Hannah: And so what are the price points? Just to give listeners an idea of how much these packages are.

Glenn: Sure. It’s all subject to change, and it is going to be changing very shortly. We’ll tell you all about it in a second.

Glenn: For the bulk of it, for the young professionals … and by that market, we mean people who are couple of years out of graduate school, they’re working, they’re doing well … but their concerns, largely, are student loan debt, and then, “How do I do everything? How do I get in my first house? How do I pay off these loans? How do I start saving? What initial insurance do I need?” All that kind of thing. Bulk of the business we do, our two plans in there, are $1500 and $2000.

Glenn: And then for the retirees, the bulk of the work there is either at $2500 or $3500, just depending on the complexity of the work.

Hannah: And then, are you both working on all of these?

Glenn: Together? Yes.

Hannah: So you’re meeting with clients together, and—

Glenn: Always. There are many, many times when after a client meeting, I’ll say to Jonathan, “Did you notice this?” or he’ll say to me, “Did you pick up on that?” So two sets of eyes and ears always works to the client’s benefit.

Hannah: I wanna talk about your partnership. I know there are some interesting things going on. We had a brief conversation FPA about this, so I’m curious to dive in more to that.

Glenn: Sure.

Hannah: But on your partnership, so are there pieces … Do you guys both kinda do everything, or is there one person who … like, how do you guys divide up the responsibilities of client work, but also just running your practice?

Glenn: Yeah, well, Jonathan’s the Chief Executive Officer and I’m the Chief Compliance Officer, so I handle all the compliance tasks, for the most part, which of course included delegating some stuff to Jonathan. One person can’t do all that. Then, in terms of client meetings and the client relationships, we both … whoever has that natural market is the one who sort of takes point with the relationship. So for me, that’s the retirees, and for the young professionals, that’s largely Jonathan.

Glenn: What’s worked, Hannah, is with the young professionals, in a client meeting, having somebody experienced with some gray hair works, and with the retirees, having somebody younger, who will be there after I am gone, it also works. So we are very aware that the age difference is a big selling point. So we’re sure to use it.

Hannah: Yeah. I know I’m a younger planner, and I have prospects come, and they’re like, “Well why should I use you?” and I’m like, “Because I am young.”

Glenn: Yeah.

Jonathan: That’s right.

Glenn: And it’s great that you can see it that way, too, but really and truly, I think the entry is your CFP marks, and once you’ve got those, you’ll kinda need to stand on them and make your case to the client that, “I have more training here than most people out there. So yeah, I really do know my stuff, so let’s give it a whirl and see if we’re gonna be a good fit.”

Hannah: I know when I talked to you guys at FPA, there was a talk of going back to your clients and possibly looking at charging a different way and seeing what your clients thought about that, and you guys had … I don’t know if it was a shareholder meeting in October?

Jonathan: A focus group.

Glenn: A focus group.

Jonathan: Yeah.

Hannah: Focus group.

Jonathan: Yeah. It was great.

Glenn: That was such fun.

Jonathan: It was a blast.

Hannah: So can you guys set the stage for that?

Jonathan: Yeah, so we set up a focus group with a handful of clients. It was mostly clients, and a few centers of influence, I guess you could say, some attorneys we know, and bank trust officers. So there were about 10 of … well, including Glenn and I, there were 12 of us in the room, and this was great.

Jonathan: So what this was is we were thinking of some big changes in our offerings at CameronDowning, but we also know that we are … you know, if we have an idea, we like our own ideas, right? But they may not be the best ideas. So we wanted to take it to our clients and some friends that we trusted, to run it by them, pay for some dinner, and let’s talk about this.

Jonathan: So Glenn had the brilliant idea, he was introduced to the software called Mentimeter, which we highly recommend, and what it is is it’s an interactive software that syncs with your slideshow presentation, where the audience … or in this case, the dozen people in the room … can, in real time, engage with the presenter. So we can go through our slides, and of course, I’m up there and I’m talking about, “We’re thinking of doing XYZ, what do you think?” Rather than just say, “What do you think?” we actually had a slide with pre-thought questions up on the slide, and people could vote on which one they liked best: A, B, C.

Jonathan: We tried to make them as open-ended as possible to facilitate discussion afterwards, or after the people vote. So you could see, if we set it up for example, like a pie chart, depending on whether you answer A, B, C, you could see the pie chart moving in real time, depending on how quickly people voted.

Jonathan: So it was such a blast that one of our clients, who’s an attorney, owns his own practice, stops me as I was talking and says, “This is awesome.” You know you’re doing something right when someone’s just sitting there listening to you talk, but then makes a point to tell you that.

Jonathan: So some of the things we wanted to run by them was, we mentioned the packages, and that’s been successful. People have liked that, and everyone who isn’t a client in that room purchased one of those and did a planning engagement with us, but what we’re also … we wanted to run by them a couple other things, which was one, a subscription model, and what that looked like, and just in a nutshell, we wanted to be able to tell them, “Yes, we did this financial planning engagement with you in, for most of you, it was about three meetings from beginning to end.” We would have a followup, if there were investments to manage, that’d be kind of our ongoing relationship there, because we put a percentage of assets under management.

Jonathan: But if you didn’t do investments with us, beyond just setting up a new planning engagement, what was our formalized engagement, four years, two, three, four, and so forth.

Jonathan: So this was, in our eyes, this was something we needed to address, but we wanted to run in by them. So this is where the idea of subscription model really, to us, made sense, but we wanted to talk to them about it and just kinda throw around some numbers and see what they were comfortable with. Especially since they were some of the target market.

Jonathan: So that was one thing, and for that particular, for the subscription model, this would be getting even deeper than we had with most of them in the room, so we incorporate a lot of technology, whether it’s through mobile apps, or just different software that we’ve purchased to have a greater experience, financial planning real-time experience, because as we mentioned, this is a dynamic, very fluid season of life, so it’s not just a one-shot plan and, “See you later.”

Jonathan: So we threw some of that by them, and one of the things we threw out there was we wanted to go deeper into niche marketing, so one of the things we realized is a lot of the natural market for the young professionals have been younger attorneys and younger entrepreneurs. So that was what we were running by them as well, to going deeper into the niche area of having a niche practice for this group, not just simply young professionals, but specifically young attorneys and young entrepreneurs. So that was that piece of it.

Jonathan: The other piece of it was adding what actually they ended up calling “a la carte.” We didn’t’ even use that term, but they started using it, and they all started using that term when we had our discussion, but the idea being, “Okay, not everyone’s ready,” or maybe not everybody can afford a comprehensive plan, and you just want help with debt payoff. You just want help with someone to look at your 401(k) at work. You just want help with whatever, so we would essentially have something on our website, which would be a la carte.

Jonathan: You’d say, “Okay, here’s one goal. This would entail one meeting, and then a followup email recommendation, so it wouldn’t be a long-term engagement, but it would be a way to engage us without having a complete plan, but it addresses your primary pain point,” whatever it is at that point. So the reaction we got for that was, “This would make it easier to refer to you, because maybe you’re not gonna pay $2000 for the plan, but it’ll be something less than that for one goal or one concern you want addressed,” so they liked that, too.

Jonathan: So whether it’s that, overall, whether it’s a subscription or the … for lack of a better term, the a la carte model, these two things were well received. Like Glenn said, it was a lot of fun to have that.

Jonathan: And it was a good sign that at the end of the meeting, people just didn’t take off. It was late at night, and we kept emphasizing throughout the night, “We know you’re busy, we know you’re busy, this is the market we wanna serve, these busy professionals. You’re very, very occupied. A lot of computing priorities,” and so, but even though we know that’s the market and that’s the group that we invited there that night, they stuck around and we hung around and we talked for a long time afterwards. A lot of them didn’t wanna leave immediately.

Jonathan: So that’s another good sign that we were doing the right thing there by getting their opinions on some of these new offerings.

Hannah: So having this meeting, what surprised you?

Glenn: I’ll give you one.

Glenn: We got a lot of great direction from the people, but one surprise, it was just a blessing more than anything else … as we were breaking up, a wife who was there, was part of a couple, said, “You know, I have something I’d like to tell everybody,” and so, you know, “Okay, good, go ahead,” and she started speaking and said, “You know, we both just finished our masters degrees, and because we went to CameronDowning to these guys first, while all of our colleagues were complaining at graduation about the student loan debt that they had, we finished our masters degrees, paid for them in cash, and went to Europe afterwards to celebrate.”

Glenn: And that was, oh my gosh, that was just like, the best thing anybody could’ve ever told us. And we didn’t know it. We didn’t’ know it until then and there, in that meeting. We knew they were planning a trip, of course, but the extent to which we had been able to help them … oh, that was just wonderful. There’s no price you can put to that.

Hannah: You know, we talked about the power of financial planning a lot, and that is such a great example of the direct role that financial planning had in making somebody’s lives better.

Glenn: But in terms of concrete feedback, let me give you some.

Glenn: Mind you, you’ve gotta picture this. We’re in Marriott downtown, Biscayne Bay hotel, and they have a private dining room, really nice space that overlooks Biscayne Bay. Oddly enough, of all the places we looked at to host this meeting, this is by far the nicest, and by far the most affordable, which doesn’t often happen.

Glenn: But one of the questions we were getting at here was, “To what extent are you willing to provide us information, even before the first meeting?” You know, because in any financial planning engagement, the bottleneck of time occurs at the onboarding.

Glenn: And whereas on the one hand, we would love to have all kinds of information about you before we meet you, on the other hand, you may not wanna give it, because we’re both kind of feeling each other out to see if we’re even gonna be a good fit to work together.

Glenn: So what the response came back, loudly and clearly was, “We’re willing to give you some information. We’re not willing to give you concrete numbers, but we are willing to give you ranges.”

Jonathan: Right.

Glenn: So ask the question in terms of ranges. “What is your income? Is it between $100 and $150?” You know, “Is it between $100 and $200? How much are your total liabilities?” Again, give a range, and everyone would feel very comfortable answering that before they even came into a meeting, because then they were giving us somewhat of a picture of who they are, but they weren’t divulging personal details. And that was something that, quite honestly, we hadn’t even thought of beforehand.

Hannah: Oh, that’s fascinating.

Glenn: Yeah! We thought so, too!

Hannah: Yeah, I mean, that’s something I can go put on my website right now! Or make a change.

Jonathan: Absolutely.

Glenn: By all means, and listen, you know, Hannah, that was another great thing that came out of the meeting, was so many … the target market here … I know we talk about that a little more … is attorneys and business owners and entrepreneurs, family income, household income of $150 and up. That’s the target market that we defined in this meeting. So that’s the people who were invited to be there.

Glenn: And they all said, to an individual, “This has been so useful. I’m gonna take this, this, or that back into my own practice.”

Glenn: So again, that’s part of our ethos of building up, and we’re very pleased that the work that we did that evening for our own benefit is also gonna be of great benefit to everyone else who was in the room.

Hannah: So you guys had mentioned the subscription model. What was this group’s feedback on implementing more of that subscription model versus the one-time fees with asset management on the … not on the side, but in addition to that?

Glenn: Two of them told us, “As soon as you have it ready, we’ll sign up.” Believe it or not.

Glenn: The target market for that is as I just described, in terms of income, but it’s young professionals who are used to paying a subscription for things they want. For Prime, for Amazon Music, for whatever. And they have more money than time, so they’re perfectly happy to outsource their financial lives to know that it’s being done well, so that they can, in turn, focus on their own businesses.

Jonathan: Right.

Glenn: If you’ve got an attorney who’s billing at $400 an hour, why not just pay us to take care of your financial life, and you go earn your $400 an hour, and you’ll come out ahead.

Jonathan: Right. The bottom line is, this demographic, this target market is, they’re busy, and we know that. So of course, the onus is on us to deliver an experience that not only meets their expectations, but hopefully exceeds them. So that’s why we’ve invested in some technology there.

Jonathan: And one thing, and I think it was Stephanie Bogan at the FPA conference, I don’t know if this was an original from her, but we thought it was brilliant, of living in beta.

Glenn: Yeah.

Jonathan: Ever since she said that, that’s just been something that has stuck with both of us, because that’s what we’ve been doing these last four plus years, and we plan to continue to do, you always have to.

Jonathan: This is more than just thinking of technology. Of course, that’s part of it. What’s the right piece of technology that adds to the client experience, or our firm operations, but just in terms of our approach, whether it’s on the behavioral side, the questions we ask, how we incorporate that into these meetings, because as we all know as planners, this is more behavioral than even the numbers part of it. So they tell us what the goal is and the concern is, and then it’s our job to not say, “Oh, you’re spending too much here, too much there,” but, “How can we, together, get you to that goal,” and, “Let’s look at it. Let’s just get organized and start there.”

Jonathan: So living in beta, we love that, ’cause that’s what we’ve been doing, and we plan to continue to do. And we’ll probably have more of these focus groups. We actually … it’s not on the calendar yet, but we plan to have another focus group with those nearing retirement, with that focus group, so we’re gonna gather some of our clients in that phase of life to be able to go over different questions, but to be able to see how can we improve or add to how we’re serving you.

Jonathan: So yeah, this is something we’re gonna be doing consistently, and comes down to, “How can we build you up, as a client?” And this is when you don’t necessarily need to ask for referrals, because you create such a great experience that they want to refer to you. But, gotta give them the opportunity to want to refer you by having meetings like this, and so forth, and sort of it speaks for itself.

Hannah: Yeah. I love that term, “living in beta.” I’ve written that down, and like, “Ooh, that’s really good.”

Glenn: Isn’t it good?

Hannah: Yeah.

Glenn: Isn’t it good. Especially when—

Jonathan: We like it.

Glenn: The software changes out from under you week by week.

Jonathan: Right.

Hannah: Yeah, well, it’s this idea of embracing change, embracing, always improving. That’s—

Glenn: Yeah.

Hannah: So good.

Hannah: So on that subscription model, are you guys gonna be charging a similar dollar amount per year, or were you looking at possibly raising your fees? What were the price points that your clients felt comfortable with?

Jonathan: Yeah, the fees are going to go up. We’re trying to nail down the exact number, but they’re gonna be more than they are now, at least for the subscription portion of it. So … I don’t know, how soon are we ready to talk about that, Glenn? We’re almost there, so … you know, it’s gonna be somewhere between, for the monthly portion of it, $150 and $200, somewhere in that range, and then we’re gonna have an up-front component as well, where it’s just kind of getting close to that or nailing that down, but what was helpful mainly was just the feedback we got, just to see how comfortable are they and how close are we to thinking about this before we execute, and start announcing it.

Hannah: You know, one of the other things that you said, Jonathan, was you guys are looking to deliver an experience. So I’d love to hear more of your thoughts, because I’ve been seeing this in other fields of … you know, that’s really the key is, what is your client experience like? It’s not just about giving them a list of recommendations. What do they go through?

Jonathan: The bottom line why people come to any financial planner is because there’s a pain point, and when talking about, specifically, the younger professional market, those pain points … that first home purchase, the student loan debts usually are the biggest ones, whether they should be or not … credit card, wealth-building as opposed to wealth preservation, just getting financially organized, ’cause now you’re making some money and need to make some good decisions, and maybe it’s especially pertinent because you have a young family now, so tax questions, those are oftentimes fairly new, ’cause now you’re making some money.

Jonathan: So starting with the pain points, their experience before meeting with us is, “Alright, there’s a problem,” or, “There’s something I know that needs to be addressed,” or, “I’ve been putting this off for a little, but now it’s time.” So it’s taking that and acknowledging that, and saying, “Yes, alright,” and making sure that … and it sounds very simple, but I think it’s very important … of repeating it back to them when they tell us, so to ask specifically, “Why are we here?”

Jonathan: One of our most recent clients that came onboard is, he and his wife joined us, and I asked them to tell me, “What were your primary goals and concerns?” So I wrote down, they were like … actually, it was more than most people. It was five, six, or seven different points there that he kind of rattled off to me, and I wrote them down, but then I … though we incorporate all the tech, as much tech as possible in meetings, in this case it seemed appropriate to just rip off a piece of paper from my notepad and say, “Here, I’ve written those …” whatever it was, “six things down. Would you …” talking to both spouses, “Would you prioritize them for me? And just write down, one, two, three, four, what’s most important?”

Jonathan: So getting them to just … we’re all silent for a minute or two. They’re kind of talking low and sort of figuring out, “Okay, what is this? Is this a one or is this a two?” and sort of figuring that out, I think that moment, that experience, not only of me writing down what those goals were, or even asking the question, but putting the paper in front of them and saying, “Would you prioritize this for me?” rather than me writing it down, it kind of let them engage in that experience, and then they handed it back to me, and then it opened the discussion further.

Jonathan: So I think that’s sort of the starting point there, in terms of the experience of, “We’re listening to you, we know this is important, this is why we’re here, and let’s start with what’s most important.”

Jonathan: So I think that’s just the beginning point. Beyond that, there’s a sort of an expectation of, “I’m hoping that it’s gonna get better, my financial life is gonna get better.” Most people will come to you, not with, “These are my five goals.” That very, very rarely happens. It’s, they come to you with a vague sense of unease … and this is the same with young professionals as with those nearing retirement … so they come with that, so our job, as we see it, “Let’s put it down together, let’s write them down and verbalize out loud what they are, and prioritize them.”

Jonathan: And I think that, at least as a beginning point, is a great experience for anyone, because in what other professional capacity will someone actually talk about these very personal things with you? In very, very few places. People will talk to us about all kinds of things because we’ve gotten them to open up about these very personal goals they have, which may or may not necessarily be money goals, but they may need money to actually address those goals, so it’s someone listening to you, and it gets pretty personal.

Jonathan: And so I think when you do that, and build on it from there, people, the trust just comes, because you were quiet and you let them tell you what’s most important to them in life.

Hannah: Well, and keeping it client-focused.

Jonathan: Mm-hmm (affirmative).

Hannah: I mean, that’s what I kept hearing when you were talking, is it’s all about them and their experience. It’s not about, “I have this great software, let me show you what I can do,” you know?

Jonathan: Right.

Glenn: Let me give you an example, if I might, please. Hannah, do you ever gone to the doctor, and you know you’re going to a doctor with just a stellar reputation, he’s the best guy in town for what you need, but your experience in the office with the staff is horrible? They just don’t even look up, “Name. Date of birth.” This type thing.

Glenn: And so the work might be brilliant, but the experience is awful. What are you gonna go back and tell your friends, if anything? That’s the point. We want our clients to become our advocates, that they come out from the meeting with us saying, “They listened. They really listened. They got me. They get it. They know what I need, and I’ve never felt like this before, so I trust these guys, and I’m looking forward to working with them for long-term basis.” That’s the goal.

Jonathan: Right. Right.

Glenn: And that means lots of open-ended questions, and just going for it. They’ve hired us, as Jonathan said, initially vague sense of unease. So in terms of asking deep and probing questions, it becomes, not difficult, from the client’s point of view, but almost a refreshment, ’cause they get to unload. And where else in life … put it this way, where else in life does somebody actually sit down and ask you what you think and feel about something, and really want to know the answer? Very few places.

Hannah: Oh, and you know, I love this idea. We talked a little bit at the beginning about contrasting working in a place where it’s just all about sales versus a focus on financial planning. I mean, just even how you’re describing your relationship with your client is so, so different, and it’s like, that’s what financial planning’s about.

Glenn: Yes.

Jonathan: Right.

Glenn: Yes. Isn’t it odd that most financial planners … in fact, most CFP professionals don’t do financial planning? Mostly over on the, strictly on the investment management side.

Jonathan: Yeah. And it’s an interesting phenomenon when we’re going through a cashflow exercise, a budgeting exercise, with a client, it’s the phenomena of, “Let’s just write it all down. No judgment here, we’re not telling you you should do this or not, let’s just write it down. What is?” So we have our template, where we can start writing their spending habits down, but that exercise and the way we do that, of just non-judgment, “Let’s just write it all down. Now let’s get into any income, and the formulas are plugged in, so spread it out across 12 months, let’s see how it lays out, and Mr. or Mrs., or Mr., or just simply Mrs. Client, does this please you?”

Jonathan: And just the approach … and this is going back to that experience … we’ve had comments where they will use terms, in terms of budgeting, just the budgeting, of, “This is awesome. This is extremely helpful.” We’ve had more positive comments from the cashflow exercises … and they’re really not complicated. It’s really just putting it down, and then seeing where their money is going, now that they know it, and as we’ve taken them through that, they see the value in it, because they didn’t know before. They didn’t know where the money was going.

Jonathan: So we’ve had more positive comments from budgeting than from our investment management. However, wonderful job we do, that hasn’t been the primary source of value for most of these … especially young professional clients.

Hannah: Again, it’s, “What do the clients want?”

Glenn: Yep.

Hannah: And it’s focusing on that. I love it.

Glenn: You know, interestingly enough, we settled on those target markets for the young professionals simply because that’s who was coming to us. Just, as it happened, that’s who was hiring us, was a lot of attorneys and a lot of business owners. And the attorneys, again, people with absolutely no time, but just feel like something is off and needs somebody to come and look at it for them, and then entrepreneurs who are very successful, and now that they can breathe a little bit, are able to sit back, take a look at their business, look and put the proper financial and legal underpinnings to it, and that’s where we add a lot of value there.

Hannah: So I wanna talk about something else with the two of you, because I’ve been following you guys on social media, and other places for the last bit—

Glenn: Oh!

Jonathan: Great!

Hannah: And y’all are really fun to follow. You can tell that you’re having fun.

Glenn: Oh, good!

Hannah: Yeah. You have a lot of personality, you’re doing a lot of videos and things like that, so can you talk about … I just don’t see many planners doing that. What’s kind of motivated you to do that? Are you seeing results, or kinda, what does that look like for you guys?

Jonathan: Let’s just kinda put some round numbers.

Jonathan: Back in 2000, that’s when websites, you have to have a website, right? You have to have a website, and so of course, that remains today, but I think we’re well beyond that. The storefront window, if you will, is social media. So social media will get people to your website.

Jonathan: Yeah, they could Google you, and that’s certainly part of that, and you’ll come up there, but getting people interested and kind of perking their interest, I think the advice that we took, and we would give this to anyone else who’s even considering starting their firm or growing their firm, is position yourself as a thought leader in your area of expertise, whatever that may be in financial planning, and put it out there, ’cause you could throw the greatest party in the world, and no one knows about it, then it’s not so great.

Jonathan: So people do need to know about it, so social media is the new storefront window, so kind of our approach is a little more on the aspirational side there. The idea is, hopefully people will be interested enough to, at some point, they’ll develop enough trust that by the time they come to our office or they set up a meeting virtually, they’ve already built that trust, because they’ve seen our work on social media, they’ve seen how we’ve posted, how we’ve positioned ourselves on our website, so it sort of breaks those barriers down before you even meet the person.

Jonathan: We did set up, a couple years back, our YouTube channel as well, so on here, I’ll tell you how we just started by … kind of started doing this. We’ve all seen videos out there where it’s clear that someone’s reading something, and you can see their eyes move back and forth, so it’s not … you know, “Okay, I’m gonna stop watching now.”

Jonathan: So if you want to have an exact script, you’d want something like a teleprompter, but when we first started, we had hardly anything. Our budget didn’t allow for buying this really nice teleprompter, so I went on YouTube and I Googled “how to make your own teleprompter,” so I figured out how you could do that. So for $10, I got a cardboard box, I bought a picture frame at Office Depot, took out the picture where it has reflective glass, downloaded a free app which mirrors your text. So I already knew what I wanted to say and I knew exactly how I wanted to say it as well, so bottom line, built our own homemade teleprompter, and we made about 30 videos on different financial topics that were relevant to our target market, and it’s only really been recent months where we started pushing it out on social extensively.

Jonathan: So it’s taken a while. It’s taken a while to figure out what we’re able to do, and the time that it needs to be done in, so we’ve been trying to position ourselves as expert leaders in certain areas, and so I think if anyone does that, they build trust over time, and then hopefully some of them will want to meet us and we can address their personal goals.

Hannah: Oh, I love that. So you guys have just this bank of 30 videos that you’re just slowly releasing?

Jonathan: Yeah. 30 right now, and we’ll probably need to refresh some of those. We have actually another one that we made recently that hasn’t gone out there yet, so we need to refresh some of those. They’re a couple years old, some of them. But yeah, we’ll be adding to those, certainly.

Hannah: So as we wrap up, what advice would you give to new planners who are entering the financial planning profession?

Glenn: CFP marks, without a doubt. CFP marks first and foremost.

Glenn: Age doesn’t matter if you’re leading the discussion with, “I use a fiduciary standard of care, Mr. and Mrs. Prospect. The advice I give is, to the most extent I can do so, always going to be in your best interest, and without conflicts of interest.” That’s powerful. So that would be the first thing I’d say. Go for CFP marks.

Glenn: Now of course, full disclosure here, I’m a CFP instructor. So that advice is a little bit conflicted. But I’ve certainly lived it out myself.

Jonathan: Yeah, absolutely. I would add to that, also, as a president elect of the FPA Miami chapter, join FPA, the Financial Planning Association. There’s just some tremendous resources there. Having returned from the chapter leaders’ conference and seeing what’s in the works and what’s really available for anyone who’s part of that organization, if you’re not already … and even if you are part of the organization, leverage the resources that you have there.

Jonathan: There’s so much there, whether it’s on the business coaches corner, or Ben Lewis from media, getting your name out there, it’s just a host of resources at FPA, and then there’s the next gen group, of course. So leverage that. Leverage the little bit of investment that it is, just to join the association, even if you have to pay out of pocket, totally worth it.

Jonathan: So CFP, of course, first, and after you join CFP, sign up for FPA, and if you’re already a part of it, leverage the resources there.

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In this episode Jonathon Cameron and Glenn Downing of Cameron-Downing show us how they are living their lives in “beta.” They believe this phrase means always being willing to grow, improve, and learn - never the “final” version of themselves as busine... Have you ever thought about your life as constantly in “beta”?

This phrase, originally spoken by Stephanie Bogan, is one that Jonathan Cameron and Glenn Downing of Cameron-Downing live by.  They believe this phrase means always being willing to grow, improve, and learn –  never the “final” version of themselves as business owners or financial planners.
These two have grown an exceptionally unique financial planning practice. After conducting a recent focus group, they’ve determined that building a subscription financial planning model is the best way to continually serve their clients in a scalable way – and the way they’re structuring their practice as a result is fascinating.
Their practice is rooted in serving their clients and delivering an exceptional, custom experience to everyone who works with them. This shines through in everything they do from the ways they discuss client pain points (and the ways they solve them), and the experience they provide beyond “just” the financial planning work they do.
Even more interesting is the way that Jonathan and Glenn view their practice. They work to make their marketing fun and authentic, and they tag-team projects so that they’re equally represented as thought leaders in their areas of expertise. They also pride themselves in their age difference, believing firmly that their “baked in” succession plan is yet another added benefit for clients working with their firm.


 
What You’ll Learn:

How and why focus groups are critical to the growth and success if financial planning practices
How to build a financial planning practice with a built-in succession plan
Why embracing change and always improving is important
What a subscription model financial planning practice looks like – and how the numbers add up to a scalable business model
How to develop an ideal client experience
How to identify pain points and grow as a result

 
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Hannah Moore clean 54:58
Launching into the Financial Planning Profession https://financialplannerpodcast.com/yafpnw-launching-into-the-financial-planning-profession/ Tue, 06 Nov 2018 18:14:42 +0000 https://fpaactivate.org/?p=11748 https://financialplannerpodcast.com/yafpnw-launching-into-the-financial-planning-profession/#respond https://financialplannerpodcast.com/yafpnw-launching-into-the-financial-planning-profession/feed/ 0 Emily Purdon started her career in 2016. She quickly realized that her CFP® certification and financial planning degree through Virginia Tech hadn’t really prepared her for the realities of being a planner - and she felt that the comprehensive planning she learned at her role with SBSB (Sullivan Bruyette Speros & Blayney) was both exciting and beneficial to clients in a way she hadn’t imagine was possible. Emily Purdon, CFP® started her career in 2016. She quickly realized that her CFP® certification and financial planning degree through Virginia Tech hadn’t fully prepared her for the realities of being a planner – and she felt that the comprehensive planning she learned at her role with SBSB (Sullivan Bruyette Speros & Blayney) was both exciting and beneficial to clients in a way she hadn’t imagine was possible. As a new planner, she learned that financial planning is so much more than different “silos” of planning – taxes, investing, and financial life planning. Everything starts to overlap, and no comprehensive plan is alike.

Currently, Emily works for Sullivan Bruyette Speros & Blayney, as a Senior Financial Planner. Through her first years as a financial planner, she’s fallen in love with the financial planning process. In this episode, she’s diving into what it’s like to be a new planner, why she’s continuing to pursue a career in this profession, and how she’s been involved with FPA Residency. Emily has found a strong, supportive network through Residency, and we’re excited that she shared a little bit about how the program has helped her continue to advance her career!

If you’re a new planner, or a college student considering a career in financial planning, this episode is a must listen! It’s so rare to hear the perspective of a new planner, and Emily truly opens up about her experience in an authentic, amazingly helpful way.

Hannah's signature

I think that any time you can connect with people who have advice to give, it’s just going to be nothing but valuable. – Emily Purdon on #YAFPNW

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What You’ll Learn:

  • How Emily got into financial planning
  • What her expectations were coming out of college with a degree in financial planning, and what the reality was when she started working at SBSB (and why she liked it better!)
  • What her day-to-day looks like at SBSB, and what other new planners might be able to expect from their roles
  • How she approaches the fact that she is so much younger in her career – and whether she feels it’s a benefit or drawback in networking situations
  • How she wrote and published a Journal of Financial Planning article – and how she views the media as building a network of financial planners and helping one another grow
  • Why networking is so important, and how she’s networked at the start of her career (and in college!)
  • How she’s been involved with FPA’s Residency program

 

Show Transcript

Ep123 Transcript


Hannah: Well, thanks for joining us today, Emily.

Emily: Yes, of course. Thank you so much for having me.

Hannah: I am so excited to have you on this podcast. You are 25, and you already have quite the resume for a financial planner. So, I want to really dig in to kind of how you did that. First of all, how did you get into financial planning?

Emily: So, I actually went to Virginia Tech and got a degree in finance and found out that I wanted to graduate early. I didn’t want to miss out on another football season, so I honestly found a track that I thought was interesting, and it happened to be the certified financial planning track. Virginia Tech has graduated hundreds of students through that program over the years. I found it through an advisor at Virginia Tech. He is, I think a mentor to a lot of us, and kind of went from there.

Hannah: Did you start with an internship while you were in school?

Emily: I did, actually. Funny enough, I think my first internship was actually with Morgan Stanley. At the time, I had no idea what wealth management was, what financial planning was, but I took it because it sounded like a great opportunity. It’s a well-known company. So, that was my first internship, actually, my sophomore summer. Then, from there, I applied to a few different companies, mostly in corporate finance, and I ended up at Boeing. Boeing was a wonderful experience. I look back at that very fondly, but it just wasn’t what I wanted to do necessarily as a career.

Emily: After that, I ended up at a fee-based firm called VLP Financial advisors and kind of that’s when I really started digging into planning. That’s also in the Northern Virginia area, so it’s where I wanted to be full time. So, I had three kind of different internships, I guess, a little bit diverse.

Hannah: And that really helped show you what you wanted to do after graduation.

Emily: Yeah. I got a little bit of I feel like I got a little bit of finance. I got a little bit of accounting, and I got some financial planning in. I think by the end of it, I was really able to walk away saying, “You know, I know what I want to do. I want to be a financial advisor.” I knew the area that I wanted to be in. I kind of knew the career path that I wanted. And I was really able to look at previous Virginia Tech graduates who have done the same thing and kind of make that dream a reality.

Hannah: As you’re graduating college and looking to your first full-time financial planning job, what were your expectations of what financial planning would look like in practice day to day?

Emily: That’s a great question. Honestly, I think my expectations were it was going to be exactly like my college classes. There was going to be a little bit of insurance, a little bit of investments, a little bit of tax, and I was just going to look at those kind of in silos for clients. We always talk about comprehensive financial planning, but I had absolutely no idea what that meant until I kind of got a few months into the career and realized when we meet with these clients. We know everything about them, you know, personally, professionally.

Emily: So, I think my expectations versus reality were quite different, but I love the way that we integrate everything here at SBSB and I’m sure other planning firms in the area. It’s exactly what I felt like Virginia Tech set me up for and prepared me for. I think that’s one of the benefits of graduating from one of those certified financial planning education tracks is you are set up for success, I think, very early in your career.

Hannah: So, you are working at SBSB, which … Can you tell me about the firm for people who don’t know?

Emily: Yeah, sure. SBSB, when I started was, I think about 50 people. I think we’re close to 65 now.

Hannah: Oh, wow.

Emily: Yeah, we’ve actually grown a lot pretty organically over the last few years since I started. We’ve done a lot of hiring of students out of college, as well as just kind of career-changers, people who are just making a small shift, or sometimes even a major change. So now, I think we’re close to 3.3 billion assets under management. We all work in departments. Then, within the departments we work in silos.

Emily: So, I am in the client service department. There’s also a tax and a portfolio management department. So within my department, I actually work on a team. My team is the smallest. So, I work just specifically for one relationship manager who’s been in the business, I think almost 20 years, if not longer. So, I work with … Her name’s Barbara. I have an operations specialist named Shelly. That’s pretty much our team. I service about half of Barb’s books, so that’s about 60 clients. It keeps me quite busy.

Hannah: Then, so Barbara has another service associate like you who’s servicing the other half of her practice?

Emily: Yes, yeah. That’s definitely true. His name is Taylor. He’s actually a senior manager. He is a little bit more advanced in his career, but he serves the other half of her book. Then together, that’s kind of our team of four. That’s pretty much how the whole firm operates, is in these little silos. That’s kind of, I think, how we’ve found certain efficiencies and really been able to service a client book of about 120.

Hannah: When you came in, did you immediately fill that role where you were client-facing, engaging with clients from day one?

Emily: You know, I think I did. It’s funny, looking back three years ago, I think when I first started, I wasn’t on a silo. I just kind of worked for multiple silos. We were really as a firm making some big shifts in what our firm was going to look like going forward. So, I worked for a few different relationship managers. I was by far the youngest, you know, obviously right out of school. They did a really good job getting me into client meetings, getting me client-facing. Then, I would say while I did some client correspondence, most of it was just trying to get me some face-to-face time and really help meet and understand the client.

Hannah: You know, it was interesting. You talked about how much SBSB has grown since you’ve and there. And in there years, I mean, that’s almost a 30% growth. I mean, that’s huge growth rate. But, has that affected your job capacity at all with the silos?

Emily: It’s funny, I actually don’t feel affected by it, other than positively, because I feel like a lot of the hiring was students out of college or recent graduates. So, I feel like I’ve made more friends at work than when I first started. It just that wasn’t necessarily the case. So, I love all the new energy coming in. It’s really contagious. There’s a little bit of, you know, healthy competition, that kind of thing. But no, because we have the work. We have the client load. I think that every associate, as we’re called, is utilized pretty fully. I wouldn’t say I’m affected in one way or another by all the hiring. I am looking forward to kind of us growing our careers together, though, you know, and reaching manager, and kind of just growing and learning together. I think that that’s pretty exciting.

Hannah: What does a career path look like for you at SBSB right now?

Emily: There’s a long version and a short version. We’re pretty vertical, I would say. So at every level, there’s pretty much two levels, which means that associate, senior associate, followed then by manager, senior manager, director, senior director. So, everyone’s career path looks a little bit different, but I would say that that’s one thing that we really find success in. Because when we’re trying to hire interns, interns want a career path. They want an understanding of if they were hired full-time what that would look like.

Emily: So, I think we put a lot of thought into that. I think it’s been very much to our success, especially trying to help associates out, understanding what their timelines look like, when they’re really required to develop business, when they’re … You know, when you hit certain milestones, it’s pretty laid out. Leadership really supports us. I think that while every path looks a little bit different, I would say people can find long-term success here pretty easily.

Hannah: So, you said leadership supports us.

Emily: Yes.

Hannah: I’m always interested whenever I hear that. What does that look like practically for you?

Emily: Okay. I think among the vertical kind of path I just described, we have an executive team. They all have … You know, there’s five of them. They have different personalities and different skills, but I ended up choosing our COO, Martine, as my mentor for the last few years. So I guess, personally what that looks like for me is just my interaction with her and kind of talking to her about what I’m interested in planning, kind of the involvement that interests me the most. She is a highly credentialed individual. I’m probably going to miss one, but MBA, CFP, CPA, very, very bright. So, being able to look at someone who’s not actually a financial planner, because she runs the company, is really I think unique and provides just different insights than maybe I would get from my direct boss.

Emily: So, what that looked like for me, actually, was I love recruiting. I find it contagious. I love meeting college students and talking to them about their career goals and their ideal career path. So, she kind of picked up on that. As a result, I was able to go to the University of Georgia, and Texas Tech University, and of course, Virginia Tech, and really help the company recruit new talent. I did that while it wasn’t part of my job description at all. I was not hired in any sort of HR or recruiting role. She found that that was something that I enjoyed. We worked well together as a team. So, we traveled around and talked about SBSB, and I loved that. It was such a nice, I feel like use of my skills. Also, it was just really refreshing to kind of take a step back and say, “Let me give back to students because I was a student very recently.”

Hannah: We talk about this career path, and you laid out a bunch of different levels. For your next step, would you be on the same team that you’re on now, or would that require you to move to a different part of the company, or what does that look like?

Emily: Yes. I think it’s looked different over the years. But as of right now, my understanding is it would be on the same team. That’s part of the reason that we’re really focusing on the silo is because I’ve developed relationships with clients the last three years. Yes, of course, they’re Barbara’s clients, but I’ve been servicing them. The point is is if I move up to manager, maybe I service them a little bit differently and I kind of elevate myself a little bit. But, the point is to stay with those clients because the clients rely on the team for kind of their planning needs.

Hannah: So, your role in the firm would change then?

Emily: Exactly. Yeah. I think my role in how I correspond with clients, it’s something that we consider. It’s called a lead planner. I think other firms have something very similar, if not the same thing, where you kind of step into that role of leading the relationship, which looks a little different for every client. But, the point is just to elevate yourself into this kind of lead planner role. Then, that’s when another associate comes from school or from a job change, and you kind of help them grow and help them learn. It’s kind of this self-fulfilling prophecy in a way, right? You work your way up and bring others with you.

Hannah: So is your expectation that someday that you’ll be basically the Barbara for your clients?

Emily: Yes, and that’s kind of where I … There’s a little bit of a gray area on how long that takes. You know, for someone like me coming out of college, I’m still in those learning years, those primary learning years. So, my job is to develop basically a technical competency that will last me through my career, and of course that’s through continued education and a lot of other things. But right now, if I really focus on the technical, over the next few years, I’ll also simultaneously be developing the relational aspects to, I guess, what financial planning is. So ideally, yes, I would end up being in a role very similar to Barbara.

Emily: That’s kind of what’s happened over the years, is we’ve seen all of these associates kind of make their way up. A great example is our tax department. Patrick Dunn started, I think, I think as an intern. It might’ve been as an associate. Now, he is the head of our tax department. So, he’s the relationship manager, but also runs an entire department. I think that that mix of career is really interesting. I would definitely be looking for opportunities later to kind of have some sort of dual role where your relationship manager with your book of business, like a Barbara, but maybe finding opportunities to be involved in the actual leadership or running of the company.

Hannah: What does your day-to-day look like?

Emily: My day-to-day is always different, which I think is what a lot of people love about financial planning, right?

Hannah: Yeah.

Emily: I mean, you know? You’re not sitting there behind a desk just … What is the word? Monotony, that kind of. You’re really enjoying yourself. So, I think that every day looks a little different, but for the most part, it’s a lot of meeting prep, and then meeting follow-up. Meetings really drive, I would say, my workflow. When maybe meetings are a bit slower, that tends to be during tax season. So, I actually prepare individual and trust tax returns. During that season, that tends to pick up. Then, throughout the year, I do quarterly tax projections, so that’s always thrown into my day.

Emily: We do have, like I mentioned before, an internship program. Actually, this past summer, I led the internship program. We had a student from Virginia Tech and a student from Texas Tech. That was part of my day, right? For the three months over the summer, I was able to kind of integrate them into what an associate actually does and help them with their training program and kind of get them involved in local NextGen events and FPA events. So, that was all of a sudden part of my day. So you know, everything’s just … It just is always different and always exciting.

Emily: I always love when a client calls me and wants to chat with me about something. Right now, we’re rolling out a new portfolio reporting system. So, now all of a sudden part of my day is getting clients set up and making sure that they understand the new reporting system, which is going to be a temporary flow of work. Then, that’ll change again. I think they keep us busy around here, but it’s definitely always something different and something unique.

Hannah: Was there anything that really surprised you when you started working full-time from what you were expecting back in college?

Emily: Yes. All of a sudden, you have no time for anything else. I had a really honestly tough time with that. You know how it was in college. If you wanted to skip a class, or you wanted to go to some event, I mean, you just had nothing but time. In college, I would’ve argued differently. I would have said, “Oh, my schedule’s so full,” but, yeah, when you’re working 40 to 50 hours a week, it becomes pretty difficult to go to the grocery store and run errands, and make time for your family, and make time for your friends. I always thought I had time management kind of … I was like, “I’m ready. I got this.” But no. That was a big surprise. It was really quite the workload to manage. You come home maybe a little stressed. Maybe you’re worried for the next work day. I mean, in college, that’s just not necessarily the case, so that was different.

Emily: Then, honestly, having a paycheck was very different. I think I thought that I wasn’t really going to be affected by that, but all of a sudden you have so much more money than hypothetically you had in college, and you have to learn how to invest it and how to save for retirement. All these things are kind of thrown at you. Thank God we’re in the profession that we’re in. I mean, we have such a leg up. I feel very lucky to kind of be prepared to think about those things. I think that honestly helped me land on my feet probably more solidly than I would’ve otherwise.

Hannah: One of the things I hear a lot from young planners, or a question that I get a lot, is, will clients actually listen to me as somebody in my early 20s giving them advice on their personal finances? What have you found in your experience?

Emily: Oh, man. That is a loaded question. I have a lot of different ways I’d love to answer that. I am going to start with one of my favorite comments, “You remind me of my granddaughter,” or, “Oh, my granddaughter just graduated,” or something along those lines of their immediately, not only not their daughter, but their granddaughter. So, I have gotten that, honestly, countless times, some sort of comment that very much makes my age apparent. And if they don’t make a comment like that, somewhere along the lines it’ll be, maybe we’re talking about a stock market crash, “Oh, well, you were in like sixth grade.” Okay. Thank you. I know that.

Emily: So, I think that clients sometimes try to find a little bit of humor in it, because they really are. They’re sitting across from someone decades younger. But, I will say two things. Having a relationship manger like Barbara in the room is wonderful because Barb helps build my credibility when I’m in those meetings. She’ll talk about the fact I got my CFP and I got my EA. She’ll talk about my involvement in a way where I’m not doing it so I can stay quiet. But, Barb’s doing it and kind of building me up. And honestly, the second or third time I see those clients. It’s such a nonissue, you know? At first, it might’ve been just blatantly apparent, but building trust and kind of building that relationship supersedes any other kind of notions or stereotypes.

Hannah: Often, I find that sometimes it’s in our heads-

Emily: Yes.

Hannah: … more than it is in reality.

Emily: Yeah. Sometimes I do sit there. I would say I have, not only Barb … I guess that’s the first thing that I felt like she’s great sitting in those client meetings. I actually have much older parents. So, I am able to talk with clients about things that I’m personally not affected by, but I know that my parents are.

Emily: To be honest, as you know, couples come in, and next thing you know, it’s marriage therapy, or some sort of counseling, or maybe they’re sharing about their health and some recent struggles that they’ve been having. Being able to have parents in their 70s where you can say, “You know what? My dad, actually … ” This is a true story. “My dad had a heart attack earlier this year. This is kind of how our family dealt with it. Here are a few things that kind of helped me get through it.” All of a sudden, I can connect with clients that have years of life experience that I don’t have, but having older parents helps me, I guess, bridge the gap of those conversations. I feel pretty lucky to kind of have the combination of the support of a wonderful relationship manger, but then the experience of my family to kind of help everyone communicate a little bit better.

Hannah: You mentioned financial therapy and in counseling, those pieces. Do you feel equipped to navigate those conversations, or is Barbara really kind of there and you’re really learning from here?

Emily: I’m going to answer this kind of two ways, I guess. With financial planning, you can prove that you’re confident through designations, or you can prove that you’re confident after building that relationship with the clients. Maybe you help them with your taxes. Then, all of a sudden, next year it’s tax time and they have some questions. You kind of built that trust. I will say that that comes faster, and I think that that comes more easily than anything in the realm of financial therapy or counseling. I think that’s because, I guess one, that’s not necessarily what a lot of financial planners major in, or study, or have a background in. So, it’s automatically going to be a little bit of a gray area. I think it’s a gray area for a lot of CFP professionals, both ethically and considering whether or not they actually have the skillset.

Emily: So, I would say that anything in that realm while I study it, and learn about, and hope to one day kind of figure out a successful way to integrate that into practice, I personally am not there yet. But, I would say that when you have a relationship with clients you develop kind of a trust. A funny story, actually. Barbara recently … One of her clients became widowed. She jokes, but she’s right, that’s she’s kind of like the husband in the relationship, because this widow relied on her husband for financial advice, and guidance, and really had no sort of foundational knowledge in financial planning. So, Barb jokes, you know? But, she asks questions of Barbara that she would’ve asked of her husband. So, I think in a way that is almost a therapy, counseling type relationship, but I would say it’s more of an underlying thing than a thing that’s actively practiced, if that makes sense.

Hannah: Oh, yeah. Absolutely. It’s a way of showing up with clients, I think.

Emily: Exactly. Yeah. It’s a way of being there, showing up for them. The financial therapy association is doing wonderful things and leaps and bounds for, I think, ways to integrate therapy successfully. So you know, I’m sure more to come on that right in the next few years.

Hannah: One thing that’s really impressive about you, Emily, is that you’ve gotten involved not just in your day job in those 40 hours of work, but you’ve gone above and beyond in getting involved in NextGen, in writing a paper, and I’m sure there’s probably other ways. But, can you talk about kind of how you decided to get involved in the things outside of your day job, if you would?

Emily: Yeah, definitely. I kind of alluded to earlier is when I first started, there weren’t a lot of peers for me to kind of look around and say, “Hey. You know, how are you getting involved? What are the things that I need to be doing?” So, I kind of deferred to Virginia Tech alumns that I knew had reached success in their 20s basically in this profession, namely Rianka, and Yousuf, and Lauren, and actually Mark as well who worked at SBSB at the time. I kind of looked at them, and I was like, “Okay. How do I achieve the things that they’ve achieved.” Without a doubt, NextGen was such a big part of their foundation that I knew that that’s kind of … That was a step that I needed to take.

Emily: So, I just started getting involved in FPA. Actually, my first thing that I did was I was a recent graduate, and I did a panel for the FPA National Capital Area Career Day. So, I was a panelist. That was it. I think I might’ve even sat on a round table. Then, all of a sudden, it was like I caught the bug. It’s so contagious. You feel like you’re making a difference. You feel like you’re getting involved.

Emily: Basically, that one panel changed the next three years. I just became more actively involved. I sat on planning committees for the NextGen retreat and the NextGen career day. Now, this year, I’m actually running the career day. So you know, it starts with being a panelist and you end up with the opportunity to kind of become more involved. So, I would say there’s no such thing as too little involvement, right? Just kind of dip your toes in and go from there. It really is you find your people and you just want to do it more frequently.

Hannah: Have you found that it’s helped your career?

Emily: That’s an interesting question. I don’t think that it has necessarily impacted my job as a financial planner at SBSB. I do not think that it has any sort of takeaway on my day-to-day. But, I will say it’s phenomenal networking. The ability to kind of reach out and ask, you can develop mentorship relationships. Like, Lauren was my mentor for a year, and of course, very successful at Yeske Buie. I think it can help you professionally in your growth and development, but maybe not necessarily helping you get from associate to senior associate, if that makes sense.

Hannah: Also, in my experience, I never understood, first of all, that I was building it, but then I never understood how important it was until you needed it. Then, I was like, “Oh my gosh. How does anybody do it without this network?”

Emily: Exactly. Yup. That’s so true.

Hannah: So, you have your day-to-day practice as a financial planner. Then, you have all this stuff that you’re doing with NextGen. But then, you’ve also written a research paper. Can you tell me, how did this come about?

Emily: Yes, definitely. So, talking about building your network, Dr. Asebedo was a teacher at Virginia Tech for almost three years, I think, in the financial planning department. I took a few of her classes and really connected with her, started developing kind of a mentorship relationship. She really guided me kind of with my next steps. Once I graduated, she kind of talked me through the timing of studying and taking the CFP exam, and studying and taking the enrolled agent examinations, and then kind of figuring out what was next for me.

Emily: At the time, she had talked a lot about Kansas State, because I think she has her undergraduate, her masters, and her PhD from that financial planning program. She would say like, “Hey, Kansas State has a wonderful graduate certificate in financial planning or financial therapy.” Then, she herself had actually gotten one in conflict resolution I think around that same time from Kansas State. So, we were kind of communicating about this whole realm of financial therapy and conflict resolution techniques, and kind of through that came the possibility to basically coauthor with her.

Emily: PhDs publish all of the time, and I knew that she was really well respected in the areas of different peer-reviewed academic journals. So, I kind of reached out and I said, “Hey, I think it would be awesome, a really different experience for me. This is kind of what I’m thinking. What are your thoughts?” She was all for it. We kind of built off of a prior paper that she had written. Then, we ended up getting published, actually, in the October Journal Financial Planning. So, it kind of all happened in the course of almost a year. I want to do it all over again. It was such a wonderful experience.

Hannah: Let’s break down this experience, because I’m fascinated by this, and I want … Oh my gosh. I want more young people listening to this podcast to do this. It’s so needed. Did you have to go do research yourself for this paper?

Emily: So the Journal of Financial Planning, and actually journals in general, publish all sorts of different types of things. We ended up publishing in the contributions section, which is toward the end of the journal. It’s definitely more academic research versus maybe a column that I could write perhaps about NextGen, which would usually go toward the front of the journal and it would be a shorter article with much less research required. So, there’s all sorts of opportunities, but we ended up doing the contribution section because I do think that that’s where most PhDs publish. So, she had this kind of foundational paper that she had written before. A lot of the research she had done in the space of conflict resolution, like I said, because of her certificate.

Emily: So, a lot of, I think, the value that I added was, well, among just obviously a second person writing, and reading, and editing, was the fact that I’m a practitioner. That’s where I feel like … I just see like a rainbow when I think about that because any financial planning practitioner could reach out to a PhD. We have such wonderful programs. I mentioned them earlier. Texas Tech, Georgia, and Kansas State specifically have these professor that write, and publish, and research. When you compare that with a practitioner, we had the opportunity to present at FPA because the pairing was so unique that a practitioner was able to read it, and understand it, and have actual key takeaways, versus maybe another research paper which could be maybe a little analytical, or you’re feeling like, “Oh, how do I use this in practice?” So, I would so encourage anyone who feels like they’re interested in writing and research to just find that pairing and find that topic and just give it a shot. I mean, there’s nothing to lose from it, and pretty much everything to gain.

Hannah: When did you start doing this? How long of a project was this?

Emily: Yeah, I think it was about a year. I feel like we started pretty heavily in January, but had chatted about it, like I said, as a mentor. She had started giving me pretty much a lot of advice, I guess, throughout my three years. But, once we kind of started really talking about it and working on it, I think it was just very early this year. We worked virtually through a combination of Google Docs and Google Dropbox. We had occasional video conferences just to kind of get on the same page. We basically come away with action items. We’d work on it, and then come back together. I mean, it’s no different than working on a college project, really.

Hannah: Oh, I love that analogy.

Emily: Yeah. I mean, it isn’t, you know?

Hannah: So, what did it feel like when you got your journal of financial planning and saw your published article?

Emily: I’m about to sound like such a nerd, but honestly, it was the best feeling in the world. It was … We were supposed to be publish in the November issue. Then, I got to the FPA conference and literally maybe a day before that, I had realized we were actually released in the October issue. So, when we had … We all filled up that massive room. I don’t know how many people it seats. Maybe a thousand, maybe 2,000. We sat down in this big kind of conference hall. I mean, you were there. The journal was on like our chairs, you know what I mean?

Emily: So, all of a sudden, it was like I know that it gets dispersed to a bunch of advisors, obviously, all over the country, but it was like a very tangible, measurable just thing. That as you know, sometimes in your profession it’s kind of hard to measure your achievements, especially with client interaction, you know? How do you actually measure that. I had this journal in my hand, and it was just this feeling of accomplishment. All of a sudden, I just had a lot of people talking to me about it. It was great. It was honestly just … It was the best feeling.

Hannah: So, you’re 25. You have published article in the Journal of Financial Planning. You’re progressing in your career track. But you’re also going to school for your master’s degree right now.

Emily: Yes. I’m actually getting a master’s certificate at Kansas State because they also … They let you study virtually, which is big when you’re working full-time. They have a financial therapy certificate program that’s basically six classes. But if you have your CFP, you test out of one. So you know, it’s a few credits. I think I’ll be able to get it this spring. I’ll be all wrapped up with it.

Emily: What I love about it, it’s most of the courses are taught by Dr. Megan McCoy, actually. What I love about it is when you are working a 40-hour week, it is so hard to find time to read and keep engaged. The number one thing teachers do is they force out assigned reading. Here’s four books I want you to read. Here’s a bunch of articles that were recently published. I want you to read this. I want you to get engaged. Having that little bit of a push to say, “I need to read this because we have weekly classes, and I need to be able to foster good discussion,” I mean, it’s such a nice way to fill in that whole lifetime of learning kind of itch that people have. So, I am doing that as well.

Emily: Considering other kind of master’s actual degrees versus certificate programs, but I have a little bit more thinking to do on that. But, what’s great about it is I meet peers that are actually getting their PhDs and their master’s, because the classes I’m taking are required of those degrees. So, all of a sudden, I connect with PhD candidates, and they want to get published. So you know, now I found another person that I could coauthor with. And all of a sudden, all these connections start coming. And once again, you’re expanding your network and you’re basically growing your opportunities.

Hannah: So, what would you tell somebody who’s considering getting, you know, going to get a master’s? It’s a master’s certificate, not a master’s degree.

Emily: Exactly. The master’s certificate is just kind of a way to say, “Here’s a few classes that we think are important to building a foundation in financial therapy, but they are by no means the full-blown 30 credits or whatever it is to actually achieve a master’s degree.”

Hannah: So, what would you tell somebody who’s looking at kind of that next level education level?

Emily: Everyone is going to give you different advice. I think that’s the first thing I had to realize before I could actually make a decision. Everyone is going to push something different, and that’s okay. It’s their advice, and ultimately it’s your choice. I think the one thing that I will say is, obviously, in our profession, CFP I think is the standard of excellent, if you will. Once you’ve done that, I think kind of finding your niche is really important. For me, we prepare taxes, so I needed to kind of, honestly, just gain a better foundation of that. So, I went for my enrolled agent exam. There’s a lot of CFPEA people out there. I love that experience, so that worked really well for me.

Emily: But then, all of a sudden, I kind of realized when I’m in these client relationships and in these client meetings, I all of a sudden kind of had an interest for the relationship and kind of the more … like the coaching and counseling techniques that could be used and integrated into practice. So for me, I found these little niches. That’s honestly what I would encourage any student to do. It’s okay not to know, you know? It’s fine if you haven’t found that niche. Give it a few years. Reevaluate. Have some conversations with some peers and some mentors. Then, feel free to go attack that in whatever way that that might look like.

Hannah: I completely agree with you. I think there’s so much pressure that’s put on new planners to figure it all out right away. Sometimes your niches find you. You can’t find them, they find you.

Emily: Exactly. I think that’s great advice, too. Just be patient. Be honest with yourself. If you’re not at tax guru, you’re not going to go get your CPA or your EA or anything, master’s in taxation. If that’s not your thing and not your nice, honestly, my advice would just be don’t push it. Find what you’re good at, because people like listening to people that are good at what they’re naturally good at, if that makes sense. There’s a lot of words. But you know, just taking a step back and really having that conversation with yourself.

Hannah: Sorry. We keep going through all these qualifications and I forgot about your EA that you have as well.

Emily: Yeah, oh my gosh. Yeah. That was just something I did after my CFP as kind of a … Like I said, we prepare about … or, I prepare about 50 returns a season. So, that was just kind of like a … I look at everything, honestly, like a college class. I took a class, I took an exam. I took a … You know, rinse and repeat, right? I think when you’re younger and you’re right out of school, you kind of have that motivation and that traction going. I would say, for as long as you feel like you have that, just to keep going for it and keep pushing it, and of course realizing there’s time. Find time for personal satisfaction in your personal life. But for me, I still feel like I’m in college a little bit. So, I don’t necessarily feel like it’s all this pressure to get a certification. It’s just continuing education, if that makes sense.

Hannah: So, what’s the next thing for you? What’s your next step?

Emily: Oh, I don’t know what my next step is right now. I want to finish the Kansas State certificate program. I did recently, I hope not to jinx it, apply to the Pamplin College of Business, which is Virginia Tech’s business school, to the recent alumni board. Even if I don’t get it kind of this upcoming cycle, I think that that’s something that I really feel strongly about giving back to my school, and I would encourage any young planner to kind of say, “Where did I find my success and why did I find my success?” If that answer is your program, find ways to serve that program through an alumni board, or volunteer opportunities, or speaking engagements.

Hannah: So, what would be your advice to new planners who are just graduating college right now?

Emily: Ooh, that’s a good question. My advice to new planners that are graduating, it’s kind of like what we just talked about. I mean, be patient and find your people. If finding your people means going to events like a NextGen retreat or the National NextGen Gathering, really have those conversations with your managers to make sure that you’re attending the events that you feel like will help build you up for success.

Emily: I mean, I’m a graduate of the FPA residency program. I have nothing but amazing things to say about that. Not only, of course, do you get, I think, 28 continuing education credits in six days, but you meet these mentors and these deans who change your life. I mean, honestly, when I was finished with the program, I wrote them all thank you notes. Then, I got thank you notes for my thank you notes because that’s just how polite everyone is in this industry. I think that any time you can connect with people who have advice to give, it’s just going to be nothing but valuable.

Hannah: I want to touch on this residency really quick.

Emily: Yes.

Hannah: Because we haven’t talked a whole lot about that on this podcast, but I hear the same thing from everybody who goes. What an amazing transformational experience it is. What was it about residency that made it so special?

Emily: A few things. It is a diverse group of really motivated individuals. I mean, they’re from all over the country, which is, of course, wonderful. I mean, where are you going to get in a room with everyone from all over the country, right? But basically, it’s a six-day program that’s held, I think, twice a year in Colorado that really focuses on the development of new financial planners. When I say new, I think it’s maybe less than three years, as well as people who are about to be CFP professionals but maybe haven’t met the experience requirement yet.

Emily: So, I think that the way that the program is structured is so … It contributes very heavily to the success of the program. Then, of course, the methods that they use, which are pretty much scenario building and case studies, but instead of focusing on technical, they focus on the soft side of financial planning. So, where are you going to learn in six days about soft side of financial planning when it could take people five years to learn that? So, I think that they found, like I said, a nice, right? They found a niche, and they’re helping so many people every year I think find success faster than they would have otherwise.

Hannah: Oh, that’s great. We’ll have the links for residency. They’re in the show notes for anybody listening.

Emily: Yeah. I would definitely encourage anyone going. I mean, a lot of the deans are just such … My dean was Jonathan Guyton and then Dave Yeske I know was another dean. I mean, they’re just leaders in the profession. They have so much advice and guidance to give that really helps, I think, new planners walk away just more confident.

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Emily Purdon started her career in 2016. She quickly realized that her CFP® certification and financial planning degree through Virginia Tech hadn’t really prepared her for the realities of being a planner - and she felt that the comprehensive planning... Currently, Emily works for Sullivan Bruyette Speros & Blayney, as a Senior Financial Planner. Through her first years as a financial planner, she’s fallen in love with the financial planning process. In this episode, she’s diving into what it’s like to be a new planner, why she’s continuing to pursue a career in this profession, and how she’s been involved with FPA Residency. Emily has found a strong, supportive network through Residency, and we’re excited that she shared a little bit about how the program has helped her continue to advance her career!
If you’re a new planner, or a college student considering a career in financial planning, this episode is a must listen! It’s so rare to hear the perspective of a new planner, and Emily truly opens up about her experience in an authentic, amazingly helpful way.


 
What You’ll Learn:

How Emily got into financial planning
What her expectations were coming out of college with a degree in financial planning, and what the reality was when she started working at SBSB (and why she liked it better!)
What her day-to-day looks like at SBSB, and what other new planners might be able to expect from their roles
How she approaches the fact that she is so much younger in her career – and whether she feels it’s a benefit or drawback in networking situations
How she wrote and published a Journal of Financial Planning article – and how she views the media as building a network of financial planners and helping one another grow
Why networking is so important, and how she’s networked at the start of her career (and in college!)
How she’s been involved with FPA’s Residency program

 
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Hannah Moore clean 43:35
Iron Butterflies and the Evolution of Financial Planning https://financialplannerpodcast.com/yafpnw-iron-butterflies-and-the-evolution-of-financial-planning/ Tue, 30 Oct 2018 13:15:10 +0000 https://fpaactivate.org/?p=11737 https://financialplannerpodcast.com/yafpnw-iron-butterflies-and-the-evolution-of-financial-planning/#respond https://financialplannerpodcast.com/yafpnw-iron-butterflies-and-the-evolution-of-financial-planning/feed/ 0 Ben Coombs, CFP®, CLU, was part of the first class of CERTIFIED FINANCIAL PLANNERS™. When he got started, nobody had jobs for financial planners. Now, he’s thrilled to see career paths developing. Tune in as Ben walks us through the evolution of financial planning through his eyes, and what he’s excited about in this profession’s future. Ben Coombs, CFP®, CLU, was part of the first class of CERTIFIED FINANCIAL PLANNERS™. When he got started, nobody had jobs for financial planners. He struck out on his own in 1971 – and was broke in a year. However, even after taking a full-time job for a period of time, Ben kept pushing. He firmly believed in the importance of financial planning as a profession, and he was thrilled to find like-minded individuals at the onset of this profession as he continued to build his practice.

Ben has developed an incredibly unique view of financial planning. As he’s honed this mindset over the years, he has created a beautiful metaphor: The Iron Butterfly.

An iron butterfly is beautiful. It’s ornate, and it looks great on a coffee table, or hanging on the wall as decor. But an iron butterfly doesn’t actually fly – and what’s the point of a butterfly that doesn’t fly?

Ben views financial plans as individual, unique butterflies. But it doesn’t matter how beautiful they are if they don’t fly. This is why he calls his financial plans “financial action plans.” He believes a financial plan might take years to fully implement as an advisor and a client gets to know one another, and as their goals become solidified, and that consistent action being taken proves whether or not a plan is successful. This episode is full of wisdom, from small nuggets of advice to larger life philosophies that this amazing financial planner abides by.

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It’s not about having a perfect plan, it’s about making progress and taking action. – Ben Coombs, CFP® on #YAFPNW

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What You’ll Learn:

  • What the beginning of the financial planning profession looked like
  • How a seasoned advisor views financial planning software
  • How financial planning has evolved over the years
  • Where financial planners find the most opportunity through market ups and downs
  • Why a financial plan is worthless if it’s not actionable
  • How to create actionable financial plans
  • How to put your clients at ease and learn more about their hopes, dreams, and financial goals
  • Why financial planning is more consistently valuable than investment management alone
  • How career paths have changed the game in the profession

 

10 Wise Lessons Learned About Being A (Better) Financial Planner

 

Show Transcript

Ep122 Transcript


Hannah: We are live here at the FPA Annual Conference, and in the NEXGen Lounge I have Ben Coombs, who was part of the first CFP class ever. So, what was your CFP number?

Ben: Well, they didn’t have numbers then. So, because I’m a Coombs, I was near the front of the alphabet, so if they had numbers I would have been a low one.

Hannah: Single digits?

Ben: Yeah.

Hannah: Yeah, single digits. So, when did you take your CFP exam? What year was this?

Ben: I took two in 1971, and two in 1973.

Hannah: So, in 1973, financial planning was not a prevalent field to go into.

Ben: No.

Hannah: When was the moment that you realized that financial planning was what you wanted to do, or you realized that financial planning was something that you needed to pursue?

Ben: Well, it was when I was employed as Director of Equity Training for California-Western States Life, and I had been in the life insurance business as an agent and a district manager for The Equitable Life. I had been Training Director for Occidental Life. And then I was in the job I just mentioned, and I knew what I liked about the insurance business, but I knew more about what I didn’t like about it.

And so, I felt like I was an answer in search of a question when I was in the life insurance business. And I was trained to help you redo your question, if I didn’t have the right answer for the question that you had. And I wanted to be answers in search of questions, so that regardless of what your question was, I could respond with advice, and in those days, product. Everybody was commissioned, compensated, in those days.

So, I didn’t know about financial planning. I thought I created the concept of financial planning in my own mind. And when I left California-Western States Life to set up my business, I discovered the International Association for Financial Planning, and was a little chagrin to find out I hadn’t made it up all myself. Somebody else, by the name of, Loren Dunton and a few other people had figured it out before me.

Hannah: So, was there any client or any situation specifically that made you, when you were that life insurance agent, wish you could do more or wish you had better answers?

Ben: I’d run across people from various walks of life from … You’d go down to the County Recorder’s Office and get a list of all the births, probably would have gotten your name here recently, and start calling on young families, and get referred to their extended family, so you’d see a lot of different situations. But you only had one product, Whole Life, and various iterations of Whole Life, but … There was a lot of other things that needed to be responded to that you couldn’t respond to unless you could convince them Whole Life was the answer to everything.

Hannah: So, the new CFP exam, is that where you learned more about the estate planning and the …

Ben: I knew all about estate planning. I was a CLU, and my dad had been in the life insurance business and had been an estate planning in the life insurance business, so I was as well versed as anybody in that era in the subject of estate planning. But, you were selling liquidity for people to fund their estate plan with, when you were selling life insurance, and I wanted to help create estates and not just preserve estates.

Hannah: One of the hot topics today is niching, and having a niche for your practice. When you got started with the idea of financial planning, was there a specific demographic that you really wanted to serve, or were you just wanting to help anybody who came?

Ben: I wanted to help anybody that would hire me, quite frankly. But I worked more with school teachers than any other employment category, because the company I’d been with, sold tax sheltered annuities, so I had a lot of contacts with school teachers from prior employment.

Hannah: So, you come out, you have your CFP designation, and you have, “I’m going to do financial planning”, how did the public respond to that? How did the people you pitched financial planning to … what was their response?

Ben: Well, you gotta remember, when I got my CFP in 1973, interest rates were double digit, and a two-income school teacher family was in the 50% marginal tax bracket. And they had just lost a lot of money in the stock market in 1973-74, so there was a lot of financial angst out there, and they were looking for somebody that had more arrows in their quiver than just one particular financial product. They were looking for advice and not product.

So, I’ve often said, if you want to start a dentistry practice, the best place to do it is in the land of tooth aches, and everybody had a financial tooth ache at that time, so it wasn’t too hard to get started.

Hannah: The story that I’m kind of hoping you’ll tell, is the one about the check that you wrote.

Ben: Oh, as I mentioned, I got my CLU in 1966, so I had on my checks, “Ben Coombs, CLU” for a number of years. And when I got the CFP in 1973, I proudly put, “Ben Coombs, CLU, CFP”. And I remember the first time I went to the bank, you used to go to the bank in those days to cash a check … Went to the bank and wrote a check to get some spending money, and the teller said, “What’s CFP?” She didn’t bother to ask me about CLU, she immediately focused on CFP, and said, “What’s CFP?” So, I proudly told her. And I immediately realized that there was something about that name, if you remember that song, but it immediately rang true with people. Her reaction was, “Oh.” As if, “I should have known that.” And she’d never seen it before, nobody else had ever seen it before, but she immediately thought it was something that had been around a long time.

Hannah: Well, I just love that financial planning is … people want financial planning, and it just makes sense on a really intuitive level for people.

So, when you started your financial planning firm, did you find immediate success?

Ben: No. I started in 1971, and it was broke within a year. And had to take a salaried position, and so I worked as a divisional sales manager for a real estate syndication firm that sold real estate syndications and tax sheltered annuities to school teachers. And it was from there in 1976, I started my own business again, and the second time it worked.

Hannah: Second time it worked?

Ben: Yeah.

Hannah: That’s encouraging. I know a lot of young planners really struggle as they start their own business, and it’s …

Ben: Well, the nice thing today is you don’t have to start with your own firm in order to be a financial planner. Nobody had a job for a financial planner, they didn’t even know what the job looked like. So, in order to be a financial planner, you had to start your own firm, you had to be an entrepreneur, sole-proprietor.

Hannah: As you continued as a financial planner, starting in 1976 … So, you retired in 2000?

Ben: Mm-hmm (affirmative).

Hannah: So, that’s almost a quarter of a century that you worked as a financial planner. Did clients’ expectations change in that time?

Ben: Only in regard to the fact that more and more people were aware that there were financial planners. I built my business solely on referrals, and referrals became a lot easier as time went on. People would wander in. I used to give out cards to clients, about the size of a three by five card, “Good for one free hour”. And I’d have people wander in with this card that a friend of theirs had given them years before. It was all bent and worn out, been in their wallet for a long time, and they’d come into the office and present that to get their one free hour. So, in the beginning you had to go find them, and eventually they were finding you.

Hannah: What did you learn about working with clients as a financial planner?

Ben: That the key is the relationship. Everything you do as a financial planner today can be farmed out. All these booths around here, you can find somebody to do something for you in every aspect of your business that needs to be done. Only thing you need is a cell phone and an automobile to be a financial planner. But the one thing you can’t farm out is the client relationship. So, the key, in my mind, is not what you know, it’s who you have a relationship with.

Hannah: As a financial planner, the information that you had access to had to have increased dramatically from when you started to when you retired, and even now it’s grown even more exponentially. What is your advice on where to get information from or how to filter through some of that information that’s out there?

Ben: Well, make sure your sources of information aren’t redundant. When I got started I was securities licensed. And as a securities broker-dealers is responsible for your training and supervision, and so you have to go to broker-dealer meetings. And the FPA’s revenues is strongly influenced by products providers, and now service providers, but in those days it was solely product providers. And then they’re all commission-based, or they were at that time, so you heard from the same people at your broker-dealer meetings as you heard at the IAFP meetings. And then the magazines all had the same advertisers, so the information in the magazines and periodicals were all paid for by the same group of people you were hearing from in the other two places. So, I woke up to the fact that I was hearing the same thing from the same people no matter where I went for learning.

So, I joined the CPA Society in California, and started going to CPA meetings, and I rekindled my relationship with the American Society for CLU to go to CLU meetings, and join an estate planning council, so I could hang out with estate planning attorneys. And make sure that I got conflicting information, different perspectives.

Hannah: And did you find that that information was conflicting often or …

Ben: A CPA community has their biases and preferences, and the estate planning attorneys and bankers and everybody all have their biases and preferences. And they have a tendency to look down on each other as not being quite the fount of perfect information. So yeah, you get conflicting opinions. And that’s very helpful in forming your own opinions.

Hannah: How did you do this or how would you advise new planners to really challenge the biases that they have, that they may not even know that they have?

Ben: Well, the only way I knew how to do it was to put myself in contact with people with different perspectives, so it’s what I was just describing. Go to estate planning council meetings, go to CPA Society training meetings. Go to CLU-oriented life insurance meetings.

Hannah: So, a lot of that … Yeah, different perspective, different … Almost that diversity of ideas.

So, I’ve heard you talk about iron butterflies in the past, can you share with our listeners, what is an iron butterfly?

Ben: Well, an iron butterfly is a very pretty thing. It’s very ornamental, and it might look good on the wall or on a coffee table or wherever you might display it, but it can’t fly. And a butterfly, to be of any use in this world, needs to be able to fly. So, I use that to describe financial plans that you might develop that look really good to the experts, but if it doesn’t communicate to the client and if it isn’t responsive to the client’s motivations and desires and goals, it won’t fly.

Hannah: So, that’s not because the client doesn’t want to implement, it’s because maybe the advisor or the planner isn’t doing it in the right way?

Ben: Well, it hasn’t heard the client. The client may not tell you everything you really need to know about their fears and their hopes and their dreams. That comes over time with a continuing relationship with a client. So, it’s easy when you know what you know and you’re in a fact-finding interview, to start developing solutions to the client’s problems, as soon as you start gathering the facts from the client. But you need to be careful that you’re hearing what I refer to as, metamessage. What is the client saying between the lines?

I would tell a client, I need to know three things about you. I need to know where you are today, and where you want to be tomorrow, and what you’re willing to do to get from here to there. And it’s that willing to do that’s probably the most critical thing you need to know about a client. Because if you design the perfect solution to their financial problems, then they’re not willing to do those things, then of what use is it?

Hannah: So, it’s better to maybe not have something quite as beautiful, but it flies? Is that kind of what you’re saying?

Ben: Yeah. I used to call my financial plans, financial action plans. I’d tell my clients, this plan is of no use to you unless you’re prepared to act on it. So, we shouldn’t even get started in this process, unless you’re prepared to act. And it’s my job to find out what you’re willing to act upon.

Hannah: And how do clients respond to that when you ask, what are you willing to do?

Ben: They’re all open to it, but they don’t really know …

Hannah: That’s why they’re visiting you, right?

Ben: Yeah, right. They don’t know what they’re going to be asked to do. So, a financial plan probably takes three to five years to really get fully implemented, because both you and the client are learning about each other.

Hannah: So, it’s not about having the perfect plan, it’s-

Ben: No. It’s about making progress.

Hannah: Making progress?

Ben: Yeah. Taking action.

Hannah: You said, financial planning is a neighborhood play, what do you mean by that?

Ben: That’s probably an out-of-date phrase anymore, because in baseball, before the instant replay, the ball only had to be in the neighborhood of second base when the runner was approaching for him, to be called out. It didn’t have to be perfect timing. And so, the double-play was always called the neighborhood play, because the ball just had to be in the neighborhood of the base before the runner got there.

We can measure inflation and rates of return out to seven digits, and all that, but as soon as you come up with a measurement, it’s wrong the next instance because things change. So, you just need to be in the neighborhood to be right.

Hannah: So, it’s not about being perfect?

Ben: No, you can’t be perfect, because we don’t have perfect clairvoyance about the future.

Hannah: Well, and the future changes so much.

Ben: Yeah.

Hannah: So, you’ve talked a lot about client trust in the past. How do you build client trust? How do you get a client to trust you? I know that sounds kind of …

Ben: Well, again, that takes time, takes a relationship. But the most important thing is to ask questions. Not give answers, but to ask questions. When I’d meet a client for the first time in the data gathering interview, I’d say … Well, first of all, when they’d come in just to get acquainted, somebody referred them to me, I would say to them, “What’s the one thing I can do for you today that will have made your time here worthwhile for you?” And every time I had a face-to-face interview with a new client, prospective client, existing client, I’d always ask that question, “What’s one thing I can do for you today that will make this time worthwhile for you?” I think that helped me develop a rapport with the client.

And just ask questions. I would have my legal pad of paper out there, and I’d say, “I’m going to be asking you a lot of questions. Now, I’m not calling into question what you’re telling me, I’m trying to find out about you. So, when I ask you a question, don’t assume that you’ve done something wrong.” And then I’d say, “Do you mind if I take notes of your answers?” When they would say something and I’d write it down, the internal reaction to the person that you’re talking to is they just said something important, if you wrote it down.

So, all those techniques would help you develop a relationship with the client, which leads to trust. And so, if they think they’re being heard, you’re taking notes of their responses, you’re asking more questions, one answer leads to another question, you’ll develop trust.

Hannah: Which helps with implementation and helps with really getting the client where they want to go.

Ben: Yeah, well it helps with getting to really know the client.

Hannah: So, it’s so interesting, I’m hearing you talk about working with clients. And so much of what you say is what we’ve heard, contemporaries of ours right now saying, but that was true back in the 1970s as well. And so, is the real core of what we do as financial planning, has that changed?

Ben: No, it’s making a clients hopes and dreams become reality, and overcoming their fears and anxieties while you’re doing it. And that’s always been the case.

Hannah: So, is it the tools that have changed.

Ben: Oh, yes. I started with a slide rule and graduated to the Bowmar Brain. The first handheld calculator was invented in the town I had my office in, in Woodland Hills, California at Pierce College. And it was the size of a shoebox, and it would add, subtract, multiply, and divide. And within about two or three years it was about the size of this business card.

Hannah: So, we have all this financial planning software now. What’s financial planning software’s role in our relationship with clients?

Ben: Well, hopefully it’s in the background. Hopefully it doesn’t come between you and the client. If it does, you’ve created an iron butterfly, I think.

Hannah: So, we’ve talked about the client. Let’s talk about just the business. You’ve seen quite a few market cycles, what have been the places you’ve seen the most opportunity as a planner?

Ben: Well, it’s when things aren’t going well. Whether it’s the layman brothers’ debacle, or the dot com bust, or the demise of real estate limited partnerships, or the 1973-74 market crash, or high interest rates, foreclosures. When people are hurting they’re looking for help. The best time to be in business is when things are going bad in the financial world.

Hannah: Which is very counterintuitive. We’re playing a different game than most financial advisors in that point.

Ben: Occasionally we put clients on, just as investment advisory clients and not as financial planning clients. And that was always a mistake. We would lose those clients if things went bad, but we’d lose more of them when things were going well, because they said, “Why do I need this guy?”

Hannah: Yeah. You were on the ground floor of our profession being built. You’re the first CFP class. How have you seen the profession of financial planning evolve over time?

Ben: Well, the biggest change is there’s a career path, and people are growing up to want to be financial planners. When back in my day it was always a career change, and it was an entrepreneurial opportunity and not an employment opportunity. So, I would say that’s the biggest change. And maybe one other big change is it’s much more highly regulated both by governmental bodies and by the CFP Board of Standards.

Hannah: If you look at the whole world of products and services that clients are offered, from life insurance to some of these brokerage firms, and fiduciary’s a big deal right now. The FPA really stands for the fiduciary, but they feel very much like the little guy when you look at the bigger scheme of things. And often it feels like you’re pushing a boulder up a hill, if you would. But you talked about critical impact is more important than critical mass. What do you mean by that, critical impact is more important than critical mass?

Ben: Well, there was 42 of us in 1973. And there’s 188,000 today. I would say the 42 of us had critical impact, we certainly didn’t have critical mass. So, that’s my point is, it’s the impact you have on the world around you that’s more important than the world around you.

Hannah: So, you were in the original class that the CFP marks. What would you say to people who are just getting their CFP in 2018 or 2019?

Ben: Well, it would differ, I guess, if it was a career change or the start of a career. For those who are just starting, their employment life, I would say, be patient and take advantage of all of the opportunities you have to learn from other people. I’d go to work for a firm and find out what all the different roles are today within the financial planning environment so you can be sure you pursue the roles you really want to pursue.

If you’re making a career change, one of the things they teach new salesmen, or have new salesmen do, is make a list of everybody they know. And then you’re supposed to start calling on them, right? Well, the problem with that is, if you’re making a career change, all those people know you from your former life. So, they know you as a school teacher, or they know you as whatever it was you were doing, and they know you’re brand new in the financial planning business. So, you’ve gotta get outside your natural market quick, and start meeting people who have only met you for the first time in your new role, and that’s all they know you as is a financial planner. So, for people who are making a career change and want to build a business, want to build their clientele, I would say, get out of your natural market as soon as you can and create a whole new list of names.

Hannah: The line that you have on here, it says, “Be sure that the marks stay worthy, and that you stay worthy of the marks.”

Ben: Right.

Hannah: So, as new people are taking the CFP exam, what would you hope that they know about what it means to be a Certified Financial Planner, and the responsibility that comes with that?

Ben: You mentioned fiduciary, they need to have a gut level feel as to what it means to be a fiduciary. If they have family and kids, you’re learning more about being a fiduciary now that you’re a mother than you’ve ever learned before. So, it’s getting a sense of the emotional tie to your responsibilities as a fiduciary. Another word I like better than fiduciary, and that’s steward. You are a steward of your clients’ well-being. It’s an awesome responsibility and a fantastic sense of … Oh, what’s the word? Anyway, it borders on love.

Hannah: So, you’ve had 45 years that the CFP mark in existence, what do you hope the next 45 years brings for the CFP mark and the financial planning profession?

Ben: More of the same. It can’t possibly grow as fast as it’s growing, but I would expect that CFPs would be as invasive in our world community as attorneys and CPAs are today. But in San Francisco, about 20 years ago, I heard there was one attorney for every 850 people. If we have one CFP for every 850 people maybe we’ve gotten there.

Hannah: We’d be able to reach a lot more people than just the top 2% of America.

What would you caution, especially young planners, as we look to the future? What would be your caution?

Ben: Don’t feel empowered by your information, because everything you know is going to change. Don’t go around feeling good about yourself because you’ve passed this exam, or because you’ve gotten a new certificate, or whatever it might be. Just feel good about yourself, because of the relationships you’ve established.

Hannah: It sounds like things are always changing so we have to always keep learning.

Ben: Well, you always have to keep learning, but it’s not what you know that’s important, it’s who you know and have a relationship that’s more important.

Hannah: You’ve talked a lot about service in the past. How important has service been to your career?

Ben: Well, we are in the service business, right? So, that’s another term … We mentioned fiduciary, and mentioned steward, another title I think is very important is servant. You need to be a servant to your clients and that means you need to be a servant to your family, you need to be a servant to your community, you need to be a servant to your church, you need to be … Wherever you are, grow where you’re planted. And the only way you can grow is by being a servant, I think.

Hannah: Did you find volunteering and being involved with your professional peers helped you?

Ben: Well, yes, I probably shared this story with you about waking up to the fact that I was a servant and that I needed to serve somebody. I made a promise to myself I’d serve one person every day. When you have no clients, it’s hard to serve one person every day, so I got involved in my church, I got involved in the Chamber of Commerce, I joined a service club. Went through the chairs of the local IAFP chapter. When you have a lot of times on your hands, you can be of service to a lot of different people and organizations. And they all say thank you, and that makes you feel pretty good.

Hannah: What makes you excited about financial planning?

Ben: Well, now, I’ve been retired 20 years, or almost, and the thing that makes me excited now is hanging out with my peers and watching the growth of this profession, and the excitement that comes with all the new faces at these meetings. I go home very tired from these meetings, because I’ve been having too much. I’m too old to be acting this young, but … It’s still an infant, even though it’s 45 years old. Relatively speaking, it’s still in its infancy, and that’s an exciting period of time.

Hannah: Well, is there anything else or any other thoughts you’d want to leave with new planners?

Ben: Be excited, stay excited, and be a servant.

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Ben Coombs, CFP®, CLU, was part of the first class of CERTIFIED FINANCIAL PLANNERS™. When he got started, nobody had jobs for financial planners. Now, he’s thrilled to see career paths developing. Tune in as Ben walks us through the evolution of financ... Ben has developed an incredibly unique view of financial planning. As he’s honed this mindset over the years, he has created a beautiful metaphor: The Iron Butterfly.
An iron butterfly is beautiful. It’s ornate, and it looks great on a coffee table, or hanging on the wall as decor. But an iron butterfly doesn’t actually fly – and what’s the point of a butterfly that doesn’t fly?
Ben views financial plans as individual, unique butterflies. But it doesn’t matter how beautiful they are if they don’t fly. This is why he calls his financial plans “financial action plans.” He believes a financial plan might take years to fully implement as an advisor and a client gets to know one another, and as their goals become solidified, and that consistent action being taken proves whether or not a plan is successful. This episode is full of wisdom, from small nuggets of advice to larger life philosophies that this amazing financial planner abides by.


 
What You’ll Learn:

What the beginning of the financial planning profession looked like
How a seasoned advisor views financial planning software
How financial planning has evolved over the years
Where financial planners find the most opportunity through market ups and downs
Why a financial plan is worthless if it’s not actionable
How to create actionable financial plans
How to put your clients at ease and learn more about their hopes, dreams, and financial goals
Why financial planning is more consistently valuable than investment management alone
How career paths have changed the game in the profession

 
10 Wise Lessons Learned About Being A (Better) Financial Planner
 
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Hannah Moore clean 32:30
Venturing Into Entrepreneurship https://financialplannerpodcast.com/yafpnw-venturing-into-entrepreneurship/ Tue, 23 Oct 2018 13:12:32 +0000 https://fpaactivate.org/?p=11732 https://financialplannerpodcast.com/yafpnw-venturing-into-entrepreneurship/#respond https://financialplannerpodcast.com/yafpnw-venturing-into-entrepreneurship/feed/ 0 In this episode with Stephen Rischall, CFP®, we’re focusing on what it means to run your own financial planning practice with a team. We’re discussing the ups and downs, the big wins and the challenges. Stephen’s story is incredibly inspiring, and his insights are spot-on! Stephen Rischall, CFP®, runs his own financial planning practice and works primarily with millennials and young professionals. When he first started his career, he was working with another advisor at their financial planning practice. This advisor acted as Stephen’s mentor, and sat him down one day to lay out his future career options. It quickly became apparent that Stephen had three career choices in front of him:

  1. Work with his mentor forever (which would have been fun – they got along really well).
  2. Go to work for one of the big wirehouse financial planning firms.
  3. Start his own practice.

Stephen’s entrepreneurial spirit got the best of him and he struck out on his own shortly after that. Over the years, Stephen has learned so much about running his own business. As his practice grew, he learned each element of entrepreneurship himself until he was able to add team members. Stephen has focused on digital marketing, speaking, outbound marketing, growing with a business partner, and so much more.

In this episode, we’re focusing on what it means to run your own financial planning practice with a team. We’re discussing the ups and downs, the big wins and the challenges. Stephen’s story is incredibly inspiring, and his insights are spot-on!

Hannah's signature

My plan B is to try harder. – @smartmoneysteve on #YAFPNW

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What You’ll Learn:

  • What different career paths in financial planning might look like for a new planner
  • How strong mentorship relationships can change the game as a new planner or career changer
  • What to expect when you’re starting your own planning practice
  • How a business partner can help you grow in ways you might struggle to do alone
  • What challenges you might face as a financial planning entrepreneur
  • What type of staff you may eventually look to hire
  • How to focus on a digital marketing presence
  • What a “digital media kit” looks like – and how to build one
  • Why starting early and trying new things often is more important than getting it “right” on your first try

 

Show Transcript

Ep121 Transcript


Hannah: Well, thanks for joining us today, Stephen.

Stephen: Thanks for having me, Hannah.

Hannah: Yeah. So you have your firm, 1080 Financial, how long have you had your company?

Stephen: We started our RIA, my business partner and I, we left the broker-dealer space about four years ago, so we’ve had our RIA for about three and a half, going on for years, and it’s been a great opportunity. A lot of challenges, but a lot of fun at the same time.

Hannah: Now, how did you know that you wanted to start your firm?

Stephen: If I rewind to when I was in college, I had an opportunity in my junior year where I started to work as an assistant to another financial advisor. He was also, at the time, with an independent broker-dealer so I feel fortunate that I came up in a more independent environment. I remember it distinctly after I graduated a few months after, he was my mentor and he said to me at the time, “Stephen, you have three choices, number one, you’re going to keep working for me, and I love you and you’re doing a great job and that would be wonderful. Number two, you’re going to go work for one of the big firms, the big banks, the big Wall Street machine, and you’re going to help them build their business.” I remember him saying that, “You’re going to help them build their business.” And then he said, “You have the third option is you can do what I did and figure it out and build your own business.” And I just had this entrepreneurial spirit and I just knew a few things, one, I loved his independence, I loved the way that he had a lot more flexibility to actually focus on helping clients, and of course, come on, an entrepreneure, a young guy, I love technology, I was like, “I’m probably going to figure out a better way to do this. I believe I can.” And that’s how it all started from there.

Stephen: So from day one I knew that at some point I would have my own firm, and it took a little while to get there but best decision we ever made.

Hannah: Was there ever any talk of internal succession plan or you buying into his business?

Stephen: Not his business. I think I was probably too green back then. I mean, I started … Back then I was like 19, 20 years old, I didn’t even know what succession was, so there was never any talk of that. And again, I think I really just had this mindset of I wanted to start my own thing and put my own flag in the ground.

Hannah: How long was it from when you started working at that independent broker-dealer to when you started your own firm?

Stephen: Yes. So technically I worked for that group for about three years, so just a little bit after graduation, is when I sort of ceased. I found other broker-dealers that would actually let someone like myself, a young, what was I, maybe 23-year-old college graduate at the time, just start a book of business. As crazy as that might sound. I think it’s a wonderful opportunity today, but I did it. So I actually linked up with a broker-dealer first, worked under the broker-dealer for about three, four years, and then was at a point where I think I had enough confidence, I had enough practice in the field, I had enough clients where I felt secure that, hey, if I actually start my own thing I think there’s enough folks that would want to come my way, I’ve developed strong relationships with, and I think it’ll work.

Stephen: Looking back at it, it sure did work and it was a scary leap to make, but I have to say in that moment … And let me add this, I met my business partner, Matt, working at the broker-dealer. So today I’m 31, he’s 52, but we’ve always made a good match. Having someone else to bounce ideas off of, having someone else to share in those stressful moments and just vent to sometimes was very helpful. So I didn’t necessarily feel like I was making the jump by myself. It was a little bit more comfortable making it with him and doing it together.

Hannah: When you were at the broker-dealer did you start out from zero where you were having to find your own clients and work through that processor, or you teamed up with somebody, or getting legacy clients? Or, what did that look like?

Stephen: Started at zero. I’ll just be brutally honest about it, it was a grind. It still today is a grind, it’s just a different method that we go through today, and I think I have a little more street cred so it makes it a little easier, but I learned a lot in those early years working at the broker-dealer. The interesting thing is when you’re in an environment and before you have a lot of experience you don’t know what you don’t know, so I was soaking it all up. It was wonderful. I developed a lot of those soft skills. But it wasn’t until I learned more about this RIA fiduciary thing that really fascinated me, and something just told me that’s the future. That’s the right answer it. It’s true independence, it really puts the focus on the client.

Stephen: I was smart enough to figure out within about a year at the broker-dealer, even though it’s called an independent broker-dealer it was pretty obvious that it was much easier to do business if you sold these things, and I use that word because that’s frankly what we were doing there. One thing that really irked me in that environment was they lead with financial planning, but the truth was the goal of their financial plans 9 out of 10 times was to lead to some sort of a product sale. That got really old really quick. That’s not what we were about. It was really just, like I was saying Hannah, it was like the clock was ticking. It was a matter of time till we felt we had enough with us that we could jump ship and start our own RIA.

Hannah: Those clients that you were serving, where they younger clients? Were they older clients? Who were you able to find as clients when you first started?

Stephen: It was a mixed bag. If I could give a little bit of advice to anybody starting out, that’s younger, I’ll speak for myself here, I was really cognizant and anxious and nervous that people would perceive me as this young, punk kid Stephen … Okay, fine, you got a great story, you started investing when you were 13, whatever, you’re still in your 20s, am I really going to trust you with my life savings that I’ve worked 30, 40 years to save? You’re not even 30 years old, kid. So I was really sensitive about that. In the beginning I definitely targeted my natural market. I think a lot of people do that because it’s more comfortable till we know. I did my best to try to work with younger people, but the truth was in that broker-dealer model, they won’t super fond of you working with, let’s just face it, the smaller accounts, people just getting started. And there was a lot of pressure to, honestly, get back to your family and focus on the people that have the money, and again, these things were not really meshing with me but it was a mixed bag. I worked with a pretty even amount Gen X, Gen Y, so my peers, worked with folks that were more my parent’s age, pre-retirement, and retirees as well. Fortunately, through just being able to connect with folks, I had a pretty good run in it.

Stephen: I had this experience where I was speaking with someone and they said, “This weakness that you feel you have, this perceived weakness, can you turn it into a strength?” I thought about that a lot, and I’m still known in my community today … I’m 31 now, I’m still young, but I started in my early 20s when I was out in public and you have 10 seconds to introduce yourself at a chamber event or something. I would introduce myself as, my name is Stephen Rischall and I’m the financial advisor that won’t retire before you do so, I totally turned that perceived weakness on its head and made it a strength. And I’ll tell you what, that message rings true with people. So big piece of advice I would give for any new planner, new entrepreneur, if you’re going to launch your own practice or start focusing on bringing in clients, guess what, being young is an advantage. You know the technology better, you know the new ways and new practices, new laws and new regulations better. You may not have as many gray hairs or you may not be missing as much hair as I am, or some of the other folks, but at the end of the day being young and being there for your clients and your client’s kids, and that next-generation, that’s what you’re planning for. So being able to turn that perceived weakness of your youth into a strength is very beneficial.

Hannah: You specialize in working with younger clients now, is that a true statement?

Stephen: For the most part. If we look at our business today, our households we work with, yes I am the young guy on the team so I tend to gravitate more towards working with young folks, but really only about 30% of our practice today, maybe 25%, is actually comprised of Gen X and Gen Y. But I’m going to be their main point of contact because I’m the guy they want to talk to.

Hannah: Yeah. There’s a lot of talk about niching in financial planning these days, have you found a niche that you work with or that your firm works with?

Stephen: Yes. Luckily now as our firm has grown, we have four partners, everyone sort of has their area of specialty, and that’s made it a lot easier for me to hone in on the clients I really enjoy working with and that I just sort of have a knack and I guess a natural market I’ve developed for now. I am in LA so it may not be too much of a surprise that I target working with folks in the entertainment industry. Don’t think in front of the camera, grant it I have some of those folks too, but think more behind the camera, supportive services, people that are in production, post-production, editing, grips, lighting, casting, a lot of that is in my backyard. I’m in the Encino and Sherman Oaks area, not too far from Studio City in Hollywood, Burbank where a lot of the studios are, so I’m really targeting and working a lot more with folks in their late 20s to late 30s, whether they’re married or not, but at least one or two of the partners are in the entertainment industry in one shape or form.

Hannah: Getting back to your career path story, what was the reason that really made … Was there an event that made you go from the broker-dealer to the RIA? Or, was it just a plan that you were implementing?

Stephen: I feel when I look back at it that it was definitely a long-term plan because I knew when I joined up with that broker-dealer I wanted what the gentlemen I worked for when I was in college had, which was true independence, his own firm, not really working inside of some other department or compartment. So I knew that I wanted to get there. I honestly was not totally sure of the path, but I was confident enough in my ability to navigate it and to make the right decisions, that just something about me I just knew I would get there.

Stephen: Someone asked me early on in my career, it was an older gentleman, in some table talk we were doing at some event, and he said, “Stephen, if this doesn’t work out for you, do you have a fall back? What’s your other plan?” I was quick with the answer and I said, “My Plan B is to try harder.” So I was committed from day one. I knew that I was going to make it work and I made it work.

Hannah: Yeah. That’s great. So, working with those younger clients, how do you approach them? How do you work with them? What does your service offering look like for them?

Stephen: Yeah. So one thing I think you have to take a step back and think about is, look, it’s not necessarily always about the money. From a business standpoint, yes, you need to be profitable, it is in your client’s best interest that you stay in business, so let’s make that very clear. That said, you can find ways that you can work with younger people that may not necessarily have an asset amount that can even pay enough for your time, because you have to be fair to your other clients too, but with today’s different business models, working virtually, a lot more digital tools, their time that they need of us, it’s not as demanding in terms of a planner.

Stephen: I find that typically younger clients have a more simple financial situation, but that’s not always the case, so let’s just be honest about that. It doesn’t take as much time as some of, maybe, the more complex and, in my opinion, fun cases, because I like the nitty-gritty and the detailed stuff. So, look, it doesn’t take as much time, you can use technology to augment a lot of it. There’s innovative business models, whether it’s subscription-based, retainer-based, or AUM, or some mix of those … And we’re finding that, hey, we can engage these younger clients on focusing on more of the basics of their financial foundation, budgeting and cash flow, helping them understand their employee benefits and take advantage of them the right way, the way that benefits them most, maybe setting up a retirement plan or a retirement account, a little bit of light tax planning, refer them to an attorney if it’s time for them to maybe put an estate plan together, and that’s about it. They typically don’t have very advanced needs so it’s not very demanding on our time, and we can help them.

Stephen: And you really ought to be thinking about investing in client potential. So even though the revenue might not be there today, there’s a lot of client potential. I think as you meet more people you become a really good judge of character and you understand people’s intent, you’ll be able to know if someone’s a good client. A great example is any millennial that walks in the doors, or just calls me these days, or reaches out to me online and say, “Hey, Stephen, I want to save some money for retirement and I was looking at this Roth IRA and I was looking at my 401(k) at work, what should I do?” The answer is both and more, and it doesn’t take me that long to explain that to somebody. So the point being, it’s a more simple situation. We can just give folks a few minutes of our time, it will impact them, and maybe in the future they’ll be a better fit for our services because they demand and they need more strategic planning, they need more of our help, but in the early days you just help people, and I’m a big believer that it will come back and pay you 10 times forward.

Hannah: Do you have a minimum for your clients or how do your clients pay you, except for the small account sizes?

Stephen: We do have a $1,200 fee minimum. So we have two service lines, so as it relates to sort of foundational clients, folks getting started, it’s a $1,200 fee minimum. So if you don’t have the AUM to pay that, our max fee is going to be 1%, so do the math that’s $120,000 in assets. A lot of young people might not be there yet, perfectly fine, we’re still going to help you and engage in a more financial planning light, a more ad hoc financial advice, we’re there for you. When you have financial questions, we’re here to back you up. You’re looking at buying your first home, let’s talk through the process, let’s look at the offers you’re getting in terms of the mortgage rates, is it good, is it bad, are you getting sold something. Our goal is to be there and help people make smart financial decisions. They will remember that and long term, it’s going to come back to you. So if you don’t meet our minimum from an asset standpoint, that’s fine, we just do a quarterly flat dollar amount and it’s going to be $1,200 a year. We found that that’s very, very approachable even for folks that are just getting started.

Hannah: You mentioned that there are four different partners at your firm, do the other three partners buy into this idea of working with these smaller clients in this way? I mean, because that is kind of a counterintuitive message or something that you don’t hear at the big conferences.

Stephen: Yeah. I’ll be honest about it, it’s been a bit of an uphill battle. It’s been interesting now that we’ve merged our firm with another fee-only RIA, great opportunity, and we’re growing, and it’s definitely in the right direction, but I wouldn’t be honest with you if I was telling you it was all sprinkles and rainbows. The truth is there is a bit of a culture clash of the old-school mindset of million-dollar minimums and, the one that bothers me is, we’re losing money on this client. I mean, think about that, losing money on this client, let’s really break it down and figure it out, what are our fixed costs, we’ve done this, we have figured it out, when you factor in labor and real estate, fine, it gets up there, but look if you’re able to generate $1,200 in revenue, at least for us, we’re not losing money on anybody. We may not be profitable or very profitable, but that’s okay because my belief, and what I’ve helped instill in some of my new partners, is this happy medium of you invest in that client potential.

Stephen: We don’t say yes to everybody, you got to be a good fit for us and we have to be a good fit for you, but you invest in that client potential, they’re going to stay very, very loyal to you. And what I appreciate the most is helping people. So they’re going to reach out to us with those questions and we’re going to be able to demonstrate and provide that value. So it is a bit of an uphill battle, but clearly we’ve had some success stories with younger clients, and my new partners are seeing that. They’re believing it, they’re understanding the importance of having the digital footprint like we do online, and it is all coming around.

Hannah: What prompted you to get partners?

Stephen: Yes. So my partner Matt and I originally are the ones to start our RIA and then we just merged with two other partners, so there’s four of us now, and what prompted that is growth in economies of scale. They’re in aging practice, more of their clients are in the distribution phase and in the accumulation phase, we’re the exact opposite. My new partners didn’t really have a very strong digital footprint, or marketing, or really using processes and technology as good as they should internally, look at our firm 1080, we’re absolutely crushing that game, so bring us together there is a lot of complementary facets of our practices. My two new partners are both CFAs so they have a lot more expertise and strengths on the investment management side and, as much as that’s something that we’ve always been comfortable with at 1080 Financial, let’s be honest, it’s a little bit stressful. I like to focus more as being a CFP on the financial planning, and the strategic planning, and the one-on-one client communication. So to offload some of those tasks, like reporting and billing, and more importantly, the asset management piece, to another group internally was a very, very smart decision that lowered my stress levels and helped me focus on the things that I’m really, really good at and not spread myself too thin.

Stephen: So bottom line, being able to merge and benefit from economies of scale and more resources is really helping us in being able to implement processes, having a larger team and dedicated staff now we’re really able to grow this business. And what I’ve learned is we can really provide a much better client experience across the board that we can replicate, and to me that’s pretty amazing.

Hannah: How big is your staff at your firm?

Stephen: Yeah. So we’ve got four partners, we have one junior advisor and then we have three full-time staff in addition to that. One of the staff is also another CFA, he’s running all of our trading, rebalancing, managing models, very active with that. We have another staff member, very proud to say I hired someone from my college in the financial planning program. I was super, super stoked about being able to do that about a year and a half ago, big accomplishment, and he graduates pretty soon, actually in about six or seven months so at that time he’ll really be full-time. He’s practically full-time, but school first. School first, guys. Get out of school, get good grades, pass the CFP. And then we also have someone that’s more, I don’t like to say an office admin because she’s not, but she fulfills some of those tasks. I would call her more that director of first impressions, have you heard that title before?

Hannah: Yeah.

Stephen: She’s great. I mean, she communicates with our clients, keeps them in the loop of whether they deposit a check or money’s going out to them. She plays a crucial role too. That’s the cool thing, having a team where everybody has value that they’re bringing to the table and feels that they’re making a contribution and is really helping our clients, that’s really neat and I think that’s really beneficial.

Hannah: So, how do you spend your time? How much of your time is client facing versus marketing, because I know you do a lot in that space verses other tasks?

Stephen: Yah. It’s interesting, about two, three years ago I switched a lot of my outward networking to be more digital, and now I think that’s great because now instead of having one partner I have three partners that are more out there, pounding the pavement, shaking hands with the CPAs and the attorneys in our community, which I still have a lot of those relationships, no doubt, but it’s given me more time to focus online, doing a little bit more video. So please feel free to reach out, happy to answer your questions, but you can give me a follow at @smartmoneysteph across Twitter, Instagram, Facebook. It’s allowed me more time to focus on my digital presence, which has been good for myself and for the firm. I’d probably about 35% of my time these days is more client facing, somewhere between 30 and 40% realistically, whether it’s just feeling a phone call … If I’m available, I want to talk to my clients. I’m really about that sort of client relationship and client experience.

Stephen: If you think about it, when I go live on Facebook, I might not be getting a ton of likes, I might not be getting a ton of comments, but I can’t tell you how many of my clients, the next time I’m speaking with them or we do a client appreciation event, they say, “Hey, Stephen, I saw that video where you did this,” or, “Hey, Stephen, I really liked how you did that,” or, “Can you talk more about this?” It blew my mind because it’s like, why aren’t you liking and commenting on my stuff, but you know what, that doesn’t even matter. It blew my mind because that proved to me that people are watching and paying attention, and even doing some of that outbound just digital marketing stuff is putting me in front of my clients and keeping us connected. So I’m even connecting with my clients, I believe, when they’re surfing on their mobile phones, or on their computers, or tablets, and surfing their their Facebook feed or their Instagram, I’m still connecting with clients then. Now, I can’t quantify that time, but I mean, definitely, overtly, I’m probably spending 30 to 40% of my time directly working with clients or prospective clients.

Hannah: So, on the marketing, when did you decide to go full in on the digital space?

Stephen: It was probably about 2016, mid-to-late 2016. Something told me, looking at myself, what are my behaviors, where would I find this service or that service, and it was proving to me you’re going to just start Googling more and more stuff, so I knew that it mattered that I needed to make sure that we ranked on Google. That’s a challenge in our business, especially in a market like Los Angeles. I have never paid for any type of search engine marketing, or paid ads, I haven’t done that yet, I’ve experimented a little bit on Facebook, but the point being everything I’ve been able to do to date has been organic, so yes you can do it, 100% you can. We ranked fairly high, still, I’m pretty sure, in a lot of our keywords that we’ve been working on for SEO, organic search, in the Los Angeles area, but it does take time.

Stephen: We now see, I’d say about … At minimum, we’re getting probably three prospective clients per month that are qualified clients coming in through just Google searches, or Yelp searches, or maybe saw something I was quoted saying in an article, so it was pretty clear to me early on that that’s where the trend was going and I just wanted to get ahead of the game and get a jumpstart on the big firms because I knew they would get into the space eventually. Now they clearly are, and they’ve got way more money than any of us do to spend on it, but we got a little bit of a jump on them.

Stephen: I would say this to anyone that’s getting started, look, even if you haven’t gotten started yet, if you have some type of story or financial knowledge that you want to share with your peers, or your friends, or a specific type of target market, it’s not that hard to start a blog. It’s not that hard to start doing some live videos. Yeah, your production value might be a little lower when you get started … Like I’m sure, Hannah, when you started your podcast you may not have had all this same fancy equipment, you may not have made the thumbnails as nice, you learned a few things along the way, right?

Hannah: Oh yeah. It’s painful when I go back and listen to the first couple of episodes.

Stephen: But you started somewhere, right? You can’t get to the top of the mountain without taking the first step. So I would really encourage anyone that’s serious about this profession, getting involved one way or another, if you’re passionate about it, you want to share some knowledge, you want to share your word, get out there and do it. Whether it’s using social media, whether it’s using tools like podcasts and YouTube and live streaming, you can do it, and now more than ever those tools are available to you and you should start doing that now.

Hannah: If you were to start over today, 2016 really wasn’t that long ago, would you do anything different in that digital space, in that marketing space?

Stephen: Yeah, it’s a good question. I think if I were just to rewind all the way … Again, a great experience working with my mentor in the beginning and learning about the business, and I’m happy I went in this direction and didn’t work for the Wall Street machine, that was a definite turning point in my career, but I would say if I just started over in general, today there are so many more opportunities to start as a fiduciary, start as a financial planner … I mean, it’s amazing to me that you actually don’t even need to be on that sort of business development sales side if you don’t want to, you can literally get higher today and make a great living and make a huge contribution to people’s lives and help them by just focusing on financial planning or just focusing on investment management, may you want to get your CFA. The point being, you no longer have to be that broker salesperson anymore if you don’t want to be.

Stephen: Now, I’m not going to discount the importance of that, sales is not a bad word, and I think in our profession what we’re really doing is we’re selling our service and building rapport and trust. We’re not selling a product. That’s the difference. To me, financial advice is not a sales pitch. But at the end of the day, you have to help people come to making a decision and that takes a bit of sales and it’s not easy. So if I could rewind to earlier in my career I would have started from day one as an RIA. I might’ve joined up with one of these networks, there’s a bunch of them out there that are very supportive, connect you to technology at a discounted rate, connect you to the support system with other independent advisers, getting started as RIAs, I totally would’ve been going that route. So if I was graduating college today, that’s probably what I would be doing right now is starting my own thing as an RIA from day one. So I think there’s tremendous opportunity for folks getting started today.

Stephen: Same thing like I said earlier, maybe you’re still in school or maybe you’re thinking about this career, you’re not just ready yet or you’re studying for your CFP, guess what, if you’re studying for your CFP you probably have a lot of information in your head, a lot of information that you can share on a podcast, on a social media post, on a video, I would start doing it sooner rather than later.

Hannah: Because you learn along the way.

Stephen: That’s right.

Hannah: We talk about financial planning a lot on the podcast and, really focusing on that, did your education background give you enough to really feel competent as a financial planner to start out from the gate? Or, how did you develop those skills?

Stephen: I would say no. When I went to school, at least the school I went to, we didn’t have a formal financial planning program. I did graduate finance honors and that was fine, but the one thing I think no matter what that you lack and it’s going to be tough … It’s really exciting to hear in some of the programs at these colleges, that they’re actually doing one-on-one student counseling, that’s exactly what they should be doing. If you have a financial planning program at your school and you’re listening to this right now, whether you’re a student or you’re faculty, you really need to implement some type of a one-on-one student counseling program. The main reason why, it’s going to help develop those soft skills of being able to talk to people about uncomfortable or unfamiliar things, debt, student loans, budgeting, that nitty-gritty not so fun stuff. You got to get over that hump.

Stephen: So I think it’s wonderful that there’s programs now that teach about that, but I would say myself, coming out of school, I didn’t feel … Again, I didn’t really know what I didn’t know. I knew that I knew about investing, I understood asset allocation, I understood the basics of financial planning, but most all of my experience I gained on the job. I gained a lot of my experience working at that independent firm in the beginning. And I have to say, let’s just be honest about it, I was very fortunate, he had a niche where his focus was family businesses, primarily franchise owners, so I had the benefit of working on some very, very complex financial plans, tax planning, estate planning, business transition planning and succession planning really early on in my career. So being able to use the technology, which I was on the front lines of figuring out how to use the technology, interface with these accountants and attorneys that were way older than I was, but hearing them and then being able to make the technology do what they were talking about, that’s how I learned most of what I did was just trial and error and learning by doing. I am a kinesthetic learner so I learn by doing.

Hannah: And you do a lot of media appearances, and speaking and things like that, is that a more recent occurrence in your career or has that been something you’ve been doing for a while?

Stephen: Yeah. As far as doing public speaking, it’s something I enjoy. I wouldn’t say I push it that hard, I’m not out there trying to speak at a conference a month, I got a business to run and that’s not the business I’m in, but if it’s something that I’m passionate about, I’m happy to chat more about it depending on the audience, if that makes sense. So I do enjoy that. I do some public speaking. I’m always happy to increase that.

Stephen: Some of the media stuff, I got lucky early on, and I would suggest, again, there’s so many more resources today where they use something like Help A Reporter Out, HARO, or eventually you get your CFP or other credentials, and you’re able to be on some sort of listserv through the Financial Planning Association or the CFP board. There’s a lot of ways that you can get that these requests from media that they’re looking for a subject matter expert. I learned early on, probably 2015, maybe 2016, probably 2015 was the first time I got quoted somewhere and I thought it was the coolest thing, and I learned a little bit more about creating what’s called a media kit or an electronic press kit. So if you’re trying to get quoted in the media first, well, you got to get your first one, but once you do that, make sure you document this stuff. Go Google right now electronic press kit, it’s not hard to make, it’s basically a website that tracks all of your present media. Go do that, put that together, because it does build upon itself. Success builds upon success.

Stephen: And now I’ve gotten to a place where I probably have enough street cred where I have a handful of reporters that’ll reach out to me, or bloggers, or, again, Hanna, thanks for having me on the podcast, because folks might hear you on a podcast, or on a video that you did, or wherever it is, and they’re going to want to say, hey, I want to talk to Hannah, Hannah knows what she’s talking about, she’s sharp, I need to find her, she’s got that podcast, we need to talk to her about X, Y, and Z. So again, going back to what we said earlier of if you’ve got some information, you’ve got some knowledge, today with social media, putting that out there, you would be surprised who might be on the other end receiving that message.

Hannah: Are there any other pieces of advice you’d have for the new planners coming into the profession?

Stephen: Yeah, here’s an interesting one, my mentor, when I got started, told me this, and it’s been true to me, and I don’t mean to sound a little daunting or depressing here, but he said it like this, he said, “Stephen, in the first five years you’re going to work your butt off and you’re not going to get paid very well, it’s going to be a struggle,” and you know what, he was right about that. That was true. It wasn’t easy. He told me, “Years 5 through 10, you’re going to make a good living, you’re going to do okay, and you’re still going to work your butt off,” and he’s been right about that too. And then he said, “If you make it past 10 years in this profession, in this industry, if you can make it past 10 years, you’re doing something right, you’re going to be just fine,” and because I’ve had some resets in my career, launching my own firm … Or, maybe really at this point, I’m saying about four or five years into really having our own RIA, but I had another four or five years prior to that of being with a broker-dealer, I kind of feel like we’re at that 10-year mark.

Stephen: In some ways, we’re doing amazing and I feel like we’re crushing it, but in other ways, I’m definitely my own biggest critic so I know the biggest room in the world is room for improvement, and we just want to strive to help more people, provide a better client experience and just do the right thing for the right reasons.

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In this episode with Stephen Rischall, CFP®, we’re focusing on what it means to run your own financial planning practice with a team. We’re discussing the ups and downs, the big wins and the challenges. Stephen’s story is incredibly inspiring, Stephen Rischall, CFP®, runs his own financial planning practice and works primarily with millennials and young professionals. When he first started his career, he was working with another advisor at their financial planning practice. This advisor acted as Stephen’s mentor, and sat him down one day to lay out his future career options. It quickly became apparent that Stephen had three career choices in front of him:



Work with his mentor forever (which would have been fun – they got along really well).
Go to work for one of the big wirehouse financial planning firms.
Start his own practice.

Stephen’s entrepreneurial spirit got the best of him and he struck out on his own shortly after that. Over the years, Stephen has learned so much about running his own business. As his practice grew, he learned each element of entrepreneurship himself until he was able to add team members. Stephen has focused on digital marketing, speaking, outbound marketing, growing with a business partner, and so much more.
In this episode, we’re focusing on what it means to run your own financial planning practice with a team. We’re discussing the ups and downs, the big wins and the challenges. Stephen’s story is incredibly inspiring, and his insights are spot-on!


What You’ll Learn:

What different career paths in financial planning might look like for a new planner
How strong mentorship relationships can change the game as a new planner or career changer
What to expect when you’re starting your own planning practice
How a business partner can help you grow in ways you might struggle to do alone
What challenges you might face as a financial planning entrepreneur
What type of staff you may eventually look to hire
How to focus on a digital marketing presence
What a “digital media kit” looks like – and how to build one
Why starting early and trying new things often is more important than getting it “right” on your first try

 
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Hannah Moore clean 34:05
G2 and the Importance of Continuous Learning https://financialplannerpodcast.com/yafpnw-g2-and-the-importance-of-continuous-learning/ Tue, 16 Oct 2018 13:00:19 +0000 https://fpaactivate.org/?p=11725 https://financialplannerpodcast.com/yafpnw-g2-and-the-importance-of-continuous-learning/#respond https://financialplannerpodcast.com/yafpnw-g2-and-the-importance-of-continuous-learning/feed/ 0 Lauren Stansell of Yeske Buie gets interviewed by our guest host, Alexandria Cole. Lauren wasn’t sure she wanted to be in financial planning and just several years later is on track to be partner at her firm. Tune in to hear her story and learn how she has been instrumental in creating and growing their Resident Program, a three year training program for new financial planners. This week, Lauren Stansell of Yeske Buie gets interviewed by our guest host, Alexandria Cole. Lauren wasn’t quite sure she wanted to be in financial planning and now, just several years later, she is on track to be partner at her firm! At Yeske Buie, Lauren has been instrumental in creating and growing their Resident Program, a three year training program for new financial planners. Through the program, residents learn the nuts and bolts of financial planning and all areas of running a firm, including how to train others. The end goal of the Resident Program is not to stay with the firm long-term, but to be trained in how to do financial planning well. Lauren shares their approach to Residents and gives insights into what new planners can do the set themselves apart.

Lauren shares how important continuous learning is and how conversations at her firm led her to pursue a Masters in Advanced Financial Planning with a concentration in taxation from Golden Gate University. As a soon-to-be partner, Lauren shares how this influenced her decision to pursue her masters degree.

As the second generation of owners in Yeske Buie, Lauren shares why she is excited to buy into the firm and how the goal is to make the firm not dependent on the founders by 2020. Lauren shares her advice for other young planners who are interested in having conversations with their firm owners about buying into their practice.

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One of the things I love about financial planning is it’s really fast-paced, and you’re kind of forced to learn as you go. – @LaurenAStansell on #YAFPNW

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What You’ll Learn:

  • What the Yeske Buie Resident Program looks like
  • Skills Residents and new planners need to have
  • Importance of continuous learning
  • Factors to consider in pursuing advanced degrees
  • What it’s like to be the second generation of a financial planning firm
  • How to have conversations about being a successor

 

Show Transcript

Ep120 Transcript


Alex: Today, I have Lauren Stansell on the podcast, and I am so excited that you are on today to talk to us about your journey in the financial planning profession.
Lauren: Me too. Thank you so much for having me. I’m really excited to be here today and just get to chat with you.
Alex: Thanks. Yeah. I’m always interested in learning more about people, especially when you meet them at conferences, and you can just get to know them better, but also allow them the space to share what they’ve learned so far on their journey. I want to take this time to just jump right in, but I do want to share a fact with our listeners. This is something I just recently learned maybe a year and a half ago, but you have a really cool, or at least two really cool bosses, Elissa Buie, who’s actually your mom, and I did not know that.
Lauren: That is correct. Yup. Elissa Buie is my mom, and Dave Yeske is my stepdad. I grew up around financial planning. I was always in the car rides to horseback riding or soccer practice and soccer games with my sister, and would be in the back seat yelling, “Please stop talking about financial planning.”
It’s still our ongoing joke, and now that I’m in financial planning, my sister makes fun of us even more, but growing up, being around it all the time, I was kind of thinking, “Maybe I’ll do something different. I’ve heard about this constantly. I want to do my own thing.”
Alex: Yeah.
Lauren: Obviously, that didn’t happen because here we are.
Alex: Exactly. That just transitions us right into where you are today and how you started out. I know you are a Virginia Tech alumni. I don’t know if other people get to say, “Go Hokies” if they didn’t go there, but …
Lauren: Anyone who wants to cheer for the Hokies can.
Alex: Okay. Cool. I just wanted to know, I saw that you and Ian actually started the Student Chapter, the Financial Planning Student Chapter at Virginia Tech, so maybe you can share a little bit about how you started that and what maybe was beneficial of doing that as a student.
Lauren: Yeah. Absolutely. I’m going to rewind a little bit before that happened. I, as you said, went to Virginia Tech, Go Hokies, and was studying economics and finance. I knew about the financial planning program, but not really, and I started going to some information sessions, and I was like, “Oh my goodness. I was wrong all these years.”
“This is what I want to do.” It puts all of my favorite things together, and so I joined the program, and I just think it’s interesting that going through the program and looking back on it now, even though I grew up in a financial planning family, I really didn’t know the extent of what was offered in this financial planning program and all the amazing courses, and the advisors who were there to really help you learn about this profession and start to build your network before you even get into the profession. The program advisors at Virginia Tech do such a great job of helping all of the students find jobs that they may be interested in, either with respect to the type of firm and the type of role, or even the location. They send out at least monthly emails with all sorts of job descriptions from all of the firms that they have these great relationships with, and they share the title, any requirements, and the location of the job, and then work to connect that student with that firm to help them find those positions. I think that’s so important, and I am confident that other financial planning programs around the country do that.
I know that’s true because we’ve posted our job descriptions to some of those advisors when we have openings, and so it’s a really great benefit to be part of one of those programs because you’re going to get connections, and you’re going to be able to hopefully find a role that is going to fit you in terms of type and location, so it makes me really happy to think about it now looking back on it, but it was really exciting to join into that program.
Alex: Yeah.
Lauren: It was not long after I joined into the program that I met Ian Harvey, and there was an email sent out to the program about the, I think at the time, it was the Financial Planning Club. It had been something that was in existence before, but the leaders had fallen off, and they wanted someone to revive it. Ian and I looked at each other and said, “Hey, let’s do this.” We’re passionate about this program. We think this would be a great way to get to know all of our students in the program, and get them involved and learn about what real financial planning looks like, and so we took it and ran with it.
Ian Harvey, current President of FPA NexGen, he and I work really well together because we have different strengths, and I think he mentioned this in an article he was quoted in recently, and we laugh about it all the time. He is really passionate, and he has amazing, amazing big ideas, and I’m really on the organize side and getting the actual pieces done, the paperwork that was required with Virginia Tech and with the Financial Planning Association, and we worked really closely with our advisors, the program directors to get everything started and get meetings on the calendar, and so we would have meetings.
Alex: Yeah.
Lauren: We tried for once a month with the chapter where we’d have a financial planner come in, usually local or from somewhere within a few hours, and come speak to us about what their firm did, and what they did, what they thought about financial planning, why they joined the profession, their history, all sorts of things, and we always had pizza at our meetings because if there’s one way to get college kids to show up, it’s pizza.
Alex: Yeah. It’s the food. Yeah.
Lauren: Yes. Absolutely. The whole experience that was really great experience for me in getting into the financial planning profession and learning about how passionate other people were, which made me really excited, and learning from so many different financial planners who came down for our meetings and shared the different ways that they did business and the different ways they served clients, and about their investment philosophies and how they presented financial plans, it was a ton of learning, and it was a really great experience to just get my profession or my career kick-started.
Alex: How did that maybe help you into the start of your career? Did you find out about your first internship through there? Right after that, did you start with Yeske Buie? What did it look like right after you finished in college?
Lauren: Yeah. I actually did an internship in the summer right before my final semester, and that was with Abacus Planning Group in Columbia, South Carolina, Cheryl Holland’s firm. It was a great experience. This was my, kind of my first foray into financial planning in how a business runs and how they serve clients and what the work actually looks like on a day-to-day basis, and so I learned a lot of valuable skills there from scanning. That’s a good thing an intern does, to learning how to answer the phone and talk with clients on the phone, and be composed and articulate, to greeting clients in the office, to doing actual client work, and working on projects for some of their clients who needed analysis done.
Alex: Yeah.
Lauren: We got the experience of doing some of that analysis first, alongside with the financial planner, where they were training us what to do and why, and how to think about it, and then we got to do some of the work on our own and send it, submit it to them, or present it to the financial planner for review. That was a really great first experience. Then, I finished school, and decided I want to know little more experience before I really decided where I wanted to live, or what type of firm I wanted to work for, so in the summer of 2013, I started my internship with Yeske Buie and hit the ground running. It was really exciting. I got to see every aspect of what the financial planners did on a daily basis.
I was sitting in client meetings and taking notes from day one, and that is true of all of our interns to this day. I was working on writing the follow-up emails for those client meetings that I had been sitting in, learning how to write an email that would share what we talked about and the action items without completely reiterating the entire meeting in a succinct, clear and understandable way. As time went on throughout that internship, I got to do the financial plans, and work on all the various reports that we prepare for our clients, and do those and present them to Yusuf before he presented them to Elissa for the meeting, and of course, on top of that, all of the normal intern things, all of the administrative stuff that interns can be really helpful for and still provides learning. At that time, it was probably two and a half or three months into my three or three and a half month internship, and I loved the team at Yeske Buie. Every single person had been so welcoming and had taught me so much, and given me so much space to learn and to grow, and I really didn’t want to leave.
I just wanted to be part of this team, and luckily, Yeske Buie at the time was hiring for an entry-level, what we call an ‘Assistant Financial Planner’ in the Virginia office, and I remember, I will always remember, I walked into Yusuf’s office one day and I said, “Yusuf, how do I apply for this open position?”, and he smiled. He’s got that silly grin, and he said, “You just did”, and so there was a process from there.
Alex: Yeah.
Lauren: Fortunately, I had had a two and half month interview of sorts by being there working as an intern, but the team did some work together on talking about the candidates they had and whether they, who they wanted to keep or who they wanted to hire for this position, and what it would look like, and any thoughts they had. Luckily, they ended up keeping me. They chose me, and the rest is history.
Alex: Yeah.
Lauren: I’m really happy to be part of the team.
Alex: It sounds like you became a financial planner very quickly right after your internship. Did you ever feel at any point that, “Wow. This is moving very fast. Am I ready for this?”, or have any kind of reservations of that was the track you wanted to go down when you first started your internship, or you were really like set that you knew you wanted to become a financial planner?
Lauren: I think after my very first internship in South Carolina, I was pretty sure but maybe not 100% sure, and so that’s why I wanted to do another internship with Yeske Buie. After about, I would say one to two months of that internship, I was pretty sure this was the team I wanted to be working with. It was the work I wanted to be doing. I was really passionate about what Yeske Buie was doing for our clients and why, and all of the groundedness behind the decisions made from everything, from a project that I worked on, to make both of our offices feel and look the same with respect to notepads, and pens, and fountains in the entry way, so everything from those decisions to the investment philosophy and the big picture, high-level strategic thinking is all very purposeful and client-centered, and so that really was exciting to me.
Alex: Yeah.
Lauren: I don’t think that I ever had any doubts of, “Is this what I want to do? Is this where I want to be?”, but I would say, and one of the things I love about financial planning is it’s really fast-paced, and you’re kind of forced to learn as you go and just learn a ton.
Alex: Right.
Lauren: There’s so much to learn. We’ll never learn it all because things are always changing.
Alex: Correct.
Lauren: One of the things that we really strive to do at Yeske Buie is to always be learning, always be growing. We have a robust culture, and so we’re always … You’re kind of learning on the edge, is one of our things that we always say, and it can be uncomfortable and it can be scary, and yet, when I look back on all of those various situations where I was feeling a little overwhelmed or like, “Wow. This is really going fast”, I look back and they were amazing learning experiences.
Alex: One thing that I’m really just fascinated to hear more about that you guys offer is a Financial Residency Program. There’s not a lot of firms that offer this, but Yeske Buie does, and so I just want to tee up what that is so listeners know what we’re talking about when we say Financial Residency Program.
Lauren: Sure. Right off the bat, there is one clarification I think is important, and this comes up often, is there’s FPA Residency, which is a week-long Financial Planning Boot Camp on all of the soft skills. It is absolutely phenomenal. If you haven’t heard of it or been to it, I highly recommend it, but that’s probably a topic for another discussion.
Alex: Yes. We’ll add it in the show notes because that is a very intense program that definitely everybody should go. I haven’t gone yet, so it is on my list once I pass my CFP.
Lauren: Yes. It is phenomenal. Truly one of the best weeks of my life. There’s FPA’s Residency, and then Yeske Buie’s Financial Planning Resident Program. Our Resident Program is not the first of its kind, but one of few that is existing to this day to my knowledge, and it’s essentially very similar to a medical residency.
When you’re becoming a doctor, you do rounds, and you do your residency for a few years, and so we have financial planners. Almost always, they are very recent graduates of their undergraduate program or a graduate program, and they come in right after graduation, and they stay with us for a period of three years. The three years is very intentional. It is to give them the three years of experience they need to earn their CFP designation, and so during their three years with us, they get that three years worth of experience and we support them in studying for and taking the CFP exam so that … The goal is that on graduation day, they are a CFP professional, and can graduate and go off and do whatever it is they may want to do.
One of the appealing pieces of the Resident Program is that oftentimes or in the past, these are financial planners who know that they want to do something other than work for Yeske Buie forever or live in San Francisco or Virginia forever. They know they want to start their own business, for example, or they know that they have a job even waiting for them when they’re done. The person just simply doesn’t have the time or resources to train them for those three years. They need someone experienced, or they have a goal of going and becoming someone’s succession plan, who again just may not have the time or the resources to do this three years worth of training and experience, and need someone to come in and hit the ground running.
Alex: This program is only three years, but people don’t stay with Yeske Buie after the three years. I know some people are like, “What? That’s not a job”, but that’s really interesting to know that that’s how that program runs, is to really just help you get the skills you need to become whatever position you want to become in a long-term at whatever firm that is at, or like you said, starting your own firm. What I really like to know is, so what is it that you guys are teaching or helping build specifically with individuals that come through that program?
Lauren: Everything we possibly can. That is the goal.
Alex: Yeah.
Lauren: Our financial planning residents are, like I said, with us for three years, so the first 12 weeks of their time with us, we call it ‘Boot camp’, and it’s their training period, training program. Each week, so the first week, as everyone knows with a new job, the first week is kind of just the fire hose of information, “Here’s who we are”, or, “Here’s all the technology you need to use. Fill out all your paperwork”, all of that normal stuff. Usually, during that first week, we like to have a welcome lunch, go out to lunch together, get to know each other better on a personal level, not necessarily in the office. Then, each of the 11 to 14 weeks after that, just depending on life, and schedules, and timing, each of those weeks has a specific focus on a certain type of analysis that we do for our clients, or a certain dimension of financial planning, or a certain service that we offer or thing that we do for our clients.
For example, some of the week focuses are, one of them is tax projections. There’s an entire week spent on tax projections, and on Monday, they get the full training, which is a few hours long, and then, they go off, and they try it on their own, and try to do a projection that’s assigned to them for a client that they will actually be sitting in the meeting with. Then, they come back, and we give them feedback, we share with them if we need to do additional training there on … Maybe they took really good notes, but just really one piece didn’t click with them of how to calculate it or where to find the information, and so the goal is … Tax projections are tough.
They’re intense. They take quite a bit of time. Sometimes, those are ones that end up taking multiple weeks, but the goal is that each of those weeks, they’re doing a number of these analysis or reports, and so they’re having that repetition and that bunching of learning how to do something, and then doing it three to five to 10 times that week to where it’s really getting stuck in your memory of how to do that one analysis, and so the hope is that with those weeks, even though they may do tax projections in week four, and then a couple throughout the rest of the time because they’ve done them so intensely in that week, that the learnings and the approach sticks with them.
Alex: You did say one thing that I did want to just highlight, is so people that go through this program are sitting in meetings the whole way through the program while they’re also learning at the same time?
Lauren: Yes. Similar to our interns, our financial planning residents are sitting in client meetings from day one, and they are responsible for doing all of the note-taking, and learning, and then being responsible for drafting and putting together all of the follow-up emails, and from that, whatever tasks or action items for us stem from that, we put into Salesforce, which is our client relationship manager. The goal is really that they’re coming in, and they’re doing exactly the same thing as any other entry-level financial planner would do with Yese Buie, they’re learning all of the same pieces, they are sitting in all the same meetings, they are communicating with clients to schedule meetings, or send those follow-up emails, or answer questions that come in of money movement, or if a question comes in that requires a CFP’s response, they might draft it or sit down with the CFP to talk about, “Okay. Here’s what I think. What do you think as the expert?”
The goal is really that it’s beneficial to everyone. It’s the real deal in terms of real work, real clients, clients that they are communicating with and learning, and meeting, and building relationships with. It’s extremely beneficial of course to the company to have these very competent financial planners and have them be growing at such a fast pace, and so excited to learn, and just see how everything works.
Alex: This brings on a point of how difficult I think it is for young planners to come in and get that experience, and knowledge, and technical skills when they start with a firm for various reasons why, time, commitment, capacity, or it may be a small firm, but it sounds like this is a way to help with that problem that are, professions kind of running into with training younger advisors. I think that it would be kind of interesting to know how would, maybe a firm, even larger than you guys, or even a Senior Planner that’s maybe silo help to do something in their own office like a residency program. Is it something that anybody could really apply, or is this unique to only Yeske Buie and the couple other firms that are around the country that have it?
Lauren: I think anyone could create a program like this, and I hope that more people do, because it has been really successful for us. Personally, it’s been a great learning experience for me just in terms of building a program like this from scratch and learning as we go. Our program is not perfect, and it probably never will be, and it certainly didn’t start perfect. It has grown immensely since day one. We jumped in, and we had two initial residents who were just fantastic.
They dove right in with us, and it helped us create it as we went along, and so this boot camp didn’t come around until after two rounds of residents when we realized we really needed a more robust training program that was more focused, instead of kind of ad hoc training as something comes up and a client needs it. It was very focused and intentional each week, and so I think anyone could absolutely start this, and my advice is just start it. Have an intention as to why you’re doing it and what your goals are, and then find the right person who’s willing to dive in and help you build it, and improve it, and be open to the fact that it’s always going to need improvement. The residents who are going through the program are the best people to help you improve, because they are living it. They’re living it day-to-day.
They know what they think could be better or could be changed or what’s going really well, and so we ask our residents constantly to provide us feedback for how we are doing, so specifically, let’s say on training, “How am I doing on training? Is this actually effective? Do you feel like you understand? How are we doing on the hiring process?” Once they come in after they’ve been hired, we ask for their feedback. “How was that hiring process experience? Would you change anything?” It’s just something that we want them to always be willing to share with us what they think we could improve because they are living it, and I think they’re really the best assessors of what could be different.
Alex: Yeah. That’s really interesting you say that, that not only are the residents getting a huge bit out of this, but Yeske Buie and its leadership team is basically making themselves better. You guys are learning how to hire people better, what’s a best way to train someone, so it’s both ends that are getting so much from this residency program. It’s not like, “Oh, come in. Learn everything”, and you go your own way. There’s really this two-pieced to having a residency program that can really just elevate both the residents that come through, and the firm as a whole, and that’s really unique.
Lauren: Yeah. I totally agree, and it’s so beneficial from all of the different sides, and one of our goals or our hopes is that it’s also benefiting the profession like I mentioned.
Alex: Yeah.
Lauren: Some of these residents, wherever they’re doing their financial planning resident position, they’re going off, and they now have this great experience to go do whatever it is that they have, whatever their passion is in the profession, and whether they’re going to work for another firm or start their own firm.
Alex: Yeah.
Lauren: We know that they’re going out there making the profession better, doing amazing things, serving clients, and that’s really exciting to think about too.
Alex: How many residents do you normally guys have like on a yearly basis? It sounds like people only apply once a year or is this a ongoing, “We’re taking new residents”, or how’s that kind of process go?
Lauren: That’s another part that is always changing. In a small business, in a small company, it’s dependent on needs and capacity for taking on new residents and new employees, and so we hired … I just counted in my head. I believe we’ve had 10 total residents at this point with four of them actively still working right now, and so it’s been a changing number and timing.
Alex: Wow.
Lauren: We hired one … The very first one was one, and then we had another one start a few months later. Since then, we’ve been hiring in twos, so in pairs. I believe our plan going forward is probably to hire two in the San Francisco office every other year, and two in the Virginia office every other year with those years alternating.
Alex: Wow.
Lauren: One of the reasons that the alternating years seems to work out is because as we hire a new round of residents, one of the parts of the program and one of the goals is that the residents also learn how to train. They learn about the hiring process. They learn about handing off their responsibilities and training someone to do what they’ve now been doing for two years, so the goal is that at the beginning of year three, the residents are training their replacements, so they are running with that boot camp process. They are building it out and scheduling the trainings. They’re deciding, “Who’s going to do the trainings?”
They’re doing a lot of the trainings themselves, and that, with the goal in mind that they learn how to train and they’re also again like I said involved in the hiring process. They learned what our hiring process is, why it is the way it is, and they can take that with them when they go or learn they don’t like that process. That’s also a valuable thing to learn what you may not like or not want to do if you’re going to start your own firm.
Alex: Yeske Buie is really one of the few that have this Resident Program. After someone graduates from that program and they’re now working at a firm, one would wonder, “What other things a young planner should be aspiring to, to help with their education as they go through the financial planning profession?” One thing that I recently found out about you is that you started a Master’s program recently at Golden Gate University, and I am so excited to hear more about that. What made you want to start or go back to school, and get this Master’s program?
Lauren: Yes, I did. I started earlier this year, and I am pursuing my master’s in Advanced Financial Planning with the concentration in tax, and so probably income tax and estate tax, but maybe just one of the two. I had been thinking about grad school for a while. It is actually one of the rungs on our career ladder at Yeske Buie. In order to become a Senior Financial Planner, you have to have an advanced degree, and part of the reason that that is the case is because we really believe that learning is so important, and the CFP designation is fantastic. It is really great information, and I heard someone refer to it the other day as like walking through three-feet of water for two miles, so it’s a lot of information, but it’s not necessarily a really deep dive into any of the specific areas.
Alex: Yeah.
Lauren: Part of the reason that I am back in school is because I want to become a Senior Financial Planner. I want to continue to advance in my career and on my specific career ladder, and part of the reason is that I also really enjoy learning, and I do feel the need to deepen my knowledge in certain areas. I would say the third part of the reason is part of Yeske Buie’s succession plan, and that Elissa right now is really the expert in taxes and estate planning at Yeske Buie. She has the most knowledge. She is always the one to go to if we have a question or if we have something that just can’t figure out, and of course, she doesn’t want to work forever.
Alex: Yeah.
Lauren: My goal is really to become the next expert in tax and estate planning, and to be the go-to person for all of our team members to help answer questions, or really take a deep dive into a client’s tax situation or estate planning documents to make sure we understand what’s going on in the nature of the effect of our recommendations on those situations, and so I started doing my research on potential graduate programs last year, and I was thinking before I had really gotten this clarity on taxes and estate planning, I was thinking maybe behavioral finance because I find it fascinating, and I will absolutely learn more about it some day.
Alex: Yeah. Yeah.
Lauren: I was thinking potentially an MBA in terms of being part of the succession plan that could be beneficial. Then, as I started thinking about it, one of the pieces of the decision is to make sure that it’s discussed with Dave and Elissa, and any other applicable team members to make sure the degree of pursuing is beneficial to me of course, but to the firm and the future of the firm.
Alex: Yeah.
Lauren: Yusuf got his master’s degree in economics recently, and he again is kind of teeing up to be the next investment expert at the firm, and that’s currently Dave’s role. Lauren, the other Lauren in our Virginia office recently got her graduate degree, and so I was talking with them, and talking with Dave and Elissa, and I really do like taxes, which is such a nerdy financial planner thing to say.
Alex: Of course.
Lauren: I had been looking at the Golden Gate Program and other programs, and it just became clear that the Golden Gate Master’s in Advanced Financial Planning was perfect. It had classes I was really interested in taking. It had classes that I really needed to take to learn more about specific tax situations that we are going through currently with clients.
Alex: Yeah.
Lauren: Even though I’m here in San Francisco, I decided to do the program all online because I really like to travel. My husband and I like to take vacations. We like to pop out for weekend trips, and I travel quite often for work for conferences or back to our Virginia office, and so knowing that I was going to do this all online, I did have some, I’ll say conversations with myself.
Alex: Yes.
Lauren: I’ve always been pretty good at setting my schedule and making sure I’m planning my week accordingly to get things done, and so that was one of the things I definitely thought about when deciding to do it fully online.
Alex: One thing that should be touched on is how you work with your firm to figure out what would be beneficial for them, and also you. Are there other education programs outside of this Master’s program that you’re also thinking about doing, or is it kind of like, “This is what’s needed for my role”? I know you touched on that a little bit.
Lauren: We all need to know everything in order to serve our clients as the best way we possibly can, and we simply cannot know everything. It’s just impossible. Things are changing every day, and so I think there’s an interesting approach to having it be a team-based approach. I still know about economics. I studied in my undergrad program.
I intimately know our investment philosophy and the reasons behind our investment philosophy and what we believe and why, and I know how we implement that investment philosophy, but I might not have the deepest knowledge on analyzing our actual portfolios and when to make changes, or why to make changes, or the market conditions, the deep economic market conditions that Yusuf and Dave can sit there and talk for hours about, which I do love listening to. At the same time, everyone in the firm has to know how to do a tax projection or how to calculate taxes, or how to think about a recommendation in light of the client’s tax situation, but they may not know the really deep information about, for example, I’m learning about 1031 exchanges right now in my class. Everyone knows what a 1031 exchange is, but there are a lot of nuances that go into, “When is it actually an exchange, and disposition of property?”, and I could go on and on because I’ve been reading a ton about it this week.
Alex: Yeah.
Lauren: I think it makes sense to me that everyone has a knowledge and is continually increasing and improving their knowledge in all aspects of financial planning, but that there are some experts when things get tough or when something gets really detailed, and you need somebody to help you just even think through it with a different brain that really understands that topic, and so I think having the people who have those unique skills when working together can be a huge benefit. In terms of other programs, currently, I don’t have any plans for a specific additional tax or estate planning program once I complete my master’s degree, but I do know that I always want to continue improving and increasing my knowledge, and so I’m sure down the line, there will be something else. I’m really, like I mentioned, really interested in behavioral finance and behavioral economics. I am really intrigued by the Life Planning program that is also available at Golden Gate University. If I could do all three of the concentrations and actually finish school ever, I’d probably add that one on.
Alex: I would for sure love to have you just be the student that stays forever.
Lauren: Exactly, and there are so many different things. I am interested in learning more about with this financial coaching that Saundra Davis talked about on the podcast recently.
Alex: Yeah.
Lauren: There are so many things that I’m excited to learn about in the future, and at the same time, right now, I’m focused on getting through my classes I’m in now, and then the next courses, so it’s exciting to think about the future, and then I come back and say, “All right. Let’s get step one done.”
Alex: One thing that I’d be curious as a listener to know is, is there any guidance to a young financial planner, or even senior on when is a good time to be pursuing a Master’s program, and if it’s a necessity as we grow as a profession?
Lauren: Yeah. I think it’s … I’m going to give the famous financial planning answer, it depends. It depends on where you are in your career or in your firm’s career trajectory, and I think it depends a lot on the firm you’re working for, and what they think and want, and what the future of the firm looks like, and what your role at the firm in the future looks like because a lot of it depends on what’s going to make the most sense for all of the parties involved, and so that includes you, and your family, and the firm, and the clients.
Alex: Yeah.
Lauren: Talking it through with your mentors, and your advisors, and your boss, and your colleagues, and your husband or wife, or parents, I think that’s really important to just make sure it’s going to work for you, because it is a big, big, big commitment like you said, and so you want to make sure that you’re committed and that you’re able to really soak in everything.
Alex: Yeah.
Lauren: There’s so much to learn, and really being there and present and able to really soak it in is going to be the … Whenever that time is, I think that’s the best time.
Alex: The next thing I want to talk about, you’ve touched on it a little bit when you were talking about being a part of the Master’s program of it counts as your advanced degree to becoming a Senior Planner at Yeske Buie. I know that that is huge at that firm, and that that can help with career track if ownership was on the table or being a part of a leadership team. I know we talked a little bit about this briefly, but being dispensable by 2020 for Yeske Buie, and I would just want to hear more about that and what that looks like for your role currently.
Lauren: Yeah. “Dispensability 2020” is Dave and Elissa’s phrase that they had been talking about for some time. Really, what it means is that Dave and Elissa would like to be dispensable, but not gone by 2020, and so dispensable means that they could go on a three or six-month vacation to South Africa and not have to be involved in any emails or any meetings, and know that the firm was going to run exactly as they would want it to be run during that time, and that everything was going to be handled the way it needed to be handled, and the clients were going to be absolutely taken care of to the top-level. That was something, it was a phrase that was thrown around, I think, yeah, before I even started working with Yeske Buie five and a half years ago. It was a goal at that time far off in a distance, and then we had some turnover with staff members, and they weren’t sure if it was going to be a reality.
Then, over the last few years, the term has started to come back up because there’s been a bit of an emergence of what we call the ‘Leadership team’, and so that’s Yusuf, the other Lauren, Lauren Mireles and myself, and it really emerged naturally just through some conversations and staff meetings, and has been developing and growing ever since, and so I would say the term ‘Dispensability 2020’ is kind of “Back on the table”.
Alex: That’s huge to really know that you are the G2 in your office. If listeners haven’t read that book, we’ll definitely put it in the show notes. I want to put it on the table that I don’t think Dave and Elissa are ever really going anywhere from this financial profession, but I do want to talk about a little bit more on what’s your perspective of knowing that you’re a part of something like that, that you’re the G2 and the next generation to be able to carry on the Yeske Buie name, and what changes maybe do you have in mind that would keep it going even longer thereafter you that you’re trying to implement now as they go through this transition?
Lauren: Yeah. It’s very exciting. It’s also nerve-wracking and anxiety-inducing. I mean, this is a big deal and it’s something that we do not take lightly in any way, shape or form.
Alex: Yeah.
Lauren: It’s such an honor to even be involved in discussions about potential succession planning, and now that we’re talking more and more about that, and the possibilities, and the timing, and what it might look like, it’s exciting, is really just the word that comes to mind. It’s something I’m very, very passionate about this profession itself, but also about Yeske Buie and about everything that we do, and everyone that I have the privilege of seeing or talking to in the office every day. I think we have such an amazing team, and it’s just really fun to be part of it.
Alex: Career paths often are mapped out differently for everybody. Was this on your career path or your three to five-year goals of something like this happening, or you just were embracing the change and go, “Me too”? Was this another moment like back when you were in college, “I’ll start the club”? What was this feeling like, because I know a lot of financial planners maybe jump into the profession, wanting something like that, and not until it becomes a actual thought that … Does it cross your mind like, “Oh my gosh. This can really happen”?
Lauren: That’s such a great question. I think your point is spot on. It’s different everywhere, and the owners of these firms are on all different paths and thought strings about how to do their succession plan and who it might be, if it’s going to be internal or external. Again, that’s something that just so depends on the firm, but I think it’s really important to know when you start with a firm, and I say no even if the answer from the firm owner on whether ownership is a possibility in your future is I don’t know. That’s okay.
Alex: Yeah.
Lauren: I think it’s just important to ask the question and see, “Do they have thoughts on their succession plan?”, and whatever their thoughts are, are those okay with you? The answer doesn’t have to be, “Yes, you can absolutely be on an ownership track right away.” I would say it’s probably never that answer, unless you’re specific … I would say it’s never that answer as a brand new planner joining a firm in an entry-level position, and so having those conversations and open dialogue about what the possibilities may be, even if the answer is, “There may be a possibility, and let’s just keep this conversation going every time we check in. Let’s check in every three or six months on what you’re thinking and what I’m thinking, and where you can be improving.”
Alex: Yeah. One thing that pops into my head when you say that is sometimes, aren’t there yet with their career tracks, or even have anything mapped out like that. What are your takes on that when you’re not a part of a firm that has that kind of set-up and those discussions are actually able to be had?
Lauren: I think there’s definitely a space for a younger planner to initiate those conversations, and I would say it needs to be done in a very appreciative and curious way.
Alex: Yes.
Lauren: Not in an entitled way, not in a, “Here’s what I want, so what are you going to do about it?” I think it’s something that’s important for us as people new to this profession and early in our careers to be thinking about our futures. We are financial planners after all. That’s kind of in our blood.
Alex: Of course.
Lauren: It’s important for firm owners to be thinking about their futures, and their paths to retirement or to succession planning, or to exiting the firm or the profession, but we can’t force anyone to do anything, so the best we can do is just be curious, and just ask, “What is your plan? What are your thoughts if you don’t have a plan yet?” Similarly, you touched on the career path piece, and I know that this is something that comes up, I think every NexGen event I go to.
Alex: Yeah.
Lauren: There are some sort of question, or topic, or concern about career paths. It’s either, “How do I build a career path for my new hire I just hired, or how do I talk to my boss about implementing a career path because we really don’t have one?” That’s another one where I think curiosity and initiative can really help, so asking what the thoughts are around building a career path or maybe if there are reasons why career paths don’t exist yet, or if they’re just personalized, and maybe you don’t know that they exist for other people, and just see what the firm thinks, and then to the extent that they indicate interest, and maybe just don’t have the capacity or the time, or even, they just don’t even know where to start, and so they’re stuck, maybe offering to take a stab at it. Talk to your friends and your colleagues, talk to your study groups, talk to FPA members, talk on FPA Activate on Facebook, and get ideas about what careers paths look like at different firms and why different things are included or not included, and see if your firm will let you work to just build the first draft, and then take that project on, because in my experience, that’s how so many things have happened at Yeske Buie, but also in other firms I know.
Alex: Yeah.
Lauren: If somebody has this great idea, and they have so many thoughts, and so many resources, and they have passion around it, and they’re willing to really get something started, even if it’s just the first draft that gets the wheels turning, and that can be really impactful, and especially for something like our Financial Planning Resident Program, that would be someone leaving their mark on Yeske Buie forever, even if they were graduating after three years.
Alex: I love the fact of someone having a first draft at it. I feel like our profession is constantly moving forward because so many people are taking the initiative to starting something, and I think it’s just amazing that you are talking about this, especially when it comes down to something like you said, career paths that’s huge amongst NexGen.
Lauren: Yeah. I agree. I think it’s something that’s really exciting for me to watch all the posts on FPA Activate or seeing people present at conferences, and all of these amazing innovations and new ideas that people have, and how we can learn from those and take them back to our day-to-day. The only other thing I would add about that first draft mentality is I do think it’s important to start with a conversation about it, that curious conversation, versus just showing up at your boss’ desk and saying, “Hey, I put this together because it doesn’t exist.”
Alex: Yeah. Yeah.
Lauren: You want to make sure there’s buy-in on both ends, and you want to make sure that you’re not making any assumptions, that you really know maybe there is a reason why something doesn’t already exist, or why something is done a certain way, and then maybe there’s a very important or impactful or grounded reason behind that, and so having those curiosity conversations first will really make sure that you’re approaching it with the right mindset, and that you bring back to your draft one with the right intentions behind it.
Alex: Of course. Thank you so much again, Lauren coming on and really sharing what Yeske is doing with their Resident Program, how you’re really taking on the next steps with your Master’s program, and how you’re going to be a forever student at Golden Gate, and then, just talking about how we can take next steps with our firm and working with them to make sure that we are becoming the best professionals that we can within our firms. I think it’s just really important the different things you’ve touched on today, and I think a lot of listeners are going to get a lot of takeaways that they can go show up on Monday to work, and really make a difference all over again, and so I just want to say thank you again for sharing all that with us.
Lauren: Thank you, Alex. It was wonderful chatting with you, and as you can tell, I love talking about this stuff, so thank you so much for allowing me the opportunity.

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Lauren Stansell of Yeske Buie gets interviewed by our guest host, Alexandria Cole. Lauren wasn’t sure she wanted to be in financial planning and just several years later is on track to be partner at her firm. Lauren Stansell of Yeske Buie gets interviewed by our guest host, Alexandria Cole. Lauren wasn’t quite sure she wanted to be in financial planning and now, just several years later, she is on track to be partner at her firm! At Yeske Buie, Lauren has been instrumental in creating and growing their Resident Program, a three year training program for new financial planners. Through the program, residents learn the nuts and bolts of financial planning and all areas of running a firm, including how to train others. The end goal of the Resident Program is not to stay with the firm long-term, but to be trained in how to do financial planning well. Lauren shares their approach to Residents and gives insights into what new planners can do the set themselves apart.
Lauren shares how important continuous learning is and how conversations at her firm led her to pursue a Masters in Advanced Financial Planning with a concentration in taxation from Golden Gate University. As a soon-to-be partner, Lauren shares how this influenced her decision to pursue her masters degree.
As the second generation of owners in Yeske Buie, Lauren shares why she is excited to buy into the firm and how the goal is to make the firm not dependent on the founders by 2020. Lauren shares her advice for other young planners who are interested in having conversations with their firm owners about buying into their practice.


What You’ll Learn:

What the Yeske Buie Resident Program looks like
Skills Residents and new planners need to have
Importance of continuous learning
Factors to consider in pursuing advanced degrees
What it’s like to be the second generation of a financial planning firm
How to have conversations about being a successor

 
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Hannah Moore clean 49:05
What You Need to Know About Succession Planning https://financialplannerpodcast.com/yafpnw-what-you-need-to-know-about-succession-planning/ Tue, 09 Oct 2018 19:49:13 +0000 https://fpaactivate.org/?p=11716 https://financialplannerpodcast.com/yafpnw-what-you-need-to-know-about-succession-planning/#respond https://financialplannerpodcast.com/yafpnw-what-you-need-to-know-about-succession-planning/feed/ 0 Christine is the VP of Operations at FP Transitions, a business that focuses on helping advisors build a seamless succession plan that benefits founders and successors. We’re covering succession planning from the point of view of a lead advisor or founder and of a financial planner who might want to become a successor. Are you working to build your own succession plan? Are you an associate planner who wants to be part of your firm’s succession plan? This episode is for you!

It’s not a secret that succession planning is an emotional, often tension-riddled topic. So many times, a practice might have a succession plan in place with good intentions, only to have it go awry. This is largely due to mismanaged expectations, a lack of understanding and respect from all parties, and a lack of teamwork or synergy among the planners involved.

That’s where Christine Sjolin comes in. Christine is the VP of Operations at FP Transitions, a business that focuses on helping advisors build a seamless succession plan that benefits founders, advisors, and everyone involved at the practice.

We’re covering succession planning from the point of view of a lead advisor or founder and of a financial planner who might want to become a successor. There’s so much learning that every advisor can do when it comes to succession planning, and this episode dispels myths that stunt the growth of financial planning practices across the country. .

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Ownership is a state of mind. – @FPT_Christine on #YAFPNW

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What You’ll Learn:

  • How to pursue a succession plan within the practice you work for
  • How to talk to a practice owner about a succession plan
  • Why a practice owner shouldn’t view a succession plan as a “timeline until they leave the firm”
  • How to manage expectations as a planner who works for someone else’s firm
  • How to be a rainmaker for yourself
  • How small changes can make a huge impact as you move toward creating a succession plan
  • Why your “why” matters if you want to be part of a lead advisor’s succession plan

 

Show Transcript

Ep119 Transcript


Hannah: Thanks for joining us Kristine. Can you tell us what your role is at FP Transitions?

Christine: I’m Vice President of Strategic Development and Operations at FP Transitions. And basically what that means is that I have a very messy hat closet. I oversee operations. I do our own recruiting. I handle corporate relations. I’ve got folks here that help me out with each of those things, as needed. And then just trying to envision the future of our company.

And I work very closely with our CEO, Brad Bueermann, and with David Grau Sr. to try to figure out what we’re going to be doing in the next two to five years. Brad takes the 10-15 year view. He’s our great visionary. And then, I try to dial back into more achievable milestones as we get to that long-range view.

Hannah: So you really understand these new planners who are coming in and buying practices, the messiness of owning a business?

Christine: Oh, absolutely. Absolutely.

Hannah: One of the questions that I have … I mean, you guys deal with succession plans. I talk to so many advisors who are really interested in being a succession plan. But one of the questions that I’ve heard, or maybe that hasn’t been explicitly asked sometimes … it’s kind of at the root is, how do I get my boss to view me as a successor?

Christine: This might sound a little cheesy, but ownership is really a state of mind. For the advisors that I talk to that get into that minority stake, you ask them, what were they doing before they became a partner? What were they doing before they became an owner? They acted like an owner before they were given the opportunity.

So, what is the secret sauce to having a founder who offers you an investment opportunity and lets you into the equity circle? Well, you have to be acting like an owner anyway. You need to excel at your job. You need to not be afraid to put in those extra hours.

But it’s not just about hours, it’s about understanding and keeping the culture of your business. It’s about identifying opportunities and finding solutions. And you need to be able to communicate and have open communication with the owner of the business, so that they see you as a contributor, and they see you as an asset.

I hear from advisors that say that they are doing that, and it’s still not working. Keep doing what you’re doing. Don’t change … If you are taking ownership of your clients and taking responsibility, and you’re taking pride in your work, and you’re striving to excel as a financial advisor and a contributor within the business, then by all means, keep doing that.

It’s really a state of mind, and that is going to serve you well in your current position, or in a future position if you have to go some place else. It can be challenging … an entrepreneur to … well, on the one hand just to pay attention, and to realize that it might be time for succession planning, and that you are there and you’re interested and you’re capable.

Because … entrepreneurs is looking at the business and always trying to get it bigger and better and stronger, and that’s how they were able to build that business that you’re now part of. So, part of it is just getting their attention on the topic, and then making your case that you are an owner. And you have to do that with your actions before you can do it with your words.

Hannah: One of the things I hear is, you know, I’m trying to do this, but the owner just isn’t there. How do you know if the owner is ready to have these conversations? Or that the owners in the place, they’re open to us?

Christine: That’s a really interesting question, because you can’t do it based on age. We certainly had founders that have come to us in their mid 40s … or, my favorite is a 34 year old advisor who said, “I need a succession plan.” We’ve gotten an abundance of advisors who start way too late.

I think you need to approach it in a problem-solving manner. A lot of businesses as they start to grow, they extend beyond the abilities of a single producer, or even a single owner. And if all of the other elements are right, and the advisor is of a certain age, and they have a certain tenure in the business, then you can certainly approach your boss, and say, “Hey, we’ve grown x-amount in the past year. We’re taking on this amount of new clients. I am handling XY and Z responsibilities. I’m opening new accounts. I’ve mentored a para-planner. I am taking on seminars to bring in new clients. I think it would be really beneficial for our company to … let’s think about new owners. I would love to invest in the business, and I think that as a team that we can take this business even further together.”

You need to be able to build a business case for being a successor if you are unsure that your boss is there. But the important thing is having open communication, and approaching it from a problem-solving kind of scenario, especially if you don’t know if your boss is at that stage yet.

Hannah: So, you just said something really interesting, that you need to build the business case for the succession plan. And you work with so many different successors … Well, both sides of it, not just the successors. But what is a successful business case for proposing a succession plan for like your boss look like?

Christine: Well, I would say that it comes back to that question of growth and client communication. One of the things that I hear from the founders that tips their hand when it comes to biting the bullet on a succession plan, is that they hear from clients, or they hear from prospects, that they’re concerned about the career horizon of the founder.

And both the founders, we call them G1, the first generation. And then G2 or G3 for the successors. So, it’s kind of an easy shorthand that we use. But the G1s and the G2s will come together and say that it is really great client messaging when the plan is complete, to say, you know, if something happens to Sue or John, then there’s Pat, Sam, and Steve that are here that can continue to serve the clients. And they’re owners and they’re invested, and they’re not going anywhere. They’re part of the business, they’re part of my succession plan. And that is a tremendously powerful message to send the clients.

We’ve got planners that come to us, and they notice that they’re not getting new prospects, because they have a 40 year old professional who’s got a $50,000 stock plan that they’ve just received from their employer. Or they’ve got an inheritance from someone in their family who’s passed away, and so they have a windfall and they need to invest it, and for the first time in their life, they’re considering actually paying for financial advice.

So, they come and see a financial advisor, that they found on Google, or they had a referral from, but they’re looking at their time horizon as 20, 30, 40 years, whatever their life expectancy’s going to be, and the wealthy do live longer. And they’re looking at a financial advisor who’s a bit long in the tooth, and asking, “Well, how long are you going to be here, because I don’t want to have to change financial advisors over and over again?”

So, being able to present a good argument for improving that client message is one tack. The other is recognizing the growth of the business, and recognizing the capacity that you have to serve clients, and what you can do together better as partners. But first and foremost, you have to be acting as an owner, even when you’re an employee.

Hannah: So, one of the questions that comes up a lot is, do I need to be out there being the rainmaker, finding new clients? If you’re going to be an owner, in your opinion, do you need to be out there finding clients? Is that part of what it means to think like an owner?

Christine: I think especially in this industry, every job has a bit of a sales component in it. But I’ve been reading through the latest book on entrepreneurship by the Gallup folks, and they summarize it really nicely, that in any business that has grown and thrived, even in divisions within a larger corporation or organization, there are three personalities that grow and that lead a business to be really a sizeable consideration, rather than a tiny little boutique place.

And, that’s the alpha-conductor, the person who understands all of the daily operations and is really the sausage-maker. They have the alpha-rainmaker, and then the expert. So, the rainmaker’s just one part of growing a thriving business. And when we’re putting together succession plans, when we’ve got teams that are working with us to broaden that ownership base, I mean, sometimes it’s a one-to-one. There’s a single G1 and a single G2, but usually there’s a couple advisors that are participating in that successor role.

So, somebody needs to be a rainmaker, and that’s true in all of these businesses. In some circumstances, by broadening the equity circle and bringing in owners that are going to share the burden and the responsibility for making sure that the business runs smoothly day in and day out, that can free up the founder to just focus on relationships and rainmaking, and not have to be engaged on a day-to-day basis with making a sausage.

So, you’ve got employees that are reliable. You’ve got next-gen advisors that are maintaining the client relationships, they’re conducting the trades, they’re handling the paperwork. Maybe somebody’s interested in the marketing message to bring you into social media in an effective way. The founder, the G1 can focus on rainmaking. In the future, the successors need to at least build a team so that they have that skill set among them.

But the personality and the skills of a businessowner who takes that financial advising practice from nothing up to a million dollars in revenue and 200 clients, that’s not the same skill set that your successors need. And as next-gen advisors, you don’t need to be all things to all people. You do need to be adaptable in dynamic. But it’s important to have a couple of things that you do really well and recognize where you can leverage your skills with your partner’s, with the founder, with employees or interns.

So, you do need to be able to generate business. I mean, that goes without saying. But whether the business needs to transfer from a rainmaker to a rainmaker, it’s not as direct as that, it’s not as simple as that. So, we have a lot of conversations with founders actually, to try to make sure that they understand that the skill set that they’re looking for in successors is not the same skill set that they brought to make the business, and that’s fine. You don’t need to have builders in the successor pool, you need to have growers, you need to have managers.

And so next-gen advisors need to absolutely recognize that sales is essential. You need to be able to close the deal. And I don’t think anybody overlooks that. But you need to be able to collaborate and recognize where you do have shortcomings and leverage yourself with really great partners. And I think that’s part of making your business case too, is to approach your owner and say, “We’ve got two of us here, who make a great team, and we would like to build our future here with you. How do we get ownership of the business?” That can be the start of the conversation.

Hannah: The attitude is shifting of newer planners that I talk to who say, “I don’t want to be in sales.” Or they’re kind of … not fearful of that rainmaking, but they’re just not quite sure that being an owner is right for them. What would be your advice to those people who are really trying to find their place, if you would, on if they want to even be an owner?

Christine: Yeah. That’s a great question. I think it’s really important to figure out what ownership means to you, and what are you worried about with ownership? What are you resistant to? For a lot of our G1s, they got into this industry and really they boot-strapped it, and they came into the business when it was picking up the phone book and you’re dialing for dollars.

And as a next-gen advisor, you’re looking at that legacy going, “Oh boy, I don’t want to do that. I don’t want to have to start from nothing. And I’ve got student loans to pay, I can’t go without a paycheck for even a month, let alone four or five.”

So, what is it about ownership that is daunting or is distasteful to you? Before I came to FP Transitions, I worked in a couple of other fields, but for entrepreneurs the whole time. And the thing that those businesses had in common, was a lot of financial advisors is, a passion for service and a passion for the community.

I ran a vocational school and I worked in our local wine industry, and those businesses are so far removed from financial advising, but they have that common thread that they are passionate about their community, and they’re passionate about their field.

And I think a lot of financial advisors share that. And when you get into a field where you’re able to connect with your community, connect with others, and really provide an impact on their lives … financial planning isn’t all altruistic, but there are definitely warm fuzzies that come with working with your clients. You can focus on that and then define ownership however you need to.

The culture in each practice that we work is as unique as the people within it. And so you might have a firm that has a culture that is very sales-oriented, that is very aggressive, and if that’s not what you’re interested in, then you don’t want to be an owner in that business.

And it’s challenging and it’s daunting to get to that stage in your career, in your job at a certain place, and recognize that that culture isn’t what you want to be doing. That, that culture isn’t a place that you want to be for the rest of your career. And to have the courage to walk away, especially if you’ve invested four or five years with a firm and you’re not feeling it.

Of course, you don’t want to be an owner if the culture isn’t right, but that doesn’t necessarily mean that you’re not a very valuable part of the leadership team some place else, where the interest and the ethics are more aligned.

Hannah: You talked about succession planning, and I think one of the things that … Well shoot, now even being an owner of my own practice, I hear succession plan and I immediately think it’s a timeline to get rid of me. Does there need to be an endpoint for the original owner in the succession plan?

Christine: Not necessarily. For a good amount of G1s that come to us, if it’s not client-driven, it’s their own timeline-driven. And they’re starting to have notions of their own mortality. So they start a succession plan knowing I want to get out in five to ten years, and they have a timeline. But, that’s not necessarily a given, especially with teams that approach us when the founder is younger. It’s generally more of a growth plan.

And so, we’re actually trying to get the industry to talk about succession more in terms of business sustainability and business growth, because even if you let somebody into the equity circle, that doesn’t start a clock ticking for the founder.

And, we’ve got younger and younger advisors that are coming to us in order to create a team, to acknowledge the contribution and the commitment of their younger advisors, and to bring them into the equity circle so that they can all be stronger together, they can play off of each other. It provides flexibility to the founder, and there’s certainly an option that they could leave, but I would say, the minority of plans that we create have a fixed timeline as far as the departure of the founder.

Back in April, at retreat, the FPA released their report from the survey they did on succession planning, on the succession challenge, and it was still clear that most advisors, they recognized that they needed to do a succession plan but they weren’t doing anything.

And I think part of that reason is that misconception that, if I start a succession plan that means I’m on the way out. So, that’s why I think it’s important for both founders and the next-gen group to consider the steps that go into a succession plan as a growth strategy, and not the end of any single advisor’s career.

The same steps that go into building a strong and cohesive team, a team with alignment, are the same things that, yes, as a byproduct, do create a viable succession plan. But the near term outcome, and the near term goal is often that they can support their growth, and they can sustain their business, and they have more resilience within that team, because they’re all contractually locked together.

So, the long-term outcome is yes, succession plan. And certainly a good amount of founders are beginning with the end in mind, as you should. But the near-term outcome is that you have a better team to grow the business stronger and to create better alignment between your key employees, those most valuable employees that are also licensed advisors, and the founder, who has built that business from scratch.

Hannah: One of the things you keep talking about is growth strategy, and I talk to a number of advisors and they have quite a few situations where you have an older advisor, and they’re not really growing, they have a great life, and they’re getting a really good income doing what they’re doing. Does growth need to be part of a succession plan?

Christine: Growth is a necessary part of a succession plan, because that’s how both the founders and the successors are going to increase their own wealth. I think the next-gen advisors who come into a succession plan are doing it to further their own careers. And as a byproduct of that, or perhaps the leading factor of that, they want to be able to earn more on their own. And you can do it better, it’s the concept of building on the shoulders of giants, right?

If you’ve got a business that is running well, and the founder recognizes that, and is able to take some long weekends here and there, then the successors can come in and say, “Hey boss, you’ve built a great business. I want the opportunity to build a great business. And I want to build on top of yours. So, let’s see where we can take this in the next 10 years. I want to take the lead on that. Let’s do this as a partnership. Give me a chance.”

And use stronger terms if you need to, but for both the founders and the successors to really get the financial gains, they need to be growth-minded. More so the next generation than the founders, because they’ve already grown it. They’ve shown that they can do it. They’ve earned jobs. And that’s part of making the business case as well.

If you’re in a next-gen position, you need to, at the very leas, pay the lip service to your founders, but recognize that they have built this business from the ground up. And it may not be perfect, and there may be parts of running the business that your G1 is not great at, but you need to acknowledge that whatever the weaknesses may be, warts and all, they’ve built a business that you now want to be an owner of. And that’s part of the goodwill and the good faith that you can bring to the table when you’re saying, “I want to be an owner.”

The G2s that I was speaking with, I had a nice long conversation just last week, family succession. They say even though we’re the kids, you can’t be entitled to ownership. We didn’t feel entitled to ownership. My dad could have taken this and sold it out to somebody else. We have to earn it. I had to earn the right to get here, and I need to earn the right to stay here. And it’s part of, ownership is a state of mind. And recognize the work that has come from the founders to get where you are.

Hannah: What would be your advice to the person who’s kind of on the fence of whether or not they’re thinking of starting their own firm, versus pitching the idea of a succession plan to where they’re working now or possibly trying to find somebody who’s looking for a succession plan?

Christine: When you start to feel like you’re swimming upstream, what do you do? If you’re not getting anywhere with the conversations with your founder, how much do you continue pushing? Or do you just go and open your own? I mentioned that I handle the recruiting, and I get to wear some of the HR hat here. And the expression that comes up in these kinds of situations is, when expectations turn to hope, that’s when it’s time to end it.

Hannah: Oh, gosh, that’s good.

Christine: I don’t know where that came from, aside from Brad Bueermann, but Google will probably tell you. When you’re working with somebody, no matter what the relationship is, if it’s your superior that you want to have try to make some changes or give you some opportunities or recognize your contribution, and your expectation is that you’re going to go out and bring in a great client and they’re going to come in and be part of the firm and that’s going to generate a longterm relationship, and you’re going to get credit for that, then that’s terrific. You should be building the business, and bringing in clients and doing a great job, and getting credit for it.

But when you start to come into the office every day, and you’re hoping things are going to be all right, and it could go badly … Well then, you need to take a very close look at yourself and have the courage to recognize what it is. And, maybe that leads you to open your own RIA, if you are an entrepreneur, and you have that within you. But the solution might be otherwise to recognize what it is and have a candid conversation and say, “I think my career continues elsewhere.”

Next-gen advisors are very hard to find qualified talent, and if you can find a place that is going to be the right cultural fit for you, then you can thrive.

Hannah: I know people are listening to this, and they’re like, “I’m qualified talent, and I cannot find anywhere to work.” Where do people go to find those great fits?

Christine: That’s one thing that I wish we did better here, matchmaking for the G2s in an employment capacity. You’ve gotta look at it the same way that you would for finding clients. That’s the place that you have to be a rainmaker for yourself. The place that I tend to go is, just referring into recruiting firms, go back to your College of Financial Planning Alumni Association and make connections there.

The FPA is a really great resource. Attend meetings and let people know that you’re looking to be part of somebody’s business, you want to be part of somebody’s succession plan. Make sure that you have clear expectations and that you communicate those to the people that you’re networking with.

If you want to be part of a business and part of a succession plan, define what that means in a cover letter. Are you coming into the business because you want to take it over? Or are you coming into the business because you want to be a valuable part of the team, with a longterm plan to join the equity circle, and continue growing the business into the unforeseen future? But you need to be able to be a rainmaker for yourself when it does come time to make that decision.

Hannah: You talk about expectations with succession plans, and I know you have so many great success stories, but what are realistic expectations for the G2 advisors, for the next-gen advisors to have walking into a succession plan?

Christine: One of the things that we really try very hard to do when we’re putting together a succession plan, we end up doing some compensation re-engineering. It’s not unusual that clients come to us and they’re using an entirely commissions based structure, a revenue split for all of the employees. So, we do a lot of re-engineering to put them into a flat salary, a predictable salary-based compensation with bonuses that are based on measurable business objectives.

The goal when we do that is to not create a paycut for anybody, because that doesn’t generate good faith right off the gate. But in the process, a reasonable expectation is during the first couple of years, you’re not going to see a lot of changes financially.

You need to be prepared to invest and that’s going to take some give and take, but one of the things that we do … and I, of course can’t speak for other consultants or other … if you go to a local attorney and have things put together, but we create the mechanism for the next-gen to invest in the founder’s business, and then we model out the cashflow so that the business has a profit line so that those note payments can be made.

And in the first couple of years, the majority of the profit that a successor would receive does get committed to the note payment. But as the business grows … and this is why I say growth is essential for both the founders and the successors, as the business grows then the successors will see their profit distributions increase, and a smaller portion of that is going to go to satisfy their note obligation to buy out the founder.

So, that’s why we do the work to make salary predictable, so that you can meet your needs and have a comfortable lifestyle. That’s incredibly important, especially in this industry. But we also make sure that the salary obligation is equally predictable, so that the team can work together to drive profits, to grow profits. Because if you don’t have your compensation within the business structured in a way that is fair and predictable, then it’s very hard to grow the business and to be profitable when you have multiple owners.

So, one of the first things that I would say to expect is small changes on the outside. One of my favorite case studies is a team of a founder with four junior advisors, who had come to us after going through all kinds of management psychology exams. And they had gone to at least two other consultants who had put them through this battery of tests before they started building a plan for them.

And the psychologist had said, “This team won’t work. You’re not compatible.” Or, “You’re not complimentary.” Or whatever it was. “You could invest however many thousands of dollars in a plan, but we’re predicting that it’s doomed to failure on the outset, so keep that in mind.” And they went, “Well, nuts to that, I’m going to go to somebody who says it’s possible.” And they eventually found their way to us. And we said, “Well, if you guys are committed to working together and you want to do it, let’s see what we can put together.” It’s their boat to row.

So, we worked with them. It was about a $2 million business, in terms of value. So, we worked with them, we engineered the compensation, we normalized the compensation, we created a profit-line, we helped to structure the note. The seller did take the note personally, so there wasn’t big financing involved in the initial traunch. And there usually isn’t, so that’s why we have to have profitability coming through to the bottom line.

But the four junior advisors all got an equal stake of ownership, and then they signed their documents, and they went on to run the business. A couple months later we heard from the founder that he was doing groceries or something on a Saturday, and he drove past the office, and he saw all the lights on, and started shaking his fist, “Those boys, they left all the lights on. I bring them in to be owners, and they can’t even control the electricity.” And he pulls into the driveway and goes into the office. It was an office that was in like an old house, in a historic neighborhood, that kind of thing.

And he goes inside and he sees that there’s three of the guys that are sitting in there working on financial plans and cleaning up documents, and they’re in the office on the Saturday to do the work, and that’s why the lights were on. And the founder’s like, “Oh, hi. I didn’t expect to see you here.”

But they all knew that they made client commitments, and that they were going to keep the clients happy, and they were going to make sure that they hit their revenue targets that they had all created, so that they could get their profit distributions. They needed to make sure that they got all of the work done, so it wasn’t everybody, but they each had their own little story afterwards. But they were in the office on the Saturday to make sure that everything got done, much to the founder’s shock and surprise.

So, kind of a funny little anecdote on the impact that being an owner can have on an employee mentality. You’re just a little bit more committed. That story is a fun one, because the founder did … that succession plan actually lasted about four years. And then the founder had gotten a bit of a taste of extra freedom, and accelerated his timeline to retire.

So, we started out with four successors, one of them did fail. So, the four other owners, the founder and the three remaining successors had a conversation with the one person who wasn’t a great fit as an owner. Their mentality actually didn’t jive with the rest of the team. And they went back to their shareholders agreement and then they bought out that one junior partner. But the other three remaining advisors did accelerate and they bought out the founder after about four years, because the business had been growing and they had been working so well.

And the founder got some extra time out of the office and went, “You know what? I have a couple of hobbies that I’ve neglected, and I’ve been able to enjoy them in the last four years, and I think I’m going to enjoy them a little bit more.” So, they just went forward and called the bank, and they took over the whole business, three equal partners at the end of the day. And now, they’re leading the ship all on their own.

Hannah: When people become part owner, do they get to be part decision maker at that point, or how does that usually work?

Christine: There’s a lot of concern from founders around giving up control. It’s important to have a seat at the table. When you’re in a founder’s position, and you open up the equity circle to let somebody invest in the business, you have to listen to their suggestions. You have to listen to their opinions. It’s just being polite, right? But when you’re talking about opening up a 10% investment opportunity, then the founder still owns 90% of the business.

In that kind of a situation you still have all of the control, and so the minority partnership is a great opportunity. For some people it might be very frustrating, but it’s about creating teamwork, and synergy. And the founder will maintain the decision making … will have the decision making seat. But even as a minority partner, you need to be able to speak up and have your voice heard.

There’s a team we worked with down in Florida who was totally terming when they addressed the dynamic between the three advisors, the founder and the two successors. And one of the successors had said, sometimes it was frustrating to listen to the G1 go on and on about how, “I built my business from nothing, and I know what I’m doing.” And the successor, said, “I come up with what I thought were great ideas, and he’d just shoot them down.” And it’s frustrating because sometimes it turned out that he was right.

And there is a lot to be said for experience. And it can be very hard for a next-gen advisor who’s got 5, 10 years of experience to go, “You just shot me down.” But the founder might have 25 or 30 years of experience. And so, they do get to make the decision. And the important thing is to keep the right perspective.

And if you’ve come up with an idea that gets shot down, then approach it from a different angle, if you really believe in it. And, see if there’s a different approach that you can take to get to that goal, that whether it’s a business development idea or a technology investment, or deviating into a different niche, you’ve gotta be able to make the business case for it. So, you should have a seat at the table, you’re an owner, but for most plans, until you get to that 50-50 level, the founder retains decision making control.

Hannah: If somebody’s really interested in succession planning, where can they go? What are the other resources that they need to be reading or tapping into to really prepare themselves for these conversations or being a successor?

Christine: I don’t want this to sound, usually self-serving, but it’s going to come across that way …

Hannah: I keyed you up.

Christine: David Grau Sr. wrote a really great book a couple of years ago, Succession Planning for Financial Advisors, and there are so many people that we talk with that start their conversation with, “Well, I read David’s book …” And it’s a good tool, because it talks about some of the different strategies, and dispels some of the misconceptions on succession planning as the plan that starts the stopwatch for the founder.

And so it’s actually … I’ve been trying not to say this for … “How can I get my boss to think of me as a successor?” “Give him a copy of David’s book.” David is the founder of our company. He’s seen a lot of these kinds of struggles and changes that an entrepreneur goes through building a business from nothing, and he’s focused exclusively on financial advisors his entire career.

So, the information that’s in that book speaks to founders and successors, but really a lot to founders, explaining the mechanics, the financing, the benefits, the incentives. He explains it all in a lot of detail. So, that would be the first, the most powerful resource that I would send people to.

I’d also go to FPA meetings where you’ve got advisors that are talking about the topic, and just see what kind of conventional wisdom is out there, and then go back and read the book again.

Hannah: Oh, that’s great. Well, is there anything else that you want to be sure that we cover?

Christine: Well, one of the things that I hear from a lot of folks is just, bloom where you’re planted. If you can make the most of your situation, and be an owner, and create the relationship with your founder so that they can see you as a successor, because you’re just thriving where you are, that’s what I hear from a lot of the successful successors, is some variation on, bloom where you’re planted.

For founders that aren’t sure where they’re going to look, there was a podcast that I was listening to just the other day about CEOs, and they referenced a study that came out just after the crash, it was like a 2009, 2010 academic study on corporate performance when CEOs changed. And the study found that when the CEO of a publicly traded company was sourced internally, was promoted internally, the performance of that company was somewhere 20-30% higher than the firms that brought in an outside CEO.

A corresponding figure, the CEOs that were sourced externally were millions of dollars more expensive for these companies to recruit and to hire. And this is looking at Fortune 500 companies, so these are looking at multi-national businesses, right? But, the same kind of concepts can be applied, looking inward at the financial planning industry. A lot of founders are looking at their successors and going, “No, I need to bring in somebody from the outside.” Or, “I’m not ready to let this go, and I’m just going to sell it externally.”

But if you’re trying to find a person that’s going to do the best job for the business, the internal recruit, the internal successor knows the most about your business, knows the most about your clients, and can generate stronger, better returns for your business, than necessarily bringing somebody in from the outside.

So, for the successors, bloom where you’re planted. Make the best of your situation and think like an owner. And if you’re a founder, take a look at your internal staff, because it might be that the most effective person to continue your legacy and to build the business on top of your shoulders, is that person that you’ve already hired and trained and indoctrinated into your culture and to your client needs.

Hannah: Well, thank you so much for joining us, Christine.

Christine: Thank you, Hannah. It’s been very nice talking with you.

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Christine is the VP of Operations at FP Transitions, a business that focuses on helping advisors build a seamless succession plan that benefits founders and successors. We’re covering succession planning from the point of view of a lead advisor or foun... It’s not a secret that succession planning is an emotional, often tension-riddled topic. So many times, a practice might have a succession plan in place with good intentions, only to have it go awry. This is largely due to mismanaged expectations, a lack of understanding and respect from all parties, and a lack of teamwork or synergy among the planners involved.
That’s where Christine Sjolin comes in. Christine is the VP of Operations at FP Transitions, a business that focuses on helping advisors build a seamless succession plan that benefits founders, advisors, and everyone involved at the practice.
We’re covering succession planning from the point of view of a lead advisor or founder and of a financial planner who might want to become a successor. There’s so much learning that every advisor can do when it comes to succession planning, and this episode dispels myths that stunt the growth of financial planning practices across the country. .


What You’ll Learn:

How to pursue a succession plan within the practice you work for
How to talk to a practice owner about a succession plan
Why a practice owner shouldn’t view a succession plan as a “timeline until they leave the firm”
How to manage expectations as a planner who works for someone else’s firm
How to be a rainmaker for yourself
How small changes can make a huge impact as you move toward creating a succession plan
Why your “why” matters if you want to be part of a lead advisor’s succession plan

 
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Hannah Moore clean 47:35
History of Financial Life Planning pt 2 https://financialplannerpodcast.com/yafpnw-history-of-financial-life-planning-pt-2/ Tue, 02 Oct 2018 21:07:01 +0000 https://fpaactivate.org/?p=11696 https://financialplannerpodcast.com/yafpnw-history-of-financial-life-planning-pt-2/#respond https://financialplannerpodcast.com/yafpnw-history-of-financial-life-planning-pt-2/feed/ 0 Today your host, Hannah Moore, sits down with Susan Bradley, Elizabeth Jetton, Carol Anderson, and Rick Kahler to talk about the evolution of financial life planning, and why each of them views this “Financial Planning 2.0” as this profession’s future. We are excited to have Susan Bradley, Elizabeth Jetton, Carol Anderson, and Rick Kahler join us to talk about the evolution of financial life planning, and why each of them views this “Financial Planning 2.0” as this profession’s future. Each of these individuals has played a colossal role in growing the financial planning profession with their work in financial life planning.

Susan Bradley, CFP®, CeFT®, is the founder of the Sudden Money® Institute. She is an advocate for empowering financial planning clients to develop processes and tools for the personal side of money. She focuses on people going through transitions, and how they can seamlessly move forward in a positive way with their finances.

Elizabeth Jetton, CFP® is a former president of FPA, founder of Elizabeth Jetton, Inc., and co-founder of TurningPoint. Elizabeth is a professor at Golden Gate University where she teaches a class on financial life planning. She writes, speaks, and mentors new planners and works with all financial planners interested in the financial life planning movement to help them deliver true value to their clients.

Carol Anderson, M.S., is the founder of Money Quotient, a non-profit organization focused on helping financial planners guide their clients to a more successful relationship with money. Money Quotient focuses on education and research, and Carol is deeply involved in research projects on the benefits of financial life planning.

Rick Kahler, CFP®, is the owner of Kahler Financial Group. He is also a writer, researcher, educator, and advocate for financial therapy. Rick has served in several leadership roles both through the FPA and other national financial planning organizations.  

Every member of this group has been involved with the history of the financial life planning movement and each of them has incredible insights to share. Tune in as they discuss everything from the first meeting of the Nazrudin Project, to the importance of community and the future of the financial life planning movement. You don’t want to miss this episode!

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Financial life planning is financial planning done well. – Rick Kahler, CFP® on #YAFPNW e118

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What You’ll Learn:

  • What the beginning of the financial life planning movement looked like
  • What the shared expectation of financial life planners is within the profession
  • The importance of community within the financial planning profession
  • How financial planners can care for and encourage one another to make an impact on their clients’ lives and grow sustainable businesses
  • How financial planner emotions impact their ability to grow as a planner
  • The idea of being and doing – and how they differ in financial planning
  • How different financial life planning is now than it was 20 years ago
  • How these industry leaders view financial life planning, and how the practice will evolve in the future

 

FPA Retreat

 

Show Transcript

e118 Transcript


Hannah: Well, thank you guys all for being here. So talking about the history of financial life planning, you know before we can really talk about the history of it, What is financial life planning?

Rick: Roy Diliberto would say its financial planning done well.

Elizabeth: I would say, you know, the answer to that question is part of the history and it’s evolving and we are looking for way I think to. Integrate the different aspects of financial planning into something that’s whole this are greater than the sum of its parts. And I think we’ve sort of used financial life planning as a way to describe tending the whole person, you know, in various ways. Bringing in the interpersonal skills, the communication to address not just the external resources of money but the relationship with money.

Carol: I would agree with that and I think it’s also a melding of qualitative data gathering and goal setting with the quantitative data gathering and goal setting process as well. And I think it’s actually through that that really engages the client so that they take ownership. It becomes much more meaningful process for them.

Susan: I think we need to step into working on the personal side, the interior side, the human side, it also calls on the advisor to be different in to step up. And to build a presence that wasn’t required before. It was pretty straightforward in the early 80s when I started. It was more about numbers. It was the training, anyway. And we didn’t have a discipline to be present, human being to human being. So it’s something that is it’s driving the evolution from many layers and many points of view. And it is something that I think by nature is evolutionary. It is never complete.

Carol: I agree with that.

Hannah: So this idea of financial life planning. When did it start? Where does the story start?

Carol: For me, I think it’s different than the rest because they were financial planners and then began to embrace a more holistic perspective. And I don’t want to be speaking for you. But that’s my perception that you really were drawn to having deeper relationships with your clients and really serving the whole person.

I did not come from a financial planning background, but came from a definitely had some experience in financial services, but I came more from the academic community and also a real desire to see financial education throughout the country and was determined to be sort of an evangelist for that. And so that was sort of the purpose for my going back to school and to getting some extra education and adult learning theory and psychology and consumer economics and so forth. But I was very disappointed to learn that financial education did not equate to higher levels of financial well-being.

So that kind of set me back on my heels and I tried to think we’ll what what does work. And so this is kind of that journey is what brought me to this process of discovery and qualitative data gathering and goal setting. And melding lots of different disciplines into a process that really speaks to the client and I feel like it’s a exploration that’s ongoing to really find out how to do it best. And then I came into the financial planning community through kind of a twists and turns. I won’t go into that story, but it was delightful to find this core group of financial planners that were really engaged in this. At that time it was still very controversial. But then there were many that were very eager to have a process for doing this.

Rick: I think it’s really hard to say exactly when it started. I remember I think it, Retreat 1989, that we had a psychologist speak to us by the name of Nixon, I believe. And I remember walking out of that session just thinking, “What is he doing here? We’re number crunchers. This is dangerous stuff.” I think that was well before 1994 when we say George Kinder and Dick Wagner got together and did their presentation.

Elizabeth: I have a question and some of you may know because I was sort of late to the party in some ways. I don’t think I started registering it till maybe ’97 when I started reading ‘Money and Soul”. The Money and Soul articles in the journal. And that’s how I discovered Nazrudin But was the summit that Dick put together where Jacob Needleman spoke, was that before Dick and George did that presentation?

Rick: That was, I think, that was Retreat 1995.

Elizabeth: Okay.

Rick: And the reason I remember that is when I turned 40 that … I turned 40 at Retreat.

Elizabeth: Because I always associate that as one of those those tipping point, turning points where a lot of this was bubbling and I wasn’t sure the chronological order of those two things.

Rick: And Needleman spoke and Olivia Mellon.

Susan: And Olivia Mellon, yeah. Well in 1993, there was a conference in Washington, DC. And I just found the lapel button recently. So I know that it was 1993. A little flag. And it said “financial literacy,” I don’t think they use that. But it was some kind of a personal finance summit. I think that’s what it was. And there were quite a few people there. I would guess it’d be like 500 plus people. Some senators and that sort of thing and that’s where a lot of the Nazrudin people met originally. And that’s how I think when I first met Dick. And Spring Leonard was also one of the founders of Nazrudin. There were three of them.

And then after ’94, there was a letter that was sent out and it was from the three of them Dick Wagner, Spring Leonard, and George Kinder. And I really didn’t know any of them very well. But there was an invitation and I think the invitation is to me an important part of the beginning of all of this. And it basically said, “We have an interest in the psychology and spiritual side of money. And we think you might share that interest.” So it was a real open kind of if you’re interested. It had no real context. It had a date and a place. And I remember Dennis Means was one of the contact people in in Denver, because I remember five of us ended up at five different airport Hilton’s and he was picking us up at the airport Hilton. Well, we were at five different ones and this is before, you know texting and that kind of a lot of confusion.

And we ended up in Estes Park as the first Nazrudin. But it was that … the spirit of that invitation that said, “Something bigger, something else is happening. We don’t quite know what. But we think you might be part of the exploration.” And I think they sent out 70 some letters. And if my memory is correct, 33-ish of us just showed up. And most of us didn’t know each other.

Rick: And that was in 19 … 90.

Susan: 5? Was it?

Rick: So that was after.

Susan: Yeah. ’93 was in Washington, DC and then the retreat presentation. And then I think that’s what it was. And we were using Needleman’s book as sort of the starting of all of this. So he and John Levy and a couple of other white knights of this wisdom were around and we could look forward to them to help guide some of the conversation and the thinking. And I would say at the end of that first one we decided who was in to continue the conversation. And that was the outcome was that we continued. It was never intended to have a mandate or rules of the road or anything like that. Except for the very broad ones that we have.

But it wasn’t sense back in the late 80s and early 90s, and many of us were doing different things. And it was kind of lonely. You know, you were trying something with kids or with women or with literacy or something and it was happening. And that thing in DC it brought some of us together. So it was. It was a need, an internal need that was spoken and then some organization. And it’s like a good garden. You just need a seed, and some soil and water. And you keep going and you got it.

Elizabeth: It was one of those people lonely out there somewhere doing something and again kind of late, for my own reasons, to the community. And that feeling of, “Oh, I do belong.” That sense of not being alone in those thoughts. And to be able to listen in to how it was being articulated in a way that maybe I hadn’t found yet because it was just me talking to myself and doing something. And I think that was a shared experience.

And I think we’re describing what has been called a field. That there is a field that it does have an emergent quality. And they definitely these folks led that field and certainly Jacob Needleman’s work spoke to them and they saw themselves. And I think that for me, as you were talking Susan, just to be reminded that how amazing it is that the Nazrudin community resisted what is so often the urge to create more structure and mandate and a goal and a this and a that. But the wisdom to understand that the very thing we’re dealing with here requires lots of spaciousness and messiness as a reflection of the very thing which is the relationship with money. So that took some courage and wisdom I’m sure at times to resist the urge to over structure.

Susan: I think at times, too, there were attempts to structure because it’s what the culture does. And it never worked. And so is was an experiment and we just kept coming back and kept at it. And everybody got whatever they got and it was enough to keep it moving. Yeah, there’s a lot of courage in that, you’re right.

Carol: There’s another event that I think was important. It was very important to me in that kind of foundation of life planning. And that was a kind of a think tank that Bill Anthes put together. And I think you were there Susan.

Susan: Yeah.

Carol: And Dick was one of those that organized that. And so Bill Anthes was very intrigued by the life planning movement, but he was very skeptical of it. And so he brought together … he invited leaders of this movement from two different organizations. And one was the FPA and then others was the this International Society for Retirement Planning that I was involved in and that was how I kind of got this entree into the financial planner world.

That organization was very multidisciplinary in terms of our financial planners, but there were human resource, educators, researchers. It was very small but a very diverse population in the membership. And so Steve Shagrin was a member of both organizations and knew Bill Anthes quite well. So Steve was charged to bring people from the community from the International Society for Retirement Planning Community and then Dick was to invite people from the FPA, Financial Planning Community to this kind of summit.

And our first assignment was to define life planning. And there, you know, several brought up ideas. And there was I thought a wonderful definition that we adhere to in our organization because I just think it covers all the bases really. Well, it was proposed and then the whole group accepted it after it was discussed. And there was a great white paper written about that and I think it came out in 2001. And I thought that was pivotal. It was still pretty controversial, but it was it did a great job of sort of explaining it to people in the financial planning community that didn’t have an understanding. And I sort of felt after that the tide changed. It started to change. You know, that even if they didn’t want to embrace it themselves at least it was accepted and it wasn’t as controversial anymore.

Elizabeth: I have such a vivid image in 1999 at the last ICFP annual conference. George Kinder was a keynote speaker, and he had just published “Seven Stages of Money Maturity” and the room was packed. And he, in his George way, asked everybody to turn to the person sitting next to them and share a difficult memory around money. And people started to just get up and walk out the door. And they kept getting up and walking out the door. And I could be overstating it, but it felt like half the room walked out. Mostly men.

Those of us who were so excited to be asked to do such a thing were hanging on every word. And I have often remembered that moment and my own moments where I felt like, “Am I about to walk over the abyss with something?” Of the courage he had to stand in what he truly felt in his heart was important. And he didn’t respond to it. He just kept doing it. Just offering. It was a gift. “I’m giving an offering.” And that in itself was just a modeling that was really profound. But I often think back and think I would not be surprised if most of those same people who walked out have been through the two days Seven Stages Workshop by now. I know they have, right?

Rick: I think it was around the same time. Was it 2000 at Naz? That he did the two day at Naz.

Elizabeth: Yes, 2000. Yeah.

Rick: And I think there were 75 there.

Elizabeth: There were 75.

Susan: Yeah, I was there.

Rick: I went through that. And I think that was kind of a turning point, too. Because it was a real introduction to so many people in Naz of the two-day. And I know from that we had some trainings I think where you and I met on the desert with George. And just seems that a lot of things started in motion around that time.

Elizabeth: I think that’s very true. That was an interesting one because it was, I think, that was the biggest Nazrudin gathering up to that point possibly. It brought a lot of leaders. I remember Roy Diliberto was there and he was sort of an unlikely person. It hadn’t really attracted the professional leadership and that was a shift. And Rick’s describing, you know, for several of us we then did a … continue training with George. And that group bonded deeply over, we call it “the desert experience”. But that in itself … We are telling a story of a garden that sort of seems to keep having seeds. You almost didn’t know we’re there. You know, sort of sprouting and dropping another seed. But that led to a group forming called the Pioneers. And Dick Wagner was part of it, and Rick and myself, Marcy Yeager, off and on Lisa and Dave, Troy Jones.

Rick: David Brand.

Elizabeth: David Brand, Gail and Rich Coleman, Michael Smith. And for us that was our own place to stew in the juices. We worked. It was that experience of, “We’re not a study group. We’re here to work on our own, our own money lives in a safe place.” And also we thought that perhaps we were there to form, we didn’t know, a guild? Kind of a place where we could nurture these things. We really thought we were there to create a thing. And we went right to structure really early on. Completely over-coached and facilitated, I think.

But what was beautiful and organic is that out of that certainly Rick went on to write wonderful books and collaborate with other people and bring new knowledge in. I sort of took the path into leadership and bringing this into the vision for the profession. I hope a little bit. But each of us we ended up not hardly doing anything together, but sort of launching in organic ways from having been in that relationship.

Rick: And we came up with a lot of things to do that we decided we shouldn’t do.

Elizabeth: We did.

Rick: Go into business together. Should we have a certification? No.

Hannah: Well, it’s … so painful things that are really standing out. One, this isn’t that long ago. That’s what shocking to me and, you know, we talk about financial life planning now and it’s … I mean most people kind of buy into this idea now. And you guys are talking about early 2000s. And I mean that’s not that long ago.

Carol: That’s right.

Hannah: And so just to see the progression of that’s happened in the last 15 years. But the other thing that’s kind of standing out to me is, you know when there’s really good ideas … like you’re saying talking about that garden. They just kind of pop up. And that’s what’s kind of really neat. Is everybody has their own version. Not version, their own interpretation of life planning. Did you know, not that there were expectations when you started meeting together, but what were you hoping would be the outcome when you started meeting at the Nazrudin project? Maybe we’ll go back to the 90s. Like late 90s maybe.

Susan: I don’t think there was an outcome. I think individually we were there for our own reasons. Collectively, there was a sense of being nourished, a sense of community. Lots of variations of where we met and how many people were there, and who was the leader, and all that. And it was always a volunteer kind of thing. But it’s something would … it was … back to the Garden. It was like fertilizer and it was just there. And you take it as you take it and what happens… happens.

Personally, for me, the Sudden Money Institute was created late at night. And I’m not a late-night person. So I was probably just saying “yes” to get out of it and go to bed. But Dick Wagner kept pushing about my book, “The Sudden Money” book. “What am I going to do now?” We all know that’s a famous Dick Wagner thing. And I said nothing. I’m going to go back to my full-time practice. And we all know that that was never okay with Dick. And he pushed and pushed. And I said, “Here you do it if you think it’s so important. Here’s the book.”

I really was resistant and he wouldn’t do that. And he pushed and really that was in one night, completely unexpected to me, never had an idea of carrying this beyond the book. It was born and that was March and we had our first Conference in June of 2000. So it just took a few months and it happened. And he showed up and he showed up at many of them and was a participant, an instigator. He always had a little bit more, to “do a little bit more.” Do a little bit more one way or another, which is, at the end of the day it’s a good thing. And I think that story, although that is my story, many stories like that have happened. And it could be a conversation between any group of people and it’s just rich.

Rick: And that was one thing that really struck me early on was at these gatherings had no expectation and no agenda. And that was so foreign to me. That was so foreign to me. And I remember when the Pioneers nation to spend some time with, whether it’s eight people or 50 people. And there’s no speaker and there’s no program. And this is nuts. How can this possibly be productive?

Carol: Definitely felt that way, too.

Rick: Going from that to relaxing into it. That, “Well, I guess the most important thing is who’s there.” And I think that was part of Dick’s original invitation was, “Well, the right people are here. Let’s see what happens.”

Hannah: This idea of community is very … I mean, can you all speak to that? Like …

Rick: The what community?

Hannah: Or just this idea of community. And how everybody has his own ideas. Like I look just with the people here in this room. I mean the impact is profound on the profession. Would that have been possible without a community of other financial planners?

Rick: No, no.

Susan: No.

Carol: And I think, too, part of it is there’s mutual support and appreciation for each other’s work. There isn’t a real competitive feeling about it. You know, it’s a … it really is freeing to have those kinds of relationships where you don’t have to pretend to be something you’re not or try to be protective. We can just explore and get lots of encouragement and be an encourager as well. So that it is key, community.

Susan: You know, I remember in the early days when I would go to my … I was with an independent broker-dealer. And I was so brand-spankin’ new. And I’d go to these conferences and the kings, a few Queens, but mostly the kings, were the high producers. And you knew them by their numbers. And you knew them by their status and the standing ovations that they got from whatever. And there was really no sense of community. It was just competition. It was, “Someday I want to be like that. And what does it take to be like that?” And that was the conversation. And to want something else … there wasn’t a lot of room. I’m sure there were other people there that had that feeling, but it was never something that … it was like trying to strike a damp match. You know, it just wasn’t going to happen.

So to move out of that. I went independent. But to move out of that and find these kinds of communities. And really the way to find them was to go out of your local area back then. And it was the ICFP before FPA. For me it was ICFP, then Nazrudin. But that’s where you found the bigger conversations in the national groups.

Elizabeth: One thing I would add to that is that there were clearly some folks in these early days of Nazrudin that were in touch with, “How do you have transformative dialogue? How do you have different conversation?” It doesn’t just happen because where you can go be in a gathering of people and just lock down into what your expectations are and your assumptions about how you’re supposed to show up. And so it takes different structures and those were present in Nazrudin or they evolved or they emerged, they weren’t … I wasn’t at the first ones, but by the time I came and in the late 90s those processes were there. Didn’t always work perfectly but the invitation continued that this is a place where we’re going to honor each other and what you have to offer. And it was prototyping. You could sort of bring  … I remember Susan bringing her book and you know offering that. That we could offer and get feedback or offer into the whole and see what happened.

But that is a form … there is a structure in that. It’s not nothing. How to hold the space so that people can do that. And that speaks to something that’s just been going on in the world that was also emerging and found its way into our profession to help us, I think, at the right time. It seems to me that that was another piece that made the forming of that community more functional and …

Carol: Well, is this part of what perhaps, too, the art of hosting techniques and the training, too?

Elizabeth: Mm-hmm (affirmative).

Carol: Because I think the purpose of those is how to have meaningful conversations and it’s a very democratic process as well and very effective. So, I think that somehow someone was exposed to it along the way and then adopted it. And I think several of us have been to those trainings and incorporated it, other processes into the work that we do.

And you know and I just remember also when I went, it was like these different frameworks for thinking about things. It just gave me so much more insight just because it presented topics and just and processes in a different way that I’d ever thought of them before. The light bulbs just started going off. But I think that’s part of what Nazrudin did, too. It was a place to bring new ideas and share them with people and challenge one another in our thinking. So it was very stimulating, very stimulating. Rich place to be.

Rick: It wasn’t happening for us individually in our practices. And I mean, I’m thinking how important community was because at home we were the mavericks or with our employees and with our clients. There was no place to hang out with.

Carol: It also became a place we could practice together. We could learn by doing and talk about it. Traditional study groups, you really couldn’t, really wasn’t a place you could go for that. But that’s part of what the Pioneers were and I think part of Nazrudin was this is the place to bring the how am I doing this? How am I … Here’s what’s going on and I’m not sure I’m comfortable. The kind of working on self, but also the process around it. What’s it going to look like? How’s it going to get balanced with the quantitative? All those kind of things we still hear from the young new folks that sometimes come into Retreat. They’re asking those same questions that we wrestled with I think early on, too.

Susan: Is it fair to think of community as a container? As like Nazrudin does have structure by the way, Roberta Lee Driscoll, Mamma Naz has taken care of things for years for us so we don’t have to think too much. So there is some structure. But it’s almost like you go into containers or tents. And within that space there’s an expectation that shared that’s what part of the community is. There’s a respect and a something familiar. But even here at Retreat when you were leading the opening circle the other day, you built the container again. And it’s been built year after year, but it’s important to create that, to remind us who keep coming back and to those who come in this is what this space is like.

And this is a little more formal. A lot of work went into getting all this together. But once we’re here it’s a time to lighten up a little bit and have more deep-hearted conversations and not be talking about necessarily, you know, what your AUM is. I’m sure those conversations happen and why shouldn’t they? That’d be okay, too. But I think … And at the Sudden Money Institute we work on being a community of practice. So there’s a give-and-take and there’s a shared work product. And it’s a safe place to say, “I wish I had done better on this. Can anybody help me?” That’s a pretty important thing. You could do that here. You can bring a problem like that to Retreat. You could bring a problem like that to Nazrudin and hopefully lots of … I’m sure, you know, the other ones as well. So I think that we build these communities, abstract as they are, but it starts as I listen to all of us, starts to feel like there’s something almost a physical structure to it when it’s not quite there.

Carol: There’s actually a word for that. Basho. Ba-sho is both of the creating of the physical space and the energetic space that is the container that can hold that kind of energy. So it’s a real, it’s a thing.

Susan: Basho.

Carol: Basho. Creating the Basho.

Susan: Where does that come from?

Carol: I’m assuming Japanese. Sound, principle, and concept: Ba, the Ba. It’s also part of the theory of dialogue. It’s sort of embedded in all of this. So I love the way you describe it, the container. And as you were as you were talking about it Susan, I’m thinking that I actually think part of financial life planning, and what we were learning in that community, was teaching us how to create Ba with our clients. That part of financial life planning is creating a space. Creating a container where safe, rich conversations happen, because they weren’t happening before. How do we create something new and it’s with great questions. It’s with silence and deeper listening. It’s setting the physical space. It’s taking the few minutes before, all the things we’ve worked with together in our different ways we play with this to to create space.

So it is interesting in reflecting that what we were doing and creating our community was also informing the practice of financial life planning.

Rick: It was very experiential. I’m thinking, you know, a lot of us come from a very academic, left brain side as “I’m going to do, I’m going to do.” And reflecting about upon it with the space in the community, which were words that very foreign to me. Is it was learning to be. You know, it was actually experientially practicing and learning how to be with people. And to be with myself so I could learn to be with clients. It’s a very different agenda from attending a conference. I mean PowerPoints were almost banned from Nazrudin.

Susan: Absolutely.

Elizabeth: Absolutely.

Carol: I think it was a wonderful platform for everyone to get more comfortable with emotion as well because it was a kind of a free space to explore that in very … not a space that financial planners went into. And even in our personal lives, I know for me because of a family background and whatever, that was an area that even though I knew how important was on an intellectual level, there was kind of fear of emotion and being very contained. So that I think with having the dialogues with one another and exploring these issues together that it did help us to kind of explore and push out our comfort zones.

Susan: It accelerates our growth. And the idea of being is abstract; doing is concrete and measurable. But when you’re practicing or being aware of being, it’s pretty solo. But when you’re with a group that talks about it, you can see into yourself. You experience better from somebody, of the outside and you learn from behavior of others or the option of choice with others. So there’s a real acceleration in the most gentle way that happens. It’s funny. I would never have put that word out there. This is a kind of a conversation that lets you look at something that looks like a rock and you find out that it’s a diamond, you know what I mean?

Elizabeth: You know, I’m just in sitting with this lovely group of people, we’re an interesting sample because we are all in this container, financial life planning, and doing very different things within it. Which is also its nature and part of, you know, why Dick loved to describe it as the garden. That there isn’t one practice or model or process, which is kind of I think what’s beautiful. How the way we talk about it and the language is evolving and how we’re thinking about it that it’s not a one thing and it has different expressions and components. And I think we’re getting better at finding ways to talk about that and hold all of it together. And it will be very exciting to kind of see how that keeps unfolding.

Susan: It had occurred to me that it … in a larger sense of community, there’s lots of different communities. That if you keep the community’s integrity, but keep your doors open. There’s a flow back and forth. And not only for other people who want to come in, but even for us to learn from each other. The continuous flow. And I think that’s what protects the vitality. If you’re all in separate, you know, tents with limited supplies and waters and you know in scarcity, it’s very hard to thrive and to blossom. But if you have the free flow, that’s when I think it just gets far more fun.

Elizabeth: That’s the attitude that really supports community, too.

Carol: For sure.

Hannah: So we look at the time, 1999 was the Kinder talk where everybody’s walking out. We’re in 2018, almost 20 years later. How would all of you all describe the progress of financial life planning in the last 20 years?

Carol: Well, it’s definitely a concept that’s much more accepted now. I would say from my perspective it’s not controversial. That I think most all planners would say there’s real value to a life planning approach. And I think there’s still a lot of room to grow in terms of the number of planners that they definitely are not resisting the idea any more, but those that have actually have implemented a process that would be defined as bringing in a more holistic perspective. I think a lot of planners have the heart and the intent, but maybe not a real structured process so that all of their clients do get a taste or an experience of that. I think there’s lots of ways to do that. But you know that perhaps it’s a level of comfort with having those conversations might be holding them back.

Rick: We’re starting to see it push into academia, which I think is pretty critical for the growth. We’re seeing certificate programs in financial life planning, financial therapy. It’s very embryonic right now, but we’re starting to see that happen. And just on a personal note, it was mentioned in the beginning … somebody mentioned money scripts and I hear that a very common term. And I flashed back to the phone call that I was on when Ted Klontz said, “Well, yeah. So and so calls them life scripts. Why don’t we call them money scripts?” And just to think how ubiquitous that term has been.

And I remember at a Nazrudin gathering throwing out therapy, the idea of therapy and financial therapy. And there’s just like a recoil, even from that community. Like, “oh no, we’re not going there.” And you know how that’s growing in acceptance. So it’s amazing how far it’s common 20 years.

Carol: I think the broadening of the interdisciplinary nature of it does draw. We’re seeing the application that really coming from communication and behavioral and psychology and social psychology and adult learning and change studies of change and all of that is useful and informative and into so does keep expanding that garden of knowledge that allows us to build practices and tools and models and things to, you know, new arrows in the quiver. And this notion that I mentioned it earlier in a session that I read somewhere and I loved it. It’s not just having more arrows in the quiver, but it is the archer, the quality of the archer that brings the power to the tools. And being able to be directive and effective.

And I think that’s something we’re all sort of saying in different ways. But that to me is more newly accepted. This notion that the being, the archer, the planner. And you talked about it Susan, of having a role and having to show up and be different. I think that’s a more recent acceptance and unfolding and attention really being paid to that. We’ve talked about it for a long time, but it feels like it’s getting cred.

Hannah: It’s interesting to me. You look at financial planning’s background and it was about bringing in different disciplines into one thing. It was about bringing in the estate planning and the insurance, and everything like that. And now what’s fascinating to me is I’m hearing the same thing about life planning. It’s about how do we bring in all the technical to the psychology, to all the various academic theories that are out there and disciplines that are out there, to better serve our clients. There’s a lot of parallels.

Susan: One of the interesting things about it is that you can’t create the kinds of things that we’ve all created from inside the industry. You have to go outside. And you have to be an explorer, a scout, a curator, all of that. You have to draw from the sciences. You have to draw from disciplines that are brand new, disciplines that are ancient. It’s the whole thing. And then you bring back what it seems to be useful, and then you play with that and you integrate it. And it work, it doesn’t work. And then you go out and you find some more.

I think we’re getting to a point where it will be time to … give me some room on this … where institutionalize, which is kind of a contrarian here for this discussion, but to it 20 years from now, but more like two years or five years from now with the age of acceleration, maybe, this becomes a norm. As you enter the profession you don’t just get one thing but you maybe get others or you you adhere to or you belong to different study groups or you find places. And this conversation will be so normal they’ll kind of laugh that we made a distinction.

Elizabeth: Mm-hmm (affirmative).

Carol: Yes, that’s wonderful.

Susan: And then we would have been cathedral builders and it would be built. It’s done. But for now, it looks like we’re just one generation of putting a couple good bricks in there and mortar. But possibly we’ll live to seeing this be more normal. I can’t wait for the day that I call some of you up and say, “Did you see that on the news?”

Carol: But I think the reference to the college programs that Rick made is really huge and even though you know we can get CE for these topics, but it’s still not required to pass the CFP test. But more and more the instructors in those courses are really wanting to expose their students because they see that this element is really the key to their success as financial planners. So they’re really looking at their students as whole people and as professionals that will really be successful. So they are introducing it into their coursework, even though they know they don’t need that knowledge to pass the CFP test.

And also those younger generations are so hungry for this. It’s just … it’s not foreign to them. You know, those generational characteristics really Jive, you know in terms of what life planning offers them and they really embrace it. So I think in terms of what’s next, I think it’s really will build and be just the way it’s done.

Rick: There’s been the pockets, as you’re talking of the training the experiential because that’s so different from the academic. And you know what Susan’s created, what you’ve created, there’s certificate programs. There’s the designation that you’ve come up with. There’s a new designation of Certified Financial Therapists that will be popping up. We can argue whether the designations are helpful or not, but it’s a completely different type of training than, say, what the CFP program has offered. And I’ve been critical of the CFP program for not incorporating more of the exponential. But I just had the thought, as you were talking, you know, it’s a financial component and it’s an exponential component and they both belong.

Carol: Right. I just came out of a conversation … and this is a great kind of intellectual conversation, but I actually don’t want the CFP board to take … to go too far into this. I don’t think that’s their job. I think they should own the technical. And I do think we’ve influenced, financial life planning has influenced them. They’ve brought in communication, but that’s partly why. They are not equipped to do experiential and they are not the experts within that realm. And they are not to be the holders of the whole garden of knowledge. And I have a real resistance to them really going there a whole lot more.

What I love is seeing it … I wanted in the halls of Academia. That’s where I want it. That’s where knowledge lives and grows, and gets tested and you know, we play with it and can do things with it. And so I really sort of love how it’s submerged. But I got into a pretty healthy argument about it. But that’s exciting.

Susan: That’s funny.

Carol: Yeah, pretty good argument about that. But we all were hearing each other and I think it was like, “No, we all agree. They should have the communications component. They should give credit, CE credit. But there is a journey and I do think we would all agree that because it’s experiential and we are really talking about wholeness and integration, that is not a novice set of competencies and skills. You can begin to read about it and understand it and but it does require practice.

Susan: Yeah.

Carol: And so it’s, in the helping profession they call that clinical reasoning. And novices are not expected to exhibit clinical reasoning. And that sounds like a hard term and it’s much more. It’s really describing the wisdom ability to bring in the technical, interpersonal process, self-awareness, and the wisdom that comes with doing and learning. And that’s a quality of this and that’s partly why I’m resistant to it being part of that certification of the CPP. That’s a foundational, technical entry point. And then we help through all these other ways through new academic programs and offerings. That’s kind of how … that’s personally how I’m sort of envisioning it and it’ll surprise us all how whatever really does happen.

Susan: Yeah. I think it’s a big part of it. I think the CFP is a technical change model, a technical model for managing finances. It’s beautiful. It’s wonderful. I don’t regret having the CFP and doing that work at all. And I think it should continue but you’re right. I think you you stay in your unique ability. And you get better and better and better at that. And you don’t need to … almost sometimes feels like a land grab. You know, “I want everything.” And that’s not how a territory thrive is by doing that. So hopefully there’s a recognition.

I will say something about all the certificates and certifications. And I resisted it for 12, my first 12, 13 years. There’s something about the structure that’s demanded around one of those when … you don’t do that lightly. And you have a continuous demands to maintain. And so eventually you reach a point of rigor and a point of, I don’t know, a structure of completeness that you couldn’t have gotten to if you weren’t really pushed into that. It’s not an easy space and there’re many days I wish I had never said the words because of regulations and that kind of thing. But you know, so be it. And I think there will be more. But these specialized areas of practice with the CFP as a floor, as an entry point, because people do hire a financial planners for financial reasons, they walk in through the financial door.

So in my point of view, you have to have that technical side. But then you integrate as best you can in the personal side and the combination,  the synergy of the those two halves is the human. And however you reach that expertise on each side, it’s the combination. And I think there’s probably areas of practice that we can’t even imagine right now that will come out because of all the technology and the way we humans live on this planet 5 years from now not 50 years from now.

Rick: I’m reminded as you talk of how common this is to us. I mean we’ve been baked in this. We’ve been hanging out together forever. And I remember, I don’t know ten years ago Elizabeth. You told me, “Rick, not everybody is like us.” And I was reminded recently in the course I was teaching, one of my students said, “I’ve been in this business for 19 years. I have never run into anybody like you.”

And we were teaching the emotional side and I told him I said, “Well, I am not that unique.” There’s four or five hundred, a thousand of us nationwide that are hanging out. But it just struck me. How can somebody have been in financial planning for 19 years and had never been exposed to what to us is just normal. I mean, it’s still amazing how far we have yet to grow.

Carol: Right. Yeah.

Rick: That’s the truth.

Hannah: So looking at the history of life planning, you know the audience for this is new planners. What would be your hope for new planners as they look forward to, you know, 40, 50 years of their career in working in life planning. What would be your hope for them?

Elizabeth: That they have wonderful questions, you know? That they. They plant seeds, discover seeds, and nourish them. I love what Susan said about hopefully we’d get to discover that we’ve been building a cathedral all along and another one will replace it. As we learn … as you’re saying, Rick, you know, as we learn more about how humans work and what works, I don’t wish them no struggle because as Susan’s beautiful symbol of the butterfly that struggle in the … what is that stage? In the chrysalis, that struggle is part of the ability to survive.

And so I don’t think any of us wish anything but good struggle and informative, and the will, and the courage, and the mentors, and the tribe, and the community to support what they need to emerge. I guess that’s kind of what occurs to me.

Rick: I was thinking my hope for them is that they come to the struggle earlier than what I did.

Carol: Right.

Rick: I’ve often said that I had the gift to my children of the personal work that I’ve done is that maybe they’ll be in therapy half as long.

Elizabeth: Well, I think there’s a whole lot of intrinsic reward for financial planners that embrace this more holistic approach, whatever you want to call it. And that becomes kind of the inner motivator to embrace and grow in this and just bring so much more joy to their work. They, you know, it’s really amazing to touch lives and change lives and that in itself becomes kind of the impetus to just keep going and growing.

I, you know, my personality is to feel like I need to really be perfect at something before I do it and there’s just you know, the preparation is endless. And my advice is don’t do it that way. To, you know it’s kind of stepping out into an unknown territory for a lot of people. And there’s that a ton of training and support that’s out there to help build confidence. But the most important quality is this caring about the client and this intention to serve them and to get to know and understand them and enter it into it with a spirit of curiosity and caring.

And it’s amazing that that may be the only thing you need, you know. Systems and processes are great, but it’s sort of that’s the bottom line. That’s the most essentially ingredients. And hopefully that will give individuals, planners some confidence that they can do it.

Susan: In addition to all the beautiful things that have just been said, to come into this profession taking care of yourself. Who you are, the person who shows up for your clients is essential.  Learn that it’s okay to not know answers. Learn to be curious. And don’t push yourself so hard that you hit some kind of burnout and you see your clients as distribution units or as the number of people that you need to see in the week and that sort of thing. That dehumanizes not only your practice, but yourself.

There’s something very beautiful that happens in this profession that I’ve not seen in other professions around the world. You really have the opportunity to make a difference way beyond yourself, but you can’t lose yourself in the process. And that’s hard in the beginning when everything is new and there’s a full plate and there’s always people who want more and more and more. But knowing how to find your pace and keep your pace. I think that’s the way you have a long life with your profession and you get to achieve the goals that you want. The  burnout of the new is detrimental to everybody. Not that I’m speaking from experience.

Hannah: Was there anything that we missed?

Rick: I’m sure there’s plenty. Probably go on for many hours.

Hannah: Great. Well, thank you.

Elizabeth: Okay.

Carol: Yeah, it was a pleasure.

Elizabeth: This is lovely.

Carol: Yeah.

Elizabeth: We should do this more often.

Susan: I was thinking we didn’t even have a fire in the middle.

Elizabeth: I know. I should have brought my fire. Paper fire.

Hannah: Thanks guys.

Susan: Thank you for doing this. That’s really a great experience.

Hannah: Absolutely

Elizabeth: I hope you can factor out my Game of Thrones phone message thing.

 

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Today your host, Hannah Moore, sits down with Susan Bradley, Elizabeth Jetton, Carol Anderson, and Rick Kahler to talk about the evolution of financial life planning, and why each of them views this “Financial Planning 2.0” as this profession’s future. Susan Bradley, CFP®, CeFT®, is the founder of the Sudden Money® Institute. She is an advocate for empowering financial planning clients to develop processes and tools for the personal side of money. She focuses on people going through transitions, and how they can seamlessly move forward in a positive way with their finances.
Elizabeth Jetton, CFP® is a former president of FPA, founder of Elizabeth Jetton, Inc., and co-founder of TurningPoint. Elizabeth is a professor at Golden Gate University where she teaches a class on financial life planning. She writes, speaks, and mentors new planners and works with all financial planners interested in the financial life planning movement to help them deliver true value to their clients.
Carol Anderson, M.S., is the founder of Money Quotient, a non-profit organization focused on helping financial planners guide their clients to a more successful relationship with money. Money Quotient focuses on education and research, and Carol is deeply involved in research projects on the benefits of financial life planning.
Rick Kahler, CFP®, is the owner of Kahler Financial Group. He is also a writer, researcher, educator, and advocate for financial therapy. Rick has served in several leadership roles both through the FPA and other national financial planning organizations.  
Every member of this group has been involved with the history of the financial life planning movement and each of them has incredible insights to share. Tune in as they discuss everything from the first meeting of the Nazrudin Project, to the importance of community and the future of the financial life planning movement. You don’t want to miss this episode!


 
What You’ll Learn:

What the beginning of the financial life planning movement looked like
What the shared expectation of financial life planners is within the profession
The importance of community within the financial planning profession
How financial planners can care for and encourage one another to make an impact on their clients’ lives and grow sustainable businesses
How financial planner emotions impact their ability to grow as a planner
The idea of being and doing – and how they differ in financial planning
How different financial life planning is now than it was 20 years ago
How these industry leaders view financial life planning, and how the practice will evolve in the future

 
FPA Retreat
 


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Hannah Moore clean 1:00:58
Disrupting Portfolio Management with a Flat Fee Business Model https://financialplannerpodcast.com/yafpnw-disrupting-portfolio-management/ Tue, 25 Sep 2018 20:18:27 +0000 https://fpaactivate.org/?p=11687 https://financialplannerpodcast.com/yafpnw-disrupting-portfolio-management/#respond https://financialplannerpodcast.com/yafpnw-disrupting-portfolio-management/feed/ 0 Scott MacKillop, CEO of First Ascent Asset Management, never thought of himself as a disruptor in financial planning until he became one. As a career changer, Scott began working in the investment management space. Several years ago, he began to ask why investment managers charged a percentage of assets instead of a flat-fee, even though […] Scott MacKillop, CEO of First Ascent Asset Management, never thought of himself as a disruptor in financial planning until he became one. As a career changer, Scott began working in the investment management space. Several years ago, he began to ask why investment managers charged a percentage of assets instead of a flat-fee, even though through technology the amount of work didn’t go up based on the fee. This question was what launched First Ascent. Rather than being intimidated by the challenges that come with a new business model, he pushed forward to disrupt the industry!

Scott is dedicated to building exceptional portfolios and revolutionizing the way his business is partnering with advisors through a flat-fee business model. He knew he wanted to found First Ascent using flat fees for portfolio building and management for two reasons:

  1. To provide the best service possible for advisors
  2. To pass along savings to clients so that they can keep more of the funds in their investment accounts.

In this episode, we explore the ways financial planners can manage investment assets: outsourcing vs. managing the investments in-house. Scott highlights that pros and cons of each method, including diving into the operational responsibilities like the research, monitoring, performance reporting, billing and more.

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The industry has always charged for services on a percentage of assets under management. And a few years ago, I asked myself: Why do we do that? – @firstascentam on #YAFPNW e117

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What You’ll Learn:

  • Can roboadvisors be fiduciaries?
  • How do portfolio managers work?
  • How financial planners can manage investments, either through outsourcing or in-house
  • Why do investment advisors need portfolio managers, what benefits can they bring to your practice?
  • Is it possible to set an industry standard for roboadvisors in the profession?
  • How are investment portfolios set up, and how can advisors ensure that they’re providing the best investment advice to their clients?
  • How First Ascent has disrupted the financial planning profession
  • Why flat fee asset management makes sense

 

Show Transcript

Ep117 Transcript


Hannah: Well, thanks for joining us today, Scott.

Scott: It’s my pleasure. Thank you for having me, Hannah.

Hannah: Yes. Well, one thing I love having on this podcast is career changers, and you have a JD, so you’re a lawyer by training. Is that correct?

Scott: That’s correct, yeah. I definitely qualify as a career changer, yeah.

Hannah: Yeah. So how did you go from being an attorney to getting into financial services?

Scott: Well, I was working in the financial services world on the legal side of things and have been representing financial services firms for, I don’t know, 15 years or so? And then one of my clients asked if I wanted to join them in the asset management and penchant consulting world. And I took him up on it. It was something I’d been wanting to do for quite a long time, really, leave the legal profession, because my clients all looked like they were having more fun than I was. So it was great to have an opportunity to make the change.

Hannah: From a lawyer’s perspective, so those first 15 years of your career, what was your perception of the financial services industry or profession?

Scott: For me, I really saw myself as the technician in this world. There was the big Wall Street world, and that was the world that I was primarily involved with. I didn’t … Now, this is a long time ago, of course, when there weren’t quite so many independent advisors, and financial planning was a much smaller part of the financial services world. But that part of the world was really kind of a mystery to me, and I wasn’t quite as aware of it back in those days as I became later.

Hannah: So as a career changer, you didn’t jump into being a financial advisor or a financial planner. You jumped into the asset management space.

Scott: Yeah.

Hannah: Did you ever consider going the financial advisor or financial planner route?

Scott: No, I never did. Really, what happened was I came on board with an asset management firm, which also … primary business actually was penchant consulting. So we were working with a lot of large institutional clients, penchant plans and so forth, helping them with their asset allocation and manager selection and performance reporting and all of these kinds of things. And we were approached by some financial advisors from the West Cost who said, “Hey, all this stuff you’re doing for the institutional clients would be great in the planner world. We could use this with financial advisors, and they would have a great set of capabilities that they don’t really have today.”

We started working with them on developing a program which we launched, I guess, at the very, very beginning of 1990. I think it was the first managed account program for independent financial advisors in the mutual fund space. So we were building portfolios for financial advisors, and they were outsourcing their asset management to us. But that was really the first time that had ever been done.

Hannah: Were you the one actually managing the assets, or were you on the team that helped support them?

Scott: Yeah. I was on the investment committee, and I was initially … Of course, people saw me as a lawyer when I walked through the door, and so I was more involved in the legal side of things and structuring things and compliance issues and so forth. But as time went on, I became more and more involved in the actual investment management part of things as well.

Hannah: Yeah, that’s one of the things I find so fascinating. So many people assume that financial planner is really the only route into this profession, but there’s so many different avenues or career paths that people can take.

Scott: Yeah, absolutely. I think for me it was … And maybe other people will have the same experience. I found myself really enjoying the intellectual challenges of being a lawyer, but I just felt like I had a very narrow set of tools to work with, and I had a very narrow set of problems. I could see my clients were having a lot more impact in the world, and they were able to be much more creative in what they did.

I yearned for that, and maybe other people who are in different careers now would look at financial planning and see that same sort of opportunity. That’s how I look at it when I look at the planning world. I just think there’s so much of an opportunity to make a big impact in people’s lives and really do … There’s just a lot of open field. You can be creative and you can come up with solutions in a world where there are pretty wide boundaries for you to operate in.

Hannah: I say this often, but it’s almost like … It’s like the Wild West for entrepreneurs, in a way.

Scott: Yeah, absolutely. Yeah. It is, and it’s an area that you can get into without having to find 100 million dollars of venture capital money or something like that. The barriers to entry are relatively small compared to some other industries, which I think … It’s a great career for people who want to make a change from what they’re doing now.

Hannah: You have worked in the asset management space. Can you give us an overview of, as a financial planner, as a financial planning firm, what are the options for asset management?

Scott: Certainly. The first option is do it yourself. Some financial planning firms like to do the asset management themselves, keep that in-house. There are a lot of people who got into the financial services world just so they could do asset management, and that’s their love and their passion. Those people should just keep doing it themselves, assuming they’re good at it and producing good results for their clients.

But others … I think the research is showing more and more that for planners who want to spend more time with their clients, maybe spend more time working in the planning area per se, outsourcing asset management is a great option. There used to be … Back when we started, as I said, I think we were the only firm out there where you could outsource investment management to a firm that would build mutual fund portfolios for you.

Obviously, there are lots and lots of those firms out there now, so you’ve got way more options than you did before. So I think if people are interested in spending more time with their clients or focusing on other areas of financial planning, the investment management part of it is not your passion, then there are a lot of outsourcing options.

Another thing we’re finding is that people who’ve done asset management for a long time maybe get a little bit tired of doing it. Maybe it was their passion, but the mechanics of doing it over and over again and the operational aspects are not as exciting as they maybe once were.

Then you’ve got another group that’s thinking long term and saying, “Hey, if I want to institutionalize what I’m doing here at my firm …” Maybe I want to have a succession plan where I can transfer this firm to somebody, or maybe I want to sell the firm to one of the firms that’s out there buying advisory firms now. I need to institutionalize the asset management. If I’m the chief investment officer personally, I can’t really transfer the company very well. But outsourcing helps with that.

Hannah: Let’s go through some of these options and really talk about the pros and cons of each one of them. You talked about that do it yourself, DIY, keeping the investments in-house. What are the real advantages to firms doing that?

Scott: Well, certainly the number one is you don’t have to pay anybody to do the outsourced work. So there can be a cost benefit there, although that’s … You have to kind of step back and consider, if you give up the asset management to somebody else and let them take care of it, you definitely have to pay them a fee, but you gain that back, maybe, by building a bigger practice because you’re focused more on getting clients and so forth. So that’s a trade-off. You gotta look at the cost part of it.

Control is certainly a part of it. Most outsource firms, and ours is no exception, we have a certain way we manage money and a certain philosophy we manage money. We are pretty flexible in terms of working with advisors who have their own ideas. We’ve actually what I would say is co-created a number of series of portfolios for advisors who liked what we were doing but maybe wanted a little twist on it.

But control is another issue. If you’re doing it yourself, you obviously have complete control over what happens in the portfolios. If you outsource, the outsource firm will have … At some point, there’s some boundaries and some limitations around what they can do for you.

Hannah: For people in that DIY space, we’re talking from people who are actively trading individual stocks to people who have a passive mutual fund portfolio. It includes a lot that’s in that space.

Scott: Yeah, absolutely. Yeah. There are lots of options out there.

Hannah: So then we have this outsourcing, the investment management piece. That is where you put the money with a third-party manager.

Scott: Yep.

Hannah: Terms that I’ve heard thrown around, tamps, wrap accounts … Can you walk through, what is a TAMP and what are the different terminologies that planners are using?

Scott: Yeah. It’s gotten so confusing these days because people use these terms differently. A TAMP, a turnkey asset management program … That’s what TAMP stands for. This is a term that was coined, I think, back in the early ’90s. It really refers to any firm that you can outsource your portfolio management to, and they usually provide a basic suite of services that includes the asset management itself. They will also include billing services. That is, they’ll build a client. So you bring the client’s assets to the TAMP. The TAMP manages a custodial account, let’s say TD Ameritrade or Schwab or Fidelity, or wherever the account’s opened.

They have trading authority over that account, so they’ll manage the account. They’ll also do the billing for the advisor and for their own firm, so they’ll just pull the funds out of the account. And then they’ll do performance reporting, typically. And then there may be other services. Obviously, in the TAMP world, there’s a lot more competition now than there used to be, so they will try to provide additional services to the advisors. Some of those may be practice management, trainings. They could be any number of different activities.

But the main suite of services is trading the accounts, managing the accounts, billing, and performance reporting.

Hannah: I’ll add, when I started my firm, when I started my RAA, I used mostly TAMPs. When you talk about the billing, that’s a huge compliance and just administrative burden … I mean, that’s a really big deal. And so I know that that was a huge advantage for me for why I kept TAMPs at the beginning in my firm.

The second one is performance reporting. That’s a really big cost, especially for a new firm. I’m using Advyzon for my performance reporting, and it’s $6,000 a year. That’s the best value that you can find out there. You start looking at Orion or Black Diamond, and it’s per account. It adds up very quickly. So there’s a lot of value wrapped up into that TAMP.

Scott: Yeah. No, there is … I think this is the thing that, really, people miss, especially when they’re starting in the business, is that the asset management part of it itself is kind of the glory part of the business, but it comes along with a lot of other responsibilities. There’s a lot of research and monitoring, trading and lead balancing, billing, performance reporting.

All of these things are fairly significant operational responsibilities that could take a huge amount of time, and as you pointed out, the tools you need in order to do those properly can cost a lot of money. So just being able to kind of push that off on somebody else and outsource all of those things is a great capability if you find the right partner.

Hannah: So we have the TAMP. Are there other categories of third-party managers?

Scott: Yeah. You mentioned the term wrap fee, and so let’s talk about that for just a second. That typically is a TAMP where all of the services are combined in one fee. At our firm, for example, if you work with us, our fee is separate from the advisor’s fee, and the custodial fees are broken out separately. TD is our main custodian client working with us, would typically see our fee set forth, the advisor’s fee set forth, and the custodial fee set forth. So there you have complete transparency on what’s going on.

Wrap fees are different. They basically bundle all of those fees together so that the client really just sees one number. It’s a little hard for them to understand which part of the fee goes to the custodian and which part goes to the TAMP and sometimes to the advisor. So that’s just a matter of preference. There’s nothing inherently right or wrong about either one of those ways of doing business. It’s just those are two different models.

Hannah: It’s so interesting because I hear that term a lot, and that’s really just how it’s reported on the client’s statement. That’s not even really saying characteristic about the third-party manager.

Scott: Yeah. No, absolutely. The investment management part, the core part of what we do, is the same whatever label you want to put on it. This is true, for example, if you … You may hear the term “unified managed account” or “managed account” just by itself. Those terms all really refer to the same thing. Somewhere there’s an asset manager who is doing the investment management for you.

In a unified managed account world, it may be actually groups of asset managers. So you could use First Ascent, and you could use five other asset managers all kind of in a unified account. It would all be accounted for technologically under one umbrella. But, really, the core of the business hasn’t changed that much over the years. It’s the technology around it which has changed, and some of the terminology has gotten a little confused as a result of that.

Hannah: Another term, as we’re just going through these terms, SMA, separately managed-

Scott: Yeah.

Hannah: Can you walk … What is that?

Scott: Yeah, sure. That usually refers … It used to refer exclusively to the situation where you hired a manager who then banished a portfolio, individual stocks, or bonds. That was the separately managed account. And then that was contrasted with firms like ours, which manage portfolios of mutual funds or ETFs, for example.

Separately managed account, that term has gotten a little bit blurred. Now it sometimes refers to firms like ours because we are literally managing a separate account for each individual client, but really, separately managed account usually refers to a manager who’s managing individual stocks and bonds.

Hannah: You said “has an account that’s managed separately,” like for the client. What would be the alternative to that where it’s a pot of money that’s divvied out, or like a mutual fund?

Scott: Yeah. It would be like a mutual … Yeah, like a mutual fund. Yeah, exactly, or a collective trust fund or something like that where clients’ money was pooled together in one large account and managed collectively. Again, mutual funds get a tremendous amount of scale by just pooling everybody’s assets together. But, of course, that’s not always appropriate for our clients.

Sometimes they have individual needs that require some sort of customization or tax lost harvesting, or there are a lot of things you could do if you’re managing a separate account for one individual client rather than a big, collective pool of assets.

Hannah: Are there other categories or terms that you hear thrown around?

Scott: Yeah. There’s a new one, which is “model marketplace,” which is kind of a attempt to unbundle the TAMP space, if you will. Today, the biggest example of a TAMP is Envestnet, and they provide access to lots of different asset management firms like ours and others, hundreds of them, literally. They provide the trading and they provide the performance reporting and the billing and all of those things.

What the model marketplaces are trying to do, they’ve come along and … Orange is a good example of a model marketplace. I think Orion has developed model marketplace. TD has developed one now. What they’re doing is they’re taking the models from firms like ours, the so-called strategists, and they’re providing those to the financial advisors for a fee. Tends to be a lower fee than you pay if you went and got the whole bundled packaged.

Then the advisor can take that model. They could take a First Ascent model and they could implement it themselves. So they could do the trading. They could do the performance reporting and the billing. They could even make customizations to our models if they wanted to. Those are pretty brand-new programs called model marketplaces.

Really, the difference there is that the advisor isn’t paying for the whole package of services. They’re just getting the model, and then it’s up to them to implement that model in whatever way they want.

Hannah: I thought your comment was really interesting about, really, what’s changed is the technology. So we still have these just basic two camps: do it in-house or outsource it. And then it’s just, what is the technology wrapped around that?

Scott: Yeah, exactly. Well, this is what you’re … Certainly, the robo-advisors are the utmost obvious example of a development that really changed the world in recent times. Their deliverable, really, when you get right down to it, isn’t any different than any other TAMP, right? They’re managing a portfolio, and they will either do a good job or they’ll do a bad job of it.

But the technology around how you access that portfolio and how you interact with the firm that’s managing it for you is totally dramatically different than anything that had existed before the robos arrived. It made a huge difference in the pricing of this kind of service, and it made a huge impact on the industry, which is still being felt and probably will still be felt for years to come.

Hannah: So this idea of these robo- … I mean, because that’s … It was a really hot topic a couple years ago. Have you seen them take off like people anticipated they were going to take off?

Scott: I don’t think so. I think they made a big impact initially. I don’t think they’re going away. I think some of them are going away. Obviously, they’re being bought by other firms and some of the smaller ones have closed their doors. But I think the concept of robo-advisors will be around.

Historically, the way I see it is, back before robos were here, there was always a group which was basically a self-help group of investors, but they needed a little bit of guidance. They didn’t want to do it totally on their own, so they might go to Schwab or go to TD and get a little bit of advice from somebody in the custodian office and then build their own portfolio that way.

I think that’s a little bit the market that robos have now picked up. They’re taking people who really don’t want a full relationship with a financial advisor. They just want somebody to help them put their portfolio together, and I think that’s that part of the market that they’re being successful in. Now you’re starting to see, of course, firms like Betterment and Schwab are developing these so-called hybrid programs where you can actually access a real live financial advisor. And those seem to be proving pretty popular.

But really, the robos, I think the thing that’s missing there is they’re still missing some flexibility. So the flexibility that you could get by accessing a full-service outsourcer isn’t there, but certainly the most important thing is not … There is the relationship with the financial advisor, and that’s key and crucial to the success of many investors. They need that help, and I do some behavioral coaching from a financial advisor.

Hannah: With your background as a JD or as an attorney and where you are now, I see a position paper on your website of, Can a Robot Be a Fiduciary? This is a huge topic, especially among new planners. Let me just ask you, can a robot be a fiduciary?

Scott: My simple answer is no. Now, that’s not a position that the SEC agrees with right now. I think the SEC has given robos a little bit of a free path on the fiduciary topic just because their technology is interesting and the robos who are out there are basically good guys in the world. Betterment and Wealthfront and some of these other firms, these are firms who are really out there trying to do good things for the investors they work with.

But if you really do the analysis, what you have to know about a client and what you should know in order to provide the kind of service that is demanded from other fiduciaries, you can’t really do that by answering a six-question questionnaire online and choosing a portfolio. That would be unacceptable. If you in your practice … If a client came to your office and said, “Fill out this six-question questionnaire,” and they filled it out and you punched a button and said, “Okay, you’re in my balance portfolio,” and that’s all you’ve ever talked to them about or ever asked them about their financial situation and their goals and their life, whatever, that would be unacceptable. But yet, from the robo world, that’s perfectly acceptable, at least under the laws that exist today.

So yeah. I wrote a paper about it. I think, really, what needs to happen is the legal structure needs to recognize that there’s this new thing called a robo advisor, which is a good thing and can be a good thing, but it needs its separate category of regulation. It’s not providing the full range of fiduciary services that a human advisor provides.

Hannah: This all raises this interesting question of, how much information do you need to be a fiduciary? Is there ever a clear, bright white line, if you would, on what it means to be a fiduciary?

Scott: Yeah. I think the concept has … I mean, it’s never been written down. The interesting thing is all of us who are registered under the Investment Advisers Act of 1940, which includes pretty much all the RIAs and terms like ours, we’re all fiduciaries, and yet there’s no requirement in that statute written specifically that says that we are fiduciaries. That was bred into the law back in the early mid-’60s by the Supreme Court, and ever since then, this fiduciary statement has been clearly applicable to financial advisors and planners and those providing investment advice.

The details of it, the specifics of what that means exactly, have never been really written down. They’ve been determined by rulings that courts have made or the FCC has made. They’re not clear and they’re not bright-line kinds of requirements. So this has been the way we’ve always operated it, and it’s worked pretty well, actually. There are some basic general concepts that you must understand. You have a duty of loyalty and a duty of care.

To most people, it’s pretty clear what that means. As a financial advisor, you really have to stand in the shoes of your client and do for them what you would do for yourself. Pretend like your client is your mother or your little brother or something. How would you want to treat that person? How would you want to see that person dealt with?

But that test is pretty amorphous right now under the law. It’s very open to interpretation. We’ve seen this now with the DOL fiduciary rule and the new SEC rule. The new SEC rule doesn’t define what “best interest” means, so they’re imposing a new standard that, again, isn’t very well defined. So I think this is a topic where people have to really commit themselves to doing what’s right for clients and not trying to figure out where that line is. If you try to figure out where the line is and get real close to it, you’re probably not a very good fiduciary.

Hannah: Yep. I like that analogy. Will it be possible to define more what that fiduciary is to basically set this industry standard? Is that possible in our business?

Scott: I don’t think it’s possible to do it and to do it well. The problem is what happens, and this is, I think, what the brokerage industry has pushed for and it looks like they may even get it a little bit here if the SEC continues down the path they’re on, is they like to have some sort of bright-line requirements so that they can figure out where the line is and then move right up to it, the very thing I was saying you shouldn’t do. But that’s how they want to operate.

I think it’s actually a good thing that these things aren’t very well defined, but they’re concepts that are kind of living concepts that the SEC and the courts and others can interpret as the world changes. I think this is kind of a conundrum we have going back to the robo issue. It’s kind of the conundrum we have there. The robos didn’t exist when the fiduciary standards were first developed back in … hundreds and hundreds of years ago under English common law and so forth.

Now we’ve got this very strange creature called a robo advisor that doesn’t really fit within the normal concept of a financial advisor. And so the FCC is, I think, giving them a free pass, but I think rightly they’re giving them a free pass. They’re trying to let this new creature exist and operate in a way that hopefully will be beneficial to the investor population that’s out there.

Hannah: One of the reasons I was so excited to have you on the podcast was this idea of disruption. I know when I talk to young planners, they see these obvious holes, and it’s frustrating especially. But I really view First Ascent and what you guys are doing as a disruption to the asset management world, especially the outsourcing piece of it. Can you tell the listeners what is First Ascent, and how have you disrupted that market? And we can talk about this idea of disruption a little bit more.

Scott: As I said, at least going back to the early ’90s, firms like ours have been around, and I think I was part of … If it wasn’t the first, it was one of the first ones. The industry has always charged for its services on the percentage of assets-under-management base and continues to do that.

A few years ago, I asked the question, first to myself and then to a lot of other people, I said, “Why do we do that? Why, with the technology that we have available to us, why do we charge that way?” I didn’t get very good answers. I didn’t have a good answer. So we started a firm that charges a flat fee. So we charge $500 per portfolio per year, and it’s a flat fee. It doesn’t matter if it’s a $100,000 account or a million-dollar account. We charge the same because from our point of view and given the technology we have available to us, the amount of work and the amount of value that we’re providing is the same.

So we just decided to go at it a different way. We introduced the flat fee into our industry. And then we also … I won’t go into details here on the podcast because we don’t have enough time, but there are changes that we made in the way we managed portfolios that I think are different from the way they’re typically managed in the industry. We also tried to shun the typical wholesaler approach to distribution of our services. The advisors we work with, we interact with pretty much through our website, over the internet, emails. We do a lot of videos. We communicate with people electronically rather than trying to make appointments with them three weeks from now and get on an airplane and show up for a face-to-face meeting.

It’s a different way of doing business. I think it’s a more efficient way and probably fits in with the approach that more and more advisors are wanting to take.

Hannah: This idea of evaluating what you were … If you’re a fish, you only see water. Was this something that you had always noticed from the beginning? Or did you ever have … What was your “aha” moment on that?

Scott: No, it’s really … This is the thing that was really a little bit embarrassing to me, is that I was … I’ve been in financial services now 40-something years, a long time. I’ve got lots of gray hair. It wasn’t until, oh, maybe five years ago where I first started thinking about this problem. It really was just the result of seeing the technology develop in our industry to the point where, literally, you didn’t even know the difference between a $100,000 account and a four-million-dollar account, to use that example again. They were being managed in a very similar way.

So I started asking this question, first of partners at my old firm, and they didn’t have a very good answer to that question: “Why are we charging this way? Why don’t we try to do something that’s different and take a flat-fee approach?” Ultimately, I had to go start my own firm in order to do that because nobody really wanted to hear my flat-fee idea. Sometimes that’s what you have to do. If you want to do things differently, sometimes it just means scraping the old house off a lot and building something brand new. So that’s what we did.

Hannah: From an outside perspective, you are leaving a ton of money on the table with this new model.

Scott: Yeah, I think that’s the perception. Here’s a different way to look at it. I don’t want to compare us; we’re a dinky firm compared to Amazon, but if you look at Amazon and what Amazon has done, Amazon has found a way to use technology and use scale to reduce the prices of all kinds of products that they offer to their clients. That’s kind of what we’re doing.

We designed a firm that’s very efficient, uses technology in a very efficient way, and allows us as we reach scale to continue to produce the outcomes that we produce for thousands and thousands and thousands of accounts without having to increase, really, the headcount at our firm. It’s a way of looking at the business. Instead of looking at asset management like a bunch of cobblers at their workbench, it’s looking at more a business of scale where there’s an assembly … There is an assembly line, and that’s kind of a blue-collar mental picture, if you will.

But that’s really what portfolio management has become or can become if you build your firm a certain way. It doesn’t mean that the intellectual capital that’s there is any less valuable or of any less quality. It just means that once you’ve decided what your portfolios are going to look like, there are very efficient ways to implement that set of portfolios for large, large numbers of clients. So that’s what we’re trying to do.

It’s not that we’re trying to produce a big asset management giveaway here. What we’re trying to do is say, “Hey, advisors, there is an opportunity for you and your clients to save a lot of money. And if you all come to our firm and work with us, we’ll reach the scale we need to make a significant profit as well.” That’s the idea. We’re not a eleemosynary organization. We’re not trying to give it away. But we just looked at the business a different way and said, “Hey, you could build a business of scale here and do very well for yourself.”

Hannah: What is it like … I’m assuming you still go to trade shows and things of that … conferences and things like that.

Scott: Yeah.

Hannah: What is it like now being there as the disruptor instead of being … not too presumptuous, being the one who’s about to be disrupted?

Scott: Yeah. No, it’s fun, actually. When you finally give yourself in to it, when you … because there’s a moment. Whenever you do something like this, there is, at least for me and for the group that I work with, there’s this moment of questioning what you’re doing where you say, “Well, I’ve got this idea. This seems like a good thing to do,” and then you look around and you see everybody else doing it a different way. And you think, “There must be something wrong with my idea because if it was such a good idea, somebody else would have implemented it before.”

Then you get past that and you give yourself in to this notion that, no, you really have come up with something that is important and useful and good. You just throw yourself into it and let yourself embrace that idea and go with it. Just let all your passions take that idea as far as it can go. So that’s where we are right now. As a group, we’re just very excited and thrilled to be doing something that’s different. And from the perspective of the advisors and the clients we work with, it’s a great opportunity to get a deal, if you want to look at it that way, and still get excellent-quality portfolio management from our firm.

So it’s fun, and I know I’ve talked to a number of our competitors, large competitors, who I know pretty well. They’ve all shared their … both a little bit of their concern as to what we’re doing, but we’re still really too small to really be scary to the really big firms. But they’re cheering us on. They’ve shared with me the fact that they think what we’re doing really is the direction of the industry and really is good for clients and really is probably something they’re going to have to get around to doing themselves.

But that’s fun. These are people that are friends of mine and I respect a lot. So it’s very validating to hear that from them. So, yeah, it’s an exciting time to be us right now.

Hannah: Did you view yourself … I mean, you’ve had a long career. You were talking about, the last five years, you’ve really had this idea. Did you view yourself as a disruptor throughout your career?

Scott: No, not really. I think what I realized … And this I didn’t realize until I looked back and started thinking about how I got here. How is it I ended up starting a firm three … Three years ago is when we actually formed the firm. How did I end up doing this after all these years in the business and basically being an entrepreneur from the ground up and just starting from scratch? That’s not the typical profile for somebody of my age.

I thought a lot about why I did it, and looking back on my career, what would have led anybody to think I was going to do this? I think, really, the first inkling I got of this kind of approach to doing things was back when I was thinking about leaving the legal practice. I realized that there was this … I really believed that a lot of people, and certainly I do … A lot of us are driven forward by a creative energy that we have inside of us. It’s just a force that causes us to do all kinds of things: play music and paint pictures and, in some cases, build businesses.

I think the reason I wanted to leave the legal practice was because I felt like I needed a little bit more opportunity to be creative and to do things, just to get ideas and to think about new ways of approaching problems. I think this, at least for me, was kind of a gradual thing. I did it more and more and more and became more confident in doing it, and then got to the point where I had a handful of ideas. The flat fee was one of them, but had a handful of ideas about how this business could be done differently and just said, “Okay. I like this feeling of being able to use my creative energies to do things differently and hopefully better than they’ve been done before. Let us give it a shot.”

Hannah: I love that creativity angle.

Scott: Yeah. I think this is true … This is something that everybody should at least think about, is if you’re feeling some level of dissatisfaction with what you’re doing, maybe that’s part of it. You’re just not feeling that you have enough room to be creative and to be yourself and to pursue passions that you have. So, yeah, that’s a good … I think it’s part of the introspection process that everybody should go through a little bit as they’re charting their career path.

Hannah: What advice would you have to the new planner who’s coming in and they’re seeing so many places for disruption, and perhaps they’re frustrated in their firm right now because they aren’t getting that avenue to explore that? What would be your advice to them?

Scott: Well, I can just talk about the process that I went through. I think once you start to feel that, first of all, you should congratulate yourself for having ideas and for thinking critically about things. As I said, I think I went through a lot of my career without asking enough questions about why we did things the way we did.

So pat yourself on the back. Keep asking questions. Really continue to explore whether there are new ways to do things and whether there are better ways to do things. Also learn patience because not everybody around you is going to think that your idea is such a great thing. People are very afraid of change. Things that have worked in the past, people are very wedded to. There’s a huge amount of herd mentality that you will encounter as you try to promote new ideas.

So be patient and learn to be diplomatic, and maybe learn to ask for a mile and be satisfied with just a yard or two initially. Just get some leeway to try some of your ideas. Maybe experiment with them in limited contexts and see if they work. Let other people participate in the process. Certainly, the ideas I had initially and what we’ve actually ended up doing at First Ascent are in some cases very different, and it was because the team really got involved. There was a lot of building on … We built on each other’s ideas, and people think differently about different problems. So try to get a group of people who can help you build on your ideas.

But then, at the end of it, recognize that you may have to go start something of your own. You may have to start your own financial planning firm, or you may … I know some people who’ve been advisors and who’ve started technology firms because they got some ideas about how to do things better in the technology area, and they just got very focused on doing this and actually ended up as fintech entrepreneurs instead of advisors.

But just love that feeling that’s inside of you, when you experience it, of dissatisfaction about how things are. Love the ideas that you have that come up about how to fix it, and just see if you can take an organized and, as I say, patient and diplomatic approach to trying to work with those in the context of whatever organization you’re with. But be bold. If it doesn’t work in the context of the place that you are, go out and give it a try.

A lot of people are so afraid of failure that they take great ideas and they stuff them under the mattress and don’t do anything with them. I think this is certainly something I’ve learned over the course of my career, is that failure is just another form of learning experience. Don’t worry about it if people define something that happens to you as a failure. That’s great. Let them look at it that way. But you should look at it as a very valuable learning process.

Hannah: Such great advice for anybody, not even just the people who are really looking to be the disruptors.

Scott: Yeah. That’s what I told my kids when I was racing home. I said you can’t be afraid to fail, and you shouldn’t even use the word, probably, because it comes with such negative connotations. But, really, we all get down the road with lots of bumps and bruises on us, and nobody comes out with a perfect 10 record at anything we do. Let’s just accept the fact that that’s the way it’s going to be and get out there and do things. Make things happen.

Hannah: If you’re not finding people who are supportive of that, find new people.

Scott: Get some different friends. Yeah. That’s right. Yeah, exactly.

Hannah: Join us in the Facebook group.

Scott: Yeah. Exactly.

Hannah: Oh, good stuff. Well, is there anything else that you want to be sure our listeners know about?

Scott: No. I think, certainly, anybody that’s interested in flat-free asset management, we’d love to talk to you. But, really, I think it’s just, rather than focusing on what First Ascent does, I think it’s more important to just focus on whatever the listeners are doing in their own world. And just go with that creative energy that you feel. Don’t be afraid to fail. If people that you’re hanging around with don’t like that, find some new friends. Yeah. There we go.

Hannah: Great stuff. Well, thank you, Scott.

Scott: Thank you very much, Hannah. I appreciate you having me on here.

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Scott MacKillop, CEO of First Ascent Asset Management, never thought of himself as a disruptor in financial planning until he became one. As a career changer, Scott began working in the investment management space. Several years ago, Scott MacKillop, CEO of First Ascent Asset Management, never thought of himself as a disruptor in financial planning until he became one. As a career changer, Scott began working in the investment management space. Several years ago, he began to ask why investment managers charged a percentage of assets instead of a flat-fee, even though through technology the amount of work didn’t go up based on the fee. This question was what launched First Ascent. Rather than being intimidated by the challenges that come with a new business model, he pushed forward to disrupt the industry!
Scott is dedicated to building exceptional portfolios and revolutionizing the way his business is partnering with advisors through a flat-fee business model. He knew he wanted to found First Ascent using flat fees for portfolio building and management for two reasons:

To provide the best service possible for advisors
To pass along savings to clients so that they can keep more of the funds in their investment accounts.

In this episode, we explore the ways financial planners can manage investment assets: outsourcing vs. managing the investments in-house. Scott highlights that pros and cons of each method, including diving into the operational responsibilities like the research, monitoring, performance reporting, billing and more.


What You’ll Learn:

Can roboadvisors be fiduciaries?
How do portfolio managers work?
How financial planners can manage investments, either through outsourcing or in-house
Why do investment advisors need portfolio managers, what benefits can they bring to your practice?
Is it possible to set an industry standard for roboadvisors in the profession?
How are investment portfolios set up, and how can advisors ensure that they’re providing the best investment advice to their clients?
How First Ascent has disrupted the financial planning profession
Why flat fee asset management makes sense

 
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Hannah Moore clean 46:39
Defending the Fiduciary Standard https://financialplannerpodcast.com/yafpnw-defending-the-fiduciary-standard/ Tue, 18 Sep 2018 18:00:50 +0000 http://fpaactivate.org/?p=11600 https://financialplannerpodcast.com/yafpnw-defending-the-fiduciary-standard/#respond https://financialplannerpodcast.com/yafpnw-defending-the-fiduciary-standard/feed/ 0 In the world of financial regulation, it’s easy for the voices of fiduciary financial planners to get drowned out. One of Skip Schweiss’s many jobs is to give financial planners the microphone, and raise awareness about the fiduciary movement both in Washington and in our public communication with consumers. In the world of financial regulation, it’s easy for the voices of fiduciary financial planners to get drowned out. One of Skip Schweissmany jobs is to give financial planners like you and I the microphone, and raise awareness about the fiduciary movement both in Washington and in our public communication with consumers.

Skip truly believes that a lot of the consumer confusion around the distinction between financial planners and brokers comes directly from how we define the financial planning profession. There’s such a lack of definition and regulation when it comes to titling who is and who isn’t a financial planner. This confusion is frustrating for many planners in the profession, and unfortunately leads to many consumers being led astray.

Skip Schweiss is the Managing Director of Advisor Advocacy at TD Ameritrade and the President of TD Ameritrade’s Trust company. Skip works closely with trade associations and works to amplify the voices of financial planners to Washington representatives and policy makers. He also focuses on how to best identify how advisors feel about proposals and regulation, and continually advocate for their interests.

hannah's signature

It shouldn’t be a one-size-fits-all. We’ve operated under this assets under management model for 20-30 years…but it doesn’t work for everyone. I’d encourage young entrepreneurs in this field to think about new ways of doing business. – @Schweiss_TDA on #YAFPNW e116

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What You’ll Learn:

  • How advisors are being advocated for in Washington
  • How regulation impacts our profession
  • What different interest groups exist
  • Why it’s so difficult to push for better regulation and disclosure that protects our clients
  • How the fiduciary standard is being protected
  • Why the CFP® certification means so much
  • What an industry-wide fiduciary standard may look like
  • What regulations are currently in place to protect consumers at the federal and state level
  • Are regulations a benefit or a threat to the profession?
  • How technology impacts our profession

 

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In the world of financial regulation, it’s easy for the voices of fiduciary financial planners to get drowned out. One of Skip Schweiss’s many jobs is to give financial planners the microphone, and raise awareness about the fiduciary movement both in W... Skip Schweiss’ many jobs is to give financial planners like you and I the microphone, and raise awareness about the fiduciary movement both in Washington and in our public communication with consumers.
Skip truly believes that a lot of the consumer confusion around the distinction between financial planners and brokers comes directly from how we define the financial planning profession. There’s such a lack of definition and regulation when it comes to titling who is and who isn’t a financial planner. This confusion is frustrating for many planners in the profession, and unfortunately leads to many consumers being led astray.
Skip Schweiss is the Managing Director of Advisor Advocacy at TD Ameritrade and the President of TD Ameritrade’s Trust company. Skip works closely with trade associations and works to amplify the voices of financial planners to Washington representatives and policy makers. He also focuses on how to best identify how advisors feel about proposals and regulation, and continually advocate for their interests.


 
What You’ll Learn:

How advisors are being advocated for in Washington
How regulation impacts our profession
What different interest groups exist
Why it’s so difficult to push for better regulation and disclosure that protects our clients
How the fiduciary standard is being protected
Why the CFP® certification means so much
What an industry-wide fiduciary standard may look like
What regulations are currently in place to protect consumers at the federal and state level
Are regulations a benefit or a threat to the profession?
How technology impacts our profession

 
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Hannah Moore clean 48:02
History of Financial Life Planning pt 1 with George Kinder https://financialplannerpodcast.com/yafpnw-history-of-financial-life-planning-pt-1/ Tue, 11 Sep 2018 19:52:35 +0000 http://fpaactivate.org/?p=11591 https://financialplannerpodcast.com/yafpnw-history-of-financial-life-planning-pt-1/#respond https://financialplannerpodcast.com/yafpnw-history-of-financial-life-planning-pt-1/feed/ 0 George Kinder of The Kinder Institute of Life Planning has had an incredible impact on the development of financial life planning. To hear him speak about the human element within financial planning is inspiring, and absolutely necessary for all planners - whether you’re new to the field, or you’ve been a planner for decades. George Kinder, CFP® of The Kinder Institute of Life Planning has had an incredible impact on the development of financial life planning. To hear him speak about the human element within financial planning is inspiring, and absolutely necessary for all planners – whether you’re new to the field, or you’ve been a planner for decades. In the early 1990s, George Kinder and Dick Wagner partnered together to discuss:

  • The skillset advisors needed to hone to in order to engage in financial life planning
  • The philosophy behind financial life planning
  • The ways that the human component of money can positively impact financial planning as a profession, the lives of financial planning clients, and our world as a whole

In this episode, George covers a lot of ground. He discusses the beginning of the financial life planning movement within the FPA – from the founding of Nazarudin, to the growth of the movement, to how the initial financial life planning community worked to get the message out to the masses.

hannah's signature

Financial life planning is listening and listening so well to your client that you’re able to inspire them to the place that they reveal as being the place of their greatest freedom. – George Kinder, CFP® on #YAFPNW e115

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What You’ll Learn:

  • What the beginning of the financial life planning movement looked like
  • Who was involved at the onset of this movement
  • How the Nazarudin movement began, and how it still exists today
  • What the three phases of the financial life planning movement has looked like, and how it’s grown over time
  • The “why” behind financial life planning
  • The importance of developing a “one hour” life plan for everyone – not just those privileged enough to have access to advisors
  • The different exercises that financial life planning moves through
  • What questions are the “right” questions to wrestle with with your clients – questions like “What is it to be human?” or “What is it to be human in this world?”

 

FPA Retreat

 

Show Transcript

e115 Transcript


Hannah: I guess my first question is, we’re talking about the history of life planning, but what is life planning?

George: The mystery question.

Hannah: Well I think I came to the right person.

George: Well, I think you’ll find a diversity of thoughts about it, which is great. I think that life planning is listening professionally, is listening so well to your client that you’re able to inspire them to the place that they reveal as being their place of greatest freedom. And you inspire them to move to accomplish that freedom in short order. So that would be my definition I think of life planning. You can do it for yourself, but it’s much harder to do it for yourself, much easier when you have someone who’s really supportive there to help make that happen.

Hannah: I’ve heard people say that life planning is financial planning well done.

George: Yeah, done right.

Hannah: Or done right, yep.

George: Right, yeah.

Hannah: And I’m fascinated by the fact that you start with just listening as really kind of the core of that. We can maybe dive in more on life planning, and I’m sure there’s been evolutions of it, but how does something like this start? How did this get started?

George: Well there’s so many stories. I could tell story, after story, after story of the beginning of this, and then we’d have the beginning nailed but we wouldn’t get to the whole history. Partly it started in the experiences that Dick Wagner and I had individually. Dick was really key, largely because he had a political sense and a community, and I didn’t. And so he had been working to develop really financial planning, and understanding it more and more as life planning because it was clearly client-centric from the beginning.

Meanwhile, I’d been of in my corner of doing practice, actually doing life planning, giving three questions to clients, listening so well that I would spot there passion for freedom and where it was, helping them working with emotional intelligence to really be there where they felt sorrow, or anxiety, or frustration. And so working with the practices and developing specific skills. And he and I met at a wonderful event that the ICFP, before the FPA was created, where I felt like I was this hayseed because I’d grown up on … I was born in West Virginia and I grew up on the Ohio, West Virginia boarder and I thought, who am I? And he was the head of this big organization with thousands of people.

And I remember he was the only person in the whole conference that talked about spiritual values. And so I very, almost fearfully, went up to speak to him. And he had a crowd of people around him and I waited until they all died down and moved out. He already had an eye for who I was. I went up to him and I said, have you ever read Jacob Needleman’s book Money and the Meaning of Life? And he went, I can’t talk about that here. Come on, let’s go over in a corner and I’ll tell you. And he said it’s the book that he felt he was meant to write, that felt so close to him. And it was a book that really inspired me. It was very close to the life planning I was doing. It was very close to his conception of financial planning moving forward, and we completely bonded over this being a secret society between him and me and a few other people maybe that we’d bring in.

And the next thing we knew was six months, nine months, a year later, the woman who ran the ICFP before Dick, and I’m just spacing on her name. Wonderful woman, and she’d seen me speak, and she said, I gotta have you at the FPA retreat. So really, in many ways it began right here at the FPA retreat. And she gave me all these things. She says, why don’t you talk about estate planning? I said, no I don’t wanna talk about estate planning. Well, how about budgets or investments, she gave me all these things. I said, no. I said, where is it? She said, Colorado Springs. I don’t want to go to Colorado Springs. And then finally she said, what about, is there something we’re playing with called the human side of money. And I said, you got me, I’ll do it, but only on one condition. And I said, that is that Dick Wagner partners with me.

And I’d only met Dick that once, but I knew he would be a great partner and we’d be able to launch something from it. Little did I know that he was the one that had actually talked to her about the human side of money, so he was passionate about the topic too. So we came here to retreat, to Colorado Springs, and we had the greatest time. And we delivered three conversations with the community, each from our own domain. Mine more from skills used as practitioners, his more as you know broadly philosophical, economical, the rest. And just a marvelous time. And the first time we had a full room, and the next time people were standing all around the edges of the room. And the third time, because back in those days you gave your presentation three times, and the third time people couldn’t get in the room.

And that was really the launch of life planning. At the end we were like Bogey and Claude Rains at the end of Casablanca, we walked out arm in arm. We said, wow, what are we gonna do next? And created Nazrudin from that. I had told a series of Nazrudin stories, so that was kind of the birth of the community of life planners, the initial community Nazrudin was. So that was the beginning I would say.

Hannah: Let’s talk a little bit about what was going on in the world of that. It sounds like there was such an appetite for what you were saying. So there was really nobody else talking about the human side of money?

George: No. I mean it’s amazing, you read the press now and you’ll see it all the time, they’re talking about it. There was just a big article in The New York Times, nobody mentioned Dick or me, but we were the ones that started it. So it’s really exploded. It’s really, I think, what we were hoping would happen. There’s a lot more to come, and we ought to talk not only about the history but a little bit about the future toward the end perhaps. But no, nobody. I mean, it was … you’ve gotta realize that largely financial planning was a transactionally oriented business, largely commission oriented. It grew out of two traditions, one was sales and one was law.

And neither of them are particularly … I mean in sales you are related to being human and all, but you’re not really trying to create an authentic relationship, you’re trying to convince the person to buy something. So the reason that so many people came, it was like all of the leadership, I think there were like six president in a row of the ICFP and then the FPA who did the two day training, six in a row. And all became avid Nazrudin members, and included Roy Diliberto, and Yesky, and Guy Cumbie. Anyway, an astonishing kind of beginning to the whole thing.

Hannah: For the people listening to this who don’t know what Nazrudin is, what is Nazrudin?

George: Well, you’ve gotta understand, I left Nazrudin. I started it with Dick, but it was a community. But I began to think of life planning as something different. So Nazrudin was a community, and still is, a community of open source. It was open ideas as to … really about the human side of money. And so it was where we all gathered together and we had a community of like-minded people wresting with these issues. Most of us, I think many of us, felt we were more like astral counselors with our clients. We realized that when someone talked about a divorce there was pain there, and not just an opportunity to sell a product. And so we were all kind of oriented toward the human beings that were in our offices.

And there was nobody talking about it, it wasn’t part of the profit model for people. It wasn’t part of how they thought of money. So Nazrudin was a place where we got together and really explored in a very open way all of these questions. And many wonderful communities came out of that, Money Quotient, a lot came out of it, Susan Bradley’s work came out of it, Rick Kaylor’s work came out of it, Ed Jacobson and all the work of appreciation came out of it, and certainly the Kinder Institute came out of it. So that was a … to me that was the first period. I think of three periods when I think of the history, and that was the first third of it.

Hannah: And so Nazrudin, was there an invite list? How did people … I mean, it still exists today. How do people find … we know, spoiler, there’s no website for it.

George: Right, it’s totally … it’s a mystery. Well I mean, I think it’s all down to how we conceived of it. We wanted it really to be personal. And so anybody can join, it’s just that you have to find out about it and then find out someone who’s in it, and they need to lead you to the person who can bring you in. And so anybody who wants to can come in, it’s just that that process has to be followed somehow. And it happened, but Dick and I, as I said, the first time I met him he kind of hushed me up and took me to a corner of the room to talk about it because this hadn’t come out of the closet. We were hiding around all the press. And particularly I think him, in a position of political sensitivity leading a whole industry, largely of sales people, a lot of sales people, certainly spreadsheet people and people who were concerned about the law and not so much the personal side.

So when Dick and I walked out of the room together at the FPA retreat that third time arm-in-arm, I said okay, I think maybe we could do something. Maybe we should get some people together and have ongoing conversation about this. And he said, leave that to me, George, I know just the people. And so he sent out a personal email to all the people he knew. And I knew nobody, so it was just like a match made in heaven as far as I was concerned, and I think as far as he was concerned as well.

Hannah: So you have your first Nazrudin meeting, all of these people do they … they don’t really quite no what they’re getting into. They show up, and then what was that like? Can you describe what that first Nazrudin meeting was like?

George: I think everybody … I mean, Dick had been a leader for sometime and I’d been a teacher for many years and led workshops, so both he and I had good workshop skills and facilitation skills, and we knew we wanted to draw the people out. So I think there was just this energy of excitement. People couldn’t leave, they were in this room together at Estes Park in Colorado, and we’d come together for a few days to just hang out and discuss all of these questions. And the way we would determine what the mini workshops within each day would hold is we asked people to just speak them out and we would then vote. And there was a “Law of Two Feet” where if we didn’t like the room we were in we’d get up and go someplace else.

So this wonderful sense of freedom. And back in those days you weren’t necessarily teaching, you were more holding a conversation with some offerings as well. So you presumably knew something about what you were doing, but you were facilitating a conversation.

Hannah: And listening, right?

George: And listening, listening is huge. Listening is huge, yeah.

Hannah: So you spoke of three different phases of life planning. So we have this first phase, we have this Nazrudin group who are just coming together to talk about this. What is the second phase and how did that transition from that first phase to the second phase go?

George: Well the transition happened about halfway through the first phase, and the transition happened really with the release of my first book Seven Stages of Money Maturity, because it gave a structure that people could fasten around, people could talk about, people could teach. And all of the different life planning techniques that I knew were already in there. And I had basically drawn a lot from conversations in the book, from the conversations we had at Nazrudin, so it really was a Nazrudin book but filtered through my layers of experience. And so it started … it added a lot of energy.

So for instance, I know that I was asked to speak at all of these different organizations, and I don’t think any of us had been before. So suddenly it was happening that corporations were starting to talk about it and other organizations in the financial world were starting to talk about it. And so it really exploded with keynotes and then breakouts. And you don’t have the same person come back the next year, but gosh it was a good theme, who do we invite next? And so all the other communities began to develop.

So in the second half of that open phase that I think of, there were all these other communities developing. Rick was beginning to develop his work with psychology and Susan Bradley with Sudden Money, Money Quotient was taking form, Ed Jacobson on appreciation, appreciative inquiry. And what happened at the end of I think that open phase was that Dick and I worked together beautiful as a great partnership for about 13 years, and then there came a time where I had built so much in Kinder Institute and had put a new designation out there, which was the registered life planner, and Dick had always questioned the term life planning. I liked the term life planning, and he like finology, or one of the other, he used a number of different terms over the years.

So there became … Dick and I in some ways were going in different directions. And I wanted to deepen with the work that I was doing, largely coming out of my second book which was on evoke and on methodology for going from meeting to meeting, and the methodology that explicitly delivered freedom for clients. And he was interested, fascinated, loved it, but at the same time he didn’t Like the term life planning particularly. And he wanted to continue the very open organization. So I basically stopped going to Nazrudin and formed a community that was vibrant in the evoke methodology of life planning.

And when I think of the second phase I think of all these different organizations spreading out and beginning to deepen their knowledge, writing books. And still Nazrudin continued, but it was the seed anymore of all the different movements that came out. So I know in that second phase much more what we did, and we did a lot that still hearkened back to the whole life planning movement, and one of the things is that we now have financial planners I think in 30 countries who have studied either Seven Stages or Evoke, almost all of them have studied Evoke in one way or another. And life planning, know the term life planning, use the term life planning. So I was very interested in internationalizing the life planning movement and deepening a methodology for delivering freedoms.

Hannah: So what’s a context of … we talk about this first phase started out with you and Dick doing these presentations together, what year was that?

George: It was around 1993.

Hannah: And so ’93, you said 13 years.

George: 13 years.

Hannah: So that puts us what, 2006?

George: 2006, 2007, somewhere around there yeah.

Hannah: So this is recent history, this isn’t-

George: Oh yeah. Yeah, there was nothing … I mean some people will talk about how they were talking about the human side, but nothing developed. It became a movement when Dick and I came together, that was what really launched it I think.

Hannah: Yeah. So the second phase is really you going deep into the registered life planner and the Kinder Institute, Susan, all the people kind of doing theirs. What are your thoughts on the different angles people are taking on life planning?

George: Well I have two minds. It’s really interesting because on the one side I love it, I think it’s fantastic. I think the more that people are thinking about, and engaging with, and wrestling with this notion of the human side of money, the more freedom comes for the clients and the more the advisors begin to wake up and look at that’s what they really want to deliver. And they want to be emotionally intelligent rather than selling products. So I think it’s fantastic on the one side.

And then on the other side I have a methodology that I’ve designed and delivered and developed that I love. And I see the results of it almost daily as I work with trainers and advisors, now almost 3000 people I think have taken these programs and they’re all over the world. And to see what they’re doing in all these different cultures is phenomenal to me, and to hear the stories of freedom coming out from how it is that they’re doing it. So I’m working with that community, and we’re starting to talk about how do we get this work into the masses? One of the things I’ve been passionate about but I’ve not had time for, but I think after … in the third phase this will begin to happen.

I think that there should be a movement that delivers life planning in hour long life plans to anyone who wants one. It means to people who are indigent, to people of working class, to middle market, whatever you call it, hour long life plans. And I’m working with people right now talking about how we can do it, pairing with this simultaneous movement. Have you heard of basic income? There’s this experiment that’s happening in many countries where they’re giving a basic income, often it’s at poverty level or a little bit above, sometimes a little bit less. And what I’m trying to do is find a partner in the basic income community, there are communities that are receiving basic income as an experiment, and just say look let’s give a life plan, an hour long life plan, to everyone who’s receiving that basic income at the beginning of their receiving it, and look at the difference of what happens. Because I think what you’ll find is tremendous economic growth and an explosion of entrepreneurial energy coming out of that community.

Hannah: So is that phase three, kind of where you see?

George: I think phase three is even broader than that. Part of phase three is taking it into all the communities we’ve missed. And the primary community we’ve missed, largely because of profit motives, is the community of the underserved. But I think there’s much larger communities that life planning is gonna go to. I mentioned that it stimulates entrepreneurial energy. When we think of entrepreneurial spirit we primarily think of the kind of energy that comes, that’s fostered and paid for by venture capital and private equity. So it’s squirreled away into business schools and the elite. And life planning delivers entrepreneurial spirit, it democratizes it, it gives it to everybody.

So I think part of what happens in the third phase is looking at life planning as something that shifts society. So right at this moment in society, we talked about how there was nothing before life planning practically, it was just sales or legalities. And we’re in a cultural that has become largely institutional. Institutions or the very wealthy own our media, they buy our democracy, they certainly own financial services by and large, so we find an attitude that is not so humane. One of my dreams is actually to get democrats and republicans to take an Evoke five day workshop and have them pair up with each other. Every democrat gets a republican, every republican gets a democrat, and they life plan each other.

And what they learn is to love someone that they wouldn’t normally and to love their dream of freedom, and then see how to deliver that dream of freedom to them. So it humanizes their relationship to freedom. So I think that life planning actually will have a lot … there’s a lot broader audience potentially for life planning, having to do with its delivery of freedom.

Hannah: You’ve taught this idea of life planning, and I heard you even saying it in the definition of life planning, is tying it to freedom. How did you say that again?

George: Life planning really is delivering freedom into a person’s life. It’s delivering their dream of freedom.

Hannah: What does that mean? Can you dive into that a little bit deeper?

George: Well the most common technique, the technique that’s used by more life planners than probably any other technique, is the technique that I taught and teach, it’s in all my books, called The Three Questions. And in the Three Questions you’re asked, if you had all the money that you needed what would you do with your life? And then the second question is, if you only had five to ten years left to live what would you do with your life? And then the third one is a little bit different. The doctor tells you that you’ve got an ailment, you’ve got a disease and you’re done, it’s curtains, it’s time to go, you’ve got 24 hours left to live. And the question’s not, what would you do with your life, but what did you miss in reflecting on your life, thinking about all the things that you’d wished you’d been able to do, all your dreams. And so the question is, what did you miss? Who did you not get to be?

And in life planning, what we do is we take that question more than the other two. And in an exercise we call Heart’s Core, we take the Heart’s Core column more than the ought to or the fun to column. And we make sure that when we do life planning we deliver everything in the Heart’s Core column and everything in question number three to the client, everything. Often those questions … I mean, obviously those are questions that are not the kind of questions that the early forefathers of financial planning were wrestling with. They were wrestling with questions of insurance, and estate planning, retirement planning, and all the rest. But they’re the right questions because they’re the questions about what is it to be human, and who is it we’re meant to be in this world. And if we’re to be fiduciaries, you have to know those things. You can not do it just with money, you have to know who the person is and dedicate yourself to who they want to be.

So when we come to those questions, those are the places that touch a person’s heart. They’re life and death questions for a person. And we basically deliver them. And there are all questions, how can you deliver something about a relationship with a kid and all that? Or a spiritual life, or healing a relationship that’s already gone? Well we have methods for doing that, we train people on how to hold those moments. But most of the stuff is pretty simple, it’s having a good family, that’s one of the major ones, or a great relationship. It’s our values, sometimes it’s our spiritual life. It’s our creative life, being wildly creative, it could be in a business, it could be in the arts. It’s community and it’s the environment, it’s living where we want to live and really celebrating the life around us.

And those are pretty much … they’re common for everybody. So we deliver exactly how a person wants to be in all of those arenas in life planning. And the client experiences that first in the life planning engagement, there’s a moment we call Lighting the Torch. That was my second book, which was for advisors. And there’s a moment where it’s like the top of their head goes off, they explode with excite or collapse with tears, and they’re tears of joy mostly, unbelievability. Can I really have that? Can I really live that way? We deliver that. So we deliver a moment of freedom, and then we get busy with our spreadsheets and our financial plans on solving all the obstacles and delivering what they really want, and in relatively short order. People usually make dramatic changes within a matter of weeks with a great life planning engagement.

Hannah: So it’s really freedom to do what’s at your heart’s core, is that what it is?

George: Freedom to do, freedom to be. Freedom to be who you want to be. A lot of times you’re working a job and you feel like you can’t be completely who you are, you can’t be completely truthful, you feel like you’re compromising yourself in a variety of ways. So it’s freedom to be, freedom to do, and also freedom to have.

Hannah: So you talked about these three different phases, where are we now? Where it’s 2018, what phase are we in? We’re not in phase one.

George: I think we’re moving toward phase three, and it’s what I’ll be talking about here on retreat. And the topic that I’m talking about it … I’m adding two topics to life planning. I’m talking about mindfulness life planning and a golden civilization. If you think about someone who’s been life planned and has received that jolt of freedom and really begins to live their life in that way, that’s a golden civilization. That’s creating a civilization where people are authentic, they feel passionate about what they’re doing, they’re alive. So I think we’re right at that place. We’ve got a series of methodologies that different people are doing, and it’s time now to spread that work out into the broader society, to take it even further globally than I’ve been able to take it, and to take it deep into society.

Part of that is actually deepening our skills, and that’s the reason I have mindfulness in there. When we started our conversation today you asked me what life planning was, and I said it’s listening. And listening in such a way that delivers freedom, but it’s listening. Mindfulness is the most subtle training in listening that you can do, because it’s listening inside yourself ad it’s listening to moments. It’s trying to capture every single moment as it wanders through you, but that’s a very subtle kind of listening. And if you can master that kind of listening, you’re really mastering the present moment. So it’s much subtler, it’s a much subtler training than a sales technique or even the Three Questions.

But if you can really have a mastery around that, then when you’re listening to a client you’re actually accessing that subtly of listening inside yourself to everything, to your fears, to your excitement, to their fear, their excitement. And it means that you’re a tuning fork for what is authenticity for them. It’s extraordinary.

Hannah: There’s such a richness to life planning and what you’re saying. One of the things I have a response to, I’m assuming you would too, is people who take your Three Questions as, I’ve got it figured out. I got the cheat sheet, I got life planning down. What is your thoughts or response to that, they think that they can just bring those questions into a client meeting?

George: Right, well first of all I’ve got these two minds, one of my minds just loves it. All right, go for it, wonderful. Let’s see what you can do. And at least you’re gonna do much better than you used to do because you’re asking profound questions and you’re willing to engage in that conversation. It means that you’re gonna be challenging yourself constantly to be able to go deeper with a client, great. So that’s my first response.

And then my second response is, well how good a listener are you? And what are you gonna do with those three questions? Are you gonna appreciate their profundity? One of the mistakes that people make with the Three Questions is they take them into business planning for instance, or retirement planning, or estate planning. So they’ll go, let’s do the Three Questions around your estate plan, and it doesn’t work very well. I mean, it works better maybe than anything else they would do, but the three questions are meant to be life and death. And they should be guiding the estate plan all by themselves, not designed to be worked within an estate planning process.

So what happens if they’re designed to be worked with an estate planning process, is that their depth and urgency gets rocked. It no longer becomes life and death, it’s like and death around your estate plan. The estate plan is the advisor’s agenda, not the client’s agenda. So it’s taking away from our fiduciary responsibility, which is to the client.

Hannah: And cheapens it, yeah.

George: And cheap … exactly, and cheapens it, which is a sad thing. So two minds, one is great go for it, and the other is good to get some training too and learn to listen.

Hannah: Sounds so simple, but not easy.

George: What’s that?

Hannah: It sounds so simple, just listen, but it’s certainly not easy.

George: No.

Hannah: So we talked about the three phases of life planning, the origins of it, the phase two how it’s been branching out and deepening the body of research, and then the third is this aspirational how do we get this to everybody, is what I’m hearing.

George: Yeah. How does this … I think life planning really is meant to be the basis of civilization. If you think about democracy and economics, which are the two poles that we’re constantly thinking about, relating to, as we read the news or as we wrestle with our jobs, in a way the highest ideal for each of us in both of them is freedom. And yet there’s no methodology, there’s not a real focus on it. Which is why I said, let’s get the republican politicians and the democratic politicians together and have them actually learn what freedom means, and then learn to deliver it.

So I see it as a basis for economics. We talk a lot right now about the fiduciary movement, that’s huge for us. And at the same time, there isn’t a widespread recognition that you can’t be a fiduciary without being a life planner. I think that that’s one of the destinies of life planning, is that we are the fiduciaries in the world of finance. But there’s a larger issue. Just the other day there was a major drug company that bought this huge physician’s practice, many physicians in it. So it’s like product companies acting as advisors. And what’s really important is the fiduciary nature of what we’re discovering, fiduciary nature brings value to the consumer and the client and our customer.

And that fiduciary nature should be widespread, not merely in financial planning. We can be the leaders of it, but throughout certainly through medicine, I think probably through all of society, the larger an institution gets … I mean, all you have to do is look at Facebook, and the issues of surveillance and all of that. The larger an institution gets, in a way the more it owes to all of us a fiduciary responsibility. That includes government as well as corporations.

Hannah: So Dick Wagner also has something … was thinking along the lines, looking at his Financial Planning 3.0. How would you compare or contrast your vision of this with what Dick was working on at the end of his life?

George: I think the main thing that I would like right at this moment is to be able to sit right across from Dick and talk with him. I think for me to play with the ideas without him being present feels sad and unfair, I’m not prepared to do it at this point. I’d love to sit with him and spend a day just talking about these two sets of ideas and where we go next.

Hannah: One of the things that’s just so … history you can see patterns, and that’s one of the beautiful things about history is you can see you guys started together and then you’re really … your vision for what it becomes is far more aligned than different, I would say.

George: Yeah, absolutely. Well we were aligned from the get go, and it was really a couple of technicalities, and I think needing our own domains for a bit of time. For him to really develop his thesis he needed some freedom from the potency of my ideas. And I think I needed some freedom from him. So it was a wonderful period. And we communicated on a number of occasions over the last few years with real heartfelt connection each time. So it would be wonderful, but it’s not to be.

Hannah: Financial planning came out of this idea that we could bridge these interdisciplinary areas, insurance and estate planning and law and sales, into really one profession. And so what’s really interesting to me as you’re talking about this phase three, is we’re taking these personal finance … what financial planning is, and integrating it even broader across disciplines. Can you talk for a minute about that?

George: Yeah. It’s incredible, isn’t it? How is it that this idea to begin with has come up in the middle of the world of money, right at the heart of what we think is the most dark or the most materialistic of topics and of energies in the world? So in a way that gives it all the more power, because if we an tame the world of money, and not merely tame it but brings it’s power out for the good, for authenticity, for human beings, how powerful then we have the opportunity to bring it everywhere. So I think it’s natural that it goes into those other areas. We have kind of touched the mother lode, the mother lode is not about money, it’s about the human relationship with money.

And the human relationship with money is not just in financial planning, it’s in computers, it’s in business in general, it’s in home economics, it’s in the machinery of democracy, the powers of government. It’s in all of those areas, and the question of humanizing all of those areas but with really fine skill, is I think what we’re … where we’re destined to go with the essence of life planning, of financial planning done right.

Hannah: So who else do you see playing in this phase three?

George: The truth is that I think it goes across many disciplines. So I think that there are spiritual figures. I look a lot to spiritual figures in all the different traditions. I look to people who care about listening and compassion, and are active in that way. There’s a whole new group that is rethinking economics, in fact that’s the name of a group and they give major conferences. Larry Summers has gone to speak there. So I think economists could be involved. I think if you look at a golden civilization there’s no war in it, no war at all. So I think that getting both the antiwar movements and the military involved strategically, because the military are probably our greatest tacticians and strategic thinkers, and to get them involved thinking about how can we put an end to this would be a great thing.

So I really see it being quite broad who is involved. And as I’m working on the end of this book, we’re actually working on a Mapp Marketing campaign where we’re identifying many of those people. I don’t know them at this point, but we’re gonna reach out to them and see can we do this. There’s certainly some politicians, but probably very few really at this point, because most of them are making deals and most of them have taken money from big companies or corporations or wealthy individuals, and aren’t so concerned anymore about simple freedom for the constituents. But we’ll be talking with them as well.

Hannah: You’ve gone into multiple countries and cultures, does life planning this idea of freedom translate to all cultures?

George: Yeah, it does. Right at this moment I’m working with a woman from Kenya who is … she’s actually a princess. She’s basically the daughter of one of the top … of a tribal leader. There are 40 tribes in Kenya. And her husband is an ROP, she’s taken the five day training, and she is passionate about bringing communities out of extreme poverty. And she and I have engaged in a conversation about teaming up with basic income people, it’s happening in Kenya, and how we might do it and bring her work with communities and what she knows together with the life planning that we do and basic income. And she couldn’t be more excited about it.

In India last year, Louis Volbrecht who’s the top trainer that we have at Kinder Institute in Europe, and I went. Mary Zimmerman had gone the year before, for a couple of years I think in fact. And what we found was nothing but passion for these ideas. And I think in fact they can relate to it in some way more quickly than we can because of the mindfulness basis of their society, that they’ve been meditators for thousands of years. So they understand that quality of listening.

And the other way to think of it is that every human being on the planet has an aspiration for freedom. Everybody does. And most of us feel inadequately supported in that aspiration. So to actually bring someone who says, yes you deserve that and let’s make it happen, and yeah I know money has to do with it, that’s my skillset I can help you with that, what a wonderful thing. So to have that happening in every culture makes sense. It just makes sense. There are differences, the Brits do have a stiff upper lip. But gosh, in America we’ve got this split, this huge split as we know, culturally, politically, country versus city, huge split. Life planning works in both cultures. People want to be free.

Hannah: There’s no doubt you’re one of the pioneers of life planning, I would say to larger financial planning as well. What is your hope for new planners as they continue on this work?

George: Really to go for it. I mean, they’ve got so much energy. Here I am many decades past my youth and there’s so much energy, and I love to see it, vitality. And my encouragement would be for them to start with it, not to hold back, to really go to the deepest trainings they can get as soon as they can. Because otherwise there’s a shortchanging of their clients and a shortchanging of themselves. Training yourself to listen really well, challenging yourself around the Three Questions, makes you a deeper and richer person and means that all of your life unfolds in a much more authentic way. So my hope for them would be to live their life plans right from the beginning and to deal with subtle levels of listening inside themselves and with their partners, their spouses, as well as with their clients.

Hannah: How are you spending your time these days? What are you spending your time on? Where is George Kinder’s energy going towards right now?

George: Well finishing up this book, which is really exciting for me. It is Golden Civilization and it’s asking this question, I don’t know if I mentioned this to you, but it’s taking us out a thousand years, or a thousand generations even, and imagining that we’ve arrived at a golden civilization looking back to right now and going, what are the things that are going wrong and what’s going right? Because we know a lots going wrong, otherwise we wouldn’t have this politically dilemma that we’ve had, we wouldn’t have had the banking crisis that we had. So we’re looking back and going, all right whatever wouldn’t lead us to a golden civilization, let’s just throw it out and see what happens if we just put the things that would lead us to a golden civilization into the basic, fundamental, the foundation of society.

And so I’m suggesting that we can actually start a golden civilization pretty much right away. And so I’m looking at leadership, and democracy, and economics, and all of these areas, and I’m designing ways that we could actually shift to make authenticity and freedom be the bedrock. One of the things I think is that we need to end distrust and cynicism in civilization, they lead no where and they basically say something’s wrong. So let’s fix it. And so it’s basically using life planning techniques on civilization. So that’s where one piece of my energy is.

And then I’m really looking forward to my next set of books. I’ve got a series of books coming out that are gonna be four books of poetry and photography and four books of plays. And they’re already well along, each of them has … the poetry and photography are nearly completed, it’s just fine tuning each of them. And the plays will come back to some money themes. So I’m excited about being wildly creative and doing a lot of mindfulness practice. That’s where I get my energy, and my 14 year old daughters.

Hannah: You talk about being wildly creative. Does everybody have it in them?

George: Well, I think everybody’s got something pretty special in them, whether we call it wildly creative or we call it … I mean, my wife says what she is is loving, that’s what she believes in, compassion and love. Wow, how beautiful that can be. I think when we’re given permission to be who we want to be there’s an energy that comes out that becomes pretty creative around how we can do it. And that’s one of the things, that a life planner makes a great partner and mentor to make that happen.

Hannah: What did we miss?

George: I miss Dick, I miss Dick. I’m sorry we didn’t have a chance to spend a day together in the last couple years and really spend some time. Other than that it’s wonderful what FPA is doing, what the retreat has stood for all these years. And I’m excited for retreat, for where it goes. This seems like it’s the biggest and boldest of all the retreats that they’ve had, and it’s a thrill for me to be part of.

Hannah: Well it’s exciting.

George: Yeah.

Hannah: I’m excited to see what the next several decades hold.

George: Thank you.

Hannah: Great.

George: Good.

Hannah: Excellent. Well thank you so much for doing this.

George: Thanks, Hannah.

Hannah: We really appreciate it.

George: Thank you.

Hide Transcript

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George Kinder of The Kinder Institute of Life Planning has had an incredible impact on the development of financial life planning. To hear him speak about the human element within financial planning is inspiring, The Kinder Institute of Life Planning has had an incredible impact on the development of financial life planning. To hear him speak about the human element within financial planning is inspiring, and absolutely necessary for all planners – whether you’re new to the field, or you’ve been a planner for decades. In the early 1990s, George Kinder and Dick Wagner partnered together to discuss:

The skillset advisors needed to hone to in order to engage in financial life planning
The philosophy behind financial life planning
The ways that the human component of money can positively impact financial planning as a profession, the lives of financial planning clients, and our world as a whole

In this episode, George covers a lot of ground. He discusses the beginning of the financial life planning movement within the FPA – from the founding of Nazarudin, to the growth of the movement, to how the initial financial life planning community worked to get the message out to the masses.


 
What You’ll Learn:

What the beginning of the financial life planning movement looked like
Who was involved at the onset of this movement
How the Nazarudin movement began, and how it still exists today
What the three phases of the financial life planning movement has looked like, and how it’s grown over time
The “why” behind financial life planning
The importance of developing a “one hour” life plan for everyone – not just those privileged enough to have access to advisors
The different exercises that financial life planning moves through
What questions are the “right” questions to wrestle with with your clients – questions like “What is it to be human?” or “What is it to be human in this world?”

 
FPA Retreat
 


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Hannah Moore clean 51:32
Building Non-Traditional Career Paths https://financialplannerpodcast.com/yafpnw-building-non-traditional-career-paths/ Tue, 04 Sep 2018 18:48:52 +0000 http://fpaactivate.org/?p=11585 https://financialplannerpodcast.com/yafpnw-building-non-traditional-career-paths/#respond https://financialplannerpodcast.com/yafpnw-building-non-traditional-career-paths/feed/ 0 This panel through TD Ameritrade Institutional with Charesse J Hagan, Kelli Cruz, and Heather Fortner offers fascinating insight on how non-advisor roles in the financial planning profession are evolving - and why they’re important. In today’s episode Charesse J Hagan, Kelli Cruz, and Heather Fortner join Kate Healy from TD Ameritrade for a panel discussion at LINC 2018. They offer fascinating insight on how non-advisor roles in the financial planning profession are evolving – and why they’re important!

So many people within the financial planning profession are hyper-focused on becoming an advisor. When working toward being a revenue-generating advisor is the only career path available, many people who are happy performing their current non-advisor role feel lost within the profession, and struggle to find their place. Everyone is able to take ownership of their role within an advisory firm, and building out career paths in operations, investments, or compliance can help everyone find their stride.

People each have a unique skill set, and helping people find their sweet spot where their skill set and their passions overlap can motivate non-advisors to build and grow their own career path within a firm. This panel covers so much fantastic information, from how to build non-advisor career paths as a profession, to the best way to motivate non-revenue-generating employees within your firm to scale, grow, and find success as a team.

Whether you have back office employees at your firm, or you’re new to this profession and aren’t sure whether or not being a client-facing advisor is right for you – this podcast episode is a must-listen!

hannah's signature

A lot of people are shifting the mindset. A lot of firms think that the only way to own a business is to be an advisor, but some people want to support advisors and create that business model. – @charesse_hagan

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What You’ll Learn:

  • How to navigate a career path when there is no career path at your firm
  • How to free up time for your advisory team by delegating, outsourcing, or finding a technology solution
  • The best ways to motivate team members, even if they aren’t firm owners or on track to be firm owners
  • Why it takes people with different skill sets and passions to scale a firm successfully
  • How to stretch yourself to think beyond your revenue to see value in everyone’s role
  • How to give non-advisors the resources they need to lower cost and be successful
  • How to work virtually with either contractor or full time employees who aren’t client-facing
  • How firms can know what their next hire should be
  • How to organize your back office with exceptional processes
  • Questions firms should ask before hiring a non-advisor role 

 

Charesse J Hagan

Cruz Consulting Group

Signature FD

TDA4Advisors

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This panel through TD Ameritrade Institutional with Charesse J Hagan, Kelli Cruz, and Heather Fortner offers fascinating insight on how non-advisor roles in the financial planning profession are evolving - and why they’re important. Charesse J Hagan, Kelli Cruz, and Heather Fortner join Kate Healy from TD Ameritrade for a panel discussion at LINC 2018. They offer fascinating insight on how non-advisor roles in the financial planning profession are evolving – and why they’re important!
So many people within the financial planning profession are hyper-focused on becoming an advisor. When working toward being a revenue-generating advisor is the only career path available, many people who are happy performing their current non-advisor role feel lost within the profession, and struggle to find their place. Everyone is able to take ownership of their role within an advisory firm, and building out career paths in operations, investments, or compliance can help everyone find their stride.
People each have a unique skill set, and helping people find their sweet spot where their skill set and their passions overlap can motivate non-advisors to build and grow their own career path within a firm. This panel covers so much fantastic information, from how to build non-advisor career paths as a profession, to the best way to motivate non-revenue-generating employees within your firm to scale, grow, and find success as a team.
Whether you have back office employees at your firm, or you’re new to this profession and aren’t sure whether or not being a client-facing advisor is right for you – this podcast episode is a must-listen!


 
What You’ll Learn:

How to navigate a career path when there is no career path at your firm
How to free up time for your advisory team by delegating, outsourcing, or finding a technology solution
The best ways to motivate team members, even if they aren’t firm owners or on track to be firm owners
Why it takes people with different skill sets and passions to scale a firm successfully
How to stretch yourself to think beyond your revenue to see value in everyone’s role
How to give non-advisors the resources they need to lower cost and be successful
How to work virtually with either contractor or full time employees who aren’t client-facing
How firms can know what their next hire should be
How to organize your back office with exceptional processes
Questions firms should ask before hiring a non-advisor role 

 
Charesse J Hagan
Cruz Consulting Group
Signature FD
TDA4Advisors
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Hannah Moore clean 55:15
Financial Advice: What Works and What Doesn’t https://financialplannerpodcast.com/yafpnw-financial-advice-what-works-and-what-doesnt/ Tue, 28 Aug 2018 21:28:11 +0000 http://fpaactivate.org/?p=11578 https://financialplannerpodcast.com/yafpnw-financial-advice-what-works-and-what-doesnt/#respond https://financialplannerpodcast.com/yafpnw-financial-advice-what-works-and-what-doesnt/feed/ 0 Dr. Moira Somers, author of Advice That Sticks, wears many hats. She’s a clinical neuropsychologist, professor, and executive coach whose work focuses on financial psychology. We’re honored to sit down with her today to discuss all things money and the mind. So many advisors are frustrated by the fact that their clients fail to implement the advice they give them. What they don’t realize, today’s guest suggests, is that often the advisor may be making predictable mistakes in giving that advice, or clients may simply not be ready for change. Dr. Moira Somers joins us for today’s episode and she wears many hats! She’s a clinical neuropsychologist, professor, and executive coach whose work focuses on financial psychology and mental health. Dr. Somers’ book, Advice That Sticks, is currently being read by the FPA Activate Book Club – and we were honored to sit down with her today to discuss all things money and the mind.

Dr. Somers shares what type of advice is inherently sticker and how planners can give advice in a way that is easier to follow. Through examples, Dr. Somers shares the what makes advice stick, or the motivators behind many of these messages (and they aren’t what you think!). Additionally, planners need to realize that their advice is going against everything that North American society is telling consumers. Financial planners often feel as though they’re competing against one another when giving advice to clients, when in reality they’re competing against:

  • The messaging in the media
  • The certainty that comes with spending over saving (or the immediate gratification and reward that comes with spending now rather than saving for later)
  • The predictability of falling back to what’s comfortable, even if it’s not a financially wise decision

Dr. Somers does a fantastic job of exploring how to motivate clients, how to listen actively, and how to follow-through to help your clients continue to make progress in their financial lives.

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Hush more. Stop talking, and start listening. – Dr. Moira Somers on #YAFPNW

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What You’ll Learn:

      • The importance of listening to your clients
      • The right questions to ask your clients to gain the information you need to help motivate them
      • What are the “stickiest” motivators for people
      • Why clients may not take your advice
      • What you’re truly “competing” against when you give financial advice
      • Why financial advice is uncomfortable for some clients
      • How to navigate around a client’s emotional capacity to understand and follow your advice
      • What elements make advice sticky or easier to follow

Money, Mind, and Meaning

 

Show Transcript

Ep113 Transcript


Hannah: Well thanks for joining us today Moira.

Moira: It’s a pleasure.

Hannah: You are a clinical psychologist and the author of the book Advice That Sticks that came out earlier this year, and I am so excited to have you on. I can’t tell you how many planners I talk to where there’s just so much frustration about their clients who don’t implement eh great advice they give them. But from your perspective, what really prompted you to write this book?

Moira: I too have been concerned about the fact that so many people are struggling to implement good financial advice, and the fact that it doesn’t get acted on compromises everybody. It compromises individuals in our society, it compromises their families, it has huge implications for public policy when you’ve got this huge cohort of people who are facing impoverished retirements, and all of the kind of healthcare decisions that that involves.

Moira: Then there are the concerns about what that does to people who are trying to help them. And how can we just get better at helping them out so we as the advisors are more satisfied with our work at the end of the day and that clients and the broader society are better served by the work that we do.

Hannah: I don’t know quite how to frame this question the right way, because it’s not about pointing fingers as who’s the problem. From your perspective, where are the fundamental issues with advice that doesn’t get implemented?

Moira: I think it doesn’t lie at any one person or system’s feet. I think it’s a multi-factorial problem, Hannah. There are certainly there is much about North American culture that flies in the face of sound financial advice. We are bombarded 24 hours a day with all kinds of ideas on how to part with our money. And a message that if we don’t own this or if we don’t do this that we are somehow less desirable as people or less successful. So there’s societal contributions to financial problems. And there are some predictable and preventable errors that advisors themselves make, or anybody within financial services professions, I’m using advisors very broadly there to include accountants and bankers and credit counselors as well as investment advisors. There are just some mistakes that we see crop up at the level of the advisor time and again.

Moira: There are some things that reside really within the individual client, their own history with money, their own level of financial literacy. There are some parts of the advice itself that contributes to its likelihood of flying or not flying. Some advice is simply harder to take than others, and we actually know a great deal about what makes some advice harder than others. Yeah, those are the big five factors that contribute. The domain of finances itself, what characteristics of the specific advice that’s being given, what the clients do, what the advisor and the advisory team do, and then what are some of the broader societal contributors including what are the inherent defaults in systems that either promote or help to thwart financially desirable behaviors in the long term.

Hannah: When you first started talking, oh it’s a really interesting point. I hear a lot of conversations about how we can differentiate ourselves from other financial planners, but really what we’re doing is we’re competing against all the different places that our clients are being asked to spend their time and their money. And that’s a really kind of sobering idea.

Moira: Well it’s one of the things that makes financial advice hard to take in terms of the advice characteristics itself. You’re asking people to forego immediate pleasure for the sake of a future self that may be literally decades down the road. You’re asking them to forego something certain, like that thing that they could purchase today or that experience that they could have today for something that’s pretty ill-defined or pretty vaguely thought of, again, farther down the road. There’s a lot about good financial advice that’s a lot like good lifestyle advice, which is that it all sounds very easy, we all know that carrots are better for us than cheeses, but why do we not then do those things? Because it’s not just a matter of head knowledge it turns out, it’s a matter of yearning and it’s a matter of pleasure, and it’s a matter of competing demands on our time and our energy.

Hannah: Is that a problem that financial planners can help with? Or do clients kind of have to have that internally figured out before they walk into our office?

Moira: I think advisor teams can do a lot to help with that. We know that there are lots of things that will help people gain access to their best self. We know lots of hacks that get around the willpower problem. When you think about what banks do, for example, Hannah, why is there such a success in terms of people paying their mortgages every month? Why does that work? Why do the vast majority of people make their mortgage payments?

Hannah: You’d lose your house, yeah.

Moira: In part because they don’t have to do anything once they sign the initial paperwork. The banks make darn good sure that the mortgage payments come out automatically without a client having to think about that decision, remember that decision, remember to act upon the knowledge that the mortgage payment is due. The defaults are just set up. Once you sign hat initial paperwork, the good behavior follows without you ever really having to think about it again. And similarly, financial advisors are trying to figure out ways to help clients make one decision initially that renders all a host of subsequent decisions unnecessary.

Moira: If you sign the paperwork to contribute to your pension, your 401k or in Canada your RSP, then once you’ve signed that, the default is that the payments will get made. And in order to undo that, people have to go through a series of steps that are quite manageable, but nevertheless they require action to undo that step. The fact is that most people, we’re just far too lazy to uncheck a box, so the default reigns supreme. And the best willpower hacks are those things, those steps that allow people to use their willpower to make the right decision initially, and then just to have habit and defaults carry on from there. We know similar things exist with respect to savings and earnings. The more we can do to make these things automatic, the better.

Hannah: It’s funny, when you gave the mortgage example, my immediate thought was tying into retirement or you’re gonna be the bag lady under the overpass.

Moira: Yeah, it turns out fear is a really short-term motivator and it’s insufficient most of the time to really result in lasting behavior change. Think about somebody who’s had a mild heart attack and has been told that she needs to lose weight and stop smoking. She may be very virtuous and motivated because she’s just had a life threatening event occur, but that fear, we habituate to emotion. Fear is one that we tend to habituate to quite rapidly in fact. So over time, people pick up the cigarettes again, and we need to get better systems in place to help them persist on these hard behavior changes.

Moira: When you think about go back to the mortgage example, Hannah, people could be highly highly motivated to keep their house, of course they would be, and highly scared to lose it. But that emotion is not nearly as strong a driver of behavior as is a simple default action that’s been set up. Because you can be really motivated to do something, but then forget to do it. Pure old normal human forgetting or overwhelm contributes a lot to advice not getting followed. Paperwork that gravitates to the bottom of the pile or just gets forgotten about. It’s not that people made an active decision to not follow advice, it’s that it wasn’t top of mind anymore and it just kind of fell off the radar.

Hannah: The term decision fatigue came up when you were talking about we want to help clients make one decision that makes future decisions for them as well. Do you see a decision fatigue? Is that kind of what you’re talking about?

Moira: Sure, that’s one of the things that we try and avoid. And part of what financial advisors can learn to do better is to give advice, to understand that often clients are coming to you because of decision fatigue or because they’re trying to avoid it. They don’t know which of these 76 mutual funds is better than the other, and they don’t want to pour through the prospective for each one. They want you to do it, and that’s a great thing that they can trust that you would help them identify what’s best for them.

Moira: When you think about differentiating yourself or promoting yourself as an advisor, certainly one of the things that you can promise is that you hope to simplify decision making, and that’s a great thing.

Hannah: And it’s so interesting that that is the value proposition for clients. You don’t have to prove your value through making things complicated. You actually prove your value by making it simple.

Moira: Absolutely.

Hannah: You’ve talked about motivators to get people to change their behavior and having some of these lifestyle things. What are the other main motivator that help clients actually create change in their lives?

Moira: It’s really hard. The first thing I want to say about that Hannah is that it’s so hard to motivate clients from without. And often we can get temporary agreement or acquiescence in an office, especially if we’ve kind of got the gift of the gap or we’re skilled persuaders. You can get to a temporary yes set in clients that is the result of them believing your conviction, your earnestness about why this is a good course of action. But especially if what they need to do is something that actually requires some lifestyle change, you need to get them to tap into their own motivation. What is their intrinsic motivation for doing this. And not only their motivation, but you need to figure out whether they truly believe that they have what it takes to fancy term for that is self-efficacy.

Moira: Do they believe that if they do this thing you’re recommending, that it will result in the desired outcome? And do they believe they can do it? If not, why not? And again, that’s part of what a great advisor does is help assess readiness to implement advice. Are you in agreement on this proposed course of action? Do you think you could do it? Can you already foresee obstacles to your success? Would you like to address those obstacles now? What would increase the likelihood of your being able to follow through on this, and can we help harness those sources of support now before you leave the office today? These are things that skilled advisors know how to do.

Hannah: You had made a comment at the beginning about how you had really an individual and their history of money. Can you talk more about that? What does that mean in terms of the client sitting across from you? What do we need to understand about that to be great advisors or planners?

Moira: My biggest piece of advice to advisors, if I can only give one or two, probably one of the biggest ones would be to hush more, to just stop talking and start listening, and to learn the questions that draw clients out of themselves, that make it easy to talk about money. Or if not easy, then at least creates a degree of safety and trust and understanding, and even excitement in your office about what is possible for them.

Moira: Sometimes clients come to us with painful money legacies. They may have made mistakes in the past that they feel quite embarrassed about. They may have a sense that they’re not where they should be compared to their expectations of where they would be or ought to be at this point in life, or compared to where they see their friends at this point in their life.

Moira: Conversely, they may feel that they have been blessed with or cursed with a level of richness that is totally undeserved and unmerited, and they don’t know what to do with it. They may feel quite conflicted about it. I’ve just highlighted a couple of the things that can make advising both challenging and wonderful because of the complexity of peoples relationships with money.

Moira: We can’t just assume that everybody comes in believing that money is great and that more money is greater and that the ultimate alpha out of their work with you is that they’ll get better returns. That’s kind of what a lot of financial advisors believe, but it isn’t actually what a lot of clients believe, and it isn’t their primary focus in coming to you.

Hannah: Often you have two people coming into your office too, so I would imagine that each one has their own stories as well.

Moira: Mm-hmm (affirmative), and of course one of the really challenging things is to figure out how can you be the advisor to a couple who believe different things or want different things with their money. How do you work to get them growing in the same direction or creating enough space so that both parties can get what they need and want out of their engagement with you.

Hannah: You had talked about questions that help draw this type of conversation with clients out. What are some examples of those questions?

Moira: In terms of their relationship with money?

Hannah: Yeah, the information we need as advisors to really help guide them well on the complexity of their story of money.

Moira: One of the first things I ask is, “Have you ever worked with an advisor before?” Or “Have you ever talked to anybody about money before?” What went well in that relationship and what didn’t go well? Many of your listeners will have the experience of inheriting clients from another advisor if they’re coming into an existing advisory firm. Others may be out there recruiting clients cold, trying to scare up clients that don’t have an existing advisor. And the other thing we know however is about 70% to 80% of an advisor’s new clients actually come because of a major life transition. Things like marriage, a divorce, an inheritance, a child on the way. And those major life transitions are events that actually change people’s sense of identity. These are not little things. This is not just like moving from one car to a different car, this is really the dividing line between, “I used to be this, but now I’m this.” I used to have parents, but now they’ve died and I’ve inherited this money, and I’m without my parents. That’s a big shift in identity.

Moira: When clients come to new advisors, it’s often during these times of turmoil in a client’s life. And the more that an advisor can find out about what’s bringing you here now and what’s happening in their life that led them to contact you, and what it is it that they’re hoping to get from their involvement with you? What would be the absolute best thing that could happen as a result of their meeting with you today?

Hannah: I know there’s a lot of people listening to this right now who are hearing everything that you’re saying and just being like, “Okay, this is great, but how do we fit this in our hour-long meeting?” Is there a process about this, is this something that can actually be applied for the average planner out there who maybe doesn’t have the counseling background?

Moira: Right. What I’m trying to do is to make sure planners don’t believe they have to be counselors. I think that’s quite a dangerous boundary violation. But what I can say is especially in the first couple of meetings, Hannah, the big mistake that advisors make is they talk too much. They talk way too much. They feel pressure to get through all of the stuff that’s in the know your client protocols or that kind of thing, and as a result they actually slow down the process of connecting and may actually blow the client relationship.

Moira: The first thing is they just need to ask some of those really important open-ended questions earlier, and they need to learn how to hush and listen to the answers without interruption. They need to learn how to set an agenda every single meeting, now just in the first one and not to assume that they know what needs to be discussed in the yearly meeting, but to say, “As we meet today I’d really like to know what would make this time together the best use of your time and energy and money?” To just clarify that every time. There are a few things that need to happen every session, and one final one that I would say is if you’re gonna send anybody away to do anything, you really need to make sure that you have established their readiness to do it, that they understand it, that they agree it’s the top priority for them, that they believe they can do it, and that you are prepared to support them through its implementation.

Hannah: That’s such an interesting concept of this readiness. How do you know when a client is just giving you lip service that they’re ready versus them actually being ready?

Moira: Let’s take something like a client is over-spending. That’s one of the things that I think drives most advisors most crazy. And something has come up where you’ve got them to agree that they’re going to stop over-spending. It might be that broad. You ask them, “If you were to reign in your spending in this area, what would be the advantage to that? How would that benefit you?” And if they are giving you lackluster lukewarm answers, “Well I know it’s really important that I do this so I’ll do it,” you can assume that there will be lackluster follow-up. What you want to do is really help people get to their own why. And if they are not digging deep on this, you can say, “I’m sensing that you have some ambivalence about this,” or “It sounds like maybe you believe intellectually this might be a good thing to do, but you’re not quite committed to it. Do I have that right?” And to be able to just work with peoples ambivalence and not strong arm them into agreeing with you during the meeting, because you know they’re just gonna fall off on the implementation once they leave.

Hannah: If somebody is ambivalent or they’re not gonna make a commitment that’s gonna last on that, and I hear you say you kind of push it a little bit of gently calling it out. Not what do you do, but is that all can you do? Is there just times when you just need to wait and just know that maybe in six months they’ll be ready?

Moira: Absolutely, absolutely. You can ask, “Is there something that you do feel ready to act on today? Where is it that I’m off the mark? Where is it that you are ready to take some action?” Let’s say that people do not feel that they can save any more than they are currently saving. We can often get them to pre-commit, they want to pre-commit to give a percentage of their future earnings. They can’t do it right now, but they know that they’re getting a bonus six months down the road or that they are expecting a raise three months down the road, and they will very willingly pre-commit a proportion of that future earnings in the office with you now. You can get the paperwork signed for that, and people feel really good about that. Then you just need to make sure that you’ve got policies in place to help follow-through with that, that you remind yourself, that your team is reminded to follow up with people when that thing is gonna happen or when that inheritance is going to come through, that sort of thing.

Moira: Even if the conditions are not right for them to do what you feel is the most important thing right now, they may know that there are other things that they’re absolutely ready to do. And advice that gets acted on or behavior change that is minor but successful is better than a proposed major change that never gets off the ground.

Hannah: I have some clients who they compact their spending, their plan works. And if they don’t, it doesn’t work. I guess we’re giving them the hard facts of that information, but is there any way to …

Moira: Is that a math issue? Is it that they don’t get the math, or is that a self-control issue? Or is that a overwhelm issue and a not having systems in place to do this thing? Again, often getting people to pre-commit to savings so that the first 5% of their paycheck just gets out of their bank account before they see it, that is the most successful strategy, bar none. But there are lots of other strategies that can be employed in working with … We can take overspending as an example Hannah, or we can take something like excessive supplementation of adult children’s lifestyles is another example. Those are probably the top two challenges that advisors come to me with.

Moira: If we go to the overspending thing, we know that can we get people to agree to put their credit cards away? Because discretionary spending goes down by about 30% if you put credit cards away. That’s a very simple little behavior change that is way more effective because in fact of its precision than, “You need to cut down on your spending.” All we need to do is get people to put away their credit cards and use cash and great things start to happen.

Hannah: What are some of the other predictable mistakes that advisors make that you’ve seen when working with advisors?

Moira: In addition to talking too much, they talk too fancy. They kind of forget what it was like to not know everything that they have come to know through the course of their training. The number of new terms that you learn in the course of your training as a financial advisor is in the thousands. And when that specialized really technical vocabulary slips unbidden into meetings with clients, you can really quickly overwhelm their capacity to understand to follow you. But it’s very rare that a client will say, “Hey hold on, I didn’t understand a word you said there,” or “I didn’t understand that term.” They will just let the conversation keep going, hoping that it’ll become clear to them. But often it doesn’t. When clients leave meetings feeling like they didn’t get what you said, they feel stupid. And that’s not something they want to replicate, so often they’ll just vote with their feet by not coming back to an advisor who does that to them repeatedly.

Moira: Again, it’s really critical during the first few meetings that you spend time figuring out what is this client’s level of financial sophistication, and understand that even highly intelligent and well-educated people may not be able to follow what you say if you just give it to them rapid fire in a meeting without giving them supporting materials, and especially if you don’t get them to say in their own words what it was that you’re advising them to do and why. That’s something that I do at the end of every client meeting. “Can you tell me in your own words what we agreed would be the next step and why we thought that would be the case?” Because if they can’t go home and explain to their family why they’re doing what they’re doing, chances are they really didn’t understand. Or even if they understand in the moment, as I said, they may well forget it.

Moira: If you view yourself as a real partner in that adherence process, in that process of delivering timely advice in a skilled manner, if you see yourself as a partner in follow through, then you’ll make sure that you give them whatever they need for that long-term retention so that they can get home and remember what they agreed to do and why.

Hannah: Does that come across as condescending to a client asking them to repeat what we agreed to in this meeting? Or is that appreciated by clients? How do you balance that?

Moira: Do you know the work of Carl Richards, the guy who does the little drawings in the New York Times, behavior gap guy?

Hannah: Yeah, yeah.

Moira: I’ve heard him say several times that he’ll submit a drawing to I think it’s the New York Times that they initially show up in, and he’ll think, “Oh goodness, I’m gonna get fired this time. This is such a stupid drawing, of course everybody knows this already. I’m gonna be found out for the fraud that I am.” And then as soon as this little drawing is published, people write back in and say, “That is the best thing you have ever done.” Time and again, we’re coming to understand that people love the experience of being able to understand complex materials. And the better you can get at both explaining it and ensuring comprehension, the more valued you will be as an advisor. Giving people a 100 page financial plan is actually not a gift. Giving them a one page financial plan is a tremendous gift. And that’s what increasingly we’re trying to get advisors to be able to do.

Hannah: Advisors really do give clients a one page financial plan?

Moira: You know what the compliance and the regulations around this stuff … of course you’re gonna give them the 100-page plan, because your neck would be on the line if you didn’t. But what the clients will hold onto is what you drew during the meeting. That thing that you scrawled on. Or that one page summary that you’ve typed up and prepared ahead of time that includes simple beautiful graphics if that’s appropriate, and that uses their words. My cottage dream, my early exit from hell plan, whatever words they use in their meetings with you, that’s what you put on their plan. And they talk about how much they appreciate that.

Moira: And it doesn’t mean this isn’t a tremendously sophisticated or even complicated plan. The genius that you have is being able to take these complicated and technically brilliant plans to deal with their particular estate complication or their tax issues, and really put it in terms that they can easily communicate to their partners or easily review when they get home and say, “You know what? I really like this part, but I didn’t like that part.” Again, enhancing the partnership aspect of this alliance you have with them.

Hannah: One of the other pieces of your book is you talk about there’s parts of advice that are just harder to follow than other pieces of advice. Can you talk more about that? What are the harder pieces of advice to follow?

Moira: Harder pieces of advice are certainly those that require complex lifestyle changes. Things that make them visibly different from other people. Things that are multi-step, and things that they have to implement completely on their own with no supervision or support in following through. Those are the things that are most likely to get abandoned by the roadside unless you figure out how to change that.

Hannah: Can you give me an example of what you mean by that?

Moira: Let’s take that overspending problem for example. You know how earlier we were talking about the little tweaks that people can be turned onto? That’s an example of taking a huge complex lifestyle change and just revealing it kind of one step at a time. I call it the dance of the seven veils where you’re just revealing a little bit and once you get people, “Yeah I can do that,” you create momentum. You say, “Let me know when you signed off on one click ordering, and I’ll give you the next secret to the universe.” You follow up in two days and say, “Are you ready for the next secret of the universe? Did you do this step?” And they’ll say, “Yes, what’s next?” And so it’s almost a gamification, it is really a gamification of the stuff that they want to do, and it was just nothing but pain before has now been turned into something that’s really quite easily done because you’ve broken down this huge task into something that only takes a couple of minutes a day, if anything, if that.

Moira: Not everything can be done that way, right? The overspending can be done that way, but let’s say the advice involves having a conversation that they’ve been avoiding for years with a business partner or with the children about what the estate plan is, and they’ve been avoiding having these conversations because it’s going to cause conflict. That’s another example of advice that’s going to be very hard to implement, because avoidance is such a brilliant strategy. It works immediately. It just reduces all that pain. So how are you gonna overcome that particular adherence barrier? What are the strategies for getting people to do emotionally difficult things? Sometimes that can be in the office with you, you actually role play some of those difficult conversations. Maybe you help supply them with the words that they’re lacking. Maybe you offer to bring in those adult children and help co-create the estate plan. Maybe it’s that you refer them to a really fine estate lawyer, or perhaps you offer to refer them to a therapist who can help develop skills both at managing the anxiety and at improving communication. But these are ways in which a really valuable piece of advice, “Go have this conversation,” doesn’t just become a useless piece of advice because they can’t possibly implement it.

Moira: By virtue of what you do in the office with them and your referral network, you help make this valuable piece of advice something that actually gets acted on. And that works to not only the client’s benefit, but of course to yours as the advisor. When clients don’t follow advice, when they don’t keep their commitments to whoever they’ve made them to, they feel embarrassed. And they kind of avoid, they put off future meetings, “Yeah I thought we were gonna meet today, but I wasn’t able to do what I said I would do.” And if you’re not careful, you can completely lose touch with them, all because they didn’t implement, they didn’t make good on their commitment to you and they feel bad about that. So the more you can offer to help be there, not necessarily during the conversation, but that you can help anticipate where the barriers are and then build the latter to get past that barrier, the more valuable you’ll be to them.

Hannah: We’ve talked a little bit before about financial planners aren’t counselors, that’s not what we’re supposed to be. A question that struck me is how do you know if you’re in over your head for some of these conversations? Because these are some heavy conversations to have with clients.

Moira: It’s important that you develop a really good gut check. If you’re uncomfortable with the level of emotion involved, you can just name it, Hannah. There’s nothing wrong with saying, “Wow, this is really a difficult thing to contemplate, isn’t it? I am uncomfortable even as I imagine you trying to do this, so I want to make sure that you don’t go home to do something that you’re not ready to do. What do you think would be useful to you in doing this?” By checking in with your own gut and recognizing that you’re sensing a non-readiness or you are worried, you can just bring that into the room, your own gut sense, your own intuition that perhaps this is something that needs somebody other than you or that perhaps this needs a little more thinking before you send them home to implement on it.

Moira: I always say that one of the most valuable things that any one of us has in our practices is our contact list. That group of colleagues in aligned professions that we know to be ethical and competent, that we know we would feel that we were putting our clients in good hands by referring them to these allied professionals. Making those referrals and offering even to facilitate a meeting with them is great. Giving people two or three names and making sure that you follow up on it, because even the best … No one is a great fit for everybody, so you may refer one of your clients to somebody only to find out that that didn’t go well. And you want to have access to that information, so you really want to make sure that you follow up, and if that didn’t work that you are able to refer to somebody else.

Moira: I know in some firms you have to be really careful about making those referrals, so I’ll just acknowledge that that’s not even a possibility for some of your listeners. In some, they actually have some of these allied professionals in-house. You may be, for example, an investment advisor, but there’s somebody else on the team who’s an estate planning expert, and you can just kind of hand the client off at timely junctures to do some of this additional work.

Hannah: For a lot of the planners who are listening to this, they may not be the lead advisor in these relationships, but they’re seeing a lot of the problems that you’re talking about and they want to help the clients, even though they may not be the one speaking up in the meetings. What would be your advice to them?

Moira: I think the new advisors who are sitting in on meetings, just by virtue of being a new set of eyes and ears, they can often ask curious questions that the lead advisor may not even have thought of. The new advisor can become experts at follow-through. They can provide more of a listening ear when they do that follow-through, they can provide yet another opportunity for people to let them know what they’re concerned about and what’s working and what’s not working. I love the fact that we’re having senior advisors work with people from an entirely different generation, and that we may be bringing in the best situations we’re increasing the diversity of a firm by bringing in more women, by bringing in people of different ethnic backgrounds, and that allows not just a transition of the firm, but a transition of clients from one generation of the client’s family to another, knowing that they’re gonna be in good hands because these people are on board.

Moira: These are all things that I think the new advisor can bring to a situation that’s just such a great value add.

Hannah: Was there anything else as we wrap up?

Moira: I don’t think so. In my book at the end of each chapter, I list a number of questions that are quite simple, but quite powerful as examples of how it is that you can become more of an adherence partner with clients, as ways of making sure that really great advice doesn’t go wasted. I would just drop peoples’ attention to the summary at the end of each of the chapters that provide some great questions that you can ask to further enhance your relationships.

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Dr. Moira Somers, author of Advice That Sticks, wears many hats. She’s a clinical neuropsychologist, professor, and executive coach whose work focuses on financial psychology. We’re honored to sit down with her today to discuss all things money and the... Advice That Sticks, is currently being read by the FPA Activate Book Club – and we were honored to sit down with her today to discuss all things money and the mind.
Dr. Somers shares what type of advice is inherently sticker and how planners can give advice in a way that is easier to follow. Through examples, Dr. Somers shares the what makes advice stick, or the motivators behind many of these messages (and they aren’t what you think!). Additionally, planners need to realize that their advice is going against everything that North American society is telling consumers. Financial planners often feel as though they’re competing against one another when giving advice to clients, when in reality they’re competing against:

The messaging in the media
The certainty that comes with spending over saving (or the immediate gratification and reward that comes with spending now rather than saving for later)
The predictability of falling back to what’s comfortable, even if it’s not a financially wise decision

Dr. Somers does a fantastic job of exploring how to motivate clients, how to listen actively, and how to follow-through to help your clients continue to make progress in their financial lives.


 
What You’ll Learn:





The importance of listening to your clients
The right questions to ask your clients to gain the information you need to help motivate them
What are the “stickiest” motivators for people
Why clients may not take your advice
What you’re truly “competing” against when you give financial advice
Why financial advice is uncomfortable for some clients
How to navigate around a client’s emotional capacity to understand and follow your advice
What elements make advice sticky or easier to follow





Money, Mind, and Meaning
 

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Hannah Moore clean 45:50
Marriage, Money, and the Military https://financialplannerpodcast.com/yafpnw-marriage-money-and-the-military/ Tue, 21 Aug 2018 13:00:19 +0000 http://fpaactivate.org/?p=11567 https://financialplannerpodcast.com/yafpnw-marriage-money-and-the-military/#respond https://financialplannerpodcast.com/yafpnw-marriage-money-and-the-military/feed/ 0 Andi Wrenn’s mission is to reach as many service members and their families as possible to help coach them through their finances to achieve their biggest life goals. More than that, she approaches each conversation with a mind to marriage and family counseling, which allows her to view financial coaching in a more comprehensive way. Andi Wrenn’s mission is to reach as many service members and their families as possible to help coach them through their finances to achieve their biggest life goals. As a military spouse, she’s truly walked the walk, and works to help people understand the unique financial challenges they might face while involved with the military. More than that, she approaches each conversation with a mind to marriage and family counseling, which allows her to view financial coaching in a more comprehensive way.

Andi has an educational background rooted in both financial planning and counseling, which is unusual within the financial planning profession. Listening to this episode, you’ll be blown away by Andi’s approach to financial planning and how she incorporates counseling and coaching into her work with clients.

There’s so much that financial planners from all walks of life can learn from her, from how to balance dissenting opinions between a couple during a financial planning meeting to how to listen in a way that builds trust and creates a positive client relationship.

hannah's signature

 

When you’re working with couples, it’s helpful to listen to them both, to give them both an opportunity to speak, and to share without judgement from the other partner. @LoveandMoneyAFC on #YAFPNW

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What You’ll Learn:

      • What unique financial dilemmas military members and their families face
      • How to listen and build trust with clients
      • How family and marriage counseling can tie into financial planning
      • Why getting a variety of experience is beneficial
      • How to balance a couple’s differing financial views
      • The best way to incorporate coaching into your financial planning
      • How to encourage a couple who are a financial planning client to listen to one another and find middle ground

 

Zeiders Enterprises

 

Show Transcript

Ep112 Transcript


Hannah: Thanks for joining us today Andi.

Andi: I’m glad to be here. Thanks for having me.

Hannah: I’ve talked to you in the past and I love what you do around the military. Can you tell the listeners kind of what is your role and how are you involved with the military?

Andi: Well, my current role is as provider network manager for the personal financial counselor program at Zeider’s Enterprises. And we provide financial education and counseling to service members and their families. So I recruit, hire, train, support financial professionals that work in the field with service members and their families.

Hannah: And how did you get into a role like that?

Andi: I started with the whole idea of working in the whole money realm because I was raised and heavily influenced by grandparents who grew up in the Great Depression. And, I hated that. And I paid off my own debt, my college debt and things like that as fast as I possibly could. I became a government contractor working with military program after college and I really enjoyed the financial aspects of being a business owner contracting with the government.

Andi: Then I married somebody in the military and my job was not as easy to move from one location to another, so I started writing on our military installation about ways to save monies for a newsletter on the military installation. And, then during deployments, I helped military spouses who stayed home while their spouse was deployed to pay off their debt, to get their money organized, and to save for their future.

Andi: That really is kind of what led me to when I saw this scholarship that came up to become a financial professional to apply for that. As networker at heart, once I got my financial certification, I started networking with other people who received the scholarship and the government decided to start a new program and I got to be one of the lucky people that helped develop that program and then I managed a program placing and supervising interns that got this scholarship to become financial professionals.

Hannah: So you were just helping … This was before the days of blogging, right?

Andi: Oh yeah.

Hannah: It sounds like you were putting information out there because people needed to hear about personal finance.

Andi: Right. I think the biggest thing is when my husband was a commander in the military and I had mentioned that I paid cash for my house and people are like, “What?” You know what I mean? We started talking about it, and I started talking to people about what we did to become debt free and to pay off our debt and to buy a house paying cash and how that money freed us up to do other things that we wanted to do financially and somebody said, “Oh, you should write an article on that.”

Andi: So I started writing for our base. So that was really fun.

Hannah: I just love how it came out of this truly authentic place where you’re like, “No, I’m just wired this way, so therefore I do it.”

Andi: Right. It’s organic.

Hannah: Yeah.

Andi: And the role that I’m in now, I was working with the government contract with that internship program and I had met somebody who worked at Zeider’s and they said they were working on a government contract to put a bid in for a contract and said, “What do you like to do?” And I said, “I like to do this, this, this, and this.” And they made my role as a network manager.

Andi: I have a group of financial professionals. Some of them work full-time. Some of them work the occasional weekend. Others are, maybe they’re retired or they have their own business and they want to do three to six months a year. They might work full time for three months at a time, and then go back to their own business and do that during the rest of the year or be retired.

Andi: So it’s a good way for planners to keep busy. It’s a good way for planners who are getting started in their businesses and kind of getting that ramped up, they have a regular paycheck, but they’re working with their own … building their own clientele as well.

Hannah: And so, how many financial planners are in this network?

Andi: Over 700.

Hannah: Whoa. Your placements, are they all in the United States, or I mean, there’s military bases all around the world.

Andi: There are military installations-

Hannah: Do you place around the world?

Andi: Yes. We have Asia, Europe, Puerto Rico, Virgin Islands, in the Caribbean, anywhere there are service members.

Hannah: What does planning look like for them?

Andi: We don’t do a comprehensive financial plan where we tell people where to put their money in and what to do with their money. What we do is we educate them. You might teach a class on what does investing mean, what is their retirement plan, and all the pieces of that.

Andi: How do they pay down debt? Different types of savings and all kinds of things related to personal finance and we do all of that. And any need that they have so that they can learn to fish rather than we just do it for them and then they have no idea how they came about that plan.

Andi: A lot of times people say it starts with that budget, that getting to know the cash flow. What’s coming in, what’s going out, and naming every dollar. What are we gonna do with the money we have to spend each paycheck and what are some of the things that are gonna come up?

Andi: We help people in all areas of life so that if they’re going through a divorce or if a service member died, we work with the military spouse who’s lost their income earner. And new recruits. We help them. Maybe they have never even heard about budgeting or they came from a place where they didn’t talk about money in their family. Financial professional can teach a class then meet with them one on one and help them set a path to be financially successful and be able to retire the way they want to eventually.

Hannah: Do they have to go through this program, or is it a purely volunteer?

Andi: There are requirements for the military at certain points in their career that they’re supposed to have specific financial education and touch points. Basically, that’s gonna be when you come into the military, everybody will have a financial class. Now, sometimes it’s the military installation people that teach that, because every military installation is supposed to have at least one financial professional.

Andi: And, National Guard and Reserve, because we augment the installation program, we also have National Guard and Reserve programs that we work with. Everybody’s job might be a little bit different. So sometimes, our personal financial counselor is working as that representative on the base teaching those classes to the people who come in to the military. Sometimes they’re just augmenting that and doing whatever work they need.

Andi: Like maybe they’re doing financial counseling when people need help. So, somebody else taught the class and they do the one on ones to help people. It can vary quite a bit and that’s the nice thing, I think, that people don’t get stuck in a rut so to speak.

Hannah: Always that variety.

Andi: Yeah. There’s something new everyday. It’s the same but it’s different.

Hannah: Now, you call them financial counselors? Is that I’m hearing?

Andi: Yeah, that’s what the contract is. It’s personal financial counselors.

Hannah: Okay, so is it essentially the same thing as the planners, or there are distinctions that you see?

Andi: For the most part, I would say it is generally the same. I know that a lot of our CFPs that we have had come from selling backgrounds and that’s one thing that we don’t do. We sell their own financial health and fitness, but we don’t sell products. The only things that we really educate people on are government approved resources and programs.

Andi: If we’re talking about their retirement system, their thrift savings plan, which is like a 401K, those kind of things, that’s what we’re teaching people about. But we’re not saying, “Oh, in the thrift savings plan, you should be in this fund.”

Hannah: Okay, so that’s how you kind of draw that?

Andi: Yeah. We educate them on all the different funds there are and all the different ways they can look at it. We talk about risk. We talk about what they’re comfortable with doing, because personal finance is personal. You can’t apply one thing to everybody. It’s very exciting.

Hannah: For these classes, do they build relationships with those members, or is it more of a like, there’s a classroom and people just king of like file in and out of that?

Andi: Well, that can depend on the specific people. So if somebody goes to a class and they go, “Oh my god, I’m so excited. I wanna learn how to do this.” They can sit down with that professional, if they’re working on a military installation or working full time, they can sit down with that professional on a regular basis if they want to get through all the hurdles that they need to get through.

Andi: They may go to the class and they go, “I don’t need to know this, and you never see them.” Or they may only talk to somebody one time. If somebody’s having a financial crisis, for example, they can come in, work through that issue, or process, and that might be the only time that we talk to them.

Hannah: And so a lot of the topics you said are just kind of real basic like the budgeting, what is investing, things like that. What are the other things that you help service members with?

Andi: You have your, of course your basics. Money management, credit and debt, saving for the future, investing, and sometimes we get people who wanna talk about more advanced investing and that’s something that’s usually done more one on one because we don’t have a lot of people that, once they get to that point, it might be time for them to work with a financial planner and we might educate people on, how do you find a good financial planner?

Andi: Let’s look at the FINRA Broker information. And, checking into, what do you need to know about these kind of policies and things like that. So we talk about insurance. We talk about just everything under the sun. Anything related to military. I think there were in one program, for a military program, I was helping to work on some curriculum and they had 26 different presentations and I think the hardest one that I worked on was estate planning because that can be a lot of legal ease.

Andi: You know what I mean? And you have to be really careful about how you talk about estate planning when you’re not an attorney. We do referrals so they can work with somebody who’s more appropriate for a topic, if that’s the situation.

Hannah: So, these financial counselors, do they have to have their CFP or their designations that they have to have or what does that education piece for them look like?

Andi: All right, so the requirements for the government contract are a minimum of a Bachelor’s degree. They need to be a US citizen. And they have to have one of three designations. Chartered financial consultant, certified financial planner, or accredited financial counselor.

Hannah: And, then can you walk through, how are those designations different from each other?

Andi: I think all three of those are national designations and that’s probably, I’m not gonna say this is what the government says, but that’s probably why those are selected because we get a lot of people that are maybe CFPs … sorry, CPAs, or other designations that might be state regulated and because we’re not selling, some of those things, people that have just a series 66 or seven, or whatever, we’re not selling anything, so those are not a requirement for the program.

Andi: The chartered financial consultant, a lot of times those are people on the insurance industry. For many of the people that I know, it’s like one class beyond CFP typically, because most of the CHFC folks that I know, they’re continuing education as long as it’s approved by CFP, it counts for CHFC continuing education.

Andi: The accredited financial counselor, again, does not work as much on the telling people what to do with their money, and advising in that sense, but they work in all areas of personal finance, but they have a counseling class so that you’re learning a little bit more of how to work with that, in that counseling kind of mode where you’re helping people to … We’re bringing out what we need to know and what they need to hear themself say regarding their financial situation.

Andi: A lot of times people will say, “Oh, this is my problem.” When it’s really Y is their problem, not X. A lot of times that kind of comes out. That’s the nice thing about the different certifications. And then of course certified financial planner, I would say most of your listeners know what that is. And, that ranges from your fee only to your person who’s managing a UM and all that fun stuff.

Andi: The nice thing I like about having a network of financial professionals that come from three different designations and backgrounds and experiences and all these fun things is that they can build on each other. So when I have a class and I do interactive classes as many times as I can throughout the year to get people to engage and help each other become successful working with service members and their families. They all bring that different aspect.

Andi: “Oh, I specialize in this,” so when I’m teaching a class on how to get out there and meet people at that walk around counseling class, they go, “Oh, this really worked for me.” Or if I’m teaching a class on insurance, which I have coming up, then I have people how have lots of different insurance backgrounds. Maybe they came from this field or that field and they can share what they know, their knowledge with each other.

Andi: That’s what I love about our continuing education program for our service members, well, for the people serving the service members.

Hannah: These financial counselors, are they young out of school, mid career, second career? What do they look like?

Andi: I have everything. I have, and this is my smallest group right now are the people who are just getting started in the field. They just got out of college and they’re looking for something to do. A lot of times because of their earning their CFP, they may not have those hours that they need to be certified yet, so, a lot of them might get that accredited financial counselor because it takes less hours and a lot of the studying materials are similar so if they pass one test, they can pass the other, right?

Andi: Then they can work full time toward their CFP hours as well. And then, we have military spouses. They move all over the world. They are fantastic to have because they know the life. They experience it everyday. They’ve been through moving over seas or moving from one place to another and finding out you have to move in six weeks. Oh my gosh.

Andi: And, for them, it’s a portable career because we need a financial professional at most military installations. They’re gonna come in handy whether they volunteer, or they do this as a paid position. Unfortunately, we don’t have any volunteer programs for us, but most installations do have programs where military spouses can volunteer, so they can keep their experience up if there isn’t a full time job, or they don’t wanna take a full time job at that time.

Andi: We have service members who’ve left military service, and maybe they were something, a lot of the branches have command financial specialists, which did that kind of work in a unit on a military installation. I have some of those folks that they just really enjoy the money part and when they got out of the military they decided to become accredited and get that certification.

Andi: So I do talk to service members a lot that, “Hey, I heard about your program, or I met with your personal financial counselor,” and they all direct them to me ’cause I recruit people and I say, “Hey, yeah. You working on your certification? Here’s what you need to do. As soon as you’re done, let me know.”

Andi: So I’ve had people who came straight from the military to working for us on a military installation. And that’s great. Then I have people who had a successful career and they’re ready to do less, but they just don’t wanna run their own business anymore, or they don’t wanna work for this company selling anymore, and they’re in that 56 to, I have an 80 something. I have a couple 80 year olds that they can make a 40 year old look bad, run circles around them.

Andi: I have the whole gamut really. And, nobody’s better than anybody else really, and that’s the nice thing, like I said, about bringing our team together. Everybody really learns from each other. Younger people, maybe they have new ideas or they went through school recently and there’s some different things they can share.

Andi: Older people, they may have that how do you work with clients and gain their trust a little bit more. You never know. They’ve seen a lot of things.

Hannah: It’s that whole wiser together concept.

Andi: When I’m ready to retire from my position, I’d like to be a personal financial counselor and go to some of those places that I haven’t been before, I was a military spouse and, we didn’t get to go anywhere fun. We had boring places to go.

Andi: So I’d like to go to some of those fun places if the opportunity arises. But, you know, there’s places all over the country that I haven’t been to yet that I’d love to experience too. They can send me anywhere.

Hannah: Going back to your story. When you were going through that internship program, you got that scholarship, what did you imagine your path was gonna be?

Andi: My goal when I started this program was to be able to help as many people as possible. When I started, I worked two days on the Air Force installation and two days on the Army installation, and I did different things at both places. At one place, I did more one on one counseling sessions, where I worked with people one on one, and then I did some presentations too.

Andi: So, I would do a presentation. People’d say, “Oh, I want to meet with you.” And so we’d sit down and talk.

Andi: On the other location, I did a lot of one on one as well, but, I also wrote for the base newspaper, so I would write an article and hopefully kind of say, “Hey, we have a class coming up on this topic.” And then that would hopefully drive people to the class. It was very exciting to be able to know that my article was reaching two different installations.

Andi: That’s kind of cool. When I went into working with the internship program, I was excited because my enthusiasm and my knowledge and my ideas on how to help people work with people would help interns do a better job out in the field and they would reach more people.

Andi: Well, then jumps from 150 to 700 people, I’m hoping that classes that I teach encourage our people to work with as many service members as possible.

Hannah: Well, I just love that exponential impact that you can have on things.

Andi: I just try to help people be as successful as they can out in the field. That’s my job. That’s what I feel my job is.

Hannah: What have you learned about financial planning and financial advice as you’ve had … How many years are you into this now?

Andi: 10 years with just this contract.

Hannah: And really a lifetime of caring about personal finance. What have you, especially about the financial planning profession. What have you learned, or what have you discovered over the years about it?

Andi: What I have learned is that people come from different places. They all have a different mindset and one of the reasons that I got a degree in marriage and family therapy was because I found that everybody brings their values and their relationship issues, go hand in hand with financial issues.

Andi: When you’re working with couples or individuals, they came from what they were raised to believe, and what they experienced growing up, and having a 15 minute conversation with somebody who had no idea about compound interest and knowing that that can change their whole life trajectory, is incredible.

Andi: Having that positive conversation and listening to what they have to say even if it means reading between the lines of what your client is saying, is so important. That being a good listener and being authentic, and being honest with our clients truly impacts their life forever.

Andi: I’ve heard so many stories, heard so many stories about somebody who was in the military and they had this one person that told them about this and that’s why they’re here today. I have financial professionals that were in the service. And they’re like, “I became a financial professional because commander such and such or sergeant such and such told me that if I did this, I would be set up for life and I would be able to retire and not have to work when I’m older.

Andi: Things like that have had a big impact on my life and my career.

Hannah: So you knew, you saw how hand in hand this personal finance and relationships?

Andi: Right, I knew I could either go more towards the investment side, but I really felt I was more on the people side. Now it does help me very much with management, I will tell you that right now. Being able to talk to people and communicate with people and listen to employees, is a huge impact and I know that I had thought about working full time on an Air Force base and one of the requirements for being the financial professional or working in the Airman and Family Readiness Center was to have a social services degree, because you’re working with people.

Andi: That also helped me decide that getting my degree, and I started out in a counseling program, but I decided that marriage and family therapy fit me better. I like working with couples. I like talking to people about premarital counseling, and talking about their money before they get married. And then, if somebody gets divorced, I’m happy to help them with that. I also did the, in North Carolina they have a family financial mediation program, so I did that training as well.

Andi: You can help people get divorced too if you need to. Amicably.

Hannah: Both sides of the coin.

Andi: That’s right. Before, during, and after.

Hannah: When you did that marriage and family therapy degree, did they ever bring up finances? Did they ever talk about that in the course work?

Andi: Well, I do. But, we got to do … You know, when you’re working on program and writing papers and things like that, you get a focus, that’s what I really liked about this. I got to focus on the areas that I was interested in. So in one class I did, I talked about the deployment affects on children, on youth.

Andi: In another class I talked about the financial stressors on military families. I got to write papers on these things that I was seeing every day when I was working with people. So that was really encouraging too, ’cause then I really got to expand on what I knew and do some research on it. That was really beneficial.

Hannah: What are those financial stressors that someone who isn’t in the military might not realize, especially for the planner who’s listening to this who might have military clients? What do they need to know?

Andi: Well, a lot of times, I think people get involved with a financial planner at the end or after their military career, so they might miss some of the things that have happened down the road.

Andi: I’ll just give you an example. My husband was in the military for 27 years. He moved 20 times. Now, that’s not the norm for people. There are some people who move twice in 27 years, it depends on their career field and that kind of thing. But, there are people that move every two to four years and it makes it difficult on a family if a military spouse has a hard time getting a job.

Andi: I began as a teacher, and for me, when we moved, after I married my service member, for me, when we moved to the new state, it was gonna cost me so much money to get my certification approved for that state, it was ridiculous. So that’s one of the reasons that I just continued doing the contract work that I was doing and I kind of left teaching behind.

Andi: That moving on a regular basis is difficult. So that’s one of the nice things that I think our program does is military spouses can keep this on their resume no matter where they live. So if they’re working full time, it’s on their resume. If they’re just doing weekend work with National Guard and Reserve, it’s on their resume still.

Andi: It stays on their resume for their entire career if they want it to. But, when you’re living on one income, that’s just not the norm anymore. You see most families are having to have two income families just to make the house payments ’cause education costs have just gone up so much that paying your college debt is ridiculous compared to what it was 20 or 30 years ago.

Andi: It’s more important now for people, if they wanna buy a home, if they want to invest for their retirement to have a dual income household. That’s a big stressor. So many times, if somebody moves, it may take them six months to get hired at their new location, and then they have to move in two and a half years and start it all over again.

Andi: Another thing is during deployment, that’s a really difficult time for a lot of people to have the burden of the whole household responsibility while somebody’s deployed and for National Guard and Reserve for example, maybe they work a full-time position that pays more than the military, so while their deployed, they have a lower income, the family has a lower income, plus, the bread earner is gone and you don’t have that second person to help with family life, chores, fixing stuff.

Andi: Sometimes people are the fixers. I was the fixer at my house. Everybody has a honey do list when their spouse comes home from deployment though. But I loved, that was one of the things when I was just volunteering to help people during deployments. I loved it when somebody said, “Oh my gosh, I told my husband how much money we had in the bank and they were like, “Oh my gosh.””

Andi: They would be so excited and it takes the burden off of that person who’s deployed, who’s working about money if they’re working with a financial professional and they’re getting the help that they need to be successful during that deployment. They can worry about the mission, they don’t have to worry about the money and the family back at home.

Andi: There are special tax things related to military life that are important for the service member to know about, so that’s some of the things that we talk about and teach.

Hannah: For somebody’s who’s listening to this and is just like, “I’m really interested in being better at that counseling side,” what can they do to help themselves be better with clients?

Andi: I think practicing helps a lot. Find somebody to work with and just practice your listening skills. I just taught a class on listening skills a few months ago, how to be an effective listener.

Andi: There are classes out there on that. There are YouTube videos out there on that, and I’m sure there’s podcasts out there on that. But, learning to be a better listener and practicing in your everyday life, listen to your spouse, listen to your family, listen to your friends, and, I like to talk about being mindful as well, because if you’re not all the way there and able to listen, you’re not gonna hear what they have to say, what they really have to say.

Andi: It’s important to clear your own mind before you go to sit down with a client so that you can hear what they have to say and let them know that you’re listening.

Hannah: Were you always just kind of naturally wired that way or has that been more of a learned skill?

Andi: I was probably wired that way, but I’ve practiced to become a better listener and I think even people who do it on a regular basis still need to practice and to be mindful of that and be aware of what they’re doing. You know, you always hear about people saying, that professional is sitting there thinking of what they’re answer is gonna be while the person’s talking instead of listening to them.

Andi: Being able to pause and say, let the person know, “Hey, I might pause, just ’cause I wanna take in what you had to say before I answer.” And letting them know up front that that’s what you’re gonna do.

Hannah: So few people are actually listened to today. And so, when anybody does it, it’s kind of a shocking and very meaningful experience. If a financial planner or counselor is one to do that, that’s really powerful.

Andi: It really helps to build trust, if somebody feels like they’re listened to. That’s an immediate trust builder. And that’s what you want your client to do, trust you.

Hannah: Speaking to the new financial planners who are, maybe even still in school or in just in the first year or two of their career, what can they do to be a better planner? I mean, I know we’ve talked about listening. But what else can they do?

Andi: I think getting a variety of experience can be really beneficial to them. If you just say, “Hey, I only wanna do this.” That’s great, become professional at that, but, bring in some of this and that. So, maybe volunteering for a program that serves low income people or meeting with people who work with high net worth clients to find out about what they’re business is like.

Andi: When I go to FPA meetings, I don’t wanna just sit there and listen to the continuing education and not talk to anybody. I want to talk to the people who are there and learn about them and about their businesses, and gain that knowledge, so I can see, “Well, what is the next thing I wanna learn?” So kind of being inquisitive and really broadening your experience as much as you can.

Hannah: And that can be, I mean, there’s so many different sides to financial planning.

Andi: I say we learn every day, right? When I’m interviewing somebody, and I talk about or I ask them, how do you keep up with the latest issues and trends? Well, for the most part, our issues and trends, people are reading, they’re online, they’re watching videos, webinars, they’re reading blogs and so forth, and articles, but there are just so many things people can do to get their continuing education and to continually learn.

Andi: And there’s so many things to learn. You just have to focus and I try to learn as much as I can so I can teach people about those subject matter, those subject areas as well. Things that might come up for service members and their families especially. But I also do work outside the military. I meet with clients as well, usually couples, to help them be successful and say married and be happy about their finances and their decisions together.

Hannah: Good financial planning can help save marriages.

Andi: It can. It makes a huge difference. When I work with couples personally, I’m so excited when they call me and say, “Hey, I just wanna let you know, we paid this debt off,” or, “We changed our retirement savings.” Or whatever they did.

Andi: Because, it’s about their goals and their priorities and once they get on the same page, it makes a huge difference. And I think one of the things that I learned in my masters in marriage and family therapy that was very beneficial to me, is I can not put my values and my beliefs on my client. What’s right for them, is right for them.

Andi: If they believe this is the way things should be done, and this the decision that’s right for them financially, then, I need to help them be as successful as they can with that. I can’t say, “Hey, I’m gonna save 15 percent, and you should do it too. It has to be, cause I have lots of financial friends that are like, “I can’t believe you paid cash for your house.”

Andi: And I’m like, “Well, it was the right thing for me, because we were able to put our kids through college without having to take out any loans and help them the way we wanted to because we had all our income was freed up to do that.” If we didn’t have any car payments or house payments, it was a wonderful thing to have that freedom to do what we wanted to with our money.

Hannah: Somebody’s saying, “That’s not what’s best for us,” it kind of reframes what does it mean for a financial planner to be an expert.

Andi: Right. We have to … Everybody’s an expert in their own money. They know how they spend it. They know how they save it. They know how they don’t track it. I’m sorry, tracking is my biggest thing. If people just kept track of everything that they spent, then they would know what their priorities are.

Andi: And that’s one of the things that I love doing with people first, is saying, “All right, track your spending for two weeks. Come see me, then in two weeks we’re gonna check your full month of spending.” And, people go, “Oh, I didn’t spend that money because I didn’t want to write it down.”

Andi: And I’m like, “It’s not about me. I don’t care what you spend your money on, but that’s your priority. If you’re telling me your priorities are this, this, and this, but on paper, you’ve spent money on this, this, and this, these other three things that you say aren’t your priorities, if that’s what you’re spending the majority of your money on, then that is your priority.”

Andi: So then, that helps them to define their goals and to refrain their money spending.

Hannah: And that’s what we wanna do. We want to help people be better, have a better relationship with their money.

Andi: Yes. Definitely.

Hannah: What are your tips for planners who are like, “Oh couples are just so challenging”?

Andi: That’s a good question Hannah. Oh. When you’re working with couples, I think it’s really helpful to listen to them both and let them both have an opportunity to speak and to share without judgment from the other partner. And to lay the groundwork that, “Hey, in this meeting today, we’re gonna talk about what each of you have as financial goals, and I don’t want you to make any ugly faces or go, “Oh, that’s a stupid idea.” Put each other down. I want it to be an opportunity for us to work together to come up with as many ideas as we can of how we can be successful, each of you, and then let’s see which ones of those you go, “Oh hey, that’s a good idea. I think we should do that.” And then you can have a list of things that will work for both of you to make that financial plan come together and to be successful.”

Andi: Starting with that brainstorming where you don’t knock any idea down, then you move to that area where you start selecting things that, “Hey, I really liked you said this,” and giving the people the support saying that, “Hey, that was a really good idea,” and, “Hey, I liked how you complimented your husband.” Or, “I like how you supported your wife.”

Hannah: Well, and they’re on the same team, right?

Andi: Right.

Hannah: I think so many times couples get … They feel like they’re fighting each other, and it’s like, “No, no, no. You guys are on the same team going hopefully in the same direction.”

Andi: Yeah. Yeah. And not every couple’s perfect ’cause my husband and I, we’re a really good example. He was crazy when it came to spending at Christmas time, especially. He grew up in a family where the grandparents spent tons of money, they charged it up, they paid from February to December for their Christmas that previous year, and the room was filled with presents and toys and things like that.

Andi: And I came from a background where I didn’t have a lot of money and I was raised by these people who were depression era that gave me those influences that said, “Don’t spend unless you need to. Be wise with your spending. Save money. Buy on clearance. Whatever. It’s gotta be on sale.”

Andi: When we got married, that first year was a little bit of a head butter ’cause it was like, “No, we’re not gonna spend that much money on Christmas.” So each year, we got better and better and before he died, he passed away three years ago, and before he passed away, I was like, “Oh my god, I created a monster because now he’s more of a tightwad than I was, I think.”

Andi: We gotta find a balance. You gotta find a balance so that both people in the relationship are learning from each other and you mesh and make one financial life together so that you’re not butting heads with two different financial values and lives.

Hannah: Was there anything else, Andi, or any other thoughts that you have from our conversation?

Andi: Let me see. Well, do you think anybody would be interested in learning how to connect if they had any questions about possible career field in this? Cause I’m always helpful if I can help people to jump into this working with military life?

Hannah: Yeah, well, and I know before we got on here, you said that there were a number of job openings, so if somebody’s looking for a job, it could be a great way to connect.

Andi: All right. It’s zeiders.com. So www.zeiders.com and you’ll see the job openings for certified personal financial counselor. There’s are tons of locations. We’re looking for local people, whenever possible. And if somebody is one of those people who, maybe they can go anywhere, hey, you’re just out of college, you can go move anywhere, you don’t have anything tying you down, then you would apply for that nationwide opening.

Andi: Or if you wanna work weekend work while you’re working in your current role, that’s that nationwide opening. And then, my email address is awrenn@zeiders.com. Awrenn@zeiders.com. Z e I d e r s. And, I am always open to talking with new people and helping them decide if it’s the right career move for them, or how they can be involved if they wanna be involved in any way.

 

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Andi Wrenn’s mission is to reach as many service members and their families as possible to help coach them through their finances to achieve their biggest life goals. More than that, she approaches each conversation with a mind to marriage and family c... Andi Wrenn’s mission is to reach as many service members and their families as possible to help coach them through their finances to achieve their biggest life goals. As a military spouse, she’s truly walked the walk, and works to help people understand the unique financial challenges they might face while involved with the military. More than that, she approaches each conversation with a mind to marriage and family counseling, which allows her to view financial coaching in a more comprehensive way.
Andi has an educational background rooted in both financial planning and counseling, which is unusual within the financial planning profession. Listening to this episode, you’ll be blown away by Andi’s approach to financial planning and how she incorporates counseling and coaching into her work with clients.
There’s so much that financial planners from all walks of life can learn from her, from how to balance dissenting opinions between a couple during a financial planning meeting to how to listen in a way that builds trust and creates a positive client relationship.

 

What You’ll Learn:





What unique financial dilemmas military members and their families face
How to listen and build trust with clients
How family and marriage counseling can tie into financial planning
Why getting a variety of experience is beneficial
How to balance a couple’s differing financial views
The best way to incorporate coaching into your financial planning
How to encourage a couple who are a financial planning client to listen to one another and find middle ground





 
Zeiders Enterprises
 

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Hannah Moore clean 44:11
Starting an RIA Serving the Next Generation https://financialplannerpodcast.com/yafpnw-starting-an-ria-serving-the-next-generation/ Tue, 14 Aug 2018 13:14:36 +0000 http://fpaactivate.org/?p=11557 https://financialplannerpodcast.com/yafpnw-starting-an-ria-serving-the-next-generation/#respond https://financialplannerpodcast.com/yafpnw-starting-an-ria-serving-the-next-generation/feed/ 0 Steven Fox, CFP®, founded his fee-only financial planning firm, Next Gen Financial Planning, in 2016. As a business owner, Steven has learned to serve a wide range of millennial clients. He practices on a unique model of wealth management that focuses on managing student loans, getting started with investing, and more. Steven Fox, CFP®, founded his fee-only financial planning firm, Next Gen Financial Planning, in 2016. As a business owner, Steven has learned to serve a wide range of millennial clients. He practices on a unique model of wealth management that focuses on managing student loans, getting started with investing, making employee benefit selections, negotiating salaries, combining finances with a new spouse, and more financial planning topics that resonate with his millennial audience.

Steven uses a simple, flat-fee monthly retainer for financial planning with additional investment management (at no additional charge). Many millennial-facing advisors have walked away from the traditional AUM method of charging – and Steven is here to attest to the benefits of flat-fee financial planning.

In this episode, Steven is going to cover everything from the mindset shift that took place when he became a business owner, how he markets a millennial-facing practice, and what he values as a financial planner.

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I don’t have a line script that I follow word-for-word. I just like to talk to people like they’re people. -Steven Fox, CFP®, EA on #YAFPNW

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What You’ll Learn:

      • What books to read as a new RIA owner
      • How to market your millennial-facing RIA
      • The difference between charging a flat-fee for financial planning, and how that looks in practice
      • How to “sell” through honest communication
      • How financial planning impacts younger clients

 

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Conversations That Sell

The Ultimate Sales Machine

 

Show Transcript

Ep111 Transcript


Hannah: Well thanks Steven for joining us today.

Steven: Thanks Hannah, I’m excited to be here.

Hannah: Yeah, you are the founder of Next Gen Financial Planning out in San Diego. What inspired you to get into financial planning and to really start your own firm?

Steven: To start financial planning in the first place. Like most people in our industry, I came from somewhere else. I was doing something else and I was a career changer into this. I think very few people start out with the intention of going into career and financial planning and so for me before doing financial planning it was the Marine Corps. I was in for about eight and a half years and I loved being a marine and doing that work. I had a lot of different jobs and different types of units that I was in. I got to travel around a lot. I loved all the guys I was in in my different units but I realized that I didn’t want to do it forever. I wanted more control over the direction of my own life which you don’t really have in the Marine Corps if you’re told to deploy somewhere you go deploy somewhere. If you’re told you’re going to go to this unit and do this type of work then that’s what you’re going to do. I wanted to have more control over what I’m doing in my own life.

I also wanted to, I knew that I wanted to start a family someday and be able to hang out with my wife and future kids so that was important to me. I ultimately decided to get out after about eight and a half years. My last duty station was at Camp Pendleton which is near San Diego and I loved the city, I knew that I probably wanted to stay here forever. My girlfriend at the time Michelle who’s now my wife she also loves San Diego and if I wanted to leave elsewhere she probably wouldn’t have gone with me so staying here was a pretty easy choice.

Ended up going to school at San Diego State University because their business college had a pretty good reputation and because they also had a pretty large veteran population there so I thought that I would fit in a little bit better than some other universities that didn’t have that element. I initially wanted to be a finance major just because I had always been interested in finance and economics and those types of topics and as I was going through their finance program, I was I think less than a year in when I was at a meeting for a student group, they’re called Finance Investment Society and they would bring in speakers that work in all different areas of finance and one time they brought in a guy who was a financial planner for a local firm.

Once I heard him talking about working with individual clients and the impact this his work had on their lives and the types of stuff he could help them with I realized that that was the career choice for me. I didn’t know that that was a thing that existed that you could do with helping individuals with personal finance stuff and I just loved the idea right from the start as soon as I heard him talking about that. I got really, really lucky in that SDAU actually has a really good financial planning program where I was able to switch my major over to that and then take the CFP exam right out of undergrad. They also had a student chapter of the FPA there that I got actively involved with right away. I got involved with our San Diego chapter of the FPA. Met a lot of awesome people there that helped bring me in and it was a pretty easy choice to go to that career field. I was lucky that I found it when I was in a year through of school.

Then as far as starting my own firm, I think the first time that that crossed my mind was probably only a few months after I heard from that guy I mentioned at the FIS meeting. I was at a meeting of the San Diego FPA and we had Bob Veres come in to talk to us about the future of the financial planning profession. I went up to talk to him afterward to ask him a couple questions and he mentioned that I would probably be interested in this new group that had just started up called the XY Funding Network. I went to their website, started reading what they were all about. I think they were only, I don’t know six months old or something at the time and when I was reading about the types of support that they offered and stories of other people that were starting their own firms, I decided again very quickly, very easily that this is something I wanted to do.

I started working at Met Life in their financial planning division to start getting some experience while I was in school but I knew right away that I wanted to start my own firm. I wanted to have the opportunity to work with people that I wanted to, to do things the way that I wanted to and using the tools that I wanted to use. I wanted to be responsible for my own success or failure so I didn’t even have to think about it very much, I just knew that I wanted to start my own firm instead of working for somebody else.

Hannah: There’s so much here that I want to ask you about and I will. Career changers, I especially like career changers because I think they bring such unique skill sets into the business and into financial planning because of what they did in the past. How did your military experience really influence, how does in influence your work as a planner? What did you learn from that experience that makes you a better planner that somebody without that experience maybe wouldn’t have?

Steven: I think the first one that comes to mind is my time in the military exposed me to a lot of people who came from very, very different backgrounds than what I did, had very different personality types and learning to work well with people who are very different from myself I think has been useful when I start dealing with clients who of course are not going to have the same personality or skills or interests that I do. Not that they don’t communicate in the same way. I think that’s the first thing that comes to mind that useful from the military.

The second would be I’ve lost some of it now but I did help develop some sense of personal discipline, of sticking to the things that I say I’m going to do and working hard and staying focused on the mission. There have been sometimes where I’ve definitely failed to do that but overall I think the Marine Corps had a big positive influence on me in that way as well.

Hannah: Yeah, I’m always interested to seeing how people use their first career to leverage their second career in financial planning.

Steven: Yeah, it’s not the kind of thing where I developed, there are no, none of the technical skills of financial planning came from the Marine Corps. I wasn’t when I’m in the field playing with machine guns or something I wasn’t learning about the tax code. That’s not how it worked. It didn’t help me at all in that way. It didn’t help me develop any contacts that have been useful in my career. I didn’t really get any direct experience but it helped develop me as a person. I left the Marine Corps being far more mature and thoughtful than I was when I went in, a lot more focused. I think it helped me in those ways even if they weren’t directly related to financial planning.

Hannah: Are you still involved in the military in any way through financial planning?

Steven: I am not active duty anymore and I’m not a reservist so I am completely out of uniform, have been for about five and a half years now. It was January of 2013 when I left and so officially I’m completely out of the military. The only way that I am involved now is through a non profit organization called Financial Independence Training which is a group that helps to improve this idea called readiness within the military. We have a lot of military bases here in San Diego and one really big problem among military personnel that most people aren’t aware of is the fact that they have tremendous personal financial issues. There’s this concept of readiness in the military which refers to your ability to deploy and do your job. Some of the most important components of readiness are things like do you have the equipment you need to do your job? Do you have the training? Are you physically fit? Do you have medical issues? Are there disciplinary issues? Those are the biggest components that people think of in terms of your readiness to deploy and do your job.

The number one cause for a lack of military readiness and the ability to deploy is actually personal financial issues and a lot of people even inside the military don’t realize that and it’s especially true for young military personnel but really it’s a problem all the way up and down the chain. What we’ve been doing with that organization last few years is doing one on one sessions at local military bases that we call financial readiness clinics or personal financial planning days which is where I’ll just get together, maybe one or two dozen CFP’s from our local FPA chapter and we will have one on one meetings with marines from a local unit at one of our bases here. Usually they’re about 20, 30 minutes and the financial planner will counsel that marine on whatever they have questions about and hopefully help to have an impact with solving their problems so that they have less stress in their life and they’re better able to deploy and do their job or they’re able to exit the military and return to civilian life being better financially prepared to do so.

Besides those one on one sessions, we also teach classes and we do some consulting with leaders of military units who create some educational materials from our website so we’re trying to help solve that problem to the extent that we’re able to have an impact on it, we’re trying to do so.

Hannah: That program existed before you came around or did you help create that program?

Steven: It was initially created by a guy named David Block who is a former army officer who retired and became a financial planner and then retired from that and now he’s the primary driver of everything that we’re doing with FIT here. He started it I think in 2013 or 14. I met him in early 2015 and I’ve been helping him out with it ever since.

Hannah: Well it’s so neat to see even just that giving back element. I know that’s a huge deal for a lot of new planners is how do we give back to where we came from. That’s exciting to hear.

Steven: Yeah, I think that’s one great way to do it. There are a lot of people out there that have needs in this area and military personnel are one example of a group that has a significant need there. We actually have a lot of support resources for our volunteers that we’re starting to try and expand to other FPA chapters and other military bases around the country so we can have a bigger impact in what we’re able to do with the few bases here in San Diego. Some of the things we do are we have handouts that we give. I’ve given classes to our volunteers. A lot of our volunteers are worried that they don’t know enough about military personal finance issues like the blended retirement system or the savings plan or the military benefits when you deploy, things like that. We try and give classes to our volunteers so that they’re able to have a little more confidence providing guidance to these marines during the one on one sessions.

Really most of the things that they have questions about are things that most CFP’s are way more than qualified to be able to talk to them about like basic stuff infesting and credit scores and managing cash flow. It’s generally pretty basic stuff that they need help with. Anything that financial planners think that they can help with, they’re probably able to have a much bigger impact than they think they can.

Hannah: We sometimes forget how much we know.

Steven: Yeah it’s usually very basic stuff they want help with.

Hannah: Your firm is Next Gen Financial Planning and you go on your website and you talk about how you differ from the traditional model of financial planning with how you work with your clients. Its always exciting to me when I hear somebody who discovers financial planning and then has this vision for what they want to do that’s maybe not influenced by people who’ve been in the industry for five or 10 years themselves. Did you initially have that vision for serving younger clients right away?

Steven: Yes, I wanted to do that from the start for sure. That’s a big part of why I started my own firm is because I wanted to work with people I could more closely relate to and I thought most of our industry tended to ignore and there was a significant need there. I thought it was more fun too just to be able to work with clients who have, they tend to have more dynamic lives. For most older clients, there really isn’t a whole lot changing in their life in any given year unless maybe they have some kind of big health issue or maybe in the year that they retire. For the most part from year to year there isn’t a whole lot going on in their life. When you’re dealing with somebody in their 20’s or 30’s, there tends to be a lot more going on. They’re getting married or divorced, they’re having kids, they’re starting businesses, they’re changing jobs, they’re moving across the country. There’s a lot more going on in their life and a lot more opportunity for us to provide guidance that can be meaningful, substantial to them. A lot more opportunities to have an impact. It’s also more fun to work with those people I think.

Hannah: When you started out, did you know how you wanted to serve them? Did you have an idea of how you charge, how you structure your business or was that a process of discovery for you?

Steven: I had an idea and it’s definitely changed along the way. I didn’t get it right from the start for sure. I’m not sure that I have it perfectly right now but I am definitely changing and learning as I go along.

Hannah: That’s a great part of being a business owner right?

Steven: Yep.

Hannah: There’s always an evolution of it. You talk about being different than the traditional model of financial planning. How do you define that for your clients? When you serve them, how is what you do different than the traditional wealth management firm besides answering their phone call or taking them on as a client.

Steven: Yeah, working with them in the first place is one thing but I think really the most important elements are exactly the same it’s not that millennials are some weird alien breed that nobody understands, they’re just people. It’s really mostly the same. It’s still about listening to the client, learning about what they’re trying to accomplish, what they’re excited about, what they’re afraid of, what’s most important to them and then you create and carry out a plan to help them. There’s the most important things are exactly the same regardless of who you’re working with. What is a little bit different about serving younger clients is the topic areas that they typically need help with.

I don’t really have any questions that I get about Social Security or pensions or Medicare or generating retirement income or managing a large portfolio or complex estate planning. That stuff is not really on my radar at all like it is for most financial planners. Instead, I’m helping with areas like managing student loans for medical school or law school or grad school. Getting started with investing, what type of account they should be contributing to. Making employee benefit selections, negotiating salaries or making career decisions. Combining finances with a new spouse, questions about managing cash flow or spending plan, improving credit scores, maybe starting a business. A lot of these areas, most financial planners tend to avoid them because they just haven’t been a major concern for their older and wealthier clients. For the folks that I’m working with who are maybe 30 years old it does matter a lot. These are the things that are absolutely top of their mind.

Hannah: For the older planners and traditional wealth management model it’s AUM is how you get paid. How do you get paid for your services?

Steven: I have a monthly retainer, a simple flat fee. For most folks, it ends up being around 3,000 per year and it’s split up into monthly payments and then we adjust up or down depending on the complexity of a person’s case and how much work I expect to be doing for them. Then for those folks who want it, investment management is also included at no additional charge. I have no minimum account size, no percentage based fees.

Hannah: What does your ideal client look like? What is a normal client for you?

Steven: I think median age is probably mid 30’s or so. They usually have almost no investible assets. They’re just getting started with that. They often times have big student loan debt from medical school or law school or grad school or something. Maybe they’ve recently been married or they’re considering getting married soon, they have no idea how to combine finances with a spouse, they’re scared of that. A lot of them are worried about things like maybe buying a house, starting a business-

Hannah: What’s their income range usually?

Steven: I think median income is probably around 150, 175, something in that range, median household income. Some are as low as zero, someone that’s starting a business right now, they have zero income. Some are as high as I think highest is maybe 400, 450 I think household income. There’s a fairly wide range and that’s one of the factors that I consider when I figure out how much I should charge them is I don’t want to exceed too high of portion of their income that it becomes burdensome to be able to pay me.

Hannah: When you look at the traditional wealth management clients, it very much one client has, you charge 1% AUM and they have $2 million, well you have $20,000 of revenue now. That’s a lot different than $3,000 of revenue a year for a client.

Steven: Sure.

Hannah: It seems that scale is really important and that marketing to try to bring people in is really important. Have you found that true with your business?

Steven: Yeah, the cost of acquiring each client is important to be aware of and to improve where you’re able to and then also having efficient ways of serving each client is important as well.

Hannah: Okay, let’s talk about cost of acquisition for clients because I don’t hear financial planners talk about that very often.

Steven: Right now my average cost of acquisition is around 400 to 450 per client. It’s gone up and down depending on different things I’ve done over different time frames but that’s about what it is.

Hannah: You’re able to measure all of your marketing. Is all of your marketing targeted to where you can measure it I’m assuming then?

Steven: I can’t always measure the difference between channels so the way I come up with that average cost of acquisition is I look at what’s my total marketing spend and the total number of people who end up signing. It’s tough to evaluate each individual channel. For example, one big channel for acquiring clients for me is referrals from other financial planners who I’ve gotten to know through FPA or elsewhere that they serve different target markets and when they come across someone who’s a good fit for me they send them over. I didn’t really spend any dollars to make that happen, it’s just that I spent time. It builds up on its own over time as I’ve developed those relationships.

Then other things are a little bit more able to be measured. For example Yelp advertising. I know I’m spending there each month and about how many prospects I get so it’s a little bit more clear on the cost of acquiring each client. Even then it’s still a little bit challenging because people don’t always know where they find me. I ask that every time someone schedules a meeting. It’s part of the form that they fill out when they schedule a meeting is where did you find us and sometimes people say, they’ll just write I don’t know or they’ll say internet. That’s not really very helpful when you’re trying to evaluate the effectiveness of different marketing channels but to the extent that I’m able to figure it out, I do.

Hannah: I’m fascinated by marketing. I’m just drawn to it. What stood out to me is that if you do marketing well almost everything can be measured. There’s things like you’re saying your time, you can’t but if you spend dollars on marketing you should be able to measure returns on those dollars. It’s really cool to hear you talking about that and in those terms.

Steven: Yeah, I don’t know that I’ve cracked the code and have a handle on it 100% but it’s definitely on my radar and something that I try to be aware of and I am planning on expanding some paid marketing channels including social media advertising and for that type of stuff it should be much easier to directly measure the impact. That’s one of the reasons I’m interested in that channel because I can measure the effectiveness very clearly.

Hannah: Right, and then you can scale it or not or one thing I know we talked at Next Gen gathering and one thing that just stood out to me when we were having this conversation is really how you viewed being a business owner. You’re obviously a planner but you also take a lot of pride in being that business owner. What does that transition look like for you?

Steven: You’re certainly right that I am taking two dual pathways at once right now of being a business owner and being a financial planner and I think there are pathways that have very different acquired skill sets, different mindsets, different daily activities that I should be doing each day and I’ve recognized for a while now that if I want to reach my full potential of being as good as I possibly can be at something, if I’m continuing down those two pathways at the same time I’m never going to reach that full potential. I’m only going to become moderately good at both of those areas at best. I’ve been starting to think more and more about which pathway do I want to focus on and how do I make that transition into focusing on that pathway. I’m realizing more and more that as much as I do enjoy meeting with individual clients and doing the work of financial planning, I think I would prefer to focus on the business management side and so the idea now is that I’m going to stop taking clients that I individually serve once I hit a certain cap and then past that point only send them over to, I’ve already brought on one financial planner to my team and I’m going to be bringing on others over the next couple years.

As future clients come on, send them over to those people to work with and that way I can focus on things like marketing or operations or compliance or recruiting and training employees or other aspects of managing the business because those are very different things than having client meetings every day. It’s totally different skill set and I don’t want to be mediocre at a lot things, I want to be really good at a few things and I think this is one step towards helping me get there.

Hannah: Did this surprise you?

Steven: I kind of knew ahead of time before I started my firm that I would ultimately run into this problem and that I would want to choose one path or the other. I did not know which path it was going to be and that’s what I’ve used the first two years of running my business to help figure out is which side I enjoy more and which one I think I have the higher potential for to be good at.

Hannah: You gave a couple examples in there of the business owner side versus the financial planner side of the business and when you start out on your own business you basically do everything. How is your time split especially in the first year of owning your own business?

Steven: Time is split between whatever feels most urgent that day. I did not do a very good job in the beginning of allocating a set number of hours towards specific areas depending on the importance. I felt like everything was on fire, I had no direction. I was terrible at managing that in the beginning. I’m still not great at it but I’ve come a long way. Yeah, you’re right you’re responsible for everything. I’m compliance, I’m marketing, I’m sales, I’m financial planning analysis, I’m meeting with clients. I’m the IT guy when the printer breaks, I’m the janitor. I have to do everything in the business and I think I’ve done a much better job now of keeping track of what are the most important things that I want to focus on. I have a weekly meeting with myself where I look over what went well or poorly over the last week and what are the key things that I have to accomplish next week.

Each day when I have my to do list, I have a couple things on there that are must dos, the first things that I do during the day and if those initial key things get done then I feel like I’ve had a successful day. Anything that I’m able to do after that is just icing on the cake. As long as I focus first on the things that are most important to my business or to my clients, then I feel like it’s a win. That took me a little while to learn. I would have to do list that was 60, 70, 80 things long. It just gets bigger and bigger and bigger and then I look down the list and it gets overwhelming and I would look at, okay well this list is crazy long. I need to get some stuff done so I would just go through the list. That looks easy, boom that one’s done 15 minutes later. Look down the list again, okay that one looks easy. Let’s do that. That would not result in the most important things getting done it would result in more things getting done. That’s not the idea approach. I need to focus on the most important things getting done first.

Hannah: Well gosh, there’s my takeaway from this podcast. That’s a great piece of just productivity advice.

Steven: Yeah. That’s been helpful for me so I feel like even if I’m not chugging along at full speed I’m at least heading in the right direction is how I think of that. Going full speed is important too. You need to be effective and efficient but doing the right things is more important than doing a lot of things.

Hannah: Do you have really clearly defined business goals that you’re shooting for?

Steven: Sometimes. Not always.

Hannah: How have you approached the idea of business goals?

Steven: I’ve tried setting goals in terms of number of client meetings or amount of revenue or trying to set different metrics and I don’t think that’s very effective for me. I try and track activity rather than results and I try and think of success as being in terms of activity rather than what happens as a result of that activity because I can’t always control the outcomes of what I do. I can control what I do and how well I do it but I can’t always control the outcomes. There are a lot of factors that are just not within my control. That’s the way that I think about how well I’m doing or how well I’m not doing and as far as specific business goals, no I don’t really think about it like that anymore. I know what I ultimately want to build and what it looks like but there aren’t really numbers attached to it of, I want to have X numbers of employees with X revenue serving X number of clients. I don’t think about it in terms of that. I think more about what are we actually doing and how are we doing it.

Hannah: Let’s go back to your career story and being a financial planner. You ended up graduating school, working at Met Life. How long were you at Met Life for before you started your own firm?

Steven: It was about a year and seven months. I think it was July of 2014 to December 2015.

Hannah: At what point did you feel confident that you had the skill set to be a great planner and run your own firm?

Steven: You know I’m still not sure that I have supreme confidence in that but-

Hannah: It’s always this catch 22 question.

Steven: Yeah. I think really from the start. I was never the type who was really worried about looking dumb in front of a client or that I didn’t know everything I needed to know. I knew from the beginning I was lucky enough that I worked for a guy who taught me this. I knew that I don’t have to know everything about everything to be able to provide a valuable service to a client. Really, the minimum that you have to know is just more that the client does to be able to provide some kind of value to them. Of course you want to know way more than they do and help as much as you can but you don’t have to be an expert on everything and besides that you can’t be an expert on anything. There’s just way too much to know.

I was never the type who was really nervous to deal with clients in the beginning. I know that’s a problem for a lot of young financial planners but I was just lucky enough that it wasn’t for me. I knew before I even started there that I wanted to start my own firm ultimately and because I knew that going in I tried to expose myself to as many different areas of their business as I could to just get some minimal level exposures that I’m aware that that exists, that that’s a thing you should be doing and looking at and being aware of. I think that was pretty helpful to me.

Hannah: One of the other things a lot of new planners struggle with is the idea of sales and bringing on new clients. Was that a struggle for you?

Steven: Oh yeah, I’m glad you brought that up. That was actually my biggest fear as I was starting my own firm is I had zero experience with sales at all. I know to an extent every conversation you have with everybody is a sales conversation to some degree. I understand that mentality but I had never been in a position where I had to convince somebody to pay me money for my product or service outside of some random online marketing stuff that had done on my own and wasn’t dealing with people one on one. I didn’t get any sales experience in the Marine Corps. When I was at Met Life I was not in a sales position there. I was doing financial planning support work. I didn’t even have a whole lot of opportunity to talk to clients one on one. That was my biggest fear as I was starting my own firm was even if I get technological good at doing financial planning you have to find people to do financial planning for and convince them to pay you for it. That was my biggest fear and probably my biggest limitation over the first year or so of running my business.

I had been hoping that I would grow by an average of maybe 1-1/2, 2 clients per month and let’s see, firm launched in June of 2016. At the end of that year, six months later I think I was at about four or five ongoing clients. There was some hourly work but it was only about four or five ongoing clients. Then at the one year mark, by June of 2017 I think I was at maybe about 10 or so, nine or 10 and then by the end of 2107 at one and a half years I was at 15 people and then in the seven months since then, I’m at like 34 or 35 people or something. It’s been way higher growth this year and at the tail end of last year and what turned it around for me was a couple different things.

One, I hired a sales coach, a local guy here in San Diego who was very good at what he does and helped me to develop a clear system to the way I approach sales conversations. Also changed the way I think about sales a little bit. It doesn’t necessarily need to be, it doesn’t need to feel slimy like you’re manipulating people’s emotions or thoughts. It’s really just having a conversation about what they need and you saying, “Okay, cool. This is what I can do for you and what I can’t do for you,” and letting them make a decision and learning how to address some of the objections they might have going into it and learning to identify different personality types and relate to those people more.

Working with that sales coach helped a lot. I read a few books that really helped a lot on that front and then I also went through a course, an online video course with a small group run by Nancy Bleeke called Genuine Sales. That was really helpful for me too. Going through those things really changed the way that I approached sales and gave me a lot more confidence that it is actually something I can do and now I feel fortunate that that’s not a concern at all for me in my business. I know I can get more clients whenever I need to and the concern has started to become am I taking on the right clients for me for the long run and how do I effectively serve these people and manage growth to not be too fast and create issues because a few months ago that was a big issue for me. I was taking on too many people per month. Four, five, six, seven and it was creating problems and I wasn’t giving the service that everyone deserved because I had too much on my plate at once.

Hannah: You talked about your working with that first sales coach. Do you have a script that you work on? How does that work preparing for sales conversations?

Steven: Yeah, he tried to get me to create a script and I didn’t really want to because I didn’t want the conversation to be about me. One thing that I had to learn is that I need to really just shut up and listen and see what it is that they need and talk about all the things that they want to hear from me. There are a few key things that you have to cover with every new prospect but for the most part I should only be addressing the things that they want to hear about and I need to make sure that I’m listening to, reading between the lines and understanding what it is that they’re really asking and what’s going through their head and what do they need from me. I think that’s been the biggest thing and having a script doesn’t really go along with that. I was never one to take that approach of having a script.

I do have a rough outline of the way I want to guide the conversation and I have a few specific lines that I like to use that tend to get pretty good conversations going with people but I don’t have a line by line script that I recite word for word. I just try to talk to people like they’re people.

Hannah: Right. Do you have an example of one the of the questions that you like to use?

Steven: Questions that I like during prospect meetings, sure. What’s the best decision you’ve ever made about money or what’s the worst financial decision you’ve ever made? That often leads to a pretty good conversation for them. If we’re sitting here together a year from now and you’re saying, “Steven this has been the best thing ever. I’m so happy I hired you. You’re an amazing financial planner,” I ask what has to happen between now and a year from now for you to be telling me that. That opens up some insight into what it is that they actually really need. Also sets the stage for the expectation that I do like to work with people over long periods of time, that it’s not a transactional thing where I give you this 200 page binder full of charts and graphs and that we’re done. It’s financial planning is an ongoing process and it helps reinforce in their mind that them being happy is my most important consideration so I like asking that question.

Hannah: You had mentioned a couple of books that were really helpful for you?

Steven: The single best sales book that I read was The Ultimate Sales Machine and then I’ll plug Nancy Blakey again. Her book, I think it’s called Conversations That Sell. That one was really helpful too especially in understanding the different personality types of people. She groups them into four categories and that was really helpful in helping me understand how to best relate to people and meet them where they are, communicate with them and in the way that they want to be communicated with instead of forcing my way of doing things onto them. Conversations That Sell and The Ultimate Sales Machine are two good ones on that topic.

Hannah: We’ve talked about working with younger clients, are there any stories that you’re comfortable with sharing with about your ideal clients and really the impact that financial planning can have on their lives?

Steven: When I think about the impact that financial planning can have on a client the first person that comes to mind is actually someone I took on who was not in my target market at all but I decided to work with her because she clearly needed a lot of help and I knew that there was a lot I could do to help her. I was willing to take her on even though she wasn’t exactly what I was looking to work with. Also, it was only something like seven months in my business so I needed really any client that I could get as long as I knew I could do what they needed me to do.

I took her on. She was a 65 year old woman who was, her husband died around 15 years prior and since that time she had been having a lot of personal struggles and financial struggles as well and one of the problems that she was having was she had an enormous fear of spending money on anything at all. She was letting bills go unpaid, she was scrimping every single place that she could and had tremendous fear around anything related to money. She was actually a millionaire. She has a net worth of something like 1.2 million but didn’t know that and was completely disorganized around money. Some of the things that we helped her with were finishing the paperwork to finish processing a payment from the state of California that they were holding onto from an insurance policy that her husband had had when he died around 15 years prior. It was several hundred thousand dollars that she didn’t even know she had coming to her she didn’t know how to go through that claims process. We finished that up for her.

We looked at investing some cash that she had just sitting there because she had no idea what to do with it. We looked at whether it made sense for her to get a reverse mortgage. What else? Insurance coverages, paying some past due bills, setting up automated transfers between accounts to make her life easier. Showing her some of the long term projections to realize that yes, even if we spend this much per month which is way more than you’re spending now you absolutely going to be okay unless an asteroid hits the planet or something. You have absolutely nothing to be afraid of. Getting her to talk more about what it was that she wanted to do with her life, the things that she most enjoyed and helping give her confidence that it is feasible to do those things. Taking things off of her hands whether it’s stuff that I can do for her or that we can automate or outsource to some other service provider, that’s been really helpful. She just had a tremendous emotional stress around this, around financial stuff and it’s been really rewarding to help her in that way.

Even though she’s not in my target market at all, I recognize that there was a valuable service I could do for her and she’s probably my most loyal client by now. Shed never leave me because what we’ve been able to do for her up to this point.

Hannah: Wow, that’s a really cool story and even just the power of financial planning.

Steven: Yeah. Because of her and a couple other examples, I don’t want to limit myself strictly to working with people in my target market but my target market absolutely is the predominant focus of who I’m serving and the focus of all marketing efforts. In the mean time especially in the early days, I’ve been taking on some other folks too as long as I know I can actually do what they need me to do.

Hannah: Do you have high turnover with clients?

Steven: Higher than I’d like. I’d like zero. I don’t think so high that it’s a big problem. Let’s see, I’ve lost a total of I think six or so recurring clients over the last couple years.

Hannah: It’s always an interesting, you don’t have the stickiness of the AUM for the assets.

Steven: That’s actually one reason why I do manage assets for people that want me to which is mostly people I work with. Even though I don’t charge for it it’s not additional revenue for me, it does help improve the stickiness of relationship and provide an additional service that they appreciate, that they don’t want to take care of themselves. That’s the primary reason I do it.

Hannah: What have you learned about yourself and our profession since you’ve been a planner?

Steven: I think probably the first one that comes to mind is that I’ve always thought of myself as being absolutely terrible at talking to people, very socially awkward. I’m not good at building connections or demonstrating empathy. I think I have a pretty poor level of emotional intelligence. I guess a few ex girlfriends could probably tell you that. I’ve realized through dealing with clients that this isn’t something you have to be born with, it’s a skill that can be learned and it’s incredibly important and also a lot of fun to do so, to put more focus on this. I’m finding that I really enjoy that aspect of dealing with clients even though I sometimes feel like an unqualified therapist when people are crying in my office. It is an area that I can get good at if I keep working at it, and it’s not something I enjoy a lot so that’s probably the biggest thing I’ve learned about myself is that I don’t have to be terribly emotionally stupid and unable to deal with people effectively.

Hannah: How do you get better at that?

Steven: By being aware of what I’m doing and how it’s impacting people. Just paying attention to it and actively thinking about it I think has made me a little bit better. Carefully observing other people who I think are very good at it and the body language that they use or the way that they phrase things or how they listen to people, just paying attention to it I think has been the best thing. I’m not sure that that’s something I could learn in a book or by watching videos, I think it’s just a matter of being aware of it. Knowing what you’re doing and how it impacts others and caring about getting better at it.

Hannah: What have you learned about our profession that you didn’t realize when you were in school learning about it?

Steven: I didn’t realize at first how many different ways there are to do financial planning and how many different meanings there are to the term financial planner. I think that’s probably the first thing is not all financial planners are the same. There’s a huge range out there not just in compensation models but in service models and who you serve what you’re doing for people as well.

Hannah: You talked about looking at the financial planning community, has that been an important element for your development as a planner and business owner?

Steven: Oh absolutely, yes. I mentioned that soon after I found out that financial planning was a thing that existed that you could do, I became involved with our SDSU student chapter of the FPA right away. I became the president of it as soon as I could and got involved with the San Diego chapter as well, went to all their meetings. Started bugging every person that would let me talk their ear off for a while about what they’re doing. That’s been tremendously impactful. We have an awesome financial planning community here in San Diego. Actually I noticed you’ve had a lot of San Diego people on your podcast too, at least four. Was it Taylor Schulte and Jon Luskin and Debra Fox and Mary Beth Storjohann. There are so many people here in San Diego that are really awesome financial planners and surrounding myself with people who are a lot smarter than I am has been really helpful to me as I’ve made this transition to this career field. I still try and do that to the extent that I’m able to all the time.

I’m involved with our FPA chapter now. It’s where I’ve made a lot of friends and learned a lot. I’ve been really involved with the chapter as a whole. I’m the president elect of it right now and I don’t plan on stopping that type of involvement anytime soon.

Hannah: It’s helped you build your business but it’s also helped you be a better planner. Is that fair to say?

Steven: Absolutely, yes. Sometimes it’s just hearing stories about what people do with clients like how they helped them or how they couldn’t help them with something. Sometimes it’s sharing specific problems that I have in my business and they say, “Oh dude all you’ve got to do is this,” and that’s problem solved. You’re like, oh yeah you’re right. That probably would work. Why am I overthinking this? It’s going to be fine. Yeah, it’s been very helpful to surround myself with other people. That was something you asked earlier about stuff I had carried forward from the Marine Corps, I think that’s probably another example of that is back then when I was in uniform too I’d always try to surround myself with people who are smarter than I am and try and learn from them. I’ve done the same thing here and in this career field.

Hannah: What do you wish you would’ve known before entering this profession?

Steven: Probably that I can’t do it all. I’m not Superman. I have limits to my capabilities, to my interests, my time and I can’t just charge through like a bull on a rampage and work my butt off and things magically happen. Maybe that mentality was a bit of a holdover from my time in the Marine Corps too of thinking I could just outwork any problem or outwork any person. Instead I’m realizing now that I need to be a lot more focused on the things that I’m better at or that I most enjoy and learn to count on others to fulfill the functions that I can’t do as well. Don’t do everything, don’t kill yourself trying to. That’s probably the biggest lesson that I’ve learned or the biggest thing that I had known before entering this profession is focus on the things I’m good at or enjoy and that it’s okay to not be Superman.

Hannah: Well as we wrap up are there any other thoughts or anything else that you want to be sure to point out for our listeners?

Steven: Going back to the Financial Independence Training Organization, I think if people are interested in getting involved with that and helping us accomplish that mission, there are a few things that they could do that would be really helpful for the organization as we’re trying to grow. Right now it’s just us with our San Diego chapter volunteers and we bring in some from Orange County and we’re working with local military bases here but we really want to start expanding it nationwide and dealing with the other FPA chapters and other bases around the country. If folks are interested in learning more about how they can help support that, they can go to the website, we have a volunteer page with a ton of info about what we’re doing. If they have any contacts at local military bases to help us get in, if they have interest in taking charge for their chapter of making this happen in your area, we can help them get it started, we can give them handouts that we’ve used and help share lessons about what we’ve learned and run the first event or two with them but it’d be great if we can have a leader and multiple FPA chapters taking charge and getting it done because I can’t just travel around the country and do everything everywhere. We need to have people that are involved in those local areas.

Hannah: That’s great. All that information is in the show notes for anybody who’s interested in knowing more. I think it’s just so powerful, just one conversation can change your life.

Steven: Yeah, we’ve been excited to see the impact that this work can have. We have limited ability to follow up with the marines that we provide counseling for because we don’t collect contact info. We have very strict rules about you’re not there to solicit business, you’re there to provide guidance and advice during your session together. We don’t even have contact info for the marines that we’ve counseled. We do know that we are having some impact because we look at things like the feedback we get from the unit commanders about some of the metrics that they track like number of people who are losing, I don’t know maybe losing security clearances because of credit debt issues or we hear from the personal financial management specialist on each base that they’re getting more appointments scheduled with them of marines trying to learn more about financial stuff. We know that we are having some impact and I want to do what we can to help increase that.

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Steven Fox, CFP®, founded his fee-only financial planning firm, Next Gen Financial Planning, in 2016. As a business owner, Steven has learned to serve a wide range of millennial clients. He practices on a unique model of wealth management that focuses ... Next Gen Financial Planning, in 2016. As a business owner, Steven has learned to serve a wide range of millennial clients. He practices on a unique model of wealth management that focuses on managing student loans, getting started with investing, making employee benefit selections, negotiating salaries, combining finances with a new spouse, and more financial planning topics that resonate with his millennial audience.
Steven uses a simple, flat-fee monthly retainer for financial planning with additional investment management (at no additional charge). Many millennial-facing advisors have walked away from the traditional AUM method of charging – and Steven is here to attest to the benefits of flat-fee financial planning.
In this episode, Steven is going to cover everything from the mindset shift that took place when he became a business owner, how he markets a millennial-facing practice, and what he values as a financial planner.

 

What You’ll Learn:





What books to read as a new RIA owner
How to market your millennial-facing RIA
The difference between charging a flat-fee for financial planning, and how that looks in practice
How to “sell” through honest communication
How financial planning impacts younger clients





 
Volunteer with Financial Independence Training
Conversations That Sell
The Ultimate Sales Machine
 

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Hannah Moore clean 46:20
Internal Succession Plans and a Culture of Success https://financialplannerpodcast.com/yafpnw-internal-succession-plans-and-a-culture-of-success/ Tue, 07 Aug 2018 19:07:13 +0000 http://fpaactivate.org/?p=11548 https://financialplannerpodcast.com/yafpnw-internal-succession-plans-and-a-culture-of-success/#respond https://financialplannerpodcast.com/yafpnw-internal-succession-plans-and-a-culture-of-success/feed/ 0 As more established planners plan for their own futures many young professionals are offered a succession plan as part of their career path. In this episode, Connor Koppa, CFP® walks #YAFPNW listeners through what it’s like to be part of a succession plan, what his ownership arrangement looks like at Focus Financial, and more. Many young professionals will one day be offered a succession plan as part of their career path as more established planners plan for their own futures and put a succession plan in place. Only some of these succession plans are successful and many aren’t. Connor Koppa, CFP®, was incredibly fortunate that the financial planner who he worked with at Focus Financial, Kyle Watkins, CFP®, wanted to encourage his dream of owning a financial planning practice.

Together, Kyle and Connor worked through a unique ownership agreement that worked for them. Right now, Kyle is still the Executive Officer and a financial advisor at Focus Financial. Connor now owns 15% of the practice, and takes the lead on client relationships, business structure, and building a practice culture.

Not everyone is fortunate enough to have an open, honest line of communication with with the lead advisor and owner of the financial planning practice where they work. In this episode, Connor walks #YAFPNW listeners through what it’s like to be part of a succession plan, what his ownership arrangement looks like at Focus Financial, and more. We hear about succession plans often in this profession, but we so rarely get to peek behind the curtain to see how an individual plan pans out – and this episode gives you that opportunity!

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If another talented individual can come in and improve my weaknesses, and provide something different, I think we’ll all be better off. We’ll have a better chance of growing this into something bigger. -Connor Koppa, CFP® on #YAFPNW

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What You’ll Learn:

      • How to set up a succession plan
      • The best ways to communicate with a firm owner about your desire to own part of the firm
      • How financing works when you buy into a financial planning practice
      • How ownership of clients, business decisions, and more work when there are more than one owner in a practice
      • How to potentially work in future owners into your plan
      • What being a part owner of a financial planning practice looks like in the day-to-day
      • The importance of creating a communicative culture and fostering innovation in your financial planning practice
      • How you can get involved and find fulfillment as a financial planner even if you aren’t interested in becoming an owner

 

How To Think Like An Owner

 

Show Transcript

Ep110 Transcript


Hannah: Well, thanks for joining us today, Connor.

Connor: Yeah. Thanks, Hannah. I appreciate you having me on.

Hannah: Your story is fascinating, because you are 28 right now and you’ve already bought into a practice. Did you ever imagine, when you started your financial planning career, that you would already be owner of a practice by the age of 28?

Connor: No. Not at all. It’s been kind of a fun, but wild journey. Truthfully, when I started with the firm that I’m currently with, I just wanted to be a good financial planner. I was fine just kind of being a part of the team and really didn’t have a concept of what elevating to financial advisor, having my CFP, being a part owner, what all that looked like.

But truthfully, I stumbled into a great opportunity and was provided just fantastic chances to kind of elevate in my own specific career path, and here I am now in my sixth year with this team. As of January 1st of this year, I’m now part owner. So yeah, to flashback half decade or so, no, I never thought I’d be in this situation.

Hannah: Time goes fast in this profession.

Connor: It does. Very much so, yeah. It doesn’t slow down, that’s for sure.

Hannah: When you were first hired, was anything ever positioned about ownership, or was it just, “Hey, I got a good job.”

Connor: It really was just the, “Hey, I got a good job.” Now, to be fair, my partner, whose name is Kyle, Kyle was really good from the outsets of kind of not just saying, “Look, here’s what’s expected of you in your initial role, but here’s effectively the future path that I see in front of you.”

He communicated that there was opportunity here, but it really wasn’t until I reached about the end of 2013, so I would have been on the job I think close to nine months at that point, where he kind of outlined his idea for the future. At the time, I think he was either maybe 52 or 51 and that was the first time that the idea of ownership became a little bit more of a concrete idea versus just something that he was thinking about how to communicate it.

Then shortly around that time, he had actually given me an article I think by Angie Herbers called How to Think Like An Owner. Stupidly, admittedly, I sat on it for a bit. It was just one of those things I was like, “Okay, great. Thanks, and I’ll get around to reading it.”

A couple of months passed and I was kind of stalling out a little bit and I decided to pick that up and that was really what changed kind of my focus. I think in the mid 2014, early 2015, we started having more serious talks about what does that path towards ownership look like?

Hannah: Okay, so I have so many questions for you.

Connor: Sure.

Hannah: Give me a landscape of like what does this firm look like? How big is it? How many clients, how many other advisors? Do you have other staff?

Connor: Right, yeah. Our practice is a team of five right now. We do close to about 120, 130 assets under our management, just depending on how any one advisor will quantify a client or a household. We’ve got anywhere from 150 to 175. How we were structured previously was Kyle owned 100% of this practice as an independent financial advisor, as a registered representative with Royal Alliance who’s our broker-dealer, but then also Focus Financial, which is the firm.

He is one of many different advisors inside the firm. I think there’s about 110 or so advisory practices inside this firm, and Focus as a whole I think manages north of five billion in assets under management. I don’t have the exact figures right in front of me, but we’re probably I would say easily in the top five to 10 as far as total practice size by assets under management.

A lot of the advisors here are kind of just sole practitioners. Us having a team of five, we’re probably in the minority in the sense of team size. It’s the five of us here, and the way that we’re structured right now is we basically have Kyle as the controlling partner, me as the minority partner, and then we have three staff members. One investment specialist, one individual in kind of a paraplanner client service role, and then another individual who’s kind of the Jack of all trades, kind of business operations, first face the clients see when they walk in, that kind of thing.

Hannah: Was anybody else interested in ownership?

Connor: The way that our team is structured, it’s kind of a nice setup with diversity of age. We have me at 28, the individual that works in our paraplanner role, she’s 25, and then the other three team members are north of age 50. Prior to me joining the team, it was Kyle and the investment specialist and then another individual who no longer works with our practice, and they were all right around the same age range.

So, bringing me on infused a little bit of youth and then we did the same with another recent hire. The way that it’s effectively structured here is you have Kyle and I yes as the advisors, then there’s the admins, and then whether or not those individuals were interested in ownership, truthfully, admittedly, I don’t really know.

The conversations never, I believe, occurred with them. From two ways, I don’t know if interest was ever expressed, and then I don’t know if that way in which Kyle has his vision set up for the long-term, those were the right individuals for that. I think it’s really just simply a product of I can be a little tenacious sometimes and I’m sure that maybe gets on his nerves, but I pushed and pushed to have that conversation because I really bought into his vision and what he wanted to do long-term.

He selflessly really gave me the opportunity. Whether other people had that conversation or not, I’m not sure. Whether people want to have into the future, we’re always open to any ideas that increase our talent quotient here at the firm.

Hannah: You keep mentioning Kyle’s vision. What was Kyle’s vision for the firm, or what is Kyle’s vision for the firm?

Connor: Sure. The way that I understand it is we see a lot of the changes that are occurring in the industry when you look at the demographics of the average age of the advisors and what’s changing in regards to how they’re transitioning out of the industry, what amount of talents coming in. But then at the same time, a lot of the pressures with things like topnotch client service, utilizing technology, streamlining investment management and focusing more on comprehensive holistic financial planning.

There’s a lot of just these different headwinds and tailwinds in the industry that’s I think for the first time in a long time and needed, causing some change and some disruption. He saw that really early on and he knows his weaknesses and his limitations, and I think that by him adding me onto the team, we were able to kind of create a nice yin and yang of younger and older experience versus inexperience.

But someone that whereas he can be of the next decade or so phasing into the twilight of his career, he’s now got someone that’s kind of tied to him at the hip to be focused on how do we combat those changes and make ourselves relevant.

His vision really ultimately is to create the one stop shop for topnotch client service and convenience, and to make our value proposition truthfully building of the relationships, understanding what’s best for the clients, and trying to move further and further away from having kind of a singular value proposition just strictly around whether it be investment management or one factor or thought facet of financial planning.

We really want to provide our clients more sticking points to understand the value that we create. You can’t automate trust and I think that that’s where our focus lies is how can we make everything around us more efficient and streamlined in order to provide the best overall experience for our clients.

Hannah: What’s striking to me about what you’re saying is Kyle recognized that he needed to bring in people around him in order to provide that experience for his clients.

Connor: Absolutely.

Hannah: That just seems very counter to what I hear a lot of people say like, “Well, I can build it.”

Connor: Right. I have to give him credit. He’s a fantastic leader and he’s also someone that has zero issue checking their ego at the door. That’s actually been a saying that we’ve kind of tossed around between the two of us for a long time. This isn’t hyperbole. I’ve never had a situation in the six years that I’ve been here where he’s had his door closed to an idea.

I mean, he’s got a very open door policy and he doesn’t want to surround himself around yes men and women. He wants to absolutely be challenged, be brought forth with new ideas. This took me a bit to learn, but he also wants those ideas to have some meat on the bone. If you’re going to present a challenge, present the solution.

Once I figured that out, I think that’s where we really started to gain a little bit of traction. I always joke with him, this whole structure that we’ve got set up, at some point it won’t be begging him to stick around. We’ll probably be forcing him out the door because he’s just looking for every way to make our clients feel more comfortable with us and ultimately have more peace of mind with their financials.

As a way of doing that, he really doesn’t know how to slow down or stop. He really always has kind of the pedal to the metal so to speak. With us, bringing me on and other individuals, he realizes that he needs that kind of counter balance so he doesn’t burn out, so he doesn’t have to feel like he does it all on his own, that he can maybe just be the guy where at the end of the day, he signs off on the idea but the people around him are the breeding ground of great ideas.

He’s leveraging us up to be able to do that and empowering us to do it. I’ve definitely bought into his methodology and he’s very much someone who doesn’t think he knows it all. Now, he also thinks his ideas are the best, but he’ll let himself be challenged on it, right?

Hannah: We all think our ideas are the best.

Connor: Right. I’m the same way. I can’t even fault him for it.

Hannah: That’s great. The advisors or the planners that I just admire the most are the ones who make decisions with the client at the center of that decision, whether that be in how they interact with their clients or how they run their business. That’s a lot of what I’m hearing you say is I want to serve my clients better, so therefore, I have to give up ownership.

Connor: Absolutely, absolutely. That was I think kind of what he maybe realized was he had this unstoppable force, so to speak, kind of brimming and bubbling underneath him saying, let me do more, let me do more, let me do more. But it was never selfishly designed. It was all things that I wanted to do as a way to improve our experience, not only for our clients, but also for our culture.

I’m really big on creating a great environment for a team, and that’s because I luckily was able to learn on somebody the same way. Yeah, you’re totally right. I mean, it’s definitely the client’s experience at the forefront of all of our thought.

Hannah: One of the things that you brought up earlier was this article, How to Think Like An Owner. When you read that article and kind of as you transitioned from just, “Hey, I have a great job,” to now a business owner, what have you learned about what it means to think like an owner?

Connor: Sure. The biggest lesson for me was, because when you’re not an owner, now that I am, it’s a totally different way of thinking. That way of thinking, that door being opened for me wouldn’t have happened had I done the process of trying to think like an owner even prior to having kind of my neck on the line or more for me on the table as far as ownership and control or whatever.

From 2015 on, it was having to kind of through deep practice train myself to literally view almost every decision that I was making, whether it be direct client facing decision in the meeting with the client or it was kind of back office related or tech related or whatever it might be. Every time that I was going through one of those decisions, I had to stop and say like how would Kyle handle this? How would an owner handle it?

Is this a decision that’s worth pursuing further, or is it one that we should stop? Is it costing me time? Is it costing me money? Is it impacting our clients? To do that is a really hard leap to make when you really can’t quantify or understand exactly what it’s like to be an owner. But now with all the operation stuff and understanding more of how to actually run a business, I’ve already got out of the way that methodology of just trying to feel like you actually have skin in the game.

If there was anybody else that would be going through this situation or looking to do so, the best thing you can do is just slowly train yourself to think like an owner, and even if you don’t get that opportunity in the specific job you’re at. I mean, I always reserved myself to saying nothing was guaranteed. What if this never matriculated and Kyle didn’t give me the opportunity or was open to the opportunity of having a partner?

For me, I said to myself, even if it doesn’t work here, all the stuff I’m doing right now is building a skillset for the future. So, that’s probably the biggest thing I learned is just to try to train yourself to literally save for being cheesy here, to follow Angie’s words and think like an owner.

Hannah: Was there any particular decision or aha moment that you had especially at the beginning of that process?

Connor: With like reading the article?

Hannah: Yeah, or thinking like an owner, what in your daily life were you like, “Oh my gosh, I need to think about what I’m doing right now differently.”

Connor: I found that emulation was a big part of success. Whenever I would struggle with something, or I was learning something new, a client calls in and they’re upset about something, or they call in and they’re not upset about anything. It’s even something as simple as wanting to thank us for something, instead of trying to forge my own path, and of course it’s key to be genuine and be your own individual, but I would oftentimes emulate the same things Kyle was saying.

Then before you know it, those were things that I started to believe in more or understand better. It became more of a habit, so to speak. That was probably the aha was when on individual things, where in that moment you felt it go from being something that had historically been a difficult challenge to feeling yourself having mastered that concept.

Emulation was a huge key to that. At 24, 25, 26, you just don’t … No matter how smart you are with this profession, there’s just whole things when it comes to beyond the personalities and personal management and then people management. It’s hard to know exactly the right way to handle stuff. So following someone who had done it and that I respected, I think really paved the path for me to kind of be able to create my own environment where I was able to do the same things but with my own spin, my own flair.

Hannah: One of the things I’ve been thinking about a lot lately is, is the goal to be right or is the goal to make progress? We can be right all day long, but that doesn’t mean that we’re actually helping our firm or our clients move forward.

Connor: Absolutely. Somebody once told me, and I hope I don’t butcher this, but that life was three parts, knowing where you came from, knowing where you are, and knowing where you have the potential to go. The reason why you say potential to go and knowing where you have the potential to go versus saying you know where you’re going is that if you already know where you’re going, you’re only going to stay where you are.

I remember that being a huge eye-opener for me at a young age that it doesn’t matter how much experience you have, how old you are, how young you are. None of that matters. It’s truthfully, every day is a learning process. I think that if you focus your direction every day to trying to accomplish something new or be better than the day before, it really humbles you as well because you figure out real quickly that you truthfully don’t know what being right is. I completely agree with you. I think the progress is exactly key.

Hannah: When you go in to buy a firm, can you talk a little bit about the logistics of that? Kyle started the conversation, did you guys use outside consultants to help with this?

Connor: We did. Here’s kind of looking back full circle here. I thought kind of stupidly that I could figure it all out on my own and present him the perfect win-win formula and all the research. You know what? I pursued that and what was actually great about that was I think it softened the beachhead, so to speak, where I presented all this data. I showed him the industry changes. I showed him what a win-win looked like for me.

I was reading every book that I could find on succession planning and listening to every podcast that I could find. I was doing everything. I finally just hit a wall and I told him I said, “I don’t think I can do this, and I don’t think we can do it on our own.” We actually reached out to a third party consulting firm heavily focused on succession planning for financial advisory industry.

We started with them in June of last year. They provided a valuation for Kyle’s business by the end of June I believe it was. Then we spent the remaining part of the year just kind of focused on all the logistics of what does the structure look like for full buyouts by the end of the plan? What are the financials of that? How are we going about obtaining financing?

Everything from writing down a memorandum of understanding, so we have kind of a soft contract between Kyle and I of what’s expected at different times throughout our relationship. Then doing all the legality behind it, setting up the different business entity.

So, all of that took a long time and then admittedly, our busy season because we do a lot of the year end tax planning for our clients, got super, super busy earlier than normal and we kind of stalled out a bit and then wrapped up everything early into 2018. I think it was by the end of March everything was signed and official. We had kind of already been acting in the capacity as partners, but the signatures were on the pages and we moved forward.

Hannah: So, you get the valuation of this firm. Was there a negotiation on the valuation, or did you just kind of take whatever number was handed to you?

Connor: That would maybe be a better question for Kyle, but from my memory, I don’t think there was much in a way of negotiation. I think we felt very comfortable with the valuation that was provided to us. If anything, the negotiation component, which was very minimal in our process, more or less resided in once that we had the valuation was when we had a suggestion from the succession consulting firm as far as what the initial buy-in looked like.

Because you’ve got to look at things like well, I have a lack of controlling interest and lack of marketability, so am I buying 100% of the value? Am I getting a discount? All those different things we wanted to take a look at. That was really where we negotiated, but it really wasn’t much in the way of negotiation. It was him expressing his thoughts and feelings, me doing the same, us using an expert to kind of guide us and meet in the middle.

Hannah: Did you have to put money upfront for the succession plan?

Connor: Yes. The way that we structured it was effectively, I’m utilizing instead of going through bank financing, we decided to do seller financing. Effectively the way that we structured it was there was an upfront down payment and then the remainder being financed over a 10 year period. Then for future business tranches, it just depends on do we utilize an outside form of financing or do we do seller financing again?

In the truest sense, the way that we had it structured was a win-win for both of us. Where it wasn’t all of a sudden overnight, I needed to come up with hundreds of thousands of dollars and then all of a sudden be over leveraged and really risking my own personal finances. It was structured in a way where there was minimal impact unnecessary to Kyle from the perspective of taxes, same for me. Then at the same time, just making sure that he gets full value and that it’s not him stringing me from a daily cash flow perspective.

The structure of all that was the end game. It was kind of us both having to be a little bit more honest and open and kind of vulnerable to say, what are we capable of handling individually, and how do we do this that it not only a win-win for us, but a win-win for the important people in our life, our spouses, our family, et cetera?

Hannah: You guys are at a broker-dealer, right?

Connor: Right.

Hannah: Are you guys doing reps on the accounts, or kind of how have you structured that from a logistic point on the ownership of the clients, if that makes sense?

Connor: Absolutely. That’s a great question. This is where for anyone that’s listening in a similar situation or for anyone interested in this, you know it’s a bit of a leap of faith on my end. What we strongly believe here in our team is kind of the lean methodology process of just more or less trying not to get too caught up in step 10 or 12 steps or whatever it might be, and really just focusing on what’s in front of us and seeing if we can master that.

Initially, admittedly, when there was the idea of okay, now I’m going to be partner, what does that look like for me? Like you said, kind of how the registration of the reps are with both the broker-dealer, accounts on statements, all that fun stuff. It was a bit of myself having to check the ego at the door, and what Kyle and I agreed on was for simplicity and then as I mentioned earlier, kind of keeping the clients in the forethought.

It was a big deal to just bring up the whole concept of a long-term business continuity plan and the succession plans for our clients, to all of a sudden shift them to where my name is showing up on everything and that I own them in the eyes of the broker-dealer just felt like an unnecessary burden potentially for the client. Right now, everything runs up through Kyle. Everything is in his rep code and my name is not tied to any one specific singular client.

From a registration perspective, when we reach, we all have a controlling interest of the firm. That will predictably change, but up until that point, I don’t need my name on anything or sole ownership or anything running up through me to justify what we’ve got going on here. In fact, I would argue that to do so would just be an unnecessary waste of time at this point, because I own the value in the business. Having my name tied to a client specifically wouldn’t …

Yes, you could make the argument that I’m taking a risk there in case anything ever went sour between Kyle and I, but I believe in what we’ve got going on here so much that that was an easy decision for me to make. Not everybody’s situation would be that way.

Hannah: How much of this has been communicated with clients and how did those conversations go?

Connor: Yeah. Another great question. We were really nervous. We thought like this was going to be something that clients, what was their response going to be? They’ve been used to Kyle for years. Older clients that we’ve had in terms of how long the relationship has been with our team, we thought would be a bigger push to kind of get them to understand what we’ve got going on, versus newer clients.

In fact, what we actually found out was a little bit of the opposite. Some of the clients that had been around for 30 years felt that they appreciated that Kyle was doing planning not just for himself, but also putting continuity in place for their relationship. How that started was in 2015, we started communicating with clients, not necessarily that Kyle and I were going through the process of these discussions, but that I would just be getting involved on a more one-on-one basis with them.

Maybe I was doing their client meeting upcoming or if they had a question on a specific topic, I was the leveraged expert on the team for that. Then through that time, I started beginning my own relationship with these individuals. By the time that it rolled around where we were able to communicate it in depth what we’ve got going on and what does that look like for their relationship, we’ve had minimal, if any, pushback from clients.

The only ones that have really had have actually been newer relationships that are still learning our process, so I think it’s less of a pushback of having a succession plan in place, but just more still getting comfortable with everything, that it all of a sudden as it would for anyone, hey I’ve joined on and I’ve got referred to meet with Kyle and he’s great. I’m working with him. Then oh by the way, here’s this communication about changes that could be occurring into the future.

We’ve limited that conversation a little bit, so some of these newer clients that have been referred directly to Kyle, I haven’t been as involved with. But we’ll get them on that same process of communication down the road. But clients that whether they’re our largest, smallest, newest clients, oldest, I mean it really runs the gamut of who they are, that we’ve explained everything to and most people I’d say 99% really have been extremely happy with what we’ve got planned.

Hannah: A lot of newer planners come in and there’s this expectation that they’re supposed to become the rainmaker if they want to buy into a firm, or have a career path within a firm that at some point they have to start bringing in assets.

Connor: Right.

Hannah: Bringing in client relationships. Is that an expectation for you?

Connor: Yes, and no. We don’t want traditional fracture lines in our business, where there’s this expectation of okay, I bring in X, Y, and Z, which again reinforces why everything runs up through Kyle’s rep code or whatever with our broker-dealer is because we didn’t want to have any sort of internal competition.

Now, that’s a great marketing strategy, Kyle, but that’s not for my clients. We didn’t want that. We wanted one team, one vision. Multiple layers of input, sure, but if we’re going to buy into something as a group, we all need to be on board.

So, while there’s an expectation absolutely to grow the business, that was more of a layered expectation I think the last two or so years where I wasn’t an owner and maybe those were different opportunities that were laid in front of me to maybe prove that worth, so to speak, of the ability to go out and gain more clients and build up our business.

But now, and this was I’d maybe referenced earlier, the idea of how to think like an owner changes when you’re an owner. That’s the big change, is that all of a sudden you realize that everything you’re doing, that you had been thinking about potentially impacting you, now is. So, every day you spend making sure that your client acquisition and client retention are at their highest.

Our expectation isn’t necessarily any sort of quota that you need to go out and meet. We don’t want to grow too fast at the expense of our current relationships, but at the same time, we recognize the need to grow and remain consistent in existence in this industry.

If anything, moving forward now as an owner, I think our focus is more or less going to be making ourselves as an attractive team for maybe potential other practice acquisition in the independent financial advisory space, versus going out and trying to develop any sort of method or marketing strategy to try to gain clients on a one-on-one basis, if that makes sense.

Hannah: Yeah, so there’s like no bonus or anything for any clients you bring on or any oddball structure like that?

Connor: No. There was a little bit in the past when I was acting just in an employee role. There was incentives there, but in a strange way, and again, I get not everybody would be wired the exact same way, but for me, I guess I never really looked at it like that. I just looked at it as are these good clients? Are they kind of people that we want on board? Are they going to be fitting our niche? Let’s move forward.

To me, whether the bonus was met or not, it was all kind of that process of am I doing the right stuff for the day to put ourselves in the position to gain good clients? As a result, those bonus incentives luckily for me were met, which was always nice.

But now that I’m an owner, Kyle and I have not sat down and outlined some sort of incentive program or anything that I need to reach. It’s just basically every day coming in here and, as you had astutely pointed out earlier on, focusing on the process and progress more so than any sort of one specific measurement that we are attaining in kind of a tunneled vision.

Hannah: As you progress, is it six years that you’ll be the controlling interest?

Connor: I believe so, yes. It’s the start of 2024 will be when. That’s just the blueprint of the plan. Life may change, but that’s the plan is ultimately for me to switch over to a controlling interest ownership in the year 2024.

Hannah: Then is that every year you gain more shares?

Connor: Right now, I’m currently 15% owner. I stay at that for through 2021 and then in 2021 the plan is for me to acquire another 15% and then between 2021 and 2024 prepare myself to acquire in 2024 21%. It’s actually three tranche purchases versus any one kind of gradual uptake year over year. I’ll stay at 15% from now until 2021, and then switch up to 30% at that time, but it matches …

The reason why we structured it that way is it matches at that time my hours and time in the business will increase as Kyle’s decrease relatively. The idea was by that time, we’ll have been five years into the plan. I’ll now own 30%, but theoretically, he’ll be able to be in the office and involved a little bit less than he is right now.

Hannah: Then for the payment for those future tranches, is it still going to be owner financed or I mean will you do something with your salary?

Connor: That’s yet to be determined. Again, with that lean method where we’re kind of figuring out a lot of stuff that works right now. The processes in place here has worked great so far where it was important for Kyle and I both to not really take a huge reduction in overall gross pay from 2017 to 2018. The way that we structured our first tranche here worked out nicely for that.

When 2021 hits and there’s a reduction in his hours and an increase in mine, we’ll probably change the base compensation for both of us as well there. But then as far as the structure of will we choose to do seller financing or will we choose to use bank financing, I think it will just depend on where we’re at at that time. What we’ve found is a lot of institutions, they wanted us to have a higher amount of ownership for me on the upfront because they didn’t like the idea of underwriting an initial loan lower than $500,000.

When we got that pushback, we just figured yes, it’s different than Kyle getting a duffle bag of cash and instead he’s getting payments per month. But it just was more comfortable for the both of us, versus all set in me getting saddled with unnecessarily high closing costs and interest rates just to make me advantageous or attractive to a third party financier. For future acquisitions, will be a higher theoretical purchase price. I would imagine using some sort of outside financing.

Hannah: Has there been any talk of potential future owners as well?

Connor: Yeah, there has. I’ll be completely transparent here. Like I said, tenacious, but a bit of a control freak sometimes too. When we first set out with this, I was like, “No, I’m going to own the whole thing outright. It’s going to go one to one transition from Kyle to me long-term.”

As I’ve gotten more involved both at the process leading up to the succession and then actually being a partner, there’s a lack of I think really good talents in the industry that also is interested in being an owner. There’s a lot of people I think that are just very good financial advisors and financial planners that they’re in their lane and they’re good with that.

We haven’t really run into a whole lot of people, at least maybe in our sphere that are also interested in hiring and training and managing and focusing on our business bottom line and operations and being up to date on tech and all that other stuff.

If the right person comes along, I think I’d be a fool to not give them the chance to buy into what we’ve got going on here. Because ultimately, if another talented individual can come in and kind of improve on where my blinders are or improve on my weaknesses or provide something different, I think we’re all made better off and we’ll get an even better chance to have this grow into something bigger than if I try to do it all on my own.

I had to have my own process of getting to check my ego at the door, but we have talked about it because we realize there’s good individuals out there that want to do what I’m doing with Kyle and we’d be stupid to not have an open door policy to at least entertain the idea to have them potentially come in and get involved. What that looks like, how that would occur, I mean there’s just so many unknowns there at the time but I think we’re open to the idea if it’s the right fit.

Hannah: How has your day to day changed since being an owner or as you’ve transitioned into that ownership role?

Connor: Yeah. That’s a great question. A lot hasn’t changed, just because the last few years leveraging up to being more involved with clients one-on-one. From a client perspective, really nothing has truly changed from a day to day workflow. Where the change has occurred is I’m more heavily involved in our initiatives for marketing or our initiatives for a better streamline use of our systems internally.

More involved in making sure we’re up to date and always constantly evolving and refining our investment management philosophy. I’m more heavily involved in that stuff. Additionally, by adding more team members. We’ve brought on two new people that are here currently since November of 2016, which for our sized team was pretty rapid growth.

There’s a lot more delegation and delineation of tasks. What I’ve found has had to be the biggest change for me is a better focus on time management. I spend way more time now time blocking, specific time for emails, specific time for phone calls. I now use a planner to outline my day, which is something I’ve never done.

At the same time, I spend an active amount of time reading and educating myself not just in all the things that we need to know to be successful in this industry, but also to create a fantastic workplace environment and a great culture. Because this all is going to come crumbling down if I don’t have the team around me that’s buying into what we’ve got going on or wants to be here every day.

I spend more time now focused on big picture things, but if I had to be completely honest with you, it does not feel like it’s that much more time because I actually kind of from a nerdy perspective, I love that stuff. So, to take extra time to read it and be better and learn, it’s really not that much of a change. It’s just more of a time commitment.

Hannah: You’ve talked about the consultant that you worked with. You talked about how to think like an owner. For the planners who are listening to this who are really interested in the idea of becoming an owner, what are other resources or places that they can go to help get them up to speed?

Connor: Oh gosh, that’s a really, really good question. Yeah. Wow. One of the best resources I read, and it’s just a bit out of date now, but that’s less because of the information and just more of how the industry has changed over the last four to five years.

But there was a book by David Grau who works with a company called FP Transitions. We actually didn’t use them, but I really liked their stuff, the stuff that they were putting out. Not just currently through the form of blogs or whitepaper, their own form of media to kind of put the information out there about the industry changes and how advisors can take advantage of them.

David Grau actually wrote a book called Succession Planning for Financial Advisors, I think was the exact title. I read that front to back. It’s chockfull of a ton of information. It kind of reads like a textbook, but for this subject, you kind of have to treat it that way because it’s getting caught up to speed not just on the industry changes, but for someone that would be in a very similar role as I was in and a very similar career path that I was in.

It doesn’t really matter about age. But for me that was a big deal because I wanted to kind of approach this with the idea of it’s great to know every statistic about this. It’s great to know every potential avenue or opportunity, but what’s the psychology that I’m dealing with?

You have someone like Kyle who joined in the industry during the computerization. The overall change in the industry in the 1980s of your broker, your financial advisor, your trader being more readily available to the every man, and he was very successful at that. Then transitions out of more of a product pushing commissions, high sales role into really being kind of on the forefront of the idea of fee-based asset management in the early ’90s.

Like many people like him, there’s this career that has been extremely successful and it’s provided a tremendous amount of opportunities for him as an individual that maybe when he set out didn’t know where even he would be in 30 years. Those that have lasted for that time period, they really had to cut.

They ran a heavy sales culture and that’s just not what most individuals that are coming in the industry now have to deal with. Having not had dealt with that on my own where I came in and just learned that I need someone and kind of leveraged up over time into a different role.

What I wanted to do was provide myself more understanding of what was the individual I was trying to convince that a succession plan made sense for? Not the statistics that I was trying to use or anything else. What could I do to help convince them more? For me, it was understanding that psychology.

That book actually helped for that, because I think the first two chapters are explaining like how we got to now, which is great. I would recommend that. Then Michael Kitces did a podcast with a gentleman by the name of Eric Hehman out of Austin with a firm called Austin Assets. He was much younger when he bought in. I think he was like 22, 24, somewhere in there.

In his podcast with Michael, I’ve listened to multiple times because it helped me understand that psychology even better. Then he and two other authors actually co-authored a book that was also very helpful. Those are really outside of just kind of random things that are here, read here and there with different blogs or resources. Those were the three that I relied on the most.

Hannah: Can we have you talk just a little bit more about that psychology. How did that change your approach or what … How did that tangibly change the course of kind of what your succession plan and your track was?

Connor: No, that is a really good question. When I first started with that process, I’d mentioned thinking I could kind of tackle everything on my own. I was very data driven. If I just tell Kyle the best statistic or show him the best win-win formula, it’s a no-brainer. In a lot of ways, to give him credit, it wasn’t a hard sell.

I mean, he saw it. He got everything. I then realized with him that once I could get past that hurdle that it was going to be a challenge once we started really getting into the nitty-gritty of everything. You could talk about a succession plan, you can look at statistics, you can view all the pros and cons in a vacuum.

But it’s not until you really start to get into the process when the solo practitioner realizes they’re going to have to give up some value to grow, that we’re taking on a risk, especially during an upmarket, in a market that’s been nice for a considerable amount of time. For me, it was really important to kind of go with the art of war here, so to speak, is another literary reference and try to understand the individual that I was trying to, to use kind of the art of war terms, “conquer”, versus trying to just figure out my own methodology or my own path.

It was better to understand what were their blinders? What were their weaknesses? What were their issues, and how could I make them feel more at peace with it? That was really important to me because I never wanted a partnership with Kyle that he was ever 50/50 on or sitting on the fence with. I wanted him to be fully on board.

To kind of lay down my armor, so to speak, and kind of go into this with my ego checked at the door, it was best to understand what is it that he’s struggling with? There was a lot of times where we would have conversations that would be him and I just kind of opening up to each other and me asking him tough questions that had less to do with the numbers of everything and more to do with just how he felt about everything.

There really was no magic formula. It was literally just sitting him down and saying, “What’s on your mind? What’s your struggles with this? What’s the real challenge? How can I help? What can I do?” Then slowly over time, when things started to get very real for me, little did I know he was doing that right back and kind of offering me those same questions from him to me.

That made the whole process really smooth. The brain is a powerful thing. If you can tap into utilizing that to your advantage, not just your own, but understanding someone else’s, it makes everything way easier because then you truly do get to empathize with them and understand their challenges. It makes it more real to you as well.

Hannah: The irony of everything that you’re saying is that’s what makes great financial planners great financial planners.

Connor: Right. Yeah. That’s exactly it. It’s that obvious. It’s the best planners in the world are ones that really truly try to understand what is best for their clients. Even the idea of trying to “put yourself in their shoes”, that’s still a method that’s centered on you.

Hannah: Yeah.

Connor: It’s really putting yourself in a position to be open to understanding what’s making them tick. It’s easy to sit back in hindsight and make it sound like I’ve cracked the code on something, but honestly, throughout the entire time, I can quantify it to you now. But at the time, I really just wanted to check in with Kyle and make sure he was good with everything.

If I did that, then whether it went the route that I wanted to or whether it was as optimal as I wanted it to be, none of it mattered to me if he was going to be regretting his decision. That doesn’t make for any good outcome for either of us, which is also I guess like a financial planner, right?

Hannah: Right. This is just so great, Connor, and hearing your story. Are there any other pieces of advice or thoughts that you wish you would have known when you started out?

Connor: Yeah. It’s an industry that really I think the self-starters are the ones that cut it and make it. While it’s great to be where I’m at at 28, just something as simple as Kyle provided kind of the key to the kingdom by handing me an article by Angie Herbers that said How to Think Like An Owner and I sat on that for three months.

I can’t tell you why or if I was just busy or whatever it was, but my number one advice would be this industry is absolutely changing and we’re here to really take advantage of a huge transfer of wealth that’s going to occur. Then also just a transfer of opportunity between advisors that have been in for 30 years and those that are just now starting out, to prepare yourself to be able to handle that.

It’s not waiting, procrastinating saying that you’ll wait till tomorrow or the opportunity will present itself. You almost have to, without ruffling any feathers or stepping on any toes kind of have a move or get out of my way mentality. That didn’t really click for me right away, but once it did, it was that definite approach where I view it every moment as how am I not wasting my time? What is worth my time right now?

My number one advice for people would be figure out what works best for you. But just kind of I guess the overarching theme of our conversation here has been kind of trusting that process and the results will come and that just working towards progress every day is worth it. Don’t sit on anything, especially if someone that’s come before you nudges you in the right direction, don’t wait three months to tackle what they’ve given you.

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As more established planners plan for their own futures many young professionals are offered a succession plan as part of their career path. In this episode, Connor Koppa, CFP® walks #YAFPNW listeners through what it’s like to be part of a succession p... Focus Financial, Kyle Watkins, CFP®, wanted to encourage his dream of owning a financial planning practice.
Together, Kyle and Connor worked through a unique ownership agreement that worked for them. Right now, Kyle is still the Executive Officer and a financial advisor at Focus Financial. Connor now owns 15% of the practice, and takes the lead on client relationships, business structure, and building a practice culture.
Not everyone is fortunate enough to have an open, honest line of communication with with the lead advisor and owner of the financial planning practice where they work. In this episode, Connor walks #YAFPNW listeners through what it’s like to be part of a succession plan, what his ownership arrangement looks like at Focus Financial, and more. We hear about succession plans often in this profession, but we so rarely get to peek behind the curtain to see how an individual plan pans out – and this episode gives you that opportunity!

 

What You’ll Learn:





How to set up a succession plan
The best ways to communicate with a firm owner about your desire to own part of the firm
How financing works when you buy into a financial planning practice
How ownership of clients, business decisions, and more work when there are more than one owner in a practice
How to potentially work in future owners into your plan
What being a part owner of a financial planning practice looks like in the day-to-day
The importance of creating a communicative culture and fostering innovation in your financial planning practice
How you can get involved and find fulfillment as a financial planner even if you aren’t interested in becoming an owner





 
How To Think Like An Owner
 

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Hannah Moore clean 50:16
Fighting for the Fiduciary Standard: FPA’s 2004 Lawsuit Against the SEC https://financialplannerpodcast.com/yafpnw-fighting-for-the-fiduciary-standard-fpas-2004-lawsuit-against-the-sec/ Tue, 31 Jul 2018 20:40:28 +0000 http://fpaactivate.org/?p=11543 https://financialplannerpodcast.com/yafpnw-fighting-for-the-fiduciary-standard-fpas-2004-lawsuit-against-the-sec/#respond https://financialplannerpodcast.com/yafpnw-fighting-for-the-fiduciary-standard-fpas-2004-lawsuit-against-the-sec/feed/ 0 On March 30, 2007, the Financial Planning Association made history by winning a lawsuit that vacated SEC Rule 202(a)(11)-1. This forced brokers to become SEC-regulated advisors, and helped to create a division of the two hats in the financial services industry: fiduciary and suitability. On March 30, 2007, the Financial Planning Association made history by winning a lawsuit that vacated SEC Rule 202(a)(11)-1. This forced brokers to become SEC-regulated advisors, and helped to create a division of the two hats in the financial services industry: fiduciary and suitability. This was the one of the first times that the American public was exposed to a discussion that had long been brewing in the financial planning profession, and the fight to improve the fiduciary standard in the financial services industry continues on today. In this episode, we hear from Elizabeth Jeton, Dave Yeske, and Nick Nickolette about the importance of FPA’s lawsuit against the SEC, how FPA is continuing to push for regulation, and why all of this is truly at the heart of our profession.