You're A Financial Planner; Now What? https://financialplannerpodcast.com Exploring the world of financial planning Tue, 09 Oct 2018 19:49:13 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.8 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 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.

Hannah's signature

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.

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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.

hannah's signature

Hush more. Stop talking, and start listening. – Dr. Moira Somers on #YAFPNW

Click to share

 

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





 
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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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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.

FPA’s lawsuit against the SEC baffled many on Wall Street because there was little financial gain for FPA and its members. The lawsuit was backed by FPA because it directly protected and impacted the American public, and the organization’s leadership knew that having the best interest of consumers in mind was always their number one priority. Nobody knew, when FPA first started to pursue the SEC lawsuit, how people would react. So many questions bubbled to the surface.

How will the media respond? Do we need additional partners and resources to make this happen? Where will we get the support we need?

The lawsuit was undoubtedly a push to protect financial planning clients across the country, and FPA members felt strongly that their organization was taking a true stand for their core values. The lawsuit itself was often likened to a case of David and Goliath. FPA was fighting against corporate giants to force regulation for fee-based wealth managers – and it was an uphill battle.

But the lawsuit had a much larger impact than simply increasing regulation. It was the first time the debate between suitability and fiduciary had a public forum. The FPA was in publications such as The Wall Street Journal, and the New York Times making the case for a fiduciary standard. They were taking a stand against brokers giving advice without abiding by the fiduciary standard as outlined by the Investment Act of 1940.

To this day, the FPA pushes for public education and their advocacy positions center around the fiduciary standard because the fight isn’t over. Every member is courageously fighting to provide a place for clients to come where they know they’ll be taken care of, and where they never doubt that their financial planner puts their interests above his or her own.  

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It meant a lot to our members to know that we stood for something…To have your voice amplified, to feel confidence and conviction in our members that they were a part of something bigger that took a stand. #YAFPNW

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What You’ll Learn:

  • How the FPA’s lawsuit against the SEC came about
  • The full history of the SEC lawsuit, and what happened to cause FPA to win
  • Who was at the heart of the movement
  • How the FPA got involved
  • Ways that the FPA pushed for a more clear fiduciary standard, and promoted direct regulation of fee-based financial advice
  • What financial planners are still doing today to fight for the fiduciary standard, public education, and better SEC regulation

 

FINANCIAL PLANNING ASSOCIATION v. SECURITIES AND EXCHANGE COMMISSION

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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 ... 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.
FPA’s lawsuit against the SEC baffled many on Wall Street because there was little financial gain for FPA and its members. The lawsuit was backed by FPA because it directly protected and impacted the American public, and the organization’s leadership knew that having the best interest of consumers in mind was always their number one priority. Nobody knew, when FPA first started to pursue the SEC lawsuit, how people would react. So many questions bubbled to the surface.
How will the media respond? Do we need additional partners and resources to make this happen? Where will we get the support we need?
The lawsuit was undoubtedly a push to protect financial planning clients across the country, and FPA members felt strongly that their organization was taking a true stand for their core values. The lawsuit itself was often likened to a case of David and Goliath. FPA was fighting against corporate giants to force regulation for fee-based wealth managers – and it was an uphill battle.
But the lawsuit had a much larger impact than simply increasing regulation. It was the first time the debate between suitability and fiduciary had a public forum. The FPA was in publications such as The Wall Street Journal, and the New York Times making the case for a fiduciary standard. They were taking a stand against brokers giving advice without abiding by the fiduciary standard as outlined by the Investment Act of 1940.
To this day, the FPA pushes for public education and their advocacy positions center around the fiduciary standard because the fight isn’t over. Every member is courageously fighting to provide a place for clients to come where they know they’ll be taken care of, and where they never doubt that their financial planner puts their interests above his or her own.  

 

 
What You’ll Learn:

How the FPA’s lawsuit against the SEC came about
The full history of the SEC lawsuit, and what happened to cause FPA to win
Who was at the heart of the movement
How the FPA got involved
Ways that the FPA pushed for a more clear fiduciary standard, and promoted direct regulation of fee-based financial advice
What financial planners are still doing today to fight for the fiduciary standard, public education, and better SEC regulation

 
FINANCIAL PLANNING ASSOCIATION v. SECURITIES AND EXCHANGE COMMISSION
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Hannah Moore clean 50:29
Financial Coaching and Exceptional Planning https://financialplannerpodcast.com/yafpnw-financial-coaching-and-exceptional-planning/ Tue, 24 Jul 2018 20:14:26 +0000 http://fpaactivate.org/?p=11534 https://financialplannerpodcast.com/yafpnw-financial-coaching-and-exceptional-planning/#respond https://financialplannerpodcast.com/yafpnw-financial-coaching-and-exceptional-planning/feed/ 0 Saundra Davis believes that financial coaching skills and financial planning go hand in hand. As a financial planner, you may be completely confident in the guidance you give to clients – but feel frustrated and lost time and again when they fail to follow your advice. This, according to Saundra, is where coaching comes in. […] Saundra Davis believes that financial coaching skills and financial planning go hand in hand. As a financial planner, you may be completely confident in the guidance you give to clients – but feel frustrated and lost time and again when they fail to follow your advice. This, according to Saundra, is where coaching comes in.

Coaching clients through financial decisions can inspire them to take action and pursue the financial life they desire. Evaluating how clients make decisions, and what could potentially stand in their way from making financial choices that serve them, can help financial planners to have a larger impact on the lives of their clients – and extend their impact for generations to come.

This conversation with Saundra will absolutely move you. As financial planners, we often focus on how we want to serve younger generations that often don’t fit the mold of “ideal client” for larger, established firms. Saundra’s take on financial coaching will inspire you to serve your existing clients better, extend yourself to be able to serve everyone, and grow the financial planning practice you’ve always dreamed about.

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Coaching is an opportunity for you to align what you know with what they do. @sagemoney on #YAFPNW

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What You’ll Learn:

  • Core financial coaching elements, such as how to get clear about what a client wants, the gap between what they want and where they are, and how to create a financial plan that can help them achieve their goals, regardless of their income or wealth
  • The importance of how we view our clients and the consequences if we don’t view them correctly
  • How financial coaching intersects with financial planning (hint: if you want to be a better financial planner, financial coaching skills are critical)
  • How to serve low income individuals through financial coaching in a way that focuses on asset building
  • How financial coaching connects us as financial planners to our deeper fiduciary duty
  • Where to “plug in” to conversations about financial coaching within the financial planning profession
  • The importance of bringing financial expertise to financial coaching
  • How to start coaching-based financial planning conversations with clients
  • How the financial planning profession can move forward into serving demographics that aren’t currently being served
  • How coaching can help you guide your clients to live the life they want
  • Motivation and inspiration – knowing what you provide and what the client provides
  • The power of motivational interviewing and how you can improve your client skill set

 

 

Show Transcript

Ep108 Transcript


Hannah: Thanks for joining us today, Saundra.

Saundra: Thank you. I’m glad to be with you.

Hannah: Okay, I am so excited to have you on this podcast, and I know it’s going to be so good. I want to talk about financial coaching. For the listeners, what is financial coaching?

Saundra: Financial coaching is a way of being with clients that supports them understanding what’s most important to them, how they live with their money, and how to align their financial choices with what matters most. Rather than be in the seat of their expert, I am actually their partner in excavating and designing a plan that is founded in their behavior choices.

Often, the role in my world is that I at any point in time of that engagement, we’re doing what’s called a dance, right? That client has an opportunity to explore more deeply. We call that discovery. Not discovery in the sense that you would as a financial planner, but the discovery is about the client’s reflection.

Not so much what they tell me about like this isn’t information gathering. It’s not the same. It discovery is a self-discovery about what really matters to you because as you know, I’m sure, is it’s very seldom about the money. My colleague, a very close colleague says, “People don’t have financial goals. They have life goals with financial implications,” and I really believe that to be true.

One of the things that we focused on as a financial coach is how do you align what you care about and what the money does for you with the plan and then your behavior? One of the reasons that financial coaching is a thing is that often you can create this amazing financial plan, all of the what fors, whys, all of the right stuff to do, and have a client that doesn’t follow it.

Often, that’s because it is not their plan and as a coach, I am not interested in being right or having the right plan for a client. I’m interested in that client reconciling, what they know and what they want, with what they do. When you think about the way of coaching, it is how am I going to be with that person as they go through this very iterative process, right?

It’s very seldom, if ever linear, how am I going to be with them as they claim their power around their financial choices, and then align their behavior with that power?

Hannah: One thing that stood out to me is it’s not about being right as a financial planner and that’s so countered to the training that we’ve got because we get tested on finding the best solution, but you’re really saying that maybe it’s not about the best solution. It’s about the client discovering what’s best for them?

Saundra: I’d say it’s both because I have to know what I’m talking about, right? This is one of the reasons that I have made such an impact on financial coaching as a profession is because I’m actually one of the first people, and actually maybe even the first, to say that a financial coach must be a financial expert. When you come from the life coaching field, which many people do, life coaching would say that you do not have to be an expert in the topic.

You coach the person not the topic. As a financial coach, I believe that that’s just flat out wrong. As a financial coach, you must coach the person and you must know the topic. It’s not that I don’t have to have the highest quality skillset, the highest knowledge level for my financial work. I have to know that because if not, I can actually coach someone into something that’s financially disastrous for them.

I have to know it’s what am I going to lead with. Am I going to lead with my knowledge or am I going to lead with my coaching skills? As a coach, I lead with the coaching skills and I apply my knowledge as appropriate based on where that client is. One of the challenges about comprehensive planning, which I believe is absolutely necessary is that we blurred out all of these things that client should take action on it.

Often, they get stuck because it’s just too much and it’s not that one thing is any more important than the other, but what coaching allows us to do is be in that relationship with the client to really figure out what is going to be a metaphor that Andrea White uses “the gas in the tank.”

What is going to be the gas in the tank that keeps that client moving even when they have competing financial goals, when they have financial struggles or things come up that they just don’t know how to cope with. Many people just give up and don’t execute their plan, but as the coach, I want to be able to bring the very best in my knowledge to bear in what moves them.

How does that client stay inspired? How do they set a target for themselves? Then carve out that pathway certainly with my expertise, but I have information they know themselves. How do I bring my information to bear with what they know about themselves to keep them moving in the direction that’s going to help them get where they want to go?

Hannah: Can you do financial planning outside of financial coaching like this financial coaching have to be an element of good financial planning?

Saundra: This is a rub because there are many financial planners who just want to crunch the numbers. They want to get the plan right. They want to get the numbers right and I believe that there is value in that. The challenge is if you’ve got the numbers right and your Monte Carlo simulations are right on and the client doesn’t execute the plan, what have you done?

The coaching is an opportunity for you to align what you know with what they do. I don’t think that everyone is going to be a coach nor do I think that that’s necessary. Many financial planners said I train either in my class at Golden Gate or at the Financial Fitness Coach certification, those planners are using the skills to support a higher level of discovery, a deeper level of discovery, a deeper level of action planning that the clients can actually own.

Notice I don’t use the words buy in that the client can own that come from them and then in that implementation piece, right, how do they actually do what they know to do? Now a lot of financial planners say, “Well, look the clients do that, they won’t need me anymore.” I actually see the opposite.

I believe that what happens is that you have such a trusted and deep relationship that you know them, and you understand them so well. You’re listening to them in a way that no one else does quite frankly, most it’s not even your spouses, right?

You have this engagement with them that they come to rely on you being able to help them see and reconcile their blind spots. Not only in the information but in their behavior, and rather being a shame face, though, yes, I know you told me to do this, not in the other, but I just couldn’t get to it, this happened or that happened.

They come with, “I got home, I tried to do it, and I just couldn’t get that done,” and then the coach will say, “Okay, so what’s up with that?” We are the accountability partner, not for shaming or blaming or judging, but for being there through the transitions and being there as you work through those parts of you that are ambivalent, right?

It’s like the example that I use in my classes is that I love being healthy, I love being strong. I know that I need to get up in the morning and I need to hit the pavement or get to the gym. My bed is so comfortable. I got one of these really cool pillows and like, what do I do when that ambivalence is there? How do I choose?

That’s what a coach does, right? It’ll help you to figure out how do you navigate those times when you’re not doing what you know to do. Many financial planners are using the skills along with their planning. It’s not an either/or. It’s a both and, and so learning those skills can certainly help with client communication.

It can certainly help with client inspiration. Again, I don’t use the word motivation because I don’t believe you can motivate another person. I believe motivation comes from within. I certainly inspire people and their motivation, I can help them tap into it, and then that’s my job, to help them tap into it, and then reflect back what I see.

If I’m working with a client that says, “Hey, yes, or I’m going to track my spending. I’m going to make sure that I’m doing this, that, or the other” and they’ve decided what they’re going to do. Then I say, “Okay, so what is our accountability plan? What support do you want from me?” What I want you to check in with me once a month and let’s take a look at where we are.

If they check in and they haven’t done what they said they were going to do, then my job kicks in, okay, so talk to me, what’s up? What do you want to do about this? Is this really something that’s important to you? If not, what’s the alternative?

We use techniques like motivational interviewing. We certainly look at the transtheoretical model of change around precontemplation and contemplation, and all the way through action. We use those skills and bring those skills to bear for the client’s benefit not so that I can be right, not so that I can have the best plan, but so that the client can honor their commitment to themselves, to create the financial life that they want.

Hannah: There’s a lot to talk about we do share this idea of client first and I feel like what you’re saying your client at the center. I feel like what you’re saying is taking that to a whole new level, but how do we keep the client at the center of everything that we do?

Saundra: Yeah. I think that that’s true. Here’s the thing, Hannah, most people join in this profession because they really want to do good work. They really want to help people live well with their money. They want people to have access to the highest quality financial planning that’s appropriate for them holding the fiduciary standard.

A lot of times helpers really think that we can change what someone else does and anybody that’s ever raised to teenager is really clear that you really can’t make anybody do anything that they don’t want to do. For me where the rubber meets the road around the coaching conversation is how do we get really, really clear about what you want.

Then how do we get clear about recognizing the gap between where you are and where you want to be, and building a plan that you are ready, willing and able to execute, and then be in your accountability support as you take those steps.

Hannah: Yeah, that’s a lot more than just saying here’s your list of recommendations going from that. Yeah, that’s kind of a thing. Maybe I know more about you than the listeners do right now, but one of the things that was fascinating to me about your answer on financial coaching was you didn’t put that to an income level.

Saundra: No. No.

Hannah: You had nothing in there about how much money you have to make and so much of what financial planning is right now is about serving high-net worth, high-income individuals. I know that’s not true with the work that you’re doing. Tell me more about your work. On your bio, it has you work with community-based organizations that focus on asset building for the working poor.

Saundra: Right, right. I am a career changer, I think you know that. I spent 25 years in the non-profit sector prior to becoming a financial planner and what that was about for me was I spent a lot of time helping non-profit agencies raise money. I was a grant writer so a grant writer and development director for 25 years.

I got to the point where I realized that it really didn’t matter what we did that unless people took charge of their financial choices irrespective of how little they had, nothing was going to change. It didn’t matter if we help them get a job, get a house, go to school, whatever, whatever we did. Nothing was going to change.

I was working with non-profit agencies that we had this revolving door of clients coming … The same clients coming back over and over again most often for the very same circumstance that they had been with us before. To be quite frank, I knew nothing about money, nothing. I did not know what a financial planner was. I cannot, honestly, say I had ever even heard the term.

I was noticing that I knew nothing about money. I was making every bad financial decision possible. My family was making every bad financial decision possible and I just woke up and just realized that, you know what, everybody I know needs this. Everybody I know needs to understand how people who are wealthy acquire, build, and transfer their wealth.

Everybody I know needs to know how to do that. I was talking with my partner one day and he says, “Well, why don’t you be a financial planner?” I’m like okay, you do realize that I’m the person who took bone-head math because I was afraid to take the placement exam.

Yeah, seriously, that’s no joke. That’s no joke. That’s a whole another story. I started reading about what a financial planner was and it’s just so strange. I graduated from my undergrad at Golden Gate and I looked at Golden Gate. It’s so funny how things happened.

I have gotten an e-mail from Golden Gate and I have looked at their masters programs, and there was a master’s in financial planning. I started looking into it and I decided, okay, I’m going to take a run at it, and I did. I was the 2006 Financial Planning Student of The Year and I was volunteering at an organization in San Francisco that did what you call “Individual Development Accounts.”

At that time, they were very, very popular because it would help people who are working poor save for an asset so rather than just … I tell people I’m not in the business of helping poor people be for comfortable being poor. This was about how do you build? How do you increase your resources to be able to change the trajectory of your family and even your community?

We built the practicum class at Golden Gate University with some persuasion and a really good lunch at a Japanese place in San Francisco, who we were very fortunate to get Dave Yeske to be our first instructor at the practicum back then. We had the class at Golden Gate. I was volunteering at EARN. We were building this program and the idea was to bring comprehensive financial planning to low-income people.

Back then no one was doing that, right. No one even felt it was necessary. Everybody felt that poor people just managed the budget and stop buying television and Nike shoes, everything would be fine. I had the belief then as I do now that unless people manage every dollar and every dime particularly if you are poor. Nothing will ever change, and so that’s what I started doing.

I became very involved with the Financial Planning Association’s pro-bono committee, built a pro-bono boot camp, and really went all in on being very active with making financial planning full service, comprehensive financial planning accessible for people who traditionally would not receive those services.

It was a very exciting time, a very challenging time, but I decided at that point to keep my focus on that population. Now, of course, that meant I was working for a long time, but I’ll tell you, I absolutely have no regrets. The way that I did that is I had bought a home in 2000, and I took out a home equity line of credit, put myself through school.

I had two years’ worth of income to survive on before I was able to start making a living, and that’s how I did it. Yeah, I still have a mortgage and I still have a couple of student loans, but I am living the life that makes my heart beat fast. I’m serving the people who need me the most and there are now financial coaching programs all over the country.

I have a lot to do with that and I am really proud of that work. The piece of it that I’m most proud of is that I refuse to accept a standard that says you can be a financial coach without being an expert. I believe that irrespective of how little you make, you deserve to have access to competent and ethical financial planning.

I’ve been really fortunate I’ve had mentors that Dave Yeske, Kacy Gott, Elissa Buie, Holly Gillian-Kindel has been right by my side as I have gone through this journey, and then I’ve gone to classes. Ted and Brad Clotch, Rick Keller, all of the work around the human side. Who we are and what we do?

I just have made a really strong commitment to make sure that low-income, moderate-income folks have access to that level of support. Now, the CFPB, the Consumer Finance Protection Bureau, has a financial coaching program that’s have 60 coaches all around the country serving this exact population, and I’m really proud of that.

There’s a lot of really experience financial planners and brand new financial planners who are volunteering to do work with that population. It’s necessary and one thing I do want to say before we go on to the next thing is that my very first client, I served her with a sliding scale. She was really broke, really, really broke.

She was the first person in her family to go to college. She actually became a physician and she had so much student loan debt. She was really, really in financial struggle. It literally took us a year, one full year to get budget. She kept having emergent season and tailor.

Yeah. It took us a really long time and after about a five-year engagement of just annual, quarterly check-ins, quarterly for check-ins but then annual goal setting. Now she’s a home owner and she has moved to another state. She’s a home owner, doing the work that she loves. She has a child now. She is living the life she wanted.

When we met, she literally was so upside down on student loan debt, a car that wasn’t reliable, living in a place that was not safe. When those things happen, you know that you are kind of in this sweet spot where you could help people bridge a gap that they felt they were always going to be on the wrong side of.

Those kinds of things just keep me inspired and motivated to keep doing what I’m doing, which is how I ended up talking up to you, I guess, right?

Hannah: We talk about financial planning being so powerful. You helped guide her, though, to a place in her life that she may not have ever gotten to.

Saundra: Thank you for noticing. That was a coaching moment you just had there, Hannah, because you were ready to say I changed her life and you’re right, I did not. She changed her life.

Hannah: Yeah.

Saundra: She changed her life because I saw her-

Hannah: Yeah.

Saundra: For who she was and I stayed with her through all of the bumps. I reflected back to her when she was not honoring her commitment to herself and I held her accountable based on what she said she wanted from me. Now we might talk once every couple of years. She doesn’t need me anymore.

Now, when she needs to talk … What I did because I’m not a CFP, what I did was connected her with someone who helps her manage her assets now. She doesn’t need the work she did with me anymore. Now she needs a CFP, and that’s what she has. She is doing her life now in a different way. Now she is going to pass this knowledge down to her child.

She has a different way of being with her parents and her siblings and her cousins, and all of the people who had this perpetual mindset of poverty before we met. Those are the things that I strive for. I am charged with, I believe, making sure that people know that they get to design their journey with money, and then I’m with them as they do that.

Hannah: How powerful of the courage where you said is? You are helping generations of families like it’s not just … Like what you what you said it’s not just her, it’s generations of families totally different.

Saundra: Yeah. That was what drew me to the profession. I choose to work mostly with low and moderate-income clients, but I’ll tell you, there are just regular, every day folks, that the Garrett Planning Networks serves well.

That many financial planners don’t seek out those plans because they don’t have assets to manage, but that’s the majority of the people. That’s the majority of the people in the world and I’ll tell you when you look at all of the robo advisers popping up and all of the ways that people are starting to engage with financial planning now, there’s a huge need.

There’s a huge need for work place financial planning. There is a huge need for how to do you plan your way out of student loan debt. All of those things are crucial, and I will not mislead people. I did not make big bucks doing this. I had to be very thoughtful about the life that I wanted and what I wanted that to look like.

I tell people all the time, I keep my needs small so that my wants can be outrageous. That’s how I do this. That’s how I’m able to do this, but that’s because I know what’s important to me. It’s important to me to live my work life in a way that’s satisfying. I’m sure I could work more and longer and harder and all of those things and make more money, but that’s not what I want for my life at this stage.

If I were younger, if I had joined this profession that in my 20s, maybe even 30s, I might feel differently, but I’ve joined this profession at 44. I had to look at what was my trajectory going to be. I joined this profession. I changed careers at 44 because I knew I was not going to have enough to retire.

I had to find something that I loved that I could do well into my 70s because I knew I would have to work that long. This has been just that for me. I am closer to 60 than not, right? I’m really, really clear that I can do this as long as my brain holds up. I really love what I do.  Every single day I love what I do.

It makes a huge difference whether I’m standing in front of a room of a hundred people who are doing their own planning because I do some client-facing workshops or whether I’m doing train the trainers where I’m training other people of how to use coaching skills for their clients.

It just doesn’t matter which one of those I’m doing. It’s a very satisfying way of being for me as a professional.

Hannah: How do we serve the working poor? How do we serve demographics that traditionally financial planning has not served well? Is that through that non-profit space or what is, for a lack of a better way of asking this, what’s the business model around that? That you found like- what works?

Saundra: Yeah. I can say what works for me and then I can say what I think works in general. I would hear the chatter about the Garrett model doesn’t work and you can’t make a living that way. I don’t think that that’s true.

I think that what happened happens a lot is that people don’t self-manage and that’s another core coaching skill, right? If I know that I’m only hired to do X, Y, Z, and I do A, B, C, D, and X, Y, Z, I know I’ve created the problem.

For me the business model is number one to be very, very clear about what I’m going to offer you and price it fairly. Now I have a sliding scale. I started out with one and I still have one today. People who make less pay less and they understand that as they make more and as they are in a better financial situation, they will pay more.

That client I described for you when we started out, she was paying me 25 bucks an hour. By the time we were finished, she was paying 250 bucks an hour. I believe that that is absolutely manageable. Now what that means is that I have to have enough clients at that high end of the scale to know how many I can do at the low end of the scale.

I keep that clear, right? I’m very clear with myself about that. What can I afford to do? Then there’s also one of our planning colleagues said to me, work doing high-net worth clients and do pro-bono for the clients who are working poor that you wanted or sliding scale that way.  That’s certainly an option.

This is one of the things that I just love about our work, I do believe that while we are not magicians, financial planners are magical. Financial planning is magical. We can change the trajectory of how people view money. I just don’t believe that there is anything more powerful in the financial space than being able to help people see themselves in a way that they never did before around how they live with their financial choices.

We can do small groups like I do a group … There’s a group of black women that I work with in the San Francisco Bay Area in the east bay. The reason that I hone in on the ethnicity of the group is I’m a black woman and it’s really important to me to stay connected to black women in particular having access to high quality support, right?

That’s fiduciary. That is accountable and that is accessible for them. There’s a group of 10 women and they get together and they check in quarterly. I provide the knowledge base and they provide the accountability support.

There are all kinds of ways that we can do this. Now, I don’t charge them because that’s part of my give back, but I know a lot of people that do. You can charge them a sliding scale and you can charge them a flat rate. There are all kind of ways to do this.

The ways are only as limited as our imaginations are. The reason that I do this specifically in the black community is that the black community is traditionally been left out of this conversation, the wealth conversation. When you look at closing the racial wealth gap in those kinds of things that’s a priority for me and so I make sure that I do that work in my community, which keeps me inspired even when it’s tough or even when people fall off and they do.

There are ways that we can do this for the working poor, but I would say that accountability and a commitment to excellence doesn’t change based on who you’re working with. I don’t care whether it’s someone who has a lot of money or someone who has no money. The way I treat them and the way I work with them is the same.

Hannah: Can you talk more about that? Because I know in our conversation before we started here to record, you had such wisdom on that point of how do we treat the person in front us, the client?

Saundra: Yeah. Yeah. The client is the expert in their own life and I treat them as such. I have information, but I don’t know them. They know themselves. When I’m spending time with them, when we’re in our discovery conversations, and we are in our visualizations or we’re looking at or exploring what they want for themselves, I honor them and hold them as the expert in their own lives.

I recognize that my role is to be their best advocate for what they say they want. Even if that sometimes advocating with them to stand up for themselves in what they want, but they are the leaders. They decide the topic. They decide the phase and there is no judgment.

It’s completely a no shame zone with me and I hear them and accept them exactly where they are. The very first time I heard this, I know it’s in the motivational interview, but the very first time I heard this was with Ed Jacobson, which really resonated with me.

He said to me, right, because it’s just so he was … I was the only one in the room. In this big whole room of people, he said, “If you cannot hold your clients in perfect positive regard, you have not earned the right to work with them.”

When he said that, that touched me so deeply because I believe that that’s where we missed out so much. We talked about clients being a non-compliant and all kinds of unflattering and I would even say degrading ways when they don’t do what they should do.

I think that we have to think about how do we hold them with empathy? If we are financial expert and we are good with money, that’s terrific, but what if there’s an area in your life that you are not as good as doing what you know you should do? Do you want someone to talk to you in a way that is demeaning or undermining?

I just think it’s so important that we are very thoughtful of holding them in perfect positive regard and if we can’t make a referral because it’s just not fair. It’s not fair to do that. That doesn’t mean that we don’t have an accountability. That’s what they come to me for.

They come to me because there is a gap between where they are and where they want to be. We work on that, but even in that I hold them as the expert in their own lives. I support them in honoring standing up for that part of themselves, that part of their children, their grandchildren that they want to show up for in how they live with their resources.

I listened. I do a lot of listening. I was telling people that when you’re coaching, you are actually listening 80% of the time and talking 20% of the time. I wonder how many financial planners would be able to meet that statement.

Again, like you said, it’s how we’re trained. We believe that people come to us for answers. I believe people come to us to ask them the questions that they don’t know the answers to so that they can figure out the answers with our help.

That’s how I view that someone I’m thinking about, how I work with a client. I’m their partner in the process. They are not accountable to me. They are accountable to themselves with me as their witness. They get to decide. They get to decide.

Hannah: In your meetings with the working poor, what are the issues that you are addressing? What are the common issues?

Saundra: Honestly, the most difficult is remembering what they really want. When you have felt thwarted in achieving what you want for whatever reason, external, your own limitations, whatever. It’s very easy to forget what your goals are. I tell people all the time that there are a lot of judgments around why people are poor and what they should be doing and what they shouldn’t be doing.

I say that it is not surprising that someone who believes that they will never get their goal, they’ll never be able to buy the home that they want or never be able to put their kids through college or never be able to do those things. It’s very easy to say, you know what? I’m going to drive through McDonald’s and we’re going to buy a little bit of happiness.

Hannah: Yeah.

Saundra: We are going to have a little bit of happy today. I want to see my kids smile.  I’m going to put these $100 Nikes on my child so that my child doesn’t have to feel as poor as I do. We make a whole lot of assumptions about people and what drives them. What I think we need more of is to have fewer assumptions and more listening, knowing how to be with people in their discomfort.

There’s a very high cost to being poor in this country. If you don’t have a bank account, you end up using check cashiers and pay their lenders and really predatory financial products and services. If you don’t have an emergency fund and you are one flat tire away from an emergency, you run the risk of not being able to get to work or go into debt to get to work.

There is just so many things that people who are experiencing poverty have to deal with and if they are on any kind of public benefits, if they have food stamps or SSI, or things that are supposed to help them have a safety net, and they save.

I think right now the asset limits are $2,250. If you can imagine being a family of four, but if you save more than $2,250, you lose your food stamps. With $2,000, have you feeling secure enough to give up food stamps?

Hannah: Not at all. Yeah.

Saundra: Yeah, exactly. They have what’s called an asset means test and those asset means test keep people in poverty because if I’m trying to help them save to stabilize themselves as soon as they hit that threshold, they lose the very things that help them stay stable.

Those are the really biggest challenges because then people have to either lie to me or run the risk of getting the stability they seek because they lose their benefits. It truly is a Catch 22. My job is to help them navigate these very tenuous situations.

That if they are on a path way to saving, if they are finally able to open a bank account and finally able to save a portion of what sometimes is a very decent sized tax return, are they in a position where they in a position where they can afford to give up those benefits?

Just so much goes into being able to help people navigate systems that are quite frankly designed to crush them. It’s called a safety net, but the fact is what … Think about it? If you look at the gift tax exclusion for wealthy people, how much can they transfer now without any consequence-

Hannah: Right.

Saundra: What is it?

Hannah: Fifteen thousand? Yeah.

Saundra: Fifteen now? Yeah, but some poor people can save too. My contention is, all right, let’s make the asset means test if we are going to have one, and I understand why we have them. You don’t want to be using public benefits for people who are wealthy. I get that, but at least make it match the gift tax exclusion.

Then that way people can actually build enough of a buffer. They can build that three to six-month worth of emergency fund. If they lose their job, they are not back on welfare. They are not back in public benefits, right? I’m saying if we’re going to have a system that to help people out of poverty, let’s make sure it’s really helping.

Then make sure that there is those of us who care about this that really can help people be wiser with their choices so that they have a path way. I really do believe that financial planning is a path way, but you’ve got to not only have access, you have to have assets.

How do you help people do that? I do believe that it is possible. I’ve seen it. I’ve seen at United. Look, if I were not seeing a change in people being able to do this, I wouldn’t be doing this for, what I’m going on … how many years, 12 years now? I wouldn’t keep beating my head against that wall if I didn’t see that it was possible.

I see kids who because of what we did they are often college now. I see parents find homes who were priced out of the rental market. I see magical things happen when people are able to connect their drive with the support of someone who cares and someone who is knowledgeable.

To me that’s what financial planning is all about, right? We … Financial planners bring something that just no other profession does. What we do, and I don’t really consider myself a financial planner at this stage. I strictly do coaching and I would not be doing financial planning without a CFP frankly.

This is the path I’ve chosen. For me I do everything from financial education to financial coaching and then I refer when there’s a need for planning and/or financial therapy. I’m a firm believer in that continuum, financial education, financial counseling, coaching, planning, and therapy.

I believe that is the continuum. That’s the one that I support. I do what I do. I stay in my lane. When someone needs a referral for investments and many people who come up through my ranks, clients who come up through the point where I’m a one person right here at Treasure Island.

They went through their programs, was homeless, went through some of their programs, and it’s now making 10k a month. Now, they need a financial planner. I’m really proud of that work. I’m proud to know so many financial planners who meet me there.

They will do a short-term engagement to get people started. They will do a package that is accessible and affordable for people. I’m really grateful for that. I’ve got several planners around the country who I can turn to when I’ve got clients who are ready for them.

I view financial coaches as getting the clients ready for planning and financial coaching as a skillset for financial planners who really want to fine tune their client communication and really want to fine tune their skillsets around helping clients actually implement their plans. Did I answer your question at all?

Hannah: I have more questions now.

Saundra: Okay, sorry.

Hannah: It’s something like I don’t even remember what the question now. I know we just had too many conversations with planners especially new planners who … Let’s say I got into this because I want to help people and I want to help people like back home where is this who want to help people who are like me, like my family? Not just million dollar plus or whatever that will be. What would be your advice to them?

Saundra: The first piece I would say is try to avoid treating it as either/or. You really can do both. Your expectations of yourself have to be in alignment with what your needs are. If you can carve out a niche for yourself that if kind of like what I did, sure, go all in. if you have to do both, don’t abuse yourself about it.

Be gentle with yourself particularly if you are a new planner. Everybody told me I was never going to make a living doing this. They were wrong. They were wrong. Don’t let anyone else tell you what you have to do to make a living. You get to decide and you might have to make some sacrifices.

You might have to go some places with your professional skills that you didn’t know you had to go but decide what you want to do for the people who are like you.  Build your skillset for them. Build the connections with the local community-based organizations.

That you can have good solid referrals when they need more help then you can offer. Be realistic about what you can offer. You will not change someone else’s behavior and I’ll tell you what team coaches told me.

It is not easy to turn need into demand because we look at our families and you look at our communities and we say, wow, everybody needs this. Then we do a class or we do something that we’re all excited about and two people show up. It’s like, wait, everybody, when I’m talking to them, they say, “I want it. I want it. I want it,” but you know what? Change can be challenging for people. You got to meet him where they are and you may not be ready that’s about you. That’s not about you saying, “Okay, well, I’m never doing that again,” that’s not okay.

What else? What else can I do to be there with my people as they travail, traverse this very bumpy road, right? Decide what you’re willing and able to do, and the do that thing. It might be pro-bono. It might be low cost. There are many, many ways to do it, but don’t let anyone tell you that you can’t do it. That’s a personal decision.

If you decide not to, that’s a personal decision. There is nothing wrong with that either. I don’t begrudge people who choose to work with high-net worth clients, that’s where your inspired. It’s just now what I choose. There’s value on both sides. How do you do what makes your soul sing?

How do you do the work that makes your soul sing and not out of guilt or obligation or any of those things? Out of knowing that what you bring to your community has the power to turn things around in ways that truly nothing else can. Not even the lottery, right? What you can do as a financial planner in communities that are struggling is deeper and broader than what anybody else can do. You have to take good care of yourself because you’re an asset. You have to bring that part of yourself and be mindful to not burn out.

When you asked about, is a non-profit sector the way? Maybe. Maybe, but you just want to make sure that you don’t burn yourself out because you’re an asset. You’re offering your strengths and your commitment to them in a way that lifts you up and brings them with you.

Hannah: The other piece we talked about was coaching and if you aren’t you say called to working with the working poor or you aren’t making that decision to work with the working poor, but you want to be better a financial planner by being better at coaching. Where do you go or what would be your advice to that person who is listening?

Saundra: Yeah. There is a couple of things. There is a coaching class at Golden Gate, which I’m very, very proud of. My students have given amazing feedback about what it is meant for them. I’m not very good at getting that pollster, but I work on that. Yeah. I need a social media guru. There are classes you can take, but here’s the thing, reading about it is nice, but it’s coaching is better experienced than talked about. Either work with a coach where you have it someone coach you.

I’ve got a new thing that I’m doing now, executive coaching for financial planners and it’s for that very reason. They don’t … They’ve already got their CFP. They maybe already have their masters. They don’t necessarily want to take a class. I do that and then there is also the financial fitness coach as a certification. Now, if you don’t need another certification, you can take it as professional development. We’ve got a lot of CFPs that do it that way. Some of them go on and get the certification. Others have them take the training. The training as a practical approach. You have to do the work.

You don’t get the badge. You don’t get the certificate … the certification without doing the work. You actually do practice. That’s really what made me how I am as a coach. Reading about it is great but doing it is different and being able to truly dance in the moment is not something that you can read about and do. It’s something that you have to practice.

There are many ways to do it. There are a lot of coaching programs. The reason that I built what I built was that life coaching classes are not quite rigorous enough in my view for financial topics. I like what they do. It’s nice. It’s very feel good and I’m a San Francisco hippie. You might have picked up on that, but I don’t think it holds the level of rigor that I think is necessary for financial planning. For financial planners, who want to bring coaching, I think it’s a different skillset.

There are some things like motivational interviewing is a big deal. I think Ted and Brad Clotch have the financial behavior specialists that’s learning about it, but not the actual practice. There are many ways to learn how to bring these kinds of skills. Rick Keller does some work in this area as well. There are many ways to learn about it, but there are fewer ways to actually practice it. I would say that quite frankly that’s the reason I built what I built.

Hannah: It’s so good. What is the name of your program again?

Saundra: Yes. I do my program in partnership with the AFCPE and the program is called “Financial Fitness Coach” or FFC is the actual certification. It is a certification not a certificate. There is ongoing professional development and demonstration of the skills. It’s not just taking class and getting the thing. You actually have to demonstrate the skills.

There is Financial Fitness Coach. There is accredited personal finance coach, which is a higher level. It’s a deeper dive into coaching skills. For most financial planners to be honest doing the financial fitness coach work whether they choose to do the certification or not.

Usually it’s very helpful and then they can decide whether or not they want to go all the way. Many people just take module one, which is the coaching essentials. They take module one, decide whether or not it’s something that they want to go further in. Coaching has nothing to do with income. Coaching skills can be used at any aspect of your practice. The place that I find it most relevant are in discovery, implementation, and accountability for financial planners if you are going to advice.

It also helps you give advice in a way that is more accessible for the client. It doesn’t take away your role as the expert. It expands your ability to hold the client as the expert in their lives with you being the expert in financial planning and putting those two things together for the client’s highest invest.

Hannah: Any final thoughts, Saundra, as we wrap up?

Saundra: Yes. I have to say I have really been impressed with what I’m seeing with this next generation of planners coming through the work that x, y is doing, and Next Gen was new when I first joined. I’m so impressed with this generation of planners whether it’s not an age thing.

It’s coming into the field thing, the rigor and the standards that you’re holding yourselves to and the desire to help people of all financial situations is just really inspiring and gives me a lot of hope. I want to thank you for doing this and making sure that you’re giving people a way to find their way. I remember … I’m just glad I was as old as I was when I came into the profession because I didn’t let people tell me you can’t do it.

If people don’t get anything else from listening to me, what I hope you get is that you get to do it the way you want to. Don’t let anyone tell you, you can’t. You might have to fix it yourself. You might have to make it yourself. We might have to build it yourself. If you do, just make sure that is what you want. Make sure that every decision you make broadens rather than minimizes your options. Whether it’s getting that degree … It drives me nuts to see people say, “Don’t take out student loans, don’t do this.” You know what? Do what you have to do to get what you want.

I took out student loans at 44 years old to create the life that I want and I’m still paying them. You know what? I am not upset about paying those loans not one bit. I have the life I want. I would have not done that had I listen to what other people said that I should or should not be doing.

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Saundra Davis believes that financial coaching skills and financial planning go hand in hand. As a financial planner, you may be completely confident in the guidance you give to clients – but feel frustrated and lost time and again when they fail to fo... Coaching clients through financial decisions can inspire them to take action and pursue the financial life they desire. Evaluating how clients make decisions, and what could potentially stand in their way from making financial choices that serve them, can help financial planners to have a larger impact on the lives of their clients – and extend their impact for generations to come.
This conversation with Saundra will absolutely move you. As financial planners, we often focus on how we want to serve younger generations that often don’t fit the mold of “ideal client” for larger, established firms. Saundra’s take on financial coaching will inspire you to serve your existing clients better, extend yourself to be able to serve everyone, and grow the financial planning practice you’ve always dreamed about.

 

 
What You’ll Learn:

Core financial coaching elements, such as how to get clear about what a client wants, the gap between what they want and where they are, and how to create a financial plan that can help them achieve their goals, regardless of their income or wealth
The importance of how we view our clients and the consequences if we don’t view them correctly
How financial coaching intersects with financial planning (hint: if you want to be a better financial planner, financial coaching skills are critical)
How to serve low income individuals through financial coaching in a way that focuses on asset building
How financial coaching connects us as financial planners to our deeper fiduciary duty
Where to “plug in” to conversations about financial coaching within the financial planning profession
The importance of bringing financial expertise to financial coaching
How to start coaching-based financial planning conversations with clients
How the financial planning profession can move forward into serving demographics that aren’t currently being served
How coaching can help you guide your clients to live the life they want
Motivation and inspiration – knowing what you provide and what the client provides
The power of motivational interviewing and how you can improve your client skill set

 
 
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Hannah Moore clean 59:57
Navigating Workplace Dysfunction https://financialplannerpodcast.com/yafpnw-navigating-workplace-dysfunction/ Tue, 17 Jul 2018 18:04:10 +0000 http://fpaactivate.org/?p=11528 https://financialplannerpodcast.com/yafpnw-navigating-workplace-dysfunction/#respond https://financialplannerpodcast.com/yafpnw-navigating-workplace-dysfunction/feed/ 0 Krista Sheets and Sarah Dale from FPA’s Coach’s Corner are here on this week’s episode of #YAFPNW to talk about how to combat a dysfunctional workplace and build a people-focused team. After experiencing dysfunctional workplaces throughout their career, Krista Sheets and Sarah Dale partnered to build Performance Insights. Together, they focus on helping financial planners increase results through practice management and people-focused decisions.

There are so many unhealthy work environments within the financial planning profession, and both Krista and Sarah agree that this largely is a result of poor communication. As a result, they help the planners they work with on developing well-structured team communication plans, amplifying everyone’s voice on a financial planning team, and creating an environment that fosters positive communication. Krista and Sarah discuss the importance of understanding team members and using various personality tests to identify strengths and what motivates each person on a team.

In this episode, Krista and Sarah are going to be discussing how to spot warning signs of a dysfunctional workplace, the best way to communicate efficiently, and how focusing on team development can lead to a more successful career in the financial planning profession.

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The only thing we have control over is what we say, what we do, and how we react to the things that are happening to us. We have to be our own advocate – even in the most desperate of work situations. #YAFPNW

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What You’ll Learn:

  • What creates workplace dysfunction
  • How to make people-focused workplace decisions
  • The best way that young planners can help their practice build a functional, healthy work space
  • How to effectively communicate to avoid dysfunction
  • Why words matter
  • How to communicate questions, challenges, and frustrations
  • Best practices to identify warning signs of a dysfunctional team
  • Why much of our dysfunction never gets addressed
  • How each individual can focus on their strengths and personality traits to contribute to their team effectively
  • Why team building matters for financial planners in our “people focused” profession
  • How to create a healthy succession plan
  • The best way to define roles in your practice and amongst your team
  • Why focusing on people is often a better investment than focusing on the numbers

 

 

Show Transcript

Ep107 Transcript


Hannah: Well thanks for joining us today Sarah and Krista.

Sarah: Thank you Hannah it’s nice to be here.

Hannah: Yes. You guy’s focus is team development. Can you tell a little bit about yourself and how you got into team development as really your focus.

Sarah: This is Sarah. And to give you just a little bit of background. I began in the industry in 1990 at a regional brokerage firm and I served both in a support role and an advice role and I spent some time on the product side of the business and I served as director of marketing and training and business development for a regional brokerage firm which was owned by a bank and I also served in a leadership role on the firm’s management committee. And then in 2003 I had that entrepreneurial bug bite me and I ended up starting my own business doing consulting and coaching and speaking and content development within the financial services industry. And then Krista and I met back in 2005 and started working together. So Krista do you want to give a bit of your background?

Krista: Sure Sarah thank you. I actually joined the industry in 1997 as a consultant to begin with. I didn’t come from a financial services industry so I kind of fell upon an industry after working in a family business that held a lot of dysfunction. I learned how not to manage and motivate people on that family business and I just couldn’t get along with my father and trying to lead that company to its next generation. So I decided to go elsewhere and I was hired by Paragon Resources the company that I now own to do team building. To do work with financial advisors because the gentleman that founded the company was a former advisor, former money manager and he saw the industry back in the late 90s is going in the direction of teams and making sure that in order to deliver the ultimate client experience there had to be a team of people serving the client’s needs.

Krista: So I got excited about learning a whole new industry and now that I have been 21 years in it, I think I have become a little bit of an expert of everything when it comes to financial planners, RIAs all different channels of this business to help them really put together their teams. Sarah and I collaborated on writing a book together, the Five Steps to Five Star Service. We released it in 2007 and we work with many of our corporate relationships as well individual advisors and planners on helping them build their own infrastructures and making sure that they can take care of those client deliverables in a good way for their clients.

Hannah: One thing I’m noticing just in hearing both of you talking, I know it’s a subtle difference but I think it’s a really important difference is that you’ve all talked about working with a team rather than working with your employees or having a manager work with their employers. I think those terms really matter. Can you guys expound on that. Is this intentional? First of all is it intentional?

Sarah: It is intentional.

Hannah: And why do you do that?

Sarah: Yes Hannah it really is intentional. I think words really matter and perception is a pretty powerful thing and so how individuals interpret words can affect their mindset, their behaviors, their actions and then subsequently their performance. A lot of people will perceive that old term employee sort of from the perspective of ownership like the company owns us, we have marching orders, it’s a one way street. Versus the term associate is definitely an improvement on employee but the term team creates that feeling of belonging, your voice in your work really matter and are all part of this sort of unified course, a singular movement, vision and goals where by sort of every team member on any given day it’s critical to the longterm success of that company, that firm.

Sarah: So the word team has connotations of togetherness and support and collaboration and comradery versus that employee term as more sort of feels like ownership and marching orders and it’s a one way street not a two way street. And Krista and I sort of believe that teaming has more of a we mentality mindset whereas employee has more of a sort of I mentality mindset. Does that make sense?

Hannah: Absolutely. And even when you were talking about the employee I was cringing as you were describing it, it was like, yeah. That doesn’t sit right.

Sarah: And feelings matter, right? So the way that that word makes you feel is going to affect what your attitude is and subsequently what your work is and how well you perform and how loyal you are to that firm. It just has so much more of a positive together collaborative connotation and it makes a big difference.

Krista: I think the industry has some old mindsets that need to change and evolve. It’s not an individual context sport anymore. It used to be just go out for thrill of the hunt of the client, close it, skin it move on. Well, if a client never heard you talking about them like a hunt, which is how it used to be in the olden days, it wouldn’t go over too well, I’m sure. So this really is a team effort. Again to deliver everything that has to be done for a client, to do right by the client, it involves a collective collaborative group working together and being able to see value in all contributions in that team. It’s not just the planner that is the value in that organization or in that company. So I think the mindset is definitely evolving and moving forward hopefully. We’re dragging it forward.

Hannah: And that’s why we’re so excited to have you guys on this podcast. I talked to so many planners and the word that just keeps coming to mind is there’s so much dysfunction in the workplace, really unhealthy work environments. And so for the listeners, there are a lot of times younger or newer planners, how do you recommend that they kind of deal with this dysfunction in the workplace?

Sarah: First of all dysfunction can come from many places and be defined differently by different people in different generations and backgrounds and experience. Some of the things that create dysfunction are ego and pride and greed and lack of respect and poor communication or lack of processes and systems. Lack of clarity on what’s expected of each team member. No understanding on priorities. All these types of things greed, dysfunction in the workplace and the three of us could probably talk about dysfunction for the next two hours. But Krista and I would probably say in our experience wherever we go across the industry, most of the time, dysfunction is rooted in some sort of communication problem.

Sarah: If you think about sort of your life, not just work but if you think about any relationships in life, most disagreements or arguments stem from some sort of communication in our personal and our work lives. So it could be over communication or lack of communication, ineffective communication, poor non-verbals, lack of active listening, having preconceived notions of what someone is going to say. All of these things are tied to communication issues of one sort or another and most of the time these are the things that create that dysfunction in the workplace.

Sarah: So Krista and I are huge proponents of having really well structured team communication plans and making sure that every team member understands that they have a voice on that team and that their ideas and questions and thoughts and suggestions are all going to be heard. And we like to make sure that each firm or each advisory team has great in-person team meetings for communication as dealing with electronic communication in the form of everything from sort of email standards and voicemail and especially that CRM and expectations in and around that.

Sarah: I think what happened so often and sometimes this is generational as well is that the younger planner may not understand where the order or the more veteran or experienced advisor or planner is coming from and sometimes they don’t speak up. If we don’t communicate our questions or our challenges or our frustrations then we sometimes end up sort of leaving the firm which is a really bad thing if it could be solved through having a conversation. And so the biggest thing to remember advice-wise for younger planners and trying to confront your boss or something like that is making sure that your communication always come from a place of respect. And when you respectfully ask questions or respectfully challenge other people on the team regardless of length of service or title etc then starting that conversation and asking questions and answering them can lead to solving that particular communication problem.

Sarah: Think often Krista and I see sort of people try to put band-aids versus really going to the root cause of what that real communication problem is or what that real dysfunctional element that’s coming through in the workplace. What is really the root cause of that problem. And in any work environment, the things that we want to make sure that we eradicate or minimize dysfunction are things like trust, respect, fairness and that effective two-way open honest, transparent communication. I think when people become better listeners and become better communicators we can solve all kinds of dysfunctional problems in the workplace.

Krista: Much of the dysfunction never really gets addressed. There’s an avoidance characteristic of this industry. Often we know there’s a problem, we may not know exactly where the problem is coming from but we really don’t want to deal with it and then often why they don’t want to deal with it is that everyone is so darn busy. There’s so much in a reactive mode all day long. Responding to client’s needs, responding to the next prospect, looking for more leads, looking for what is going on in the markets and what we need to keep up with our training and our professional development. It’s just there is so much work that need to be done to do it right.

Krista: Again that’s why we focus on teams but then what happens is we might put people together, one body in a seat but we haven’t really taken the time to do the due diligence to make sure the right people are doing the right roles or that we’re having as Sarah said the communication fluid and we’re speaking our truth everyday and we’re making sure that we really care about our team members. So we just kind of just react to everything all day and we drink from that fire hose of activity when we really need to just stop the madness, take some time, a lot of times out of the office and really work on the issues and deal with them as a collective group. Don’t expect just one person to solve all the problems.

Krista: Si it’s quite interesting ’cause Sarah and I often feel that we have a sign over our heads that says dysfunction come here, we bring the fun into the dysfunction. We often get our clients because something is really problematic. Here is performance issues. There’s partnerships. There’s making sure that all the work can get done and there’s efficiencies and everything to get it done. We’re really much trying to make sure that people work well together and eliminate their issues as much as possible.

Hannah: As I’m hearing you guys talk about this and how important communication is, I keep thinking of this idea of managing app and I’m just thinking of the new planner who’s listening to this and is identifying with everything that you’re saying. If their bosses aren’t willing to change are they kind of in a hopeless situation?

Krista: Well, Sarah, you want to take that first and then I’ll give you my opinion.

Sarah: So my thoughts on that are, with anything in life, the only thing we have control over is what we say and what we do and how we react to things that are happening to us. I feel that we have to be our own advocate even in the most desperate of work situations. So you need to have your voice, you need to respectfully try to communicate with your boss and maybe it happens, you have to try several times. If the response is repeatedly back or that there isn’t going to be any kind of change on their part, then really you have two choices. Either there’s enough stuff in your work environment and satisfaction in your role that you learn to deal with it or you make a choice to leave and find a home where you are on a team that does, is more inclusive, where you have a voice where your boss will listen to you. They may not always agree with everything but they’ll at least hear you out and you’ll feel more supported and collaborative and all that good stuff.

Sarah: If you try once and you get no response, don’t give up yet, I would try it a couple of times. But at the end of the day if the boss isn’t going to change at all, then you have one of two choices; you stay and you make the best of it or you leave and find a different home.

Krista: I probably would say that there’s too many people staying in positions. To who’s fault it is, I don’t know, I don’t want to put blame or fall on somebody but I’ve just seen too many people stay in a situation way too long. And they start to realize or they start to accept this is just the way it is to be a financial planner or just that’s what this industry is about. And I would like to say it’s not. There are a lot of people that are evolving in this industry and making sure that we can continue into the next generation. We have to evolve. We have to make some changes. I am often in conversation with individuals whether they be partners, whether they be associates, whether they be a support member and making sure that they really are aligning their true talents and their needs for engagement in the work that they’re doing, are being fulfilled and really to make a decision.

Krista: Again it goes back to the dysfunction side of things that there’s so many times that people will not make a decision because they’re fearful of it, they may think that there’s no other jobs out there. Well in this marketplace since Sarah and I this year, we’ve been working with all of our advisory teams and I don’t know any team that’s not looking for any person, that’s not looking to expand their chain. This is a very gross … The economy is great right now but I would say this industry in particular because it is aging so quickly and there’s less people that are getting as interested and doing the planning and providing the advice, that I think you have a little more control over your destiny and really making sure that you get the right environment that’s going to be conducive for you.

Krista: If it’s not working where you are and you know you’ve tried and you’ve communicated to your boss or your supervisor or whatever title, it’s not working, it’s really time to do something about it because you should enjoy the work that you do, it shouldn’t be work. It should be a vocation. It should be a calling for you to do what you’ve been put in this earth for.

Hannah: It’s so true. I can tell you conversations I’ve had in the last several weeks of people who are scared to make that job that after they make the job, it’s so much better. I think there’s some quote about the best things in life are on the other side of fear. So it’s how do we break through that fear of putting ourselves out there, starting another job. That’s where some of the best things in life are.

Sarah: Hannah one of the things that we see all the time is that when someone joins a team, there is not enough clarity around expectations. So the leadership is not necessarily in many cases, not all obviously we have some great leaders in the industry but many are not very good at articulating what the expectations are of that new team member and the team member isn’t very good at articulating what their expectations are of the firm or asking exactly what is expected of them. So the trouble is when we don’t talk about expectations, we can’t really be surprised by people walking out the door or negative impact occurring. So we talk about this with clients all the time.

Sarah: We’ll ask an advisor or planner, “When was the last time you communicated with Mr. Smith.” They’ve just shared with us that Mr. Smith has left them.  He headed out to another firm. So we ask, “When was the last time you spoke to Mrs. Smith? And they say, “Well, two years ago.” Well if you’re not communicating, then how do you know what’s going on in their lives? How do they feel like they’re being serviced? And then when they find out that their expectations weren’t being met on the service side, we ask, “When did you talk to them about service expectations?” And the planner or the advisor goes, “We didn’t do that at all. We talked to them about performance expectations but not about service expectations.”

Sarah: And the same thing happens with teams. Here’s your job description that was written by some HR consultant 25 years ago. That’s not really pertinent anymore, that we don’t update and we don’t talk about everything that’s expected. So the new person doesn’t understand what’s expected of them and then when communication isn’t there either, then you end up with a poor result and the person either leaves or the employer, the firm is disappointed with them and it’s just negative, negative, negative. So expectations conversations are really important at the onset of the relationship as well as throughout the relationship and making sure that you’re giving feedback and you’re not blowing off or procrastinating doing performance reviews and things like that. It’s so important to always to be talking about expectations.

Hannah: That’s such a practical takeaway, I mean if you’re looking for a job and you’re interviewing firms or you’re being interviewed and you’re interviewing firms, what is your expectation of somebody in this position? It’s such a basic question, it seems like. And then if you’re working with somebody and you’re working for somebody, having the conversation of, I’m I meeting your expectations? I mean that feels vulnerable but, men that seems really powerful.

Sarah: But yet we avoid it.

Krista: And so often not done and that’s where I think there’s this hierarchy kind of perspective that I can’t ask these questions or I can’t dig deeper. They’re too busy, they don’t have time for me or do they really care about my development and the role that I’m doing. Do they look at my personal needs.

Sarah: It’s so very basic.

Krista: And eve in interviews there’s nothing wrong with the person applying for a position to ask questions, to dig deeper, to see if it’s going to be a good fit. The person hiring the individuals, they don’t want to make a bad hiring decision, they don’t want to be bad culture or bad fit in their culture, in their team. So the more that there is that dialogue, again communication comes up again that’s why we spend so much time understanding the nuances of people’s style of communication, their preferences, what drives them, what interests them. We’re not robots. We are humans and it’s very important to make sure there’s direct candid communication at all opportunities.

Hannah: I just love this idea of the communication and how important that is and it shows so much initiative for somebody, for an employee to come and drive those conversations. And so part of this communication is just defining roles, I know that you guys are … It’s really important to your work that you do it with clients. So can you talk more about that, of how defining roles is important and making sure that you get in the right role.

Sarah: One of the things that I think, human beings often like to believe is that were good at everything. And the fact is we’re just really aren’t. Now Krista and I would probably both say anyone can do anything but if we can identify our sweet spot, if we can really know what our natural talents are and find those roles where we can spend at least 80% of our time in that sweet spot, then we’re going to be better more productive, happier people at work and we’re going to be driving more results for the company with whom we work. And so in the old days, so much on the sole proprietorship, it was one person and half a support person and everybody was expected to everything but the business was a lot less complex, it was a lot more simplistic back then.

Sarah: Today the business is so much more complex and there’s so much more to do and because not everyone can be good at everything, again when we define the role, when we define the work, the actual responsibilities that have to be done and then think about the type of person who is going to be a good fit for that, then we’re going to win. A great example that Krista and see all the time is if we use the title Client Service Associate which is fairly prevalent throughout the industry. This person sort of in the old days, answered the phone, typed correspondents, it was very administrative. Whereas today, that person is expected to do those things and process paperwork and operational type stuff and lots of dotting of Is and crossing of Ts. But they’re also expected to make proactive courtesy calls to clients, be front facing, run the client communication plan or the client appreciation plan.

Sarah: And most people don’t have both those skillsets naturally so they have to stretch too far out of their comfort zone which means they often then lead to spending too much time doing things that not only are they not good at but they may not like, which again leads to disengagement. So if we can better define the role that’s needed as this is all operational, it’s more behind the scenes, it’s more tactical, it’s more rolling up the sleeves and digging into the minutia dotting Is, crossing Ts and we find the right person for that and then create a separate role for the front facing person who needs to be making courtesy calls and taking more initiative and driving appreciation events and all those sorts of things. Then we can find a person who is better, who has more people skills and is better at that front facing versus the CSA person who is doing all the operational paperwork type stuff.

Sarah: Today there’s so much more volume and there so much more to do that if we can divide the role and put two people who have those different skillsets, we’re going to be more productive, we’re going to drive productivity, we’re going to drive loyalty with our team members and all that good stuff. So figuring out the roles, defining the specific responsibilities and finding people with that natural skillset is going to help. One person or two people trying to do it all, just doesn’t work. You can’t retain clients that way.

Krista: So I’m going to say that when we look at working with people, we don’t really want to look at the title that you’re looking to fill for your organization but really looking at the function that you’re trying to fill in the organization. We like to look at any business that we work with as having kind of three core building blocks of the business. That there has to be folks in the business and technology and resources and knowledge on how to find new business. So looking at the key elements of bringing new business into the door. So the functions of marketing and selling to individuals.

Krista: The second core kind of building block of the business is grind. What we look at with grind is kind of making widget, is making sure that we’re addressing all the technical aspect of what needs to get done for the client relationship. Financial strategy, the product selections, the insurance needs the wealth management needs, the investment needs, all aspects. The administration operations, the very detailed work that Sarah was just talking about to make sure the Ts you’re crossing, the Is you hare dotted, we have to make sure we handle that function in the business.

Krista: And then lastly, what do we do to keep clients around? This ultimate client experience, the showing our appreciation, the proactive servicing of relationships, we call that minding. So finding, grinding and minding is a model that we have been using for a couple of decades now. We actually trademarked the terminology and how some assessments that look at people’s businesses and making sure that they have all the elements to do the finding, grinding and minding. If we look at it that way for role definition it’s a lot clear that everyone contributes to the overall solution for the client. That it’s not just the solopreneur as Sarah said earlier that is important. It’s everyone has value.

Hannah: Well, I really like that idea of the finding, minding and grinding in helping, where do you fit within a firm. So immediate question that came to mind was, are you one of those throughout your entire career or do people evolve and change into different roles? What have you guys thought in your experience?

Krista: Our experience has been that usually there’s some core traits to a person, or natural talents to that person that are inherent for a lifetime in that person. So it has nothing to do with what we’ve put in our head and we’ve learned in school by reading, by listening to podcasts, by doing webinars, by training events. It’s not something that we learn it’s just that it’s an inherent attributes that give a talent to someone in one of those areas. Now we’re not just one, we probably are one and maybe a little bit of something else. But one thing I do know is that we’re not all three of those. And that’s where again the industry has come from a mindset that you have to be able to find, grind and mind. It’s one person do it all, figure it out and then when you have your first heart attack then we’ll come and save you from the situation.

Krista: And that is what we see, we see there’s a lot of stress in this industry. So it is something that we have tendencies and we have elements or attributes to us that we have a natural desire to do, maybe we can’t define it but that’s why we spend the days helping our clients understand their team members better so that they can jumpstart that role definition. Sarah would you add any more from you experience in helping people understand their talents?

Sarah: No, I think that you said that really well. And it’s not Hannah that we’re saying that no people can’t evolve and have sort of a career path. But I think people do inherently have a natural skillset.

Hannah: So let’s talk about that. You guys do a lot with personality tests in the context of teams. Can you tell us more about how you do this and why this is so important to work with advisors I guess.

Krista: What we’re really proud of is we have a database now exclusively from the financial services industry of all different roles, management level, to ownership levels to advisors, to planners to technical analysts, to all different client service associate type roles, administration operations, sales managers, all different roles. Our database is about a hundred thousand reports and we call them assessments because we don’t like to use the word test you often. Because a test makes you go back to school and think you’re going to pass or fail the class. You can’t pass or fail yourself we like to say when you’re doing your assessments.

Krista: The DiSC model is one of the two assessments that we always use with all of our advisory teams. And it’s because I think there’s this misnomer that just because you have that title or just because you became a planner or you are in an administrative role, client, service associate that’s the only thing that you are. You can’t be anything else. We really want to understand what makes you tick, what gives you energy. Because if I put you in the right role that keeps you highly energized and doesn’t ask of you to play a different person, to be somebody different each day. You’re going to have the capacity to do more and more of that. And because we need so many different styles to get everything done for the client, that we need to make sure we understand how we can manage our capacity by managing our energy.

Krista: The assessments that we use, DiSC is a very common model out there, it’s been around for a very long time and it’s always been used for helping with communication and helping people kind of bring self-awareness. DiSC that we use is a private label, mapmystrengths.com assessment that we have generated because we think it’s really important to not generalize people. To not put people in a box. To not say they’re just one behavior type. But to really understand the nuances of them. So the report that we actually asked you Hannah to complete, the DiSC map report actually generates one of 2401 responses based on how you answered the questionnaire. So it’s really sensitive to how you answer the questionnaire.

Krista: We know by how you answered it that you’re an incredible talker, you can influence many people to your way of thinking. You’d do great in the sales process and telling a story about the impact that your business can have on a client’s relationship. And that we know you’re probably best not being in front of a computer or pile of paper because that’s stretching you away from what your talents are, which is to go talk to people, to introduce yourself to others. So as a planner, we want you out of the office more that in it. We want you meeting with people rather than sitting bend that desk. Now there’s great people that are really good at doing the analysis and making sure that the Ts and Is are crossed … The Ts are crossed and the Is are dotted but we want to make sure you’re out there with the people.

Krista: Have you learned how to do all the technical stuff and all the details? Of course you have. But it’s not where you’re energy should be placed all the time. So that’s why we’re created, we have this database, we’ve done this for a couple of decades now of collecting the information on these folks. And we can understand what your natural attribute for you Hannah because of your result you’d be a natural gifted finder, that person that’s really good at marketing and sales and making sure that we bring in new relationships as quickly as possible and make sure we tell those stories to them.

Krista: The other part of our database is looking at why you do what you do. Why did you get into this business? That the element that I’m seeing more and more changes in for the generation that we’re in right now. A lot of people kind of stereotype generations. I hate to do that, I like to look just at the people and use these two languages of DiSC and motivators. So DiSC telling us how you do what you do and motivators talks about the why of your behavior. And that why I think is changing for the industry.

Krista: It used to be an industry that was much more economically driven. They wanted to get into the business because they get a return, they sell, they make money. I think there’s a little bit more meaning behind the people that are coming into the planning world today that we can identify by using these assessments, that what’s really driving you? And making sure that there’s some elements of putting a team together that’s driven by the same thing. That sees the world the same way. Is what leads to really cohesive teams. Is the experience that Sarah and I have had.

Hannah: Thinking about what you guys had talked about before, going through my DiSC profile and it’s with every strength comes a weakness and it’s just recognizing that about yourself and it’s not a bad thing, it’s just reality.

Krista: Right and the thing is that we don’t want to spend so much time on ‘weaknesses’, we say let’s capitalize on those strengths. Let’s make sure we use most of your strengths most of the time as Sarah said. 80% of the time if I can be in my zone of who I am, I will highly be energized to do the work that I do and I need to surround myself with people that are more talented in elements that yeah, they’re my weaknesses, yeah I could do them. But if I surround myself with somebody who is excellent at it, we are a cool team. We are a team that is a force to be reckoned with, we can really address all of the needs to the community when it comes to being a great financial planner.

Hannah: It’s funny have a number of friends who have one employee and one of the biggest problems is in the interview process they end up hiring somebody like themselves. Then it doesn’t work out and you’re like, well from the outside of course it wasn’t going to work out. You hired somebody who wants your job.

Krista: Right Sarah said many examples of that working with the coaching clients that she’s had with … We get in the interview, I really like them, would have coffee with them every day then they realize when they get them in the job itself, they’re like, they want to have coffee all day, they want to talk with me all day. They don’t necessarily want to do the work that I need them to do.

Hannah: I remember my first admin … Well the first one that worked out, we did some personality tests … Caveats set everything. One of them was, she was really high follow through. And I was like, “Oh I need you.” And it turned out to be a great relationship.

Krista: Right and that’s referencing the Kolbe index which is one that’s been around for a very long time. That one are the ones that we choose to use but we have several of our clients that use it in conjunction with the assessments that we use. Just because that’s a great high level overview of the person and then when they come to us, as we said earlier, a lot of times we’re coming because of dysfunction, we go down with a much more fine tune result by looking at the DiSC and the motivators side of things.

Hannah: So what are the motivators? I know you talked about that a little bit. What are the motivators that are out there for people. Especially as newer planner are looking for jobs, they’re looking to partner with people, what should they be looking for?

Krista: There is no one answer. There’s no one size fits all when it comes to teaming and so that’s why the motivators assessment is really helpful for looking at how people can be compatible not combat-able, compatible of working together. We have what’s called six universal motivators. And this goes for anyone in any industry. It doesn’t just mean the planning world. But it just means that there’s six kind of subject areas or areas of interest that people will have a desire, will view the world in that kind of lens in which what’s important for them and we kind of prioritize them. And those six different motivators the first one that’s pretty predominant in the financial services industry is called the economic. Because the economic is a person who’s looking for a return on investment of time, money and resources.

Krista: They’re very resourceful, they want to make sure we’re getting the most bang for our buck. That we’re growing and preserving assets. So the business world in general and especially the financial services world has always been very strongly driven by that economic motivator. And so profitability, productivity is of utmost importance. Another motivator that we see also a lot in the industry but not necessarily for everybody, is a conceptual motivator. Conceptual is all about seeking knowledge. Gaining and giving that information. Being inquisitive in nature. So it has nothing to do with smartness, IQ. It just really has to do with, “Do I want to dig down deeper and discover the truth in things.

Krista: So these folks in the industry are really good at discovery, getting to know the client. They’re very good at staying and attune to different financial strategies, what’s going on in the market, what are the different approaches to solving client problems, they’re very much the puzzle figure out. They figure out the end of the book before they finished reading it.

Krista: Another motivator that we see especially with their leaders in organizations as well and mostly in the financial planning world as well as kind of the leader of the free world is our power motivator. These are the folks that have real strong desire to be competitively driven, strategic, to be a leader, to champion their course and really kind of control their destiny and the destiny of others. The power motivator is one that’s consistently a strong one for lead financial planners in this world because they want to kind of like control their destiny. I mean that’s just what they want to do. So they have a harder time working in organizations where they feel like they are low on the totem pole.

Krista: The fourth one is called aesthetic which we don’t see as often in this industry but you have this one Hannah.

Hannah: It was my top one. Yeah.

Krista: Yeah. It was. And we don’t usually get to see as many aesthetics. I have the aesthetic also, it’s my third priority out of these six. The aesthetic person is very much into a life-work balance, a lifestyle business in particular. What I mean by life-work, I always say life-work because it’s because work comes last. In others words, our life comes first and we’re living to fulfill our own personal development. So our own best life. We’re putting a stamp out there. We’re unique characters. We usually have some ability to have artistic expression, an art form. We’re very much into the experience of living. So money should be something that is fulfilling our lifestyle. So the aesthetic motivator is a lot of times in this industry, every building that you kind of go into is kind of corporate gray. It’s because most of the people that are leading those organizations are low aesthetic. They’re not looking at the experience as much as somebody like you and I would be.

Krista: The fifth one is regulatory. I mentioned that one a little bit earlier. We also call this our principle motivator. It’s where we often see folks that that very much look that they have been on this earth for a calling, for a purpose. And we’re seeing a little bit more of this coming out in the industry than we have in the past. It’s usually a lower priority one but I am seeing more of it where especially for the younger planners that are joining in, is that they really feel that they have principles that they need to uphold and what is right to do for the client. Making sure that we hold true to our faith, our family and making sure that we leave a legacy.

Krista: So that’s the fifth one and then the last one is humanitarian. Our altruistic person. That’s the person that really would prefer to do pro bono work, would prefer to do on charitable work. It’s giving back to society, seeing the potential in other people and helping them live that potential. You might have some elements of all six of those but we usually prioritize the top three as being the top three as being those things that drive us forward. And what we’ll find out is a lot of times birds of a feather will flock together. So Sarah and I will share this need for theoretical or in that more strong conceptual motivator, that knowledge. Or because we’re consultants we want to share our knowledge but we also keep on working our craft and continuing to get more professional development is a very important aspect to what we do. And you’ve got that one hight too Hannah. The three ladies here we could just talk all day long and learn more and more about one another and about other subjects.

Hannah: We really could. Then what I love about this is, I know we keep saying this, is that there’s no right one. They’re all good.

Krista: Yes.

Hannah: It’s just how they work together and it’s understanding like, hey if my boss is that economic utility hardwired, cost benefit, return on investment, type, that’s the language that I need to be speaking to them.

Sarah: That’s exactly right and I think the assessments that we utilize, the DiSC really helps with role definition and it really helps with communication so we better understand our boss’ style, our team members style, all those good things. And we can flex our own personal style to make that working relationship more effective. And with the motivators, we hopefully have synergy with our other team members. So we have things in common and there’s top three motivators on the team. And when we don’t, sometimes that can be cause for sort of lack of chemistry. But when we’re aware of our own motivators and other team members, if they are different, that awareness in itself can be helpful in working together in a more effective way and having a better understanding of each other.

Hannah: We’re talking about these personalities, the motivators, one other things that came to mind as we were talking about that is, it’s one thing to work with … To have a boss who is a different motivator but when we’re still looking at partnerships or succession plans. Think it’s likely more important that you guys are aligned on some of the motivators. I guess the bigger question here is do you see this playing out with succession planning? Or what are you seeing in that space especially as it relates to this personality test or personality assessments.

Krista: Sarah why don’t you take that one ’cause you do a lot of work with succession planning with your clients I know.

Sarah: As it relates with the assessment Hannah, we see those tools being unbelievably helpful regardless of where the team is on that journey. So we utile them with young teams that are on growth mode and we utilize them for succession as well. The thing with succession is as Krista said earlier, there’s an aging financial advisor population, an aging financial planner population. And the industry has changed a lot. And for those who are still in the sole practitioner mode, and they’re looking to find a successor, many times they are looking for someone who is exactly like them because all they are looking for is to have a transition to get out and they want to find someone who’s just exactly like them from a DiSC perspective and possibly a motivator perspective as well.

Sarah: However, if they are looking for a successor but they’re on a team already, then we may not be looking for someone who’s exactly like them. We maybe looking for someone who’s the opposite of them. So as it relates to succession planning there is no sort of one answer as it relates to the DiSC and motivators assessments but they are unbelievably helpful when we first get the senior advisor or senior planner to define what exactly they’re looking for, for their vision, for the future for the exit strategy, for their ultimate team, their ultimate practice. So it starts with them and then understanding who is already on the team and then figuring out where the gaps are to fit into that.

Sarah: But some of the problems that we see with succession planning are that people are waiting till the last minute. It’s funny that we do financial planning for a living but we’re not really doing our own plan if you will. And so a lot of times advisors are like, “Yeah. I think I want to get out in a year.” Well, a year is not enough time even if you’ve already built a team and your success is on that team. A year is not enough time to make all the transitions that need to occur. So Krista and I have found that as it relates to transitioning client relationships, it takes a minimum of three years.

Sarah: So when you bring on a successor planner and you endorse them with your clients, that’s great but endorsement is entirely different than trust. And so they may feel that that person is, “Oh I’ve trusted my financial planner and they’ve brought this new person on …” But it’s going to take them three years of working with that new financial planner to really build that trusted relationship with them like they had with you. And so the biggest mistake we see is people waiting too long. Ideally you want to have a seven year plan for succession to transition out of the industry but at a very minimum as it relates to clients transitions, you want to have three years.

Krista: A lot of times we think we need someone just like me to take the business into the next generation when in reality because the industry is evolving, the person that would be your successor may not be like you. They may have same principles of how to do the investments, what kind of plans to put together and the product selection and all of that. But they may not be a carbon copy of you. And I think too many people think it should be and so every situation is unique and that’s why using the assessments and having good due diligence and taking the time to objectively look at the relationship before getting into it I think is so helpful.

Krista: So many people just jump right in or they say, “You’re successful, I’m successful. Let’s work together. Let’s figure it out.” When in reality that’s one of the worst things to do because they’ll just compete with one another. They won’t really get synergy. They won’t really see or reap the benefits of complementing one another. That’s why using the assessments would be very helpful ’cause in a succession plan that they may have waited too long, if we can understand who we are, what makes each of us tick, we can go into the relationship with an understanding that we can at least work together for the next couple of years to make this work.

Krista: If I had to work with you everyday for the next 30 years, that would be whole another story. But we want to try to make it so that there’s more formation of succession plans than there are disillusions of them. Because right now again it’s an industry that’s having some challenges and making sure there is a plan. I will have to say a lot of my clients that come to me, the planners that come to me they’re a little scared before they have had their first client actually say, “Well hey, you’re getting a little old. We’ve been working together for a long time now. What’s you plan because I don’t know with my money when you’re not around.” That feels horrible to the planner that’s having to receive that message from their top client. And so it’s better off to put a plan together before you get that question asked from any of your clients. ‘Cause if they’re not actually verbalizing it, they may still be thinking about it and not saying anything. So that’s a little bit of a shock factor a lot of times for the advisors on our call today.

Hannah: And being a young advisor I’ve heard clients say that they work with me because I’m young, because they know they won’t have to find another advisor.

Krista: There you go.

Hannah: And it’s when I have prospects call they’re like, “Why should I work with you?” And I’m I’ll say that. “I’m young. I’m going to be here when you’re 90.”

Krista: I am committed to your investments, I am committed to your plan, yeah exactly for a lifetime. That’s good.

Hannah: Why does all of these people … Because you’re very focused on understanding people and this team stuff really matter.

Sarah: So Hannah I think that often in business we focus so much time and energy on the numbers, the numbers and we forget that it’s people who drive the numbers. And so if we don’t focus on people, the numbers aren’t going to happen so we might have a record month or a record year but that success is not sustainable unless we have the right people on our teams surrounding us, helping drive that success. Krista and I talk a lot about ROP, return on people where so many in the industry focus on ROI. We kind of believe that ROP will drive ROI. If you focus on the people first, on building the right team that can drive your client experience, then the numbers, the big numbers, the big successes will follow.

Sarah: But you need the right people and you need to create the right culture and environment and team experience where they can thrive and grow and have fun and avoid dysfunction and all of those things and when you focus on that team experience, have great communication, great appreciation, growth potential, feedback. All of those things are going to breed team members that are loyal and productive which will dive those numbers and that productivity. And I think the industry has changed so much and I bet 25 years ago if you asked a financial planner or a financial advisors what business are we in, they would not say, “We’re in the relationship business.”

Sarah: Whereas today that is true. We’re definitely in the relationship business and the industry has changed dramatically over the last two decades. We no longer sell products, we solve problems. What we do today is relational not transactional. We’ve gone from being reactive to being planning based. We’ve gone from me the sole practitioner to we, the team. We’ve transitioned from being more competitive to more collaborative. We’ve gone from serving the masses to serving a niche or a target audience. We’ve gone from low touch to high touch.

Sarah: All of these things are people oriented, are relational in nature. And so what Krista and I see so often is that people are focused on the business side, the marketing, the numbers. And they’re avoiding dealing with the people issues that they have which could be not enough people, it could be the wrong people, it could be the right people but in the wrong role. It could be communication. And when focus on all of those internal people issues … Where can we drive bigger numbers and greater success and be able to do more for our clients. So people to us is fundamental to the ultimate success of the business.

Krista: We do this business. We help planners and their team members and in reality anyone that comes up to me who’s not happy at what they do, who’s in a job that doesn’t fulfill them. I like to shake them. I like to tell them, “It doesn’t have to be this way.” I watched a TED Talk probably about a year ago now and I said, this is why I do what I do. It was a TED Talk on how to live to be a hundred plus. It was on National Geographic studying these incredible communities called the Blue Zones and talking about how they eat certain things or they do exercise or they take their medication. What is it that really keeps these unique communities in Italy and Greece and Costa Rica … Actually there’s one in California. It’s the one that’s closest for us. What is it about these folks that they last so long?

Krista: And it’s because of their relationship with other people. Their social integration, their ability to communicate and interact with people and smile and look at people on the face. Not look at your smartphone and send a text, because it doesn’t do the same thing to your brain of making your happy and making it feel like you’ve had a chocolate bar all day of putting some dopamine and some good oxytocin in your brain and making you feel good. It’s when you look at somebody and you talk to them and you see them face-to-face.

Krista: I think there’s so many people … I saw it when I was a kid. As I mentioned earlier I worked in my family business where my father and I just couldn’t get along and that was because of his style of leadership. He just would yell at people and if you didn’t like it, you got out of there and you quit. And I just saw the revolving door and the angst on people’s faces. I wanted to make a commitment to help people really find what their talent is, what their contribution is and let them have healthier relationships with the people that they’re working with. We spend so many hours at the office.

Krista: And why have a relationship that’s not the best? And so I really want our leaders, our planners that are building enterprises to really think about their environment. Is it one where you can be there for a hundred years that you really want to be there. Because it’s not the stuff we’re eating or the medication we’re taking or the exercise. It’s really the distinction. It’s really about the relationships we have with the everyday people that we spend our time with. So that’s why we spend so much time on ROP as Sarah called it, return on people.

Hannah: And if you do that right, your clients benefit and that’s really what this is all about in the end. It’s how do we help our clients.

Krista: Yes.

Hide Transcript

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Krista Sheets and Sarah Dale from FPA’s Coach’s Corner are here on this week’s episode of #YAFPNW to talk about how to combat a dysfunctional workplace and build a people-focused team. There are so many unhealthy work environments within the financial planning profession, and both Krista and Sarah agree that this largely is a result of poor communication. As a result, they help the planners they work with on developing well-structured team communication plans, amplifying everyone’s voice on a financial planning team, and creating an environment that fosters positive communication. Krista and Sarah discuss the importance of understanding team members and using various personality tests to identify strengths and what motivates each person on a team.
In this episode, Krista and Sarah are going to be discussing how to spot warning signs of a dysfunctional workplace, the best way to communicate efficiently, and how focusing on team development can lead to a more successful career in the financial planning profession.


 
What You’ll Learn:

What creates workplace dysfunction
How to make people-focused workplace decisions
The best way that young planners can help their practice build a functional, healthy work space
How to effectively communicate to avoid dysfunction
Why words matter
How to communicate questions, challenges, and frustrations
Best practices to identify warning signs of a dysfunctional team
Why much of our dysfunction never gets addressed
How each individual can focus on their strengths and personality traits to contribute to their team effectively
Why team building matters for financial planners in our “people focused” profession
How to create a healthy succession plan
The best way to define roles in your practice and amongst your team
Why focusing on people is often a better investment than focusing on the numbers

 
 
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Hannah Moore clean 1:00:14
Growing Together: Voices of Gathering 2018 https://financialplannerpodcast.com/yafpnw-growing-together-voices-of-gathering-2018/ Tue, 10 Jul 2018 20:19:16 +0000 http://fpaactivate.org/?p=11494 https://financialplannerpodcast.com/yafpnw-growing-together-voices-of-gathering-2018/#respond https://financialplannerpodcast.com/yafpnw-growing-together-voices-of-gathering-2018/feed/ 0 This episode is brought to you by the many incredible voices of NexGen Gathering 2018 attendees. Ian Harvey, the FPA NexGen President, also joins us to share about the theme of NexGen Gathering and how we can together, as a larger financial planning movement, grow together. Today, we bring you your peers! Members of our community at the 2018 NexGen Gathering were kind enough to share their biggest career struggles, what they have done to overcome them, and why they are passionate about financial planning. Each has their own story and perspective that gives us a better idea of the profession as a whole.

Ian Harvey, the FPA NexGen President also joins us to share about the theme of NexGen Gathering and how we can together, as a larger financial planning movement, grow together. He challenges new planners that this is our profession and the future of the profession is in our hands. New planners, like you, are being challenged to take your seat at the table and help move our profession forward.

NexGen Gathering is one of the biggest events for new financial planners in the country and we took the opportunity to interview many voices at Gathering to give you a taste of the energy and passion new planners have around the profession.

hannah's signature

What I love most about financial planning is helping people. -Bryce Snell on #YAFPNW

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What You’ll Learn:

  • Why NexGeners are passionate about financial planning
  • What the biggest challenges NexGeners have faced in their careers
  • What NexGeners have done to overcome those challenges
  • Why finding your community as a new planner is so important
  • How new planners are changing the landscape of our profession
  • How to find your community and other passionate financial planners like you
  • The important role that we, as new planners, have in moving our profession forward and taking a seat at the table

 

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This episode is brought to you by the many incredible voices of NexGen Gathering 2018 attendees. Ian Harvey, the FPA NexGen President, also joins us to share about the theme of NexGen Gathering and how we can together, Ian Harvey, the FPA NexGen President also joins us to share about the theme of NexGen Gathering and how we can together, as a larger financial planning movement, grow together. He challenges new planners that this is our profession and the future of the profession is in our hands. New planners, like you, are being challenged to take your seat at the table and help move our profession forward.
NexGen Gathering is one of the biggest events for new financial planners in the country and we took the opportunity to interview many voices at Gathering to give you a taste of the energy and passion new planners have around the profession.


 
What You’ll Learn:

Why NexGeners are passionate about financial planning
What the biggest challenges NexGeners have faced in their careers
What NexGeners have done to overcome those challenges
Why finding your community as a new planner is so important
How new planners are changing the landscape of our profession
How to find your community and other passionate financial planners like you
The important role that we, as new planners, have in moving our profession forward and taking a seat at the table

 
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Hannah Moore clean 36:49
Becoming a Marketing Advocate for Financial Planners https://financialplannerpodcast.com/yafpnw-becoming-a-marketing-advocate-for-financial-planners/ Tue, 03 Jul 2018 16:38:27 +0000 http://fpaactivate.org/?p=11369 https://financialplannerpodcast.com/yafpnw-becoming-a-marketing-advocate-for-financial-planners/#respond https://financialplannerpodcast.com/yafpnw-becoming-a-marketing-advocate-for-financial-planners/feed/ 0 Patrick Brewer, CFA, CPA, founder of SurePath Wealth Management and Brewer Consulting, has found his passion in helping other planners learn to market themselves. Patrick helps other planners to find their voice, connect with their ideal clients, and advocating for young planners who are ready to make a name for themselves. Patrick Brewer, CFA, CPA, founder of SurePath Wealth Management and Brewer Consulting, has found his passion in helping other planners learn to market themselves. He started as many planners do – in a call-center type of roll fielding questions from people who were looking to close their retirement accounts because they were afraid of the markets. That roll inspired him to pursue a career as a financial planner.

He quickly realized that the financial services industry pushes planner marketing that creates a uniform planner “persona” across the board. He believes that this type of sales-driven, cookie cutter marketing is hurting solo financial planners who are good people and are trying to get client eyes on them.

Patrick still runs SurePath Wealth Management, his financial planning practice. But through Brewer Consulting, he’s also staying connected in the financial planning profession and helping other planners to find their voice, connect with their ideal clients, and advocating for young planners who are ready to make a name for themselves.

Hannah's signature

A lot of (planners) are good humans looking to help other good humans, but they’re running into a lot of road blocks. Patrick Brewer, CFA, CPA on #YAFPNW

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What You’ll Learn:

  • How traditional sales methods and marketing limits new financial planners
  • How to recognize and then articulate your value to firm owners and clients
  • How to identify your client’s pain points to put together a marketing plan that accesses them
  • How to warm up your audience
  • Ways you can use funnels and video to target your ideal clients
  • How to keep marketing budgets low at the start of your business
  • The importance of growing niche affiliations.

 

Show Transcript

Ep105 Transcript


Hannah: Thanks for joining us today, Patrick.

Patrick: Happy to be here, Hannah. Thanks for having me on the show.

Hannah: Yes, absolutely. So, you are the founder of SurePath Wealth, a financial planning firm down in Austin, as well as Brewer Consulting. We’ll dive more into the Brewer Consulting and how your career has transitioned, but what I find so interesting about you is your career path and how you’ve navigated different roles, if you would. So, how did you first get into the area of financial planning?

Patrick: Well, we have to back up a few years if we’re going through the story. So it took me about, I want to say, eight years or so to make it into financial planning. I actually graduated from University of Delaware with a degree in finance and really had no idea what I wanted to do. Frankly, I didn’t really work that hard in school because I just didn’t know what I was working for. I would go to class and I would learn these things and be like, “How does this apply to the real world?” I didn’t really understand exactly how I was going to transition this head knowledge into anything meaningful.

Patrick: So When I graduated, it was 2008, and I learned the hard way that you should probably work hard in school if you want to get a job that you don’t want to stab yourself in the eye with a fork when you get it. I went to work for Vanguard, which is a great company and I learned a ton, and that was the turning point for me. I lived my life in a way that was more lackadaisical. I didn’t really have a strong sense of what I wanted to do, what I wanted to be when I grew up.

Patrick: And when I started working for Vanguard, the first two to three months were training. They would train you on the Series 65 and the Series 6 so that you could start taking phone calls. I was placed in the institutional services groups, where I would take … I didn’t know this at the time, but I would take about 100 phone calls a day from people that were looking to cash out their retirement accounts and do nothing. They were just scared of the market. And I was 22 years old at the time. I had no idea what I was doing, didn’t understand financial markets. Got probably a C in whatever class they taught that in at the university. The first call I got, it changed my entire life. The reason why is I picked up the phone and my trainer was sitting right next to me and he was supposed to be there to guide me on the calls.

Patrick: I pick up the phone and it was a guy from Mississippi. It was a plumbing and pipe fitter union and he goes, “I want to cash out my OK 401. Can you help me with this?” I just look over at the guy training me, and the only thing that was flashing through my mind is, “This is not my life. There’s no way this is my life right now.” So it flipped a switch in my mind where I realized that this was something that I needed to go through because I hadn’t really applied myself. I didn’t really do any of the hard work on the front end to get a job that I would enjoy doing, and it just changed me.

Patrick: I went nuts. I studied for the CPA after work after taking 100 phone calls a day until 7:00 p.m. because there was mandatory overtime. I would stay until 10:00 and study for the CPA because there was this one out. There was one out that I had and it was applying for this accelerated rotation program that Vanguard offered, and that was all that was on my mind. It was like, “I have to get this because I can’t take 100 phone calls a day. This can’t possibly be my life.”  As much as I wanted to help these people, I just didn’t feel like I had the skillset to do it at the time because honestly, people calling in with a million dollars in their account and wanting to cash it out at the time to me felt a little overwhelming with no real knowledge in financial markets or investments outside of what I had kind of remembered from school.

Patrick: I applied for that program while I was taking my CPA and I made it to the final round, then I didn’t get it. That was a tough year, because I then had to prepare for it again because they only offered it once a year, and by the second time, I was able to get through the CPA and had differentiated myself enough in that role that I was accepted into the program. And you would think that I would’ve just stayed at Vanguard and been like, “Oh, I achieved my goal and now I’m in this accelerated rotational program through corporate finance, fund accounting, and audit,” but that fire that was lit in me during that first call could not be extinguished.

Patrick: I was there for two months, did a rotation through corporate finance, a little bit through audit, and realized that I was not supposed to be in the mid office. I was the worst mid office person ever because it was too analytical. There was no interaction with people and the projects were very linear. My mom, who had also worked for Vanguard, I followed her there. Honestly, the only reason I got the job with Vanguard is because my mom worked there. She had moved to Austin, Texas about two and a half years after I started working … Or, sorry, while I started working at Vanguard, she moved to Austin, Texas and she had been there for about two and a half years while I had been working at Vanguard.

Patrick: And she started working for this company, and many of you will probably know that are listening, Dimensional Fund Advisors. She had called me one day and was like, “Hey, I’m working for this company, Dimensional. I think you’d really like it. There’s a lot of people that I think have your personality. They seemed to be wired similarly.” Sorry, guys, if you’re listening to this. I know you’re not a crazy person like me.

Patrick: She said, “You should come down here and interview. I think you’d really enjoy it.” I took her up on it. I flew to Austin, met with pretty much their entire sales team. It was a much smaller company at that time. If anyone is listening who’s familiar with Dimensional, really small, tight knit sales group. And I met with most of the senior leadership and I just loved it. I accepted the job offer as soon as they made it to me or gave it to me. And that was to become an associate in the financial advisor services group.

Patrick: So I flew to Austin, moved down there, and worked my way up over a couple years into a regional director role, got the CFA, because that’s what you needed to be cool at Dimensional. That was pretty brutal for me, because I’m not wired to be a CFA, but I got it. And after about a year and a half of being a front-facing regional director, working with advisors one on one and getting a really good look at the industry from the strategic relationships that they had, like Loring Ward multi-billion dollar firms, through the broker dealer home office to the individual RIAs, I felt like I had a really good understanding of the industry and how to build an advisory firm.

Patrick: That fire was still going, and I’m a pretty competitive person, so I decided that the corporate world wasn’t for me and I needed to do something a little bit more entrepreneurial. An opportunity presented itself. There was a gentlemen out in Sacramento. He was an advisor.

Hannah: So, wait, wait, wait. Before we get there, okay, so you just ran through a bunch of this. I’m like …

Patrick: Yeah.

Hannah: Let’s talk about, at Vanguard, you’re basically in a call center. And you keep talking about this first phone call that you had that really lit a fire under you. What about that call really lit that fire for you?

Patrick: I think it was just the idea of … I felt like I could do more. Having not really prepared myself in school and then getting on the phone and hearing someone who clearly didn’t understand what they were doing or how to interact with finances and being in their 50s, and this guy was in his mid 50s, to not understand, like he was in a 401(k) and did not understand that he was probably 5-10 years out from retirement, I was like, “How is this happening? How is this a real thing right now that this person doesn’t know that they need to retire in 10 years and they haven’t saved anything?” It was a combination of that, and then just the combination of taking 100 calls. As soon as I was told I needed to take 100 calls a day, that was a little overwhelming.

Hannah: Yes, 100 calls a day, how many is that an hour? That’s 10-15 an hour?

Patrick: It’s the worst thing ever. We were chained to the desk pretty much, and you’re trying to drink coffee to make it through, but they only had nondairy creamer because it’s Vanguard trying to cut costs. You weren’t getting Starbucks anytime soon.

Hannah: And so you moved to Dimensional Funds. How long were you at DFA?

Patrick: I was at DFA for about four years.

Hannah: For about four years.

Patrick: About four years at DFA.

Hannah: I always think it’s really interesting, especially when you start talking to wholesalers, because they get such an inside look at all the advisors that they talk with, all their practices. So you were … I’m using the wrong term, I know … the external wholesaler or relationship manager?

Patrick: Yes. Moved from internal to external. I know that wholesaler is kind of an evil word in Dimensional speak, but yes, that’s pretty much what I was doing.

Hannah: Yes, I know.

Patrick: Too bad.

Hannah: Sorry, guys. So you would just go around to different offices. Were you coaching advisors or just trying to help them integrate DFA into their practice, or what did those conversations with the advisory practices that you went out with, what were those like?

Patrick: It was a variety of conversations. I mean, I had a really good, I guess spread, as far as the types of advisors I was exposed to. When I first started, I was supporting people in the RA space. So it was anyone from $20 million up to let’s say, $300 million in assets and I was working on a team doing portfolio analytics, helping them understand the dimensional investment philosophy and all the things that go into how to build a portfolio that captures market rates and return at the least amount of cost. All the fun stuff that Dimensional talks about. And then I got promoted and started working the broker dealer space, and that was a really cool role, because I got to lead some of the initiatives with LPL’s MWP platform, and worked with one of my mentors, Hunt, on building all of the investment models for MWP on behalf of Dimensional, and just interfacing with the home office. So I got to see how the industry actually worked that supported the advisors on the broker-dealer side.

Patrick: And then I had a brief stay on the strategic side with Loring Ward and a couple of the other larger relationships that Dimensional has. Got to work with them, their advisors, see how they do things. Great firm there, and then transitioned back into a one-to-one advisor, let’s call it wholesaler, where I was flying out, covering the West Coast, and meeting with a lot of the larger advisors that were affiliated with Dimensional that maintained a broker-dealer affiliation. It was a good mix of responsibilities.

Hannah: One of the things that I’ve seen that’s really hard for people to wrap their head around, especially when they’re starting out, is the landscape of the financial services industry, or profession, or whatever you want to call it, and how many options there are to really do work in the RIA space, in the broker-dealer space. So to the people listening who don’t really have a firm idea of that landscape, how can they find out more? How can they learn more about what their options are as an advisor or a planner?

Patrick: When you say what their options are, do you mean how they decide whether they want to be part of a broker-dealer or an RIA or join a larger firm? What type of options do you mean?

Hannah: Yeah, kind of thinking through that … I guess what I’m seeing a lot of, and maybe this is just my biases come through, but I’m seeing people who are in the RIA space only being exposed to the RIA, or in the broker-dealer world only being exposed to the broker-dealer world. And there’s so much more out there. And so how do we break people out of that isolation, if you would?

Patrick: Yeah, it’s tough. A lot of people like to … They’re comfortable with what they know, and they feel like what they know is right, and they’re looking for confirmation bias, and they hang out only with people that know what they know and think of the world in the way that they do. So it’s tough to mix them together. It’s interesting, I have about 140 advisors in my marketing program, some of which are affiliated with a broker-dealer, some of which are fee-only RIAs, and what I’ve noticed is the advisors that are affiliated with a broker-dealer, they hustle, man. These guys, they get it, they understand that this is a marketing and sales game on the front end, and they’re willing to do what it takes to build a real business.

Patrick: And those people definitely exist on the RIA side, don’t get me wrong. Fee-only, fee-based, whatever you are. But I’ve just found that in the broker-dealer space, there’s a lot of even younger advisors who were homegrown in that environment, and they’re just open to the push, I like to call it. Working hard and building the business. And they have the mindset for it.

Patrick: So I think that the broker-dealer model, I’m not big on that. I think that maybe broken dealer can be a better term to describe a lot of the things that are happening right now in the broker-dealer space. But there are some progressive broker-dealers who do a good job for their advisors. It’s just, as with anything, you’re going to find some that are good and some that are bad. But I think the cool thing that I’ve seen with my group of individuals, advisors, is there is that cross-pollination, and when they start to see things from each other’s perspective, it’s kind of neat to watch how they interact and start to share more of a common vision. But yeah, I don’t think there’s any perfect way to break down those walls.

Hannah: Right. And it’s just one of the challenges that we have.

Patrick: Yeah.

Hannah: Yeah. So you’re at DFA, you’re flying to the West Coast to help basically coach financial planning firms. What were your biggest takeaways from that experience, especially working one-on-one with these firms?

Patrick: In general, it was a very positive experience. There’s a lot of advisors … What annoyed me the most, and the reason why I wanted to get, I think, out of Dimensional and into the advice business in some capacity, was how frustrated the advisors were about how they were really trying to help people, but everyone saw them as being exactly the same, because you’ve got the Northwestern Mutuals of the world and all these big boys that pump sales and marketing super hard and are selling products. And then you’ve got XYZ advisor who’s got $60 million in assets who’s fee-only, who’s an expert planner, he’s been doing it for 20 years.

Patrick: And I’m sitting there talking to him and he’s just super upset because he doesn’t have the ability to uniquely connect with people in a way that he’s comfortable with, that they’re comfortable with, and that was … The biggest takeaway that I really had from it was there’s a lot of good advisors out there that have a story to tell, and they have a message that would resonate with their audience, but they just … They became complacent because the industry just spends so much money and energy making them all look and feel the exact same.

Patrick: So that kind of bothered me, and I didn’t really know how to solve the problem at the time, but that was one of the big takeaways that I had, I think, from serving advisors out on the West Coast. A lot of them were just really good humans and looking to help other humans, but they were running into a lot of roadblocks.

Hannah: That’s interesting. You said that the industry puts a lot of money into making everybody look the same. Can you talk about that more?

Patrick: Oh, yeah. I don’t think there’s going to be anybody … Most people disagree with some of the things I say, but I think this one, this is pretty much a fact. But the goal of the industry is to sell product, for the most part. Most of the industry’s designed to sell product. And by making the good advisors look exactly like the sales people and annoying the consumer with bait-and-switch messaging, like, “Hey, you want a financial plan? Well, it looks like you need more life insurance or disability insurance.” It’s like, no, me and my wife are actually totally all set on that. We just don’t know how to spend and allocate our resources. “Well, let’s talk about this whole life insurance plan. This could be a really good thing for you.”

Patrick: So I just think there’s a lot of money and energy spent. I don’t think it’s the advisor’s fault, I think it’s the system’s fault for knowing that they can make a profit off these things, and then teaching people how to sell product versus becoming experts in advice. But I’m preaching to the choir here on that. I just think that the marketing machine that is the large financial services firms, the only way to stop them will be if they get fully regulated. But we saw what happened with that, so …

Hannah: That’s a whole ‘nother conversation.

Patrick: Oh, yeah. We could go down that rabbit hole for decades, so … skip that one.

Hannah: Oh my gosh, yeah. Okay, so are you the type who … You got the interview at DFA. You took the offer right away. So as you’re thinking about leaving DFA, is this something that you’ve put a lot of thought into, or was it more of an opportunity that arose and you just jumped on it?

Patrick: I was kind of brash, I think, especially in my 20s. I was probably 27 at the time when I decided to leave Dimensional, and I was super cocky, ’cause I had moved up quickly at DFA, and there were a lot of really talented people there. And I just had this weird idea in my mind that I can build this, I don’t need to be in a W2 role, and it was more driven out of pride and ego, I think, than anything else.

Patrick: But I definitely … I don’t think I fully evaluated the situation, and there were definitely some warning signs on the front end from my wife, from my family, saying, “Hey, I think you should slow down. Seems to be moving pretty fast.” So I would say that it was more of a gut-level decision than one that was fully researched, despite the fact that I had the CFA and I should’ve probably researched it a little bit more. But those habits didn’t take place.

Hannah: What was your next step after Dimensional?

Patrick: I ended up partnering with two advisors that I didn’t really know that well. They were good guys, and they were going to put up a substantial amount of capital, and we were going to buy a firm out in Sacramento, California. It was a larger firm, about $200-ish million in assets under their management. Fee-only, DFA, Vanguard. Awesome people that were at that firm. I really enjoyed my time there. The problem was I was a super charged up late 20-year-old who wanted to take over the world, and I entered into a suburban Sacramento firm that had three working typewriters. And it was mostly me just coming in and being a complete tornado. I wanted to redo the entire operating infrastructure, all the technology, all the marketing, the brand, I was just … It was like you could walk into a house, and it’s not your style of home, and you’re like, “I need to rip everything out. We need to refurnish the whole place in 10 seconds.” That’s kind of how I interacted with the opportunity.

Patrick: And it was really a shame, because had I had a little bit more self-awareness and a little bit more experience, I think I would’ve dealt with it differently. But there were some other things that happened throughout the time of me being in Sacramento. I was only there for about a year. Ended up selling my shares back to my partners that had put up the money to acquire the firm, and initially, the goal was to build a larger conglomerate of firms. A roll-up similar to, let’s say, United Capital or BAM or something like that. And in my naïve 27-year-old mind, I thought, “Yeah, I can compete with these guys at 27 with no knowledge outside of Dimensional.” So I needed to learn the hard way to stick my hand on the stove, get burned a few times, and that’s pretty much how that went down after I left DFA.

Hannah: I have so many questions about that experience, but you probably don’t want to-

Patrick: Go for it. It’s fun. Yeah, that could be a two-day … It’s a two-dayer. I do have, I guess whatever that clause is in the contract that says where you can’t say certain things. So I could probably talk a little bit, but …

Hannah: Yeah. Okay, so you’re there. You’re a bit of a bull in a china shop is what I’m hearing.

Patrick: There you go. Why don’t you talk for me? That’s so much faster.

Hannah: So what was the point where you realized that it wasn’t going to work out?

Patrick: I think about four months in. I had been out there for about four months, and the advisor that had sold us the practice, he was really reluctant to introduce me to clients. I think it was because I was changing things inside of the firm, as far as how we were doing things from a technology standpoint, from a workflow process standpoint. About four months in, I started to see the writing on the wall that there was going to be some issues between his personality and my personality, and that’s when everything started to move in the wrong direction, as far as being, I guess, negative versus positive. So it took about four months in, I would say.

Hannah: You work with a lot of advisors. So to the person who’s in that spot, who sees the writing on the wall, is it worth waiting it out?

Patrick: As far as building your own firm, or as far as actually waiting it out and waiting for the succession plan-

Hannah: Trying to make it work.

Patrick: … to fully be realized? Man, that is a tough question. It really depends on the team dynamic and the personalities that are at play. I’d say for me, now I might be able to do it in my early 30s, now that I’ve had some more life experience. Some people, I’ve noticed, are a lot more mild-mannered than me, and they’re more patient, and they’re going to be in a better position to have an effective transition in a succession planning environment. I still think that I’m more of the bull in the china shop. I don’t think, for me, I would ever try that strategy again. But I think for some people, it could be a really great way to enter the industry, especially if they find somebody who can mentor them into the profession, into relationships. It could be a really cool thing, it just never really turned out like that for me.

Hannah: I can’t imagine working for somebody else at this point in my life, and just from hearing so far your story, I can’t imagine that you would want to go work for somebody else at this point either.

Patrick: I can’t. I’m broken at this point. I know too much about a lot of different things, and I just feel like if I had to work for someone in a W-2 role, I would drive them completely insane. And I can definitely work with partners. Actually, I really enjoy working with other people and having partners, but if there’s someone … I can report to someone who moves super fast and is a visionary all day long. But what I’ve had trouble with, every time I get put behind someone, I always want to move faster, and they’re always uncomfortable with it. Not to say I’m always right, but I just have to make mistakes. If I feel like I’m going to make mistakes, I’m going to make a mistake, and I just have to move. I just feel like I’m in a constant state of motion with that stuff.

Hannah: Did you know that you wanted to start your own business right away?

Patrick: Honestly, I didn’t. I went through this weird transition. I kind of felt like I was taken advantage of a little bit, I feel like, when I was in Sacramento. In hindsight that’s not true, but I had this chip on my shoulder, so I didn’t really know if I wanted to start my own business, go back to work for Dimensional, go find a job somewhere else. And I took a couple months off and just did some soul searching to figure out what was going to be the next step, and I decided that I was unemployable, like we talked about. There was no going back and working for someone, so I needed to figure out what type of business I wanted to be in.

Patrick: And frankly, I didn’t feel confident at that point that I was ready to start a wealth management firm from ground zero. If I’m completely honest, I think I was scared that I wouldn’t be able to grow the business, because I didn’t really have a sustainable process for getting in front of anyone, and I didn’t really know anybody that I could talk to about wealth management. All of my friends and family worked for Dimensional or Vanguard or some other place in the industry, so I couldn’t just call them and be like, “Hey, you know that Dimensional fund you own? Why don’t you just transfer it over to me and I’ll manage it for you?” That wasn’t going to happen.

Patrick: So I felt, I guess, a little bit hesitant to start my own firm right after that opportunity in Sacramento had fallen through.

Hannah: And so what did that time look like for you?

Patrick: It was a little bit of a dark time, honestly. It was one of those things where I had a six-figure job at Dimensional, I was doing really well, I was moving up the corporate ladder. My wife was super stoked about it. I had a lot of certainty in my life, and I decided to blow up the certainty, move to Sacramento against my family’s, probably, request, and ended up with that partnership blowing up in under 13 months. So I got some money out of the deal for the troubles and everything, but I spent a lot of time and mental and emotional energy in that engagement. I felt like I was working 100 hours a week for the 13 … I probably was. And I was flying every single week from Sacramento to Austin to get back home on the weekends to see my wife, who was still working in Austin.

Patrick: And I was burnt out. I was very emotionally fragile, I think, after that opportunity. So I needed some time to collect myself and really figure out what the next step was going to be. So it was not like a really fun time, I would say, for me in my life.

Hannah: And so what got you out of that? Or maybe you’re still in it, I don’t know. But what was the transition point for you? You obviously started … We’ve already prefaced this whole podcast, that you have your own firm. What led you down that path?

Patrick: It was a couple things. At first, I didn’t start the firm because I felt like I wasn’t going to be able to do it. I just didn’t think I had a good marketing strategy. I chatted with the guys over at XY Planning Network. Good folks. They had just started, I think, when I left … I probably would’ve been member number 50 or something, had I joined back then. And I just didn’t feel confident that there was any type of a marketing strategy that I could take up to be able to be successful.

Patrick: So I ended up doing something completely random. I’m not going to go into this in a lot of detail, just because it would sidetrack us, but I started an insurance company. An insurance agency, rather. It was a Medicare insurance agency that was initially designed to help people that were turning 65 find the right Medicare plan. And it was going to be a quoting tool backed by data. So I hired two developers, and we were going to build this tool where we could smart search all the plans, and based on the medications and the doctors that people saw, we’d be able to figure out which plan was going to be most appropriate, and it was going to revolutionize the Medicare industry.

Patrick: So long story short, what I realized after about seven months is I wasn’t in the technology space, I wasn’t in the insurance space. I was in the online marketing space, because healthcare is one of the most competitive lead generation markets in the entire world. So even if I built the best quoting tool ever, which I couldn’t do because there was one company that had a specific exclusive contract with medicare.gov for the price of the drug at the pharmacy level, so we couldn’t even build the tool. But had we been able to build the tool, we would’ve been a marketing company, and not an insurance or technology firm, because we need to drive eyeballs in order to get people to interact with the product.

Patrick: So then I started really getting into online marketing, direct response, lead generation, and that shaped my path for the next three and a half, four years.

Hannah: And so is that what gave you the confidence to start your own firm, that you thought that you had a marketing strategy?

Patrick: Yeah, it did, because I started putting together a marketing strategy for the Medicare company. We basically pivoted off the quoting tool and just started doing lead generation to make money and to try and build something, ’cause frankly, I was running out of money. I was paying developers, I thought I was super cool working out of WeWork in Austin, and every month, the bills just kept coming in, and the revenue was flat-lined right at zero. And I was working probably 90-100 hours a week, trying to figure out, how do I build a client acquisition strategy that’s going to get eyeballs on this fricking website so I can sell a Medicare product?

Patrick: And after spending probably $30-40 grand in researching it and testing things, I was able to put together a sales funnel. Right now compared to what I do, it’s pretty basic, but it was this linear sales funnel on Facebook, basically driving people to a webinar that would drive them to a call center or a workshop, and then we would have them attend a workshop locally in Austin, San Antonio, or Dallas, or we would try and sell them over the phone if they were open to that. And we were able to get the business to about $25,000 in monthly recurring revenue selling mostly Medicare supplements.

Patrick: But I just got tired of Medicare. It’s a really shady industry. There’s just dealing with insurance companies and all the politics and BS that comes with that. I just had to get out, so we stopped doing that after about a year. And I say we, it was mostly me doing that, and I had a couple agents that were working part-time. But I stopped doing that after about a year into it.

Hannah: So, it’s funny. I haven’t … We’ve done over 100 podcast episodes. I’m trying to think back if there was anybody who’s ever done Medicare plans like that. And I think some people may have done them on the side, but nobody went full in on it. So that’s really interesting.

Patrick: I wouldn’t recommend it. I would not recommend going full boar into Medicare, I’ll tell you firsthand.

Hannah: Maybe there’s a reason you’re the only one to do that.

Patrick: Yeah, I’m the only weirdo. I needed to burn myself down before I was ready to get back up, and I feel like that’s what was going on here, so.

Hannah: So as you did that, were you still in touch with the financial planning community, that larger … Did you know that you wanted to go back to financial planning? Because at this point, you could go sell widgets online. What kept you in financial services?

Patrick: It was actually a meeting that I had with a guy who’s now one of my partners in the wealth management firm. His name is Tim Power. Awesome guy, we met through my stepdad. Tim and my stepdad were doing prison ministry at the same prison. They weren’t in prison, they were doing ministry there. And they met, and Tim had overheard my stepdad talk about how we were doing the stuff in Medicare. And Tim approached him and said, “Hey, you’re doing some stuff in Medicare. I’m a financial advisor.”

Patrick: So they started talking and my stepdad decided that it would make sense for me and Tim to meet up, so we met up about a week later at a Whole Foods north of Austin, and we just started talking. And within 30 minutes, Tim could … Based on my background, the CFA and everything, he’s like, “Dude, why are you selling Medicare? This makes no sense. It’s like death from a thousand paper cuts. Why are you doing this to yourself?” And I didn’t really have a good answer for him, and it caused me to really just step back and reflect on it. I’m like, “Why am I building a marketing agency selling Medicare? That doesn’t make any sense.”

Patrick: And Tim just hung around and we just kept talking, and his background … He worked at New York Life, Eagle Strategies, was definitely more on the insurance side, wanted to transition into more of a fee-based or fee-only role, but just didn’t have a good running mate because he’s more wired to connect with people emotionally. He’s a great sales guy, but just doesn’t have a strong interest in the complex aspect of financial planning and doing all the detailed work.

Patrick: And we just decided one night, we’re like, “You know what? Let’s just fricking start a wealth management firm and see where it goes. And I think for me … For Tim, that was awesome. He was like, “I just want to start a wealth management firm, it’s the best thing ever.” For me, I was still like, “I kind of want to see if I can build it. I don’t know if I necessarily want to be a financial advisor, I don’t know if I necessarily have a really strong interest in financial planning. But I really like the industry, and I’m almost more curious to see if I could do it.” It was like a test in a weird way. I know I’m a weird person.

Hannah: A challenge.

Patrick: Yeah, because I just saw a lot of people honestly struggling. I was looking at a lot of the advisors that I think are super talented. They’re phenomenal planners. A lot of them are now in my program on the marketing side, and they were struggling to acquire clients. And I’m like, I want to see if this is possible. I’m going to give it my best go for 12-13 months, and I’m going to see what happens and see if I can do it or not. And that’s pretty much what we set out to do.

Hannah: And is this the SurePath Wealth Management?

Patrick: This is SurePath Wealth Management, that’s what we created about two years ago now.

Hannah: And so you and Tim, were you 50/50 business partners on this, or …

Patrick: No, so I ended up funding the entire business. So right now, well, basically where we’re at now is I still own 100% of the firm, but I’m probably going to be diversifying the equity structure, ’cause I’m focused a lot more on market strategy and consulting and things now, and we need some other people to step in and carry some of the weight. So right now, I’m 100% owner.

Hannah: Oh, I just love that you say that knowing that you want to give up some of the ownership of it. It’s like, yes! You get how it works.

Patrick: Of course.

Hannah: Or how it should work.

Patrick: Oh, that’s my biggest point of frustration in the industry right now, is all these old cats hanging onto their equity for dear life, and making talented young people that could be empowered to be in a role of greater responsibility do it on their own from scratch. It pisses me off, frankly. And that’s part of my mission, if anyone listens to my message on the marketing side … For better or for worse, it’s kind of an against brand. I’m training the next generation of advisor to take market share aggressively so that when the tidal wave comes in 7-10 years and assets start to transition … Let’s just say my right capital software has $30-40 million in inheritances already modeled out, and that’s coming from somewhere.

Hannah: Absolutely. So you start this wealth management practice. So what was that experience, what was the first month of that like?

Patrick: It was all in the registration, honestly. I registered the firm in basically three weeks. I just went completely insane, registered it. I was driving down to the Texas State Securities Board every day and harassing them. I brought donuts and tacos in one day, like, “Hey, maybe push this file up to the top here?” ‘Cause we had some people that were ready to roll over some money that we had got from the Medicare webinars, so that’s initially what started getting us going, was we were running the webinars, and instead of just selling Medicare, we were upselling wealth management and financial planning and things like that.

Hannah: So you had already started building out that marketing pipeline through your Medicare business. Was the timing so that you shut down your Medicare business as soon as the wealth management got up and running?

Patrick: Pretty much. There was a little bit of a transition there. I would say two to three months where I basically transitioned all of the Medicare business over to my stepdad. So he runs the Medicare agency now. He’s got about 500 clients that he serves, and we helped him build that and we still are helping him build that out. But I’m not affiliated with it in any way anymore, ’cause I don’t have time or any interest in it. So, yeah, we pretty much rolled that up as soon as we started making progress with the RIA.

Hannah: Yeah. So you’re very much that serial entrepreneur, it sounds like.

Patrick: Yeah. It sucks. I wish I was normal, that’d be great. Being normal would be awesome.

Hannah: So you were able to … You’ve learned all this about marketing. Were you able to see results from that at SurePath right away?

Patrick: Yeah. Everything takes time, and every strategy’s a little bit different, depending on the goal of the campaign. Initially, I need to eat tomorrow. We needed to do hardcore lead generation, because if I wasn’t talking to people, then we weren’t going to be in business. And we took a multi-pronged approach. We expanded on the funnel for Medicare for the first couple months and were driving a lot of people to in-person workshops, mostly so that we could close and get some AUM on the books as fast as possible. And then we pivoted our strategy to basically focus a little bit more on doctors, and we were using LinkedIn, email, retargeting, and sales funnels to help people illuminate problems in their life.

Patrick: The way I think about marketing is you’ve got two types of individuals. And let’s say you had 100 people in a room. Two of those people are going to be open, to some degree, about what you have to say right now. Maybe they’re in pain about financial planning or tax or something like that. They’re going to be open, and you need to give that person a very quick and clear path to solve that problem, ’cause they’re in pain. It’s like if I was up on stage talking about how to reset people’s broken arms, and somebody in the audience has a broken arm, they’re not going to Google me, look up reviews, and read a bunch of stuff. They’re going to come up on stage and I’m going to reset their broken arm.

Patrick: Most of the audience is not open right now. So there needs to be a separate and distinct process for warming up the people that aren’t ready to work with an advisor right now. And the way that I’ve done that is a lot heavier on the video marketing, content retargeting, funnels, and I’m just trying to stay in front of people as much as possible, with the least amount of effort and energy, and for the least amount of money, because if you do this the wrong way you could potentially go broke.

Patrick: But the goal is instead of when that person comes across something in their life where they’re like, “Oh, I need help with taxes,” or they’re like, “Oh, I need help with financial planning,” what we don’t want them to do is go to Google and type in “financial planner fee-only”, “financial planner NAPFA”. I want them to say SurePath or Patrick Brewer or Tim Power, whoever it is, because I’ve spent the time and energy helping them illuminate and solve problems in their life, so that they’re now going to look to me as an authority instead of just going to Google and just finding whoever’s top of the list.

Hannah: And so that’s really … You hear a lot of people talk about paid market versus organic marketing. And I really heard you make that distinction there. Would you agree that that’s the distinction you were making?

Patrick: To a degree. I think lead generation is definitely paid marketing, but I think awareness and building an audience also requires some ad spend in today’s environment. The challenge that a lot of advisors face right now is they do need to focus and clarify their market. So they need to pick a “niche”. I call it an affiliation because I think it’s a better term based on how people affiliate with certain things, activities, companies. But they need to clarify their market.

Patrick: Once you’ve clarified your market, there’s a paid component and there’s an organic component. The challenge with organic is on Facebook, organic’s pretty much dead, based on the changes in the Facebook algorithm. On LinkedIn, the news feed works pretty well, but it takes some time to season out, because people aren’t as active on LinkedIn. And then Twitter is just a bunch of noise. Nobody’s building with relationships with 100-whatever characters.

Patrick: So I find that there is a very, very good organic strategy that you can leverage, using the combination of LinkedIn, Facebook, and email, but you have to do it in a very specific way. I’ve also found paid advertising to be incredibly effective with video marketing, because you have a lot more ability to control the psychological journey and the indoctrination of the person, of the prospect, once they’ve raise their hand and said, “Hey, I’m in a little bit of pain,” you can create a very specific sequence of events to get them to view you as someone who can help.

Hannah: So, I love this stuff, and I think I could talk to you for hours about this. But for the listeners-

Patrick: Sorry.

Hannah: When you say … No, I love it. So when you say raise your hand, they raise their hand and let you know that they’re in some sort of pain. What does that mean from your strategy standpoint? What does that actually look like? Who would raise their hand?

Patrick: Yeah, there’s a couple different ways. We use a multi-platform approach. So instead of just saying we do SEO, or we do content, or we do LinkedIn, it’s not enough. And the reason why it’s not enough is there’s too much noise in the world right now to where if you just focus on a singular service or strategy, you’re not going to be able to build the attention and relationship that’s required to get people to actually take action.

Patrick: And the challenge with our industry as it relates to marketing is it’s a non-linear cycle in order to build a relationship. I can’t just walk up to someone and say, “Let’s be friends.” They’re going to be like, “I don’t know who you are, and we’re not friends.” Whereas if I’m selling a product or a service, it’s a lot easier. Maybe I need a T-shirt. I’m going to go buy a T-shirt, I don’t need to build a relationship with the T-shirt maker. I just need to buy the T-shirt.

Patrick: So for our industry, it’s really specific in the way that you need to serve up content and get people to interact in order to build that connection and that human connection and get the trust part of it established because you introduce the solution. As far as how it works for illuminating problems, this is my content creation process. I’m going to share this right now, congratulations if you’re on the call. It’s pretty awesome. And it’s simple, it’s super simple. This is how I create content.

Patrick: So I figure out first, who is my market? I clarify my market. Who am I speaking to directly? What are their characteristics? Once I’ve figured that out, I write down the 10 mistakes that they’re making in their life, their business, and their finances right now. What are the 10 mistakes that they’re making that either they don’t know about, or maybe they do know about and they just don’t want to address yet? Then I write down the 10 desired results that they want financially, in their business, in their personal life, et cetera.

Patrick: So I’ve got 20 pieces. 20 things that are important to my ideal prospect. And then what I do is I fractionalize that content through the lens of what I call the seven pillars of content. And what that is is stories and experiences … Imagine if instead of just saying, “Here’s an article on the restricted application strategy for Social Security,” what if I had a market of people, let’s say 5,000 people, that were watching a video and I served it up to them, and instead of serving them up a piece of content on a very complex topic, I just said, “I had a client in my office the other day. Her name’s Mrs. Jones, and this is what we were talking about, these reservations around Social Security.” So you tell this story from the perspective of your life and the client’s life, and obviously you don’t share private information. But it allows the other person to insert themselves into the story and figure out what you do.

Patrick: And on top of that, you’ve got a couple others. You’ve got personal philosophy, which is why you do what you do, why it’s important. What do you stand for, what do you not stand for, what’s equally as important as what you do stand for, which is huge for advisors that are principled, fee-only DFA people. The community needs to hear about this. And you’ve got educational content, you’ve got other forms of content, like promotional, win-share. There’s seven different ways that I create content that allows me to build the human connection on the front end with the person, so I can get them to say, “Oh, that’s what Patrick does.” Or, “Oh, I’m in pain right now, and it’s interesting how they see the world.”

Patrick: So that’s a little bit about how we do it. But we use LinkedIn, we use Facebook, we use email marketing, we use YouTube, we use retargeting, we use Google. Everything. It’s gotta be an integrated approach or it really just doesn’t work.

Hannah: And so you’re talking about spending money on advertising for this. One of the things … I’ve said that I really enjoy this. One of the things that I’ve learned about marketing is that everything is trackable if you do it right. And so you spend $10, you can see, hey, what results did I get for that $10, or however much money you spend. What are you seeing with the advisors that you’re working for? What’s the ad spend that they’re spending each month?

Patrick: Yeah. Right now, we have two ways that we help advisors. The first way is for the people that, let’s say, I have a place in my heart for. It’s the entrepreneur, and where I was at three or four years ago. They don’t really know what they’re up against. They know they need a marketing and sales system, but they don’t know where to turn. And everybody’s telling them to blog and pick a niche, and it’s like, cool, I just put out my 40th blog and now I’m ready to drive my car into a lake. I’m over it.

Patrick: So my main product is to help those people and give them a path to the solution, which is getting clients sustainability for the least amount of money possible. And all of the clients that I’ve helped in that product, not one person has spent a dollar on advertising, because I have a very specific strategy that leverages LinkedIn, email, and some light funnels and the news feed to be able to create enough interaction to where you don’t have to get to paid advertising. And I’ve perfected that over the course of two and a half years. We’ve changed it, we’re still iterating, but that’s really where people start if they don’t have the money to go into paid ads, which is most people. They just can’t afford Facebook advertising and they can’t afford the content production and distribution process and everything else.

Patrick: And the cool thing about the product that we have right now is it allows people to test their offer or test their funnel. I don’t want to get too complicated, but they can test it without spending money. So they can see what the click through rates are, they can see how many people are opting in, and based on that, they can see what the strength of their offer is to their niche or clarified market. And once they do that and they have data, like you were talking about, the analytics around it, then it’s just a game of putting money in the slot machine. That’s when you go to paid advertising and you start boosting that to an audience on Facebook, on YouTube, on Google, and you drive as many people as you possibly can to it that are in that market. Then it’s all about distribution.

Patrick: So what I really focus on for most people is they come in and they have no idea who their target market is. They’re like, “I like helping people. I’m a financial advisor, and I think that I like young people and that’s what I want to do.” Okay, cool. So let’s start there, and let’s build a real target profile as far as who you’re going to serve. Let’s figure out the exact systems that you’re going to use to build an audience of those people. Let’s figure out the message that’s going to get them to raise their hand and say, “I’m in pain right now. I’d like to become a client.” But more importantly, let’s figure out the long-term communication strategy that gets people to opt in and say, “Yes, I’d like to learn a little bit more about this particular topic,” and then nurture them. Once we finish the nurture sequence, we know we have a sustainable offer. We’ve got a good market. Boost it. Go to paid traffic. Go nuts.

Hannah: So, okay. So I got a bit ahead of myself.

Patrick: Oh, you’re good.

Hannah: I’m just so excited to talk about marketing. So at SurePath, this is where you really started … You tested out a lot of this through your Medicare business that you did. But with SurePath, you’re really able to test this out for a wealth management practice. I guess the biggest question is, was that successful?

Patrick: Yeah. And one of the questions that I get that I think we should probably address, ’cause I get it all the time, it’s like, if this is so successful, why are you just scaling up a massive wealth management firm and doing this all on your own? Why are you giving this information away, because clearly people need this information. And I’ll answer your question first, and then I’ll answer that one.

Patrick: But to answer your question, it was successful. I had to actually stop marketing in my wealth management firm about six months ago because we were working on two things. One was creating leverage in Brewer Consulting, because we were getting too many people, and I could keep up. So I needed to divert time and attention and hire staff to be able to scale that business so that I could keep doing it. So we literally had to stop marketing to be able to make sure that business stayed on the rails.

Patrick: And in addition to that, I wanted to invest in the future of SurePath, so I created a tax and account division that’s going to be a carve out here probably within the next few months. We’re working on the brand right now, and that’s going to be called SurePath CPA group. So we brought on a tax partner, we’ve got two contractors doing books and tax returns, and we brought on about $50,000 in revenue the first tax season, which is not terrible. But that was really where my attention went about six to seven months ago, was maintaining Brewer Consulting, building out the CPA firm, and now we’re finally turning our energy back to the marketing side for the wealth management firm. But we have grown from zero to about $20 million in assets, $8 million in assets under advisement, a good amount of retainers with younger clients, plus the revenue coming in from tax and account services that’s ramping up.

Patrick: So I would say that we’ve definitely been successful. It’s just, unfortunately, there’s only so much time in a day, and I think the only way to know what you’re uniquely positioned to is to have competing interests for your time and for whatever reason, every time I have time to work on anything, I’m always like, I want to work on the marketing company. I just enjoy it more. So that’s just where I’ve been drawn.

Hannah: Yeah. That serial entrepreneur side.

Patrick: Yeah.

Hannah: So one of the things you talked about was the importance of building out a niche market, or, I’m sorry, affiliations.

Patrick: All good. You can use niche.

Hannah: So with your SurePath Wealth Management, what was the group you were really focusing your marketing on?

Patrick: So we started with doctors. I still have the site out there. It’s surepathmd.com, and we have a number of doctors and dentists that work with our firm. And we’re using the strategies without paid advertising to perfect that particular marketing campaign. We attracted about, I want to say 12-15 doctors, and that’s when you hit the wall. And we’re like, we gotta scale this business, we don’t have any more time to market.

Patrick: So we turned our attention to the marketing company, and over the past three months, I’d been building a marketing funnel that is focused on the retirement income space. So it’s mostly going to be leveraging Social Security as the pain point to drive people through a very automated experience, multi-platform, and we’re going to be running about $4,000-7,000 a month in advertising spend through that marketing funnel in Austin, because the way I think you could … Niche, to me, it doesn’t have to be doctor/dentist/lawyer. That’s what I’ve realized. It could be somebody who’s affiliated with a particular company, it could be a cultural affiliation, it could be an industry. It doesn’t have to be those three. It could be craft breweries, it could be e-commerce, it could be something that’s not as highly pursued. And it could also be a local focus.

Patrick: People affiliate very strongly with the problems or the results that they want in their life, so if you turn yourself into an expert for solving a particular problem, like Social Security or Medicare or taxes in retirement or whatever. You can take over the market with a very integrated approach if you know how, and that’s pretty much what we’re going to do, is take over the market in that space over the next couple of months. That’s the goal.

Hannah: Very interesting. Well, it’ll be really fun to watch and stay in touch and see what happens.

Patrick: Yeah. Well, we’ve gotta staff up too, that’s the issue. It’s like, if you’re constantly juggling resources, you’re like, okay. Three months, or three weeks, we’ll be done. Oh, wait, this thing just exploded, so we need to get this person to do that. So you know how it is being a business owner. But that’s the goal, that’s on the strategic plan.

Hannah: It’s funny, I was just talking to somebody else about how sometimes business problems, you feel like you’re back in business school, being like, okay, here’s the facts of your case and what do you do now? And it’s like, oh, this is real life. This isn’t just a case that I get a grade on.

Patrick: Yeah, yeah. It’s funny.

Hannah: So where can people find you?

Patrick: I pretty much stalk people all over the place, I think. I’ve got my videos that go out all the time, I’m pretty active on LinkedIn, YouTube. So you can pretty much find me on any social platform. As far as the way that we’ve structured our ability to work with folks, if you want to learn more, the website is a good place to schedule a call. You can opt into our funnel there. There’s a guide that we’ll walk you through, and once you opt into that, I’ll stalk you around the internet until you eventually die a cold death. So be careful about hitting my pages.

Patrick: But there’s a button on the site that says Talk To Us, you can book a time. We ask you to fill out a brief application, just so that we can get a sense if you’re going to be a fit. We only work with fiduciary advisors, we don’t work with anyone who’s not a fiduciary. That’s important to us. And most of the firms that we have had success helping … Just to be fully transparent, because I feel like a lot of people are like, who doesn’t have success with your program? So I’m going to mention that.

Patrick: The people that we haven’t been able to help are advisors that are over … And not to say that it’s an age thing, but for whatever reasons, advisors that are over 55, under $100 million in assets, we’ve had a really hard time helping those folks. I think it’s just a combination of technology, a change in strategy, a shift in mindset. Those are the folks that we’ve seen to really not be able to have that great of success for. Anyone who is building their business, who’s under $100 million, who wants to grow a business online, we can definitely help. Anyone who’s over $100 million, regardless of age, practice, it’s going to cost you more, but we basically have a marketing agency where we build out all the funnels, all the integrations and everything that you would need in order to take over whatever client profile you want.

Patrick: So I would say website’s definitely the best, and then fill out the application, and we just have a quick chat about the practice.

Hannah: That’s awesome. And we’ll have all the links for that in the show notes. Well, anything else, Patrick, before we jump off?

Patrick: No, I think we’re good, Hannah. Thank you so much for having me on here. It’s been a pleasure talking to you, I really appreciate what you’ve been doing for the industry. It’s much needed. I know that this is maybe a little bit of a thankless thing here, running this podcast, but hopefully it doesn’t go unnoticed. So thanks again for your contribution and your time.

Hannah: Absolutely. Thanks, Patrick.

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Patrick Brewer, CFA, CPA, founder of SurePath Wealth Management and Brewer Consulting, has found his passion in helping other planners learn to market themselves. Patrick helps other planners to find their voice, connect with their ideal clients, SurePath Wealth Management and Brewer Consulting, has found his passion in helping other planners learn to market themselves. He started as many planners do – in a call-center type of roll fielding questions from people who were looking to close their retirement accounts because they were afraid of the markets. That roll inspired him to pursue a career as a financial planner.
He quickly realized that the financial services industry pushes planner marketing that creates a uniform planner “persona” across the board. He believes that this type of sales-driven, cookie cutter marketing is hurting solo financial planners who are good people and are trying to get client eyes on them.
Patrick still runs SurePath Wealth Management, his financial planning practice. But through Brewer Consulting, he’s also staying connected in the financial planning profession and helping other planners to find their voice, connect with their ideal clients, and advocating for young planners who are ready to make a name for themselves.

 
What You’ll Learn:

How traditional sales methods and marketing limits new financial planners
How to recognize and then articulate your value to firm owners and clients
How to identify your client’s pain points to put together a marketing plan that accesses them
How to warm up your audience
Ways you can use funnels and video to target your ideal clients
How to keep marketing budgets low at the start of your business
The importance of growing niche affiliations.

 
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Hannah Moore clean 56:49
Demystifying the Financial Planning Profession https://financialplannerpodcast.com/yafpnw-demystifying-the-financial-planning-profession/ Tue, 26 Jun 2018 16:48:11 +0000 http://fpaactivate.org/?p=11364 https://financialplannerpodcast.com/yafpnw-demystifying-the-financial-planning-profession/#respond https://financialplannerpodcast.com/yafpnw-demystifying-the-financial-planning-profession/feed/ 0 There are many technical terms flying around in the financial planning profession. This week, we’re decoding these technical terms - and going over why new planners need to know them. There’s a lot of terms within the financial planning profession and today’s episode looks to bring clarity to some commonly misunderstood terms. From the difference between an RIA and a Broker Dealer, to the different fee structures and even understanding what it means to be an investor, there are so many different terms thrown around. These terms can be confusing, but it’s critical that planners understand what each of them mean as they navigate the profession, their careers and most importantly capture who they are and what they do.

In this episode, Dan Moisand, former President of the FPA, sits down with your host Hannah Moore to talk through the technical definitions that comprise this profession. We’re really getting in the weeds with it here – and this episode will act as a primer for all new planners entering the financial services industry.

Dan also guides new planners in how they can move beyond these technical definitions to move our wonderful profession forward.

This is a must-listen for all new planners who are looking to decipher the difference between marketing terms and ways that the financial planning profession is actually regulated by our governing bodies!

hannah's signature

If you asked people on the street what ‘fiduciary’ is they’d likely say ‘to act in someone’s best interest’ – and that’s kind of the short cut. Dan Moisand, CFP® on #YAFPNW

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What You’ll Learn:

  • The difference between a RIA and a Broker Dealer  
  • What a “Wirehouse” is – and what you need to know about them as a new planner
  • What a “Custodian” is
  • The difference between a Financial Planner and an Advisor
  • The difference between an Agent and a Broker
  • Why “Wealth Management” is technically a marketing term
  • What “Financial Planning” actually is
  • The difference between Discretion and  Non-Discretion
  • What the Fiduciary vs. Suitability debate is all about, and what the difference is for consumers and planners
  • What the different career paths for new planners are (paraplanner vs. associate planner vs. junior planner), and how to know what you’re applying for
  • What the SEC proposed versus DOL fiduciary rules
  • What it means to be an investor
  • What the difference between a trader and a speculator is
  • How you, as a new planner, can help to move the profession forward in spite of the technical jargon
  • How to communicate with clients about the technical titles in the profession
  • Why you need to know these technical terms

 

Show Transcript

Ep104 Transcript


Hannah: Well, thanks for being here Dan.

Dan: Thanks for having me.

Hannah: I am so excited for this podcast because there are so many terms that get thrown around the financial planning profession that I’m just not sure everybody has a really clear understanding of what they mean. That’s why we brought you in.

Dan: Dan the answer man, great. I’ll do my best.

Hannah: No pressure right?

Dan: Right.

Hannah: Let’s start out with one of the big, everybody’s heard these terms, an RAA versus a broker-dealer. What are they and what the heck is the difference?

Dan: Well, RAA actually has a legal definition. Some of the things that I know we’re going to talk don’t, it’s just kind of an understanding but RAA is one that is actually defined in the law, the Investment Investor Act of 1940. It defined an advisement advisor as any person or firm that for compensation is engaged in the business of providing advice to others or issuing reports or analysis regarding securities.

Dan: There was a few terms in there that need further definition, and the Securities Exchange Commission has commented on it a number of times. One of the determinants for whether you’re engaged in the business of advice regarding securities is whether you’re holding yourself out as an investment advisor. That makes perfect sense to me. The staff has talked about what is advice about securities.

Dan: They’ve stated, this was just a few years ago, longtime staff member named Bob Plaze put out a thing about the SEC’s view of regulation of investment advisors. This is post 2008, Dodd–Frank, all that kind of stuff. The SEC staff has stated in this regard, that advise about market trends is advice about securities. Advice about the selection and retention of other advisors is advice about securities. Advice about the advantages of investing in securities versus other types of investments is advice about securities. Providing a selective list of securities is advice about securities, even if no advice is provided to any one security. And, asset allocation advice is advice about securities.

Dan: So, pretty clear. If you’re telling people what they should be in, you should be an investment advisor, which gets a little money because it seems like everybody in financial services is doing this.

Dan: A broker-dealer, a broker is basically an intermediary between a buyer and a seller. A dealer is acting as a principal in the securities transaction., so they are the sell side. Broker-dealers, therefore are int he business of transacting securities. They are either selling directly the securities or the products, or they’re acting as the intermediary between some other seller and a buyer. It’s a transactional thing.

Dan: The reason the broker-dealers are not investment advisors is because there’s a specific exemption under the law in the Securities Exchange Act of 1934. They’re excluded from the 40 Act, the Advisor Act if the advice given is solely incidental to the conduct of its business as a broker-dealer and it does not receive any special compensation for providing the investment advice.

Dan: Broker-dealers have been hanging their hat on not being regulated as advisors on this incidental advice exemption. That’s why there’s been great debate about what’s been from a regulatory structure between advisors and broker-dealer worlds. When this whole thing was set up in the 1934, 1940 Acts, the broker-dealers was a transactional based business, investment advisors was the advice business.

Dan: So, the broker-dealers were facilitating the transaction, the advisors were figuring out what transactions needed to be facilitated. That’s the more plain English way to explain what’s supposed to be a difference between an RAA and a broker-dealer.

Hannah: We might need to dive into this a little bit more.

Dan: Sure, there might be a few wrinkles on there.

Hannah: I know right? You made it seems so black and white.

Dan: Ironically Hannah, it is black and white. It’s in print. It’s in these laws. Now, what has happened over the years is the brokerage firms have figured out quite clearly that people aren’t that interested in just facilitating transactions. They’re interested in what those transactions should be for themselves.

Dan: So over time, the broker-dealer registered representatives who were the ones going out, finding buyers to buy things from sellers, maybe even their own firm as a dealer, the registered representatives have gotten more and more into advice that in a lot of people’s opinion is not incidental to those transactions. And, as the SEC did not enforce in a hard line way that very clear distinction in my mind, it’s gotten more and more muddied and that’s why we’re where we are today.

Dan: It is in the best interest of the public that they get advice about securities, but the fight’s more about what standard needs to apply because there aren’t any brokers. Do you run into brokers anymore? Very rare, they’re all financial advisors.

Hannah: I know a lot of financial planners who call other people brokers, who don’t call themselves brokers, but … As you were talking through this, I was thinking back to when I took all of the regulatory exams. I took my Series 7 exam and then my 66 and the CFP, maybe not even in that order. Just how different that Series 7 exam was from the CFP exam. The Series 7 was very focused on options trading, what does the transaction of a bond look like? Who are the different players in having that bond issued? I’m seeing some correlation with just the exams that are required for the broker-dealer versus the RAA.

Dan: Right, now if you were a CFP you may not have sat for the Series 65, investment advisor representative exam. That materials about the rules and regulations that apply to investment advisors. It’s a very different exam than the Series 7 and it should be. Broker-dealers are supposed to be doing something very different from what investment advisors are doing.

Hannah: At the broker-dealer, I was listed as an IAR. It was an investment advisor representative.

Dan: Correct.

Hannah: How does that fit in with, because I was under a broker-dealer providing investment advice so therefore I was an IAR.

Dan: Yeah, and in fact today, most people who would describe themselves as a financial advisor are in fact operating in a world where they’re involved in a little bit of both broker-dealer activity and RIA activity. They’re either dually registered, which means that they’re operating under the … They’re working for the broker-dealer, and then they work for an RAA also set up by the broker-dealer or the ultimate entity there. It’s all FINRA regulated.

Dan: Then some are hybrids where they have a Series 7 license, they do the brokerage, and then they also have an RAA on their own as a separate entity away from the broker-dealer registered with the state or the SEC. It’s a hybrid. Most people who are involved in financial advice these days do have ability to be in both worlds, which is nice on the one end and it’s very confusing for consumers on the other if people aren’t careful or nefarious.

Hannah: For the people listening here who are part of a broker-dealer and they’re like, “Hey now, I have my friends in the RAA space. I know what they’re doing with clients, I know what we’re doing with clients and it actually is really similar.” Is that possible to have it be very similar?

Dan: Well, yeah. That’s pretty much the way it is these days. It wasn’t originally conceived to be that way in the long, but it has evolved that way. Particularly in the FPA community where people are in the same room because financial planning is important to them, you’re going to run into a lot of people who have brokerage licenses either as an employee with a wirehouse or they’re affiliated with an independent broker-dealer. They do wonderful financial planning for their clients, they behave as fiduciaries even in the circumstances where they wouldn’t be held to that standard if there was an issue. You’ll see that all over the FPA.

Dan: It’s certainly not anything evil by any stretch of the imagination to be a brokerage license. It’s just confusing to the public and the securities regulators have not done a very good job of making the people in the financial services business clear about their roles.

Hannah: It’s interesting, I hear this debate going on a lot with new planners about fee only, fee based, RAA, broker-dealer. All of this is going on and really the root of everything is coming down to regulation. Is that what I’m hearing?

Dan: Regulation’s important for a lot of reasons. To some degree, regulations can flat out prevent bad things from happening because good people don’t want to be in violation of the law. But the bigger reason that we need good regulations and we need them enforced properly is when the bad people, the bad guys do something.

Dan: Imagine that if drunk driving were not illegal. Personally I wouldn’t be driving drunk anyway, but if drunk driving weren’t illegal, the guy who does drive drunk, you can’t do anything about it. So regulation, it does have a certain preventive quality to it but the main thing is, it gives a mechanism to deal with behavior that’s not appropriate. It’s a huge deal, setting the standards of how we in the financial advice arena are supposed to behave.

Dan: It started with an erosion of the distinction, the blurring of the line, you’ll hear it called that often. Late 90s, the thing called the Tully Report came out. Tully was the chairman of Merrill Lynch. Shockingly it said if people aren’t paid strictly on transactions, they might not transact quite as much so they lobbied the SEC to put in a rule that allowed the brokerage services to be provided for a fee instead of a commission, an asset based fee, which on one level makes perfect sense.

Dan: The problem of course was that there was no fiduciary standard attached to that. It was the presentation of these fee based trading programs as advice that was particularly troublesome. Schwab had a version of it they actually called Advised Investing. The small print said it wasn’t investment advice, it was just brokerage, that the advice was incidental, which is kind of hard to understand when it’s called advised investing.

Dan: So, after a number of years and going back and forth, the FPA actually sued the Securities Exchange Commission and they ended up winning that suit. That really gave a big swift kick to the debate about fiduciary and shortly after that case result came down, we ended up with the financial crisis of ’08 and out of that Dodd–Frank. Part of that was the SEC’s ability to “harmonize broker and advisor regulation and post fiduciary duties” and all this other stuff.

Dan: The DOL decided it didn’t want to wait for the Securities Exchange Commission, so it came out with its rule, which just recently, yesterday I guess or a day before, deadline passed there so that thing looks dead. Now we have a new proposal from the Securities Exchange Commission. So, the regulation has devolved into something that’s not in my opinion helpful to the public, but the debate about what to do about it is definitely raging more so now than it has at any point on my 28 years.

Hannah: It’s very interesting just the context that you just gave of this idea of a fiduciary. This has been decades long. We’re not new to this fight. This has been going on for a long time.

Dan: Right, and most people in the FPA community and listeners to this podcast, which I assume are mostly FPA members, it almost induces an eye roll and a shrug because it’s such a basic underpinning of any profession that there be a fiduciary duty. Most of the dual registrants and hybrid folks out there that are involved with financial planning, they don’t have any problem being held to a fiduciary standard. They conduct themselves as if they’re going to be held to that standard every day. It’s just the proper way to deal with clients.

Dan: It’s a very good way to conduct your business. You don’t get into a whole lot of hassle if you’re constantly focused on what’s in the best interest of the client and act accordingly. From my perspective, it’s not a boots on the ground problem, it comes from a much higher level within the organizations that are lobbying to keep the waters as muddy as possible. That line as blurred as possible and it’s a shame.

Hannah: Let me see if I can summarize this. I may need help with doing this because there’s so much here. So, we have the registered investment advisors, and that is if you’re in the act of providing really any investment advice.

Dan: Yup.

Hannah: Then you have the broker-dealers who on the broker-dealer … The broker-dealer company is responsible for actually transacting buys and sells on investments. That could be individual stocks and bonds, it could be private placements, it could be a lot of things. For both of these, these are investment advisors that work for them and they can do a lot of the same things, it’s just really muddy to the public as to who does what because there is so much crossover between you can have a great financial planner in a broker-dealer and in an RAA. Or on the reverse side, you could have an RAA who does no financial planning.

Dan: Of course, absolutely. I mean, RAA in its purest form has nothing to do with financial planning at all. It’s simply investment advice.

Hannah: That was one of my questions when you gave that definition. I was like, “Where is financial planning in there?”

Dan: Yeah, it’s not in there at all. But financial planning as a pursuit is much younger than the Advisor Act of 1940. You’re talking about Loren Dunton and those guys, 1969 was really the genesis of it all. College of Financial Planning, that’s the early 70s. You did a wonderful, wonderful job at retreat talking to Ben Coombs and Mr. Blankenship and Mr. Hughes and Mr. Walker. I encourage all your listeners to go back and listen to that if they haven’t. It’s fascinating stuff.

Hannah: Let’s talk about another term that gets thrown out, wirehouses. How are wirehouses different than RAA or broker-dealers?

Dan: Originally wirehouses, they were national broker-dealer organizations that were linked together through dedicated phone and telegraph lines, thus the wirehouse, national organization. Today the main distinction between a wirehouse and other broker-dealer organizations, most of the time people will draw the line based on the type of employment that their representatives are involved in.

Dan: Wirehouse typically has W-2 statutory employees. Independent broker-dealers are typically employing registered representatives that are independent contractors who can very easily leave and go work for another independent contract or organization. That’s probably the leading definition.

Dan: If there was going to be another one somebody might talk about, it would be the scope and size of the organizations. Wirehouses, there’s only, I can’t remember, I think there’s maybe three or four left; Merrill Lynch, UBS, Morgan Stanley, those groups. They also nowadays have more of a global presence than a typical broker-dealer would. That would be a distinguishing factor as well. At its core, wirehouse is a broker-dealer organization first and foremost.

Hannah: Another term, custodian. Can you say what a custodian is?

Dan: A custodian is just somebody that hangs on to somebody else’s stuff. In a financial planning world, that’s almost always a, from investment accounts, it’s a broker-dealer firm; Schwab, Fidelity, TD Ameritrade, Shareholder Services. They’re broker-dealer organizations. A custodian could be a bank, it could be an insurance company, but a custodian is basically an organization that holds on to somebody else’s belongings. They have custody of such.

Hannah: I always tell my clients whenever they write a check out for their accounts, I’m like, “You always write it to the custodian, never me.” It’s always very important who actually is responsible for holding that money.

Dan: I saw a thing somewhere, and it does happen every now and then somebody starts asking questions about making checks out to Charles Schwab.

Hannah: That’s funny. Another distinction or term that I hear thrown around if financial planner versus financial advisor. What’s the difference between these two terms?

Dan: Well, one way I describe the problem with titles, financial advisor in particular is when I come across somebody, meet somebody for the first time and they say, “Oh, my brother-in-law is a financial advisor.” I’ve been in the business for 28 years. I’ve been around a little bit. I don’t know what the person does for a little bit. I have my suspicions and I know the questions to ask to figure it out, but they could be working for a bank, brokerage, insurance company, a combination of those, all these different places.

Dan: So, financial advisor for most people doesn’t necessarily mean anything specific. It just has something to do with money. CFP Board’s been kind enough to change their definitions of things in their new standards and update of those. I’ll read those to you real quick. We joke that a financial planner is somebody that does financial planning, but what’s the definition of financial planning? It’s what a financial planner does. It’s kind of circular, doesn’t really get you anywhere.

Hannah: That’s not helpful.

Dan: Right. I am willing to use the CFP Board’s definition. It seems very reasonable that planning is a collaborative process that helps maximize the client’s potential for meeting life goals through in advice that integrates relevant elements of the client’s personal and financial circumstances. They are making a distinction here between planning and advice.

Dan: Then they actually talk about advice being a communication that based on its context and presentation would reasonably be viewed as a recommendation that the client take or refrain from taking a particular course of action with respect to the development or implementation of a plan, value of or the advice ability to invest in purchasing, holding or selling financial assets, investments policies, strategies, portfolio composition, management of assets or other financial matters. The selection and retention of other persons to provide financial or professional services to the client, or the exercise of discretionary authority over the financial assets of a client.

Dan: To put that more in plain English, some of the different factors between advice and planning is the scope. Planning is much broader. Planning relates to the integration of different elements of a family’s finances. Coordination of those interests, whereas financial advice is much more narrow.

Dan: My favorite definition though that I’ve ever heard, which doesn’t really explaining it to clients very well, but for people who have been involved with financial planning it resonates pretty well. That comes from my good friend Elissa Buie who says, “Financial advice is nice, but financial planning is magical.”

Hannah: You know, it’s so funny. I always say once people really experience financial planning, you can’t go back.

Dan: No, you can’t. One thing financial planning is not is, it’s not charts and graphs. It’s not a thing, it is a process. It is a decision making process that things in all of the relevant aspects of whatever’s going on in a person’s finances. It’s not a thing. It is a process. It’s the essential process to making decisions. If you want to make the best decisions you can, you do that with a competent and ethical financial planner.

Hannah: How do you identify yourself?

Dan: Our firm, underneath the name of the firm on the website it says financial planning and wealth management. Then under our names on the bios it says financial advisor. That’s a deliberate cop-out. To avoid having to explain to people why we’re this, that or the other, we just use all three. We’re not real proud of that, we just haven’t figured out what to do about it exactly. 99% of the time though I will describe myself as a financial planner. It’s at the core of what I do every day.

Hannah: The next term or terms that I’ve heard people throw out that there’s confusion around, what’s the difference between an agent and a broker?

Dan: In most venues, an agent is somebody that represents the seller. A broker can either represent a buyer or can serve as a middleman between seller and buyer. So, brokering a deal between two parties, you’re in the middle person, an agent though, almost every place I’ve ever heard that term used, agent represents the seller. Insurance is where you hear it most frequently.

Hannah: I was going to say most frequently hear like insurance agent. We’ve talked about RAAs, broker-dealers, wirehouse, can they sell insurance? Can they be an insurance agent on top of each one of those other elements?

Dan: Can who? An RAA or a broker-dealer? Sure, absolutely. Get licensed and go for it. Most states you have to get your insurance license, and then you also have to be appointed with the insurance companies or work through a general agent that has appointments with the insurance companies to sell their products. You’re an insurance agent of the selling companies.

Dan: Some states now have a thing called Unaffiliated Insurance License, where you can get licensed to give very specific advice about insurance without having to be in a sales position. There aren’t many of them. We do have that here in Florida. It’s a 215 Unaffiliated License because very similar to investment advice, as soon as you start getting very specific about the workings of a particular insurance policy, you’re probably crossing into the area of insurance advice, where a state regulator might want you to be appropriately licensed.

Dan: That doesn’t usually cover things like … You need insurance, if you need any more life insurance, you should probably get $2 or $3 million of it, that typically does not cross over into insurance advice. In fact in Florida, the needs assessment for how much life insurance a person needs isn’t even a part of the exam license to get licensed as an insurance agent, so it’s hard for a regulator to say that’s insurance advice when it’s not on the exam.

Hannah: Another term that we’ve already talked about a little bit is wealth management versus financial planning.

Dan: From what I see, most of the rimes there’s no difference whatsoever. Wealth management is just a term used to make it sound like it’s a higher net worth deal, but financial planning is a process. Start with the end in mind, what are the goals, what’s going on, analyze what’s going on, figure out what to do. Show up the weaknesses without undoing the strengths as much as possible. How does this integrate? What are the tradeoffs, all that. That all applies to wealth management as well, but it’s typically a higher net worth deal and sometimes it’s not.

Dan: Sometimes it just sounds cool so they use it for marketing. To me there’s no real … From what I can see functionally, the people who claim to be wealth managers have the same basic process as people who claim to be financial planners. Or there are people like me that claim to be both.

Hannah: Whatever you want, the marketing side of it. Another term that I hear thrown out a lot is discretion versus non-discretion, or discretion versus solicited. What is the difference between those terms?

Dan: That has to do with permission-ing to transact on a client’s behalf. If I have discretion over an account and I think that it’s time to sell X, Y, Z and buy A, B, C, I just do it. I’ve been granted the discretion to do that by the client. If it’s a non-discretionary relationship, I’ve got to call a client and get permission to make that change.

Dan: So, it’s really about where the permission comes to facilitate the transactions. Discretionary is going to be always, or should always be, at least that’s the SEC’s interpretation and that’s what’s pretty clear in the law to. Discretionary arrangement’s going to be an advisory arrangement, not a brokerage. Non-discretionary can be either.

Hannah: That can fit again, if you’re an RAA you can have discretion or non-discretion, if you’re in the broker-dealer, you can have discretion or non-discretion.

Dan: If you’re a broker-dealer and you have discretion, that account is going to be deemed advisory by the Securities Exchange Commission and should be operated under the advisory rules.

Hannah: Another two terms that we hear thrown out quite a bit lately are, and we’ve already talked about one of them, fiduciary versus suitability.

Dan: The way I explain that is somebody who is under a suitability standard, which I don’t have the exact definition in front of me. I can’t believe I didn’t write that down. But, it’s one of those circular definitions, the financial planner, financial planner thing that I was joking about earlier. Suitability is almost equally a joke. It basically says you have to … The definition is suitability is you have to provide recommendations that are suitable. It’s silly.

Dan: The way I try to describe it to people that they grasp pretty easy is, if I’m under a suitability standard, I’m allowed to recommend something that’s good enough. If I’m under a fiduciary standard, I have an obligation to at least seek what’s best.

Hannah: I like that definition.

Dan: If I’m working for a brokerage firm and they’ve come up with a list of 10 large cap value funds, this is a really simplistic example and we’ve determined that the client should have certain amount of money in large cap value, I can pick any of those 10 funds, including the one that pays me more because it’s suitable, it’s good enough. If I’m working for an RAA and they present to me, “These are the 10 large value finds that you could use,” I’m supposed to try to figure out which one’s actually best. Not that that’s necessarily easy.

Dan: That’s not a great example because a lot of large cap value funds look like other large cap value funds. It may not be anything that jumps out as a distinguishing feature, but there are differences and they need to be looked at and there needs to be a process to go through to try to assess what that is. It’s the difference between being able to just go with good enough and having some responsibility to at least seek what’s best.

Hannah: After leaving the broker-dealer, there was … On the new account applications there was a section of suitability that we had to fill out and it was like 12 to 15 questions. I know a couple of years ago more were added into that. I always tell clients suitability, we just had to check all these boxes and then if something bad happened with the investment, all they had to do was say, were these boxes … Did those boxes correspond with what this investment should be, yes or no? And if it was yes, I’m off the hook instead of that fiduciary standard of saying, was this the best option for the client?

Dan: I first got the Series 7 back in 1990, suitability was basically income and net worth. Those were the only two boxes you had to check. What’s the income? What’s their net worth? And if there was high enough on those things, it was deemed suitable. I guess that’s evolved now if you had 15 boxes to check instead of just two.

Hannah: You had to do account. Was it income? Was it growth? Time horizon, other outside assets, liquid net worth.

Dan: Yeah, and the suitability standard isn’t horrible.

Hannah: It’s something.

Dan: It should be suitable, it’s just not what I think people really are expecting when they hire a “advisor” or any type. Certainly not as sophisticated enough as it should be for a true fiduciary.

Hannah: Yeah, and the question comes down for the suitability. It seems to me to be, the advisor, the planner’s CYA versus the fiduciary, which is the client’s CYA. The focus is different like, who are you protecting?

Dan: Yeah, absolutely. That’s the fundamental difference between being a true fiduciary or not.

Hannah: Let’s jump into some other terms here. Specifically as it relates around career paths, especially for newer planners. We have a lot of different terms that get thrown around. paraplanner, associate planner, junior planner, what do those mean?

Dan: I don’t know.

Hannah: Touché. Who does know?

Dan: Unlike the definition of investment advice which is in the law somewhere if you dig it out, it seems to vary from firm to firm. The associate advisor., associate planner, junior planner, junior advisor, nine times out of 10 … That’s just a number I made up, but it’s a significant majority if the time when I see those types of titles. These are people who are supporting a lead planner, person responsible for the relationship with the client on behalf of that firm and they are on a career path to move into a lead role with clients at some point in time.

Dan: Paraplanner, sometimes that is true, it is the same, and sometimes the position remains more of administrative career path and job duties. All of those are extremely valuable to any firm but the of those three, the associate, the junior and the para, the one that is most likely not to be on a career track for being a lead planner from what I can see is the paraplanner.

Hannah: This just gets down to … If you’re interviewing, you need to be interviewing the firm that you’re applying for just as much as they need to be interviewing you.

Dan: Absolutely, it’s tough though, because I’m a dad and my daughter just graduated. She’s starting grad school for physical therapy. She just started up in Boston at Massachusetts General and my son is finishing his second year. As a dad, you want your kid to graduate and get a job right? So, there’s this whole interesting dance out there when looking for employment and as an employer, I’m on the other side of it.

Dan: I’m talking to Megan’s friends about what do I do at an interview? You hire people. What do I say, what do I do? You want to be authentic and you want to be genuine, but you also want to jump and as an employer, you want to be authentic and you want to be genuine because you want it to be a good fit and sometimes you’re not sure if you’re getting authenticity on the other side. You’re wondering if the person, are they after this job or are they after a job? There’s a big difference.

Dan: Luckily with people like Kayla Brown and other folks out there that have really ramped up the financial planning community’s ability to conduct thorough hiring and processes, I think we’re doing much better on that. But you do need to interview the firm that you’re applying to because if it’s not a good fit, it’s not going to be good for anybody.

Hannah: And it’s expensive for firms to go through people, I mean to have high turnover.

Dan: It is and it’s scary on our end as employers to. Our newest employee here with me here in Melbourne came out of the Western Kentucky Program run by Ryan Rhodes, a former advisor and another regulatory junky out there, a friend of mine. Ryan’s a great guy, but you got to worry about, is life in Melbourne, Florida going to be very different than life in Bowling Green, Kentucky? And it is.

Dan: It was pretty clear after enough conversation that that’s what he wants, he wants something different. He wants to live and work and develop in a new area. So, there’s a lot of risk on the employee side as well.

Hannah: Thanks for making these distinctions with these terms. We’ve talked about both of these. We have the DOL Fiduciary Rule versus the proposed SEC Fiduciary. I don’t even know if you call it SEC Fiduciary Rule, but the SEC’s-

Dan: Oh no, no Hanna, no. You can’t call it the Fiduciary Rule. The DOL Rule basically is dead from what I can see.

Hannah: And that was through the Department of Labor, so that was specifically for retirement accounts and only spoke to those.

Dan: Correct, correct. The SEC’s new proposal, it’s not a fiduciary rule. They went to great lengths not to call it that. Instead, the call it the Best interest Rule, or Regulation Best Interest. On one hand, they’re purporting to be raising these standards for advice given by broker-dealers, which is a fine thing I guess to be trying to do. But, they’re defining that new rule as … They’re not calling it suitability anymore, they’re calling it best interest.

Dan: I am not a big fan of it at all for a lot of reasons. Number one is, if you were to pull somebody off the street and ask them, “What’s the definition of fiduciary?” If they had an answer, it would probably be acting in somebody’s best interest. That’s the shortcut for what a fiduciary duty is. So, calling a non-fiduciary duty best interest and not fiduciary because you specifically don’t want it to be fiduciary seems a little confusing to me. I’m confused just saying it right now here I this podcast. I can only imagine what that does to the public.

Dan: Then you look at the samples they have for the customer relationship summary, their new form, a four pager that they’re proposing you give clients. It’s just loaded with weird stuff. There are statements in there that I can’t say because they’re simply not true. It goes to great length to present a brokerage account as very close to on par with an advisory account as far as the level of responsibility that the people have involved.

Dan: You have the fiduciary and then suitability, which are different, now renaming suitability best interest and they’re talking about it as if it’s very fiduciary-like. I think it’s extremely misleading. I think it’s going to be more confusing than anything rather than clarifying, so I’m working on it.

Dan: I’m working on it. I’d like a dutiful, I don’t want to complain without trying to help the situation and the SEC’s been kind enough to ask for our opinions about these things through August 9th or something like that so I will be working on my comment letter to them, to share that with them. But, it’s a proposed rule. It could take a long time for anything to become final. Who knows where it’ll go? But it’s the next iteration of this whole discussion about this whole discussion about fiduciary responsibility and regulation of financial services in general.

Hannah: I just want to make note, you are as Dan Moisand, CFP are writing a comment letter to the SEC about this rule?

Dan: Yes, anybody can. It’s public comment, you should to if you have an opinion about it. They’ve asked you for your opinion Hannah, give it to them.

Hannah: I’m pretty good at throwing my opinion out, but I think that’s really powerful. I’ve been talking with all these young advisors and Dan, we’re going to be together at the young gathering later this month. This-

Dan: Yes, can’t wait.

Hannah: It’s going to be so good. The topic has come up about, how do young planners become leaders in the field? This is such a great way to do it. Like you said, every person listening to this podcast, the SEC has asked for your opinion so you can give it.

Dan: That is correct.

Hannah: That’s really powerful.

Dan: Yes, and one of the great values of being involved with an association is advocacy. An association of any significant size is going to have members that disagree about a lot of subjects. From time to time the association may put out a position that a members disagrees with. The associations have put out positions on various things that I wasn’t really quite sure about, but you should never let that stop you from being involved with the association and active in formulating those policies.

Dan: If you have not already, there will be or is somewhere out there from FPA … I think I just saw the survey a couple weeks ago now that I think about it. What is your opinion about this SEC thing? What should we be telling the SEC? So, if you don’t want to take the time to craft your own comment letter, participate in that process and help the association do it. It’s one of the things that we simply can’t do on our own, which is come together as a group to advocate and Financial Planning Association is the one organization that is solely focused on financial planning as a protection and its advocacy. CFP Board does a little of that, but CFP Board’s a quasi-regulator. They’re not a membership organization.

Hannah: And if we’re really bought into this idea of financial planning as a profession, that’s what the FPA’s about. How can you be for the financial planning profession and not be a part of FPA? I just don’t … There’s a disconnect somewhere in there for me.

Dan: Yeah, I agree. For those non-members, I’m not saying you’re not part of the profession if you’re not a member. I’m just saying you should be a member, that’s all. Hannah, I have a hard time with this one because it never in 1 million years occurred to me not to join the association. Now, there was no FPA at the time. Another great podcast that you just did was about the merger of the ICFP and the IAFP. That was wonderful.

Dan: I got my CFP in ’94, so I immediately joined the ICFP. It wasn’t because I did any kind of analysis of ICFP versus IAFP, it was because I was a CFP and there was an institute for certified financial planners, so I’m going to join that. I didn’t even think about it. I kind of have a hard time sometimes relating to people that put a little bit too much thought into it. For me it’s not expensive, there’s so many ways to get many multiples of that little membership fee.

Dan: I started out with very little business and a lot of expenses and there’s a lot of members out there who don’t have a whole lot of money to throw around. I understand that. I don’t want to poo-poo the membership fee too much, but of all the things that you can spend money on, you should very easily with a little effort and a little bit of diligence get far more out of an FPA membership than what you’re paying in dues. There’s just a million ways to do it between the networking. The advocacy alone would keep me a member even if I never went to a meeting and talked to another member about anything in any way, shape, or form. That would be enough for me.

Hannah: It’s just like you said earlier in this podcast. You talked about there’s a lot of really good advisors that are working at broker-dealers and RAAs. It’s the next level up. It’s that higher level that’s really making things money for their consumers and that’s where the FPA’s advocacy is, “how do we make this clear? How do we advocate for the consumers? How do we advocate for the financial planning profession?”

Hannah: Because like you said, the FPA’s the only group where the end goal is financial planning. Everybody else has a different thing that they’re advocating for. There has to be a group advocating for financial planning and if you’re not part of the FPA, you’re not part of that larger conversation, things like the SEC proposal and things like that. It really does matter that you’re part of the group that’s advocating for financial planning.

Dan: Absolutely.

Hannah: One of the questions that we had come up with is, what does it mean to be an investor?

Dan: I guess that’s the one that we run into this definitional thing a lot with clients because they’re used to picking up the [inaudible 00:46:20] to the extent that anybody reads a newspaper any more. I’m going online or something and the headline will be: Investors Flee Market on … What’s the latest thing? Trade war, that’s a good one, trade war fears and the DOW’s down like 112 points or something, which is what? point nothing right?

Dan: But, investors are fleeing because they’re nervous today and then tomorrow tensions ease and they’re flooding back into the market. The media is really famous for using the term investor for anybody that owns a security or is thinking about it. You look up definitions in the dictionary, Merriam-Webster and all that kind of thing and you get things like long term, commitment, that kind of thing versus shorter term or quick profits, high risk. That’s all more speculative.

Dan: So, really what the media’s talking about more often than not are not investors. They’re talking about traders, which is to me a form of speculating, actively trading. It’s a common point of confusion for a lot of people when they first start to explore working with somebody to help them in financial planning that they don’t actually need to worry about whether some group of traders has fled the market today because of trader war fears and then flooded back in the next day.

Dan: There’s a difference between information and knowledge and wisdom, what’s relevant, what’s practical. That’s a part of what we do as financial planners, is help sift through all that to what’s really important to that particular client. I’m still amazed at how many people just almost audible sigh with relief that they don’t have to follow financial news to be financially successful. There is other ways to do it. They don’t need to torture themselves with not understanding why things are happening on a day-to-day basis.

Hannah: Well, it’s exhausting.

Dan: Yeah, we call it noise. Our firm motto, which we’ve federally registered trademark, a sanctuary from the noise. We git that from talking to clients and asking them, “What are the things that you find most valuable?” This is an example of where value comes from. You’ve had Vanguard and Morningstar with its Advisor Gamma. Advisors can add X percent by doing these different things and all that.

Dan: That’s true, we can add value there, but one of my favorite sayings I credit Elizabeth Jetton for. She got it from somebody, but she’s the one that said it over and over to me and God bless her, I repeat it all the time, which is not everything that counts can be counted and not everything that could be counted counts.

Dan: Our clients told us one thing they really appreciate is we don’t fill their inboxes with a lot of junk. It’s relevant, it’s timely. If you send it to us, we know it’s important. So, most of them actually read our stuff. It’s nice. But there’s a lot of noise out there and part of our role is sifting through that and focusing on what’s actually important to this particular family and their particular circumstances. That’s where that magic Elissa talks about really comes out.

Hannah: You know, as financial planners, we’ve talked about this idea of fiduciary being who are we protecting? we’re protecting the client. Are we always doing what’s in the best interest of the client? What do we as a profession need to do to make this clear for the client? What as a profession, our next steps?

Dan: I think it’s a continuation of what we’ve been doing, which is first and foremost, the true financial planning profession continues to actually deliver financial planning and we keep working to get better, and better, and better at that. I think that’s key to that continuing. You don’t need the lobbyist to of this. Each listener to this podcast in their own little corner of the world, in their cave sitting across table or the couch or whatever you’re doing, your beanbag chair, it’s likely that’s popular to do now, whatever.

Dan: Wherever you’re set up talking with your clients or online like we are now, that interaction, getting that family in a better financial situation where they know that they’re organized and they’re doing things to achieve their goals based on their resources, so very focused on them. By providing that service, you’re doing a wonderful, wonderful thing. That alone is very helpful to the development of the profession because that’s what the profession is all about. We have to deliver the goods. That’s all of us little foot soldiers out there with the boots on the ground. Got to produce there.

Dan: The second thing we have to do is, we have to continue to preach the importance of living by, and being accountable to a fiduciary standard. A value proposition that ends with, “But don’t hold me to that,” is not a value proposition, it has no value at all and so much of the financial services industry does that. “Come see us, trust us, we’re your advisor, we’re your helper. We’re going to help you build your plan,” all this kind of stuff and then the fine print is, but it’s just buyer beware or suitability, or some lower standard. We need to keep pressing that.

Dan: And, we need to keep pressing with the regulators that financial planning is in fact than investment advice, different than brokerage, different than insurance sales, different than banking, different than all that. It’s its own process. It’s its own profession. It is distinct.

Dan: What’s going to happen, which has happened over the last several decades and continues to happen, people will vote with their feet. I think ultimately that what changes the tide. The larger firms that are the corporate powers that be, as that business model continues to erode, they’ll adjust. I think they’ll eventually come around. Either that or some powerful center, his mom gets screwed over y somebody, it’s going to get personal and then you’ll see something happen.

Dan: But I think it’s more likely that the general erosion of the market place will ultimately be the arbiter of all these debates and the trend will continue. The people will be seeking true fiduciaries and real planning and all that type of stuff. But it all falls apart if we’re not doing a good job.

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There are many technical terms flying around in the financial planning profession. This week, we’re decoding these technical terms - and going over why new planners need to know them. In this episode, Dan Moisand, former President of the FPA, sits down with your host Hannah Moore to talk through the technical definitions that comprise this profession. We’re really getting in the weeds with it here – and this episode will act as a primer for all new planners entering the financial services industry.
Dan also guides new planners in how they can move beyond these technical definitions to move our wonderful profession forward.
This is a must-listen for all new planners who are looking to decipher the difference between marketing terms and ways that the financial planning profession is actually regulated by our governing bodies!


 
What You’ll Learn:

The difference between a RIA and a Broker Dealer  
What a “Wirehouse” is – and what you need to know about them as a new planner
What a “Custodian” is
The difference between a Financial Planner and an Advisor
The difference between an Agent and a Broker
Why “Wealth Management” is technically a marketing term
What “Financial Planning” actually is
The difference between Discretion and  Non-Discretion
What the Fiduciary vs. Suitability debate is all about, and what the difference is for consumers and planners
What the different career paths for new planners are (paraplanner vs. associate planner vs. junior planner), and how to know what you’re applying for
What the SEC proposed versus DOL fiduciary rules
What it means to be an investor
What the difference between a trader and a speculator is
How you, as a new planner, can help to move the profession forward in spite of the technical jargon
How to communicate with clients about the technical titles in the profession
Why you need to know these technical terms

 
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Hannah Moore clean 54:29
Unlocking Your Greatest Asset https://financialplannerpodcast.com/yafpnw-unlocking-your-greatest-asset/ Tue, 19 Jun 2018 18:30:49 +0000 http://fpaactivate.org/?p=11356 https://financialplannerpodcast.com/yafpnw-unlocking-your-greatest-asset/#respond https://financialplannerpodcast.com/yafpnw-unlocking-your-greatest-asset/feed/ 0 Stephanie Bogan thinks it’s time for a breakthrough. Through Educe Inc., Stephanie works with countless successful advisors on elevating their career, focusing on their personal fulfillment, and changing the way they approach financial planning. Stephanie Bogan thinks it’s time for a breakthrough and through her experience working with some of the most successful planners, shares tips that will help new planners excel in their careers.

Through Educe Inc., Stephanie works with countless successful advisors on elevating their career, focusing on their personal fulfillment, and changing the way they approach financial planning. Before she was a coach, Stephanie ran a successful startup, sold a Fortune 200 company, and held roles on senior executive boards. Finally, she decided it was time for a change. She pursued her true passion – helping financial planners run their businesses with a virtual coaching practice while moving her life to sunny Costa Rica.

Stephanie helps financial planners through both group and private coaching. As an advisor coach, she’s truly seen it all – and she’s ready to start solving the problems that new financial planners are facing in this profession.

In this episode, we’re talking about how up and coming advisors can find a position with a firm owner – and what they should look for when forming a partnership. We’re talking about work life balance. We’re talking about commitment both to your career, your firm, and this profession.

By the end of this episode you’re going to be ready to tackle your biggest goal as a new advisor. Stephanie has some fantastic insights on getting clarity, and you’ll leave the episode inspired to pursue your purpose as a financial planner.

hannah's signature

We’re going from fear to here. From confusion to clarity. From complexity to certainty…They want the value of your advice, not information. Stephanie Bogan from Educe, Inc. on #YAFPNW

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What You’ll Learn:

  • What makes financial planners successful and what you can start doing today to put yourself on that path
  • How to approach a founder about a potential partnership or succession plan
  • How both founders and new planners can talk to each other and understand one another’s experience and validate emotions
  • How young planners can engage with clients in a way that is meaningful right now
  • How to know why clients come to you for financial planning services
  • The best ways to dig deeper and grow personally as a young planner
  • Knowing how to approach clients about money – because it’s not always a happy topic in their household
  • How to get clarity

Stephanie Bogan: Are you building a wildly successful business and a life that you love?

Show Transcript

Ep103 Transcript


Hannah: Well, thanks for joining us today Stephanie.

Stephanie: Oh, it’s my pleasure, Hannah. Thank you for having me.

Hannah: For people who don’t know you, you work with a lot of very successful financial planners. We’ll just jump right in. What do new planners need to know in order to really be wildly successful like the planners that you coach?

Stephanie: Well, there’s a lot. There’s a lot that goes into success. But I think one of the things that’s most often overlooked is sort of what are the key variables to success? So, one of the things that I talk a lot with my clients about, are what are the three contributing factors to success? And behavioral psychology and neuroscience have basically determined they are environment, skills and mindset. Now that makes perfect sense to most people, but what is most shocking to most people, and it blew my mind to be honest the first time I read it, is that 80 percent of success is driven by mindset, sort of by our behavioral psychology, how we intake, process and respond to the world and the information around us.

Stephanie: One of the things that I’ve really noted about some of the most successful advisors, entrepreneurs, CEOs that I work with is that they tend to be very, very focused on what it is they want whether it’s revenue growth, building a firm, right? So this concept of what you focus on it what expands and so the sooner that you’re very clear about what your endgame, or your outcome is and I don’t mean, right, “Hey, I’m gonna build a firm and sell it in 30 years” but even in the next best step of your career. When I talk to younger planners or what I’ll call emerging planners, right? They have a number of years of experience, They likely have their CFP. They have an established role in a firm and they’re trying to figure out, “Do I continue on in that path? Is there a path to partnership? Do I just want to stay what I’ll call an employee advisor? Do I want to take that path to ownership?”

Stephanie: There’s no right or wrong answer. What really matters is that you have clarity about what you want to accomplish and why you want to accomplish it. So, I would say that clarity is really important. But with that construct of mindset behind it, which is, “How am I thinking about things?” When I talk about very senior planners or I talk about with emerging or even younger planners, often times there’s not that sort of sense of what that perspective is going into it. So, mindset and clarity are really, really important.

Stephanie: The second variable is what I’ll call personal growth and I don’t mean go out and read every self-help book although there’s no downside to some of that. It’s really about investing in yourself. What are the skills, capabilities, mindsets that you need to be more successful in your career and your life? This goes back to that first point around focus and clarity. What is it that you think that you want and why do you want it? And if it’s right, “I want to be on a career path to becoming a partner” you’re gonna in one of probably three situations. You’re either in a firm where that career path is set. That’s not the most common, but they certainly exist now more than they used to. You’re gonna be in a firm that sort of has something in place, maybe written, maybe not, but sort of a general path or maybe someone else has done it. But it’s not necessarily formal or documented.

Stephanie: And the third option is you’re in a firm where that’s not necessarily an obvious option. It hasn’t been put out; it’s not on the table. You really don’t know. And so, if you have an idea of what career path you want, understanding that environment is really important. Where the skills that you need to succeed in any one of those paths, and they’re different, right? Moving up a career ladder to becoming a partner in a firm is a different path than staying an employee advisor, which is a very different path than becoming a business owner, right? Lots of similar skills, but they’re still really different.

Hannah: So let me ask you, a lot of, especially new planners, I’m talking to people who just graduated school, are in their first job and still trying to figure out which way is up, how often, at what point do you see people gain that clarity. Do they have that at 22, first job in financial planning? Or is this something that people progress into?

Stephanie: I would say you definitely progress into it, right? If you’re in your early to mid-twenties, you probably don’t know yet and that’s okay. To be honest, even if you think you know, that can change. So for people who are, let’s call it, under thirty and how aren’t certain, A. Just know that that’s okay. So this is where that mindset piece becomes really important, which is, you don’t necessarily have to know, when I said you don’t have to know the exact outcome, what you do need to know is what you want for yourself and your career. So for me, because as many people know, I sold my firm, I retired to Costa Rica four years ago and now I work part-time and my clients are in the US and I’m in Costa Rica. For me, one of my non-negotiables is that my work needs to be location independent. I need to be able to work from anywhere. So when someone calls me up and says, “Hey, will you come be the CEO of this company?” And I say, “No because I know I’m going to have to go into that office every day and be in that location. That’s just not going to work for me.” Right?

Stephanie: So I’ve talked with younger planners, for example, who really want a more flexible work life balance, or they want the ability to work from home. Those people aren’t going to necessarily pick a path in a firm where that structure is not in place. So what you do need to know is what your next best step is. And so when I’m asking myself about big things I want to accomplish, right? Most people will say they want a successful career, they want to do work that they love with people that they enjoy, they want to be financially successful, and they want to live a happy life, right? When people come to me in some form or fashion, they want solutions to problems that will help them have one or all of those things. And so I presume that, that’s what everyone on your podcast for the most part wants too, right? No one calls up and says, “Hey, I want to do mediocre work with people I don’t really enjoy, for crap money and be miserable in the process.”

Hannah: Right.

Stephanie: Right? We all chose this career and this profession for a reason. And that reason is it has immense value, and it can be just incredibly fulfilling work and it can also be very financially rewarding. And so you don’t have to decide if you want to be a partner or an owner. If you’re going to be an employee advisor for the rest of your life between the ages of 20 and 30, you don’t have to make those decisions.

Stephanie: What I think you should know in terms of always looking at how you can be the most successful is, one, keep yourself in a success state, which is focus on what you want and where you want to go and ask yourself what the next best step is, right? “What’s the next best step to advance my career, to put me in a position to serve the kinds of clients I really enjoy, to have the kind of financial success that I want. To be happy and fulfilled in my work and my life. What’s the next best step?” Because sometimes you know, I’ll have the heads of multi-billion dollar firms come to me, these huge problems and, and the answer almost always is, “How do I solve this problem?” Is you eat the elephant one bite at a time, right? You’re 25. You’re not going to decide where you’re going to be at 35 and even if you did, it would change. You can always ask yourself what your next best step is.

Hannah: You know, as you’re saying this, I’m loving it, and I’m also just imagining in my mind of being, always asking yourself these questions, and a lot of job hopping. And I know that’s maybe not necessarily what you’re implying on that, but what are your thoughts on continuing to explore a job hop, if that makes sense?

Stephanie: Are you asking in terms of in general or am I asking from a business owner’s perspective or am I asking, are you asking me from the right of, if I’m in any of those scenarios, you’re probably going to end up in one place, which is the phrase job hop by itself has a negative connotation.

Hannah: Yep.

Stephanie: So even when we, when we phrase it in those words, right? We’re saying that’s probably not a good idea. Does that mean that you have to be at a job seven to ten years before you can reasonably leave? Absolutely not. Now I can tell you I have helped dozens and dozens of firms hire advisors and I have helped dozens and dozens of firms build the partnership tracks and make the decisions about who makes partner and who doesn’t. So I’m absolutely able to give you some insight into how it looks from that perspective. And I can tell you that when I look at a resume where someone has moved three times in three years or four times in seven years, you really have to dig very carefully into why, because it sort of creates the impression that someone’s going to be there a year or two and they’re going to leave. And what I want everyone listening to this podcast to understand. There’s always two sides to every equation and I explore both of them fully anytime I’m doing consulting work.

Stephanie: But for people on this side of the equation, what’s really important to understand is when you’re asking someone to make an investment in hiring you, they’re making an investment in you and the development of your skills and your capabilities, your experience, teaching you what they know, introducing you to and integrating clients, which is the biggest risk from a firm’s and an owner’s perspective. It’s a significant investment, so what they want to know is that you have the capability technically the commitment, right? In terms of the kind of work and being able to stick to it if you will, and sort of the character and cultural fit that are going to align with them and that you’re going to be around long enough for them to have some safety and security and continuity that when they give you work, when they transition clients, that you’re going to be a reliable resource for them hopefully for years to come. That’s not to say that you are not well within your right to pick up and change jobs if the environment isn’t right, if another opportunity comes along right? There’s a whole list of reasons where it makes perfect sense to move, but just be cautious about how frequently you move relative to how that’s going to be viewed by the person looking, that you’re asking to make that investment in you the next time that you ask someone to hire you.

Hannah: You know, one of the things that you said that I think it’s a really interesting idea, is this idea of like commitment and how firm owners are looking for a level of commitment, what does that look like? What is a healthy level of commitment?

Stephanie: Well again, this is where one of the phrases I use so often working with, what I’m going to call up and coming advisors and founder advisors, right? The people who own the firms and who are looking at hiring or doing succession or maybe even selling at some point, is I’ll tell you what I hear all too often is this difference in perspective. So that phrase that I use all the time is, “The problem is you’re both right, and you’re both wrong.” And here’s what I mean by that is, I can’t tell you the number of times I have heard, I just wrote this in my investment news article that actually turned in the other day, so it’s funny that you ask it. I can’t tell you the number of times that I have heard firm owners or partners in a firm say, “They just don’t understand. You know, when we started out, we had to work twelve hours a day, seven days a week. We filled out our own applications. If somebody wanted to see us at 10:00 at night, we did. We worked, we sweat, you know, blood, sweat, tears; we went to work uphill in the snow both ways. Right? All of that they don’t understand.”

Stephanie: And there’s sort of this feeling and perception that there’s an element of entitlement that all that they worked for looked so easy now that, that next generation of advisors is just expecting it to sort of easily and effortlessly flow to them. That is, whether you agree or not.

Stephanie: I’m just going to be honest and say that is so frustrating to owners and partners because it always takes so much more than the next generation sees because obviously they haven’t been around for all of it. At the same time, I’m just as direct with the other side of the coin, which is most people at this point who aren’t in that founder or senior generation have grown up in a different time and place, it’s an entirely different world, where it used to be a sales culture where you were dialing for dollars now, right? We’re coming out of school, we’ve got degrees, we’ve got CFPs. We’re expecting to have a professional career like a law firm, or an accounting firm where you go in, and you have a job, and you have a salary and clients are assigned to you and you move your way up the ladder and if you develop rainmaking skills, great. And, and so this idea that they’re going to work twelve hours a day, seven days a week, you know, blood, sweat, and tears. There’s generations of people saying that was great for you and we respect that, but that’s not the way we want to live. Right? We want our work life balance to be a little bit something more.

Stephanie: And so there’s always two sides the equation and it’s about how you reconcile those sides. So when I talk about commitment, it’s in the sense as what firm owners want to see, they want to see initiative. When I talk to firm owners I use, I use these stories all the time. You sometimes have to imagine like you’re laying down a trail of breadcrumbs, so they know where to go next and what the next step is and what you want of them. And then the owners will say to me, “Why do I have to do that? When I started out, I just got up every day and I looked around, I saw what needed to be done and I did it. Why do I have to spell it out in black and white? I don’t understand.” Right? So, and that’s not, you know, there’s a little bit of sort of generalizing and stereotyping, but that’s a theme that I see all the time.

Stephanie: And so what I think they want in terms of commitment, they want initiative. They want someone with an owner mentality that looks around, sees what needs to be done, steps in and says, “I’ll take care of it.” And it has authenticity, accountability, and ownership. “Hey, this went wrong, it was my responsibility, here’s what I’m going to do to make sure it doesn’t happen again.” And I think if they saw a lot more of that, it would make the conversation easier and of course there are a lot of things that they could do to make it easier on the next generation, which I tell them all the time, I promise I do. I really am like, “That’s not, that’s not going to play, that’s just not gonna work.”

Hannah: Well, and you know, it’s building a business versus just building a book of business.

Stephanie: Exactly.

Hannah: There’s huge differences. You know, one of the things you said just a little bit earlier was about the mindset and the psychology behind it and almost that behavioral psychology. And it was really interesting because we talk about clients and behavioral psychology, but really like you’re really applying it to us as the advisors and how we approach our career and in our career growth. Is that right?

Stephanie: Absolutely. In fact, while I’ve done the consulting work for the last, what, 20, 21 years now, really, the last couple of years, I’ve sort of always done it, but now it’s a very intentional focus is around sort of this executive and leadership coaching and it’s because of what, I mean I spent a number of years when I first moved to Costa Rica, I literally spent like three solid years just studying performance psychology, behavioral psychology and neuroscience. What makes us tick? What’s the difference between people who are really wildly successful and people who are not? What’s the difference between people who are really happy and who are not? And for me, what I was seeking was the ability to have what I now call, ready wildly successful business and a life that I love. I wanted both and I wanted to know how those two worlds can play really well together. And what I learned is it’s 100 percent mindset. I say 80 percent because that’s what the Cambridge study said. I was actually sitting down with the neuroscience a couple of weeks ago and he said, “Stephanie, you know, it’s 95 percent, right?” I said, “I know, but I don’t want to freak people out.” Eighty percent, 80 percent.

Stephanie: And so here’s what I mean by that, and if you, if anyone’s interested, they can, I think if you Google me and investment news, my articles really always layer in this concept of mindset and it shows up in every single thing we do. How we hire advisors, right? The process through which we screen and filter them. We tend to hire people just like us. That’s not necessarily what a firm needs. How we define our client services. Do we have service segments? Do we have tiers, right? Are we actually servicing clients in a profitable way? Right? How many of you have, are in firms where there’s sort of this mass of clients from, you know, somebody with almost nothing to really wealthy people and everyone in between and there’s no service model and it’s not organized. That’s really, really common. There’s no business case for that.

Stephanie: There’s no business case for waiving your minimum. There’s no business case for taking a client that’s below your minimum just because they were referred. There is no business case for discounting fees. There’s no business case for not having open, honest conversation with your advisors about what your expectations are. There is no business case for not having a good marketing plan in place and not asking for client referrals. When 85 percent of the industry’s growth comes from client and centers of influence referrals, right? So most of the problems in firms, there’s no business case for and look, I’m not the first person to talk about practice management. It’s been around for decades. Everybody’s heard the big stuff. Everybody’s heard that you should have a career path. Everybody’s heard that you should have a model for segmenting and tiering your clients so they’re fairly serviced and profitable. Everybody’s heard about marketing and branding. There’s nothing new. What is new is how we approach it. It’s no different than what advisors are doing in the context of how they work with clients.

Stephanie: It has really evolved over the last few decades and so what we’re really learning is that mindset is what drives ultimately everything that we experience in our lives, our businesses, our bodies, our bank accounts, right? Wanting better relationships. All of it’s driven by sort of this state that we’re in, and when I talked earlier about having a success state, that’s what I mean is most of us, most of the time are in a stress state. So just a little geeky neuroscience. Each of us has between 12 and 60,000 thoughts per day. Eighty percent of those thoughts are unconscious, right? Because we can’t process that much information. Our brains are actually processing 11 million bits of information a minute. It’s not possible without shortcuts, and so there’s a whole lot of brain biology that goes into, you’re not really processing 80 percent of your thoughts. Your subconscious is doing that for you and it’s doing that through the lens of your mental model. Your internal representations, or your belief systems.

Stephanie: So you guys see this all the time with clients. If you’ve seen people come in and they grew up with no money, what’s their mindset around money?

Hannah: Right, there’s never gonna be enough, yeah.

Stephanie: “I can’t buy a new car, ever.” Even though there’s a million and a half dollars in the bank and the pension covers everything. It’s like, “No, I can’t buy a new car.” There is no logical reason for that. That is behavioral psychology. That’s a mindset issue. Their mindset around money is scarcity. It’s conservation. It’s you never know if it’s going to go away, so you have to protect and guard that resource to the utmost.

Stephanie: Now, the interesting thing about mindset that neuroscientists have figured out is they’re not fixed. There’s a concept called neuroplasticity. You can actually change your mindset. You can grow your brain, so those 80 percent of thoughts that we have or that are unconscious, it gets better. Hannah, are you ready?

Hannah: I’m ready.

Stephanie: Eighty percent of those are negative. Negative. So listen to those voices in your head. They’re not your friends, right? Do you get up every day? And they’re like, “Hannah, you look so amazing. Your work was so perfect. That meeting you couldn’t have said anything better. Wow. That was the, you’ve organized the best podcast of anyone ever.” Are those the things that the voices in your head say to you? Most of the time?

Hannah: Oh, of course not.

Stephanie: No, it’s. “Well that outfit wasn’t, maybe we had one too many burritos last weekend.” I mean, this isn’t just you, this is every single one of us and the way that I know it’s every one of us is everyone listening as a human being, nobody is exempt. So 80 percent of our thoughts we’re not even aware of, we’re operating on autopilot and 80 percent of those are negative and then frame everything that you’re talking about through that lens. “I have to hire an advisor.” Well, what if I have a fear mindset? What if the last advisor didn’t work out? What’s the thought process that I’m going to approach that process with? Is it going to be open and optimistic and objective or am I going to go into it worried, fearful and conservative. Right?

Stephanie: If I believe that my identity is wrapped up in my firm and I have financial security issues, I mean I literally have a client right now that has millions of dollars, millions, he could, he doesn’t have to work another day in his life and every time that there’s an investment to be made in the firm, it’s an event. It’s an event. Which is really frustrating to his team. There is no business case for that. It’s all about his money mindset, right? What his thoughts and feelings and views on money are, and in his mind, it’s something to be conserved, not necessarily an investment to be made in a firm for a ROI. Now that doesn’t mean he can’t get there, right?

Stephanie: That’s what coaching is for and that’s the path he’s on and right? He’s made probably $100,000 worth of investments in the last year. But that required coaching to give him a different perspective and so that’s the value of mindset as your listeners are approaching their careers and they’re looking at any issue in their firm, the best advice I can give them is understand the frame. What’s the frame that you’re viewing the situation through and what’s the frame that the people that you’re interacting with, right? In this case, maybe your managers or the firm owners, what’s the lens that they’re looking through? And that commitment issue is a really good one, right? We’re saying “We want a career, we want a job, we want the path to be laid out” and they’re saying, “Hey, if you want to get ahead, you have to put in some extra effort and we want to see that extra effort.” Right? And somewhere in there is a balancing point that works for everyone, but there’s almost never communication around it. And that’s the biggest breakdown that I see in firms, no matter who you are working in them.

Hannah: So I have two questions from this. The first one is, as younger advisors or newer planners who are interviewing at firms, how can we interview firm owners as whether or not this is a place to work based on their mindset?

Stephanie: I feel like I should write an article on this or it should be a White Paper or even a book, right? I think this is the opposite. And it’s a really valid viewpoint, it’s not the viewpoint that people talk about a lot. And what I would do personally is I would, this goes back to that first question of, you know, sort of what are the things that you can do in one is have some level of clarity if you don’t know what that is in terms of a long-term career path and as we talked about, you don’t have to. What is it that you’re looking for in your next job? Right? So if you were going to write a glowing review of your next job, what would it be? Right? So what I always tell clients, no matter what work we’re doing is begin with the end in mind because when your vision is clear, your decisions are easy.

Stephanie: Now the execution may take some work, a little elbow grease, but your vision, when your vision is clear, decisions are easy. If, for example, you decide that you want to have a flex schedule and the ability to work at home some time that would be a question that I would ask of a firm. “Do you have a flex work at home schedule?” And if they say no, then if that is a non-negotiable, right? So I will generally put in a list of wants and a list of needs, wants are things I’d like to have needs are non-negotiables, right? So I’d always have my needs and my wants and then I would ask questions around those. The flex schedule is one example.

Stephanie: If you think you would like to have the opportunity to advance in the firm and at least have the opportunity to become a partner someday. Then of course it’s totally reasonable to ask a question in that regard. Be thoughtful about how you ask the question, don’t say, “How do I become partner someday?” Right? Do say, “You know, I really want to join a firm where I can make a long-term commitment, really invest myself, make a significant contribution, advance the firm, while also advancing my career and I’d love to be able to do that in a place where in exchange for that, I had the opportunity to participate at a partnership level at some point when I’ve obviously just determined that I, you know, that my contribution had merited that being a serious conversation.” Right? If you say it like that, someone’s going to be like, “Oh my God, can I please hire you?” But if I’m being honest, that’s not how most people ask the question.

Stephanie: That’s what I mean by frame. Frame is, “I want to be partner. How can I be a partner?” Not a great way to ask the question ’cause it’s a me-centric frame. What’s the other person’s frame? “I’m a firm owner. What kind of person do I want to hire? I want to hire somebody who is going to show up, do a great job, demonstrate initiative, contribute and make everything better and make this place easier for me to be in.” Right? So frame the question from that standpoint. “I want to be in a place where I’m doing this, this, this, and this. If I’m able to demonstrate that, is there an opportunity for partnership here?” You win points just by asking the question.

Hannah: There’s so much research on behavioral finance and there’s so much, I mean, every conference you go to there are sessions on how to help our clients get a better mindset around through behavioral finance and you know, there’s all the techniques and everything like that. Is it possible for an employee to come into a firm and help their firm owner with their behavioral issues around running a business?

Stephanie: Absolutely.

Hannah: So what does that look like?

Stephanie: Well, remember, so one of the conversations I have all the time with clients and we all joke about it ’cause it comes up all the time, is what it’s what I call framing, right? Framing is everything. So how many of you listening have observed things in your firm that you think should not be that way? And if we were all in a room, every single one of you would be raising your hand. Right? And I’d raise all my hands because this is what I do for a living. Like there’s so much going on in firms that makes no sense whatsoever. Like none. Like we all know how to run a business. We know we need systems, we know we need scale. We need it to be efficient, right? We kind of get that and then we all sit around scratching your heads going, “Well, what’s so difficult?” And what’s so difficult is everything has to go through the mindset and so you can absolutely, you don’t have to be an owner in a firm to be, to have an impact and to be an incredible contributor in a firm. And part of how you can do that is understand that everyone is evaluating everything through their frame and then approach everything from that perspective.

Stephanie: I audit firms. I’ll go and I just delivered a report this morning. We go into a firm and we assess everything, right? It’s a three month process. We look at literally everything in the firm and then it’s my job to sit down with the principal or partners at the end of that process and explain to them what’s working and what’s not and you can imagine which list is usually longer. I have to tell them really difficult things. I don’t sit them down and go, “You’re not doing this, you’re not doing this, you’re not doing this. You really start doing this and this and this. It’s all framing, right? You’ve got a really good base here in order to take this to the next level. Here are the three things that are going to sort of allow you to get through the strains, the capacity constraints that you’re facing, one, two and three.” Framing.

Stephanie: So if you see something in your firm or there’s an opportunity you want to create, I’m working with two, I don’t know what you call them, mid-gen advisors, right? They’re in their mid to late thirties and they’re bringing financial planning into an investment firm. They’re bringing in the CRM, we’re building out the automated processes. We’re defining services and segments and fees and who’s going to do the planning and how we’re going to do it. And so every time that there’s a conversation with the founder about what we’re doing or how we’re doing it, we don’t walk in and say, “Hey, here’s what we’re doing.” Or “Hey, we want X” or “Hey, we want to spend Y.” Right? So I’m coaching them on how to better engage themselves in the firms so that they can be change agents and contributors that are viewed very positively by the partner as opposed to them, him perceiving that they’re just coming in and asking for stuff or complaining. Right?

Stephanie: So one of the things I teach my kids that I would say to any human being is don’t complain, contribute. So if you see a problem like, “Hey, you know, the service tiers aren’t organized, it would be a lot easier if we knew who the A’s B’s and C’s were and we knew how to schedule that.” Think about the frame. Ask Yourself, this is common sense at this point. So basic question number one is, “Has my owner or partner heard this? I’m going to assume yes, unless they’ve been hiding in a cave for the last 20 years. Okay. So, but let’s ask ourselves the question.” Two, “What’s their position and view on it?” Either they’ve never spoken a word of it or they’ve said something, right? If they’ve given you some inclination like, “Yeah, it’d be good to do that at some point” then you know that you’re working with maybe fertile ground if they’ve never uttered a word, you don’t know what you’re dealing with, which means that you need to do a little probing before you just go in and say, “Hey, we need to create a service model and we need to do this and we need to do that.” That’s overwhelming to someone who’s been doing it this way for 20 or 30 years.

Stephanie: And so the framing is what becomes really important is, how can you frame it in a way that respects and validates what’s been done, always because all firm owners and partners are humans and that’s what people want, to be respected, validated? And that identifies the problem in a constructive view. I’ve noticed, you know, “Bob, do you have a few minutes to sit down and talk with me on Friday?” Do it thoughtfully. By the way, don’t just be like, “Hey, by the way” just be like, “Hey Bob. There’s a couple of things that I’ve been noticing. I’d love to get your feedback on could I meet with you tomorrow?” And then you sit down and you say, “Hey, you know what? I keep, you know, I’ve heard you say a number of times now” right? Something positive. “You really want to take the firm to the next level. You’ve been wanting to spend more free time out of the office.” Whatever it is, tie that back into your what I call a point of contribution that’s code for the problem you want to solve.

Stephanie: Point of contribution is a lot nicer and then you look at it through the lens of, “How can I help? How can I be a facilitator and what’s the frame?” So if you know that Bob is a diehard on not wanting to change anything, that’s going to be harder than if you just don’t know why it hasn’t been done yet. Right? And you can change your languaging to address any of those scenarios. So what I always tell my clients when there’s any kind of meaningful or significant interaction that you’re going to have with another human being, that the outcome is important to you, sit down and do the following. Ask yourself what outcome you want. Two, ask yourself, what the frames are, yours and theirs. How is Bob likely to perceive your issue based on what you know of Bob? You can’t be in Bob’s head, but Bob may or may not have said some things, come back from a conference, etcetera. Right? So you should have some kind of a read or you need to do some probing. And then ultimately how are you going to frame the conversation as a point of contribution?

Stephanie: And then what you really want to make sure of is that you really think through for yourself, what the options are, so I will always ask my clients, “Well, what are the possible outcomes? All options of what could happen?” So you have this conversation with Bob. He might be like, “Wow, Hannah, that’s a great idea. Let’s do it.” Okay, so it’s a sure yes. He might say, “Heck no Hannah, that’s the worst idea ever. I don’t ever want to hear you say that again. Walk out of my office.” That’s a hard no. And then probably some variation of in the middle. Right? And so if you know that, how are you going to handle the yes. How are you going to handle the no, and how are you going to handle that, maybe in the middle.

Stephanie: And if you know that going in, it fundamentally changes the conversation. I do this in terms of “Hey, you keep telling me I’m going to be a partner.” I’ve coached so many younger advisors on how to have those difficult conversations. I can’t tell you how many times I’ve gotten a phone call. “He keeps saying I’m going to be, I’m the heir apparent, I’m going to be the partner someday, but there’s nothing in writing. And he keeps saying not to worry about it and I’m, you know, now I’m 32 and my wife’s had a baby and you know, I got to know like, is this my future or do I need to be going someplace where I’m actually going to get to be a partner someday?”

Stephanie: And so it’s all about how you frame that conversation. If you say, “You know, you’ve been saying this to me for years and it hasn’t happened.” How do you think that conversation is going to go?

Hannah: They’re immediately defensive. Yeah.

Stephanie: And by the way, and I’m guessing that this will be spot on for many of you, depending on the types of people that you work with, but many advisors are conflict avoidant. And what I mean by that is they’re usually people who are kind of, they’re louder and they’ll get in there and they’ll have the conflict, and then there are people who won’t. And the people who won’t are actually harder to deal with when you want things, because anytime it’s uncomfortable, they withdraw and retreat.

Stephanie: So I’ve got a client right now, multimillion dollar firm, two advisors and literally the comp conversation has been so difficult that they, that was ultimately the impetus for them calling me. There’s a lot more broad we’re going on ’cause they had other needs, but it was, this is, like people are gonna leave and then it was like, “Well we need to have a comp plan. Why don’t we have a comp plan?” And he’s like, “Well, you know, we haven’t really gotten around to it.” Okay, that makes sense. Then I talked to the two advisors. Not only had they talked about it, Hannah, they talked about it multiple times and put together a PowerPoint deck with a proposed compensation model, talked to him about it and left it on his desk and he said, “Okay, let me look at that and get back to you.” And that was where it left, literally. But when he explained it, it was, “Well, you know, we’ve talked about, we haven’t really gotten around to it. Totally different perspective and it’s because that’s an uncomfortable conversation for him.

Stephanie: It’s a mindset issue. There’s a lot, and this is what I mean by framing and I say this with all due respect, but if you haven’t been in their shoes and you don’t have their mindset, it’s really hard to understand. So if you really want to know what your prospects at a firm are, look at the mindset of your owner. Is it positive and abundant? Things are good for everyone, positive culture or is it, I’m avoiding doing the things I need to do. I’m avoiding putting plans in place, I’m avoiding documenting. That will tell you a lot about the future of a firm and what the possibilities in that firm can be.

Hannah: So I have to go back to the succession plan analogy that you just gave because I’m like, I need to know the answer. You left me hanging.

Stephanie: You and 5,000 other people, yeah.

Hannah: I know. It’s like, okay, let’s get back to this. So you talked about the succession plan owner, you know going into the conversation, there’s going to be one of three. It’s a hard yes, it’s a hard no or somewhere in the middle. What do you do when it’s somewhere in the middle? It’s still that ambiguous state?

Stephanie: Well, and let’s also not negate the no. Now here’s the trick. They probably won’t tell you straight out no.

Hannah: Yeah.

Stephanie: Right? Most people don’t go, “Nope. You’re never going to be a partner someday. So just be good with being an employee and you got to be okay with that.” I would prefer that sometimes just so people knew what they were dealing with.

Hannah: Right.

Stephanie: But let’s just talk a little bit about the, what I call the maybe in the middle, right? That gray area where you don’t even exactly know where it got left, right? The, “Oh yeah, I’ll take a look at that and get back to you” or “Yeah, I’m working on that.” So the yes is easy. “Great. How can I help move this forward?” So you always want to take responsibility for that next step. “What can I do to help move this forward?” “Oh, nothing. I need to meet with the accountant to talk about X, Y, or Z.” “Great. So why don’t we get together and you know, would it be okay if we got together in two weeks to kind of circle up on that?” Right? So that’s just in a yes scenario, that’s option.

Stephanie: In the no scenario, what you want to do is make sure that you’re asking them to think about why and then be able to articulate that back to you. Not right now. “Bob, I totally respect your view. It was really important to me to kind of get a sense of where you were on this. I’d love to better understand what about creating a partnership opportunity is really uncomfortable for you. Is it something about my individual performance? Is it the construct in general? I’d really appreciate having a better understanding so that I can understand what my future role in the firm will look like. Would it be okay if we got back together in a week or two to just kind of download on this?” Ninety-nine percent of the time, the person’s not going to say, “No. No. I will not explain to you the rationale for my thinking.”

Stephanie: But what happens is many times when we get the no or we get an answer, we don’t like making that transition to the maybe in the middle is we don’t frame it in a way that still allows for resolution. Right? When they turned in that comp plan or when that senior founder said, “You’ll be the partner someday. Don’t worry, I’m working on it.” The junior person in this scenario didn’t frame it and say, “I understand that these things take time and you might be working on that. How can I best help move this forward? Can we get together next month to talk about our progress?”

Stephanie: And so that’s kinda that maybe in the middle gray area is depending on how soft a yes or no it is, right? It’s usually somewhere in that spectrum, is you want to be asking what can I do? Because what is that demonstrating?

Hannah: That commitment initiative.

Stephanie: Commitment and initiative, right? Critical, critical, critical. And if you can start with validation and belonging, affirmation, “I understand that this is a big topic for you. It’s a big topic for a lot of people. I know it’s confusing and complicated for me; it’s probably even harder for you. I just want you to know that I really want to have a constructive, open and positive dialogue around this and I want you to be really comfortable and I want us to have that conversation together in a way that feels good to you and me.” Affirmation, right? This is hard. I get that it’s hard. I want it to be a nice, hard, not a hard, hard. And then it’s, “I appreciate that.” Right? So this is sort of the, maybe we’re not exactly sure. I’ll get back to that or I’ll think about it and then it’s, “I appreciate that. As you can imagine, this is an important topic for me. What can I do to help move this forward?” And if they say something, then great, go do that, like lickety split be all over it. And if they’re like, “Oh well, you know, I need to ask the account about equity structures and taxes” or “I just need to talk to so and so” or “You know, give me a couple of weeks to think of, get back to me.” Absolutely make sure that you’re going back and doing that.

Stephanie: “Totally understand these things take time and thought, and we need to give it attention. How can I best help move this forward? And if it sounds like you need to meet with the accountant great.” Would it be okay? So two phrases that are really easy ways to ask for anything are, would it be okay if? Or would it be alright if? “Would it be all right if I came back in a couple of weeks to just touch base with you about the progress and sit down with you about some of the questions that I have?” Right? It would be weird for them to say no.

Hannah: Yep.

Stephanie: Right? So it’s all in the framing and the framing is really understanding the mindset of the stakeholders in the conversation and where they may be coming from. And then under, like if you know that, that person is in the mindset of having built a firm from scratch, then you’ve got to put yourself in that mindset of the blood, the sweat, the tears, the uphill in the snow both ways kind of thing. If that sort of where your founder’s mindset is at, and you can usually get sort of a general idea. And if they have like this, you know, it’s open and it’s abundant, everything’s wonder and positive culture, well then we probably aren’t even having this conversation because they’ve probably done the things they need to do.

Hannah: We’ve talked a lot about career growth and personal growth, but you coach a lot of people on like client skills and even looking at young advisors, there’s a point where if they want to advance to a certain point, they have to be able to find clients. So can I have you talk about just that client skills and how do we engage with a client? How can we as young planners engage with clients in a way that is meaningful right now?  

Stephanie: From a prospecting perspective or just as in terms of actually serving as an advisor servicing them?

Hannah: Let’s just about servicing them right now and then we can talk about finding clients in a minute.

Stephanie: Well, I think at the end of the day it’s knowing why clients come to you and I think there are quite honestly a lot of firm owners and firms out there that don’t go through this exercise. And when we all know why from a functional perspective, right? They want their investments managed; they want financial plans so they know when they can retire, right? The big five questions. But at the end of the day, the real question is, nobody wakes up in the morning and goes, “Oh my God, I’m going to go do some investment management. I think I’ll go hire a financial planner.” That’s not usually how it happens. It’s sort of a need, and then it presses and when you think about it, is money a really happy conversation in most people’s homes or does it tend to come with a little bit of stress?

Hannah: It’s a lot a bit of stress.

Stephanie: It’s, it’s a lot of a distress, right? Most people don’t come into your offices because they don’t have that stress or they wouldn’t be walking into your office. Right? So what they’re coming is with uncertainty, confusion, big burning questions, you know, a lack of clarity. They don’t know what the next steps are. They’re usually, remember I talked about states, success state, positive, abundance, feeling empowered, can do anything. Stress state is literally a different state, not just from a mindset perspective but from a physiology, right? So if our thoughts are going on in the background and they’re largely negative, and then we get on the topic of money, that usually triggers a lot of fears and pain points for people. When they’re coming into your office for the first time and even on an ongoing basis, what you have to ask yourself is, “What do they really want?” They want advice, not information. They don’t need 40 page financial plans. Doesn’t mean you can’t give them one, but they don’t need them. I’ve proven this dozens of times when people promise me that their clients had to have them.

Stephanie: A really simple way to solve that problem, by the way, is just at the end of a meeting tell the client, “We’ve covered a lot and there’s a lot of documentation that goes into this, but I know there’s probably only a few pages that are really important to you. If you want to pick out a couple of pages that you’d like to take with you, I’ll make a quick copy and you can take them away.” And I promise you they’ll never take more than a few pages and then you know which pages actually mattered to them and then you can stop killing trees. But I’m sorry I got on a sidetrack there, but that’s one of those things that come up a lot.

Stephanie: So I think what we really want to think about as clients is where they’re coming from, right? What need do they have and how can we fill it and what they usually want in some form, One, to get out of the stress state, what I call relief. They want relief from their big burning questions, from the lack of clarity, whatever it is, right? And then because they’re human beings, I guarantee you the next thing they want is what? To move into the success state. They want to move out of the stress state. They want to find relief, make the pain stop, and then, can we focus on the possibility? Success state, “When can I retire? What kind of income will I have?” Now, it doesn’t mean that those are always easy conversations, but that’s the journey that your clients are on at a behavioral level. “Move me from here at the pain point, to here to something that feels a lot better.” Right? “From relief to peace of mind.” Right? “From confusion, to clarity, from complexity to certainty.”

Stephanie: And so if you know that, the question becomes how do you approach those client engagements? So one of the things we talk about in our coaching program is, clients want, the value, is advice, not information. And the biggest mistake that I see financial planners make as a whole is they grossly undervalued the work that they do. I’m not saying everyone should run out and double their fees, some people probably should, but what I’m saying is the actual value of the work. If people truly understood the value of the work, they would never discount a fee. They would never waive a minimum; they would never take a client under that minimum because they need there to be a fair exchange.

Stephanie: But at the end of the day, if you understand what clients need, you can serve them so much better. It changes everything. It changes the questions that you ask, right? A lot of questions are very functional, but when I design sales processes and advice processes, we have a lot of different kinds of questions. So one of the fun questions, when people are sitting down, if you want to get a couple talking early on in a meeting about themselves, which is a good way for them to like the meeting, ask them great questions, like I don’t know, you guys have lots of great questions out there, but one of my favorite questions after you’ve done a sort of the warm-up is asking things like, “So tell me where the two of you agree about money and tell me where you disagree about money.” You won’t have to say anything for the next 45 minutes. Now you should because that should not be allowed to go on for 45 minutes.

Stephanie: But the point is if you asked that question, what are you gonna hear? You’re gonna hear where the pain point is around money for them and that’s the big value. If you can ease that pain point it’s a no brainer. Right? If you ask people, “What are the big burning questions that are keeping, do you have any big burning questions that are keeping you up at night?” Most people have a question or two. “Do we have enough to put the kids in college right now or do we need to save more?” That’s a big question if you have a child. Right?

Stephanie: So we tend to view meetings whether they’re on-boarding and what I call enrollment meetings ’cause I don’t really like the word sales process, I don’t think we’re selling anything at this point. I think we’re persuasive educators that give people the opportunity to improve their lives through planning and if they do, great, and if not, then okay, great, they’ll go on and do something else.

Stephanie: But at the end of the day, if you know what the need that you’re really filling is, it fundamentally changes the meeting and we have this tendency to focus on the functional and technical. “Here are the investment reports. Here’s the Morning Star report. Here’s your net worth statement.” And that’s all great. I’m not taking away from the merit of those things, but that’s not why people sit down with an advisor. They sit down with an advisor for all those other reasons that I mentioned. They’ve got questions that are important to them and you’re the source of answers and if you frame every interaction with the client from that perspective, you will have the best client relationships, right? Yes, you should have a service model. Yes, you should have a clear process. You should have great deliverables. It should be simple and elegant. You don’t need to overwhelm people. It should be advice driven, irrespective of kind of what that advice is, but if you can frame all of that in the context of “I’m getting people from here to there behaviorally, emotionally, and you view your interactions and frame them with the kind of questions and dialogue that are considerate of that, you will have powerful, deep, engaging client relationships.

Hannah: You know we mentioned extending this to finding clients that people get that to get to that point in their career where they want to, if they want the extra income, you kind of have to be able to find clients at that point. How does this extend to prospecting and bringing in new clients?

Stephanie: It’s exactly the same ’cause a prospect is just a person that hasn’t said they need you yet. Right? So rule number one is, and we all know this, you’ve got to be able to talk about what you do. You just have to. Now, that’s one of the other big things that I hear from partners and owners, is “She’s not doing any rainmaking. She’s not going out. He’s not doing any rainmaking. He’s not bringing in any clients.” Now, I’ll be really honest, there’s a lot of conversation that can be had around this because that isn’t always the expectation. That’s not always the advisor’s skillset. There’s not necessarily any training, right? They’re like, “Just go off and do it.” “Well okay, I didn’t go to go off and do at school. I went to CFP school, so they didn’t cover that part.” Right?

Stephanie: So there’s a lot, that’s a really complicated conversation. You have to really unpack it. But at the end of the day, what you need to be able to do is talk about what you do competently and confidently. And this is a huge problem, not just for the people on this podcast, but I promise you for really successful people, like most of them are just not that great at really articulating what they do in a clear, concise and compelling manner. So there’s a couple of really easy ways to do that. One of them is what I call my as a result of. If you say, “I do financial planning” people go, “Okay, thanks, that’s great.” But look, I also, you know, this concept of the elevator speech, I just, when was the last time that you got into an elevator, had that awkward pause and had them ask you what you did?

Hannah: Yep.

Stephanie: It doesn’t exist. That scenario doesn’t exist, right? What happens is you might be at a networking mixer or you might be meeting new people and someone will say, “What do you do?” You are not, I’m just so sorry. You’re just not going to say to them, “I am a wealth architect and I” that just sounds so weird. I mean, right? It’s like you’re trying just too, too hard and some people can pull it off and God bless them, but if you just say, you know, I’m a financial advisor, that kind of ends the conversation. Right? And so again, time and place for everything, but anytime you get the opportunity you want to talk about what you do, all you really want to talk about, and this is all that matters are the results of what you do. If I say to you, if you say, “Hey Stephanie, tell me a little bit about what you do.” And I say, “Oh, I’m a business consultant and CEO coach.” Well, that’s a boring conversation. That’s a period, we’re done. If I say “Hannah, I’m really, I’m glad that you asked, I’m actually a business consultant and CEO coach. I really love what I do because as a result of working with me, my clients see radical growth in their revenue with the owners gain back their time and freedom and they’re finally able to build a wildly successful business and life that they love.”

Stephanie: And if you’re really prospecting, then you could say, “Who do you know that sounds like that?” Right? “Who do you know?” So there’s these really simple ways to just, it’s what I call seeding. And I think that’s one of the big misnomers in the sales conversation. I say that in quotes in this profession is you’re not going to walk up to someone, tell them what you do when they’re not going to say, “Oh my God, can I please come into your office tomorrow?” I mean, that might happen like once every thousand times. What you’re doing is seeding. Seeding is you’re, you’re planting a seed, so when the time and place come that that person is someone or knows someone that might have a need for this work that you’re going to come to mind. And so that’s what you always want to be doing is always be seeding, right?

Stephanie: So if you’ve got a friend that’s a business owner, and even if they’re not your target client profile, right? Maybe they’re just not big enough yet, and you’re talking about what you can do, you could just say, “Wow, I really love the firm that I work at. We do an amazing job of helping people, you know, plan, protect and grow their wealth. We answer their burning questions and they go from not being able to sleep at night to being able to sleep on it and feel really good knowing that they don’t have to do the work and worry because we’re doing it for them.” Now, that person, again, might not even need you, not going to run out and call you, but are they going to remember you when they’re talking to someone who’s like, “Dang, I just can’t even get to sleep. I’m so stressed out about work.

Hannah: Yep.

Stephanie: Right? You’re always wanting to be seeding. Always. And that is, I think one of the biggest challenges for advisors sort of in the, you know, not founder or senior generations, is it is a different environment. So how do you develop this rainmaking skill because we aren’t dialing for dollars anymore. And quite honestly, I don’t know anyone that wants to.

Hannah: Yep.

Stephanie: Right? We’re professionals. We want to hold ourselves with a level of character and integrity and ethics, right? Accustomed to doctors and lawyers, and we could laugh about the lawyers and tell a joke, but we’ll skip that. But the idea is, right? That we want to operate at this real level of professionalism, which means that we’re not ambulance chasing. And so what we do want to do is find, really informed and appropriate ways, it’s what I call making a dignified offer. We don’t sell. You’re not a salesman, you’re a persuasive educator and you don’t sell, you make a dignified offer. Your job is to give people the information they need to make a good choice about their financial future and to give them the opportunity to make one.

Hannah: Right.

Stephanie: That’s your job. If they don’t choose to work with you, you’ve done your part. Sleep well. Go find someone who is ready to work with you. Don’t worry about the person who isn’t.

Stephanie: So I think the biggest, the best advice I would give anyone really wanting to advance their career is, develop that skillset. And if you don’t know how, and you have a firm manager, partner or owner that you can approach, I would find it to be really odd if someone called me up and said, “You know, someone at my firm came to me and asked me to help them develop rainmaking skills.” I think my clients would love it if people came to them and had those conversations “Hey, you know what? You know, rainmaking isn’t really a part of my role, but I can see the success that you’ve achieved. And rainmaking is clearly a big part of it. It’s not a skillset that I really developed and I’m not super comfortable, but this is a muscle I know I need to develop. Is this something that we could work on together?”

Stephanie: I mean, I can promise you that half the people that heard that will just be floored because that’s not what’s happening in most cases. Now, in fairness, they should be going to the advisors that they’re sometimes complaining about taking the initiative and saying, “Hey, if you want to advance and achieve this level of success, rainmaking is a skill that you’re going to need to develop. I’m happy to help you with that. Is that something you’d like to do?” Right? It’s a two way conversation. It’s just that most firms aren’t having it.

Hannah: And you know it’s on younger planners to be the initiator sometimes. It’s not an excuse just because your boss isn’t doing it.

Stephanie: Well here’s a really good way for anyone listening to determine if they should take more initiative in this regard or in any other. If the point has ever been discussed and nothing has happened, that’s your clue. That’s your clue. Because if there were going, if you had a conversation and they were going to do something about it, they would have done it. So that’s when you really want to establish that, so here’s the real truth of it. There’s only one of three reasons that these “things we’re talking about” whatever they are or aren’t getting done, it’s because an advisor can’t, doesn’t want to or doesn’t know how. Can’t is not even an option in any of these conversations. Of course, you can do any of these things don’t want to, that’s a tricky one because sometimes they say they want to, but at a mindset and a behavioral level, they really don’t. Right? They’ve got some fears or some concerns that they’re not even always consciously aware of that are really holding them back. I see that all the time by the way. So it’s kind of a very passive aggressive thing. “Yes, you’re going to be a partner someday.” No game plan, no path, no documentation. “Yes, you’re going to get that raise.” No game plan, no path, no documentation. “Yes, I’m going to transition more clients to you.” No game plan, right?

Stephanie: So it’s either they don’t want to, consciously or unconsciously or and this is true in a lot of the cases, they just don’t know how. And what is really incredible, you guys will get a real kick out of this. I do every single time. It’s not what people would think Hannah, but I can’t tell you how many times advisors just freeze because they don’t know how to approach something. They don’t know how to design the comp plan. They don’t know how to design the partnership path. They don’t know how to design a process to transition clients from them to that right up and coming advisor. They literally don’t know how. And so again, what does your brain do when you have a problem you don’t know how to solve and you’re already busy? Your brain just goes, “We’re fine. We’ll deal with that later. We’ll deal with it later. We’ll deal with it later.”

Hannah: Right.

Stephanie: And so it’s not that they’re doing it in 95 percent of the cases. I promise you they are not doing it on purpose. They don’t know why they’re not doing it unless they are just intentionally, but that’s not usually the case. At least not the firms that I get called into. Those people may exist. They don’t call me for help. And so it’s really important for anyone listening as they’re looking at their firm and their environment and their opportunities, right?

Stephanie: We’ve talked about a lot. I’m sorry if that wasn’t the intent. I get excited about this stuff. What you really want to understand is what’s the environment that you’re operating in. If there are problems or challenges or things that you want to see change or happen that aren’t, and you’ve had a conversation about them. If you haven’t, then take everything you heard in this call, listen to it a couple of times and write out, write bullet point how you want that conversation to go ’cause there’s some really good advice in here about how to make that a better conversation. But if you’ve had any kind of conversation, go back to it with that new frame because we can always do it better and then apply that, “What can I do to move this forward? Would it be okay if we touch base in two weeks?” And then in that process, really try to establish is, if it’s an “I don’t want to, or I don’t know how.”

Stephanie: And that’s where the acknowledgement and the affirmation can be so valuable. “You know, Frank, we’ve talked about this” I’m now mocking up a real conversation that I taught someone to have, “Frank, I’ve been here seven years, I love the firm. I have the utmost of respect for you. I think I’ve made a really significant contribution and I really enjoy being here. As you know, we’ve talked about this path to partnership over the last three years a number of times and I’m really trying to understand what I can do to help bring some clarity to that process. I know it’s important to you. It’s really important to me and I have to say as important as it is to me, I know that it’s probably a lot harder for you, right? You’ve never had to do this before. There’s lots of, you know, it’s probably not as easy as I think it is, but I just want you to know that I’m happy to participate in that process in any way that I can that’s going to help move that conversation along.”

Stephanie: That’s very different than going home and saying to your boyfriend or your girlfriend or your parents or your spouse, “Oh, he just told me I’ll be there someday, but nothing’s happening.” Right? That’s not an empowered state. Right? So one of the things that, I just say one of the things like seven times, right? So there’s obviously a lot of things I would love for people to know about mindset. But the most important thing is everything that you’re experiencing is a function of your mindset and sort of the reality that you create. ‘Cause if someone says to you seven times, “You’re going to be a partner someday, don’t worry” and they don’t take any action and you’re still there 10 years later, are they the only one to blame?

Hannah: Right.

Stephanie: Right? There’s two parties in every interaction. So it’s a function of looking at your environment, right? What’s working, what’s not working, and then even though you don’t know where you might want to be long term, in terms of what you think you want for the next three to five years, does that environment exist in a way that you think that, that’s possible and how can you take responsibility and show commitment and initiative for helping that take place as opposed to just looking at the owners for that direction? Right? So creating a collaborative process. If they’re open to that, at least by starting that dialogue. Or, we cannot say anything and let time pass, in which case we’re sort of doing the same thing that they’re doing and that’s where these big chasms occur in firms around client transitions, compensation changes, partnership pass, is that everybody just sort of knows that it’s there but doesn’t really know how to approach it and then just doesn’t discuss it or we sort of have these spotty conversations here and there, but we never really get something concrete moving. And that’s a pain point and a source of frustration for everybody involved. That’s not the goal.

Hannah: Such good stuff. Oh my gosh, I’m like, I want to go, I need to go back and re-listen to this.

Stephanie: I promised we’d only do 45 minutes. I told you it happens. I can’t help myself.

Hannah: Well, for the people who want to find you, where are the best places where they can go and read more of your work?

Stephanie: They can certainly, I write a monthly column for Investment News, so they can just Google Stephanie Bogan Investment News. I’m actually getting a new website done, but for right now they can go to limitlessadviser.com. There’s information there just in general on our coaching program. But there’s always, I think we’re giving away the Five Freedoms of Limitless Advisers White Paper right now, so if you put your email in, you’ll get a copy of that and then you’ll be on the communication list for just interesting things that we send out from time to time. And if anyone wants to talk to me directly in terms of maybe working with their firm or like, hey, you want to email me a question? You can reach me at learn more at learnmore@educeinc.com.

Hannah: Great. Well thank you so much, Stephanie.

Stephanie: It’s been a pleasure Hannah. Thank you for having me.

Hide Transcript

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Stephanie Bogan thinks it’s time for a breakthrough. Through Educe Inc., Stephanie works with countless successful advisors on elevating their career, focusing on their personal fulfillment, and changing the way they approach financial planning. Through Educe Inc., Stephanie works with countless successful advisors on elevating their career, focusing on their personal fulfillment, and changing the way they approach financial planning. Before she was a coach, Stephanie ran a successful startup, sold a Fortune 200 company, and held roles on senior executive boards. Finally, she decided it was time for a change. She pursued her true passion – helping financial planners run their businesses with a virtual coaching practice while moving her life to sunny Costa Rica.
Stephanie helps financial planners through both group and private coaching. As an advisor coach, she’s truly seen it all – and she’s ready to start solving the problems that new financial planners are facing in this profession.
In this episode, we’re talking about how up and coming advisors can find a position with a firm owner – and what they should look for when forming a partnership. We’re talking about work life balance. We’re talking about commitment both to your career, your firm, and this profession.
By the end of this episode you’re going to be ready to tackle your biggest goal as a new advisor. Stephanie has some fantastic insights on getting clarity, and you’ll leave the episode inspired to pursue your purpose as a financial planner.


 
What You’ll Learn:

What makes financial planners successful and what you can start doing today to put yourself on that path
How to approach a founder about a potential partnership or succession plan
How both founders and new planners can talk to each other and understand one another’s experience and validate emotions
How young planners can engage with clients in a way that is meaningful right now
How to know why clients come to you for financial planning services
The best ways to dig deeper and grow personally as a young planner
Knowing how to approach clients about money – because it’s not always a happy topic in their household
How to get clarity

Stephanie Bogan: Are you building a wildly successful business and a life that you love?
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Hannah Moore clean 1:01:53
Growing With Your Tribe in the Financial Planning Profession https://financialplannerpodcast.com/yafpnw-growing-with-your-tribe-in-the-financial-planning-profession/ Tue, 12 Jun 2018 18:05:40 +0000 http://fpaactivate.org/?p=11347 https://financialplannerpodcast.com/yafpnw-growing-with-your-tribe-in-the-financial-planning-profession/#respond https://financialplannerpodcast.com/yafpnw-growing-with-your-tribe-in-the-financial-planning-profession/feed/ 0 In this week’s unique episode of #YAFPNW, Hannah Moore, CFP® steps into the hot seat and is interviewed by the one and only Rianka Dorsainvil, CFP®. Tune in to hear Hannah’s story, and to learn how she came to be so incredibly passionate about the financial planning profession. Your host, Hannah Moore CFP®, steps into the hot seat this week to be interviewed by Rianka Dorsainvil, CFP®! Hannah is incredibly passionate about the financial planning profession. In this exclusive interview, Hannah is talking about her struggles early on in her career, how she discovered the difference between financial advice and financial planning, and how she found her tribe within the financial planning profession.

Hannah’s career launched in an incredibly unique way. She bought a financial planning practice when she was 26 years old, and was effectively thrown into the deep end of the financial planning world. She learned in the most hands-on way possible, and she quickly realized that isolation as a young planner was not only detrimental to her career, but to her clients.

When Hannah attended her first FPA NexGen Gathering, she quickly realized she had found her people. She was sitting next to pioneers of the profession, and new planners alike – and they were all there for one reason: to spread the gospel of financial planning and to focus on making themselves into the best planners they could be. This was game changing for Hannah, and inspired her involvement in the financial planning profession with the #YAFPNW podcast and, ultimately, the launch of the FPA Activate community.

 

What we do with planning is so powerful. It changes people’s lives. It changes generations of families. That’s what I get to be a part of… This is about financial planning, and this is about changing people’s lives, and I can get behind that and I can get excited about that. @GuidingWealth on #YAFPNW

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What You’ll Learn:

  • What makes an exceptional planner
  • How to “show up” in the financial planning profession
  • How to find your people in this profession
  • Where to connect with other planners
  • How to power through insecurities when you’re a new planner
  • Revelations Hannah has had as a planner, entrepreneur, and business owner
  • How you can combine your creative side with a career in financial planning

 

 

The 2050 TrailBlazers Podcast

NexGen Gathering

FPA Activate on Facebook

 

Show Transcript

Ep102 Transcript


Rianka: Well, this is going to be fun today, Hannah.

Hannah: It is. It’s a lot more comfortable on your side of the table I think.

Rianka: Right. So today, we are actually, well, you’re switching hats. You’re actually going to be the interviewee, and I’m going to interview you. How are you feeling?

Hannah: I’m feeling good. I’m feeling a little nervous because I feel like this isn’t going to be the normal podcast where it’s just, you know, “What’s your advice for new planners?” I know you well enough. You’re going to dig.

Rianka: Oh yeah. Well, you know, since I have my own syndicated podcast, 2050 Trailblazers. Just joking, it’s not syndicated yet, but-

Hannah: But everyone should listen to it.

Rianka: Yes, I agree. I have honed in on my skills of being a Oprah-type interviewer, so, yeah, I think you should … I know you’re over there sipping some hot tea, so I think that should soothe you as we start this interview. I’m really excited, and thank you for choosing me to interview you. This is really cool.

Hannah: Yes, absolutely. Well, we were talking about it and it’s like people don’t really know all of my story.

Rianka: Right.

Hannah: You know? I really try to make it a point not, these podcasts aren’t about me, they’re about who I’m interviewing, and I was like, “Okay. Well, let’s turn the tables.”

Rianka: Yes, and you definitely have a story to tell. So, just for the listeners’ sake, our relationship goes way back. We actually met in 2014 at, we were joking before we started recording because it feels like we’ve known each other for like ten years, but it’s really been like, four? Like that doesn’t sound right.

Hannah: I know, right? It feels like forever.

Rianka: It feels like we’ve known each other for a decade, and we actually met at my very first gathering. So gathering is, FPA NexGen Gathering is not like any other conference that you go to. You go there one person and you come out a completely totally better version of yourself, and that’s exactly what happened when I met you. We met, we chatted, but it was during closing circle where you said something very touching to me and we’ve stayed connected ever since is that you found your people. So let’s start there. So, Hannah, how did you find your people and what did that mean to you?

Hannah: Well, so I went back, we were talking about this a little bit beforehand, and I was like, “What was happening in my life at that point?” Because I think that informs a couple of things. So I had already been to a gathering or two at that point, and they were so transformational for a variety of reasons, but at this one I had bought a practice, and so I believe it was my first gathering after buying a practice, maybe my second, and by every measure of success, like people always told me how great it was that I bought a practice and how successful I must be and how…

Rianka: Right. You’re under 30, you’re buying a practice. Like what? It’s kind of like a, “You go, girl.”

Hannah: So I had all this, and like I literally had somebody be like, “You have your career handed to you on a silver platter,” and none of that resonated with me. None of that like spoke to me on a deep level. So that was 2014, so it’s kind of mapping out the year. So 2013 I bought the practice, and soon after I ended up buying like these processes that really showed you how to do financial planning. So I had been working with this woman, and she did financial planning. I’ll give her like, yes, she did, and I learned so much for her and I have so much respect for her and everything that she did with her clients, but I would say that she definitely fell into the financial advice category, and so I got these processes and I had just started putting clients through it and these clients were just like, “Oh my god, I’ve been working with this other adviser for 30 years and I’ve never been able to articulate what it is that I wanted but this is it.”

Rianka: Wow.

Hannah: Like when I would describe what financial planning was to them, and I’m like, “Wow. Okay, that’s really cool.” I got the courage to ask for $500 for six meetings for a financial plan from some of these people, so that was a big deal for me.

Rianka: Hold on. Hold up. $500 for six meetings?

Hannah: Yep.

Rianka: Oh, wow.

Hannah: Confidence is always an issue.

Rianka: Okay. We’re going to talk about that.

Hannah: So I had taken several clients through this financial planning process, and I think I had realized, like I think it was intuitively understanding the difference between: What is financial advice and what is financial planning? And the power that’s in financial planning. It’s a different game. I don’t even know how to put words around it. I struggle with that. I often ask people on the podcast that question, like, “What is financial planning?” Because I’m like, “Give me the words.”

Rianka: Yes.

Hannah: But it was such a night and day difference between the relationships that I had with clients that I took through planning and the clients that I didn’t. Everybody around me was saying, “You know, you’re so successful because you have all these clients, you have this big AUM number,” which my revenue did not match my AUM number, but to me the success wasn’t in that I had bought a practice. The success was in what I was seeing through this financial planning that I was doing, and nobody where I was at really understood that on the deep level, and so I think about going to gathering. So the story that pops into mind there was that is where I met Dick Wagner.

Rianka: Oh, Dick Wagner.

Hannah: I don’t think I understood how powerful what I had or what I was seeing or what I was feeling was, because I’m very, I feel things. I care very deeply. I don’t know. People make decisions in a variety of ways, that’s how I am. But somebody had told me there, “If you get the chance, if you haven’t experienced Dick Wagner, you have to go experience him.”

Rianka: Right.

Hannah: And so I spent this lunch hour whatever with him, and so he has these grandiose ideas and it’s all great. Like go read his books all day long. So there’s only like four of us sitting there, and so he looks at me and he was like, “Do you have anything to say? Or like what are your thoughts?” And I didn’t have any thoughts, but I was like, I told him, I was like, “I have a story. I just have a story about a conversation that I had.” It was with my dad. So I walked through the story, and it was about: What does it mean to be wealthy? He sat there. He’s kind of this like gruff guy that’s kind of like a cranky old man. That was kind of his demeanor a little bit, but he sat there and cried as I told this story, and he just looked at me and he goes, “You get it. You really get this.”

Rianka: Wow.

Hannah: And I think it was that and there were several other moments at that gathering where I was just … So I’m seeing all this in my practice, I’m seeing just these handful of clients that I’ve taken through financial planning, I’m seeing like … That was his experience to that story. I go, “All of my clients can have that.” The fact like what we do with planning is so powerful it changes people’s lives. It changes generations of families. That’s what I get to be a part of, and it was just this profound like, “That’s my calling. This is what I’m about. This is not about buying a practice. This is not about AUM numbers. This is not about how many clients can I serve. This is about financial planning, and this is about changing people’s lives, and I can get behind that and I can get excited about that.”

Hannah: So I think for me at that gathering it was this realization of like, “Oh my god, this is what I have to offer the world. This is what we as a profession have to offer the world.” And it was just this moment of like, “These are the people that get it.” At my broker-dealer, they don’t get this, but they do at gathering. They do here. These are the conversations that I can have where I’m not the crazy person that people are kind of like rolling their eyes, “Oh, she’s just naïve. She doesn’t understand the real world.” I mean, I got all that crap, but that’s I think really when I found my people. It was I found the people that get the power of financial planning and the power of what we have to offer.

Rianka: I definitely agree with you on that, and there’s going to be some listeners, some younger planners, or maybe someone who is transitioning into the profession who may be experiencing what you experienced as far as just like the eye rolling and it’s just like, “Oh, give it some more time, you’ll see what we’re talking about,” and they may not have been able to truly experience that transformational moment of what it means to truly be a financial planner. What advice would you or do you have? Like how did you kind of stick with it so that the Hannah, the CFP that you are today you kind of grew into? What did that look like for you? What advice can you give the listeners?

Hannah: Well, my career path was so different. I was thrown in the deep end, and it was like, “Can you swim? Yes or no? And if it’s yes, we’re going to throw you in a deeper end.” Four years into my career, I bought a practice, and so I feel like my career path isn’t necessarily like the traditional one, or not at all like the traditional one.

Rianka: Right.

Hannah: Or what I would hope people would do for the traditional one. But I would just say like keep looking. We’re out there. I don’t know how to say this. I talk to so many new planners now through the podcast and everything that we’re doing, and the most common thing I hear is, “We bought into this idea of financial planning,” which is just so exciting to me, “And what I’m seeing at my firm isn’t there,” and I just want to be like, “Keep looking. It is so worth it to find it.” It is so worth it. I can’t imagine a better career, a more impactful career than what I have. So if you don’t see it at your firm, get out, not get out of your … I know switching jobs isn’t that easy.

Rianka: I know, yeah.

Hannah: So I’m not saying, like … Fully appreciate how difficult some of this is, but you can stay in that job but get connected, get connected, listen to this podcast, get in the Activate group, find people. Isolation is what kills us, and so it’s: How do we break out of that isolation as young planners? And we do that from hearing other people. My gosh, I got to talk to freaking Dick Wagner. You go to any FPA national event, you are going to be able to sit next to some of the pioneers who literally gave everything for this-

Rianka: Paved the way, yeah.

Hannah: Gave everything for this profession, and so they’re out there. You just have to look, and unfortunately like sometimes it’s not that easy, but I promise you we’re out there. Just keep looking. Just keep going.

Rianka: Right. And you mentioned the Activate group. So for if there’s any new listeners where this may be their first brush at you’re a financial planner, now we’ll make sure we put those in the show notes.

Hannah: Absolutely.

Rianka: So you can get involved. You mentioned that we’re out there. I have some of the same conversations with new planners and those who are transitioning as well who may have their first firm or organization may not just be a good fit for them for whatever reason, and I say that’s the gift and a curse about our profession is that not one firm is alike, not one career path is alike. So the curse in that is that if you do have a bad experience, you think all firms or organizations are that way, and that’s not it. That’s not the truth. So the gift is there is a firm waiting for someone specifically like you, and where it’s kind of like church. You come as you are, and they want you for you, you know?

Hannah: Yep. Well, and you have so much to offer. That’s the thing is you look at what makes exceptional financial planners is how they show up, and how you show up it’s, you know, I’m a small town girl, grew up in a really, really small town in South Dakota, but that’s part of my story. That’s part of what I bring to my client meetings, and they sense that, and that’s really valuable. Like your story is what makes … What makes you different is what makes you really valuable.

Rianka: And makes you unique. So I think one of the beautiful things about our profession is that we can truly share our stories. You can share the story about your dad and talking about what it means to be wealthy or what is that definitely of wealth and talk about your upbringing and just everything, and it’s appreciated because there are going to be some clients that connect with you and just form that sense of attachment and trust because it’s just like, “Okay. Wow, Hannah gets me, and she’s just like me. She’s no different.”

Hannah: Well, and I think being in touch with your story. So like I wrote … I felt like one of my weaknesses, and it still is one of my weaknesses, is I don’t feel as strong of a writer as other people, and so I started working with a writing coach, and she was like, “Okay. Well, the first thing we need to do is you need to be able to write your story.” And I’m like, “Okay, this is dumb. I need writing for business. I want to know how to write about that.” Anyway, several meetings and it was probably like two months for me to write my story, my why I do what I do, so that’ll be … It’s on the website. It’s on my Guiding Wealth website. So I talk about growing up without a whole lot of money, things like that, and I think what it does with being able to articulate that and getting, understanding my story, like I have … When you’re able to reflect on yourself, you have so much more compassion for other people’s stories. You show up differently.

Hannah: I hear my clients who say things like, “This whole money scripts, I love it,” and I can just see their money scripts, and instead of it being this, “Okay, like how do we solve this problem?” Because, you know, that works really well. It’s more of a like, “Okay, I’ve seen my own money scripts. I know how hard this is. I don’t maybe understand the specific challenges that you have, but I care and I’m so much more compassionate and patient.” I’m there with them through that, and I don’t think I would be able to do that unless I had really examined my own story.

Rianka: That’s pretty powerful. Pretty, pretty powerful. And so you’ve found your people, you purchased this firm, and I’m pretty sure there’s been some bumps in the road since then. It’s been-

Hannah: That’s a nice way to put it.

Rianka: There’s been, well, it has been about four years. What are some of the biggest I guess revelations as far as like owning a business, some of the surprises that you’ve come across?

Hannah: I think one of the things … Okay, let me think about this.

Rianka: Told you. That’s my Oprah moment.

Hannah: So I think I’ve learned that I’m an entrepreneur, like it’s in my blood. I love being a business owner. I love financial planning, but I also love being a business owner, and I would say financial planners are terrible business owners, and I had a mentor, Patrick Dougherty. He’s local. He’s here in Dallas. And he came from a business management background. He was a career changer, and so he always just stressed how important that was to be a good business owner.

Rianka: Yes.

Hannah: And so I think what I’ve learned, I’ve learned more of what that means, so I think there’s been some natural maturing on my side of: What does it mean to be a business owner? What does it mean to have employees? What does it mean to manage my time and my schedule? What does it mean to work from home? All of those things, like I can see how I’ve grown in that, but a couple other things that, since we’re really pulling back the curtain here.

Rianka: Oh, yeah. No holds barred here.

Hannah: So I made the transition from the broker-dealer. I had like 250 to 300 clients. I shrunk my client list down to 18. Like it was crazy. Best thing I’ve ever done, but I came out of that and it was, I just needed to rest. It was such an important part of my story, but in that I started doing the book The Artist’s Way, and I think one of the things that I’ve realized about myself is that I’m really creative. Okay, like my house is not decorated at all. I can’t pick out a paint color to save my life, but business is where I can show, that’s where my artist comes out. Financial planning is where my artist side comes out, and it’s, again, that idea of: How do you bring your full self to your work? I mean, that’s all part of it. Yeah, so I think I’ve learned that I’m creative, and I think I’ve learned how to be creative in my business.

Rianka: So that creative side, and you touched on something about there’s a difference between being a financial planner and a business owner, and one of the first books that I read prior to launching my firm, and I know it’s a book that we both hold dearly that we’ve reread multiple times is The E-Myth, or The Entrepreneur Myth, by Michael Gerber, and he talks about how we wear three hats as a business owner: the entrepreneur hat, the manager hat, and a technician hat. The first piece of advice someone gave to me is that, “Rianka, you’re no longer a financial planner. You are a business owner who owns a financial planning firm.”

Hannah: Absolutely.

Rianka: So talk to me about that realization for you, and what did that transition look like for you?

Hannah: You know, again, like now I can, five years, it feels like forever that I’ve had this business. So when I started the business or I bought the practice, I did everything, because that’s what I was doing before. Like I was the assistant and then now I’m just the adviser, and you just take on the extra roles. I used to tell people it’s so hard for me to switch, to go from paperwork. I mean, I could run circles around people on paperwork. Like I was really good at it. To go from that, very core competency to being an adviser to being a business owner, like I couldn’t describe it other than like that transition, that shifting gears in the middle of my day was one of the most training things that I would do. How I thought before I was like, “I’m crazy. I have my to-do list, just get down on your list and do it.”

Hannah: And I think a lot of it is kind of what you’re talking about. It’s like there’s different roles, and so for me when I hired my assistant, it was to get rid of some of that admin work. And could I have still done it all? Yeah, absolutely. I can do a lot of things. Is that the best decision? Is that the best use of my time? And so for me that was a huge piece of letting go, of saying like, “Okay, just because I’m better than everybody else at paperwork in my office doesn’t mean that that’s what I should be doing. That’s not the best use of my time.” That was a really big revelation on the E-Myth side of it.

Rianka: I think it’s really cool, especially with the E-Myth, how we learn not only to wear our technician hat, which is the hat that we have been most comfortable wearing, the technician hat meaning the financial planner hat, but now you’re wearing the entrepreneur/manager hat because you’ve hired someone. You have an assistant, and what did that process look like for you hiring someone? And how did you find them?

Hannah: Yeah. Craigslist.

Rianka: You know, Hannah, that is crazy. You’re the second person that has told me they found a gold mine or a gem or a diamond on Craigslist.

Hannah: And what was great, so I was looking for somebody who wasn’t from financial services because I think we’re all so tainted with how we talk about things, and I wanted somebody who could give me that perspective. I can train somebody on paperwork, but what I needed, I needed somebody to teach me how to have an assistant, because I’m not good at that, and that’s what she did. Her background was she had worked, she had been a business owner in the past, and she hated the business owner side of the business, and so she was like, “I loved what I did, but I hated the business owner side, and so I decided that I didn’t want to be a business owner.” And so I was like, “Okay. Well, that’s cool. You get me.”

Rianka: Right.

Hannah: Where a lot of people wouldn’t get that, and she worked for a solo architect for like seven years. She got like the solo professional. She got all of that side of it. It was really valuable to me. Man, I looked at her resume and I was like … you just knew. I’m just like, “Okay, there’s something special.” Again, that gut intuition that, you know, because when you put stuff on Craigslist, like oh my gosh, you get so many resumes back, and a lot of people can, you can weed out pretty fast, but I don’t know. It was just kind of the stars aligned again and it was what it was supposed to be.

Rianka: The universe conspiring with you.

Hannah: The E-Myth talks about like they give a story of a baker throughout it to like illustrate, or I guess like the latest version of it, it wasn’t in the original, and one of the things they talk about is how you hire this rockstar person who basically does everything because they’re responsible, they’re high-achievers, they’re good at what they do, and it’s like the business owner is like, “You’re the most amazing thing ever because I can just give you stuff and you do it.” That’s what my assistant, she’s like, oh my gosh, like I adore her. I think she’s crazy talented on so many levels, but the E-Myth was like, “Okay, that’s not enough though for a business. You have to have the processes built out, you have to have the accountability built out, you have to have all this other stuff.”

Hannah: And so when I went back and reread it, I was like, “Wow, okay. I can’t be the person who has one great hire and then they leave.” I mean, my gosh, this is the story of so many financial planners I know. They find a great new person, they think they found their succession plan, and then this person leaves, and it’s like, that’s almost like the script of E-Myth is you didn’t provide the structure for them. And so it’s, you know, I brought her on. She’s really taught me how to have an assistant, how to delegate, kind of operate in that space, and then now my latest takeaway with E-Myth is, “Okay, I need to grow up professionally. I need to grow up as a business owner.”

Hannah: If I ever want to, and I don’t know that I ever want to, scale this business, I need to develop a different skillset. I need to run my business differently than I am right now, and so that’s kind of been, you know, an ah ha moment, especially with a baby now.

Rianka: Oh, yeah.

Hannah: Oh, my god.

Rianka: Having a baby will change a lot of things.

Hannah: Oh, I have like an operations manual that’s almost done now.

Rianka: That is awesome.

Hannah: So it’s kind of whipped me into shape on that, which is great.

Rianka: And that’s something that you don’t have to do. That’s something that you can get your assistant to do.

Hannah: Yep.

Rianka: You are speaking to me because I did the same exact thing. I have an executive assistant, and I didn’t want someone who was in financial planning. I wanted someone who had no idea what financial planning is. One, so I can spread the good gospel of personal finance to this person, but to also just bring a new lens, a new perspective to how I’m doing things, and she’s been a fantastic hire as well. She’s been with me since January, and she’s been phenomenal, and I’m having her track the processes too that everything that you do write it down, and she’s doing it, so.

Hannah: Well, and that is just, you know, “What do you need?” And so like I was looking at, “Okay, what do I need?” I look at my to-do list right now and I’m like, “What’s not getting done, or what’s sitting on there too long?” And it’s all been planning work, and so I’m having my first paraplanner, working with my first paraplanner ever on Monday, like a week from today.

Rianka: Wow.

Hannah: Yeah, and so that’s been something I’m like, “Okay. Well, this is what I need.” In order for him to do the work that I need him to do, I have to be able to tell him what I need.

Rianka: Yes, and that’s truly important.

Hannah: Yeah, and so it’s not about, “Hey, what do you want to do today?” It’s like, “No, I need this done.”

Rianka: Yeah, this is what needs to get done. Yeah. Yeah. I mean, we can have a whole podcast about that. I mean, podcast episode about what it means to be a delegator, like true delegation versus abdication, and I think the best business owners, the best planners, the best leaders learn the craft of delegation versus abdication, and I think that you have honed in on that skill of true delegation.

Hannah: Yep. Well, trying to. My thing is like I refuse, there’s so many bad business owners. I refuse to be that bad business owner. I will own up to where I’m being a bad business owner and make what I need to do like change, because it matters. That’s the thing, it matters that you’re a good business owner.

Rianka: I mean, it matters, and I think just because you’re a business owner, just because you’re the lead financial planner or senior financial planner you don’t know everything as far as just like how to train, and so for the folks that are on my team, so I have kind of like two teams, my YGC team with my RIA, with my financial planning, and then my 2050 Trailblazers team, and I explain to both of my teams I’m like, “I’m only as good to you as a trainer, as a leader as you tell me. So if there are any blind spots that you see that I have, I give you full permission to let me know, because if you don’t let me know, I can’t change.” I think that’s why I have a rockstar team and why I can do what I do.

Hannah: We did a podcast with Cheryl Holland at the beginning of the year, and they have these like 360-evaluations, and like I was shocked. She said, I can’t remember if it’s her whole team, but like people every 18 months evaluate her and her leadership team anonymously, so they can say whatever they want.

Rianka: Wow.

Hannah: I know, and I was like, “Whoa, that’s just mind-blowing to me.” I would be scared. I would be scared if I was in a position, and I kind of made that comment to her, and she was just like, “You know, if I’m going to run a world-class business, I have to be on my A-game, and the only way I can be on my A-game is if people actually give me real feedback.” And I was like, “Dang. Okay.”

Rianka: That is so true.

Hannah: “Yes, ma’am.” Like, “I’m going to be like you.” Flipping gears back to the E-Myth, I just reread it like three months ago, and so what was so cool to me was what I picked up the first time, I picked up completely different aspects of it the second time, and what was really exciting to me was there was part, like the last part of the book I read and I’m like, “Oh my gosh, I don’t quite understand what he’s saying. I can’t wait for a couple years to come back and read this again and I bet understand it in a different light.”

Rianka: Wow.

Hannah: So it was really exciting to me to be like, “Oh, there’s just a natural progression that happens.”

Rianka: Yes.

Hannah: One other big business kind of aha moment I had, I think it was last year. I lose track of time now, but the book Traction is another great one. It’s the EOS system, Entrepreneur Operating System.

Rianka: Oh, Traction. That’s what the book is called. Oh, I haven’t heard of that one.

Hannah: Yeah. No, this is definitely one that’s been a game-changer for me. Great book. Everybody who wants to be a business owner should do it. If you’re even at a firm and you’re managing people or you need to manage up, it’s a great book to read. But one of the things that they talked about in the book was quarterly rocks. So you have a one-page business plan and then you put quarterly rocks, and so I’m the type who just, I’m naturally just, I just go. I never feel like I’m doing enough, right? That’s always been one of my things where it’s like, “Oh, you bought these businesses,” and I’m like, “Yeah, but you know what I haven’t done?”

Rianka: Right. We don’t take time to stop and smell the roses as the saying goes. I’m with you there, girlfriend.

Hannah: But the Traction, so you write out a one-page business plan, and then you do quarterly goals. Okay, let’s be honest. My husband is editing this, so he’ll call me on this if I’m not telling truth. I’m not the best at implementing all of it. Maybe hopefully I’ll grow into that soon, but just the idea of quarterly goals has been really powerful for me. So like before every quarter, and not every quarter, like now … I’m sure we’ll get to this in a little bit, in a different phase of life right now, but before every quarter I’d say, “Okay, what’s going to make this quarter successful?” And I would write it down, and so I would get in these points where I was just so frustrated, like, “Why can’t we move this faster? Why isn’t this happening?” Just putting all this pressure on myself, and I was like, “Okay, no. You said January 1st this would be a successful quarter if these four things got done, and you know what? Three and a half are done, so chill out.”

Rianka: Right. Take a chill pill as my mom would say.

Hannah: Yep. So that’s been a good like balancing. We just put such unrealistic expectations on ourselves. I’m really chatty. We have a friend…

Rianka: You have a lot to say.

Hannah: I do.

Rianka: You have a lot to share. This is, what, the 100th episode of You’re a Financial Planner … Now What?

Hannah: Yes.

Rianka: So, I mean, you-

Hannah: I’ve been sitting on my hands.

Rianka: You’ve been sitting on your hands for 99 episodes. I want everything this episode, girlfriend. Everything.

Hannah: Well, I had this friend who, he did coaching with, Ed Jacobson, and so he does all of this appreciative inquiry. He’s like this psychologist. It wouldn’t be a good idea if you’re like high-strung and like trying to like rain blot through a lot of, like he’ll calm me down quickly if you know him. Great, great stuff, but my friend went to him with all of this like yearlong to-do list, and Ed’s comment to him was, “That sounds like a lifetime achievement. What you’re trying to do sounds like something that most people do in their lifetime, and you’re trying to do it in a year.”

Rianka: Wow.

Hannah: And I was like, “Wow. Okay.” So like a lot of stuff now I’m like, “Okay, is this a lifetime goal, or is this … Do I have proper expectations of myself?” Too often I’m trying to get a lifetime goal done in six months.

Rianka: Wow. That’s a great perspective because, I mean, you have achieved a lot in your, it’s been, what, a decade that you’ve been a financial planner? Less than a decade?

Hannah: Yeah. I graduated December 2018 from college, so, yeah, so-

Rianka: ’08 or 2018?

Hannah: ’08, yeah. Sorry. 2008.

Rianka: 2008. So it has been a decade, and so with that, I mean, we’re friends and I follow you and cheering you on, and so I know about Investment News 40 under 40 and the Dallas Young Guns awards, and so you’ve done a lot that most people don’t do within the first 10 years of their career, and so where do you think this ambition comes from?

Hannah: Money has never been my motivator. I don’t know if that’s good or bad. It’s probably part of my money scripts of growing up without money, but it was like this idea of like, “I want to do what I’m passionate about. I want to solve big problems.” I don’t know how to do small things. Loading the dishwasher at home, that feels like a mountain sometimes, but big problems, that’s what I want to solve. I think really been my motivation has been, and again it’s different on various things, but it’s: How can I positively affect other people? Very millennial side of me I guess if you would.

Rianka: I’m with it. I always say that we’re the generation that cares too much, but I think that’s a good quality.

Hannah: Yep. We did the podcast and I’m being pretty positive right now, my story, but when I’m feeling a little cynical, it’s: Why did I do it? Because I’ll be damned if somebody else has to go through what I did when I started. It’s like, “No, this stops.” There were so few resources out there when I started, and we can talk about the podcast story more, but it started in my local FPA, so like they were already doing some of this, but I was just like, “No, this is unacceptable. This isn’t about money. This isn’t about fame.” I had no idea what would be happening today would happen, but it was like, “If I can help one other person, if I can help 10 other people, that’s why I’m doing this,” and it was more that’s the motivation of it.

Hannah: With my financial planning clients, so like my big thing, you know, we’re doing the one-page business plan, like, “What’s the one thing?” I want to change the way people think and talk about money. So when my clients come in, I want this to be a transformational experience for them. I want them to come in and looking for financial advice and I want them to think and talk about money differently. I want the power of money to work for them instead of always holding them back, and that’s my motivation. Charlie and I were talking and it was if I retired tomorrow, I think I’d still want to do exactly what I’m doing today.

Rianka: Yeah, and that’s pretty powerful right there because I think what you do and I see this and everyone else in the profession sees this that knows Hannah Moore is that you care and that you’re very passionate about the profession, and so on top of running your firm, on top of everything that you’re doing, on top of some more exciting news that we’ll share, we’re holding the listeners hostage to hear this big, exciting news, but on top of everything you decided to launch a podcast, You’re a Financial Planner … Now What?, so that you can help other financial planners. It’s just like … wow.

Hannah: Yeah. So my local chapter, I have to give so much credit to them. Patrick Dougherty and Trudy Turner started this, they started You’re a Financial Planner … Now What? through my local FPA chapter, so Dallas-Fort Worth. They would have the seminar series in the evening, and that’s … I can’t even describe it. It felt like a lifeline. It felt like, you know, I was learning how to do Morningstar reports, I was learning how to do meetings with clients, I was learning the paperwork, the technical part of our job, but I wasn’t learning about financial planning and the power of financial planning, and so I went to the seminar series for it was two or three years, and it was just like if I couldn’t attend one of those, it was like soul-crushing, because it was just like I just had to be around people who were seeing this thing that I was seeing, and that was the only, I mean, that, and my local chapter as well. Those were the places where I could go for it.

Hannah: After I made the switch from broker-dealer to the RIA, that’s a huge lifestyle change going from 250,-

Rianka: Big, yeah.

Hannah: … 300 clients to 18.

Rianka: One, eight. One, eight.

Hannah: One, eight. So the crazy part is throwing away the year that I moved, my revenue stayed the same.

Rianka: What?

Hannah: Yeah. So follow the money, people. Follow the money. I had so much time on my hands. So after I moved I took six months where I just didn’t do anything. I was like, “Okay, Hannah, all pressure off. You maintain 18 client relationships. You do not look for business. You do not market. You do not put pressure on yourself to do anything that you normally do, and your job is just to chill out,” because I realized I had never slowed down since I started working when I was like 13 or 14 or 12 or something when I started a paper route, you know? And not that I was taking a break from work, but 18 clients usually don’t fill up 40 hours, if you do it right.

Hannah: So when Patrick and Trudy retired if you would from doing that, she asked if I would take it over, and so Lynn McIntire, who’s also local, and I started taking those over, and Charlie, his background was media, and I just kept telling him, I’d come home from the seminar series and I’d be like, “This is just the most amazing content in the entire world. Why aren’t there more people showing up? What the heck is wrong?” He was just like, I mean, he lives and breathes media. He was like, “Well, why don’t you just put some microphones on them and throw it on the Internet and just see what happens?” That’s how it got started is we started just throwing a microphone on me and Lynn, and I was like, “You know what? I have some really interesting people I know, and I’d like to get an hour of their time, so let me just interview them.”

Hannah: All the technical side, he just works his magic, like that is his area. So that’s kind of how it got started, and I had the time to do it. That’s the thing is that that was really coming out of I have this new business, not new business, it was still Guiding Wealth, but really radically transformed my business, and I had time to commit to it, and so I just did it.

Rianka: Yeah, and so I say I’m all about this there’s two sides to every coin. The gift and the curse about being an entrepreneur is that, I mean, we get to use our creative side whereas, and I always say this about myself, like I’m a bird that cannot be caged. I will die, like internally die, if you try to put a box around me or just slap a title. Don’t hold me hostage to my title. I’m more than a financial planner, kind of like You’re a Financial Planner … Now What? as far as this podcast goes. We have so much to give to the profession, and you are just a shining example of just that. You’re a financial planner, and then you started going to these meetings and seeing like, “Wow, people need to listen to this who are outside of this room, but what is a way for us to get it to them?” From, you know, your words, from your lips to our ears, and here birthed You’re a Financial Planner … Now What? podcast.

Hannah: Well, and my secret weapon is Charlie.

Rianka: Yes.

Hannah: So that’s my unfair advantage, my unfair competitive advantage.

Rianka: Charlie. So for those who do not know, and, Charlie, you cannot edit this out, okay? So Charlie is the wonderful husband of Hannah, and Charlie Moore is just a fantastic entrepreneur as well who helps out with this podcast, also helps out with 2050 Trailblazers as far as the editing goes, and just a fantastic person overall. I actually had another question about that too, because besides Charlie being an awesome guy like … You know how you have this expectation of someone? It’s like, “Oh, okay.” It’s just like, “Oh,” and then you meet them and you hope they hold up to the expectation? That was Charlie. I’m like, “Charlie is so cool. I want to hang with Charlie, too.”

Hannah: Oh, he’s so much like cooler than I am.

Rianka: You’re cool, Hannah, and Charlie is cool, too. Yeah. So what is it like having two entrepreneurs in one household? How is that … Maybe there’s some financial planners out there where their spouse or their significant other is just like, “Hey, you’re having all the fun being an entrepreneur. I want to do it, too.” How did you two manage to make this work?

Hannah: Okay, so here’s a crazy story. So we started dating like 10 or 11 years ago. So we started dating. We’re like a month dating, and he’s just like very like, “You know, my dream is to one day own a business with my wife,” and I looked at him. I’m like, “That is the dumbest thing I’ve ever heard come out of anybody’s mouth. Are you joking? Are you not in touch with the real world? Do you not understand how relationships work? Do you not understand like … “

Rianka: Oh, my goodness.

Hannah: And so he’s always kind of hung onto this, that like that’s his dream is to own a business with his wife, and I’m like, “No. Like no.” So at that point, I think I had already changed my major, but I had no idea what my career was going to be. I’m like, “This is just insane.” So we always, yeah. Anyway, so then I ended up buying a business, like getting in the position where I was like, “Oh, I’m going to own this business,” and then I buy this business and I own this business and I’m like … and he was smart enough. He’s usually a step or two ahead of me on some of these things, even if I don’t want to admit it. He was smart enough not to say too much, but as we, I bought this business, and when I really shifted gears from so many clients to really doing like deep financial planning work with my clients, I was like, “Okay.”

Hannah: So this creative side was me coming out. I’m like, “So what would it look like for a financial planner to have a media arm?” I still don’t know. That’s the thing, I don’t know. We’re still figuring this out, and I was like, “Okay. Okay, like maybe that could work.” Then we started looking at like, “What do we want our lives to be like? What’s our lifestyle?” We want to someday have kids. How do we manage that? How do all these pieces fit together? He was signed up 11 years ago. It took me a lot longer. And I was like, “Okay, maybe this could work.” So once the business, I felt comfortable with where we were with the business, it was just like, “Why not? Why not just give it a go and see what happens?”

Hannah: At that point we had the podcast going, so he was going to quit and work on that, and that, you know, one podcast isn’t a full-time job, and so we were like, “Okay. Well, we’re going to … ” Yeah, really we were going to start exploring some different options.

Rianka: Other opportunities.

Hannah: Other opportunities.

Rianka: Yeah.

Hannah: And so we were looking at direct-to-consumer. That’s definitely a place we want to go. We’ve held on to that for quite a while. It’s great talking to other advisers and I love, like you’re my people, but what could I do if I went and talked to consumers? And so, I don’t know, we’ve just been playing around with these ideas, and so we were going to really push pedal to the metal last year on that, and then other opportunities came up.

Rianka: Yeah. So let’s talk about those opportunities. So from what I understand, You’re a Financial Planner … Now What? is under the umbrella of the Financial Planning Association, FPA.

Hannah: Yes. So it started out under FPA, and it’s like still there. So it’s really kind of a cool story. So at this point we had been doing the podcast, this was like beginning, middle of last year. So we’re doing this podcast, and it’s really been like … I don’t know how to say. My gift to the profession, my like … There was no expectation. There were no strings attached. It was just like, “Somebody needs to be doing this, so I’m going to do it.”

Rianka: I think this is why we get along, Hannah, is because we’re almost the same person. We’re like, you know, ebony and ivory of … because it’s just like I’m such the same way as far as just like I can’t wait for someone else to do something. I’m just going to do it, because if I do it, I know I’m going to do it right, or at least have a team around me that’s going to help me do it and execute really, really well.

Hannah: So what’s so cool about the podcast and what has been so just enriching to my life is I’ve had all these new planners reach out to me. So I was getting two to three phone calls a week from people who were listening to the podcast, and they were like, “Hey, I’m a new planner. Help.” It was a really cool thing, and Charlie and I, we would just, like every week we were like, “Gosh, I just wish we could start a Facebook group and have all these people jump in and join it,” and we’re like, “But we can’t do that alone. We can’t do this alone. There’s no endgame here for us. This could be a full-time business. This isn’t … ” I still want to be direct to consumers. I’m an adviser at heart. There are consultants and people who go directly to advisers and make a ton of money and all that, and that’s great, love it, but that’s not who I am. We did this for the profession. I don’t know.

Hannah: We keep saying that or like, “If only we could do this for this group of people.” I had a coaching call with one of my long-time mentors who I met at gathering, and her feedback to me was, “This doesn’t fit in. You have to let it go.” It was like a grieving process.

Rianka: What doesn’t fit in? What? What? The podcast?

Hannah: Oh just the podcast, yeah.

Rianka: This podcast?

Hannah: This podcast, because it was … This is for new planners. I’m getting older. I recognize, and I hate, like one of the things, not to give spoilers, or, hey, anybody interested? That could be another way of pushing this.

Rianka: I was just going to say, are you looking for someone to potentially take over and like host this You’re a Financial Planner … Now What?

Hannah: Yeah. Do like guess podcasting or get a different lineup. I mean, one of the things I’m so aware of is we talked about like your perspective. This, everything is through the filter of Hannah Moore. I hope it’s a good filter, I like to think it is, but I could be foolish. There’s so much more to the world that I can’t see because I’m just one person. So I’ve always been really aware of like this podcast is always going to be limited because it’s just me. So, yeah, anyway. Getting a little soap box there.

Rianka: That’s very … No, I mean, that’s very selfless of you, because you could-

Hannah: Well, none of this is about me. This is about the profession. This is: How do we move our profession forward? And we cannot move our profession forward unless new planners figure out how to operate in this new profession, and that’s what this is all about. That’s what I go back to, like I don’t want to do anything that doesn’t matter professionally. Yeah, so I get this advice from my mentor who was like, “You need to shut it down,” and it was just one of those, like it was, I was so sad and I was just like, “But that’s the right thing for us to do.” I shouldn’t be doing this. I’m 31 right now, and I’m still young. I’m still young.

Rianka: But your first career was, is, financial planning, so you have 10 years under your belt.

Hannah: Yeah. That’s my day job.

Rianka: Yeah. You have 10 years under your belt.

Hannah: And like nobody wants, I mean, what’s the plan? What’s the endgame? I’m going to be 40 and still doing this? I’m going to be 50? I mean, there’s hard decisions sometimes. Like what’s the purpose? And so I was really just like, “You know what? This is just my gift to the profession, and if we shut it down, we shut it down, and we’ll pay the hosting fees indefinitely so it’ll always be up for new planners to go listen to.” So, anyway. That was kind of where I was at, and so we gave it a June 30th deadline of saying, “If something doesn’t change, this is it,” and we had some sponsors like, we had some people reach out to us and say, “Hey, would you want to partner up with us on this or that product or whatever?” And it always just felt wrong, because our motivation, like this was about the profession. This isn’t about selling a product. This isn’t about a business model. This is not about one specific career path. I don’t think everybody should own their own firm.

Rianka: No.

Hannah: I don’t think everybody … like, right?

Rianka: No.

Hannah: It was really this like pure this is about the profession. I’m selling out if I go with these other sponsors. I’m selling out if I try just to make everybody an entrepreneur when they’re not an entrepreneur. I couldn’t do it, and so anyway. A connection was made with the national FPA, and they were like, “Okay, so let’s not … Can you just not shut down the podcast right now?” It worked out right on the timeline of June 30th. It was very, very soon after Charlie and I were in Denver talking to them about what would a partnership look like, and one of the things that I was just so passionate about was this isn’t about the status quo. Again, I only do big things.

Rianka: Right. Go big or go home, right? You’re from Texas.

Hannah: Right. So it was if we’re going to do this, these planners need a place to meet. There’s no place for them to meet online right now. Nothing is about true financial planning, so they really opened the door and they said, “Hey, what would you do for new planners?” There’s already a lot that they’re doing. NexGen is already doing a lot of really, really great work, and it was so cool because I had talked to so many of these young planners. I was like, “I know these, these are my people. These are the people that like, like I know them. Like I know their stories. I know what to do to serve them.”

Hannah: It’s been such a cool partnership. I always say FPA, they had the same purity about them because they’re a nonprofit. They’re our membership organization, so they’re like, they’re in the same like IRS category as a nonprofit, but they’re the only place where new planners, or any planner for that matter, can go where it’s all about financial planning. The end goal is just financial planning. So it’s not, I love all these sponsors and vendors and I use them and all of that, but it’s all financial planning is a means to an end. Financial planning is a means to a business model. Financial planning is never just the end, except with the FPA, and I could get behind that. I could say, “FPA,” like I can tell you ever step of the way how they’ve impacted my career, and so to me it was just like, “Oh my god, this is not just the perfect, this is the only fit I would have ever done to really partner up with them.”

Hannah: They were so respectful of like, “You’ve been doing this podcast. We don’t want to take it from you.” And I was like, “No, this is it. We’re sold.” We actually approached them and were like, “Hey, can we just fold this whole podcast under your umbrella? Because it needs to be bigger than me.” That’s the thing, it has to be bigger than me. And what happens when somebody graduates from You’re a Financial Planner … Now What? There’s experienced planners who aren’t the market of this podcast. What happens hopefully when all the people who are listening to right now are like, “Hey, this was great, this helped me a lot, and I’m just in a different place now”? Where do they go? And to me it was so cool because the FPA can pick, they have that whole career arc. That’s their job is to help us be the best financial planners that we can be, so it just was this like the skies parted, the stars aligned, and it just … I don’t know. It was meant to be. I don’t have another way of saying that.

Rianka: I’m a true believer of when you put it out there in the universe, the universe conspires with you, not against you, and I think this is just one of those moments where you just have to sometimes walk by faith and not by sight and just truly trust the process. I mean, you’ve had, I mean, such an awesome career thus far. You started off with a broker-dealer. You purchased a firm. You’ve made some hires within your practice, which we haven’t even discussed. Maybe there will be a part two to this about what that process looked like, and now you have a podcast. You’ve transitioned that a little bit into FPA, and now you’re about to start another new chapter. You’re about to add another title to your name. Can you do us the honors of telling us what that is?

Hannah: Gosh, this is like so uncomfortable. No, so we’re having a baby. We’re due August 10th.

Rianka: Yay.

Hannah: Yes.

Rianka: Congratulations, Hannah. And I would like to say, I can hold a secret because I was probably one of the first ones-

Hannah: You were, yeah.

Rianka: Yeah. And I held the secret. Oh my gosh, I’m so excited for you guys. I am so excited.

Hannah: Thank you. No, it’s really exciting. It feels very surreal. Like, “Is this for real?” And I can feel a kicking now, so I’m like, “Okay, so like I really-

Rianka: What?

Hannah: ” … do think there’s something inside of me,” but it’s … I don’t think I’ve fully processed everything, but, yeah, here I am. So six months pregnant right now.

Rianka: It’s six months, and you’re looking good just FYI. I mean-

Hannah: Thank you.

Rianka: I saw you a couple weeks ago, and I was just like, “Wow, you are just glowing.” Everyone has a different experience with pregnancy, but you are definitely growing, so. Not growing, glowing.

Hannah: Doing both.

Rianka: I mean, you’re growing, too. Oh, my gosh. And so with that so many questions come to mind. It’s like you want to celebrate, get excited, start nesting or nesting your house, whatever it’s called. I don’t have any children yet, so I’m not sure of the official term so excuse me moms out there if I’m using the wrong terminology, but it’s something that we’ve talked about offline, which I’m pretty sure there’s going to be some other planners who are asking the question, too. It’s just like, “All right, well, I’m excited that this baby is coming. What about my business?”

Hannah: Oh, my gosh. Yeah, I’ve been saying I’ve been nesting in my business more so than in my home.

Rianka: Let’s talk about that.

Hannah: Gosh, there’s so much, and there’s so much I don’t know. So I feel like giving advice, I’m really like in the thick of it right now, so everything with a grain of salt. But I was, man, we’ve been talking about this for a while and that was part of why Charlie quit his job and worked with me was we will likely use some form of childcare, but I wanted it to be my choice. That was a really big deal for me was my mom was a stay-at-home mom, and I’m clearly not going to be able to do that. I always said that mom guilt is going to be my big thing, but Charlie quit his job, so now we’re looking at flexibility on: What does it look like with two entrepreneurs working from home? How do you balance this? You know? How do you do this?

Hannah: It’s just so cool because it feels like we’re not being trapped in a corner. That’s what’s so great. I’m a planner by nature. I mean, that’s my field, and so with my clients … Like, okay. So all of y’all listening to this, I’m going to tell you I always had emergencies back when I was at the broker-dealer. People would call and they would be panicked, “I need money tomorrow.” That doesn’t happen anymore because we plan for emergencies, and so from a business standpoint, I’m in such a better position. So I was like terrified to start telling my clients that I’m pregnant because I’m like, “Well, what does this mean? I’m their adviser.” I’m like, “Okay, well, I’m going to be available by phone. I’m not going to meet in person for six weeks, but if you need something, I can meet with you.” Whatever, having all these qualifications on it.

Hannah: My clients are so thrilled for me. It’s so touching. They just can hardly contain their excitement. I’ve had like, this one woman, oh, I adore her. She like almost fell out of her chair she was so excited. What’s been cool is I have, several of my clients have made a comments on, you know, that, “You kind of have the perfect job for this, to have a kid, don’t you?” And I’m like, “Yeah, I kind of do.” I don’t know how I could have scripted this out better, if that makes sense. I was really, really fearful about it before I got pregnant, and then when I found out I was pregnant, it was more like, “Okay, now it’s business time. I’m going to figure this out, and I’m going to solve this problem.”

Hannah: There’s this, a lot of things I read about, you know, how do we help our clients navigate change and all of that, all the unexpected things in life? They talk about resiliency, and so I look at all of the hard parts of my career and I’m like, “That’s built resiliency in me.” So this, I’m just like, “You know what? It’s going to be challenging, but I know I got this.”

Rianka: Yeah. I have no doubt, Hannah. I have no doubt.

Hannah: I say this now.

Rianka: Well, I mean, you have a track record of resiliency, so I think this is just going to … If anything, what I’ve seen with the new moms is it makes you so much more efficient because it’s like, “All right. Well, I have this window of time. I just want to work for six hours, and the rest of the time is for my family.” The things that used to take 10 hours in a day to get done is now taking six, and it’s just like, “Wow. Where was all that time before?” is the feedback that I’m getting, because I’m asking a ton of questions. My husband, Reggie, and I, we’re talking about it, and I’m scared out of my mind, just like you probably were when you and Charlie started first having the discussion, but it’s all going to work out.

Hannah: Yeah, it’s just such a cool thing. My mom was a stay-at-home mom, so I’ve always … worried isn’t the right term, but it’s always been like, “I’m going to want to be a stay-at-home mom.” And I think I’m definitely like pulled that way. I think that’s the most amazing thing if that’s what you want to do and are able to do it. I absolutely love that, and maybe a little part of me is jealous, but I just … The day after I found out I was pregnant, I just remember having this sense of like, “I don’t want my daughter to say, ‘My mom had a great career until I was born.'”

Hannah: And, again, that’s my story, so I want to be so sensitive. If that is not your story, I will be your biggest cheerleader on staying home. Call me up, I’ll help make a financial plan to make this happen for you. Like there’s no … But I was really surprised. I guess the moral of that story is I thought I was going to respond one way, and I found that I didn’t respond that way, and so that’s been surprising is just seeing how I’ve been responding internally, because it was different. It’s different than what I thought. I was legitimately thought that I’d want to sell my business and stay at home, and now that thought is just like, I can’t even stomach that thought. That’s not in the world of possibilities right now, so I guess some of it you just have to go through it. That’s what I’m telling myself.

Rianka: Yeah. Yeah. And you have definitely a big support group here, including myself, that’s here to kind of like be a thought partner with you. I mean, this is something new, and as much support that I can lend to you I would love to.

Hannah: Well, thank you, and so much of it like we have the Internet now. We’re like two and a half months ahead of our podcast schedule right now, so the podcast is still going to go on every week, even though I’m not going to be here. That’s what’s so cool is we’re able to put in the work, and with my clients I’m like, “Okay, so the baby is due in August, so I want to meet with you again one time before. Would you like to meet in July or would you like to meet in September, October?” They just get to pick and-

Rianka: And they’re okay with it.

Hannah: They’re totally fine with it. Yeah. They’re just so excited, and so it’s just like, “Okay, so we’re just going to line this up and get this moving.”

Rianka: And prepare for it. I think we make these assumptions in our heads, especially for those who own businesses, about what our clients may think or what they may do. I remember, this is definitely not on the same playing field as having a baby, but I went out of the country last year for two and a half weeks. This was the longest I’ve ever taken off since I started my business almost three years ago. Two weeks to go to Santiago, Chile, and I thought my clients were going to fire me, and they said, “Rianka, if you need email me one time while you’re out there, we’re going to have some problems.” I’m like, “What? You actually want me to have a break?” So weird.

Hannah: If I help my clients live their best life and I’m not living my best life, that doesn’t make sense.

Rianka: Yeah, you just hit it. You hit the nail on the head, Hannah. Yeah.

Hannah: I wouldn’t go to a financial planner who wasn’t living their best life. You have to live it out.

Rianka: Questionable. Questionable.

Hannah: And there are seasons, and sometimes we have it together and sometimes we don’t, and a lot of times we don’t.

Rianka: So for any new or expecting moms out there, what are some of the things that you have learned over the past couple of months, anything that you want to share with them?

Hannah: Oh, gosh. I don’t know. I feel like I’m such a newbie. To me I guess what I’ve learned is I have to just give it time and let it settle with me first, and that’s just, again, how I process things. We didn’t tell anybody until, I mean, longer than they say you should wait, because I had to process it myself, and so it’s, I think we’re all just so different. Yeah, that’s okay. That’s the great thing. I looked at the Enneagram, and one of the things that they had on there, you know, your Enneagram type or whatever and, because I always thought of-

Rianka: What is that? Okay, I’m showing my ignorance right now. Like what’s the Enneagram?

Hannah: Enneagram, it’s like this personality profile thing. It’s like super in depth. It’s actually really cool if you look at it. It’s like the Myers-Briggs on steroids. It’s been around for like hundreds and hundreds of years.

Rianka: Oh, okay.

Hannah: So I’m probably not giving it complete credit, but it really talks to like: What is your motivation behind things? It really goes deep. They talk about like the seven deadly sins, that came out of the Enneagram.

Rianka: Oh, wow.

Hannah: Yeah, like it’s like deep stuff. It’s really rooted in deep stuff. But one of the things that I realized after reading this book about it was I always was like, “The ideal mom is what my mom was,” right? She was amazing. I love my mom, but I’m a different person than my mom, and the best thing that I can do is offer, like we were talking about offering your full self to your clients, and I’m coming to terms with I’m going to be different than my mom. I’m going to be different than most moms out there just because of our situation, and we’re probably going to make choices that are different, but that’s okay. The thing that my daughter needs is for me to show up just the way I am, just like we’re supposed to show up for our clients that way, fully there. And so I don’t know, it was just this really big aha moment where they … Everybody else probably gets that, but it just takes me a while sometimes.

Rianka: No. Yeah, yeah. And you said daughter, so you’re having a baby girl.

Hannah: Yes, a baby girl.

Rianka: A baby girl, whose name is going nameless until-

Hannah: It’s a secret. Until August.

Rianka: Until August. Until August 10th when she is set to come out and be introduced to the world.

Hannah: Hopefully won’t be longer than that.

Rianka: Yeah. Sometimes babies make their own decisions. They’re like, “You know what? I’ve had it. I’m ready to make my appearance.”

Hannah: Oh, my gosh, and we’re in Texas August. It’ll all be good.

Rianka: Ooh, it’s hot.

Hannah: Yeah.

Rianka: It is hot, but it is … I’m pretty sure Charlie is going to have some ice for you.

Hannah: Oh, yes. But I can’t imagine a better career to be a mom in than with financial planning. Like I just can’t imagine it. That’s the thing that’s so cool, and I wish I could just shout that from a rooftop, and I’m not quite there yet because I’m not actually like, I haven’t had the sleepless nights yet, but I can’t imagine any better career.

Rianka: I think it would be cool if we did maybe like six months in, six months after your daughter is born or like a year and just talk about your experience of because you’re a financial planner and you and Charlie have a new baby girl and what your experience has been. I think that would be a good followup.

Hannah: Yeah, absolutely. It’s a whole new chapter in life. It’s, yeah.

Rianka: So, I mean, we’ve talked about a ton today, and I’m pretty sure … We’ve already said a part two and potentially a part three, but what I want to ask you and what I want to leave the listeners with is a conversation that we always have with each other, but now I want you to share with everyone, the listeners, is the question of, you know, what is our responsibility to our profession?

Hannah: You know, I’ve been thinking about this so much, and I think people are going to step into different roles. So I’m going to say what I’m going to say, but I just want to put the disclaimer on there that you give what you can, and not everybody is going to have their own business, not everybody can give the time that I’ve given, not everybody can do that. Bringing it full circle back to Dick, we did a podcast interview. So he wrote the paper, To Think Like a CFP, transformational, of what if financial planning was a profession. That’s what it’s all about, and in the paper he quotes a movie. The movie is terrible. We went and watched the movie because we’re like, “We want to see where this quote came from.”

Hannah: So in Dick Wagner, in his paper, and we have this like incredible audio of him like less than a month and a half before he died. This was right after Charlie quit his job, so I’m so thankful for that, and Charlie really, he has a really good editor’s eye and like storytelling eye, and so I was like, “How do we do this podcast, like how do we take a legend like Dick Wagner and do this justice?” We looked at his To Think Like a CFP, and so we actually had him read this, and so we did a video, or Charlie did a video I should be clear, of-

Rianka: Thanks, Charlie.

Hannah: He edited it together. Oh, it is like, every new planner needs to watch it. It’s so powerful, but we had Dick read a line from his paper, and the setup is it’s from this movie, and it’s all of these law students who are coming in and these law students are first day of law school and this professor is coming in. Reading the first part, the students file past the ivory into the oak and dust of the ancient classroom. On this first day of class, they anticipate their initial steps on a professional journey that will lift in the pinnacle of prestige, power, and authority. So it’s all of this, and the professor, his words, and I have this in Dick’s voice, and I just hear it all the time, and so I’m going to read it.

Hannah: It says, “Ladies and gentlemen, you’re embarking upon a journey of epic proportions. It will require all that you have to give and all that you are. You come here with a brain full of mush, and if you survive, you will leave thinking like a CFP.”

Hannah: And I think about this profession and I think about: What is my responsibility? And, again, I don’t want to put this on everybody, but if we’re really going to make this a profession, it could require all that we have to give and all that we are. We have to give everything we can, and we have to give everything of who we are, every ounce of creative energy, every ounce of fight sometimes, every ounce of compassion. It will require all that you have to give and all that you are, and so we’re a place in history where we have such a profound responsibility. There’s just such a small fraction of Americans who get what financial planning is. We can quite literally change the world if we together, and it can’t be just me, it can’t just be new planners, it can’t just be old planners. If we as a profession say, “This is the line in the sand, it’s about financial planning,” we can quite literally change the world, and I think that is just enormous. And so what’s our responsibility? I think it’s to give it everything we have.

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In this week’s unique episode of #YAFPNW, Hannah Moore, CFP® steps into the hot seat and is interviewed by the one and only Rianka Dorsainvil, CFP®. Tune in to hear Hannah’s story, and to learn how she came to be so incredibly passionate about the fina... Rianka Dorsainvil, CFP®! Hannah is incredibly passionate about the financial planning profession. In this exclusive interview, Hannah is talking about her struggles early on in her career, how she discovered the difference between financial advice and financial planning, and how she found her tribe within the financial planning profession.
Hannah’s career launched in an incredibly unique way. She bought a financial planning practice when she was 26 years old, and was effectively thrown into the deep end of the financial planning world. She learned in the most hands-on way possible, and she quickly realized that isolation as a young planner was not only detrimental to her career, but to her clients.
When Hannah attended her first FPA NexGen Gathering, she quickly realized she had found her people. She was sitting next to pioneers of the profession, and new planners alike – and they were all there for one reason: to spread the gospel of financial planning and to focus on making themselves into the best planners they could be. This was game changing for Hannah, and inspired her involvement in the financial planning profession with the #YAFPNW podcast and, ultimately, the launch of the FPA Activate community.
 

 
What You’ll Learn:

What makes an exceptional planner
How to “show up” in the financial planning profession
How to find your people in this profession
Where to connect with other planners
How to power through insecurities when you’re a new planner
Revelations Hannah has had as a planner, entrepreneur, and business owner
How you can combine your creative side with a career in financial planning

 
 
The 2050 TrailBlazers Podcast
NexGen Gathering
FPA Activate on Facebook
 
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Hannah Moore clean 1:15:31
Getting Honest About Community Within Our Profession https://financialplannerpodcast.com/yafpnw-getting-honest-about-community-within-our-profession/ Tue, 05 Jun 2018 20:00:57 +0000 http://fpaactivate.org/?p=11295 https://financialplannerpodcast.com/yafpnw-getting-honest-about-community-within-our-profession/#respond https://financialplannerpodcast.com/yafpnw-getting-honest-about-community-within-our-profession/feed/ 0 Alex is a great example of what it means to step outside of your comfort zone, get involved and see the benefits of being involved within the financial planning profession. From networking, mentors, peers and finding job opportunities, Alexandria has discovered new opportunities for herself and better ways to serve clients. Alexandria Cole is three years in the profession and shares what it’s like to be “in the middle” of her career story. While working at an insurance company, Alexandria attended a financial planning mixer and discovered the world of financial planning and what it had to offer. She shares her journey to find what she’s been looking for – how to help clients in a meaningful way. Alex is a great example of what it means to step outside of your comfort zone, get involved and see the benefits of being involved within the financial planning profession. From networking, mentors, peers and finding job opportunities, Alexandria has discovered new opportunities for herself and better ways to serve clients.

Many of the career stories you hear share the beginning, end and skip the middle, but Alexandria shares where she is at in her career story – the middle. She is in a paraplanning role and shares her journey in deciding if she wants to be a lead planner and how she would design her idea role, if given the opportunity.

Alexandria understands something critical about the financial planning profession: our strength lies in our community. The passion and the willingness to support each other is infectious and Alexandria found this to continue to hold true when she failed her first attempt at the CFP Exam. Instead of judgment and embarrassment, she found a community that encouraged he, is her champion and wants her to be successful. Through community, Alexandria found her passion for financial planning.

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You still have something to provide, even if you can only go to local chapter meetings every other month. @coleae2015 on #YAFPNW

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What You’ll Learn:

  • The importance of the financial planning community and how you can get involved
  • How one person can make a difference in the financial planning profession
  • Ways you can get involved as an individual – even if you don’t want to go so far as to launch your own NexGen chapter
  • How to continue to push forward with purpose if you fail the CFP® exam the first time
  • How to decide what career path you want to take in financial planning
  • How to get involved with NexGen
  • That it’s okay to forge your own path

 

Show Transcript

Ep101 Transcript


Hannah: Well, thanks so much for joining us, Alexandria.

Alexandria: Thank you.

Hannah: I feel like I’ve known you forever, even though I know that’s not true. You’ve been in the industry about three years, but I’ve seen you in quite a few places. So I’ve seen you, you know, I’m involved with NexGen, so you’re running the Northern California NexGen program. I’ve seen you at NexGen Gathering. I’ve seen you two years at FPA Retreat. Is that right?

Alexandria: Yeah, yes! Two years in a row.

Hannah: So you’ve been so involved in the profession, getting involved with the FPA and with other financial planners. Did you know to do that when you first started in or how did you get introduced to that?

Alexandria: So it’s kind of interesting. I feel like I stumbled upon FPA in a very weird way. I was in the insurance business out of college. They were recruiting students to become agents and I thought that that would be a way to get my foot into the door, and so I ended up at an insurance company and I thought that that was financial planning or being in the industry, so I was like, wow, I got my job right out of college like I said I would. And then I was reading a newspaper, ironically, and I was noticing that the article was about Debbie Gross, which was a past president of our chapter, and it said that she was a part of FPA and I had never heard of it before, so I just Googled it and noticed that they had a mixer coming up for kind of like, not new recruitment, but just getting more people interested in the area. And so I just signed up and it was free. At the time, I was still in college and I saw that you got, like, free drinks and food, and that was still very important to me, so I was like I’m there!

Alexandria: So I ended up going to this mixer and I got there and, at first, it was all older people and I kind of was like “Am I at the right place?” The lady there was, like, “Yeah, you’re here for the mixer?” And I was like “Yeah, my name’s Alexandria.” So I’m walking around, I have this name tag on that says student, and so I’m thinking maybe there’s other students here. And I’m meeting all these financial planners in the area and I haven’t met any of them before, but they’re like “You’re a student? What school do you go to?” And I’m telling them Sac State, but we didn’t have a program back then, so I just was a student in general inquiring about FPA, and so it started with me just going to a mixer and after I left the mixer, I was just so amazed from all the conversations I had with people, and I was like, “So what is financial planning again?” Because I wasn’t sure where I ended up at.

Alexandria: So that’s when I kind of started my research about what it is that I was really in and being at FPA’s mixer and then meeting with people after is what kind of started the journey of what did I stumble upon and what am I currently in at my job at MetLife, was the company at the time, it’s no longer called that, with the Snoopy. It’s MassMutual.

Alexandria: It was just interesting because I thought I was already in the industry, but until I met other financial planners that I go, “Wow, I don’t think I’m doing any of what you’re talking about.” So it kind of was an interesting start that I had to research my way into what financial planning was, even though I had showed up at a mixer.

Hannah: So many questions.

Alexandria: Yeah.

Hannah: Okay, so let’s … Okay, so you just found this mixer on the internet and then showed up, like, can you walk through what that was like? Were people welcoming? I mean that’s a pretty big step for a lot of people to take.

Alexandria: Yeah. So this is kind of, I think, a skill I would call that I have of naturally finding events and attending them.

Hannah: Just do it.

Alexandria: Just doing it and honestly because I’ve noticed that with growth, it comes from putting yourself out there and so I just signed up to go and because it was free, it was even more enticing, but once I got there, I just didn’t know what to expect. So it’s kind of faking it ’til I made it, you know, where I’m asking people, oh, what’s a financial planner and they’re like, oh, you work at MetLife? And I’m like, yeah, I’m a financial planner too, right? And that’s what I’m saying to them, and they’re kind of looking at me, like, oh really? And so that’s when I started hearing terms like CFP and fiduciary, and I’m just like, okay, I’ve never heard of any of this, you know?

Alexandria: And so it just was really interesting to be welcomed into something that I really had no idea what it was I was getting into, but I was being educated on it by just attending a mixer, so it’s like when you have a chapter or a community that’s so open to educating someone no matter what span they’re in, you never know where they’re at in their space where they may leave going home, like, wow, I want to join what they’re doing, even though I thought that was what I was doing.

Alexandria: So, it was really interesting, but it was just very welcoming and I got to learn a lot about the terminology that I didn’t know before, because from what I was learning at work, I thought that was the way financial planning was, so it was like redefining what that meant to me and then also what it means to other professionals. And that’s very interesting in itself, that everybody kind of defines it differently.

Hannah: So you go to this mixer and I loved how you said it’s almost redefining what financial planning was to you. What was it like to go back to your job then and see kind of the contrast?

Alexandria: So I’d say probably the first day in the structure of at least working at this company, you know, I had a manager that I reported to. So I went back to next day and was just raving to the manager, “Oh my gosh, have you heard of FPA?” And he’s like, yeah, how did you find out about it? And I just was like, overwhelmed, spilling all this information, “I met this person and this person and they do this and have you heard of this word, ‘fiduciary’?” I’m just like probably scaring the manager at this point, because he’s like “What? Last week, we’re just studying for your insurance licensing and now you have all this new knowledge.” And so it’s like what do we do with it? And at the time at the company I was at, I was the young person there, so everybody was very much already in their business and so my mentoring came from the manager at the time, and so I kind of struggled with how we do things at work and how I was hearing things being said at the mixer.

Alexandria: And then it kind of fast forward to when I went to the next event, which was … Gosh, what was the name of it? The fall expo is what they used to call it. It was like a mini conference that they held here in Sacramento and at that time, that was a bigger scale of financial planners in one room, but I got the information to go back to that event and kind of shared, like, “Hey, this is what I’m dealing with at my firm. Is that what you guys are going through?” And it was kind of like I was teeter-tottering on this fence line of, like, so what I’m doing, is it right or wrong? And I struggled with it at this firm because I learned so much at FPA and then go to work and try to implement it, but it didn’t have the structure to do that. We weren’t charging fees to climb, so I was like, “Okay, well, how do I do that the right way?” And they didn’t have an answer, but it didn’t math in line with what I believed to be correct because I was learning something different at FPA.

Alexandria: I just went back and forth and it kind of built up this frustration, like, “Oh my god, I don’t know what I’m doing and I don’t know how to handle it.” So I consider FPA like this equivalent of helping me find what I truly was searching for in helping clients with, because before starting out, it really wasn’t a good fit, but I didn’t know that when I started. FPA wasn’t necessarily sharing with me that, oh, I need to only be going this direction, but it helped me sort out that I should be at least exploring many options since I was so young and just starting out.

Hannah: And so were you able to find people who had different business models and were implementing financial planning maybe slightly different from each other? Is that really where you went to learn about financial planning?

Alexandria: Yeah. Definitely. I’d say probably just in the first couple months of being at FPA, I was meeting so many planners there that had small firms, large firms, support staff, and just hearing what financial planning meant to them, so that also got confusing. Because I was, like, there’s so many ways to do it!

Alexandria: So this isn’t like a profession where you’re like, okay, I’m going into a law firm that charges a certain way and you’re going to go up the ranks a certain way. It’s not a direct path because of so many paths and that kind of actually is what landed me into doing NexGen, because I was frustrated, like, gosh, if there’s other young people doing the same thing I’m struggling with or learning about, it could be difficult to navigate your first year, six months in the industry because you just don’t know what other ways are out there, so you think there’s only one way.

Alexandria: And so that’s kind of what birthed NexGen, because I was like, well, if I could get more financial planners to come talk to the group, talk to myself and share that there are different ways, then people can make educated decisions on what works best for them and where they see themselves in financial planning, where can I contribute at, and it be a passion for me.

Hannah: And so did you actually start your NexGen chapter in Northern California?

Alexandria: Yes, I did. It’s a very kind of actually funny story because, so, right after that mixer that I went to at FPA, I was really excited about that and then I found out that they were having Seattle be the national conference, so that was in Seattle and I was like, oh, it’s a hundred dollars for students to go and, once again, Alex doing that skill of just going.

Alexandria: I went to the conference and, actually, I have family out there, so it wasn’t terrible in cost, but I went to the conference and they were having NexGen voting and picking the next presidency, and so I went and I’m like hearing all this stuff about NexGen. I was, like, oh wow, this community exists. I was like, oh, this is great. Then I found out that they’re, like, yeah, local chapters have NexGen and I was like, awesome! Well, I’m going to go back to the chapter, Northern California, and ask them about where this NexGen meets.

Alexandria: So I get back from the conference and I’m asking the board, hey, when does your NexGen chapter and what days? And they’re like, we don’t have a NexGen chapter, and I was like, “Well why not? I just came from a conference where there’s plenty of NexGen and we should have one.” And that’s actually how I ended up on the board, because I brought this up as something that should be there and that’s kind of how I started the chapter, is that I brought the idea up. Little did I know that they were going to ask me to do that.

Hannah: What blows my mind about all of this is that you’re three years in.

Alexandria: Yes.

Hannah: Like I feel like I’m talking to somebody who has so much more experience. We’re talking specifically about FPA, but I think the financial planning community, it sounds like it’s fast-tracked your career. It sounds like it’s given you such a bigger perspective. Would you agree with that?

Alexandria: Yes, I definitely would and, honestly, I say this to several people when they come and ask me questions or NexGen asks me questions about how I got to at least the point that I’m at now and I give a big shout-out to all of just the financial planning community, but, like I said before, it’s really being able to go outside your comfort zone and call that financial planner that you know that is in your area, or meet up with the business owner or talk to other students amongst the FPA student chapters to just learn about what they’re doing so that way you can, one, be aware of roadblocks, but also be aware of how do I get to where they’re at if that’s what you want to do.

Alexandria: That community has helped definitely spearhead things forward because I’ve been willing to reach out and maybe take the extra step of being open and kind of vulnerable to the fact of you’re new, but you’re so interested and wanting to know more.

Alexandria: I mean, I feel like it does not hurt to ask somebody how do you do it, and it’s interesting to them because they’re like, “Oh, you’re curious about what I do?” And you are, and then at the same time, not forgetting to let them know what it is you can do to help them with what they have going on, whether that’s business related or just some type of venture that they’re working on in the financial planning industry, but it helps spearhead you because now they’re like, “Okay, Alexandria. I met you, you’re doing great. Oh, you’re looking for a job?” Or “Oh, you’re looking for an internship?” Or you know, “You just need an opportunity to help? Oh, I know who to put you in contact with.” Or “I see that you’re doing this in the community.”

Alexandria: It just drives what you’re doing in leadership and helps move your career along. I don’t know if I would use the word faster, but it definitely helps spearhead you for new opportunities and being open to new opportunities, especially in a space where, financial planning, as you’ve seen, people are able to create new things. Now, people are able to just go start a business and all virtually, or just be support staff and be virtually. This is all new stuff that the old school way would be like, you’re in an office. You’re working for somebody, 9 to 5, right? That seems very … That’s how things used to be, but now people can try something else if they want to, but it’s just the opportunity and being a part of this community helps move that along.

Alexandria: Not just that community, but the study group aspect. I have an amazing study group. How it got formed was through FPA, so another point to FPA where study groups became involved. My mentorship came from FPA, like, if I just went back and tried to trace where all my opportunities came from, it always ended up in the community of some sort. And not just in the financial planning community, but I felt like in my personal community, I did the same thing so it helped you keep involved with what’s going on in your personal life and things that you enjoy in hobby and life, but I definitely feel like it’s helped open up a lot more opportunities being involved in the community, rather than just maybe showing up.

Hannah: Absolutely. I look back to when I started my career and I think I networked pretty well and I never realized the value of it until I could look back and see, oh, those are the opportunities that I had because I was in a network, because I was involved in a community, because I really did put myself out there. And it’s just like you really open doors, maybe not even right now. Maybe in five or ten years from now.

Alexandria: And it’s also scary too. Let me not pretend like I just was out there doing all this stuff, but it’s scary too because when I started, when I went to that mixer I was 22 years old and you don’t know what you’re going to say. You don’t want to embarrass yourself. You’re the only one that looks like you. I mean, that is all very scary, but when you go and you talk and you just kind of like, okay, the jitters are a little bit gone, and then you leave the event, you always go, “Wow, that was so great” and you call up your friend and you go “You won’t believe what opportunity just happened to me just because I showed up.” You know?

Alexandria: You get points for showing up, so I think that that’s a big deal, but it also is very nerve-wracking too. It’s like bypassing that peace in order to expose yourself is huge.

Hannah: Well, and we’ll let everybody in on a secret, especially when you’re at these networking events, people love to talk about themselves. So it’s always an easy in just to be, like, tell me about your business, how did you get started? People will talk your ear off, so if you’re not sure what to talk about, just ask them about themselves or what they wish they would’ve known at your point in their career and I promise you, you will have lots to talk about.

Alexandria: Yes. Keep those two questions in your back pocket. Keep those two questions.

Hannah: So I’m assuming, I mean I know, but for the audience, so you’re no longer with MetLife.

Alexandria: Correct.

Hannah: So you’re working as a paraplanner now, is that correct?

Alexandria: Yes. So I work at a financial planning firm and I support one of the partners of the firm in a paraplanning role and I should probably give the caveat – because it will explain some of like where my stories come from – of what paraplanning means because another thing that means something different to each firm, but it’s not sitting in in meetings and it’s not sitting and doing notes or building out financial planning software. So that is a different space, but kind of how we’ve described it, it’s more the trading desk and the service and the concierge world of the clients, and helping them complete transactions and a lot of business strategy is more of what my role is, even though it’s called paraplanning.

Alexandria: I just wanted to give that caveat because I notice that that does mean something different for each person when they hear it.

Hannah: Yeah, well, and it’s also really interesting because it just kind of opens up the world of how much there is to service a client and how many different roles there are. You know, we’re in the FPA Activate group and we just had somebody ask about the different career paths and what are the ways to serve clients and it’s like there are so many different ways to do it and what you’re doing is absolutely critical to a client’s wellbeing.

Alexandria: Yeah. Yes, it is.

Hannah: I mean, it is.

Alexandria: It is.

Hannah: And it might not be that you’re in the client meeting, but that’s an important piece. That’s a really, really foundational piece that you need to know if you want to be a lead advisor or lead planner someday.

Alexandria: Exactly. And so I know a lot of people are going, “Well, that’s a lot of” – like you said – “good experience” to be able to get that information and so as I work with clients, yeah I’m not sitting in the meeting, but it’s just as impactful to be able to dissect information that’s given to you that you didn’t hear directly from the client. That’s a skill. You’re just building skills, all these things are skills and how you come up with them is, you know, a completely different topic, but …

Alexandria: There’s not a wrong way to be learning is kind of how I look at it.

Hannah: Oh my gosh, I love that so much. I did my internship and I had, like, I love the firm that I did the internship on but I scanned the entire summer, like I took two full walls of paper files and scanned them and it was awful.

Alexandria: Yeah.

Hannah: It was rough.

Alexandria: Yes.

Hannah: But, kind of what you’re saying, is I learned so much from that because I read all the client notes. I got to see how did the client relationship progress over 15 years and that was so incredibly valuable, like, I had never read a divorce decree before.

Alexandria: Yeah.

Hannah: I got to read all these things. I got to see what was in these client files and I know that’s … There were other interns who had such a better experience, but I’m like, like you were saying, you still learn how you learn.

Alexandria: Yeah.

Hannah: And it’s important to take advantage of those opportunities.

Alexandria: Correct. Correct.

Hannah: And then the best part was when I got my first full-time job, I put on my list, I put scanning or something like that and when I got the interview, she was like “Everything is perfect, even down to the scanning.” So …

Alexandria: They’re like, yes, we got another one.

Hannah: Yes. Okay, so your title as a paraplanner, you’re doing more of the client service work. Maybe not the direct planning work. Is that something you want to get into someday? Do you see your role as wanting to stay more operational? Or do you know?

Alexandria: You know, it’s funny because now that you say “Do I know”, I actually was struggling with that and I felt like I think just recently I shared with one financial planner at retreat and I was like, you know, I really want to be a financial planner. And, at first, I was hesitant to say it because I wasn’t sure because I’ve been doing client service and I like it.

Alexandria: It’s not that I don’t want to do it, but at the same time, it’s kind of scary to hear, like, “Oh, well, if you become a financial planner, you kind of miss out on doing this piece” or you end up passing that on to another resource. And so I think now after three years, I can say that that’s exactly what I want to do, so that way, I can still be held accountable and still want to learn in different ways that still keeps me on track with becoming that.

Alexandria: And so even though I’m in a client service role right now, I told somebody “If I could build out my own position, it would be half client service, half financial planner” [inaudible 00:23:31] and just be like a hybrid of both where I’m like okay, there’s some meetings where I sit in and run on my own, but then there’s still this side of intrigue that happens after the meeting that still is required of me. And I would love to do both and so I’m still doing things now that, obviously, is more in line with being a financial planner. I mean, my role currently now does not require me, you know, if we’re looking on paper, to go to, let’s say, an FPA meeting and learn about our government pension plans and if they’re failing or not. That’s not necessarily something I need to know in client service, but it’s intriguing me to know because one day, when I do come across that client and I’m helping the client later on in life, I want to be able to do that.

Alexandria: And so I still prepare myself as if, like, the opportunity came tomorrow to do it, that I’d be open to doing it because I still engage myself in that way and I also think that if I was going to do client service more intensely, that I’d still need a higher level of knowledge to get to a more critical period of not just maybe going through the flow of, okay, I’m prepping meetings, like I want to be very skilled at being the best client service person, so that’s why I’m so intrigued in getting my CFP and working towards that and other designations even though it’s not necessarily required for a paraplanner to have those types of things.

Hannah: Yeah, I just love this, like, what are you naturally drawn to and what are you naturally curious about and stay interested and show up to those things because you don’t know what your career path is going to be.