#FASuccess Ep 174: Leveraging Zapier And PreciseFP To Weave Together Independent Advisor Open Architecture, with Shanna Tingom

What You’ll Learn In This Podcast Episode

• How Shanna Started Out And What Her Firm Looks Like Today [00:04:57]
• Her Unique Advisor Technology Stack And Why She Uses HubSpot [00:24:09]
• How She Overcame The Challenges Of Going Out On Her Own And Why She Is Thankful She Started Out A Large Financial Advisory Firm [00:52:12]
• What Shanna Found Most Surprising About Building Her Business [01:24:54]
• Advice Shanna Would Give To Newer Advisors, And How She Defines Success [01:36:41]

Resources Featured In This Episode:

Full Transcript:

Michael: Welcome, Shanna Tingom, to the "Financial Advisor Success" podcast.

Shanna: Thank you so much for having me.

Michael: I'm excited for the discussion today and talking a bit about technology, our world of advisor technology and this sort of strange challenge, it seems, that we have today in advisor world, right? I feel like you kind of get one of two choices in technology. Either you work for typically a large firm that just puts it all together for you. You use exactly what they use, frankly, whether you like it or not. Like, "Here's our tech around here and the way it works, use it," and hopefully it's reasonably good, or you're in sort of this flexible open architecture world where the world's your oyster and the problem is like, the world's your oyster. You have sometimes an overwhelming number of choices. You have to figure out how to weave the technology together. Most of us didn't get into this business to be technology weavers. We did this for financial planning and serving clients and get stuck in this point of needing to figure out how to cobble together our own tech stacks.

And we kind of suffer on both ends, I feel like. Either it's too rigid and all-in-one and then inevitably, we end out with some things that aren't really great in a particular category, or you go the open architecture world and then have to struggle at that end in figuring out how to weave it all together and make it talk together. And I know you have lived both sides of this divide in your career. And so I'm looking forward just to the discussion of kind of the woes and the opportunities in how you bring a tech stack together as an advisory firm to make it all work when you didn't necessarily get into this to be a full-time techie, you're in it to be a financial planner.

Shanna: Yeah, for sure. I lived that for the first five years of my career. I was with a company that handed me a package and said, "Good luck." And it was really through that experience that I learned what I wanted to do if I ever did this on my own. I had no desire to really, but circumstances changed. And I went independent five years ago, and I started building my tech stack, looking for things that I knew I needed that I didn't have access to in my previous life. So that's kind of how it started, and it's just sort of mushroomed from there.

How Shanna Started Out And What Her Firm Looks Like Today [00:04:57]

Michael: So I think as a starting point, help us understand your advisory firm as it exists today. So paint the picture of the firm, and then I want to really understand more of like, what does technology look like and what's this technology journey been for you?

Shanna: Yeah, for sure. So up until November of last year, I was the only advisor. I had one assistant, and I hired contractors to do sort of stuff that was above my knowledge level, both with technology and other marketing and other pieces. In November of last year, I partnered with a retiring advisor in a neighboring town and bought his practice.

And so, in addition to that, I brought on a third advisor to help me service another area in a neighboring town. So, as of today, my practice is a full-time assistant, three advisors. We're looking at bringing my husband on as sort of my CTO. He's sort of been the silent, I don't know what you want to call it, but he is my CTO and has been since I started my practice five years ago, making sure that I've got all the pieces in place with data security, FINRA, the SEC, all of those things. But he hasn't really had an active role in the business.

And this year, he will have that role. And all of these pieces that we're going to talk about today will be handed off in full to him. So my practice has, for sure, grown in the last six months, some by choice and some just by opportunity. But all of these technology pieces have allowed me to be able to bring new people on and scale in ways that I couldn't have imagined a year ago.

Michael: So I want to get more on the technology in a moment, but also just help us understand size of firm overall in terms of who you serve. I don't know if you measure by AUM or revenue or number of clients, but what does that look like on the client end?

Shanna: Yeah, for sure. So I'm a financial planning-first firm. And so we don't require all of our clients do financial planning, but it is a place that about 80% of them start, maybe between 80% and 90% of them start with a financial plan. I charge for the financial plan. I charge separately for the assets that I manage as a result of that financial plan or if somebody doesn't do a financial plan. And I have about $50 million AUM right now that I manage company-wide.

Michael: Okay. And how does this work from a fees perspective? What do you charge when you do upfront planning? What do you charge when you do AUM? Do you offset one into the other? How does the fee structure work when you're doing both?

Shanna: Great question. I do not. I charge separately in my practice. You can do either/or or both. So if you come in and do a financial plan with me, the most common fee structure, I have three of them, I have a subscription model and I also have a bit of a higher-end model if some folks need more than the average. But my average client comes in and pays $2,500 the first year and $1,000 each year after that to continue to engage with the financial planning side of my practice. And then I charge 1.5% as an asset management fee. If it's under $1 million, that percentage goes down, if it's over $1 million, and then again over $5 million. And I don't waive the financial planning fee or discount the AUM fee. There's value in both of those. I strongly believe that. And so they get to pick how they engage with me.

Michael: Interesting. And so you're not just charging an upfront planning fee for the upfront plan itself and then moving to AUM, you keep an ongoing planning fee in addition to charging ongoing for portfolio management on the AUM side.

Shanna: I do. I do. Because I do have a good chunk of clients whose full financial AUM, if you want to call it that, is in their workplace plan or it makes sense for it to be in their workplace plan. And so that I don't charge on an AUM basis for those folks. I'm just on an ongoing basis. We're reevaluating their strategy and making those recommended investment decisions through the financial planning engagement.

Michael: And so I'm just wondering, how do you explain or talk through this for clients who, I'm sure you get some that inevitably ask like, "Wait, am I paying two fees here? Why am I paying you twice? How does this work? What's going on here? Wait, wait, wait, wait."

Shanna: No, those are great questions. And it's easy enough for me to explain it because it's really for two separate things. The asset management is simply to manage the assets in a way that fulfills on the goals and the dreams that we have set up in the financial plan. And so that's why I do allow folks to come in and bring me assets without doing a financial plan. I also allow folks to do a financial plan with me where I don't manage their assets. But if they want the full-service sort of experience with me, most of my clients do financial planning first, and then we determine which assets, if any, we're going to move into my care. And we move those into my care, and that is then where we get the asset management fee.

Michael: And then how do you explain the ongoing fee? Do you get clients like, "Look, Shanna, I'm already paying you 1.5%, why am I also paying this planning fee? How does that work?"

Shanna: Yeah, that's a good question. I really don't get that question a ton. I do on the outset. I just had a prospect yesterday say, "Well, I don't understand, once my plan is set up, aren't we good?" And I'm like, "Well you think so, but think about how much your life has changed in the last three weeks." Right? An ongoing financial planning fee allows us to make course corrections when life throws us a curveball. And all of our lives change so rapidly that a once-and-done financial plan is not something I'm interested in. I'm not interested in the plan, I'm interested in the outcomes of the plan for you. And so I don't want you to pay me either on an upfront or an ongoing basis if we're not constantly reviewing that plan and measuring it towards your goals.

Michael: Okay. And out of curiosity, do you get clients that just push back on AUM fees themselves? Well, there's a never-ending series of debates out there of what is the "fair" advisory fee, but at least the proverbial rule of thumb has kind of been advisors charge 1%. We don't actually all charge that. We're pretty much anywhere from like 0.2% to 2.0%, with graduated rates and the rest. But I'm just wondering like, do you get clients that ask like, "I thought advisors charge 1%, why do you charge 1.5%?"

Shanna: Yeah, sometimes. If they've interviewed other advisors, they might ask that question. But my fees all-in, so most of the time, I'd say 99% of the time these days, I'm hiring a third-party money manager, and they're actually doing the money management. So that includes their fee, in addition to all of the other platform fees. There's no extra fees. I'm paying those all out of that 1.5%. So when you look at it from an all-in perspective, I'm right in the hunt with most of the other advisory firms out there.

Michael: Okay. Because to the extent you're using TAMPs or outsourcing platforms, you're not charging your advisory fee and then having the TAMP charge their fee, you're charging, call it an all-in asset management fee and then you're covering sub-advisors and TAMP platforms and other platform costs. I'm presuming they still pay like just expense ratios of funds and things like that.

Shanna: They do. Yeah. Yeah, if we use actively managed funds, for sure. But any other fee that they would normally see, that would normally show up on their statement, I'm covering.

Michael: And so what portion of your business do you outsource to third-party managers versus keeping in-house? Are you a heavy TAMP user and outsource all of it or is it a blend? What does that look like?

Shanna: Yeah. It's a blend at this particular time because the practice that I purchased, they are doing the management themselves, but that will be shifting over time as well. What I love about this business isn't necessarily managing the investments on a technical level. So that's sort of what I learned a couple of years ago when I darn near walked away from the business was that I don't enjoy that part of the business. There are people that do it that are far better at it that actually enjoy it. And so I am more than happy to hand that responsibility off to those people.

Michael: Okay. And so how do you frame like what...if that's what you don't enjoy, what do you enjoy? How do you think about positioning yourself within the business?

Shanna: Yeah. So my highest and best use is meeting with and talking to prospects and clients. I absolutely love the financial planning process, which was a surprise for me because I didn't come from that world. Where I came from, it was heavily gather assets, gather assets, gather assets. And once I started down the path of true financial planning, I learned how much I love it. And I love those conversations, and I love helping clients achieve their goals and really rolling my sleeves up and getting nitty-gritty about making certain moves in their financial lives. So that's the thing that I would love to do more of in every week. I just don't get enough of that part of my business. I also love talking to prospects, because I love hearing how people think I can help, and really determining if they're a good fit for me and I'm a good fit for them. So those are the two things that if I could just spend an entire day doing those things, I would absolutely spend all day doing that. So I gladly hand off everything else if the opportunity arose.

Michael: Well, I think there's something really powerful in that that goes, I don't know, underappreciated in the advisor world. That particularly, well, I was going to say as you grow the business, but even if you don't necessarily grow, because you can just choose what you keep to do and what you outsource, that once you get past the really early stages where just there's no revenue yet, so you kind of have to do everything because you can't...you don't have any dollars to outsource, almost everything past that point really is ultimately a choice about what you continue to do and what you don't do in your own firm.

I think there's a commonality for us that we, as Alan Moore likes to say, we "should" on ourselves a lot. I should be doing the portfolio stuff because the client pays me an AUM fee. So I feel like I need to. Or I should be doing this piece of the service work because my clients want my personal touch. Or I should be doing the plan input because I have to look at every plan. Like, no, you really don't actually have to be doing all that stuff or really any of that stuff. If it's important for the client, someone needs to do it, the business needs to do it for them, but you get to choose in the long run what you actually do in your business that best fits your skills and talent. And in general, when you do the work that you're best at, that's good for the business, it tends to actually grow the business and help in the long run anyways.

Shanna: Oh, for sure. And there's less errors. Like I look back now and now that I've had an amazing assistant now for about eight months, and there are certainly things I know how to do because I did them for so long on my own, but when I try to insert myself in that process today, it wreaks havoc with everything. So I'm going to let her do what she's amazing at so that I can do what I'm amazing at.

Michael: Very cool. So as you've structured this, what do you actually do for investment outsourcing? When you're choosing to do that, who do you use for a platform?

Shanna: Yeah. So my broker-dealer is Cambridge Investment Research, and they have a platform that they call CAAP that's been around for a really long time that has all kinds of third-party options available within it, from small account solutions, $5,000 and up to UMA options, and we can blend the self-directed with the cookie-cutter platform.

So they've really enhanced that option in the last couple of years for sure. But that's a world, again, I came from the commission world, A-share mutual funds, stocks, and bonds, and it took me some time to wrap my brain around the value that a third-party money manager and mutual funds managed by a third-party money manager have. But I have made a complete shift in my mindset in the last three years. And looking at what's going on in the market now over the last month, I can't imagine what my life would have been like if I were still running these portfolios.

Michael: Yeah, it's an interesting distinction that I think hits home, that for advisors that have kept managing the money in-house, when the crazy market stuff happens, you have to roll up your sleeves and get into what's going on with the portfolio, right? Because someone's got to do it. And we've certainly had our share of turmoil and everything from certain funds or ETFs under stress to just certain strategies that aren't doing well or maybe doing differently than expected.

And then the firms that have outsourced have largely said like, "Yep, really good those people that I pay are doing the things I'm paying them to do and figuring that stuff out, I'm going to go do more client meetings and client conversations and plan updates and the things that keep me more client-facing and keep clients and revenue on board because I don't have to do that stuff." Not that I'm necessarily negative on managing portfolios in-house, I've seen firms that do it well, but trying to put yourself in the position to be the advisor that does all the portfolio stuff and all the client stuff at the same time, it's really times like this, I think, when it starts to hit home of, yeah, this is really just amplifying my stress.

Shanna: Oh my gosh. Yeah, I totally understand that. And if that's what you enjoy and you're good at it, Godspeed, my friend. But it isn't for me. And so I was thinking about this last week as I was literally having virtual client meetings with clients as the market was dropping 2,100 points on Monday, and I couldn't imagine. Like I was paying enough attention to my phone and what was happening in the market when I knew I wasn't the one having to press the button. I can't imagine trying to focus on what a client's fear is and what their uncertainty feels like, and really making sure that you can calm their perception of what's going on. If I were worrying that I was missing an opportunity to press the button or something in the market, just, no, thank you.

Michael: Yeah. Well, the sheer amount of stress that I was hearing and seeing in our advisor world of little things like just, oh, my God, trying to figure out which day to hit the rebalance button when...particularly in the height of that stint for a week where we were having like 10% up days and down days back-to-back, right? Like, figuring out which day or even which hour within the day to hit the rebalance button could literally be a 5% and 10% swing, when a lot of us are not necessarily thrilled to have to make that call down to that level of timing, but someone's got to make it if you're keeping the responsibility. And just the number of client phone calls and meetings and the rest that you can't do when you're putting all your time and energy towards that. And as you've, I think sort of illustrated with your scenario, at the end of the day, when you're demonstrating that you're delivering value, clients pay, As you said, you're charging 1.5% and have grown $50 million under management, like, it's okay, people are paying and doing business, it works.

Shanna: It does. You know what? I was talking with another advisor this morning, and I think our clients are mirrors of ourselves. So if we are...I get a lot of questions from other advisors that are like, just like you framed it at the beginning, "How do you get them to pay a financial planning fee and an asset management fee that admittedly the asset management fee is probably higher than the norm? There's no way I could do that." I'm like, well, then you won't, because you have to have confidence that you're worth it. And if they walk away, they weren't the right fit to begin with. And I'm okay with prospects walking away. I really am. I don't negotiate. I don't lower my fee. I don't change my fee structure. Even if I really feel like I can help or I want to help, those are the ones that usually end up biting me in the behind. So no way. It is what it is. I'm clear on my value, and I'm okay that some might not see it that way.

Michael: Yeah, and I think that's probably the biggest crossroads for most of us in trying to figure out just whatever it is we're going to charge and being comfortable with it. You have to get to that point either from a mindset perspective or just an outright financial perspective, you have to get to the point where you're okay that when you're confident about your value and what it's worth and what you charge and some people say no, it's okay if they say no, you can just go find another prospect. If you don't feel like you know how to find prospects or there won't be other opportunities, right, if you feel like there's never going to be another at-bat, you really want to take a swing at everyone that you get.

But the problem is not really, you have to keep compromising on your fees because you don't have very many at-bats. The real question is, how do you get more at-bats so you don't have to feel so anxious every time you're in front of a prospect to say, "I'm going to compromise my value or my pricing or whatever it takes to get this person on board?" That's a scarcity of prospects problem, which is a marketing problem and a challenge for the business. But you don't solve that by compromising your fees, you solve that by trying to figure out, well, how do we get better at marketing so we get more chances at the plate with people who do value what we do and will say yes?

Shanna: Yeah. And who are the right fit for your business? Right? One thing I've learned over the last couple of years is there are people I enjoy working with and people I don't enjoy working with. And every time I take one of those that says yes but I know I'm not going to enjoy it, every time it bites me. And I wish that I hadn't, and I end up losing money and sleep. And I do not want a business that I do not enjoy. That's just the bottom line. And I don't want a business where my staff doesn't feel valued by certain people. I will protect that to the death. And so that's super important to really be clear. And it has been for me to really be clear on what I enjoy doing and who I enjoy serving. And if they don't fit that mold, then I'm sorry, but I'm just not the right fit for you.

Her Unique Advisor Technology Stack And Why She Uses HubSpot [00:24:09]

Michael: And so, as you look at the business now, help us understand what the technology looks like of how are you actually running this and executing? What's the core technology stack or tools of the business?

Shanna: Let me just start by saying that I didn't launch my business five years ago as an independent and get this all right the first try. To use your analogy, I swung a lot and I missed a lot. And I think I had three different...I've had three different CRMs, three different financial planning software, two different phone systems. It was nuts at the beginning just trying to figure out how all the pieces fit together.

But today, I'm pretty impressed with what I've built. And it worked super well for me. And a piece of software called PreciseFP is at the hub. Really, it's my source of truth. And clients are able to schedule appointments with me or prospects are able to schedule initial consultations with me using that software. So they opt in to the technology.

And then once we've met in person and I want to onboard them, I send them an onboarding form that they completely fill out and attach all of their statements. And that eliminates the back-and-forth emails of, "You missed that. I don't understand this." It's just super seamless and easy. Data then zaps using Zapier back and forth from PreciseFP to HubSpot, which is my CRM, and to eMoney, which is my financial planning software. eMoney is connected to my broker-dealer.

We can push data from PreciseFP to all of these different places and pieces and parts and fire off workflows that then give my staff the tasks that they need in order to get documents sent or different pieces of that trajectory as well. So a lot of the things that I was managing through actual workflows in the traditional CRMs that our financial industry uses, I now have in automated workflows in HubSpot. So rarely do I have to push a button. Stuff just happens. And it's completely amazing. I love it.

Michael: So you had a couple of interesting sort of pieces there that I want to ask more about. So let me start with the CRM end. Most of us in advisor world use, well, it's like advisor CRM system. So Salesforce, Redtail, Wealthbox, Junxure. You're living in HubSpot, which, in general, has not much awareness for advisors. The ones who probably do know it probably know it as marketing automation software. So talk to us about HubSpot as a CRM for a financial advisor. How did this come about? What do you do with it?

Shanna: Yeah, great questions. And I started actually using HubSpot as a marketing CRM about three years ago. And I ran HubSpot and Redtail for a while, and then I moved to Wealthbox and ran HubSpot and Wealthbox for a while sort of in parallel. And what I realized was that I was not using the functions of Wealthbox that are for our industry. I wasn't using it to aggregate accounts. I wasn't using it to look at account numbers or non-public personal information. It wasn't my source of truth for that stuff.

So long story short, I had two almost full-time assistants. One of them was really designated sort of as my CRM guru, and she ran both of the CRMs and did all of the tasks therein. And one of my assistants left to work for another advisor and the second assistant, I said, "Okay, now it's time for you to move to another advisor because you want more hours than I can give you."

And I hired a couple of other folks in between who were miserable failures. I wasn't good at hiring back then. And that left me for about eight months without an assistant. And so I took that opportunity to throw out everything I knew about how the technology was supposed to work and rebuilt it the way I wanted to.

So HubSpot has a bunch of different modules you can add to it. Their regular CRM is great. They have a marketing sort of add-on, they have a sales add-on, and they also have now a service add-on, which is how we run all of our service issues through what they call their ticketing side of things. So we have support tickets and tickets for a financial plan that need to get updated or somebody that needs to get onboarded. So we literally use almost every piece of software add-on that they've ever added over the years, I've sort of opted into almost everything. And I even have my website on HubSpot now.

Michael: Interesting. So the parts that I guess you, call it like you don't get that other industry tools have is some of those functions to aggregate in, like pulling in investment accounts so you can see them in CRM, pulling in other software tools that integrate. But I think you had framed it like, CRM isn't your source of truth for that stuff, which I guess I sort of take is like, if I want to know what's going on in my client's investment account, I just log into my BD and look at their account. I don't need it in my CRM. It's not that hard to look at it in the system. So if I'm not going to move that kind of data, then suddenly I don't actually need as much in there. And suddenly non-advisor industry-specific CRMs become more viable.

Shanna: Absolutely. And what I learned was that as much as they're trying to, advisor-specific CRMs have woefully inadequate automation. We have what we call workflows, but they require a human to click a button to move it to the next step in almost every case unless things have changed in the last few years. And I don't think they have. What marketing CRMs excel in is automating that process so that a human doesn't have to click a button. And so that's what I've really enjoyed is I've gotten to be kind of a master workflow builder. I think I have something like 78 different automated workflows that run everything, from marketing to client reviews to engaging with a financial planning prospect, address changes and personal information changes with clients, birthdays. I've just built all this stuff automated. So either I have to opt somebody in to the workflow in certain cases or it just does it automatically based on stuff that we do in the CRM.

Michael: And so these are all workflows that you've built in HubSpot. And so is that really the driver for you of what led you away from systems like Redtail and Wealthbox into HubSpot, that HubSpot is actually better at doing these workflow automations than our advisor industry at doing workflow automations, even though they're advisor workflow automations?

Shanna: Yeah, I wouldn't call them automated. But yeah.

Michael: Meaning the others do?

Shanna: Yeah, totally. So yeah, that's exactly what it was. I started looking at...in that year that I was redesigning things, I'm like, "Why do I even have an advisor-specific CRM?" Mainly I had one because they told me I needed one when I joined Cambridge. And so they said, "Here are the four or five that the industry uses, pick one."

And so I did. And now, I don't miss it. There's a lot of power, actually, in not having my client's non-public personal information in the CRM because I can hire contractors and do things without fingerprinted folks that I wouldn't be able to do if that data lived in the CRM.

Michael: Okay. All right, so this raises other questions. So what data is not in your CRM and where is it?

Shanna: Yeah, that's a great question. So I don't keep driver's license info, Social Security info, any sort of account numbers. I don't keep statements or copies of statements or anything that has any sort of sensitive data in the CRM. That all lives in PreciseFP. And I also use the Microsoft suite. So I use OneDrive and OneNote to save those documents that the client needs, sends me and I need to send them. So we keep those things completely out of our CRM.

Michael: So talk to us more then about PreciseFP. Because I don't know that PreciseFP has huge adoption for the industry. They've been around, actually, for quite a few years, but I think to the extent they've been out there, most people know them for at least their roots, which was essentially data gathering.

Back not so many years ago when there were almost no data gathering tools built on the front end of eMoney and MoneyGuidePro and tools like that, if you wanted to get the data in, either you keyed it manually, right? You collected from a client meeting or you sent them a PDF or something and they would fill it out and then you would have to key the data in, or you would use a tool like PreciseFP, which could send clients sort of basic data gathering forms that you could customize for your planning software, and then it would automatically pipe the data into the planning software. So it was the front end.

But that was basically a data gathering conduit. They were a front end data gathering form. Very helpful to get the data in one place. And then I know they built some tools so you could pipe it to like your CRM at the same time, so clients didn't have to double data entry. But it sounds like you're using PreciseFP in a whole other way if this is your hub of data to the point that you're not even putting stuff in the CRM because it lives in PreciseFP. So help me understand more of like what PreciseFP is for you, how you're using it, what that functionality is.

Shanna: Yeah, for sure. So it sort of it is start to finish my client-facing tool. So my clients all have access to eMoney through the eMoney portal. But any form that they fill out anywhere along the way, whether it's to book...whether it's for a prospect to book an appointment with me or it's to onboard as a financial planning or asset management client, or it's once you're a client, if I want you to review your information to make sure that nothing's changed and your beneficiaries are the same, those forms all get pushed out via PreciseFP. The data comes in, and we can then move that data to eMoney without having to key the information in again.

Michael: Okay. And just PreciseFP keeps the integrations to move that data around?

Shanna: You got it. It's just a one click to most CRMs and financial planning software. And so some have bi-directional integration where you don't have to do anything, but some have like an import/export feature that's a couple of clicks and you're good to go. It wasn't always my hub, but once I moved off of the industry CRMs, I knew I had to have a place for that to live where I own the data.

Michael: So help me just understand more. Again, I get, hey, I give my clients forms on PreciseFP because it automatically puts the data into my CRM and planning software and the rest, right, so I don't have to double data entry. But where or how does PreciseFP become the main place the data lives?

Shanna: Sure. So there is an account sort of function if you want to call it that. And an account in PreciseFP is sort of like a household, what we would call a household. And so I have...I can push, and this is what I did actually before I abandoned the industry CRMs, I push all of my client data from Wealthbox over to PreciseFP so that each of my households now has an account in PreciseFP that then I can engage them with different forms, different things that I need them to do or submit to me or whatever the scenario is. There's actually even a pipelines feature in PreciseFP that I don't use very well. They introduced it about a year ago and I haven't really wrapped my arms around it. But they are probably closer, in my opinion, to what most of us are looking for from a data flow perspective than many of our CRMs are. And so it's...

Michael: What do you mean by that? Can you give an example? What makes it better?

Shanna: Yeah, for sure. So you can design...you can either take one of their forms that they've already done for you or you can completely customize and design your own, which is what we've done. We've taken their templates and just like supercharged them and made them exactly what we want and for us to gather the data that we want. And then we've added all kinds of other templates in there for different things.

And so we can then engage with our clients in a way that's real-time. It automatically fills in their other information. So they're not having...the thing that I always felt weird about like getting a client ready for an annual review, let's say, is that you'd send them a form, a blank form, and say, "Hey, update your information for me." And in the back of their mind, they're like, "Well, don't you have it?" And it's like, well, we should, but unless we take the time to pre-fill all of that by hand or on the computer. And that's not a realistic assumption in a lot of cases. They have to fill it all out again. It's sort of like going to the doctor's office when they hand you a clipboard and say, "Spend the next half hour filling out the information we already have on you." So, I think it really just adds that personal touch.

And then the clients can go, "Oh, wow, I've moved and I didn't let you know that." And I'm like, "Yeah, you didn't let me know that. I don't know how I didn't know that, but I need to." And they can look at who their beneficiaries are and just all kinds of things. And then they can change them. And then we see what they've changed so that we have the paperwork ready when they come in for the review to take care of all of the stuff that they changed.

Michael: And I'm just fascinated that like, you're finding you can build more of these workflows by not being in the advisor CRM systems that were made to help us run our businesses efficiently and automate them more. Is this just at the end of the day, limitations in technology that as much as all of our aggregate industry CRMs talk about workflows and automations, that we're just that bit far behind tools like HubSpot and even what PreciseFP is building on?

I know they're not built to be a...PreciseFP isn't necessarily built to be a CRM system, but you're...it kind of feels like you're using it as sort of the CRM hub. It has the data and it's powering the automations, and then the extension of them happens in HubSpot.

Shanna: Yeah, exactly. That's really the interesting part is that with Zapier, it's only as good as the automations that will allow...that the company will allow to run through the different tools. So when you get a behemoth, like a Redtail or a Junxure and there's only a handful of advisors using Zapier, they don't really care to make those integrations work any better than they currently do.

And so that's where I found real value with PreciseFP is that I can send them an email and say, "Hey, I'd really like it to do this." And they'll go, "Yeah, that kind of looks like a good thing. Let's talk about how that could work." That's been really a cool experience.

Michael: So Zapier is an interesting piece unto itself that I think not many people on our advisor world are very familiar with. Zapier is kind of a middleware platform, like connect software to other software platform. If software A says, "I can send the name out of our software" and software B says, "I can take an import of a name from somewhere else," Zapier is like the middle piece where you can program what they call zaps to zap. Like, oh, software A says they can send the name out and software B says they can send the name in.So create a little zap to do it. And now we can move the name from A to B on an automated basis whenever you change the name in the future. And you don't have to do any ongoing work because Zapier does it automatically. That's what they're built to do.

And the only question then becomes what things can you push out from software A and what things can you take in from software B in order to make these zaps happen?

Shanna: Exactly. And we're just limited by what zaps the company offers Zapier, right? So that's where it's been frustrating looking at some of the industry pieces of technology is that their zaps are very rudimentary or primitive. And looking at the marketing CRMs like HubSpot or Infusionsoft or ActiveCampaign, they're far more advanced in what they allow the systems to do because they're designed for marketers, not for advisors. So I have lots more choice.

Michael: Interesting. And so that's kind of the...so it sounds like the driver at the end of the day is, one of the challenges for integrating software in advisor world is, in essence, we have to call the software companies and shake our fists at them and say like, "Wait, I wish you would integrate better with so-and-so because we want to do more things with them."

And we have to push the software companies to do it. The distinction in the world you're in with HubSpot is, because HubSpot is just an absolutely monstrous CRM marketing automation platform outside of advisor world, just in the general business community, they've already built far more deeply into Zapier, probably because they work with so many different industries. So they can't do all the custom integrations to every industry specialized tools. So they made a really robust library in Zapier and power it that way

Then when you get to our industry, the distinction of PreciseFP, it sounds like, is PreciseFP has been more willing to build zaps proactively. And so you can zap more from PreciseFP to HubSpot than you can anywhere else, which means for all the tools that won't build the automations, you can essentially make them yourself because HubSpot has more automation capabilities and more Zapier integrations to zap things around and make them happen.

Shanna: Absolutely. Yeah. It's really cool to watch, actually. And so much of my process is automated in that way. When a prospect closes a PreciseFP form, I have zaps built to go to HubSpot and change that client or that prospect to a client, put them in the correct workflow, assign my assistant the task of preparing the paperwork, send the client a welcome email.

And they get a series of emails for the first eight weeks that they're with me explaining the firm, explaining the tools we use, explaining our process. And throughout that process, my assistant is getting tasks to do certain things at certain times. And this all is without me having to do a darn thing. That doesn't exist in the advisor CRMs that we use today. And it should. We're in 2020 here, people.

Michael: Because this is just a giant series of automations in HubSpot. Do this, then that, then that. And it gets kicked off when they do something in PreciseFP which you can zap into HubSpot to make a trigger.

So help me understand how this gets built and comes together. Because I get it, when your software won't do the automation you want, you get more robust tools that can work with systems like Zapier to make things connect. You may have to go outside the industry to get tools that have enough zap integrations because our industry stuff generally doesn't, and then you just start zapping things around and you can begin to make automations.

But many are, I would venture to say most of us advisors are not exactly like techie, custom program your own zaps kind of people, right? So you were saying before, "I didn't get into this to be a technology programmer, I got into this to help my clients with financial planning advice."

Shanna: What I would say, the best place to start, honestly, is going to Zapier and putting in the tools that you currently use and seeing what zaps are already built. Because they've got a ton that are...like, they're fairly basic zaps, but they're already built. And you can use them to sort of start to learn this process.

So if you use a scheduler, for example, like an Acuity or a ScheduleOnce or Calendly, they've got zaps built to send that data to and from some of the other tools that you may have. And that's kind of what I did when I first started learning this is I went, "Okay, well, here are all my tools, and what can I do that I maybe didn't know before?"

And so that's sort of how I started. And then I started having to hire people from Upwork or Fiverr to really execute on the vision that I knew was possible but I didn't know how to do it. Honestly, my husband and I now run an outside business helping advisors do just this. Because I got so many questions from people that are like, "That sounds really cool, but there's no way I could figure it out." And it's like, okay, great, then hire me to do it and we'll do it for you. So we do that, too. But it really isn't something we set out to do. We just got tired of giving people advice that they didn't know how to execute.

Michael: And so, again, for you, this ties to the...it sounds like kind of the secret, the glue is tools like Zapier that literally lets you zap things around to make happen the integrations that you want to have happen when they're not happening. And once you do that, you get a wider range of choices of tools, not necessarily industry-specific, because you don't have to rely on, I wish vendor A would better integrate with vendor B.

Instead, you just have to go and find a vendor with a big Zapier library and then connect what you want to connect to do what you want to do. And you can potentially get platforms that have even more capabilities than what's in our advisory industry.

Shanna: Absolutely. Yeah, it opens up the whole world of different options. And that's the cool part is really looking at what is available out there and seeing how it might help you better serve your clients.

Michael: Well, and I'm struck as you are describing it and getting there that it sounds like you're not necessarily the techie, like, I'm going to go in there and program and set up all these zaps because I think it's really fun to make my software talk to other software. You had said like just you had a vision, you want to make it work together. So you went to Upwork, which is just a site for finding contractors to do projects, it sounds like just you went to Upwork and said, "I want this to talk to this and I think Zapier can do it. Someone come make this, bid on my project."

Shanna: Totally. And that's exactly what I did. That's how I built every one of the first set of zaps that I use is I'm like...and then I learned as I was troubleshooting. And now I could probably build a pretty basic zap. So I can probably build some more complicated ones, but it's not my highest and best use. But I know what it's capable of. So now when I have an idea, I'm like, "Okay, I think I can do this, but let me see if I can find somebody that agrees with me."

Michael: Out of curiosity, just what did it cost at the end of the day for this to come together? Is this one of these like, you've poured all these dollars in your soul into it but it's finally getting to where you want it or at the end of the day, was it not actually that horrible on the cost, you just had to go spend some dollars to find someone to help do it and make it happen?

Shanna: Well, I think where it cost more money than it probably should have was me trying to do things myself that I wasn't equipped to do. So I learned a lot by my mistakes and having to redo things or having to pay people on Upwork to redo things that I thought I knew how to do. One of the things that I will gladly tell any advisor that listens is like, I spend more money on my tech stack each month than I do on my office lease.

So it's a big deal for my little firm to spend what they spend in technology. But it also means that I don't have to have another staff member managing this process for me. So what it costs in various subscriptions and contractors along the way and all of those things, I easily make up for in my staff's time to be able to do something else.

Michael: Well, now I'm just curious, how much are you spending on technology every month just to maintain all these pieces and bring them together?

Shanna: That's a great question. So I was literally, just a month ago, we moved from the eMoney street version to my BD's platform, which shaved about $700 a month off of my technology stack. Now I don't...that's a piece of technology that is included with my broker-dealer.

Having said that, it probably isn't quite as bad as I just made it sound. But when you add HubSpot and all of the pieces and parts of HubSpot that I have, and you add the Zapier subscription and PreciseFP and all of those pieces, I'm probably spending somewhere around $1,300, $1,400 a month on various technology subscriptions in order to make this work.

Michael: And it may have been close to $2,000 a month when you were all-in on street version eMoney and the rest.

Shanna: Yep.

Michael: Which is still a...it's a sizable number to spend on technology. We're well out of the like $29 a month for this and $39 a month for that. But as you'd said earlier, you're closing in on $50 million of AUM. I'm presuming even with some breakpoints on fees for a larger client, that's probably pushing $600,000-plus in revenue. So you're still in a realm at the end of the day that like, even when you were at $2,000 a month, it's $24,000 a year, it's 4% of revenue.

Shanna: Yeah, exactly. And I couldn't get a really strong employee that's good at technology for $24,000 a year. So that's sort of the way I looked at it.

Michael: If it's saving you a staff member or more, $24,000 a year to save $40,000, $50,000, $60,000, $70,000 a year for staff members or more is very manageable.

Shanna: Yeah. That's the way I looked at it. And a couple of years ago, I actually got curious and ran some statistics. And really, I was just looking at the front end lead generation that I'd set up through HubSpot and PreciseFP. And it was something like seven times ROI that year. It was crazy.

And that's not to say anything about the money that I've saved on the backend with the staff that I don't have to have any longer. So for sure, it's worth it for me. But it is a leap. And I'm fully aware that for smaller advisory firms, it is a leap financially to do a lot of the stuff we're talking about.

How She Overcame The Challenges Of Going Out On Her Own And Why She Is Thankful She Started Out A Large Financial Advisory Firm [00:52:12]

Michael: So talk to us then about kind of the growth evolution. You had made the point earlier that the business itself has been able to grow more and faster. You did this merger deal and haven't had to hire up because of some of the technology tools. So talk to us about the growth path of the firm over the past several years.

Shanna: Yeah, for sure. So I came from a captive world five years ago and transitioned over the course of a year and pretty much stayed flat that year. And I was the only advisor for about three years. So I reinvented myself in the first year. And then in the third year, I decided to flip the script and go from commission to AUM fees and charge for financial planning. So I reinvented myself again in the third year. And I wouldn't recommend that for anybody that's listening.

Michael: Making that change or just like reinventing yourself after a few years?

Shanna: I would have done it, to begin with, if I had to do it again. I would have done it all when I transitioned away from my prior firm. But I thought that would be too much of a shock for my clients at once. Now knowing what I know, I should have just done it all at once. Because I had took two huge bites at the apple.

So for those first three years, I didn't grow a ton. And then I finally got to the point where I felt good and confident in my process and my value and all of the marketing pieces that I had in place. And that's when it really...the next two years I doubled my...more than doubled my individual production and revenue and then doubled again when I acquired the other firm in November of last year. And that's really happened all over the last couple of years.

Michael: So talk to us about this journey overall then. Because I'm fascinated that you're living some of the independent technology world and wanting to weave it together, but you started on "the other side" in large firm environment.

So where did you actually begin your career when you came into financial advisor world?

Shanna: Yeah, it was with Edward Jones for five years. And lots of limitations. It was a great place to start, but I also knew that it just technologically was so far behind what was available. And when I left Jones and went independent, I didn't really get much of a fight because I wasn't quite big enough then for them to care.

So I left and took 90% of my clients with me and transitioned those over to my independent firm and kept them all commission. And that darn near killed me in revenue the first year, because I didn't know what a ticket charge was. I didn't understand how commissions really work because Edward Jones did all of that for you. So it was a trial by fire and drinking from a fire hose that first year.

Michael: Interesting. So talk to us more about that. How did it work at Edward Jones that was different on the independent side that you didn't know until you got into it?

Shanna: Oh, my God, everything was different. That's the crazy part for me is I should have known better because I had owned businesses in the past. And going to Jones, they tell you it's like owning your own business, but it really isn't. You're a W-2 employee. Your first responsibility was to the partners of the firm. And that's very clear in the training and all of that stuff.

And it got to the point with me where I really thought I was going to retire from Jones. I drank the green Kool-Aid, but they started to really pick apart how I was marketing myself to build my business. And they wanted me to stop doing what worked and start doing what they thought would work.

Michael: What were you doing to market that wasn't working for them?

Shanna: I was doing a lot of social media. I was doing a lot of speaking. Anybody that would let me speak and talk, I would speak there and talk. And they wanted me to knock on doors. And that didn't work for me.

Michael: That's kind of in the EJ formula. Like, they knock on a lot of doors in a lot of small-town America. Yep.

Shanna: Yeah. And it doesn't work so much in Phoenix, Arizona when it's 122 degrees in July. So yeah, a little bit of a problem. And they loved it when I first started because I was what they call a quick starter. Fast out of the gate. I built about $15 million to $20 million.

And then they started looking at my MO, so to speak, and went, "Well, this isn't the way we do business." And I'm like, "It has been for the last three years." So really, the last year, I had to make the decision, was I going to reinvent myself for them or was I going to reinvent myself for me? And I chose the latter. So that's when I went independent. It was the best decision I ever made, but it was also the hardest year of my life was without a doubt the year that I left and went independent.

Because like you said, I was not only doing a crazy amount of paperwork to transition all my clients, but I was learning what a CRM was and what a financial planning software did. And it was nuts. I don't know how I made it through that year. A lot of wine. That's all I've got to say.

Michael: Wine works. It certainly helps. It certainly helps. So I'm fascinated by how you framed that, that just, so you were doing some stuff. It was working for you. It wasn't working for them. They were, it sounds like, effectively forcing a change. Just that's sort of compliance reality sometimes.

Just I liked how you framed it. Like, either I had to reinvent myself for them, right, stop doing what I've been doing and have to do something else, or I reinvent for me, which is I leave them and go make my own thing, but I've got to reinvent myself.

Shanna: Yep. Yeah. I knew I would have to. And so it was probably about that time I first saw you speak actually at a FPA meeting in Phoenix. I went there with my business coach at the time, who was my business coach at Edward Jones, who always...and she didn't work for Jones, but she always said to me, "Keep your mind open because you never know when you're going to leave." And I said, "I'm never leaving."

So we had a conversation over a couple of glasses of wine and I said, "So tell me about the broker-dealer world. What does that look like?" And she got all excited and was like, "I knew you'd come to the dark side." So she was right.

Michael: The dark side? What makes it the dark side?

Shanna: Well, that's what I thought, right? Like I thought all the rogue people were over in the broker-dealer world. Because Edward Jones sort of has this us against them mentality, right?

Now, what I know is that it's the complete opposite. But I shouldn't say that too loudly because I still have great friends that work at Jones. And they're lifers and will be there until they retire. And I think if that's what they want to do, if they want to be advisors and not run a business, that's the right place to be. I actually love running a business. I love that part of what I do.

Michael: Well, and I think that's an important distinction that even I think especially from the independent channel, the independents like to give a lot of grief to the large firms and the captive firms, from Edward Jones to wirehouses to employee channels in Ameriprise and Raymond James of they're restrictive and they don't let you do what you want to do and get really negative sometimes on the employee model.

But yeah, if you're an independent-minded business owner who likes owning a business and making all those decisions and dealing with that, I can understand how an employee model would be really problematic. But not everybody actually wants to deal with all of that and do that stuff. Some people are just, I want to show up and have someone else worry about all those things and make those decisions. I want to do my stuff for my clients. And that makes an employee model very appealing.

I think the independent channel maybe underestimates how long the employee channels are going to last and how persistent they're going to be. Because just some of us like being independent business owners and having that responsibility and opportunity that comes with it, right, that risk-reward trade-off, and a lot of people don't. And that's okay. There's plenty of employee model firms that will be willing to hire you to take that load off.

It's when you get in the wrong match that it creates problems, right? When independents are in employee models, it doesn't go well because you want to do things different, and then that eventually forces a change. And if you like the employee side, you're usually pretty miserable on the independent side because you get hit with all the decisions that you talked about.

And instead of saying like, "Okay, I'm going to try my third CRM, my second financial planning software, and my third platform until I get this right," you just say, "Oh my gosh, this is horrible. I can't stand the weight of all these decisions. And I feel like I can't find the right thing. And I just want to go back to someone telling me what to use."

Shanna: Yeah, exactly. And there's nothing wrong with either approach, right? I'm cool with either approach. It's just you've got to really understand and be okay with where you fit in the world. And there's enough room for all of us. There's enough air for all of us to breathe.

Michael: Yeah. Amen, I think it's a good way to put it. There's enough air for all of us to breathe.

Shanna: Yeah. Like I said, I'm still friends with some of my old, former colleagues at Jones. And I actually have referred people back to Edward Jones when they weren't a good fit for me because they do some things really well. There may be things I don't do very well. So I'm cool with that.

Michael: So what...was there a triggering event or a moment for you that led to the decision that you were going to make a change? Because I'm just struck, to go from, "I was going to be a lifer," to, "I'm not even there anymore," just that's a big mindset shift for anyone.

Shanna: It was. It was not an easy decision for me to make. It came down to a bunch of little things that compliance kind of forced my hand with respect to social media. And the straw that broke the camel's back was a, I had a Girl Scout troop in my office and I explained to them how compound interest works with marbles. And it was a very small troop. It was one of my clients and four little girls. And I brought my Girl Scout jacket in because I was a Girl Scout and showed them all the patches. And they were oohing and aahing over it.

So I took a picture of it and posted it on my social media platform. And I got written up because I didn't have an approved presentation to deliver to these 14-year-old Girl Scouts that I was showing how to use compound interest with marbles. And I'm like, "Oh, okay, this is it. This is enough."

Michael: Okay. Yeah, I can understand that. I can understand that frustration.

Shanna: So that was kind of like, "Okay, now I really...I just need to go. I just need to go do this and do this for me."

Michael: So when you decided you were going to make a change, how did you figure out where you're going?

Shanna: Now, that's a good question. I sat down with my business coach, Suzanne Muusers. I don't know if you know that name. But she was on the board of the FPA for a while, Prosperity Coaching. She really was instrumental in me figuring out where I should go.

I sat down with her and I said, "I know there are hundreds of broker-dealers and some that are hybrids. I don't have the time to research them all. If you could give me the three that you think that I would fit best with, what are they, and in what order?" She goes, "I'm not going to give you the order. I'm going to let you figure that out for yourself. But here are the three broker-dealers I think you talk with." And Cambridge is one of them. I am from Iowa. So when I went to visit the corporate office in Fairfield, it absolutely felt like going home. For me, it was just the right fit. I knew immediately upon meeting everybody that this was where I was meant to go. And so I did my due diligence.

Michael: Because they live that strong Iowa Midwest culture?

Shanna: Yes, yes, absolutely. And that's one mistake I made at Jones was selling the firm above me. And the clients that I wasn't able to move with me it was because I did such a good job selling Edward Jones. I knew I had to go to a BD that was independent, that was going to stay independent, and had those same values in order for me to be able to tell that story well of why I made the change, without dissing Jones. I didn't want to do that.

Michael: Well, that's an interesting point. Because part of the challenge of I think particularly evaluating whether to join or then evaluating whether to leave, firms like Edward Jones, Morgan Stanley, Merrill Lynch, Ameriprise, right, they're national brands. They are nationally known names. And so there's a comfort, I think, that comes for a lot of clients when they know their money is at a national firm. Right or wrong, I think there's sort of a subconscious, like, when I see them on TV, I feel like I know who they are and that my money is safer than when it's with some firm I've never heard of.

And that's helpful I think for a lot of us when we're getting started because you don't always feel like you've got credibility. So you can get credibility endowed to you by a large firm with a national brand. But, as you noted, if you do a good job of selling the firm and the safety and the security of the firm, that means if you leave, you've actually trained your clients to pick the brand over you, which is fine when you're with the brand but not so good if you decide to leave the brand.

Shanna: Yeah, yeah. That was a bit of an unintended consequence. I did have a few clients who I was certain would come with me that didn't, and that was the reason. I had a really good connection to Fairfield. My sister-in-law is actually from Fairfield and her father taught at Fairfield High School. So I can tell a good story as to why I chose Cambridge, not only because it felt right, but they're just good people. And they allowed me the open architecture I needed to design the firm I wanted to design without limitations.

Michael: And so how do you explain to clients when you're going from national brand they know to Cambridge what? Right? In our industry, I think Cambridge has a very good reputation and is well known in the independent broker-dealer community, but I think sort of by design, they are not a retail household name and brand.

At the end of the day, almost no independent broker-dealers are actually household names and brands. Like if you ask consumers, "Do you know who Edward Jones is?" you get pretty good brand awareness. If you ask them, "Do you know who LPL is?" As the largest independent broker-dealer with as many advisors as Edward Jones has almost exactly, there's almost no consumer awareness of LPL, much less Commonwealth, Cambridge, a lot of the other industry high-profile firms.

So how does that conversation go when you're talking to clients and trying to explain this shift that you're making?

Shanna: Well, I really did take the advice of somebody that had left Jones ahead of me. And I had dinner with him. And I said, "If you could give me one piece of advice, what would it be?" And he said, "Write a script and practice it until you believe it as to why you're leaving so that when they start asking you questions, you don't get derailed and try to feel defensive."

So I really did that. I wrote out a really high-level overview of why I was leaving. That I don't wish anybody at Edward Jones ill-will. That I hope everybody there continues to do well, but it just wasn't a good fit for me anymore. And here's why. And I now have a whole other world of products and services that I can offer my clients that I was not able to offer you at Edward Jones. And really all that means for you is instead of Edward Jones name being at the top of the door and my name under it, it's the other way around now. And that's the way I like it.

Michael: Well, I like that framing. So now on the door, instead of saying Edward Jones and then me, it'll just say my firm name and then someone else. Let me tell you about this firm called Cambridge in Iowa who's going to be the back office that supports us.

Shanna: Exactly. There'll be my Edward Jones. You will never hear from them or never see their name except in really small print on the statements and on my marketing materials, but they have every resource that Edward Jones has and then some. And I'm super proud to be affiliated with them.

Michael: I think it's a really cool approach of it of just literally saying like, write a script and practice it until you're comfortable and you can say it confidently.

Shanna: Yeah. And that's really what it came down to for me is that I knew some would say no. I still to this day, and I've been in the independent world five years now, get questions from prospects. And I have now, through some of the resources at Cambridge, I now have a continuity plan and succession plan.

Amy Walls of Thimbleberry Financial is who my clients can go to if I get hit by the proverbial bus. And they all know who she is. And they all hope they never meet her. But because they are most concerned about what's going to happen to them if something happens to me, they need to know I'm taking care of them in that way.

Michael: And so the deal with Amy, is Amy also part of Cambridge, I'm presuming?

Shanna: Yep, she is.

Michael: Okay. So another advisor on the platform. And if something happens to me, Amy's firm is there to take care of you to make sure you have continuity of service.

Shanna: Exactly. And she thinks like I do. She believes what I believe. And we work very similar. We even share some staff members occasionally. And I hope my clients never meet her, but she has been introduced to them virtually. And the same with her clients. I'm her continuity plan.

I think at the end of the day what prospects and clients alike want to know is if something happens to you, what will happen to me? And so I want to make sure that there's clarity on that for them.

Michael: And it's an important point to make. Like, at the end of the day, clients don't really want to know about your continuity plan, they want to know how they get continuity and what your plan is. Like, it's not actually about you, it's about them. And that's fine. Just recognizing like, because in the end, clients want to know what happens to them.

Shanna: Absolutely. And when all this COVID-19 stuff started coming up, I sent out an email and I said, "You remember Amy? Well, if something happens to me in this crazy pandemic, she'll step in and take care of you. And if you ever can't reach me..." And I just outlined our kind of continuity plan without really calling it that. In our business, we also have a disaster recovery plan that we executed. And I let them know that. Like, if we're, in Arizona, hit by an earthquake and my office is gone tomorrow, I'll be fine because I can operate from wherever. And I'm doing that now.

Michael: So talk to us a little more this transition. You said in your first year, you were...it didn't go well, you were getting hit with charges you didn't expect and things you just hadn't seen in prior broker-dealer world that suddenly you were seeing with Cambridge.

So can you talk to us more about just what were you finding in independent world that you didn't know about before until it was suddenly hitting you?

Shanna: Oh my gosh. Yeah. So I had a lot of clients that I had trained that are...I like working with entrepreneurs. I am one at heart. And so I had a lot of entrepreneurial clients that I had trained to email me. Because entrepreneur income isn't always predictable, so setting them up on a monthly systematic debit out of their checking account felt a little bit weird to them because what if the revenue is not there, right?

So I had a lot of entrepreneur clients that I had trained to email me at the beginning of each month with how much they wanted to come out to go into their 401(k), SEP IRA, or Roth IRA. And then I'd go pull the money via ACH and trade $500 or $1,000 here and there. Holy crap. Wow. My first two months I'm like, "How do I owe them money? I don't understand how I'm negative." And so I went back and looked at my comp statement and I went, "Oh, my God, each charge is like $24. Each trade is $24." Like, "What?"

Michael: Because at Edward Jones, you weren't charged at all for it? It was just wrapped in?

Shanna: Yeah, they were self-clearing. So any amount that they paid in ticket charges or transaction charges, the firm paid for. So that was a really, really rude awakening.

Michael: And there's nothing like doing $500 trades at a time to really quickly realize how $24 trades adds up. Right, do five and six-figure tickets, it's not quite as big of a deal. Do $500 trades, it's like, "Ooh, okay, this is not good."

Shanna: This is not sustainable. So I have to make a change now. Now that I've already transitioned all my clients over to commission accounts, what's the next transition? So like I was always having to think three months, six months ahead, like, "Where am I going?" Because I don't want to bring a new client into this madness.

Michael: And so what changed? Did you convert pricing structure? Did you actually go back to some of these clients and just say, "Hey, I can't do these multi-trades anymore? I'm sorry?"

Shanna: Well, I kind of framed it as a convenience factor. I thought my assistant at Edward Jones would come with me and she didn't. So I didn't have an assistant for the first eight months until I found somebody I felt really comfortable with.

So I was making all of the money movement requests and trades myself. And so I went back to them and I said, "Listen, since I don't have an assistant right now, what's going to be best for you is if we set this up on a systematic basis and we default to, if you need to decrease it or stop it, you let me know. And then it will come in systematically, get invested immediately, and you don't have to wait for me to email you back. Because I can't guarantee that I'm going to be Johnny-on-the-spot with these requests anymore."

Michael: And in practice, if it's automated systematic trades, the ticket charges are less or lower?

Shanna: Yeah, yeah, waived in most cases. That's the way I positioned it. And they're all like, "Oh, yeah, no problem. I don't have a problem with that."

Michael: Yeah, for most busy entrepreneurs, at the end of the day, if it's like, "Hey, I came up with a way to automate this, you don't have to spend as much time on it," usually we say yes.

Shanna: Yeah, totally. So they did. And that was sort of the first thing that I did is got rid of all those crazy email requests. And then I had to start looking at AUM versus commission. And I'd been trained so well that the AUM fee was a bad thing and you should never charge for a financial plan. That should be included. And I had been taught all of these things that I had to reconcile in my own brain, honestly.

Michael: So what else were...I'm curious just what else were changes from what you were taught in the past and then what you had to try to think about or look at differently going forward?

Shanna: Well, at Jones, you're really taught extremely well how to sell American Funds A shares. And not...

Michael: American Funds, good company. Been around for a very long time.

Shanna: Oh, yeah, not to diss American Funds, I love their stuff, but they are really very ingrained in the Edward Jones culture. And I had to really understand and teach myself the difference between A-shares, C-shares, doing the same fund in an advisor class or investor class, and a wrap account. That just didn't exist at Edward Jones.

Michael: Oh, so just learning all the different share classes and types and when you can use them and where and how.

Shanna: Yeah, exactly. When I left Jones, they had just launched their advisory platform, and they didn't allow any advisor-directed activity. So it was one dude at the corporate office who was the trader for the entire firm. And to me, that was a recipe for disaster. So I wanted no part of that.

Now they've opened the architecture up significantly. They still don't allow third parties, but they'll allow an advisor themselves to do a wrap account and put their own investments in there. That wasn't an option when I was there. So I had to kind of figure out what I wanted my new normal to be. Do I want to continue to be a trader and run money myself? Do I want somebody else to do that for me? And if I do that, then how do I charge? And how do I still get paid on that money?

Michael: And so that's what started leading you down the road of outsourcing on Cambridge's CAAP?

Shanna: Yeah, totally. Yeah. I started doing my due diligence and really looking at their offerings. And this was now three and a half, four years ago where they've expanded them significantly. But I started to really see the value in having a team of an investment committee with another company whose job it was to make sure that my clients were protected. And I could get rid of that responsibility off my shoulders. And I did.

And I started to...all new money that came in for a period of time, I just drew a line in the sand and I said, "Starting this date, all new money that comes in is going into CAAP. If anybody wants a financial plan, they're paying for it. And here's my fee structure." And I drew a line in the sand on September of that year. I remember doing it clearly. And the first prospect that came in after I drew the line, I presented my financial planning fee to and they're like, "Yeah, that sounds good." I'm like, "What? Really?"

Michael: No, no, I have a list of eight objections that I have scripted and prepared to overcome. You need to object at least two different ways because I practice this.

Shanna: Oh, my God. They left my office and I went out to my assistant, I said, "So, we need to do a financial planning agreement. I have no idea how to do it, figure it out." I literally didn't know what I was doing.

And I way overdelivered in that first one because I just wanted to make sure they got value. And from that point forward, anybody that came to me with new assets, it went into CAAP. So for me, it had to be a line in the sand. Because I knew if I gave myself the leeway to go back and do it the old way, I'd still keep doing it that way.

Michael: And is there a particular manager or solution or offering in CAAP that you use? My understanding, CAAP is a fairly open platform with a whole lot of options. So are you like, pick and choose, here's a manager that fits this particular client? Because they said they want a lot of fixed income. So I'm going to find a fixed income manager. They want this tactical style. So I'm going to find a tactical sector manager.

Are you picking and choosing that way or do you have kind of just a standard offering or two, like, "Yeah, they've got 100 things, but I like these 2 and these are the 2 I use?"

Shanna: Well, I have about half a dozen that I use for different reasons. Some because they have lower minimums, some because they do better with tax management. So I have five that I have gone really, really deep on and done a ton of due diligence on.

And then when something comes up that's a little bit out of the ordinary, I might go look for a different solution. But I tend to like to keep things simple in my practice. And so when things were going down with the market over the last month, I used one particular strategy that has a risk overlay to it. And I could see, I could go to their website and see how they were responding and reacting to this.

So if a client called, and I had one that called and said, "What are you doing with my money?" I could say, "Well, here's what's happened in the last week. Yeah, that's exactly what's going on. And I can show you the trades and the transactions." And they were like, "Oh, okay." So knowing enough...I know enough about a lot of them and I know a lot about some of them is my point.

Michael: So can I ask, what are the particular managers or strategies that you found? How do you frame up your list of what you offer and what do you like to use?

Shanna: Yeah, for sure. So I really used input from other advisors that had been on the platform a lot longer than me. But I use a lot of Vanguard for smaller accounts. And everybody knows that name. So that's an easy one, right?

Michael: It's like the old...in the early days of the computer world, IBM got a lot of traction because they had this really strong brand. And there was a saying for all the purchase managers, no one gets fired for buying IBM. Even if something didn't work, like something didn't turn out quite as expected, it was like, "It's IBM, what are you going to do?" Right? Like, you're in Vanguard, the market went down. It's the market, what are you going to do? Its name was Vanguard.

Shanna: Exactly. So I use a ton of Vanguard for smaller accounts. I use Horizon for their Risk Assist models. And they've done a tremendous job over the last month managing that risk. I use Russell for tax management. And they've knocked that out of the park for me. So I'm a big Russell Investments fan. And then I use a smattering of other, Loring Ward for sustainable and SRI stuff and some other stuff thrown in there.

probably could simplify it a bit, but I don't want the clients to come in to feel like Shanna only talks about Vanguard or Horizon or whatever. So I usually go into a plan implementation meeting with a client with a couple of ideas that I think would absolutely fit what they're looking for, but a clear winner. And I'll say that. I'm like, "I've looked at these two, for me, this is a clear winner for you and here's why." And so they feel kind of like they have a choice.

Michael: Interesting. I was going to say, but they feel like they have a choice and you kind of get to show like, "Look, I did my homework. I'm not just a one-trick pony here. I may recommend a particular thing. I did look at other options, here they are."

Shanna: Yep, absolutely. Yeah, and I do the same thing when I'm presenting annuities, right? I'm not a huge annuity person, but where they make sense. I have clear favorites that I really like working with. And I'll show the clients all of the research that I've done. And I'll say, "And this one for you is the best deal and here's why."

Michael: And it sounds like this was something that you evolved to getting to a point of, okay, I just...going from, I sell all the funds and I do all the trades, into, okay, I just actually really don't want to be doing this part. That was, it sounds like maybe a three or four-year journey for you.

Shanna: Yeah. Yeah, it really was. And it really came out of a, I went to a Cambridge conference. And I wasn't supposed to go. I booked my tickets at the last minute and flew to Dallas because I knew I needed to be there. And I went. And the first night I called my husband from the conference and I said, "I need out of this industry. I'm miserable. I've built a business I hate." Being who he is, he said, "Okay, when you come home, we'll figure out how to get you out."

I sat down and cried, and then I decided at that conference I was only going to listen to the people that I wanted to listen to. I wasn't going to go to all the investment presentations and do all the stuff I knew I should do. I was only going to listen to the ones I wanted to. And it was then that I realized that I'd built this business as a traitor, that I hated. That isn't what I love. And sort of, that was the line in the sand for me. I'm like, "If I'm going to stay in this industry, I have to do this differently. Otherwise, I am going to hate my life."

Michael: And so you did. That's, to me, part of the interesting thing. A lot of us have those moments of like, I've got to do something different. I just can't take it anymore. And then the next week and month later, we're still in the same thing.

Shanna: Yeah, I'm nothing if not proactive when it comes to making changes. So I came home and I said, "How do I do this? Where do I start?" And I just drew a line in the sand and said, "Next month, in the next 30 days, I've got to educate myself on what is the third-party money manager and how do they add value? And how do I want to charge? What percentage rate do I want to charge? How do I want to charge for financial planning? And what is even financial planning?" And I had to come up with all of that. And I worked my tail off, and the rest is history as they say.

What Shanna Found Most Surprising About Building Her Business [01:24:54]

Michael: So what surprised you the most about trying to build your own advisory business?

Shanna: I guess how well I fit in this independent world. I cannot tell you how many of my old clients at Jones that came with me said, "It's about time." Like they knew I was around peg at a square hole. I just didn't see it until I wasn't there in the middle of it anymore.

So I think, like we've said earlier in the conversation, I think either you fit in the independent world or you don't. And it's pretty easy to figure out which is which for you. And so for me, it felt like coming home. It felt like where I should have been all along. But I can see why some independent advisors for sure hate it and get burned out and leave the industry. And I wish they would just consider that maybe there's another way to go about it.

Michael: And the other way going about it is?

Shanna: Yeah, go to a RJ, go to an Edward Jones, a Wells Fargo Advisors where all you get to do is be an advisor. And if that's what you love, go for it. There's nothing wrong with that.

Michael: So employee model is okay, too. Just know what fits for you and your style.

So what does your typical week look like at this point?

Shanna: Well, up until the last three weeks...

Michael: Disruptiveness of coronavirus notwithstanding.

Shanna: Yeah, notwithstanding, right? I was going to say up until the last three weeks, my typical week, I am in my other office in Tucson every other week for a day or two. And I'm primarily in my main office in Gilbert, Arizona the rest of the time.

I have my days stacked so that one day I run the business, one day I meet with clients, one day I meet with prospects, and one day I meet with anybody that wants to meet virtually, virtually. And so I really try to keep really tight control of my calendar, because if I don't, it just gets out of control.

Michael: That's an interesting framing, a day running the business, a day with clients, a day with prospects, and then a day with virtuals.

Shanna: Yep. Yep. So I have more and more people that even though they could walk to my office, want to meet with me online. They don't want to have to leave their living room. And I'm cool with that. So I have been meeting with clients virtually for the last two years, and prospects alike. And if that's what they want, I want to give it to them.

Michael: But help me understand. So I understand there are certain days that I do business stuff and there are certain days I do meetings. Why client meetings one day and prospect meetings the other, as opposed to just allowing meetings to mix up? And why in-person meetings and virtual meetings on separate days?

Shanna: What I've learned is that I'm in one frame of mind for clients. I'm in a much more analytical frame of mind for clients than I am if I'm going to be bringing the magic for prospects. And it's hard for me to shift gears. So I try to keep those segmented.

I also, same thing with virtual meetings, I don't want somebody waiting for me on a virtual meeting as I'm trying to wrap up a client meeting that's going long. They don't know why I'm not there at the top of the hour. And so for me, it's just so much easier.

Michael: Whereas at least if it's happening with in-person meetings, like, they're in your lobby and they can see you're in the meeting room with someone else. So there's an obvious visual signal that you'll be out in a minute or a few that obviously you don't get when you're going from in-person meeting to virtual meeting that's following.

Shanna: Exactly. And if I am in my virtual meeting room and a client pops in early and I'm just wrapping up, I can send them a message and say, "Hey, I see you're here. I've got about another five minutes and then I'll be with you shortly." And it just makes me feel better to know that I can virtually take care of them in that way, in that flow.

Michael: And just you had said like, a day for business meetings, a day for clients, a day for prospects, a day for virtually, and on the fifth day you rest?

Shanna: I wish. That tends to be a workday. So working on financial plans, working on investment, delivery, strategy. Any of the stuff that needs to happen in order for those client meetings to happen happens on that fifth day.

Michael: And do you literally structure in that kind of sequencing? Like Monday is the business day, Tuesday, Wednesday, Thursday are clients, prospects, and virtual, and then the fifth day or Friday is back to an internal work day?

Shanna: No, but I wish that I did. Now that I'm bouncing back and forth between two offices, it's harder to do that. Because when I'm down in my other office, that takes two days off the table typically.

For a long time, I did that. Monday was my prep work day. Tuesday, Wednesday, Thursday were clients, prospects, and virtual, and Friday was running the business. And I found I liked that a lot better than the way I have it now. So I might have to restructure that come 2021.

Michael: So what was the low point for you on the journey?

Shanna: I would say that day I sat down at the conference and said I wanted out, I meant it. And I felt like I had failed everybody, from my husband to my clients to everybody that looked up to me as an example of how you do this business. I felt like a fraud. I felt miserable. For me to even say those words took a lot. So I'm glad that I didn't listen to myself.

Michael: And it was just because at the end of the day, you didn't enjoy the work that you were doing. And so too many days, weeks, months, and years of doing the work you weren't enjoying was burning you out?

Shanna: Yeah, totally. I had built this business that I was doing a lot of things I hated and not enough of the stuff I liked. So I had to change it. And my thought of how to change it was to quit and go...I even worked on my resume that night in the hotel room. I'm like, "I've got to get out." And then I realized, "No, there's a lot of what I could do that I love. I just need to do more of that."

Michael: And for you, that was less investmenty stuff and more planningy stuff.

Shanna: Totally. Yeah, more face-to-face with clients, more fun events with them. I'd pretty much stopped doing those when I left Jones. And I needed to get back to doing wine tastings and fun stuff with clients and just really having those conversations. That's what I love about this business. The people is what I love about this business, not pushing paper and dealing with investment strategy and buying and selling investments. That is not why I got into this industry.

Michael: Well, and just what strikes me is, again, we tend to get, I don't know, I was even going to say trapped in this like, but you're a financial advisor, don't you have to do all that stuff?

Shanna: No, you don't. I'm living proof. I think that some people believe that. I think that some people truly believe that their value is doing that stuff for their clients. And I thought that because that's what I was taught. For a lot of years, I really thought that I could do it adequately. But as the fiduciary rule came in and reared its ugly head in our industry, I realized that I could do it adequately, but I didn't know that I could do it and hold up a fiduciary rule to say that I'm doing the best job I can for my clients. I couldn't say that.

Michael: And I think just the interesting sort of split to it, like, your firm still does it, like, clients still get that service. It is part of what they're buying. The distinction is just you don't actually have to be the one that personally manages every client portfolio continuously on an ongoing basis.

Shanna: Yeah, totally. And as I tell my clients, I monitor it. I pop in probably monthly to each portfolio and just look at it, see how it's doing compared to the indexes, see how it's doing compared to its peers. That's the shadow work you talk about, right? I don't do a great job at articulating when I do that for my clients, but I do. And it's a huge breath of fresh air for me to go, "Yeah, they've got this."

Michael: Anything you wish you'd done differently in launching and making the transition? I guess, like, what do you know now that you wish you could go back and tell you from five years ago when you're just about to make the transition to Cambridge to make this go better?

Shanna: I would probably say to give yourself some grace. I didn't that first year because it was just me. And a lot of people go independent and realize that now it's just them. I didn't ask for help when I needed it from anybody. And so in making the tech decisions that I made, I could have saved myself some grief if I'd have asked some other advisors for their input. I didn't know Upwork and Fiverr existed at that time, but man, would that have been helpful when I was trying to figure this out on my own? And I didn't really...like you talk about the iceberg, right? I wanted every person that knew me at Edward Jones to see that Shanna was a success, that this was the right decision for her. From my family to all of my clients, to everybody in the community, I never ever wanted it to look like I was struggling. And boy, I struggled that first year. And I think there's merit in admitting that and saying, "Hey, I don't got this."

Michael: And so what do you actually wish you'd done differently, though? I'm presuming it's not, in retrospect, I wish I told all my clients that I was miserable and struggling.

Shanna: No, not at all. I wish I'd have asked for help and just really been real with the people that cared about me more than I was. I really wanted it to look...even with my husband, who's super, super supportive, it was rare for me to complain at home, and because I just...I wanted this to be seen as the right thing. And I didn't complain until it was almost too late when I called him that night and said, "I want out." And he's like, "Wait, what?" So having that tribe and that community around you that you can sit down with and go, "Man, this is going to get real here, because I need a shoulder to cry on," that's super important. And I underestimated how important that was when I first started.

Michael: Well, I think it's one of the things that is particularly challenging when advisors leave employee models to go independents. Because one of the things you don't often realize that you naturally get in large firms that you don't necessarily get as an independent is an office full of colleagues and co-workers that you just get to talk to about all this stuff as you just...life happens, right?

We do a lot of commiserating with co-workers and colleagues. It's part of the natural effect of the work environment, that you often get in a large firm that has branches with lots of people, that you don't necessarily get when you go to an independent. And cool, you've got your own office space with a shingle on the door, but when you get started, there's no one in that office but you.

Shanna: Oh my gosh, yeah. And I was in a basement, like, literally, I was in a basement office and...

Michael: Well, they're cost-effective when you break away.

Shanna: Oh, my God, right? I'm like, "What's cheap and where I want to be?" And there it was. So for me, it was a big surprise how much I missed that camaraderie at Edward Jones. I just really didn't...I didn't think about that. I underestimated how lonely I would be that first year.

Advice Shanna Would Give To Newer Advisors, And How She Defines Success [01:36:41]

Michael: What advice would you give to younger or just newer advisors looking to come into the industry today?

Shanna: Yeah. Well, I think that for all their faults, Edward Jones and companies like them have great training programs. Their training programs and compensation structures that independents up to this point haven't figured out how to match.

So if you really need a salary and some sort of ramp to get to the next level, looking at a Raymond James or a Merrill Lynch or an Edward Jones makes sense because they offer things we can't. But if you really can get in and kind of figure it out and you don't have huge salary requirements, starting brand new at an independent could be far more appealing because then you get to build the firm you want to build from the start rather than having to do it somebody else's way.

So if you're thinking about coming into the industry, figure out are you an employee or are you an entrepreneur, and then choose your path according to that.

Michael: Right, it's pretty sure fun, just are you an employee or an entrepreneur?

Shanna: Yeah, exactly. My husband and I have laughed for years about that.

Michael: And don't self-judge, right? I think it was a cute piece that like, don't self-judge, those aren't loaded terms, just whichever it is, be okay with it. Which one makes you happy?

Shanna: Right. Exactly. And secure and safe. Like I don't have that security gland. I am cool taking risks. I take risks all the time in my business. And that doesn't impact me. But there are other advisors who would never do what I've done because they're afraid. And that's okay, too.

Michael: So as we wrap up, this is a podcast about success, and one of the themes that always comes up is just the word "success" means different things to different people. So you're building this successful firm. You seem to have figured out the technology mystery that so many of us struggle with by just going outside of our industry. So the business success box is going well for you. How do you define success for yourself?

Shanna: Well, for me, it's really about being happy. If I can go home at the end of the day, at the end of the week, at the end of the month and look at those people whose lives I've impacted and I feel good about serving them and they feel good about paying me what I think I'm worth, then that's a success.

We can measure it in AUM or GDC or any of the things the industry talks about. But for me, it's really about feeling that I've given good value and that I am valued in the lives that I touch. And so that's super, super important to me is that... I always tell my clients, I never want to build a business where I see your name on the caller ID and I don't want to answer it. That's not happening for me.

Michael: That's a good framing. I don't want to build a business where I'm afraid when I see your name on the caller ID.

Shanna: Yeah. Yeah. Absolutely. So it's harder to say no on the outset, but rather than letting crazy in the door, it's easier for me to say no, rather than having to be the one that is trying to get crazy out of the door.

Michael: Well, and there's a good point, that the challenge I find for so many of us, just like this helper mentality, I-want-to-feel-valuable mentality that we have that leads us into being a financial advisor and trying to work hard for our clients makes it really, really hard to fire, terminate, or otherwise let go of clients, even ones that are probably not the best fit.

So then we get trapped in this world where I don't want to take the call and I feel bad every time I see the name on the caller ID. But it feels awful to let go of a client that I had a long ongoing relationship with.

To me, it kind of comes back to like, this is why you have to set more barriers upfront about who you let on your bus. If you know you're not good...look, if you're really good at just saying, "Hey, we're not a fit anymore, I'm going to terminate you as a client," if that's easy for you, take anyone you want, because you'd be able to fire them later. But if the reality for you is, I know that's going to be really hard for me later, consider, as you kept saying, consider putting your lines in the sand now if you know yourself and where your challenge points are going to be.

Shanna: Yeah, absolutely. It's really all...for me, it's all really understanding what I'm good at and where my best fit is. And if you don't fit in that picture, that's okay. There are plenty of advisors that do.

Michael: And what comes next for you?

Shanna: Well, I love what I'm doing now. So I'm never going to say never again, but I will say for not a long...it's going to be a long time before I buy another practice. It's a lot of work. And it's been a wonderful experience for me, but it's just a lot of work.

I think that I just am going to continue to do what I love and serve the clients that I love to serve. And that's what I'm excited about. I'm excited about the next couple of years of really just bringing everybody into the Heritage Financial Strategies fold and making them clients for life, which is my goal.

Michael: Well, very cool. Well, I love it. Thank you so much, Shanna, for joining us on the "Financial Advisor Success" podcast.

Shanna: Oh, thank you so much.