#FASuccess Ep 227: Achieving Financial Security By Serving 50 Great Clients In Your (LGTBQ) Community, With Leighann Miko

What You’ll Learn In This Podcast Episode

• How Leighann Helps Her Clients Address Any Financial Insecurities They May Have [07:12]
• What Leighann’s Practice Looks Like Today And How’s She’s Narrowed Her Focus Even Further Within Her Niche [10:20]
• What Leighann Does For Her Clients (And How That’s Evolved Over Time) [20:12]
• How Leighann Charges Her Clients [30:44]
• How Leighann Has Implemented (And Adapted) George Kinder’s EVOKE Process Within Her Practice [39:26]
• How Leighann Integrates eMoney Into Her Planning Process [50:55]
• How Leighann Integrates (And Charges For) Asset Management In Her Fee Model [1:05:53]
• What Surprised Leighann The Most About Building Her Advisory Firm And The Low Point Of Her Career [1:09:46]
• What Leighann Knows Now That She Wishes She Knew Then And The Advice She’d Give Younger Planners [1:21:40]
• What Comes Next For Leighann And What Success Means For Her [1:24:04]

Resources Featured In This Episode:

• Leighann Miko
• Equalis Financial
• Kinder Life Planning Institute
• DocuSign
• AdvicePay
• eMoney Advisor
• Mana Financial Life Design
• BLX Internships
• How I Invest by Brian Portnoy
• Kayla Hollatz

Full Transcript:

Michael: Welcome, Leighann Miko, to the "Financial Advisor Success" podcast.

Leighann: Thanks, Michael. I'm really excited to be here.

Michael: I'm looking forward to today's discussion and talking a little bit about your advisory business and your journey through the business. You have, I feel like is certainly relative to the industry's history, a very unique firm with a focus, with a specialization in the LGBTQ community, and particularly, with creatives in the LGBTQ community. And for our industry, I feel like it's really just a very, very recent phenomenon that was even okay to be out in the financial services industry. And even at some firms, I know that's still a challenge to be out even amongst your coworkers in the firm.

And so this, I guess, this idea, this phenomenon to me of having a niche specialization in members of the LGBTQ community and making that a core part of not just your identity as a person, but your identity as a business and your identity in what you do in the advisor marketplace, to me, is just an incredible shift and revolution for where the business is over the past, I guess, 5 and 10 and 15 years. And so I'm excited both to talk a little bit about just how much the industry seems to be changing with respect to diversity and what you've done and what you've been able to build and saying, “This is where I'm going to plant my flag and build my business and grow serving my community.”

Leighann: Yeah. Absolutely. In the almost 15 years that I've been in the industry, I've certainly seen a pretty big shift in the number of advisors who are catering specifically to the LGBTQ community. So it excites me that there's more representation, which means that more of the LGBTQ community will hopefully feel comfortable in reaching out to advisors. But, yeah, I'm really excited. I've always said that I wanted to work with communities that represented who I am as an individual. And as a member of the LGBTQ community, it just made sense to pursue that route.

Michael: Now, I'm also curious, one of the challenges I hear to this as a focus, as a specialization, and it's not unique to serving the LGBTQ community, I hear it for a lot of types of specializations in serving communities or serving groups, including even the called the niche of women, is, “Hey, you work with LGBTQ creatives. Creatives are creatives, and creatives have a set of financial planning problems and maybe business problems.” What is it that makes it different or special or differentiated to say, I serve LGBTQ creatives? What is it to you that makes that a way to differentiate or a way to specialize in the marketplace as opposed to simply saying, I work with creatives or professionals, or the members of the LGBTQ community that you work with.

Leighann: That's a great question. So, for me, it's looking at both of them separately, they tend to be both be underrepresented communities. So when you put them together, you get two communities that have oftentimes been kind of ignored or left out of the equation for different reasons. And I, historically, did work. It was, oh, LGBTQ community. It didn't matter what you did, whether you were creative, just a plain old W-2 kind of employee of a company. And then I also had a kind of crossover where I was getting a lot of creative clients. And for me, what's really important to me is I always kind of root for the underdog. It's just the nature of who I am, and kind of my past and what have you.

And so I thought putting two communities together that have historically been kind of neglected made a lot of sense because I can kind of hit two birds with one stone. There's a lot of financial insecurity in both communities. And so it wasn't...it was more or less kind of the need that was there. So I don't use it as a differentiator necessarily because certainly advisors can work with each of those separately. But when you work with creatives, you're also looking at working with people who don't have traditional income situations or asset situations. And then, so there is a specialized focus there as well.

How Leighann Helps Her Clients Address Any Financial Insecurities They May Have [07:12]

Michael: So, can you talk about that a little bit more? What do you mean when you say there's a lot of financial insecurity in these communities?

Leighann: Sure. For the LGBTQ community specifically, you mentioned being out earlier. And so, for a lot of people, though we're in 2021 now, and it's becoming more socially acceptable to be out, it's still not completely acceptable. And so that's definitely on a case-by-case basis. So maybe at large, the community is more accepting, but there's still fears of coming out at work, coming out to family. There's still certainly...so that creates insecurities, right? So, if you can't get married because you're afraid of your employer finding out that you are married to someone of the same sex, that's an insecurity right there. The access to financial guidance for LGBTQ community has been limited. So, the confidence in making decisions creates the insecurity.

So a lot of things like that, where there's just not as much access to information. There's people who maybe their family wasn't accepting of them, and they were kicked out of the home and forced to kind of figure things out on their own, and then left in a situation where achieving any sort of financial independence was not really something that was easy for them to come by. Those are all big themes and things I've seen in the community, both in terms of at large, but also my own friend group of people who I've surrounded myself with over my adulthood and even teen years.

Michael: To me, that's always been one of the...is the interesting ways that many of us end up finding sort of niches or specializations or places that we want to focus our careers. I often get questions of, "Do you have to be a member of blank in order to serve blank as your niche and your specialization?" And I've always been of the mindset of “No, I don't think that's a requirement. You can learn the needs and the challenges of whatever community is that you serve and serve them and serve them well.” But being a member of the community yourself and having lived the trials and tribulations and the pain points, the challenges of the community, it does kind of give you very good firsthand experience and understanding of exactly what the challenges are, so that when you get to come to the table as a financial planner you can accurately say, "I understand the financial needs and challenges of the people that I'm serving here, because I've lived it. I've seen it in my life. I've seen it in my friend's lives. I've witnessed it firsthand. I know what's going on here and I know how to help."

Leighann: Yeah, absolutely. And I go back and forth with this idea of people who are outside of a community kind of focusing on and specializing in it. And I agree that it's not impossible and it's not kind of, you have a complete “no”. But I do think at oftentimes it becomes a marketing ploy or a marketing tactic to kind of break into, so to speak, those communities to generate revenue off of them and make them clients at least. And so to some extent, and this is just inherent in my being, I'm a little wary of people who do that because there is a certain level of understanding that comes along with being a member of the community that you're serving that is invaluable. And quite frankly, as in large part, why clients end up choosing you is because of that relation, because of the connection there.

What Leighann’s Practice Looks Like Today And How’s She’s Narrowed Her Focus Even Further Within Her Niche [10:20]

Michael: So, help us understand a little bit the advisory firm itself, tell us a little bit about your business and who you serve and what you do and what this looks like in practice.

Leighann: Yeah, absolutely. So I started...the beginning phases of the firm in late 2016 and launched as a fee-only independent firm. And my focus has always been on the LGBTQ side of things, though at that point, it was more broad. It was just LGBTQ folks, women, young professionals. I was, what are the boxes that I check off that are “me”, and then who I'd want to work with and realizing that that was pretty much everyone who needs help. So basically, it has been around for a little over 4 years and at this point, 45 current client relationships and 25 of those are purely financial planning only. So there was no investment management on that side of things. And then the balance 20, I do both financial planning and investment management for them.

And the assets between those 20 households is about $15.5 million as of yesterday-ish. And I guess the more important thing also is the firm is Equalis Financial. It was kind of a play on aequalis, which is Latin for equal. And so I just kind of took the "a" off because I figured that might be a little bit easier for people to spell and pronounce. But the idea behind it was equality, equal. I wanted to work with people who hadn't traditionally been considered an “equal”. And so that's typically who I work with, and that has kind of been narrowed down and focus into this LGBTQ creatives and other thoughtfully ambitious professionals, which my super amazing copywriter, Kayla Hollatz, came up with and it is so perfectly fitting.

Michael: So, help me understand the way this evolved, the way this changed that you said you early on were just broadly into anyone who is a member of the LGBTQ community, and then have kind of winnowed down over time towards working with creatives. I know for so many advisors particularly when they're launching, they give...if they agree or believe in, or want to move in the direction of having a more focused practice, having a niche, there's this, “I have to pick the right thing the day that I launch. I can't tell anybody I'm doing it unless I get the perfect thing from day one, because I don't want to say the wrong thing. And then, I'll lose everybody that I was never going to get.” And we get so sometimes stuck on this. You started in that direction, right. I am going to focus into the LGBTQ community, but then you have winnowed down further from there. So I guess I'm wondering, how did that come about and was that a planned strategy, “I'm going to start here and get more focused over time,” or is that something that happened more organically? “I started hearing as the business grow, I just ended out being more focused,” and said, "Okay, let's own it."

Leighann: I wish that was the case. At the beginning, right, everyone says they have this focus and I had the focus, but the reality was at that point the question was, "Can you fog a mirror? Yes. Great, become a client.” Didn't care who you were, what you had, how old you were. It didn't matter. It was like, “Can you pay me? Do you need help? Let's do this.” So despite having kind of that focus, it's certainly what's kind of on paper only so to speak. And...

Michael: Was there an issue? Cause, again, as I hear this come up so frequently as a fear and a concern, were you out there and saying, "I focus on the LGBTQ community, but then I'll still take anyone who fogs a mirror."? Did you get anyone else once you were saying that, or did you not say that because you were afraid you would accidentally rule out someone else who might fog a mirror and at this point we'll take any clients because we're just getting started? How did you actually balance that in practice?

Leighann: Right. So when I first launched and on my website, I had basically these kinds of blocks of texts that, okay, here's who we specialize in, and it was LGBTQ community, women, and young professionals. And quite frankly, that is a very broad net between the three of them. But then of course, because I was super insecure when it first started, I also put a little blurb that said, "But we help everyone." Because, sure, there was a lack of confidence in that security and that people were actually going to want to work with me. So I kind of wanted to leave it open-ended to make sure that at least I was able to get some clients. And over time, I would say that I wouldn't say a majority, but a good amount of the clients that were coming to me did at least fit into one of those buckets. And what happened over time as I continued to hone my craft and I began really focusing on specific types of clients, I was realizing a trend and it wasn't intentional.

And so being in LA and being a member of the LGBTQ community, there are a lot of creative people in LA. That's where the entertainment industry is, aside from a couple of other big metro areas. And so I was finding this trend, I was getting a lot of LGBTQ creatives. So I was getting writers, producers, directors who were kind of in the sweet spot of their career, where it was just taking off. And I started to realize, "Oh, wait, this is probably where I should focus." And so it took probably three years for me to slowly start saying no more frequently and saying no is a very difficult thing for me because I want to help everyone because everyone has a story. But I started recognizing that I was...as I was working with more creatives, I was getting a better understanding of the nuances, the intricacies, everything that was on with their finances.

And as I was getting...I would get a client who had a situation that I wasn't as in tune with or familiar with. And I was spinning my wheels, endlessly, trying to educate myself on these aspects of financial planning that weren't my sweet spot. And I started just realizing that my time is too valuable for that. And Meg Bartelt actually was really helpful in this and helping to kind of frame this idea of, she doesn't work with people who are retired because she doesn't want to have to know all of this stuff about social security and withdrawal strategies. And I was like, "That is really smart. I don't need to fill my brain space with all of this information if it's not in my target. Just become an expert in this creative, this LGBTQ creative need and only work with those people and do it really freaking well." And so it was definitely a process. And it probably was late 2019 where I kind of had that moment of, “Okay, I need to make this switch.” And it did take quite a while for me to fully get there. And I'll admit that I'm not completely there to where I won't say no to someone if there's a really good connection and vibe as a human.

Michael: So, just help me understand further what does...what got you there to say, “I want to make that switch. I think I have to start saying no to at least some or many of the people that aren't in my target domain in this focus of LGBTQ creatives.” Was it specifically the time grind? “Geez, these other clients take me a long time and the ones that are in my niche really actually don't take me a long time because after I've worked with a couple of dozen LGBTQ creatives, I kind of know most of the problems and the issues that are going to come up and what the likely solutions are.” Cause that's what happens when you kind of get repeatable expertise. Just was it the time thing that pushed you to make some change here or something else that got you to the point of actually saying, "I think I got to start saying ‘no’ to some of these."

Leighann: Yeah. That was, definitely, the time was a huge factor. Recognizing that this creating repeatable process is, understanding kind of the fundamentals, how... pretty much to a T when they reach out to me, I can explain their situation before they do. And they're like, "How did you know that?" I'm like, "Well, because pretty much everyone who's in your position is dealing with the same thing." So being able to come up with a process, and don't get me wrong, every situation is still a little bit different because, again, that would make life way too easy if there was too much similarity there. So having that kind of process, understanding what they need, but I would say to some extent, I started to see something beneath the surface on more of just kind of the human psychological level.

A lot of the creatives that I work with come from volatile experiences in the past. So as a creative, especially in the entertainment industry, you don't know essentially what job is next. So say, great, you got a staffed on this show this season, you don't know if that's going to continue, right? So this idea of you could be making $400,000 this year, but next year you literally could be making zero. And so this creates an incredible amount of insecurity, financial insecurity and instability that wreaks havoc, mentally and emotionally. And so...

Michael: So not necessarily a function of being a member of the LGBTQ community, but just this is the life of creatives, particularly high-income creatives in LA where good gigs pay a lot of money and not having a gig is still the good old fashioned zero.

Leighann: Exactly. And so the LGBTQ element on top of that is this idea of connection, right? The fear of going to someone and having to kind of not be your authentic, true self for fear of judgment or what have you, whether the person is going to respond to you negatively when...if they find out that you're a member of the LGBTQ community, this idea that a lot of folks, again, that I've worked with in the community do come from more insecure backgrounds as well. And so that certainly plays into it from that insecurity level of having...growing up in small towns where it wasn't really okay for them to be queer and then coming to LA, and struggling mightily financially and tack on the creative side of that thing. So there's definitely an intersection between those two where they overlap. But I think the LGBTQ element more than anything, it's just that comfort, that peace of mind of knowing that they're not going to be judged, that they're working with an advisor who knows their experience, who knows what it's like, who's been through it, who recognize some of those pitfalls and situations that fortunately aren't such an issue anymore but still plays into the insecurity of being queer and creative.

What Leighann Does For Her Clients (And How That’s Evolved Over Time) [20:12]

Michael: So then help me understand a little bit more of just what the business looks like. What are you doing for clients in practice when someone is a LGBTQ creative and says like, "Leighann, this sounds cool. Sign me up, I want to be a client." What happens next? How does this actually work?

Leighann: So that has also changed in recent years. In early 2020 before the pandemic hit, I was fortunate enough to spend a week in Hawaii doing George Kinder's EVOKE training. And that was a pretty impactful, empowering week where I just came to truly understood the power of empathy and conversation. It's where to some extent, I recognized that I had been doing financial planning all wrong in some regards. And so...

Michael: How so? What were you doing that you're now...you were thinking like, "Oh gosh, that was not right. I need to change that."

Leighann: I think most humans, we're solution oriented. Our inclination is to fix, and as an advisor, it is not our job to fix or come up with solutions necessarily. Sure, on the money end or the technical end of things, you got to come up with things. But when a client comes to you, any advisor worth the wait, they'll find out “What are your goals? What are you actually trying to achieve?”, before actually crunching numbers, doing a plan, putting that stuff together. But I think what was always missing was helping clients to actually uncover or discover what their goals truly are. Anyone can say, "Oh, I'd love to buy a house," or, "Oh, I'd love to travel here," but it's really getting to the root of what was important to them and helping them to discover that and prioritize it.

And that it wasn't my job to come up with their solutions. It's my job to guide them and help them make decisions that are in their best interest. Right. So removing my bias that I might put on them saying, oh, I love/hate when clients say, "Well, what would you do?" And my answer is always, “It doesn't matter what I would do. It's what do you want to do? And why? What is the importance? What is the significance?” And so it kind of pulled me back and I realized I don't need to be the solution guru. I don't have to come up with the solutions for them, which took a tremendous weight off of my shoulders when I kind of had that realization. And so, a big part of what I offer my clients is empathy, quite frankly, more empathy than a typical advisor and understanding where they're at.

Part of that is born of my own experience with financial insecurity and instability in a volatile environment growing up. I can relate to those insecurities. It's listening, like actually allowing them to speak uninterrupted, not judging them, just letting them freely express what they truly want in life and making them feel heard and valued. And so that's what I offer along with, of course, the technical side of things. So I do, I call it financial alignment planning, and it really is two of mine, their financial lives and I mean align with their emotional, spiritual, physical, financial selves. And so it's a pretty, pretty structured, lengthy process.

And the fortunate part is when you work with creatives, they're already pretty far along in that process. They're already pursuing their passions, doing the things that their parents probably didn't necessarily want them to do, pursue a career in the arts where you "don't make any money." And so they've already got a head start, which is really fantastic and wonderful for me to experience on the advisor end. So then it's a more focused on how do we create that stability and security that they yearn for but that is so hard to come about in such a volatile industry.

Michael: Interesting. This piece of how do you create more stability in a really unstable and secure environment becomes such a central theme, just it's weaving through and coming up in almost all of what you're describing through the process. So, help me understand more of what that looks like in practice. You said you call it financial alignment planning, what does that mean? What do you do? When I say I'm going to be a client now, and we're getting started, what actually happens? What's the first meeting and what are we talking about?

Leighann: Yeah. So I try to follow Kinder's EVOKE method pretty closely, but because I'm a rebel, of course, I had to make it my own a little bit. But essentially, the first year is probably seven or eight meetings. And the first meeting...I always tell people the discovery meeting is like going on your first date. We want to get to know each other, feel it out, see if it's a good fit, and if we want to actually commit to working together. And that discovery meeting really is where I find out what brought them to me, what they're looking to accomplish, what's important to them, what is essential to living their ideal life. And what that does is it also helps me understand kind of where they're at and whether this type of process is a good fit for them.

I've had people who just flat out said to me, "I'm not having an existential crisis. Can we just do regular planning?" And sure, maybe this isn't for you, but, unfortunately, it's the service I offer. And so she just wasn't a good fit. And so I think oftentimes in this discovery meeting, the primary feedback I'm getting from people is, “This was not what I expected, and I've never experienced this before,” and which is really powerful. And it kind of says to me that most advisors aren't doing planning right. Sorry, everyone. But at the end of the day, they could be doing more.

Michael: So, then help understand more of just what questions are you asking? What are you saying that prospects are coming out of the meeting with nobody ever asked me this stuff before?

Leighann: It's funny, cause I'm not saying a whole lot. This meeting is them primarily speaking. And so the questions are very simple, like “What is important to you? What is essential to living your ideal life?” And just asking the open-ended questions, the pause, the long pause, the anything else of it to help them really dig deep and pull those things to the surface that maybe they've kind of pushed down or just hadn't thought about in any sort of meaningful way in recognizing the connections. And so it's the listening part. And Ian Bloom said it best, he was in an experience with a client, "When people liken the process to therapy, it's because the only person that listens to you this intently is a therapist." Right?

And I think just on a human level, that speaks volumes to how poorly we're doing it listening to each other and providing space for each other to express what we're thinking, what is important. Just communicating really. And so I think that's why a lot of times it gets likened to therapy because quite frankly I'm listening with intent and I'm listening with empathy and allowing them to just be vulnerable and open and honest with a stranger really. And that's the bizarre part sometimes for me and for them, they're like, "I can't believe we just shared all of this. I don't even know you." But that's the power of the process.

Michael: And so discovery meetings for you in this context, I would still be a prospect. We're not working together yet. This is the “just getting to know you” part of the process. And I'm presuming now, these are virtual for you since we're in a pandemic environment. We can't really do them in person.

Leighann: Yeah. They're virtual now. I did a couple before the world shut down. But at this point, I've made the decision to go pretty much permanently remote. And so I don't imagine doing too many of these in-person, which I know it is an adjustment to have these kind of more intimate conversations through a screen versus in person. But I think because everyone is now also so used to this idea of speaking to each other through a screen that it's not going to be so much of a concern anymore. But at the end of the day, plenty of clients are still crying and feeling the emotions and feeling the process even through a video screen. So though different, I think it is just as impactful.

Michael: One, I guess, that’s part of what I was going to ask can you get to this level of conversation and intimacy sitting on a Zoom meeting?

Leighann: Yeah. One would think not. But I've been pleasantly surprised by the connection and the intimacy that I've been able to build with clients through video. Part of that is your body language, a big piece of that is what is behind you in the video and making sure you're setting yourself up in a space that is conducive to having these conversations. And the other piece is setting expectations, right? Telling clients, "Hey, look, this is what we're going to be talking about. It'd be really helpful if you didn't have distractions, so you can get the most of it," which is hard to do these days, right. Especially if you've got kids or pets and everyone's at home, and it's not so easy. But it's setting expectations. It's putting on your best face. Like I said, keeping distractions to a minimum and keeping that eye contact as much as you can in a video screen and just showing empathy physically as well as verbally.

Michael: So what happens next? We do our discovery meeting, “I heard about you, Leighann, I wanted to learn more about your services. We do this discovery meeting. I cry a little, I'm feeling well heard and understood. This seems interesting, I've not had an experience like this before with an advisor.” What comes next? Do they get asked to sign up as a client at the end of that meeting? Do you do a followup meeting? Do you send them something between the meetings? How does it move forward from there?

Leighann: Yeah. So I am the world's worst salesperson. I just have this intense feeling of patience or guilt almost, if I feel like someone hasn't fully thought through their decision-making in the process, I always want to make sure that there's no buyer's remorse. I know it can be easy to get caught up in emotions and be like, "Yes, let's do this." But basically towards the end of the discovery meeting, I explain what the next couple of meetings look like. I let them know ahead of time that the vision meeting, which is the second meeting once they become a client, there is some homework and that's Kinder three questions that I've kind of molded to be my own. I give them a little bit of information on that and I help them understand what the importance of it just to get kind of get that buy-in so they understand that I'm not just some wooey nut, that there is a rhyme and reason to like what I'm doing.

And so, I ask them if they have any remaining questions. And then, typically, I send a follow-up email. I let them know I'm going to send you a follow-up email and it has more information about next steps. I give them the fee quote, and then I just kind of leave it open-ended. I tell them if and when you're ready to move forward, I'd love to work with you. And leave it at that. Of course, if I don't want to work with them, that is not how I handle it. But typically that's how it goes. And so once they're ready, they respond and we kind of get the whole onboarding process going.

How Leighann Charges Her Clients [30:44]

Michael: So, are you actually quoting them a fee at the end of that that initial meeting, you're quoting them on the spot before they leave? Here's what your fee will be if we move forward.

Leighann: Yeah. So, I've taken an approach where I've simplified fees for the most part. So I used to have this really fun, detailed complexity calculator on my website. And I realized that it was creating too much confusion with clients and not understanding it. So I took it off. And then I just got to a point where it just...there's a standard fee. It starts at, at this point it's $5,400 for an individual and $6,600 for a couple for...that's the full 12-month process. And pretty much, that is standard. If there is more complexity involved beyond kind of what I think would be the scope of the engagement, then I may increase the fee.

So for the most part, they know essentially what they're likely paying before they even jump into the discovery meeting. And actually on my...when you go to book the meeting through Calendly, it makes you click or type "I Understand" under a statement that expresses what our fees are, because I was getting a lot of people reaching out who either weren't looking at the fees or just didn't think they applied to them. And so it was a lot of tire kickers who thought they were just going to cruise in and get a plan for a thousand bucks. So they're very well aware of what the fees are. And so in that follow-up email, I will confirm whether the fee stayed that amount or whether there was any reason to increase it. So they have that at their ready.

Michael: And so, are you outright putting the fees on your website as well? Or when they schedule, the fees are in the Calendly link just so they know? If you're asking to confirm, do you understand the fees? I'm presuming at some point you've got to put the fees in front of them so that they can say yes, they understand the fees. Yeah.

Leighann: So I definitely include the fees on my websites. I'm definitely that person where if I go to any sort of service professionals website and there's no fees on it, I immediately close the window and move on to the next.

Michael: Cause you just...you want to know what it costs, you want to know what it takes.

Leighann: It's not that there's any sort of negative reason why someone might not include their fees, but it always rubs me the wrong way. Like transparency is huge for me. And so what would be the reason not to include fees? And I know there's arguments that you can go in circles around whether people will suffer from sticker shock, “but once you explain it to them, they're more willing to do so.” But I always feel that people who are going to balk at fees in that manner are, are going to be a little nitpicky around them to begin with. And maybe don't see the full value or don't value the service as much as maybe you would like them to, which creates kind of some potential issues later down the road.

Michael: So, I know the fear, the concern for some advisors though is, “But I have to meet with them and show them the value so that they'll want to pay the fee. If you say the fee upfront and you scare them off, you would have gotten them if they'd only come to that meeting, but you scared them off before the meeting.” Do you not think that's valid or you just don't worry about that? You lose some, but at least I also don't have to talk to a bunch of tire kickers, so it's worth it to me. How do you weigh that?

Leighann: Yeah, I think it's certainly...I think it is appropriate in instances. I think, for me, it's just not something that I particularly want to spend my time having to worry about or go through. Certainly, if you've got a more complex process or there's all sorts of stuff that needs to be explained and you're maybe not doing as great of a job on your website explaining it, or it's just a process that's really hard to explain, sure. I've done what I think is a pretty decent job of outlining the entire process. And if you look at that and you think...and it's not worth the money to you, then that's okay, but I don't want to spend my time convincing you of that. If you don't...right off the bat, if you're going to...if that seems a lot of money to you, that's totally fine, but I don't want to have to spend my time convincing of the value of the process, quite frankly.

Michael: And for fee structure itself, is this a...they pay one time up front? Do you break this into quarterly or monthly? Just how do these $5,000 or $6,000 fees work?

Leighann: Yeah. So everything is split into even monthly payments over 12 months. There's certainly... I do ask clients to commit to 12 months. There's no written...it's not a gym requirement where you have to sign on for 12 months. And I know some advisors do that and there's nothing wrong with it. I just I've never liked the feeling of that. And so I say, "Look, this is at least a 12-month process." And oftentimes they'll extend beyond that initial 12 months. And so I say, "This is the fee, it's $6,600 split into 12 monthly payments," or whatever the fee is. And then, I always make it very clear that just because the fee is paid on a monthly basis, that doesn't mean we are meeting and/or doing something every month, because there oftentimes is confusion around that. The process is very front loaded. And then several months, right, in the process where we don't meet, that's not to say that you can't reach out or we won't talk, but it's not...there's nothing technically scheduled in those months. So it's always just, again, setting expectations is huge.

Michael: And then, do you get the problem of clients who sign up on a monthly basis, do all the labor-intensive work stuff upfront, and then terminate after 3 or 6 months and don't even complete the 12-month cycle, and you kind of get stiffed on the backend of the payment?

Leighann: Fortunately, I've only had I think one client who ended or terminated before the 12 months were up, and part of that which is her time. When she came to me, she was kind of some downtime from writing projects. And as we started working together, she just got inundated with projects, which is a great thing for her, but she felt that she couldn't commit enough time to the process and our work for it to be worth it for her. And so I said, "Yeah, I totally understand. No worries. We can call it a day." I don't ever require clients to pay any sort of outstanding balance. I just kind of eat the cost because I also want to create that goodwill that, "Hey, I would really love to work with you again in the future, and maybe kind of on a more extended basis."

So that hasn't been a problem so far. And I think I've done a better job of explaining the process, and again, in having a copywriter and with this relaunch that I went through this past August, I think I've done a pretty decent job of explaining what the process is and kind of trying to create that value proposition, that it makes it a little easier for them to digest and be like, "Oh yeah, sure. Let's definitely do this 12-month process." And the time flies as I was....as we were talking just now, I saw a thing come across my computer is a note from a client saying, "12 months are here already." So, it flies by. And people are like, "Oh crap. I didn't realize that it had been 12 months."

Michael: Well, and to me, just it's worth recognizing, even for saying, “Yeah, I did have a client who went through and did part of the process and then terminated before the end of the 12-month cycle. She wasn't gaming the system, like I'm going to get all the front-end load to work and I'm going to terminate before I have to pay the rest of the fee. Just life happened and she got busy and said, "I just don't think this is working. Maybe we need to move on.’" And you parted ways.

Michael: And, I guess, the reality as well as still when you're so upfront about the fees and they literally have to put on their Calendly scheduling, "Do you understand the fees? Type Yes." You're kind of screening out people who are applying to game the system. At some point, if that's your mentality as a client, there's probably just easier marks than, boy, they're kind of really upfront with their fees. And I actually have to type, "Yes, I understand what the fees are going to be." Just, if it's someone who wants to take advantage of it, they're going to move on.

Leighann: Right. Yeah. Definitely.

Michael: So, for clients who do want to move forward, it sounds like you send them a follow-up after the discovery meeting to say, "Would you like to move forward?" If yes, they get their advisory agreement at that point. And the actual sort of signup process isn't a sale at the meeting. It happens as a follow-up to the meeting. If you'd like to move forward, then we can get started on the paperwork.

Leighann: Yeah. I always encourage them to have a conversation, especially if it's a couple just to talk through...to make sure that they're ready to commit to it because it is a process. And as a lot of them are recognizing though they're not expecting kind of the "therapy" element of it, and that it leans more towards the softer side of things, they're quickly realizing how beneficial it can be for them. But I always want them to sleep on it, make sure that they're ready for it financially, mentally. And so I like to give them the time to do that. And if then they get back to me and say, "Let's move forward." I feel good about that. I feel like they are ready to commit, they're here to do it. So we do the full onboarding, set them up, get them over the DocuSign, the AdvicePay, schedule the next meeting. And then I send them the three questions, essentially having them do that prior to the vision meeting. And that gets the...that process started.

How Leighann Has Implemented (And Adapted) George Kinder’s EVOKE Process Within Her Practice [39:26]

Michael: And so for those who aren't familiar with Kinder's process, can you just talk about quickly what are the three questions that you keep mentioning you send to them? Particularly, since I think you said you adjusted them a little bit from George's standard.

Leighann: Just a hair. And it was more or less to be more in alignment with my target demographic, which might be a little bit different than the people that George had been originally thinking of or about. But the three questions really are aimed at helping clients to really uncover what is truly and deeply important to them. And it's a series of questions that get a little bit more intimate and hard-hitting.

And so the first question basically is the way I frame it is, imagine you're sitting in your favorite chair about to do your monthly financial check-in. Quite honestly, who actually does that. But client logs into the bank account, they've got enough money to provide for all of their needs for the rest of their life. They're not Warren Buffett rich, but they don't have to worry about money. So then the question to them is, how would you live your life and would you change anything? And so that starts, and they think, "Okay, I suppose I could do X, Y, and Z, maybe I wouldn't work as much or I would volunteer more," and those types of things.

Michael: I guess that gets interesting when you're working with creatives, where if you're sitting in the chair and you have enough money, what would you do? It's often still something with the creative endeavors. Yes, they do it for work, but they often also do it for passion because it's part of what they do to get that creative energy out.

Leighann: Exactly. Oftentimes, I would stop working on projects that I am not passionate about and I would only work on projects I am passionate about. Yeah, a lot of times it's giving back, it's volunteering and that kind of stuff. And so the question goes on and then we get to that second question, which is back in their current financial reality, doctor tells them they've got 5 to 10 years left to live. Good news is, won't feel sick. Bad news is, they don't know what it's going to happen. So basically with 5 to 10 years left of life, will they change anything in their life? And if so, what would they change?

So that leads into the third and more oftentimes devastating question for folks, especially what I've learned parents is instead of having the 5 to 10 years left to live, now you've only got 24 hours to live. And so reflecting on life, it's not a matter of what would you do in those last 24 hours? It's what dreams did you not get to live into? Who did you not get to be? What did you not get to do? And that question tends to have the most impact. And certainly, you see kind of themes from the first to the second to the third question, but that's where it really distills down to those things in life that maybe they are putting on the back burner, or they're not thinking about or things that they've always been told or thought they wouldn't be able to pursue or achieve, that's when that stuff comes out. And that's where I get to have fun and kind of help them realize that a lot of those things that they thought weren't possible or that they haven't been able to do, let's focus on that. Let's bring that to the table. And that's where you see a huge shift. The light in their eyes is like, "Wait, these things are possible? I can actually do these things?" And that's for me, as an advisor, is where I'm like a kid in a candy store.

Michael: So then what happens in the next meeting? Like we've gotten through discovery meeting, they've said, yes, they got the DocuSign, the AdvicePay, they're set up to pay their fees. They got their three questions. I guess, they're filling it out as homework to think about and bring with them. So take me through what happens now in the next meeting itself.

Leighann: So the vision meeting is where we get together and go through the answers to their three questions. And again, it's not a lot of me talking, it's me prompting them to dig a little bit further. And it's listening to their answers, again, without judgment, with an open heart, with empathy and understanding some of these things that they are potentially sharing or things that they are maybe embarrassed by, or even ashamed by, or what have you. And so kind of creating a space for them to air that stuff. And then, like I said, just asking questions that are helping them to dig a little bit deeper behind the meaning sometimes of those things that are important to them, helping them to kind of pull that out and truly get to the heart and core of what those things are, what they mean to them, and how important they are so we can include them in the plan itself.

And then we use that to kind of create a vision for them, right? We kind of paint a picture of a moment in time, usually anywhere from a year to two years from now, pulling out, extrapolating those things and painting that picture. It's like, "Oh, imagine a time 15 months from now, you've just gotten married. You're sitting on the porch of your new home, out on the mountainside. You've just gotten a call from your boss that you got that promotion." So you're painting this picture. I'm not doing a great job right now, but you're painting a vivid picture for them to really sit in and imagine all of these things that they've just expressed to you that are deeply important to them.

So it's kind of creating this tangible almost thing that they can touch and feel. And that is my affixing the carrot to the stick moment. Great, you've created this vision and now you've got the carrot and you’ve affixed it to the stick. And so you can kind of...you've got the stick there with the carrot hanging and that is then what they are going after. They're trying to get that carrot through the rest of the process and putting these things into place and the actual planning side of it.

Michael: So how does this meeting end? What's the culmination or conclusion of the meeting?

Leighann: The culmination of the meeting is really asking them to sit in the vision. I think everyone's natural inclination after that is to just poke holes in it and say, "But that's not possible. That's not reality. That was a fantastical dream." And so it's really encouraging them to not go to that place. It's saying, sit in this vision, literally live it, dream it, feel it, keep it positive because the next meeting is what I call the obstacles and organization meeting. So it's kind of a combo of...the obstacles basically is where we take a look at all of the things that they want to accomplish in this vision. And they basically tell me what could possibly get in the way. They want to buy a house, what could get in the way? Oh, well, the housing market, so external internal factors, and we go through this and we would say, "Okay, what can you do about it? Who can hold you accountable, when you're going to talk..." You come up with a game plan for every single obstacle that they can throw in the mix that might get in the way. So that way, when an obstacle inevitably shows up, they've got a game plan ready to just power through it.

So at that point, there's no excuse for just trucking ahead and getting what they actually want. So it's that angle of it. And then we transitioned from that side of it to a more of the technical organization side of things and start with all the data gathering. So really, the first two-and-a-half meetings are all kind of what I call the touchy-feely. We don't talk numbers, we don't talk anything related to actual finances. And so that organization part is purely just data gathering, going through the information, asking for all the statements, etc., because that sets up the next meeting to start talking about more of the actual technical planning side of it.

Michael: So I'm struck by this relative to, I think, where we're most of us are in our client process where the data gathering usually comes a lot earlier. Some of us that literally as part of the discovery meeting, some that's before the discovery meeting, fill this PDF out before you come into our office so we understand your situation for the conversation. If not, it's usually the first thing we do after they say, yes. It's like, "Okay, in order to get onboard with the client, please fill out this form or this paperwork of this information." So I'm struck that this starts for you not until meeting number three.

Leighann: Right. And I do have folks complete kind of what I call a prospect questionnaire prior to the discovery meeting, but it's very basic. I want to know what their income situation is, if they're W-2, if they've got an S-corp, if they sell props, asking about if they have stock options, rental investment property, any of those types of details, and balances, but it's only for me to understand where they are. And part of it is also just can they afford to work with me. And that is also a really tricky, loaded question for me, because I hate this idea of guard keeping, like having this minimum, but also recognizing that I run a business. And so it helps me to understand if they aren't a good fit or if they have a situation that maybe isn't in my wheelhouse, that during that discovery call, I can let them know, "Hey, look, I can give you as much information as I can on this call, but you're not a good fit," and then send them on their way.

Or so, for the most part, the bare minimum is, are they able to afford my fee and are they in my niche? Those two things. And if the answer is, yes, none of the financials really matter at that point. I also don't want that to taint the vision. This idea of, “Oh, this is the vision, this is what you want to do, but, oh, you've got no assets and you've got high income,” but so I don't want there to be any of that involved. And so at that point, it's okay, so these are your dreams, how do we then take the resources you have to make that happen?

Michael: And okay. And so, then what comes next as we go down this road?

Leighann: So once we get all the data and information from them, I tend to be pretty heavy on cashflow analysis. And part of that is just so they understand where their money goes, and also, where it comes from. And so again, when you have a pretty unpredictable or wonky cashflow, for a lot of people, it's tough to understand the cashflow. And so...

Michael: When you've got high income and highly volatile income, you really need to understand where the money goes. Cause you have to have a plan for, “And what happens if your $400,000 income goes to $0 next year because the show you're writing for gets canceled?”

Leighann: Right. And similarly, when you have these fluctuating income years, you tend to have fluctuating expenses as well. And for a lot of people, it's very difficult psychologically. This swing from being able to afford a more luxury lifestyle to the next year being, okay, we've got to live on fast food maybe for a couple of months. And so that can definitely create a lot of negative feelings and emotions. And so it's this idea of coming up with a baseline essentially. And so that's why I like to go through previous cashflow to figure out where the spending has been.

Michael: And just, how do you dig in with clients who may not know what their spending is in the first place, right? There's sort of this presumption we can dig into their cashflow and actually figure out what it is. Do you just tend to have clients who have a pretty good handle on that? Or do you have a process about how you dig in to figure it out?

Leighann: So, they usually have no clue. And part of that is because of the fluctuating income. And so, I try to go through at least six months of previous cashflow, and sometimes, it's not to say it's like the stock market right, “previous spending doesn't predict future spending,” sometimes it does. But the idea is it's trying to, I'll go through it, I categorize it all, and I come up with a summary. So, okay, this is what you've been spending on housing. This is what you've been spending on food and dining out. So I go through and I use eMoney for this, because unfortunately right now, it is the best of a bunch of crappy tools to do this. But I will go through it and actually create an analysis and I'll export it to Excel and get real nerdy with it to help them understand, because once they see what they're spending and where they're spending it on, they can be more conscious of it.

If you're spending too much money in a certain area...and this is for them to decide, certainly not me. If they feel like they're spending too much money in a certain area, this is where they have that understanding of, "Oh, wow. We spend a lot of money on X. Maybe we should not do that." And it creates more of that value alignment. And I kind of jokingly say, it's like Marie Kondo-ing your finances. You go through, it's like, “Where am I spending money that it's not bringing me joy and that I'm not enjoying?” And then you're able to more readily stop spending money there, or at least take an extra second to think about it before you spend it.

How Leighann Integrates eMoney Into Her Planning Process [50:55]

Michael: So, walk me through a little bit more of just the process of literally how do you do this within eMoney? Just you connect in their bank accounts on account aggregation, and it pulls enough historical data that you can just plow right in and figure this out and categorize it for them?

Leighann: For the most part. eMoney is not without its faults. Any third-party data aggregator is going to have its issues. So, they link their accounts, whether they stay linked is always questionable. And I found certain institutions are much better at providing more data. The worst is when an account will only pull in three months of data, and so that gets a little tricky. And so, if a client is having...is struggling with their cashflow and understanding, I will do...I will have them export transactions from their institution into Excel, and I will manually do it, which is not my favorite thing, but sometimes it just has to be done. But, oftentimes, there will be enough data in eMoney once they successfully link their accounts for me to be able to go through all of that history, and eMoney does its best to auto-categorize. It's not always great. My favorite is when it categorizes bars as childcare. I always just find these, I forget exactly...

Michael: No. This is a no-judgment zone.

Leighann: But it's the system just does it. I'm like, well, I guess that could be appropriate in some instances. So it'll go through, it'll auto-categorize, and you can create your own rules. So it is not without its flaws and could it be improved dramatically, but I also have to recognize that most financial planning software wasn't meant to do this. It had a different purpose behind it and it wasn't necessarily meant to go this deep or custom into a client's finances like this. That's proven by you can't put in an emergency fund goal in eMoney, there's just no good way to go about it. And for me, it's like that is the fundamental basics of financial planning. Why can this not happen in this software?

Michael: So, this process of categorizing spending, I guess, comes between meeting number three and number four? Cause you're gathering some of the data in meeting three, you're getting them connected to eMoney, and then, after three but before four is where you're digging in to actually figure out where's the cashflow going and where it has been allocated. Or you're getting it before so you can talk about it in meeting three.

Leighann: So I get it after meeting three. And so then meaning four is the money flow meeting. And I stole that from Mana Financial Life Design, because I thought it was so brilliant, the money flow meeting. So, basically, we get together in that meeting and it is just for the money flow. And that is where we take a look at their spending history. We set up a spending plan, right? And so that is based off of previous spending, but it also takes into account, okay, you've got to up your 401(k), you've got to up your savings to this, to that. And we create a spending plan moving forward and that's what they would use to track spending. But the other side of it also is that oftentimes clients just have...they don't understand the flow of their money because they've got so many miscellaneous accounts. And especially if you're working with a couple who hasn't joined finances yet. So the other part of that is saying, okay, let's get an ideal account structure set up and a process. Okay, you get a paycheck, let's deposit it into this account and have the money's kind of splinter out into these other X accounts. So it's creating the process also for the money to flow between their accounts to their savings targets, etc.

Michael: And so you'll actually start talking to them about how we're going to split this up. We're going to go open another bank account for as the main inflow account, you're going to change your direct deposit to go there. Then, we're going to create automatic transfers to go to this retirement account or this college plan or this short-term savings account. You're literally creating and setting up that accounts structure for them, that cashflow accounts structure.

Leighann: Exactly. And it's a little bit of trial and error. And so that's what the importance of that meeting is figuring out what is going to work for them. Sometimes, it's having money is just flow directly from their paycheck to a separate account. Sometimes, it's having, like you said, kind of just a main hub account where all the money goes in and then splinters out, but no money is...there's no transactions necessarily out of that account. So, it depends on clients. And sometimes, I have clients who the thought of having multiple accounts gives them seizures. So they're like, "I can't do that." And so then we have to figure out an alternative that's going to work for their situation.

So, sure, on the planning end of it, I can come up with a structure that on paper makes perfect sense and an easy way to do it, but it's not about me. If it's not going to work for them, for whatever reason, we have to come up with an alternative solution. And so that's what we do. And so sometimes it's opening a ton of accounts and sometimes it's closing a ton of accounts just depending on what works for them.

Michael: But the whole focus of this meeting number four is just talking about cashflow and where the household money goes.

Leighann: Correct.

Michael: Okay. Which, again, I get, particularly in the context of working with creatives where cashflow is volatile and there's a lot of financial insecurity or financial instability. It's a big deal to get the bottom of this and get them comfortable with it.

Leighann: Yes. Because what I noticed about a lot of creative clients who have S-corporations when they first start working with me is they've amassed a ton of cash that is just hanging out in their business account for no good reason. And these aren't people who need inventory or anything, they're a service-based business as a writer or a producer. And I'm like, "What are you doing? You've got $300,000 of cash in your business checking account from 2019."

Yeah, so a big part of it for them is setting up a process to get the money out of the S-corporation and into their personal stuff. So it was like, "Hey, did you know that you could fully fund your kid's education if you just took this cash into this and you could fully do this." And they're like, "Wait, really? I could just fully fund all of that with this." And I'm like, "Yes." So let's do that on a more regular basis now instead of just letting it pile up in there, so that would be getting into the market or we get into savings and we get into a vehicle that's going to be most conducive for growth or whatever it needs to do.

Michael: So then what comes next? You have this really focused meeting around cashflow and spending and where are the dollars going, what's the next meeting after that in the process?

Leighann: So that's where we do...I guess, technically it's the plan delivery. So that's the technical analysis and the execution meeting. And so, my job after that money flow meeting is to go back and crunch the numbers, so to speak. But that's when I actually put together the plan itself, right? Now we've got all of the goals that they're saving for, we've figured out what all of those are, we know what their cashflow situation is and their spending plan is. So then we say, okay, based on all of these things, the goal was you wanted to buy this house for this much, at this time, you want it to fund education to this point, you wanted to save for travel for this.

And so I actually put together the plan that says, okay, here's the investment strategy, here's the account we need to open. Here's the money we need to transfer. So it's creating the actual plan itself to execute and start to take action on. And so that's when we get together and really start to go through that action item list. It's, “Hey, reach out to so-and-so and get a term life insurance policy. Here's an estate planning attorney. You've got to get all this stuff squared away.” That's when I hit on with all of their to-do items.

Michael: : And how do you actually, I guess, queue this up and deliver it? Are you a...create a comprehensive financial plan that's printed and deliver? Do you do it all interactively with eMoney on the big screen? Are you Carl Richards style, one-page financial plan? What do you actually deliver in the plan delivery meeting?

Leighann: So what I have found is that there is no one way. It is slightly dependent on the client and kind of their communication style and the way that they receive information. And so, I have clients where I just do the eMoney interactive on screen thing, and that's worked out beautifully. I have clients where I put together a 15-page, obscenely-detailed, aesthetically-pleasing plan. And then I have clients who I just do a two-page or four. And so to some extent, it really depends on what they need. And because the reality is this is a living, breathing document. It's not as if it's...it represents a moment in time, but next week we're probably going to make changes to it. And the week after that, more changes. So the idea is it's kind of just a central repository for the information to use kind of as our springboard for implementing and making changes. It's a lot of what we do in planning is somewhat trial by error, figuring out what's going to work, what didn't work, and how to adjust.

Michael: And how do you decide who's getting what? And just, do you literally ask them like, "Hey, would you like the long plan or the short plan?" I can imagine. there's some clients I could just ask them that and they'll be like, "Oh, I need all the details." Or, “Oh God, please don't send me a long document. I need this in two pages or less.” How do you decide which one you're bringing to them?

Leighann: Part of it really depends on the information and what they...where we are in that part of the process. So sometimes it can become disjointed, right, where we may not actually tackle the full scope of the plan at this point. And so part of it is me gauging the client, which is definitely an art of learning how to read people and pick that up. I, oftentimes, will ask clients and I say this with the understanding that they may not know how to answer, and they may not know what they need, but oftentimes I will ask, "What information can I share with you that will be most beneficial? How would you prefer to have this information presented to you?" So if someone knows that they're a visual learner, great. I know how to start that. If someone says, "Cool conversation, just tell me what to do. I'm on it." Great. We'll go with that. So it's a little bit of just kind of figuring it out on the fly. Worst-case scenario, I just do the whole kit and caboodle, and that's that.

Michael: And if you ask them about this, I guess just this comes up in meeting number three or number four, along the way that at somewhere saying like, "Hey, the next meeting I'm going to be digging in and really presenting you a plan with some recommendations, how would you like me to deliver this information to you?"

Leighann: Right. Exactly. So typically at the end of meeting four, the money flow meeting we'll have that discussion around what information would be helpful for them in regards to their planning. And it also depends on exactly what we're planning for. So a client who has all of their insurance estate planning, retirement, all in check, we don't need to do the full whole plan because most of that stuff's already handled. So I might just do a cashflow projection, a home purchase analysis, and give them kind of a smaller portion of it specific to exactly what they need to work on.

Michael: Okay. And does that kind of wrap up the planning process because we're now at the...we delivered the plan or are there more meetings that come here after to continue the process?

Leighann: So there's two more meetings that come after that part of the process. So typically speaking, that's at month four-ish. And then, two to three months later, we'll do what I call the gut check meeting. And so basically the process between that analysis execution meeting and the gut check meeting is a lot of the implementation, right? That's the going and getting the insurance, setting up this account and that account, talking with your employer and changing your benefits to this. It's a lot of that, it's what the gut check meeting. We basically check back in and say, "Okay, here is what we outlined. These are the adjustments we were going to make. This is the spending plan." And kind of just doing a cross-reference of how did it shake out? What was working? What didn't work? What were you able to work through and accomplish? What is still remaining on the table? How are you feeling about it? Has life changed?

And what's been really fascinating because I just implemented this process last year, is that a lot of what was happening in these meetings is likely influenced by COVID and being at home in this kind of "new normal," and not knowing exactly what's going to happen 12 months from now. And so a lot of these gut checks meetings are super helpful because people are starting to see how life is going to shift and change. Especially as of late as we kind of are starting to see a light at the end of the tunnel. And so that's really our time to check-in and say, how is it feeling? What are we missing? Is there something lingering that you didn't...that we didn't discuss or put on the table? Or is something shifted? Is this thing you really wanted to do...still something that you really want to do? Those types of questions.

Michael: Okay. And then you said there's usually two more meetings, one more after this. What comes after gut check?

Leighann: So that's the 12-month review meeting. And so that's where we get together at the 12-month mark, we summarize what we have worked on to date. And then we take a look at the next 12 months, are there any holdover tasks that need to be completed still? And oftentimes that is a yes, because life gets busy and though people think, “Oh, we'll power through this.” It never happens like that. And so at that point, we reassess. We say, "Okay, where are we now? Where do you want to go?" It's a little bit like the gut check meeting, what's working, what's not working, what's going to happen this next 12 months. And as we know, nothing in life ever sits still.

And it's always like, oh, hey, clients kind of fell off the face of the earth, and I got a little concerned and I reached back out to them and they're like, "Oh, hey, sorry." They had two failed adoptions and were just in a really bad place. They're like, "Oh my God, we got a call. We got a baby, we've had to fly out, we've got a baby, we came home." And so everything shifted in that moment like that. And it was, okay, well we are planning for a completely different situation now. So, usually, we look at that 12 months and say, “Okay, there's a lot that's likely going to happen in the next 12 months.” And we start to get proactive about planning for it, adjusting for it, and setting things up.

Michael: Right. And, I guess, particularly when you're working with just clients in their working years and particularly clients at this kind of peak earnings years with lots that's changing because they're creative. So gigs come and go and opportunities come and go, a lot of stuff can change in their lives in 12 months. I'm thinking of this relative to retired clients where not a lot’s necessarily changing in 12 months. Retirement transition is big, but my client who's five years into a retirement usually doesn't have a big wave of change that comes in the sixth year of retirement. My 42-year-old client can have three different world changes five years into the relationship.

Leighann: Exactly, exactly. And that's why these clients have been...they've been staying clients even past that 12 months is just the recognizing that life shifts and change. And it does so unpredictably.

Michael: So now help me understand the overall business model then in this context. You talked about this this fee initially $5,400 for an individual, $6,600 for a couple. It's normally a 12-month commitment. So do they renew the same rate? Do they renew at the same fees? Is it different because it's not the first year process? How does it work after year one?

Leighann: So, they renew and the fees do stay the same. And part of that is, quite frankly, the first year, even though $6,600 might seem like a lot of money, the amount of work that goes into it, you typically don't actually become profitable until that second year. And so, typically speaking, fees don't change, and like we were mentioning, life changes, it shifts, especially with the clients I work with. And it's always like, “Oh, we think it's going to be a calm year,” but that's never the case. Rarely is it, “Oh, sorry, I spent less hours working with you this year than I did last year.” It's never the case. So, yeah, generally speaking, fees stay the same. Unless there was some sort of transition to, say, retirement, but again, I'm steering clear of working with people who are at that phase in their life. So just from my experience over the last couple of years owning this firm, nothing ever gets simpler, easier. So, typically speaking, it all stays the same.

How Leighann Integrates (And Charges For) Asset Management In Her Fee Model [1:05:53]

Michael: And you had mentioned earlier that the firm, in addition to having ongoing advice fees has $15 plus million dollars under management. So, is there also an AUM component to the business model? Do you just bundle the investment management in by the time you're paying me $6,600 a year, I'll just manage whatever your portfolio is as well. How are you handling the investment management portion when some of these people do have hundreds of thousands of dollars sitting in a checking account, there is investment management stuff to be done for at least some of them?

Leighann: Yeah. So I do include some amount of investment management in the base planning fee. I don't require clients to have me manage their assets. I know some advisors kind of make it mandatory. That's not how I run, unless they're making very horrible, terrible decisions. But, quite frankly, half my clients don't even have assets yet. So that's not even a question. And something you've talked about a lot and a lot of advisors talked about this idea when we look at fees, the typical way of offering planning was, "Hey, you've got a million dollars? Great, I'll charge you 1% and I'll throw in planning for free." I hate that approach. And I know it's kind of mental gymnastics. We sometimes play with clients because they don't realize that $10,000 and 1% of a million are the same thing. And so the way I approach it now is I wanted to kind of flip that on its head. And so, I say, “Your flat fee is $6,600 for a couple, and that is where financial alignment planning. But hey, I will throw in the first $500,000 of investment management in that fee.” So again, it's placing the emphasis that the fee is for the planning and I am doing the investment management "for free." And then, basically anything above $500k is billed at 60bps a year.

Michael: Okay, interesting. So I like the blend, right? A lot of us sort of say, we do the investment management and a planning fee, but if you have enough assets, I'll waive the fee. Or if we'll do a basic plan, but if you've got a lot of complexity, there'll be a separate planning fee charge. I'm struck just the way you come at it from the other end. Our planning fee is our planning fee. We throw in the first $500,000 of investment management and we bill you above. I could frame it as we just have a $6,600 minimum on our $500,000 investment model. But I like that you come at it from a different direction. It's certainly not what a lot of others do, but makes sense to me in what you're framing and who you're talking to as clients.

Leighann: Yeah. I really want them to understand that the emphasis is on the planning. The investments, of course, are an integral, important part of the process, but that is not where we focus. That is just a piece of the overall puzzle, so to speak.

Michael: Well, and likewise, it's not as though your fee, your minimum, your flat fee is just what the fee would have been on the first $500,000. If you're billing at 60bps, 60bps on $500,000 would be only $3,000. But you’re charging $6,600, “There's a lot more planning stuff that's happening here, and we'll cover the first half-million dollars of your assets without a separate fee.”

Leighann: Right. And part of that is it creates the stickiness of the relationship as well. So I do have a solid subset of those clients who have a minimum planning fee and I manage their portfolio, but their portfolio doesn't...isn't $500,000, it might be say $250k. So, again, being able to kind of wrap that portfolio into the mix even though it doesn't kind of hit that $500k mark, creates more of that stickiness. So it's not just the planning, I think people have a hard time digesting a $6,000, $6,600 a year fee. And that's one of the big things with this model of subscription or monthly fees is the stickiness and the client attrition and actually keeping clients for any reasonable period of time. And so to some extent, this was my way of trying to bridge that gap a little bit.

What Surprised Leighann The Most About Building Her Advisory Firm And The Low Point Of Her Career [1:09:46]

Michael: So what surprised you the most about building your own advisory business and going through this journey? Typically, since I know you had a history of being in the industry for many years in the employee end before you went out on your own to start Equalis. So, what surprised you the most about building your own firm and running your own business?

Leighann: That people willingly chose to work with me? Oh, my self-deprecating humor. No, that was a big concern. I didn't start my firm with a whole lot of confidence. Quite frankly, it was a necessity born out of a situation that went bad. And so that was always my concern is at the time I was in my early 30s, but I've always looked like I was 12. So I was like, who's going to look at my phone and be like, “Yes, she is the one I want to work with.” I didn't think people would take me seriously. And so the fact that I was getting people twice my age, who were making hundreds of thousands dollars a year that wanted to work with me and chose to reach out to me and say, "Hey, I'd really love to kind of interview you as an advisor," and then move forward and hiring me was a little confusing. I've learned to accept it. It's not in my nature to be that way, but I think that was probably the biggest surprise is how much people were willing to give me a shot, to give me a chance to kind of prove to them what I was capable of.

Michael: And why, I guess, like why? Why did it turn out that way? Just, was there something you missed between how you thought you were coming across to prospective clients and how apparently you were coming across to prospective clients?

Leighann: Yeah. I have not had the easiest path in life. And so anytime something feels like it is not easy but that it's it's going right, I question it. I'm kind of like this isn't how things were supposed to go. I'm a little confused by this. I think the empathy part is huge when you show someone even an ounce of empathy, because they're just so not used to it, that goes a long way. I think my story resonates with a lot of the people who reach out to me. I'm certainly not the advisor for everyone. And I think that based on who reaches out to me, there is definitely a common thread. There are several common threads there. And I think I've learned to accept that I do provide value and I am good at what I do, which is hard to say because I don't have a middle-aged white man's confidence. But I think I do a pretty good job of helping people to work through their money stuff and providing a platform and a safe space, really. And I think that that probably shows through, and then as more people mentioned that to me, I'm learning to accept it as truth. But the fact that I'm empathetic and I listen, I think, is taking me a long way.

Michael: So what was the low point in your career journey through being an advisor and ultimately launching your own business? I don't know if it's from the business stage or the before stage.

Leighann: I had a failed succession plan with a mentor of mine. It's one of those things where you don't know someone until you know them. And I think we both understood that of each other. And so, I bopped around from firm to firm and at some point, about eight years into my career, I had my “Come to Jesus” moment where I realized I was just not cut out for employee work. I grew up in an extremely volatile environment, both emotionally and financially. And I was a middle child between two brothers who could not keep themselves out of trouble. And so I learned for better or worse at that point to be fiercely independent. And so at that point, I realized that being an employee, and especially being micromanaged, was not something that I could see myself doing.

And so I approached a former mentor of mine and we tried to work out an arrangement and it just...it all kind of imploded after a year of working together. And so, I started my firm reluctantly because I didn't really have a choice because at that point I hadn't had a job for a year. And I realized that I probably would get fired if I tried to get another job at a firm. And so I kind of decided at that moment, it's now or never, start the firm or kind of retreat into your shell. So I started the firm and it was a really difficult decision because at that point when I started and officially launched in January of 2017, I had $35,000 of credit card debt from this failed succession plan of thinking that it was going to "pay off" once I had revenue.

And by the end of my first year in business of January, or I'm sorry, December, 2017, that had ballooned to $50,000. And so when I started...when January 1st, 2018 rolled around, here I am struggling $50,000 in credit card debt. Just having this moment of, what the hell did I do? What has this last two years been? And I would say that was probably the lowest point of just trying to reconcile the decisions I had made and the position I had put myself in. That was a really tough time for me.

Michael: And so in retrospect, what didn't work about the succession plan? Just, was there something about going into it that you missed or something you would at least do different in retrospect? What didn't line up? Cause obviously you went into it expecting it was going to work, ended out very far from there in relatively short order. So, what happened or what didn't happen the way that you expect or envision it in your head?

Leighann: I think we were just fundamentally very different people with very different approaches to business and to financial planning. She, what I learned, was very much focused on the investment side of the things, whereas I was very much focused on the planning side of things. And I started to realize there was a really big disconnect between how she worked with our clients and how I envisioned myself working with them. And I think, as we started to learn this about each other and kind of each other's approaches and what we were trying to accomplish, just realized it wasn't a good fit.

And in hindsight, I think it was a blessing in disguise because, though her clients were all very lovely people, I couldn't imagine myself working with the majority of them on a long-term basis. And for me, this idea of a succession plan was security. It was stability knowing I was kind of buying into something that was stable that had proven cashflow, that didn't mean I was going to have to start from scratch. And part of that was a confidence question, but at the end of the day, I was forced to do that. And fortunately, everything turned out just fine. I couldn't have imagined it going this way, but it did.

Michael: I find that an interesting framing that the appeal of the succession plan was security and stability. Even though, I guess, in practice, it ended out kind of amplifying the opposite when it didn't work out that way. But, I guess, it's helped me understand more of...at least what you were envisioning, just I can buy into an existing client base and existing revenue. And so I'll just kind of slip right into that. And then that's that stable and secure, was that kind of the mental framework for it?

Leighann: Yeah, absolutely. I come from humble beginnings, call it what you want, poor, didn't have money. And so the idea of being successful or financially stable was something that I only ever dreamed about. It was something I hadn't really experienced. I was raised by a young single mom who relied on government benefits, and quite frankly, the generosity of others to get by. And we barely got by. So this idea of security has always taunted me to some extent. And so think, for me, in this kind of childlike mentality of I wanted something that was going to create some sort of safety. So if I bought into this thing, it had the elements there to provide that security, to provide that safety.

And to some extent, I didn't fully recognize what that meant. And again, this is why I think I connect so deeply with some of my clients is the shared lack of security and yearning or desire for it. And that's what it represented to me more than anything was I wasn't going to have to continue to struggle. And it was something that I could use as a springboard to be better and to become better and to do more good, essentially.

Michael: So then how did you ultimately reconcile or mentally transition to the opposite extreme of, “Well, I guess I'm starting my firm from scratch with credit card debt”?

Leighann: Yeah. It was a manic weekend. Everything happened on a Friday morning and I spent that weekend either laughing hysterically or crying my face off. It was just sheer panic. And so I had a conversation with a couple of clients that I had worked with through this other firm and they were so supportive and so sweet. And they basically were just like, “You've got to do this, you were meant to do this, you can do it.” And they kind of gave me that boost of confidence that I needed. And fortunately, when I was going through the CFP coursework back in 2010, '11-ish, one of our classes required us to write a business plan for our future RIA.

And so I had this business plan kind of lingering about that was a legit business plan. It kind of wrote out all of the things I wanted to do, who I wanted to work with. And I thought I've just got to do it. It's going to hurt and it's going to suck. But hopefully it will pay off and I've just gotta hang in there. It was nothing...this was what I was used to. I was used to being the underdog. I was used to being having the cards stacked against me and kind of seemingly having no way out. And so for me, it was, well, this is just another one of those moments that I'm going to have to figure out how to power through. And that's essentially how I justified it. And I was like, “Yeah, you gotta do it”. And then I just kind of threw myself into it and wouldn't let myself think about any of the negative side of it. It was like, nope, one day I'll just...I'll be able to pay this off. One day, I'll be able to pay this debt off. And fortunately, I did very, very quickly, which again, another very fortunate position to be in. But it was not an easy process.

Michael: So how long did it take to, just for the situation to turn around where you were feeling more financially secure? Was there some point of, “Oh my gosh, I think this is actually going to work”?

Leighann: Yeah. I think so when I first had that inkling of things being okay, was May of 2019, I was able to get myself into a position where we could afford to move out of our tiny shoe box, 400-square foot apartment in Hollywood into something a little bit bigger that would give us space where I could have an office and actually be "professional" and moving into what I call my first adult house at 35, 36, however old I was. It was kind of a turning point for me mentally. And recognizing that I live in a real house now, a real space. So I was renting. It was the first nice place I ever lived where I felt comfortable. And so that's when things started to come together.

And then it was December of 2020, I made that final payment on that $50K of credit card debt. Did I say...2019, December of 2019, I made that final payment and that's when the relief kind of set in. And I started to really feel like I had gone through it. There was a seemingly small amount of security that was starting to build from there because I don't have any money at that point in the bank, any savings, but I didn't have any debt. And for me, that was huge because to be completely transparent, I started my debt journey when I was 18 with my first credit card. And from that day, from that first dollar I put on that credit card, there was always a balance from the day I turned 18 until today I paid it off in December, 2019. And that debt went anywhere from a hundred bucks in the early years, but it crept all the way up to $50K over time.

What Leighann Knows Now That She Wishes She Knew Then And The Advice She’d Give Younger Planners [1:21:40]

Michael: So as you look back on this journey what do you know now that you wish you could go back and tell you from four or five years ago when you were transitioning it?

Leighann: What a question. I wish I had more confidence and more belief that things were going to turn out the way they did to save me from the heartache, I think, and the fear, the self-loathing, the self-deprecation, the negative self-talk. A lot of that of course built up over years as a child, but I wish I had been more confident in myself and I wish that I was kinder to myself as I went through the process and recognizing that everyone struggles. And I think something that you've mentioned is there's this illusion that people can just jump and start a firm, and everything's just perfect and there's no adversity and there's no problems with it. And so many of what...so much of what we see on the internet is that being the case and it truly isn't. And I think it's doing a disservice to anyone thinking about starting a firm by creating this illusion that it's super easy to do, you just spend a little bit money to get a website, start up with this technology.

Michael: And then people just start calling you and giving you their life savings.

Leighann: Yeah. That's not how it works, quite frankly. And the other thing that I really regret missing out on and not pushing myself throughout my entire career up until I started the firm was the soft side of the business. I was so focused on the technical piece. I was like, I got this. I'm going to be behind the scenes. I can crunch any of the numbers. I know how to do all of this stuff to the point where I got a master's in tax, because I'm a masochist. I wanted my technical expertise to be on point so no one could ever question that. But what I failed to do was to learn how to talk to people effectively or more effectively. And certainly, I am better at it now, but I wish I had had more of that early on.

Michael: So is there other advice you would give to younger, newer advisors coming in today about getting on a better path for some of that?

Leighann: I think it's important to hit both sides of it, the technical and the soft side or the soft skills. And I think I just read that the CFP board is now making financial psychology more a part of the curriculum and what have you. And so we're starting to move in that direction of creating more focus on the soft skills and the psychological side of money. Don't leave one out or the other. You've really got to be well-rounded when it comes to both of those things. Or you'll stumble, I think.

What Comes Next For Leighann And What Success Means For Her [1:24:04]

Michael: So what comes next for you? What's the goal at this point? Now that you're past the, okay, I'm going to survive, I'm in it. This is sticking around. What's the goal from here? Where does it go?

Leighann: Yeah. I've never been one to set concrete goals. And I don't know that I ever really will, to some extent. I think in my ideal world, I want to help everyone. It's a blessing and a curse. I want to help as many people as I can, but I also recognize that I wanted to be able to afford the things that make me happy. And so there's a balance there. And so my plan in an ideal world is to get to the point where I make just as much money as I need to in the business. Right now, I'm probably there, so I don't necessarily need to grow for myself. There's certainly the option of growing the business to bring on team members to provide opportunities. But at the end of the day, what I'd really like to do is I'd like to be able to have a set amount of clients. So I know kind of what my workload is. And I'd like to be able to carve out a certain amount of hours per month to work with clients more on a sliding scale and to be able to really have more impact in that area.

So a lot of advisors like, "Oh, I want to work 50, 58 days a year and go on vacation the rest." And I'm like, yeah, that sounds lovely. But I do want to go on vacation, but I think I want to do...I want to be able to give back more with my time and the skills that I have, which is an interesting endeavor, because the one thing the CFP education doesn't really teach you is how to work with people who don't money or don't have a lot of money. But that's kind of where I see myself going with this firm. And I am hiring an intern for the summer, which is terrifying, and I'm doing that through the BLX internship, which is an incredible program and opportunity. And so that'll get my feet wet to see whether I want to actually grow the business to the point where I hire people in and kind of open that platform, so to speak.

Michael: But it sounds like from numbers, business end, when you're at five or six plus thousand dollars a client, little more for some that have more assets, 45 client relationships, you can generate $250,000 $300,000 from just at that average fee level. That's a good place for you for where you want the business to be that you're not feeling the pressure for growing clients at this point?

Leighann: Yeah. And quite honestly, that even seems high. Again, with that hiring, I just I don't feel the need to make more money than I need. I've committed at this point to...I donate 5% of the business profits to a handful of rotating charities every year. And I try and do more with the resources I have. Of course, saving is super important, but I feel like I've been very fortunate and privileged to be in the position I am. And I just, I don't see a need to make more money than I actually need to spend or save kind of thing. And that's where the ability to free up my time to work more on a sliding scale and to be able to offer services to people who wouldn't otherwise be able to afford them, at least in some regard, is really important to me.

Michael: And so just, it's interesting to me that, for that journey overall since you launched the beginning of 2017, it took four years to get there.

Leighann: Yeah. Just about, four years.

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 very different things to different people. And so as you hit this point in your business where it's getting to the income that you want and you're and you're comfortable with where the growth is and you look forward to what's next, how do you define success for yourself at this point?

Leighann: Yeah, jokingly, I always say success is when I'm able to make clients cry in the vision meeting. It's a joke. I kid, I joke, but it's always powerful. But on a real note, success for me is operating a planning firm that is true to who I am and my passion. And that ultimately translates into working with clients who are intentional with their resources and see the world it's something bigger than themselves. That is incredibly important to me. For me, if you don't...if you check all the boxes from a niche standpoint, right, you're the creative or the LGBTQ, what have you, but you've kind of got this selfish, greedy attitude. I don't care how much money you have, who you are, I don't want to work with you. That's just not something that I vibe with.

So it's important to me that I work with people who I really relate to, identify with, and who are looking to do more looking to do better essentially for others. And despite my personal "success" in recent years I definitely, as I alluded to earlier, found myself still existing in survival mode, even when I didn't need to, and kind of having that moment of clarity which was really only six months ago is finally seeping through in my brain and getting there. And so, for me, building this firm has afforded me the privilege to live a life I never thought I would have, and success, ultimately, is being able to pay that forward.

Michael: I love that. I love that success is ultimately the ability to be able to pay it forward.

Leighann: Yep, at its core.

Michael: Well, thank you so much, Leanne, for joining us on the "Financial Advisor Success" podcast.

Leighann: Thanks for having me. I've had a really great time.