#FA Success Ep 278: Separating Marketing From Sales To More Efficiently Scale Sustainable Growth, With Derek Gregoire

Resources Featured In This Episode:

• Derek Gregoire
• SHP Financial
• Brad Johnson
• Ask. by Ryan Levesque
• Mobile Assistant
• eMoney Advisor
• Lone Beacon Marketing
• Chris Smith's Campfire Effect

Looking for sample client service calendars, marketing plans, and more? Check out our FAS resource page!

Full Transcript:

Michael: Welcome, Derek Gregoire, to the "Financial Advisor Success Podcast."

Derek: Hey, Michael. I'm glad to be here.

Michael: I'm really excited to have you on today and talk about some of the dynamics of growing and scaling advisory firms in, I guess at least to me, what is a different model than how we did it in the past and I think much more representative of where it's going in the future.

So, when I look at the industry in the past, kind of the traditional way that we brought in advisors was pretty straightforward: "Welcome to the industry. Here's a phone and a phone book and a cubicle. Start calling." We lived a cold-calling world. If you're in certain firms, you might even do cold knocking instead of cold calling. If you don't like the cold knocking and calling, at least you can do a little bit more relationship-y things, like go out and network and join your local business councils. But it was all driven around the fact that everybody had to kind of eat what they could kill and hunt their own food.

And there's this shift to me that's starting to occur in the industry. And I know your firm has been living this, and we'll get to talk more about it. Where that model begins to shift. And you say, "Hey, we've reached a certain size as a firm where I think we can actually drive a lot of the marketing."

And marketing, at the end of the day, is kind of the function of prospecting, it's the "make the phone ring" part. We think we can drive the prospecting as a firm. And if we drive the prospecting as a firm, we might even be able to do it more cost effectively. And then we don't need to hire a bunch of advisors to go out there and hunt and eat what they kill or have...potentially have a very high failure and attrition rate, which just means a bunch of continuous hiring for us. If we can make the marketing happen as firm, we just...sort of "just" in air quotes, we just need to teach them how to take prospects that come in and convert them to clients, and then service them. But we can skip that whole messy prospecting step that I think is still probably the single greatest cause of advisor attrition, is how brutally hard it is to prospect and find people to work with in the first place.

And so just this model of what does it look like when you begin to centralize the marketing of the firm, I think, is a fascinating transition for advisory businesses overall and just really excited to hear how that's come about in your firm and what that looks like today.

Derek: Yeah, Michael, that's funny. It's a point that we hit where we came to the realization where it's like, "We can't do this by ourselves." I have two partners, Matt Peck and Keith Ellis, and it's like, "We can't continue." We had gotten to a cool point that, looking back at our early selves, we never thought we'd hit this inflection point where we have...we've been able to do some marketing. And we have so many appointments and leads that it's like, "How do we...we can't take care of these ourselves." Right? And that's where we started thinking of, "How do we grow the business where it's bigger than just us?" Right? "How do we make this...how do we change our identity where we can do something that's so much more than just three people and some employees, but really grow something that would be exciting for an advisor that maybe struggles with prospecting?"

Or maybe put it this way. If I look back at myself in 2003 when we started the firm, if the option of what we have for our advisors now was available, I don't think I would have ever started this business. You know what I mean? Because that's the hardest part. When you wake up and you have no one to see and you have to grind at networking meetings and events and family and friends, that's a hard business cycle. And we talk to our advisors sometimes, I'm 42 and I talk to them like I'm 82 sometimes. It's like, "Do you know back in the day we used to"... It's like walking to the school uphill in the snow.

Michael: Both ways, in the snow.

Derek: It's like, "Did you realize what you have?" You walk into a week and you have 10 appointments on your calendar with the asset size, the goals. You know what I mean? So, it's just a different animal than what I grew up in back in 2003, or even before that at Bankers Life, knocking on doors and cold calling. And, yeah, there's a lot of funny stories back then, but yeah. That's the kind of model we've tried to build out in the infrastructure, to have it so that these advisors can take on...learn the process of taking on the client, and then serving the client with a team, but not having to...they don't do any prospecting on their own.

SHP Financial As It Exists Today [06:48]

Michael: So, talk to us a little bit more about just the structure of the firm. I think we're going to dive in more into what this marketing process looks like and how you built it, but just to get us started. Tell us about the advisory firm overall, like size of the firm and number of the people and how it's structured.

Derek: Yeah. So, there's about 41 people, in terms of team members, on the staff. And that's divided up between operations, selling advisors, or we call senior advisors, service and planning advisors that are behind the scenes, marketing and business development. And I'm probably missing one or two, but it's really it's we started...we're a fee...an AUM, assets under management, model that most of our business functions in that light, with an insurance arm. Right? We still have...we grew up in the insurance background, so insurance and annuities are still part of what we do, but the majority is on the assets under management side.

So, from a team structure standpoint, I think if you look at our total number of how much we're handling in house of total assets, you'd probably say 40, 41 people, employees, is a lot. Right? And I've to agree with you on the surface. But I think what's different, Michael, about why we have the amount of staff that we do is you have to remember even seven, eight, nine years ago we had like $40 or $50 million that we were dealing with. You know what I mean? And so the growth, we're trying to keep up with the growth of the firm, but we're also trying to never lose the touch, the personal touch, and the service and the planning that we're providing for the clients, which ultimately leads to retention, referrals, and so forth.

So, hopefully that gives you a little bit of outline. But really, to answer your question about specific advisors, there's really, you have myself, Keith, and Matt who don't really take on many clients anymore, kind of service a few of our select clients from years past, some of our top clients. And then we have four selling, producing advisors who that's all they do, is sit with prospects and some of their clients and their goal...that's where the growth is essentially coming from. The majority of it's coming from them specifically taking on the clients that we're generating through our marketing efforts.

Michael: And just to round out kind of overall perspective of the firm, what's the client base and asset base for the firm?

Derek: I think it's about 1,200 clients and about $1.2 billion of total assets. And breaking that down, there's about $900 million of assets under management and about $300 million of annuities that we've done over the years. And some of those clients, obviously the core relationships, are less than the 1,300. Some of them we might have set up something 15 years ago and there's not a lot of core planning needed there. But I'd say probably 300 or 400 core, core clients, but we have a lot more than that. It's an issue that we're working on currently. But that's basically the amount of assets.

But if you think of the...let's say we handle $1.2 billion. A lot of the hiring and growth and so forth has happened over the past three to five years. So, $255 million of that, of new assets, were gathered in 2021. So, you can kind of multiply that out. We weren't doing the same type of business we are now 10 years ago.

Michael: So, let's dive a little bit more just into that kind of marketing and growth engine. So, you had said you do have four senior advisors whose role is to sell and close business, so sit with prospects and show them what the firm does and convince them that they would want to work with the firm. But they don't prospect. You have a marketing and business development team who's bringing the folks in, and then ultimately that's who the selling advisors, that's who the senior advisors, sit across from.

Derek: Correct.

Michael: So, help us understand further what this marketing and business development team looks like and what you're doing there that ultimately made $255 million of new assets appear last year.

Derek: All right. So, that's basically when it comes from a marketing standpoint, it's a pretty even split of that $255 million. Usually, about a third is going to come from marketing, a third is going to come from referrals, and a third is going to come from clients inheriting money or retiring and windfalls, business sales. And really, so, the marketing engine essentially, if you're taking care of your clients, doing what you're saying you're going to do, it's going to take care of the other two, as well, because it's going to lead to referrals and those new clients are eventually going to most likely have some sort of a windfall where they're going to be doing more business down the road.

Michael: Right. So, there's kind of a multiplier effect. Every new client you bring in could actually be worth two or three clients' worth of flows in the long run. Because at some point the client you brought in is going to refer someone and the client you brought in is going to have an inheritance or liquidity event or something at some point down the distant road. And so when you mix all of that together, as long as the new-new clients are coming in, the downstream multiplier effects, you're kind of assuming, will come and cascade along, as well.

Derek: You're exactly right. So, the way we look at it as, we look at an ROI over like two years. Every single marketing avenue, which we'll go into a few of them in a second here, every marketing avenue that we test and try and that we commit to, that's going to have some sort of return on investment. And so we track that over two years. And so if we...if the two-year ROI on that marketing funnel is positive, like it might be one and a half to one or two to one, sometimes four or five to one. But if it's positive, remotely, we know that that's just one-third of our business cycle, if you will. I'm not sure of the right term. But we know that there's three different distinct areas that drive business, there's the marketing, there's the referrals, and there's the client opportunities.

And so by doing the marketing on the front end, getting those new clients in the door, taking care of them, which we have a whole system in place for doing that and getting referrals, we know we're going to get X amount of referrals, we know we're going to get a certain amount of business down the road. And so that's the key metric that we're...

We have a sheet that our leadership team looks at every quarter. And there's...it's almost like the print is getting small on the sheet because there are so many things we're doing that we're trying to keep it on one page. What it essentially tracks is it looks at every marketing avenue. Right?

So, for example, it looks at television. Right? And it says, "Okay, we spent $240,000 in television last year. And with that money, we brought in $35 million of new business." Right? "And the ROI on that is two to one," or whatever the number is. And so we track that for every single avenue.

So, just to kind of give you a rundown. Looking back a few years ago, we were a seminar machine, we did a lot of seminars. And I found that to be...it works well for folks and I know people that do marketing. We still do some, but it's really, out of our $255 million new assets that were brought on last year, it wasn't a great...it was maybe $13, $14 million, it wasn't a huge home run. But it's one of the things that we still do, we'll do like one or two a month, let clients bring friends, but it's really something just to keep our name out there in the different areas. Just the process, the time away at night, it's just not my favorite thing to generate. If you think of the percentage of our overall business, it's like 4%. And it's 30-something nights out, or 20-something nights out a year. It's not my favorite thing.

And so seminars are one thing. TV, obviously that's another avenue we've started in the last couple years, which has been a pretty cool endeavor. Radio. And what's become huge in the last probably one to two years is also the digital marketing. Right? The digital side. I can tell you how we use it, but I couldn't tell you the programming behind it. I'm not your guy for that, for sure. But I can tell you kind of the funnel that we've had created for us. And it's just kind of evolved into multiple marketing funnels. And when we look at every single thing we do, the ROI is about four to one. That's the ROI across the board. Some are much higher, some are much lower, but that's the average for 2021 ROI.

How Derek Measures And Calculates ROI For Marketing Channels [15:24]

Michael: So, just talk to us a moment. How do you actually measure that ROI? What's in the numerator and denominator of this fraction to say the ROI was four to one?

Derek: Yeah. So, it's... And I will say that's kind of...we do some client referral events, and that ROI is so staggering that it kind of sways it up. Most of our events...most of our ROI is like two to three to one, but the referral events really bring that number up. But when we...what we measure is really simply how much do you spend? So, if you're doing radio, as an example. How much does that radio show cost you to air every week? And any team members that you hired to help you with that, or whatever the case may be. What does that cost your firm out of pocket?

And then simply, at the end of every year, obviously we track. We do track this quarterly. But at the end of every year, we look back and say, "Okay, what was the total revenue brought in?" And obviously if it's something on the insurance side, that's a one-time thing, or depending...or you can take...depending on if it was trail-based. Or if it's on the AUM side, we assume that we're getting paid on that for two years. And again, that's a very conservative assumption. Like most firms, our retention ratio is probably 98%, 99%. So, they should be there for 10, 15 years or longer. But we always want to take the conservative, okay, we know if we're...if over two years we're break-even or profitable, right? And we know that we're probably going to get referrals and future business down the road. We know that that's a successful avenue that we want to keep kind of pulling that. If you can go to Vegas and pull that lever, and put a dollar in and get $3 or $4 back, you know what I mean? That's a lever, from a business standpoint, we want to keep on pulling.

And so we track every single... I think it's so important to... A lot of people just wing it, "We'll try this, we'll try that," but they don't have the data to really know if what they're trying is working. You know what I mean? So, it's important to track your numbers, for sure. That's a big thing for us.

Michael: So, I think about this in sort of actual client terms. So, if I do a marketing thing, I get a million-dollar client, just to make the math nice and round and easy.

Derek: Yeah.

Michael: I'm charging a 1% fee, so it's $10,000 of annual revenue.

Derek: Yeah.

Michael: So, if you get a million-dollar client, you're essentially going to tag that as that's a $20,000-dollar revenue value, because you look at what you would get paid over two years.

Derek: Correct.

Michael: And so from your...I guess, so, from your system, if you end out with a four to one, that means it costs me $5,000 of marketing expenses to get that million-dollar client with $20,000 of revenue over two years. That's how I would get to a four-to-one ratio.

Derek: You're exactly right, yeah. Simple. I try to keep it as simple as we can. So, we have a simple spreadsheet, an Excel spreadsheet, that tracks every marketing avenue, every single possible thing, from the little things, from every single... Not even radio, but if we do multiple stations, it will track each station. And we just know what we spend. And we track exactly what's coming back to us. And then, like you said, you just, simple, drag the box down once you have the numerator divided by the divisor. I think that's the right frame.

Michael: Yeah.

Derek: My math teacher would be proud if that's right. Then you drag it down, and there's the ROI for each endeavor that we're working on.

Michael: And if I heard you correctly there as you were describing it, when you think about, "What are my costs to do this?," I think you had said it's not only the...I guess I'll call it, the hard costs, right? The TV ad spend, the radio spot spend. But that the team members that support your marketing initiatives are part of this cost equation, as well?

Derek: Yeah. So, for example, we do some...we use a couple of companies to help us on the digital side. And they have a flat retainer cost, because they're helping us with some of the marketing and they're helping us create some funnels and do different things. But then they have a cost for the actual ads they're running. Right? So, if you just ran the ad cost for the digital side of what it costs to put something on Facebook, that wouldn't tell the whole story because that...you're also paying that firm a consulting fee to help come up with the campaigns, build the campaigns. You know what I mean? So, that's... And if we're doing a workshop, and there's three employees that have to go and set up, you have to account for that in your marketing budget because that's part of the deal, right? That's part of manpower that has to go to these events and set up and so forth.

Michael: So, do you include all of your internal staff costs? I'm assuming there are some folks on the team that have marketing responsibilities, if only to manage all of the different programs and channels and the stuff that's going on. So, do you include your internal marketing team staff costs, as well?

Derek: That's a good question. Right now, mostly we do that just for the seminars. Because their salary is covering a bunch, a multitude of all different things. So, it's really... But when they actually physically have to go to a seminar, a workshop, and they're working there, we factor in, "Hey, we have to pay them extra money because that's kind of overtime."

Michael: Right.

Derek: Right? We factor that into the overall ROI of that campaign.

Michael: Okay. But otherwise, sort of a base level of marketing staff. You're not... It sounds like you're not necessarily allocating to calculate your ROI number, that's just sort of the implied, "We're... The overhead of the firm is going to have someone that has to do this no matter what, so we're not allocating that to the incremental marketing cost for the incremental marketing result."

Derek: Yeah. We probably could, Michael. It's one of those things you can micromanage so much and try to get to the exact fine number.

Michael: Just someone who's listening to this is like, "Oh my gosh, my partner and I have been arguing for like seven months about whether to put the person's...whether to put our marketing director's salary in the cost return number or not." So, just had to ask where do you guys fall on that line. So, it sounds like you're just the incremental cost it takes to do a marketing thing relative to the incremental revenue that it brought in, whatever that staff infrastructure it is that you just need to be a firm that has some kind of marketing stuff, is just part of the overhead of the firm for you.

Derek: Exactly. And this is coming from a pretty type one, OCD type person that I am that likes to have everything under control and know every single detail. That if I'm letting that slide, then it should be okay. I try to look... You want to know every single number, and you want to know your business inside and out. And even if it was hard even for me at five employees or seven employees, I could have a pretty good idea what was going on. But it was an amazing lesson for me in growth just to know that you can't...you have to trust other people to do the job, or for anything. You can't...you don't have to get to the bottom line of every single detail in your business. Or you're going to... For me, I started driving myself nuts. And over the years, now with 40 people, I know I can't do it.

So, it's not even as much of a stress level anymore because I know it's almost an impossible task to get to the details that I probably want to get to, but you do as much as you possibly can without...within reason without driving yourself to a level of, "All right, this is going to bother me and I'm going to lose sleep over these details." It's not worth it.

Michael: And I'm just curious, where did the two-to-one ROI as a goal come from?

Derek: I think it started out because a lot of firms would sometimes have higher numbers, right? Sometimes they'd have three or four on seminars, they'd just have much better results than us. And how we got... It wasn't like we said, "We want to be at two to one," we just thought that was a good benchmark. If you look at all the marketing we've done over the years, we've had some fall to one and a half to one and we dropped. Right? We dropped it. Because the amount of time it took to put into that particular endeavor, it was profitable and, yes, it would lead to referrals. But we feel like if we could put our time into something else and get two, three, or four to one and not...and use up the same amount of time, it was just a better use of our overall time.

So, it wasn't like we said, "We need to get to two to one." We just did the math that if we can put a dollar in, with our profit margins as a company and what we're operating at now, and get $2 back on that particular person, on that particular family, from a ROI standpoint, we know that we're going to increase that substantially with our other efforts. So, that was more of just a benchmark. Almost like, "If we can hit two to one or more, we're in great shape." Probably okay even less, but just more of a benchmark.

Michael: Well, and it sounds like to some extent you just got to this point of, "We're doing all these things, the average basically is coming out to be two to one, or a little north of that," once you pull out client referral events at least. "So, if we know on average we're doing things that come out at about two to one anyways, why would you do things below average when you could just redirect your dollars to the things that are above average?"

Derek: Correct. And an example, Michael. We had a radio show on a station in Boston and it was profitable for years. If I go back to 2008. What was the year... Remember the year you could do a Roth conversion, and then count it over...take the tax liability over two years?

Michael: Yeah, yeah. We've had a couple of stints of putting two-year averaging provisions in place. But, yeah, we did one of those coming out of the financial crisis, we got to do another two-year averaging.

Derek: Exactly, yeah. So, I remember when, very unpolished, very young, doing a radio show on a station in 2008 or '9, whatever that year was. And we did one on a white paper on Roth conversions. And legitimately we got over 300 calls. It was...we didn't know what to do with them. We didn't know. But we had...the phone was ringing, the people were calling. And towards the last couple years of doing the show, we put all kinds of prep, run the show. It was an AM radio station, right? It was huge in Boston. But AM radio station, I'm not sure if that's the place you want to be right now. And what happened is we would do...put all this time in and do a show, and then you'd get one call. And it was costing a lot of money, a lot of our time, and the ROI was like one and a half to one.

And then where that led into one of my good friends in our mastermind group, Anthony, had led us to looking at TV. And not just TV, but how you structure the commercial and all the things that go into it. And that...doing a TV commercial, I can show up to a studio, record five or six at a time once every six months, and then I'm good. And there's not the hour-long prep every week, there's not... So, from a timing standpoint, we all know time is the finite resource, we felt like it was better to put time...the same amount of money, but a lot less time, into TV that you could use in three to five-minute clips at a time, and you could use the same one over and over again, then to come up with a brand-new radio station every single...radio show every single week, and the ROI was better.

So, that's an example of just trying to run the business more efficiently and a little bit more smart in terms of how you're spending your time and resources to get a better ROI.

Michael: Well, and I'm struck, as well, just thinking about this two to one benchmark, because you calculate it as two to one across two years' worth of revenue. That also functionally that just means if you're hitting a two to one revenue, your first-year revenue is your marketing cost.

Derek: Yeah.

Michael: If I hit a $20,000-dollar two-year revenue for a client and it's a two-to-one ratio, that means it costs me $10,000 to get them. Which essentially means I have a million-dollar client that's going to pay me $10,000 a year and I spent $10,000 in order to get them.

Derek: That's awesome. That's exactly what we're talking about, yeah.

Michael: Yeah. Which I guess just also makes it appealing because it literally means it's cash flowing. Obviously, you've got other expenses to handle clients coming on board and such, so cost of a first-year client is more than just the marketing cost to get them on board. But there is something kind of neatly cash flowing about... I guess if you calculate your marketing ROI on a one-year...on a first-year revenue, it's essentially a one-to-one ratio. It's, "If we can spend $10,000 to get $10,000 of revenue, we do that."

Derek: Yeah. Yeah, it's perfect. And like you said, the client should... We've been doing... Remember, we started in the insurance background, but didn't...really didn't get going on the AUM side until about '13, '14. 2013, 2014. It's been a huge transition for us going from one way to this other way. And the clients have been with us since 2014. We lose maybe one or two a year as a firm, you know what I mean? So, we don't lose a lot.

So, we know that when we're conservatively picking those numbers, we're doing everything against us. So, ROI is probably a lot better over time, I know it is. But I feel like that we always try to operate...even what we're doing for our clients, you want to project in eMoney conservatively. You want to project, for us internally, "Let's project that these clients are only with us for two years. Are we going to be okay? Does it still make sense from that marketing avenue?" You know what I mean? So, it's very, very conservative, but that's just how we like to operate.

Michael: Well, and I would imagine then that's...for someone that started out deeper on the annuity side, that has to be a strange shift for you when you look at marketing spends and marketing ROIs. Because if you do this from a classic annuity perspective where you've got, I don't know, I'll take the quintessential annuity contract of old, seven-year surrender charge, 7% upfront commission. That million-dollar client pays a $70,000-dollar upfront commission. And so same marketing spend. If it takes the same marketing spend to get a million-dollar client, your ROI in the annuity world was seven to one, your ROI in the AUM world is two to one.

Derek: Yes.

Michael: Same client, same assets. Now, obviously, on the AUM side hopefully they're going to stick around a lot longer than just two years, we tend to have much longer average client tenures. And so there's more long-term upside than that, right? Obviously, if they stay seven years, in the long run you'll actually be the same on both of these.

Derek: Correct.

Michael: But from a marketing ROI spend, it does look very different from just a pure cash flow perspective when the AUM environment, $10,000-dollar spend to $10,000-dollar revenue, the annuity environment is $10,000-dollar spend to $70,000-dollar revenue. Which means you could take the other $60,000 and plow it back into marketing to get more clients. Which, for anyone who's listening, this is why you see a lot of marketing come out of the annuity side of the business.

Derek: Correct.

Michael: Because it cash-flows really, really well.

Derek: To be honest with you, that was our first 10 years of business. Which was not really a business, it was a sales organization. You know what I mean? And that's where we came from, that background.

How Changing Focus In Television Marketing Created More Prospective Client Leads [30:24]

Michael: So, talk to us a little bit more about the channels now. You, I think, had ultimately kind of highlighted four that you're putting resources towards at this point, the television, radio, seminars, and digital.

Derek: Yes.

Michael: So, talk to us a little bit more about each of these. Just we can start on the television then because you shared a little bit there already. But what are you doing in television marketing? Because I don't feel like we see that a lot in advisor world.

Derek: That's an excellent question. Because we tried this, by the way, like six, seven years ago and we did like a 30-minute show, and without much of a plan. And it was horrendous, the ROI, I think, was zero, negative. Whatever you spend, we lost. So, we basically were very hesitant to get back into it.

And one of my good friends in Chicago had a business and he's a master marketer, he's in our mastermind group. He's just one of my best friends in general. And he had kind of said, "Hey, have you tried TV?" And I was like, "No, I'm not doing that again. Just doesn't work." He's like, "Well, have you tried... What was your format?" And I said, "Well, it was like a 30-minute show on the different areas of our process and kind of the five-step income, investments, taxes, healthcare, legacy, CFP Board standard planning. And we didn't really have... It just didn't get results." And he said, "Well, what time were you on and what station were you on?"

And so after we dug a little bit deeper, what he was doing was more three to five-minute informational, almost like a host interviewing him, or in this case myself, on just a topic. Right? And so we changed the format from doing 30 minutes to doing three-minute commercials. In Chicago, he actually does five-minute commercials. In Massachusetts, on some of the stations that we're on, predominantly CBS, they limit three minutes is the most you can do. You can't buy more than three minutes at a time.

So, we...

Michael: And these literally run as commercials, three-minute commercial break?

Derek: Exactly. Yeah. So, we have it timed where we try to get the 8:57 to 9:00 a.m. break between the local news and "Good Morning America." I could...I might be getting those shows wrong, but I know there's some timing that's involved when we're on the show. We've tested different times. So, it's almost always Saturday and Sunday, and it's usually between...we tried 6:00 to 7:00 a.m., most of them between 7:00 and 9:00 a.m. So, we'll do...usually we'll do one or two Saturday and one or two Sunday. All prerecorded, all different.

So, most of them, it's more of a topic of, "Hey, Derek. Thanks for joining us," and the concept of a lot of people don't really pay attention to taxes in their financial plan, right? So, we'll do a conversation about deficit taxes, are there opportunities for things like Roth conversions, is your team...is your financial planning team talking about this, "If not, we can schedule a financial tax review." And that's one of the calls to action. So, they'll call for a tax review.

Another one we'll do is we'll say, "Take a quiz," right? So, we send them to our quiz, shpquiz.com, please don't take it if you're listening. What it does is it goes...it starts another funnel. So, instead of them saying, "Hey, Derek. We're going to raise our hand"... One of the commercials is, "Raise your hand, come in for a meeting." Right? We might get a few...we'll get a few calls every time we run that. The other commercial is, "Raise your hand to go to a website to either watch a webinar that we recorded or to do a," we call it a quiz funnel.

And essentially a quiz funnel is... A good friend of mine, Brad Johnson, and his digital company, and I know a friend of yours as well, created this amazing funnel where it's a 10-step question of retirement planning and if you're prepared type thing. And at the end of the funnel, it basically, depending on how you answer the questions, it's going to point to either what's your main weak point, either income and investments, taxes, healthcare, or estate planning. And then it's going to kick out a quick report back to you on, "Hey, this is your biggest weak spot. We see... In tax planning, here are some things you might want to think about." Very generic, it just talks about tax loss harvesting, Roth conversions, different ways to reduce taxes. And it's very simple. But it's like, "If you want more to learn about other gaps you might be missing, give us a call."

So, you think of that's kind of answering the question on the digital funnel and the TV marketing. But the TV marketing either feeds an appointment or feeds... If we do an advertisement on sending them to the quiz, which is an online platform, that might get 35, 40 people. But, obviously, it's not as warm because they just might want to take the quiz and call it a day.

Michael: Right.

Derek: But, out of those people, a lot of those people end up raising their hand afterwards or they'll go into our drip list. Right? So, where they're getting nurtured in a different way from a different team of ours on the digital side. There's TV that filters into a webinar/quiz funnel or it filters to an appointment.

Michael: And the point of the quiz, "Just in case you weren't ready to just set an appointment already, we're simply giving you a different, slightly lower-stakes way to engage with us"?

Derek: Correct.

Michael: Just help us, fill us in, for those who just aren't familiar with quiz funnels and why you do quiz funnels.

Derek: We always equate when you're doing a TV show and saying, "Come to meet me," and, "Come set up a meeting on your life savings," that's like asking to marry someone on their first date. We'll still get people that will come in all the time, that's a big part of our funnel. But it's a lot easier ask to say, "Hey, if you're concerned about this type of planning we just talked about, go to our website. And here's the URL to go there." And you'll answer some questions.

And in essence, for the advisor standpoint, it's a pre-built-out, I think it's, 10 to 12 questions that is very simple, not in-depth. Like, "Are you retired?" Basically, a series of questions that tries to lead you down a path of what your biggest gap might be. It addresses some of your concerns through this quiz process. And then, at the end of the day, that kicks out a report to that prospect. But, remember, with that whole process, we're also capturing their name, their e-mail address. And maybe three of those people will raise their hand and try to go further.

And then we have a whole campaign after for the next series of weeks that's then dripping on them, "Hey, we saw you went to the quiz. Did you get the rest of what you were looking for?" And then that sets up a whole other funnel, as well. So, that's really just a different way to... You're not going to get as many...it's not going to be a red-hot lead for your team, but it's going to be a prospect that you can nurture. So, we have a whole other company that really their main job is to help nurture our prospects along with the SHP brand, not in a sales way.

Michael: I guess just the other note I'd give for anyone who's listening and curious about this, because I had come across the quiz funnels world myself a few years ago, there's a book out there called Ask, like "ask a question," Ask, by Ryan Levesque.

Derek: Yeah. That's who set this up for us.

Michael: Yeah. Who's built this whole quiz funnel framework. So, for those who are listening, this is episode 278. So, if you go to kitces.com/278, we'll have links out for Brad Johnson and for Ryan Levesque's Ask, if you want to check that out further.

Derek: Yeah. It's funny you said that. Brad and Ryan literally worked on us to build our quiz. So, there you go.

Michael: So, there, that's the guy, there you go. So, and then I guess from the marketing ROI perspective, you know where they came from because the TV commercials have particular places to go that are specific to the TV commercial?

Derek: Correct. Yeah, we know if they come from the TV, if they're TV to quiz funnel, or if they're a Facebook ad to quiz funnel, or however, I'm not sure. I know there's multiple ways of how they...Brad and his team generates, and Ryan, how they get people to go to the quiz and take the quiz. But it's either through TV to quiz, which we track one way. That would be considered under TV. Or if it's from a Facebook campaign or some sort of ad, Google ad type thing, then that's tracked under digital.

Michael: And now help us understand just what these three-minute commercials are. Because just, I'll admit, my gut response is "commercial," just the word, pretty much makes me start to want to tune out. We're in a digital world, a lot of us have already gotten used to skipping through commercials or just watching Netflix and other platforms that don't have commercials. To the extent we have to deal with commercials, the traditional commercial was 15 seconds of highly produced stuff. And you're talking three to five-minute commercials.

So, what are these commercials that... I guess just, A, what are you doing? And B, what are you doing that has people not just tune out to the... I don't know, maybe this is just me channeling personally. But I don't think a lot of enthusiasm around three to five-minute commercial, I barely tolerate 15-second commercials now. So, what are the commercials?

Derek: So, I'm the same way. I'm like, "Who wants to sit through a commercial?" And it's very...it's set up in a way that almost looks like a news interview, if that makes sense. It looks like a... It's myself on one side and a really good news anchor on the other side. I do a lot of the marketing and rainmaking, and I do the commercials, but I have some good scripts that are written out from our marketing team and some of our resources that are set up ahead of time.

But it's really trying to hit the listeners, or the viewers, over the head right away with, "Hey, do you"... I wish I could give a better example, but it's almost like, "Do you realize right now taxes are as low as they've been for X amount of time and we have this huge deficit." Whatever it is to kind of get people to listen. Or, "Do you know how much taxes you'll have to pay in your IRA, 401(k), and retirement plans?" Or, "Do you have a retirement plan, 401(k), IRA? And do you know what the tax liability is in that plan?" Right? So, it's almost an initial...the news anchor hits them pretty good with something like that, and then we get into the...kind of the background of who we are, what we do, why it's important, why a lot of people don't plan for taxes, at least very few people do tax...full, true tax planning.

And so that's really the essence of a back and forth, informational style. Not a commercial of me walking down the road holding a client's hand, it's not that type of a commercial. It's more of a quick interview. And if you can grab the attention right away, because it's kind of going into a break and it's coming into a big program usually, then there are people, because I see the list every day of who calls on the weekends, and there are people who will raise their hands and do that.

But I know what you're saying, it sounds like, "Who wants to sit through a commercial in this day and age of DVR?" And I don't do that. When I watch anything, I tape everything and there's no such thing as a commercial. So, I get you, but it does work, it does pull for us.

And that's why you test different things. And a lot of times you learn from testing. Where we tried the 30-minute show and figured, "Hey, that's a real show, people are going to tune in," and people change the channel in five minutes because they were bored or it's too long. So, for us, that kind of commercial, three minutes has worked really well. And, to be honest with you, the one to two-minute commercials has not worked well because you really can't get into a...you can't make it an interview because it's so fast.

Michael: Right. So, this lets you get to a mini-interview. I guess, basically, they're prompting you with some questions around the kinds of tax and retirement issues that crop up for folks. So, "RMDs are going to hit you hard someday and you've got this big embedded liability in your retirement plan that you're going to have to deal with." And just surfacing those sorts of issues. Because, at the end of the day, there are prospective retirees who are dealing with it and anxious about it. So, if you really just sort of remind them they have this problem and prompt them that you have a solution, and you do that in front of enough of them, someone is going be like, "Oh, yeah, I've totally been meaning to deal with this, I know that's an issue. I guess I'll reach out to them because it's right in front of me at the exact moment I was planning to deal with this."

Derek: I've gotten even e-mails from someone like, "I'm sick of seeing your face on the weekends," right? Some old, cranky guy who just wants to rip me apart. And I used to get upset, and now I just...I find it very humorous you went out of your way to send the team an e-mail of how annoying my face is to you and how I bought my shirt at Walmart or something. It's just the funniest comments, right?

Michael: At least it means they're watching.

Derek: And I think, at the end of the day, you're right, Michael. Because if you're watching and you have an IRA and you have no idea, you're concerned about where taxes are in general, and you don't know down the road of...we're basically working with an entity that could change it on us, so literally your business partner could take more of that down the road, and it's like, "Jeez, I want to learn more about this. So, I want to go take this quiz," or, "I'm going to call." And trust me, I'm sure thousands and thousands of people see it every weekend and five raise their hand, or, for the quiz, 35 raise their hand. You know what I mean? It's not like everyone is diving on the phone.

Michael: Well, that's the thing to me around mediums like television, just because the reach is so large. There's...I don't know, I think there's like 5 million people in the Boston Metropolitan Area. So, if only 20% of them watch TV on Saturday mornings, it's still a million people. And if 90% of them are just completely tuning you out, it's still 100,000 people. And if 1 in 1,000 think that quiz is maybe interesting and worth checking out, that could still be 100 leads.

Derek: Yes. Yeah.

Michael: Which is actually a really big number. Just when you start with a huge market like that, you just get to this world of, yeah, you literally can have 99.99% of people completely tune out what you're doing and it would still be a very, very material number of leads.

Derek: You're right. And it's pretty cool to us. I love...what I like doing is we do mobile...we use Mobile Assistant for our advisors, and they'll basically dictate their meetings into this. And so I'll see like the first, second, third. And then eventually, when they become a client, it's like, "Joe and Mary signed on. Their assets are at XYZ, we're going to be moving them over to Fidelity, and it's $3.3 million." Right? And then I'll go back into our CRM and be like, "That was a TV quiz funnel from December 1st of 2021." It's cool, that person randomly saw this quiz and it went to this whole process, and now they're signing on as $3.5 million-dollar clients. I love looking at that, just looking back on when did that person raise their hand. And sometimes you can even listen to the call, if they...when they called the call center, of what that call went. So, I'm always intrigued by that process.

Michael: And so last thing on television, then I want to talk about some of the other mediums. So, just what does this cost, buying three-minute-long commercials on a sizable Boston station? What does this cost?

Derek: This is where we've been testing and trying different areas. But if you do between 6:00 and 9:00 a.m., as long as it's not 8:57 to 9:00, right? I think it's like $850 or $900 per spot. That's the total cost. Once a month we'll do the 8:57 to 9:00 lead-in, and that's like $5 grand. You know what I mean? So, it's almost... Because that's where you get the most viewers.

Michael: Okay. So, the TV folks have got a pretty good handle on who's watching when and you do pay for the eyeballs.

Derek: Correct.

Michael: You want to spend less, pick a time slot that doesn't have as many eyeballs. If you want the time slot with the eyeballs, it will cost you.

Derek: Exactly. And we started out just doing all the big eyeball spots, if you will. And then over time we realized we like to do that every once a month, we'll do an 8:57 to 9:00 a.m. spot. But we get pretty good results, not the same, but even if it's 8:19 or 7:21. But the big lead-in to the big 9:00 national show is going to be your best bet.

Michael: So, and I guess part of that is just the branding repetition effect, as well. That... Well, I guess to show up at 8:57 once a month means you're still staying fresh for the people who watch regularly, and then maybe you'll get some of them in the earlier slots. If you grab the 8:57 slot every single time indefinitely, maybe you'll get a little more repetition, but you're also going to get a lot more harassing e-mails from Bob who's tired of seeing your face and your shirt kind of thing.

Derek: It's a good combination.

Michael: Yeah.

Derek: Of, "Yes, I love this and I can't wait to see you," and, "I hate you." Yeah.

Michael: So, if I just think about that through the month and literally we're like, "Maybe we buy one $5,000-dollar spot, and then we buy a couple of the less than $1,000-dollar spots," there's four weeks through the month. So, I'm $7,000, $8,000 a month into TV ad spends for these three-minute spots?

Derek: Yeah. We used to...we were doing two Saturday, two Sunday, that's what we've been mostly doing. So, that's four. I figure about $4,000 a week. And then you add the big one at the end of the month. I'd say about 20...closer to $20,000 a month is the spend.

Michael: Okay.

Derek: You know what I mean? Because sometimes we're doing two Saturday, two Sunday. Some are $850, $900. They range in that, depending on the slots. Sometimes it's $850 or $900. And then the big one at the end of the month, I don't know, I want to say it's around $5,000, I could be a little bit off. But it adds up to about $20,000 a month, I would say, as an average cost.

Michael: And do you do this just one station, the big station? Do you have to diversify yourself across a bunch of stations? Because I don't know the TV world at all.

Derek: Yeah. Right now, we're doing it with...we're doing one station in terms of CBS in Boston, but we're trying to...we are going to branch out over time into other stations. But right now, that's what we've been doing.

Michael: Okay. And I'm just curious, how long did it take before results started coming? Did people start hitting your page and your quiz the first time it went out because you had a relevant thing and got some people on an issue they were anxious about, or did you have to do this...a couple of months of getting your name out there and doing it before anybody was willing to engage with them?

Derek: No, I would say that was...that's one of the avenues that it should...it hits pretty early. It's not like they have to see...it's not one of those things they have to see it 25 times. Some people do, but we got results pretty early on. The first couple of spots we ran, we were already getting pretty good results. So, yeah, I don't...it's not one of those ones you have to build up and wait for.

Michael: Because the whole point is you're hitting such a wide audience.

Derek: Correct.

Why Derek Sees Radio As A Less Viable Marketing Channel [49:31]

Michael: So, that's television. So, talk to us now about radio.

Derek: We went off radio. And it's kind of becoming a lower end of the funnel because it wasn't working, and we got off. And we only have one station now. And how we do radio now is more of a branding and it's a way to talk to our clients. Because a lot of clients of ours came from radio over the years. And they would say, "Where did you go? How come you're off the station?" And we realize that just being on and having our clients listen to us was almost a touchpoint during our journey of they felt like they had heard us, even though we hadn't met with them. So, it was almost another...a good feeling for them to hear us there.

So, instead of having to do all the production, everything that we're putting into...that we were putting into the radio shows for many, many years, in the last year what we do now is we do our podcast, which is like a 30-minute, more specific on a topic in our business, and then we just do...we go in and record the intro and the outro for radio, a little call to action, and then we just put that on there. The old days of getting 200, 300 calls on a radio station, it's a very small part of our business because it kind of faded away over the years.

Michael: Meaning just people don't listen to radio as much as they used to, and so you literally don't find it converts the same way that it used to.

Derek: Exactly. It might be something we end up even dropping in the next year, to be honest. We kind of dropped it, went back on with a little different flair. Because we're already doing the podcast anyways. Which is obviously, as you know, is a more friendly medium in this day and age, and gaining traction. So, we're already doing a podcast, we said, "Why don't we just use the podcast as part of the radio show?"

Michael: And so just so I'm understanding correctly, you're anchored around a podcast at this point. And so your radio broadcast is literally just, "We already have a podcast, we're going to send the radio station our podcast and just let them air that." So, it's not even live, they're just running the podcast tape?

Derek: They're running the podcast, but then internally we know the podcast is 40 minutes and we know we need to have 50 minutes of content. So, we'll do a five-minute introduction on what we're talking about in the podcast, and then we'll do a five-minute, "Hey, based on what you learned in the podcast," which could have been on super back-door Roth conversions, I'm just giving you an example.

Michael: And what does radio cost you? How do you price radio, and price radio relative to television?

Derek: Radio is roughly... For the station we're on, we have an hour show on Saturday morning, it's about $100,000 a year. We were spending about $354,000 a year just about three years ago on multiple channels. And that was a huge, huge ROI for us back in the day that slowly has deteriorated. You know what I mean? So, that's... Right now, we spend about $100,000 towards radio.

Michael: And it's moved that fast, just that you were spending $300,000-plus just three or four years ago, and now you're finding that you've dialed the spend down that much?

Derek: Yeah. We just...every time we tracked the number, like I said, that station used to be five to one, then four to one, then eventually it was like one and a half to one. And it's like, "All right, we got to"... We talked about it for a couple years, and eventually we pulled the plug and just kept on one...kept ourselves on one main station.

Michael: So, I guess I'm just curious, as you track these and think about these, right? I think about it relative to media at large. I feel like there's a lot of discussion of all sorts of traditional media under siege. People don't read newspapers anymore, they go online. They don't listen to radio, they do podcasts. They don't watch TV with commercials because they just Netflix it. But I am struck, you're happily spending on television and driving ROI, but you have dialed back radio because that actually seems to be slipping faster for you.

How do you think about all this evolution of how consumers consume content and evolution of media as you're looking at, I'll call them, air quotes, "traditional" media channels? On the one hand, a lot of us seem to be talking about moving away from it. On the other hand, you are still driving results that you can clearly measure. So, they're working some more than others. How do you think about the evolution of media and marketing channels?

Derek: Well, I think, from a radio standpoint, the...like I said, in 2008 and '9 we would generate hundreds of calls. Right? And I wish we had the infrastructure we have now back then internally, but we didn't know how to process it, we didn't do a good job of processing it. But just look at the writing on the wall for AM radio. Have you ever met someone under 50 that listens to AM radio? You know what I mean? And that's...that was our main driver. And even it's just...

Michael: If your market is prospective retirees and retirees, if only people over 50 listen to AM radio, it's still your market.

Derek: I guess so.

Michael: It’s working for a while at least.

Derek: Yeah. Even those clients... You're right. But even those demographics are starting to go away from...they're starting to do more podcasts and XM and all these other stations. I'm not even privy to a lot of the things that are...that people listen to now, but I know it's not, just the results in general.

What also happened, too, that you can't forget is that we used to be one of the only advisors in the area on radio. And then once it became successful, there was like 25 on the radio, like one show after another. So, that was part of the problem, as well.

But I see TV, we've even explored with some of our partners. We use a company called Lone Beacon as one of our partners and we've talked about, "Is there a different way to advertise in other"... Obviously, they don't have advertisements. But, "Is there a different medium through streaming that is going to be a way that we're advertising in 10 years from now?" Right?

And right now, we're going to keep pulling that lever on the TV if we can get a dollar and...put a dollar in and get $3 back, or $2 back. But we're always going to be looking at the change. And I do think...TV, I think, is going to be a slower transition than radio because people have trouble kind of cutting those cords. Is that the right word?

Michael: Yeah.

Derek: Cutting the cords on... A lot of people still have those cable boxes and watch cable TV. And even myself, I use Roku, but I watch...I still watch TV through my Comcast network. And I still occasionally will be watching a game and there will be a commercial on. So, I think the TV will be a little bit of a slower transition, in my opinion, from a marketing medium than what radio is.

How Derek Utilizes Digital Marketing & Quiz Funnels To Increase Leads [56:00]

Michael: So, then the other end of this is the digital marketing world. And I know you said that you are spending more time in digital marketing, as well. So, talk to us about what digital marketing looks like for your firm.

Derek: Yeah. So, digital marketing is really two avenues. So, what I was saying before with Brad Johnson and his company, and Ryan Levesque, to help us with a quiz funnel. Brad is also creating...we're in the process of doing a webinar funnel. Which is the same exact process, except we're creating a 20-minute mini webinar on the SHP retirement roadmap, which is the five worlds of planning, and a quick to-the-point bullet points on each area. That's what we're creating now. We have a digital side of advertising for new prospects, right? To build that list, if you will. Build the list internally so we can continue to market to them down the road.

And then we work with a company locally called Lone Beacon and they're amazing at...think of the nurturing of our clients and our prospect list. So, it's very...it's done in a way where it's... And I'm probably not the best person to speak of this in our office. But, from a high-level standpoint, it's very nurturing, it's very brand-oriented, and it's not super salesy. So, they're constantly just like our weekly market report to our clients, right? The weekly things we're sending out to our clients, we're doing surveys every year to our clients, and how they generate the surveys to give us positive and negative feedback so we can improve.

And then they're also taking our prospect list of thousands of names over the years of radio shows and TV commercials and quiz funnels and all these names that come to seminars, and that's a different nurturing campaign. So, they're kind of gently nurturing that group of people, that group of prospects, that every few days someone will raise their hand, someone will raise their hand. And they have a cool system in place which almost tracks what your prospects are clicking on, what your prospects are doing. So, it helps our business development team to, "Hey," reach out. "Hey, we saw you checking out this or that." And that's a big part of our business, as well, as just gently nurturing our funnel, our prospects.

Michael: So, this whole process of doing ongoing e-mail drip marketing, you guys aren't even driving it internally, you have a marketing agency, you have Lone Beacon as a marketing agency that does that for you.

Derek: Correct. Exactly. They work with my partner. Keith is kind of head of marketing. And Michelle, our COO, kind of coordinates that with John and his team at Lone Beacon, and Jamie, our internal marketing. Jamie and Evan work internally. And they're basically coordinating all these events. If we're doing a workshop, there's going to be some sort of an e-mail campaign to drive people to that workshop. If we're doing whatever the case is, it could be a charity event that our team is doing, they're going to gently come up with a little campaign to let our clients and prospects know.

So, they're a 10, 15-person team that almost is like an arm of our marketing side, they run a ton of our marketing, but more on the client cultivation and prospect nurturing more than anything.

Michael: So, they're not necessarily... I'm thinking of this relative to things like TV and radio, which is just out there in the marketplace finding prospects to make you...make them aware of you for the very first time. It sounds like your digital marketing end is less around that and more of, "This is what you do in the middle." Like for everybody from a radio and TV spot who comes to the website but is not ready to hand over their life savings and schedule a sales meeting yet, but is willing to sign up to do something, and now you have an e-mail address and you have to nurture them. Digital marketing for you is mostly what happens between those points of, "They showed up once because they became aware of us in radio or TV or something," and when they're actually ready to meet with a sales person to potentially hire the firm.

Derek: Correct. Yeah, that's exactly it there. It's a lot of people forget, they just want people to raise their hand, but that person might have raised their hand and got busy in life and it might not be the right timing. So, that second part of the nurturing, a lot of those people will eventually raise their hand, but you have to be there at the right time when they're ready to raise their hand. Right? When they're going through an event, a retirement, whatever the case may be.

And so just like you're doing TV broadcasting and you're going to thousands of people, and it might hit 10 of them and say, "I need to get this help." Well, the same thing, it comes to nurturing these people who didn't end up moving forward. And then out of these 10,000 people in our drip list, there's 9,995 of them that look at it and delete it. But then one time they say, "You know what? I recognize this name, I've been getting this for a while, I've been hearing them there and seeing them there on the different media outlets. And now I do have the ability. I got a buyout option at my firm and I can retire with a severance package. And here's what the option is, I want to retire now. And now I need to call someone." And then we're in front of them. So, then they are ready to raise their hand. And that's a huge part of just nurturing the database that you've created if you've done marketing over the years.

Michael: And what do you spend on this? How do you allocate dollars to this and what do you spend for, "Nurture all these leads that have come in"?

Derek: Yeah. So, we spend a...there's a consulting fee. It's probably around $100,000 a year for their services, is my guess. $60,000 to $100,000. That's just all the retainer for everything they do. And then if they're doing any campaigns for actual...like a marketing campaign, a Facebook campaign, then you pay...that's a separate campaign which they also run at times, as well. But the majority of what we pay them is just their consulting fee to be that extension of SHP Financial to do what they're supposed to do to help nurture our clients along, and prospects.

Michael: And so from a business perspective, how do you think about and decide something like a potentially $100,000-dollar consulting fee versus just hiring a full-time e-mail marketing specialist and say, "You're now a full-time team member of SHP, your job is to make these digital marketing funnels happen"? I get it's one thing when it's, "It would cost us tens of thousands of dollars for a person, and we can hire this consultant for just a couple thousand dollars to do a thing." But you're at a level where you could hire a whole person to be responsible for this. So, how do you think about why hire Lone Beacon versus hiring a full-time e-mail marketing expert?

Derek: We actually went...we've been back and forth on that years ago, "Do we hire someone and just pay a salary?" But the value of Lone Beacon is they only work in the financial space, so they know our business really well, and they have a full team of...it's almost like having a marketing team, as opposed to just access to one person. So, if we're doing a specific event, there might be someone that's better to run that material or create that content in their firm. Where if we're doing something different that's more of a, "Hey, we're doing a charity event," they might refer us to someone else in the firm that's going to create that content.

So, that's...they...we feel like we're getting more bodies and more good, solid minds doing the marketing for us and helping us with the marketing, as opposed to just hiring one person that might not have a financial background that might not know our business as well. And that's...we went back and forth on that years ago, but settled on, and we're glad we did, it was a much better move for us to just hire them.

How Derek Leverages Seminar Marketing To Attract Clients [1:03:32]

Michael: And then the last channel that you've talked about is seminars. So, what's seminar marketing for you?

Derek: Seminar marketing is, in a sense, we run some basic Facebook campaigns and mailers, like a mail house, if you will. And essentially, it's good old-fashioned, there's nothing fancy with it, where mailers go to the house, we send out 10,000 mailers, and you get 50 people to show up in a room. The difference with us is we prequalify everyone. So, we...they have to have $500,000-plus, they have to... We kind of go through a little process to prequalify them.

Michael: And how do you...just how do you actually prequalify them?

Derek: So, our business development team will call them when they call in to reserve their spot. Our business development team will call them back and go through a series of questions about... They're not going to say, "How much money do you have?," but, in essence, "Hey, what makes you want to come out? Have you been to one in the past? In terms of investible assets, would you say you have more than $500,000?" And kind of that's...we say, "This is designed for someone who has $500,000-plus in assets."

So, our new business development...our business development team kind of handles that front end to get people to the seminar. So, some people are not qualified, which is a hard conversation for them to have. It's just it doesn't make...for what we're doing, it doesn't make sense for... It's hard to do. And they do...I'm not going to do a good job of it because they're amazing at it. I'm not going to do it justice, but that's something that they're...they do every day in terms of qualifying people for the workshops and qualifying people for appointments.

We think it's important to prequalify them. And basically, they come to an event, we give them a dinner and do a presentation on the five areas of financial planning. And that's really the...it's a simple concept that's worked for years for us. It's kind of gone down a little bit, as well. But it's still working, so we're still going to do some of it, just not as much as we used to.

Michael: And how long is the seminar, again? Just the whole program. Because do you do food, do you do drinks? Is it just, "Come in here, let's talk for a little while," and then people go on about their way? What's the whole program?

Derek: It's about 45 minutes of the presentation. And followed by a dinner. And the whole thing is probably about an hour and 15, an hour and a half, from beginning to end. But, obviously, our event coordinator has to show up an hour early, get all the equipment, lights, everything, the easel. Everything we're using for the presentation has to be set up. And that's why I was saying it's a process that we're still doing it and it still works, but it is a lot of manpower.

So, we've cut it down. Like I said, it sounds like... We're still doing two a month, which is probably a lot for most people. But, again, some people are doing 20 or 30 of those a month. It's been a staple of ours for so long, it's hard to let go. We might let it go, I'm sure we could let it go, but it's just kind of something that we've always done to get our name out there and get some prospects through the door. And it's worked well, so we've kind of continued to do it.

But that's really the simple... It's nothing fancy in terms of anything special we're doing. Other than when they come, we feel like we have a special process once they come into the office, but seminar is pretty standard.

Michael: So, I'm struck that just you've been doing radio, but you've said it's declining. You've been doing seminars, but you've said it's declining. You're doing television, it sounds like that's still holding pretty well though. We all seem to be a little collectively skeptical about what television, or at least what commercial-based television, looks like in a future where we're increasingly cutting the cord and living in a no-commercial Netflix kind of realm. So, I'm just wondering, how do you think about marketing for the firm as you're looking 5 to 10 years out, or are you just planning you'll cross that bridge when you get to it?

Derek: That's part of what we're doing, is right now we still...even with radio and seminars going down, we still brought in about $40, $50 million from those sources last year. But it used to be even better. You know what I mean? So, I guess the context of how you look at it is we're remembering how it was five years ago. It's slowly going down. It's not like it's a bad marketing avenue, it's just not what it was.

So, I don't want to skew it to sound like I'm complaining about what we're getting. I just feel like in the future what seems to be picking up a lot more for us is the whole digital side, right? The quiz funnels, those type of marketing campaigns which you can really scale out, you can almost go countrywide, nationwide, with the technology of Zooms. And I feel like there's a lot more availability just to do more in that space. And I don't think we've figured it out in the financial space as well as other people have probably in terms of digital. But I think that's where, to me, I see the wave of the future of that being more prevalent, and we'll probably allocate more dollars to that each year going forward.

Michael: And so then as you add it up across all of this, you've got... How much is a total marketing spend for you over the past year?

Derek: Usually about $800,000. If you add everything, all that together, it's about $800,000 of marketing spend.

Michael: For which you had, I think you said, more than $250 million of new assets, with the caveat that some of that's existing clients and referrals. But if about a third of it was new, so you're at like $80 million of new assets. Which, I guess, gets you right back to $80 million of new assets at a proverbial 1% is $800,000 of marketing spend, $800,000 of new revenue, two to one on the two-year cycle.

Derek: There you go. Exactly. It's funny how the math works, but you're exactly right. And it's about...out of our new clients last year in 2021, it was almost 50% were from referrals, 50% was from marketing. And then the rest of our business was from client upsells.

How Derek Structures Client On-Boarding [1:09:26]

Michael: Okay. So, talk to us for a few moments of just... We talked so much about the leads and all the different funnels that you use, right? Just all the ways that basically the firm prospects. So, the advisors don't have to prospect, they simply can answer the phone when a prospect calls in or wants to meet and is interested in moving forward. So, how does this work from the senior advisors who are ultimately responsible for selling and closing business? How does this handoff happen, when do they get involved, and what do they actually do at this point, what's on their shoulders?

Derek: Yeah, so back in... Remember and think of our business structure from 2003 to 2013. Sales organization, no structure. We literally started in an attic. And then eventually, when we started doing things to... We hired a COO in 2014, we de-commoditized and started systematizing things and scaling things. And once we got to the point as a firm, we came to the realization we have to stop selling.

And we had inflection points. We had a huge inflection point of, "Well, let's...in a sales process, let's not give the client 30 decision points, let's bring it down to one after every meeting." So, at the end of the first meeting, "Do we want to go to a second meeting?" At the end of the second meeting, "Do we want to work together?" Where before that, we were saying, "Well, here is this stock, look at this amazing stock portfolio, and look at these funds and bonds and annuities," and they have 30,000 decisions to make. Where we kind of changed that, we changed our whole sales process and realize we can't keep doing what we're doing. Once we changed that, the numbers, if you look at it from our production standpoint year by year, started going through the roof. And if you need those numbers, I can share them.

But what happened is the three of us, Keith, Matt, and myself as partners, were like, "We can't take... If we keep doing this, we're going to be driving ourselves nuts with the amount of clients and reviews, just and trying to run the business." So, back in 2015, we hired out first senior advisor. That's kind of once we had the processes in place and the fundamentals in place, then we hired our first senior advisor was Joe Anderson. And Joe, he shadowed us, did all the things you do when you come into a firm, learned the processes, learned how we run the firm, learned how we plan, learned every aspect.

And then so now, and from 2016, '17, to now, what Joe does is he basically has...he wakes up on a Monday and in his calendar there's a series of appointments. It's going to be some brand-new appointments from TV, radio, all the...digital, all the funnels we're doing. And then it's going to be some of his top client reviews. Right? And so he goes into that meeting with his sole agenda of following the process, taking care... Obviously, everything comes down to taking care, caring for that client. He's an amazing person, just like the rest of the team there.

But his... You know what I mean? That's his... He doesn't have to worry about... When that client comes in, they've already heard us, seen us, whatever. Our team has...they've talked to someone one our team. They've got an appointment package in the mail that consists of a cool bunch of goodies and the SHP retirement roadmap book, all these things about our firm. The second the prospect walks into that front door, they're greeted, there's an iPad menu, there's cookies baking and muffins. They're walked down to the office, with the tour of who we are as a family and team, into the conference room. The conference room has a TV with our entire team, it's a computer/TV with our entire team showcased.

So, by the time that advisor walks in the door, they know all that's being done on the back end, and they know exactly who these people are, what their goals are, what their situation is, how much they've saved. And then that's where their process starts. They have to start following the...it's a three to four-meeting sales process, from beginning to end, and that's where they come in. And then we're obviously tracking closing ratios, and there's a lot that goes into that. But that's really their responsibility, is to onboard clients from the marketing that we're doing.

Michael: And can you describe for us a little bit more just what is the sales process? Like what are your three to four meetings and the step they're supposed to take after each one along the way?

Derek: Yeah, I think this is some...there are some valuable pieces along the way. So, we have...we call the first meeting the connection visit. And this is...a lot of this framing, by the way, is through Chris Smith, from the Campfire Effect, who's amazing at taking a company and helping them frame what they do so everyone is marching to the same beat.

And, in essence, we look at the first meeting as a connection visit. And what we're trying to do is, for an example, the first step in a first meeting is you get to know each other, but everyone is so quick to jump to the meeting. With us, we teach our process on the connection as, "Take the guards off. Listen, Joe and Mary. This is... I know you're here, it's a nerve-racking experience, this is your life savings. I just want to let you know how this meeting is going to go. This is really for you to ask anything you want about myself. I'd love to learn more about what you guys are doing and what you're looking to do. And at the end of this meeting, the only thing we have to decide is does it make sense to move to meeting two. Right? Does it make sense to move further. Meaning, can we see...do we see value we can provide? And on your end, do you see us as a firm that can provide that value?"

So, we're trying to...even in the very beginning, we're setting the agenda and getting to that one decision point at the end. Right? Is, "Do we want to move together to a second meeting or do we want to part as friends?" And so the first meeting is very...just connecting, learning, "What are their goals? What are they trying to do?" A lot more... Really, it's a lot more about this, "How much do you have? Where do you want to go?" It's like, "What do you really care about? What do you want to do?" All the important questions.

Then, assuming they...as soon as that meeting is done, they send a recap e-mail, which is huge, to let them know exactly, "Here's how clear we heard you." Right? So, that prospect gets a full e-mail within 24 hours of exactly what just...what took place. And we make it personal about their family and dogs. And at the end of that meeting, then we have a second package that goes out. So, then it's like M&Ms, an article that we were in recently, just a little bit more about the company, about their process.

And the second meeting is called the possibility session. And so how we train our advisors, how everyone is trained now, when I... We used to say at the second meeting, "How do we get this client to jump on board?," right? And so in that second meeting for us it's really we're doing high-level eMoney planning, we're doing high-level cash flow planning, just tax planning, everything from a high level. But we're not...the goal is to not say, "Here's the...here's where your portfolio is now and here's where we're going to put you." Because then that client has 20 decisions to make, "Well, do I sell this? Do I buy this?" And that's how we used to...we used to be so, "Look how good this is, look how good this portfolio has done." And it's an awful way, it's not how you should be running a second meeting.

So, for us, we start the second meeting with, "Hey, here's all the things." We're going to cover a high-level 10,000-foot view of your situation. We're going to go through multiple areas. At the end of this meeting, we're not trying to decide what stock, bond, mutual fund, anything to buy, it's not about that. It's, "Do we want to work together?" Right? "We think we can help you. Do you think we're a good fit for what you're looking for?" That's the end goal, that's the decision. Right? So, there's no selling, it's, "We're going to show you high-level how we can help you. Let's bring it to one decision point."

Michael: And what do you call this meeting, again?

Derek: A possibility session.

Michael: Okay. Okay, it's the possibility session. Okay.

Derek: And in the first meeting, remember... Just to go back for one second, so many other advisors are just trying to get to the second meeting, they want to get that client in again so they have a chance to sell them, in my opinion. Where... Because I came from that world, that's what we used to do.

Michael: Right.

Derek: And with ours, given the benefit of having the firm and stability, the clients can literally see the prospects that, hey, we don't...if we're not a good fit, it's okay. So, where everyone else is begging to get to a second, we're really trying to say, "Listen. If it's a good fit for us and for you"... And we mean that. We're not just saying it, we truly mean that. If someone is going to waste our time and so forth, we're not going to move to that second. And if they don't think we're a good fit, we want to get all that waste of time stuff out of the way and not just push them to a second meeting. And so once at the end of the second meeting, the only thing we're doing is agreeing to work together. We're not deciding on anything.

Which leads to the third meeting, which is a vision meeting. And a vision meeting is really that's when you dive into the specifics of how we're going to build out their plan. Right? Because at that point the money has already been ACAT'ed, it's moved over. We use Fidelity as our custodian. Then the vision meeting is a third meeting, that's when we go into the actual details and zoom in from 10,000 feet down in and say, "Okay, here's how we recommend your plan be built out." And that's general...that's just general financial planning.

Michael: So, in your sales process then it sounds like, after meeting number two, literally that's the, "Do we want to work together?" If the answer is "yes," that's actually when you start queuing up paperwork, that's when you start doing transfers, that's when they sign agreements.

Derek: Correct.

Michael: All of it's happening after meeting number two so that it just flows straight into meeting number three, which is, "Hey, we've talked about possibilities, we've decided we want to work together. Let's now start drilling down into what we're actually going to start doing."

Derek: Exactly. That meeting is just really picking...building out risk tolerances, picking the actual allocation and so forth. And that's...we have an internal investment committee that helps assist with that process. But that's just general, that's where the plan starts, right? So, the sales cycle is kind of over, now we're into real investments, planning, and so forth.

Michael: So, for all those that were trained in a sales world of you have to put together the proposal of what you're going to do and how you're thing is going to be better than what they've currently got. Because I'm struck, I don't feel like you ever really get there in your sales process because you actually don't drill down to that level of proposal specifics until meeting number three, which is after they've actually started to sign paperwork. So, am I...either am I missing something in that process or is it just, no, you don't actually go there and you're getting people on board just fine anyways?

Derek: That was one of the huge turning points in our career, is realizing that you don't have to show every single fine detail. You want to show them what you're trying to help them with, you're trying to correct maybe a cash flow problem, maybe a risk problem, maybe a tax problem. But if you start going into the detail of how you're going to do that before they become a client, you're opening up Pandora's box, "Well, what if I convert $201,000 to Roth instead of $199,000? And maybe I want... I don't know if I want to do that." And then you... You know what I mean? You open up all these possibilities where the inflection point for us was taking all those decision points to one. Right? So, at the end of the first meeting, "Do we want to go to a second?" At the end of the second, "Do we want to work together?" Right?

So, it's a huge, huge, huge relief to our team. And we say this is a lot of work. We deal with a lot of clients. When we do planning, we do real, real planning. And I really believe that and I know... The planning we do is extensive, a lot of our team is hired for that. And they'll tell the prospect, "In all fairness, we have a really good outline of how we can help you, but we're not going to have our investment team and all these planning teams work on you and your situation until we know you're committed to us." Right? It's just too much time for us to waste to go down the road of, "I'm going to look at 17 other advisors, and then make a decision."

And, in fairness, other firms can do that. And we have the ability to run our firm the way we want to, and we don't want to come off arrogant by any means. But it's like here's...this is how we run our business and we don't want...our clients are so important to us, and the time. That if we're taking to bring on a new client, it has to be someone that's committed to us and our team, and then we'll put in all the effort for you now and going forward.

Michael: And out of curiosity, if I can ask on this framework, how do advisors get compensated? Because they're not prospecting in the classic sort of hunt-and-eat-what-you-kill world, but they do actually have to close. You're training them in a sales process, but they have to...they do have to close. So, how does compensation work?

Derek: Very simple. The senior advisors get 30% of everything. So, whatever they bring in the doors to SHP, ongoing, 30%. W-2 employees, they're employees of ours, but they get 30% of their...anything that comes in that they're working on on their recurring book ongoing. And so it's almost, like I joked around, I always say, "This is...if I had that opportunity, a guaranteed 30% profit margin with no risk and I walk into appointment after appointment, with some of our advisors now have million-dollar minimums," I'm like, "What the? How did we get to this? It took me 15 years to get to that point."

So, yeah, that's the comp model, it's pretty standard.

Michael: And is there some kind of salary or base for them, or transition in, or even just a new advisor starts at zero and they're getting 30% of zero until they've got some clients? But since you've got a marketing process, it's not like it takes them 7 to 10 years, like some of us, to get "full" on clients, they get their pretty quickly because the marketing process. So, they just get their percentage of revenue as revenue flows.

Derek: Yeah, that's an awesome question. Brian, one of our recent senior selling advisors, I would say. A lot of them come on in the service role. So, they're doing ongoing...they're learning the role just going into meetings, servicing, planning. Right? All the behind-the-scenes stuff, almost similar to a Diamond Teams structure. Where eventually Brian made the move to become a selling senior advisor.

So, what happened there is he had a salary that, as his advisory business slowly ramped up over six months to a year, the salary slowly went down. So, he didn't go from X amount to zero.

Michael: Okay.

Derek: It slowly slided down. So, by the time his salary went to zero, his base off his book was actually at the same point he left off as a service advisor.

Michael: Okay. Because, from a practical perspective, particularly if he's already on the team, he's got planning service work to do already. So, when he gets his first client, it's not like he's sitting around twiddling his thumbs the rest of the time. He's got a bunch of other service work to do that's already been part of his base salary. So, just as he gets his own clients and can do less service work, he gets more of his percentage-based comp and less of his old salary.

Derek: You're exactly right. And real quick, we also have... What's important in terms of having processes and procedures which we didn't have in our first 10 years, it's like the second... It's like two phases of SHP. It's 2003 to '13, and 2014 to now. And so now we have a full coaching portal. So, it's cool for the mastermind group that we're in, too, because people can pull those videos.

So, the coaching portal is also for our team, where they can watch full training videos on our vision meetings. Every single meeting is prerecorded as a prop...a fake meeting. Like me and my partner, Keith and I, we'll sit across from each other and do a sample hypothetical connection meeting. Right? And then we'll do...

So, everything, all this, is built out where they can just watch recording after recording and sit in meetings. So, the training protocol for them is already established, it's not something that we have to just start from scratch. So, that's a huge benefit to have as a process, where we have a place they can go. Even if an advisor, for five years, is doing the wrong thing and they're getting off track, they might go back and watch a video and be, "Oh, I'm not doing this, I should be doing this." It just helps them stay on track for what they're supposed to be doing during that process.

The Surprises Derek Encountered On His Journey Of Building An Advisory Business [1:24:55]

Michael: So, as you look back on this, what surprised you the most about the path of building your own advisory business?

Derek: I'd say the one area is around the culture. I did not understand how an internal culture would matter externally to people on the outside. And looking at it, saying that now sounds ridiculous, but I didn't realize. In 2014, when we let go of a few employees who were kind of just here for the paycheck, good people but here for the paycheck, hired Michelle, who's our COO, and really built from there. And just hired, as much as we could, A-plus talent, people who truly cared for each other and cared for our clients, took...did...doing charity trips internally.

We have teams of seven, we have five or six teams of seven people, who we organize every year and every quarter. They go out and do their charity groups, right? We do different missions and outreach in our community. And just building that camaraderie with our team. And yoga. And we do a...if we hit our goal, we do a summer outing. If we hit a stretch goal, we go to... We're going to Aruba next month as a team, which is...I might be going bankrupt soon with that bill. But it's the culture really truly feeds to the clients. And the clients can buy into that and it does make a difference. Where my limiting beliefs back in the day were, "I don't...what does it matter what happens internally? Clients just want a good plan." That's the furthest thing from the truth.

So, the culture and people are so, so important. And then just another thing I learned is just...one of the major things I've learned along the way, whether it's any points of business. And this is something my dad taught my years ago. Is just really paying attention to...if you pay attention to the small things in life, then the bigger things work themself out.

And that...you can literally apply that to sports, of the fundamentals of football. At the end of the day, when...if Brady throws a pass to Edelman down the seam, it looks pretty, there were so many details that had to be worked out with the footwork of the line and the fundamentals and the steps. Right? And everyone just sees the final throw that Brady made, but there's so much behind the scenes.

So, and in business, that's a lot of details that have to be followed, there's no shortcuts. And even with our clients, it's like if we can take care of all the little details of your risk, and if we can make sure we're appropriately doing Roth conversations if it makes sense up to the right dollar amount, and tax harvesting, and taking care of all these little details, then the bigger things will work themselves out.

And so those are two huge lessons around just life and just business building, is the culture and just not missing the small details along the way.

The Low Point On Derek’s Journey [1:27:35]

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

Derek: There's been a few. We can go back to Bankers Life, Keith and I knocking on someone's door because they sent a lead in six years before we got there and we didn't have a phone number for them. And Keith got the police called on him because he's 6'5" and 250 and pretty intimidating.

But a true low... I would say that's back in the day, but a low point for us was around 2015, '16, where we had literally...we kind of thought...we got some things figured out on the business side and on the sales cycle and on the sales side. But we had done so much business between just the three of us that at the end of that year, I was talking to our good friend Brad and actually Shawn from Triad Partners and I was like, "We literally had our"... Our goal the next year, because we didn't have the right team underneath us, because we didn't have enough advisors taking on appointments, we made our goal to do less. We literally made our goal to do less. And that was a pretty, almost, depressing point. Because our team was excited, but it's like Keith, Matt, and I literally can't do this again. I don't want to work that hard to do that much business. Do you know what I mean?

Michael: So, what turned this around for you when you're hitting this wall of growth?

Derek: It was really coming to the realization that it can't be just about us. Right? This can be something that we can build and be beyond us. And we can't do it all ourselves, right? We just can't do it on ourselves, it's too much work. And it's going to...we're going to drive to burn ourselves out if we're working that hard to take on that many clients with just the three of us.

And so the marketing was doing amazing, you don't want to turn things off that are working well. But it's like we almost...at the end of that time period, we were thinking about reducing our marketing. So, we have all these people that want to sit down with us and we can't physically do it. And we have three advisors, because it was just the three of us at that point bringing on clients, getting to the point of almost feeling like they were burnt out. And that was the furthest thing we wanted to do.

And so that...how we...the transition from that point over the next several years is something that we're super happy about, because my free time is so much different than what it was before. And just seeing the difference that the difference makes.

So, just in our mastermind group, my friend Anthony I talked about earlier, one of my good friends in Chicago. Just seeing some of the lessons that we...and the mistakes we made along the way, he was in that same point. In the last year, he went from like $80-something million of new business in 2020 to $170 million of new business. And he spent 10 more weeks with his family, his sons, his wife. It was all about the freedom.

So, the business is great, the numbers are amazing when you hear of all the stories on your podcast and all the stories of people that I talk to. The numbers are amazing. But if you're running 100 miles an hour on a hamster wheel and you're not happy, then, we all know so many stories, it's just not worth it.

And so the...it's running the right business where you can create freedom and time to do the things that are important to you, but also take care of the clients and the folks in your team. And it's just the whole ripple effect of the difference that the difference makes is what I love looking at.

But I love internally seeing our team build families and buy houses, I love our clients thriving, I love seeing people in our mastermind group spending more time with their family and knowing that their process is better and they're doing more planning for their clients. So, it's all these ripple effects that I truly believe are making a difference in where many years ago I think I had limiting beliefs, "Yeah, I'm just another advisor doing my thing." Now, Keith, myself, and Matt, Michelle, the leaders here, truly believe that we're leaders. Right? And that there's a lot more we can learn, there's a lot more to go, but we feel like we're making a difference across many platforms.

The Advice Derek Would Give His Former Self [1:31:30]

Michael: So, what else do you know now that you wish you could go back and tell you from 10 years ago as you were building?

Derek: Yeah, I think that's a good question. I know you've...I've heard you ask that many times. And I think it's really just not...I'd say the confidence is what matters, right? Being confident, being a leader. And that mindset I just talked about, I was...back in the day I had limiting beliefs. Even though I felt like we did a good job, I was like, "Well, we're too young, no one wants to work with us, there's people a lot smarter than us." And it comes across, too, on how you show up, to show up to your team, to show up to prospects and clients.

And I think what I would love, if I could tell myself many years ago just to show up with more confidence. That you are a leader, you can thrive, you can help these people. You might be the best person for them and you're almost not even showing them because you're almost afraid that you don't believe... We didn't believe in ourselves, I didn't believe in myself. I just didn't believe in myself. I was just another advisor trying to make it. Didn't think I had the amount of impact that we as advisors.

And I think that's something people don't take as seriously. If you're being lazy, then, yeah, you don't...maybe that's not the case. But if you're truly pouring your heart and life into this business to truly impact and see the families that you're impacting, right? Along the way. That's such a huge benefit to that person, to that family that you're working with. I dealt with two deaths last week for clients losing their spouses, and just show up for them during those times. I wish I was...I wish I had the confidence that I have now, that I have, when I was 25, I wish I had more confidence and leadership ability and believed in myself more.

The Advice Derek Would Give Younger, Newer Advisors [1:33:11]

Michael: So, what other advice would you give younger, newer advisors coming in the business?

Derek: I would say just be authentic. People can read through... For instance, you've...I always joke around, Keith and I, good people. My partner Matt is 10 times smarter than us, right? And I used to try to...I grew up in the trades, my dad was a plasterer, my mom was a nurse. I was...I didn't grow up in a business background. Keith's father was a cranberry grower. And so I would almost turn on...when I first started like 20 years ago, I'd be like, "Hey, how you doing? This is Derek. How you doing, sir?" Almost this fake personality to try to be more professional. Where now...where I think if you be yourselves and you're authentic, people would rather see that, right? People don't want the fake version of you that sounds more polished. I sit down and give my clients a hard time, I have a Boston accent sometimes. You don't have to be perfect and 100% polished to be in this business because the people are buying...they want you, they want the authentic you.

So, my...I would say be authentic, people can read through that. Don't pressure yourself to bring on clients. I would say if you're goal is to serve that person, the business will come. Don't be so pressured to bring on that client. And I know it's hard to...it's easier said than done, because I've been there, when you have no money and you're just trying to bring on anyone that you can. But if you really...if your goal is to serve them and not necessarily yourself, the business will follow.

What Success Means To Derek [1:34:36]

Michael: So, as we wrap up, this is a podcast about success. And one of the themes is always... Just the word "success" means different things to different people. And so as you've helped build this wonderfully successful billion-dollar advisory firm, and still lots of room for growth from here, you have this great trajectory for growth, the business is doing well. How do you define "success" for yourself at this point?

Derek: Yeah. That's a very amazing question. And being a Christian, faith is a huge part of what I do. And I talked about my dad earlier. I was lucky to have amazing parents. And I have an amazing wife and two young boys, 10 and 13. And I think the best way I can put it is I always saw my dad doing every single thing he could to care about others and go out of his way and put others first.

And I was in Nashville recently with our good friend Brad and Shawn, and basically they had Tim Tebow there. And I don't know if you've heard him speak before, but we got to meet with him for a few hours, and even talk to him for a while afterwards. And he made an important distinction, that I thought was really key, that always defined everything I thought about, but I just didn't know how to get it in a sentence. And he said success is really about you, me, as a person. That's success. But significance, right? Significance is pouring into others.

And so I don't...I fail every day. Right? I'm a fail person, I make mistakes. But I really try to come into this thought process with pouring into our team, pouring into my clients, pouring into my family, my wife, my boys. Right? And just... And that's, I think, the difference. Success is great. Right? Everyone can get all the accolades sitting on the stage, "Look at me, look at this company we built." Even here at SHP, right? That means nothing if... It's okay to have success. But if you're not...if you don't have significance, then success doesn't matter if you're not pouring into others.

So, that's how I define success.

Michael: I love that, I love that framing, "Success is really about you, significance is pouring into others."

Derek: Exactly, I love it.

Michael: Well, awesome. Thank you so much, Derek, for joining us on the "Financial Advisor Success Podcast."

Derek: Awesome. Appreciate your time. Thank you so much and keep up the good work, Michael.

Michael: Thank you, thank you.