#FA Success Ep 287: Finding Solo Efficiency To Serve 50 Great Clients With $100M AUM, With Jennifer Murray

Resources Featured In This Episode:

• Jennifer Murray
• Stonebridge Financial Advisors
• MoneyTree Financial Planning Software
• NAPFA
• FPA
• Bernard Kiely
• Dimensional Fund Advisors
• Advyzon
• Holistiplan
• Redtail CRM
• Envestnet Tamarac PortfolioCenter
• Envestnet MoneyGuide
• Morningstar ByAllAccounts
• ShareFile
• Bloomberg Income Tax Planner (formerly BNA Tax Planner)

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

Full Transcript:

Michael: Welcome, Jennifer Murray, to the "Financial Advisor Success Podcast."

Jennifer: Thank you very much, Michael. I'm happy to be here.

Michael: I'm really looking forward to today's discussion, and just talking about the journeys in the past that we take to build practices, to build focused specialization practices. I've kind of commented over the years that our industry has, I find, sometimes this sort of near-obsession with growth, growth, growth, more and more, and more. And not that there's anything wrong with growth. Some people like to grow big things. But you can make a really amazing income and career in this business with, as I like to term it, just finding your 50 great clients that are good to work with you. And a lot of us can service 50 great clients basically entirely alone, or maybe just with a little bit of part-time support.

I know you literally have built a wonderful practice with $100 million under management and 50 great clients, and a part-time staff member. And so, just looking forward to talking about what that journey looks like, how you get to your point of the 50 great clients that you're working with, how you find a specialization, a way to attract 50 great clients to you, and what that journey has been over, I think you said now it's been 15 plus years of building the firm.

Jennifer: Well, great, thank you. Yes. I am in a good position, I believe, that with the clients that I'm serving, I am happy to help them. I feel that I'm adding tremendous value to their life, and I also enjoy working with them. So, it's been a good 16-year ride. I started my practice in 2006, and at that point, I wasn't sure who specifically I was going to be working with. I thought regular folks, couples, friends. And then, as I started to meet more clients and also based on my own personal experience of being widowed, it turned about that I was getting a lot of referrals for women who were recently widowed. So, I decided to, in 2009, really create a niche practice where I worked primarily with women who were widowed, and then as it transitioned a little bit, I also started working with women who were divorced. So that is my primary focus, is women who are widowed and divorced. I have 50 clients, 35 of them are single women and 15 are couples. So, I will work with couples, but my focus is really on single women.

Michael: And the asset base for them is about $100 million?

Jennifer: Yes, $100 million in total for the 50 households that I serve.

Michael: I see. Plus or minus a little market volatility these days.

Jennifer: Right. Exactly.

Why Jennifer Decided To Become A CFP [06:05]

Michael: So, take us back to when you were starting a practice in 2006 to go down this road. So, I guess, first is I'm wondering, were you new to the industry and starting a practice, or were you already in the industry and decided to go out on your own and hang your shingle, as it were?

Jennifer: Right. So, I was new to the industry in 2006. I had worked for Chase Manhattan Bank for many years out of college, and I worked in private banking. So, I was familiar with working with high-net-worth individuals. But I primarily worked in a lending capacity, so I wasn't providing personal financial advice. I was a lending officer helping clients get loans, either against private company stock or ARD or custody assets. I had taken the classes in 1996, and in 1997, I sat for the CFP exam and I passed. And I decided at that point that I would stop working for Chase and that I would start working as a financial advisor. So, I worked for a couple years for, I think two years, for a financial advisor in Princeton, and I only worked one day a week just so I could get some experience.

And that worked well, and I learned about the financial planning process. I was able to use the CFP marks because of my experience working at Chase. And I learned a lot, even though it was one day a week. I had two young children and it afforded me an opportunity just to dabble in financial planning without actually going full steam ahead. So that was in '98 and '99 that I worked in the industry, more or less.

Michael: I was going to ask just how one day a week came about. So you had young children at the time, so I'm presuming then this was partially as a stay-at-home parent with young children, and then also doing one day a week of part-time work so you could get some experience and just balance work opportunities and family obligations?

Jennifer: Exactly. That's exactly correct.

Michael: So, I guess if you were already 10 plus years in at least broader financial services industry and at Chase, what led you to pursue CFP classes in the first place in 1996? Were you already having a vision then of, "I don't really want to work in the banking lending capacity. I'd rather be an advisor," and started moving that direction, or was something else going on that led you to take the plunge into CFP classes to begin with?

Jennifer: Actually, Chase was offering to pay for the program for private bankers who wanted to take the CFP classes, so that piqued my interest. And I also knew ultimately that I wanted to work with more regular folks and not wealthy families or ultra-high net worth individuals who I was working with at the private bank. So, I had an idea that what would give me more passion would be to work with people that were more like myself, and not work with family offices.

Michael: All right. Very cool. So, what was the goal when you took the one-day-a-week role with the firm in Princeton? If you didn't need it for CFP experience, because the Chase financial services experience still counted, what were you doing or trying to get out of that role?

Jennifer: I was trying to learn about the financial planning process in experience because what I had learned over the classes was wonderful, but I didn't really feel confident in how to bring that to a client. So, working underneath an advisor in Princeton, she helped me understand how to develop a financial plan, I think at that point we used Moneytree. So, I learned the financial planning software. I learned about investments, which I wasn't as well versed in from my years at Chase. And I just...

Michael: Right. A little more on the debt side of the balance sheet than the investment side of the balance sheet.

Jennifer: I was very good at understanding a tax return because as a lending officer, you needed to be able to pull apart at an individual's tax return. So, I was very good on that side. But the investments and the retirement planning projections, that's where I felt like I needed some broader experience. So, working the one day a week gave me an insight into how that process worked, and made me well aware that that was something that I wanted to pursue full time at some point when my children were a little older.

Michael: And how did you find the part-time role in the first place?

Jennifer: It was interesting. One of my instructors for the CFP review class knew of this, she was actually a NAPFA planner in Princeton and introduced me, and I met with her and we hit it off. And she needed some help and I was happy to help one day a week. It was an hour or so drive from my house, so it wasn't convenient.

Michael: Ooh. Yeah. That's a little bit of a haul.

Jennifer: Yes. But it was a great experience. And then after about a year or two, I decided that I couldn't commute any longer and I wanted to find something closer to home. And I did receive an offer from an RIA in New Jersey closer to my house where I could take on a full-time role. And right about the time I was about to accept that role, which was in 2000, my husband was diagnosed with Stage 4 colon cancer. So, I just decided that I couldn't take on a full-time job at that point. I needed a lot of flexibility as he and I went through the years that were to come with doctors' appointments and other challenges. So, I ultimately turned down the offer from the RIA firm and worked part-time while he was sick for about four years, for an accounting firm. I did want to stay working part-time during those years, but I did not want a lot of responsibility. So, I worked part-time for an accounting firm, and that helped me balance my responsibilities at home, my husband's illness, and also feel that I was staying current on my professional career.

Michael: Okay. And so, what happened next on this journey?

Jennifer: So then, in 2004, my husband did pass away from colon cancer, and my children were 10 and 12 at the time. So, I had to go through the experience myself of being widowed, and make sure that I got everything that I needed to do in order as a widow and a single parent. And I learned a lot, obviously, from that experience, as difficult as it was. But I also learned that as well prepared as I was, both being a CFP and having experience in finance, that I needed a partner to sort of help me make some good decisions. So, I started talking to financial advisors in my area, just networking, letting them know about my interest in joining a full-time profession, and also about some of the challenges and decisions I needed to make as a widow. And I found it extremely helpful to have their perspective. So, it really helped me understand that no matter how confident or capable you are in managing finances and investments, as a single person, you always need sort of a thinking partner to help you, sort of as a sounding board.

Michael: Interesting. And I guess in that context, particularly as a widow, as a single person at that point, because those may have been conversations you had with the spouse in the past, and that's not a conversation partner now, that's not a thinking partner now.

Jennifer: Right. Exactly. So that was sort of eye-opening to me, and it helped me frame my understanding of working with widows in the future. Because I knew how confident and comfortable I was with financial concepts and how difficult decisions were for me, I could only imagine for someone who didn't have that background or experience, how difficult it would be for them.

Michael: So, it's 2004 into 2005. You're now starting to look for jobs or opportunities. So, it sounds like the initial path was you were looking for financial advisor roles at existing firms that you could join.

Jennifer: Correct.

How Jennifer Launched Stonebridge Financial Advisors [15:01]

Michael: But ultimately, you launched your own firm. So, what happened?

Jennifer: Right. So, after my husband passed away, I knew that I needed total flexibility around my schedule. And having the two young children who were just about to be teenagers, I knew that I couldn't work full time and I couldn't also have a job where I was responsible reporting to a boss, which had needed me to be in a meeting at a certain time. I really knew that that was important, that my flexibility was important to me. So, what I decided to do was rather than go and work for a firm either in a part or a full-time job, I decided to establish my own RIA in 2004 and start working with friends and family, and networking, and laying the groundwork for what I wanted to build for the future. I was lucky enough to have some life insurance, and I also was receiving social security income for the children and for myself, so I had a cushion to be able to slowly build a business that suited my lifestyle and my family. And that's exactly what I did.

Michael: Very cool. Very cool. Obviously, just for what we do as financial advisors and as someone who started on the life insurance side of the industry, I long since moved away from selling and delivering life insurance policies. But one of the things that you learn and experience in the life insurance world is it's a very unique experience when you deliver someone a check for a claim when someone's passed away. And as tragic as those moments are, the flexibility and opportunity that comes when you can make decisions for yourself and family and not be in a dire financial situation because there was life insurance and there’s now dollars to fund that transition, to me just it's a very powerful testimony just around the benefits of financial planning and what we do when you were able to say, "Hey, I want to be especially maximally flexible for my children during this time. So, I can start a business where I'm not necessarily going to have a lot of income initially, instead of taking a salary job, because the life insurance makes that possible. And then I can build the thing that I need to build to support the family."

Jennifer: Exactly. Exactly. And my own experience with life insurance definitely has helped me when I'm in discussions with couples regarding life insurance and how important it is. And for term insurance, especially how inexpensive it is, but how it will provide the surviving spouse with opportunities that they would otherwise not have at a time when you really are trying to create a new life for yourself. And you need to have as much flexibility as possible.

Michael: Yeah. Wow. So, talk to us more about what this launch looked like, what this initial firm looked like as you were getting started.

Jennifer: Well, in 2004 and 2005, the firm was Jennifer Murray CFP, and then I think I had another name, Chatham Financial Advisory Group, which was the town I lived in. And I really just worked with friends and family or anybody that was referred to me. I worked out of my house, I did financial planning. I would do some investment analysis or recommendations, but I was really just getting my feet wet. I spent a lot of time going to FPA conferences and NAPFA conferences, and I networked a lot and met some really wonderful advisors in New Jersey who helped me every step of the way. I remember calling an advisor that I became friendly with in New Jersey when I had some questions about investments, and I just found the willingness to help amazing. And it really just allowed me to slowly build my confidence that I would be able to pursue a career in this field.

So, I just really took it slow and steady for the first two years. And then in 2006, I decided to form Stonebridge Financial Advisors. And that's about the time I knew that this was going to be a long-term career for me. I had spent the first two years kind of analyzing that and I was confident at that point. And my husband was the director of bridge construction for New York City and stone, I thought was strength, and I thought so many women need strength during a difficult period. So, I named the firm Stonebridge Financial Advisors. And I thought that a bridge is a good metaphor, a good symbol of sort of a transition or two people meeting on a bridge, one person having crossed the bridge, or going over troubled waters. I just felt like it was a good name for my firm.

So, I named my firm, and I would go to NAPFA study group meetings and I met Bernie Kiely who was running the meeting, and telling him about how I had started my business and how I was doing. And he was moving offices and he had an extra space in his new office, and he asked me if I wanted to sublet it from him. And I was a little bit hesitant, but then I took the leap of faith and I started here in my Morristown office in 2006 under the name Stonebridge. And then I feel like I really got serious about setting up a business plan and taking all the necessary steps to really make the business grow.

Michael: Very cool. Very cool. So share with us a little bit more, getting to that point of confidence to say, "Okay, I think this is the thing I'm going to do and stick with," as opposed to not, or potentially going another route.

Jennifer: I think for me it was feedback from clients or people that I helped just saying, "You're really good at this," or, "Thank you so much for explaining this to me," or, "You've helped me tremendously." So just getting feedback from clients that I was making a difference or that they appreciated my advice, and I think their confidence in me gave me confidence in myself. I felt like I was generally a little bit not very confident in my ability to start a business. And I remember my dad and my husband saying to me, when my husband was sick and my dad was visiting, and my dad worked for the government and my husband worked for New York City. And I think at one point I was telling them both, "I think I may, at some point, start my own financial planning business."

And they were both, "Why would you do that? Why would you start your own business? Why don't you just go work for somebody?" And then I had to remember that they both came from government employee jobs, so they did not have the same risk appetite that I had. But I knew that I needed flexibility. So, when I started to hear from clients that they were happy with the services I provided, it built my confidence to actually say, "You know what, I'm going to set up an LLC, I'm going to rent office space, I'm going to network, I'm going to take a leap of faith." But I do believe that the confidence, not only on the part of my clients, but also on the part of other advisors in New Jersey that I networked with who said, "You have an amazing story. You have a background that's well suited for this industry and we're here to help you any step of the way." So, I feel like I was blessed on both ends.

Michael: So, as you're trying to get initial clients in that first year or two, I guess I'm just wondering, what was it like and what was the dynamic trying to get those first few family and friend client referrals? Were you managing their retirement portfolios and the whole full-service sort of thing? Were you simply doing piecemeal advice, pay me by the hour for advice and engaging that way? What was the scope of planning when you were first getting started?

Jennifer: Before I established Stonebridge Financial Advisors, I was doing hourly financial advice. And my first client was my personal trainer, and then it was his parents, and then it was a friend of his, and then it was one of my neighbors. So, it just kind of fell into place for me. And they were all good friends, so that I felt like I could take my time, do good work and feel like I could learn at the same time as I was helping them. So, I did hourly financial advice up until I started Stonebridge Financial Advisors. And then when I started Stonebridge, I was still thinking that I would do hourly financial advice or financial plans, but I did a plan for a neighbor of mine, a couple, they were both attorneys. I presented a retirement plan for them, and I made some recommendations about portfolio allocation. And I was at their house, I remember it was an evening meeting in 2006. I had only formed Stonebridge a couple months earlier. And they said, "Well, who's going to make the changes to our investment accounts so that they're more in line with what you're recommending? And I'll never forget, I said, "I will."

Michael: I guess I can do that for you.

Jennifer: It was such a...I remember that moment like it was yesterday. And they said, "Okay, that sounds great." And then I remember leaving their house and coming into the office next day, and I saw Bernie Kiely and I said, "Bernie, you're not going to believe this, but I have my first investment management client." And he said, "Wonderful." And I said, "I don't even have a custodian." I said, "What am I supposed to do?" And so, he was great, he said, "Okay, I'm going to call a contact I have at TD Ameritrade. I'm going to tell them about you. And I'm going to see if they can help you set up a custodial relationship." And he did that for me. And I started on the TD Ameritrade trade platform in 2006. I became approved as a dimensional fund advisor, so I started using some of their funds.

And Bernie also gave me his investment advisory agreement, because I didn't even have an investment advisory agreement. I had a financial planning agreement, but I did not have an agreement for a client to sign to give me authorization as their investment advisor. So that was really just kind of a, everything kind of fell in place after that. But it was a big leap of faith on my part to all of a sudden go from hourly financial planning to, and this client had several million dollars, to managing several million dollars.

Michael: So, it was a big client out of the gate.

Jennifer: Oh, yes, it was a very big client. And then, with time, I started getting more investment management clients. And a lot of my friends, being a single woman and living in a suburban town like I do, there were a lot of women that were rooting for me to do well. I got a lot of referrals. I also had a friend of mine, I remember in the early years, 2006, there was a fundraiser. And every time there was a fundraiser, she would say, "Can I buy a gift certificate for a two-hour consultation with you? I want to donate it to a fundraiser that either the church is having or someone else is having." So she really tried to help me get my name out there and...

Michael: That's awesome.

Jennifer: Yeah, it was good. So that's sort of how it started in 2006.

How Jennifer Grew Her Practice By Working Primarily With Widows And Divorced Women [27:44]

Michael: So, as you were getting started with this, you said, ultimately, you have this focus into widows, it expanded a little bit further into divorces later. So, was the widow focus there in 2006 when you were getting started? Because you tragically had been recently widowed at that point, was that the focus out of the gate or did that only come later?

Jennifer: That came later. So out of the gate, I was just looking to work with, at that point, anybody who wanted financial advice, just because I really wanted to learn also. And I wanted to learn as much as I could about different client situations and scenarios. But I think the realizing in meeting with clients or I would do seminars at the library or at different bereavement groups or at a hospital foundation. So, I would network, and people would ask me to give talks about what every woman needs to know about her finances. So, I was doing some seminars like that, and what I started finding is that women would come up to me at the end and tell me a story that either happened to them or happened to someone else where they either as a single woman or as a widow were not well served by either family or other financial advisors.

So, I started to realize that that was a group of individuals that I could really make a difference because having a lived experience, but also sort of being an advocate for women in that situation. So, I guess within a year or two, I realized that that was a group of people that I really wanted to work with. And it was around that time that I developed my website. So, I did not have a website until 2009. And a lot of people would say, "You need to have a website so you can get your name out there." I did not. I was a little hesitant to do that. But when I designed my website, which has not been redesigned, unfortunately, since then, so if you go to my website, you'll be very shocked at how antiquated it is, but I tailored it specifically for women.

And that was a choice that I made because I did want to work with women. I did want to hold myself out as being a specialist in that area. And I figured if couples also wanted to work with me, that was fine, I didn't think that they would say, "Oh, no, I'm not going to call her," or, "She's not going to be the right person for us," because my website was tailored to working with women. But it gave me a lot of credibility, and I remember women saying to me when they'd call, "I really liked your website." And then they'd say, "I didn't know whether I was on the website for a financial advisor or a yoga studio." So, it kind of had a very soft feel to it and I think it was not intimidating. So, I started, it was 2010, which I took on about, I don't know, 10 clients, and I think part of it was my presence on the web.

Michael: So, talk to us a little bit more about what growth looked like in the early years. I mean, I am struck kind of the first sizeable investment client actually came from not offering investment management as a service, but solely being in the hourly realm, which is a path I've seen for a lot of advisors over the years. A lot of folks that start out as hourly end out moving towards investment management, because at some point you sit across from a client that says, "Can't you just do this for me? I already worked with you, I already trust you, can't you just do this for me? I don't really want to do it myself." But there is something interestingly powerful that for a lot of advisors that start in the investment side of the business, the only thing we have to sell is investments.

That's where we start. That's where we create our value proposition. And that can be a tough sell. Starting on the planning side to the point that you're literally charging full-fledged, hourly planning fees, it absolutely forces you to really deliver good, full-valued financial planning or you're not going to get your hourly fee. And that often ends up being the thing that creates the deep, meaningful relationship and trust with the client that then makes them say, "Can't you just do all of this for me as well?"

Jennifer: Right. Absolutely. And I would say that I always led with planning. Any of the clients that I did work with, they usually came in for planning initially. And then at some point, they would make a decision that they wanted ongoing investment management. It wasn't probably until about 2015 or 2016 where I stopped taking any sort of financial planning-only engagements, but a lot of my growth from 2010 to 2016, let's say, came from planning. Either a client, I did a plan for them, let's say in 2010, and then they may have come on as an investment management client in 2012. So, I was doing standalone planning up until about 2016. And then in 2016, I got to the point where I was sort of maxed out with 50 clients, and I wasn't able to do standalone planning.

So, I stopped offering that service, but I did offer what I called a two-hour consultation. So, if a client came in with a limited scope project or discussion that we could have in two hours, I continued to offer that service, but I really didn't want to do the first draft and the final financial planning. And I also felt like as time went on, clients were less interested in that. And it just became kind of a, I felt, a waste of a good relationship, but that a series of two-hour consultations was a better use of my time and their time. And it made them more accountable versus just doing the first draft and then having them come back, but not having done any of the work that was asked of them in the first meeting. So, I learned a lot through the planning process, and I would consider myself an excellent planner for the, I'd say, I did about 25 to 30 financial plans in one capacity or another, from 2010 to 2016. So I learned a lot from the 300 or so clients that I met during those years.

Michael: So, talk to us about just how the growth actually flowed as you started taking on clients, as you started taking on assets on management clients. First year or 2 of '04, '05 was the friends and family hourly work, let's just get some confidence and make sure this is the thing we want to do. You launched formally in 2006, ultimately decide to focus on women in 2009. So, take us back to that period of '06, '07, '08, '09, what did growth look like? How many clients were you getting? What did revenue look like in the first few years?

Jennifer: Okay. So, in '06 I had 3 clients. So, the one I had told you about, and then I had 2 other clients come in in '06. So, in '06, I was probably, I think I had about $41,000 of revenue. So, I had about, I think in 2007, I had $7 million of assets under management. So, I didn't have a lot, but I was able to, because I said I also had social security income and I had life insurance, I was able to kind of cover my living expenses and cover the business expenses. So I was doing all right up until '09. Now, in '07 and '08, I did not get any clients. No investment management clients. I had financial planning clients, but no regular ongoing investment management clients.

And then in '09, I got 3 investment management clients, and then in 2010, I got about 10 investment management clients. And I think part of it was my website and part of it was these clients had been through '08, '09 and realized that they needed some ongoing investment management help and financial planning assistance. So, by the end of 2010, I had about $18 million under management, and that was really kind of a tipping point for me in 2010. And then in 2011, I had about $30 million. So I'd say my AUM went up by about $10 million a year through a period of years. And it wasn't until 2014 that I was able to pay myself a salary commensurate with what I would make if I had gone and worked for a larger RIA as a senior wealth advisor.

So, it wasn’t until 2014 that I really wasn't able to... My net profit wasn't such that I was able to pay myself what I would say was commensurate with my experience. But after 2014 until today, it's all gravy, it's all profit, which is wonderful. So there was that...

Michael: The business scales very well once you hit that crossover point.

Jennifer: Oh, yeah, exactly. And I hit that in 2014. So that was a good point for me. And I think up until 2014, if I went into a client financial planning meeting, I was so overly prepared and nervous and just always thinking I was going to say something wrong or give bad advice. I really didn't feel that comfort level. And it wasn't until, I guess, I was 10 years of running the business, maybe 2016, where I felt like I could go into a client meeting, and I had enough knowledge to be able to dispense good advice. And what I didn't have the answer for, I felt confident saying to the client, "I need to get back to you on that." And before then I felt like if I said I needed to get back to them on something, that would mean that I wasn't good at my job, or I didn't have enough knowledge, or I wasn't as professional as I thought I was. But I think the confidence that came from being able to say to a client, "This is something I haven't seen before. Let me look into it," it was a time in my career where I started to feel confident in my ability, and not worry if I didn't have the answer.

Michael: I'm struck by the journey as well of just 3 clients in '06, at least no additional investment clients in '07, '08, only gained the planning only clients, just 3 more in 2009. And then in 2010, you picked the specialization, made a website that speaks directly to the specialization, and brought in about twice as many clients that year as you had in the prior 4 cumulatively. That's a very dramatic shift for getting that shift. So just talk to us a little bit more of what changed that it was just such a turning point in growth of the firm.

Jennifer: I think it really had to do with the website, because if a client googled financial advisors for women in New Jersey, my website would come up and I was starting to get calls. I think I got some from the NAPFA, the referral program. I can't remember what it's called now. But because I was a NAPFA member, I was getting some NAPFA referrals. But I got some large clients who were widowed. And that really helped because there was a significant amount of assets under management at that point. I also had a CFP candidate who had passed the exam but needed the experience. And she worked for me for a couple of years, 2010 and 2011, so I had some support while I was taking on those additional clients. And then the same thing, I had another CFP candidate who worked with me to get the experience in 2012.

So, for those high growth years, which were 2010, 2011, and 2012, I did have support of another financial advisor to sort of help me through those years. Because at that point, I don't even think I had Redtail. I was writing my notes, I would come out of a client meeting and type up my notes in Word, and then put them in a binder. I don't even think I was scanning things then. I had binders for every client. It was very antiquated. But I had support and I had a lot of confidence that it was going to continue to grow if I wanted it to. And I remember being at a NAPFA conference and there was a panel of women advisors, and they were talking about success and being a female advisor.

And that was about the point where I was trying to figure out, should I hire someone? What should I do in terms of promoting myself more? And I remember one of the advisors had said that success is having a practice that's perfect for you. Having the dream practice. And I thought long and hard about what that meant to me, and I realized that I wanted to be a solo financial advisor. I did not want to hire a team to work with me. I wanted to have the relationship with the client and have total control, for lack of a better word, over that relationship. So, I made a conscious effort in 2011 to really only take clients that were in line with the type of client I wanted to work with. Because I know I didn't want to grow for growth's sake. I wanted to grow very intentionally.

Michael: And what defined that right kind of client for you?

Jennifer: Women. I think I really liked working with women. My experience was such that it was very relationship-driven, very collaborative. I liked the feedback that I got at the end of meetings, how much I helped them, how much more confident or empowered they felt. And I would often say that when you have a couple as a client, you have two clients, but when you have a single woman as a client, it's one client. And then someone said, "Yes, and sometimes when you have a couple it's really three clients, it's him, her and them." So, I felt that I liked working with women because it was a one-on-one relationship and it wasn't a two-on-one relationship, and I liked that. And, I don't know, it just happened that way. I guess it's just women liked working with me and I liked working with women, so I decided that that would be my specialty.

At one point, I went to a divorce association for divorce financial planners, and I was thinking of specializing also in that area and working with women who were divorcing, but I didn't really like that very much. I felt like I would work with a woman well after she was divorced. But going through the divorce process, I did not think I was well suited for that. So, I do have clients that are divorced, but they came to me years after they had gone through the process, and I was able to work well with them. But the couple clients that I would do hourly work for who were actually going through a divorce, I found it really challenging. So, I pivoted away from that and decided to just concentrate on most predominantly women who were widowed.

Michael: And you had said just overall this realization after the NAPFA session of, "I really wanted to be a solo advisor." So, I guess, describe more what was it about solo advisor that made it, "This is what I want it to look like," or alternatively, what did you not like about not solo advisor?

Jennifer: Well, I guess I really liked working with clients and I wasn't sure how much I wanted to pull myself away from that and develop a team or have human resource issues or concerns. I just didn't want to feel like I had anything else on my plate other than serving my clients as best I could. And I felt like if I built a business, then I had to worry about employees and I had to worry about payroll, and I had to worry about what they may or may not be doing in a meeting, or whether or not they were coming to work. And as a single parent, I felt like I had enough on my plate in terms of managing the family, that having employees was going to be something that was going to be a challenge.

And when I did projections, I figured out that I could do very well just sort of having a simple, staying in my lane and having a very simple practice that was very concentrated. And I didn't need the... I felt like to a certain extent, yes, my ego would like to know that I had, instead of $100 million under management, I have $1 billion under management, and I have offices in 3 states. That wasn't important to me, and it would take a lot of energy, I felt, on my part to get to that place. And I wanted a better balance in life, especially in light of what I'd gone through with my husband, that good enough was good enough, and I was very happy with what I saw as a future as a solo advisor.

Michael: And so, what did you look at as the future? How did you project it out or what were you looking at to say that these are good numbers, or this is good opportunity, this is working for me.

Jennifer: Well, at that point, I was taking on probably 8 to 10 clients a year, so I figured if that continued and my AUM was going up by about $10 million a year, that that would provide me with a very good living. And that was what was happening. So, it was kind of coming to fruition. What happened in 2004, is a financial advisor that I had met in a study group meeting asked me out to lunch and we had lunch. And he said that the reason that he had asked me was he was preparing a letter to be sent to his clients in case anything happened to him, he either became disabled, or passed away, his wife was to send this letter out to his clients. He was a solo advisor like me. And in the letter, he was going to give his clients a recommendation of a couple advisors in New Jersey to contact. And he asked me if he could include me in the letter. And I said, "Sure, absolutely. Thank you very much." It was funny because when he took me to lunch, he was asking me all sorts of questions. And I felt like, "I feel like I'm on a date." He was interviewing me.

Michael: And it turns out you were.

Jennifer: Exactly. And then at the end he said, "Well, the reason I asked you out to lunch," and then he told me. And so, I said, "Sure, absolutely." And then, never thinking that anything would happen, a year later, he did pass away.

Michael: Oh no!

Jennifer: Yes. And his wife called me to tell me that he had passed away and that she was sending the letter out. And she wanted me to know that he had passed away so that when I get calls, I'm prepared. So, I did receive calls from about 10 of his clients, I met with about 8 or 9. All except for one hired me. So, in that year, I took on eight of his clients all at once. And it was maybe $10 million or $20 million. It was a large amount, and that kind of also boosted my practice in terms of taking on $20 million without...

And the other thing is he said, "My wife is fine. There's life insurance, she's not going to need anything. So, if they come to you, it's just for you." So, it wasn't like I acquired the clients from his estate or anything like that. So that was a really big boost to my business. And interestingly, of the eight, I still have five, but three left. And two of them were couples and they just were not good fits. And it was interesting because when I took them on, I thought, "Oh, this'll be fine." But shortly after, I started to see some red flags and they ultimately left, which was fine.

Michael: And what were the red flags? What are red flags for you?

Jennifer: Well, one of the clients would question everything I did, any trade I made. And I was on a discretionary basis, but he would come in and say, "I don't understand this," or "I don't understand that." And come into my office unannounced and just kind of show up. And I said, "You really need to make an appointment. We just talked about this in our last meeting." But he was very confrontational. And I do remember he came in on a Friday kind of unannounced and started questioning some things I had done, which were all in line with what we had spoke about in our last meeting. And I did say to him, "I don't think I'm the right advisor for you because you need an advisor that you can trust, that you're not going to come in and have these questions and be questioning me on things that I've done." And so, he said, "Well, no, no, I don't want a new advisor. I want you as my advisor." And I said, "Well, I'm not sure that I want you as a client." So, I had that difficult discussion, but...

Michael: And did you ultimately say that, I mean, have to say to him...

Jennifer: Oh, yes, yes.

Michael: "...But I don't want to work with you?"

Jennifer: Right. "I don't think that you are the right type of client for me. I work with clients who are more," and I explained what I was looking for in a client relationship. And then I remember him saying, "But I don't want you to fire me." And I said, "Well, let me think about it over the weekend." And then the next Monday morning, I sent the letter.

Michael: "I've thought about it. You're still fired."

Jennifer: Yeah. Yeah. I've been very intentional about when I do see red flags with clients who I don't feel like value the advice I'm giving or don't value the relationship, of saying, "I don't think I'm the right advisor for you. The right advisor for you is someone who you're going to listen to. And if you're not listening to me, then I'm obviously not the right advisor." So, I have had opportunities where I've had to, what do they say, graduate clients, but I feel like I'm always doing it from a place of, you need a different advisor. It's not you, it's me. But sometimes I'm thinking, no, it's really you.

How And Why Jennifer Intentionally Serves A Limited Number Of Clients [51:54]

Michael: And so, you had this wonderful growth cycle from 2010 to 2015. And then you had said you were starting to feel like you were maxing out. So, what were you at for clients at that point? And how did you know you were starting to max out?

Jennifer: I had about probably 45 clients in about 2015, so I was starting to feel like I was working longer hours than I wanted to. I was putting more time in in the office than I thought I needed to. And I needed to kind of come to a decision about whether or not I was going to hire staff at that point. I mean, that was clearly the point where after the other advisor's clients came on board in 2015, I really needed to make a decision. And I hired a part-time assistant then. So, I had gone for about 3 years without any support at all, and then I hired a part-time assistant in 2017, and she's still with me now. And she does administrative functions and that's fine, but I still do all the planning and the investment management myself.

Michael: So, what happens after you're at capacity?

Jennifer: I guess I try to make... when I was at capacity, at that point, I was never very good with technology. I was never one that was constantly implementing new technology. I used Redtail for my CRM. I had used PortfolioCenter for portfolio management. I did switch to Advyzon, which was a big help to me in 2020 because the portfolio management side of the operation was starting to bog me down. I did not have PortfolioCenter in the cloud and I wanted everything to be in the cloud because I was starting to travel more and be out of the office. So that was a big step forward in terms of getting off of PortfolioCenter and getting onto Advyzon. I started using Holistiplan of recent. I've just started using technology more to help me with the streamlining processes.

The other thing is I really feel strongly that it's only in the first three or four years, maybe even just three years, where you're really getting to know the client, that it's very labor-intensive. So, I had clients going back to 2006, here it was 2016, yes, I had 45 or 50 clients, but a lot of them, those 45 or 50, had been with me and I knew them like the back of my hand. So, if they'd called me, I had a very good handle on what exactly was going on with them personally, with their accounts. So, as I took on additional clients in 2018, 2019, 2020, the other 45 or so were under control, if you know what I'm saying. They were not as labor-intensive. And some of them I would only hear from once or so a year. So, it was not the same as the first years where I'm trying to get everything in order and try to get to understand the client, what their risk tolerance is, etc.

Michael: And so, was there anything, I guess maybe the wrong way to frame it, but was there something magical about 50 clients, and did you target 50 as a round number as opposed to 60 or 40? Was it more of a, it just kind of feel like the amount of busyness I have in supporting these 50 clients is feeling like about the right level of busyness, so this is the place I'm going to park and it turns out it's 50? How did that threshold come about for you?

Jennifer: I don't really know exactly. I think it felt like the right number for me. It was kind of a round number, it was an even number. I just felt like that was where I could continue to provide excellent service. And in 2021, I did take on 4 clients, but I also lost some clients because they had passed away. So, it kind of works out that I may take on an additional client in a year, but I'm also losing a client, let's say, to death, that I'm always kind of right around the 50 mark. Maybe a couple clients more, but then it'll kind of settle back to 50. But I don't really feel that I can grow from here without having staff, and I don't want to hire staff.

So, I'm thinking long and hard about what the next couple years will look like in terms of most likely merging with another firm by the end of the year. Because I really would like to continue to work with clients, I just don't have the capacity. But especially working with widows those first year of getting them through, making some tough decisions, and feeling confident in their situation, I enjoy that, and I don't have the ability to do that. And I do get referrals, and I try to help as much as I can, but I cannot take them on as ongoing investment management clients, because I just don't have the capacity.

Michael: So, what happens when prospects reach out now and there's no seats on the bus, as it were? You're at 50 and no one is imminently moving out to free up a seat. What do you do? How do you handle it? Because it sounds like sometimes maybe a client has passed away and you are willing to take a new one, other times, someone may reach out, but you don't have room to take a new one. So how does this work?

Jennifer: Well, generally, I'll refer them to the NAPFA website to find an advisor and try to find somebody in the area, or if I know enough about the situation, I will refer them to another advisor that I know in New Jersey who might be looking to take on additional clients. There's an advisor who works a lot with women who are divorcing. So, if there is a situation in that, I will refer them to her. If it's a widowed client, I generally try to help them if I can. And I have taken on a couple more clients because of that. But it's uncomfortable. It's not an easy situation to be in, and that's one of the reasons that I'm thinking about succession planning, because I would like to be able to continue to take on new clients and help new widows, but also have some support for the financial planning and the trading and the rebalancing for my existing long-term clients.

Michael: And how does the fee structure work for what you're doing at this point? At least it sounds like you've moved away from the planning only work pretty much entirely, so it's all AUM fees?

Jennifer: It is.

Michael: And what does the fee schedule look like for what you do?

Jennifer: It's generally 1% on the first $1 million, 75 basis points on the second $1 million, and 50 basis points on anything over $2 million.

Michael: Okay. And just one standard fee schedule everyone fits. It's not like one fee schedule for widowed clients, one fee schedule for couple s.

Jennifer: No, it's the same for everybody.

Michael: And what's the core technology tools and systems that you use at this point to manage 50 clients and $100 million as a pure solo?

Jennifer: Well, I use Advyzon for my portfolio management. I use their system primarily for my client reports, for rebalancing, really, for anything related to the client investments. I also have some high-level notes in Advyzon, but I do not use their CRM. So, I'm really just using Advyzon for portfolio management. I use Redtail for my CRM. I use Holistiplan for tax planning, and I find that more and more, that is where I can add the most value with clients, especially widowed clients and some of the specific tax situations that they're in, or ability to do Roth conversions and other tax strategies or tax-saving strategies. Let me think what else I use. TD Ameritrade is my custodian. I use ByAllAccounts to bring in to PortfolioCenter held-away accounts that I charge on. I think that's pretty much it. I use QuickBooks for my bookkeeping. I might be forgetting something. I use ShareFile as my document management system, and I also use that as a client portal.

Michael: Your account aggregation for ByAllAccounts for bringing in held-away accounts, is that just for being aware of all the things that are out there, or are you effectively managing or helping to advise on held-away assets and actually billing on advised assets that are held away in addition to discretionary assets on TD Ameritrade?

Jennifer: I do bill on held-away assets. Not all held-away assets, but initially, I was billing on held-away assets. Right now, I'm not billing on new clients with held-away assets, but initially when I was starting my practice, there were quite a few clients that had substantial held-away assets that I was giving advice on. So, I did start billing on them. Of late I haven't been doing that as much, and I'm just using the assets that are at TD Ameritrade, the discretionary assets there, to bill on.

Michael: So, tell us more about that journey. I guess you started with it because it was an opportunity to add more value in the relationship and get compensated for that value. If you were billing on held-away assets that you were advising on, what led you to stop that?

Jennifer: Well, I was bringing in fewer clients in the last couple years and if they had 401(k)s, they were generally at a recent job. So, there wasn't a large balance in them anyway. It was a very small percentage of their overall investment portfolio. So, it almost became more trouble than it was worth to pull them in through ByAllAccounts. So, I just would give them a specific asset allocation to maintain in their 401(k), and then just take that into account when I was managing their assets that were outside the 401(k). A lot of clients had done 401(k) rollovers because they were moving jobs quite a bit. So more and more of the assets were coming into TD Ameritrade. And I found that there was less held-away assets with the newer clients that I was working with. So, because they were so small compared to the overall relationship, I just decided to not bill on them at all.

Michael: Well, and maybe I'm just imagining in my head, but I would envision a piece of that as probably related to being more fully focused in with widows as well. That because a lot of job and career changes tend to happen when a widowhood event happens, much more, unfortunately, a deceased spouse's retirement plans now get rolled over, life insurance gets paid out, a job change often happens with widowhood, which means the 401(k) dollars may be in motion rolling over and consolidating anyways. So, it would seem like being more focused with widowed clients, in general, would tend to end out more often with clients that just don't have significant held-away balances because of the widow focus.

Jennifer: Exactly. Exactly. That is a large part of it. In the beginning, when I was taking a lot of clients who were couples, they may have each had a 401(k) and it might have been a very, maybe half of their overall investible assets. So, you couldn't really provide advice on the accounts at TD Ameritrade without taking into consideration the accounts held away. And plus, also for asset location, in terms of having a specific asset allocation for the 401(k)s versus having an asset allocation for the taxable accounts, it was complicated. So, I felt like I needed to charge on the assets that were held away but that hasn't been so much of a situation of late. And I think you're right. A large part is because working with single women, there tends to be more of a consolidation and there also tend to be more at a point where employment, especially for widows, depending on their age, obviously, is not as big a consideration. And therefore, retirement balances are not substantial outside of what they have in their IRAs at TD Ameritrade.

Michael: And why Redtail CRM if you're in Advyzon and it does have a CRM offering as part of its system? I'm just curious what leads you to have Advyzon and Redtail.

Jennifer: Because I'm very bad with technology and I don't like change. The thing is, Michael, I guess the best way to describe my practice is I've spent a lot of time working with clients. I have not spent a fair amount of time fully integrating my technology or fully understanding the functionality of technology. I am a late adapter of technology, and I have a lot of... I'm in a NAPFA mixed group, and there was one woman in our group who was always, every time we were at a retreat, she was talking about some new technologies she was implementing. And I was like, "Oh, my gosh, that would drive me insane." And she's like, "Oh, I love technology. I love fooling around with this, that, and the other thing." I said, "Okay, whenever you find the best CRM, can you just let me know?"

And then she said yes. And then she told me about Redtail. And I'd say, "Whenever you find the best of this..." So, I really was... I know my strengths. My strengths are being in front of a client, giving them my full attention in a meeting, having them leave the meeting knowing that they're in a better place than they were when they came into the meeting, even if I have to give them some difficult news. But that I do it with compassion and with kindness and with a sense of bringing my broad knowledge to the meeting. I do not have the patience to learn a new CRM when the CRM I'm using right now is perfectly fine. And switching from PortfolioCenter to Advyzon, that was a big step for me, because that happened in the beginning of 2020.

And that was right around the time of COVID, and there was a lot going on. There was a lot going on with markets and I needed to get back to clients quickly, and I was learning this new software. But you know what? I did it and with my assistant's help. But that's not what I like doing. That is, if it's not broke, don't fix it. That's my philosophy. And I know I've been talking to the people at Advyzon, and they've told me about their CRM, but you know what? Redtail works fine for me. All my notes are in there, I know where to find them. It's easy. I kind of keep, what is it, keep it simple. I try to keep my practice as simple as possible so that I can work with clients and not feel that I'm spending a lot of time working on changing systems in the practice.

Michael: Well, and I'm struck too, at the end of the day, for all your comments of technology systems and integration is not my strength. You're running a fantastic practice of $100 million under management as a solo advisor with one part-time assistant. To me, it still speaks to there really is some pretty amazing leverage and efficiencies that come with technology as we just get used to our particular systems, whatever we use, and live into what's there and use them to the best of our ability.

Jennifer: Right. Right. And I have done that. Especially using Redtail for as long as I have, I'm learning something new all the time, but I have a comfort level with it. So, if I transition to another CRM and then I need to find a note, I might be frustrated and that it's not exactly where I wanted to be. So, Redtail CRM doesn't cost very much either. So, it's not even like I'm paying for two softwares where I could be saving a lot of money. The time that I would spend transitioning from, for my hourly rate, it would be not a good use of time. I'm better off just paying the $99 a month or whatever I pay for Redtail CRM versus the $1,200 of frustration that I would incur trying to find something in Advyzon.

Michael: Yeah. I do think it's a powerful point. A lot of advisory firms, I find, really underestimate the time and staff challenges and hassles that come with making a system change to getting an incremental cost savings on some software. And it's one thing because software B has just this amazing new feature that you absolutely want that you can't do an A and so you're going to go to B to achieve the new vision of the thing you can do with the new software. But switching software for cost savings alone, just nice thing about having very profitable advisory firms is none of our technology is really deal-breaker level cost to the business. Losing the time of redoing software systems is much more of a business cost than the software itself. And so, as you said, when you get to points where it's not broken, it can really pay to not try to go out of your way to fix something that isn't broken.

Jennifer: Right. Right. The one software that I did switch from was I was using BNA Tax Planner, and I did switch to Holistiplan. And I'm very happy with that. So that was a switch I made, but I really wasn't fully using BNA. I really hadn't ever, I think, got up the learning curve on that. So, leaving BNA to go to Holistiplan wasn't like I was recreating the wheel. I felt like it was a new technology or a new software that was not really replacing, for lack of a better word, something else. So that I did like. And I've been with MoneyGuidePro for, I don't know, since 2006, when I started my practice, when I started doing financial planning. Like I said, the advisor I worked with before used Moneytree and that I thought that was pretty complicated, but MoneyGuidePro I've been using.

But I can do a financial plan in a two-hour consultation. Not a detailed one, but a client can come in for two hours and sit with me, I can pull MoneyGuidePro up on the screen and give them a pretty good idea of what retirement could look like for them. And so, that comes, obviously because I'm very comfortable with it, and people are like, "Wait, in two hours you can sit down and you can input the assets?" And, yes, because I know my way around it. I've been doing it for 16 years. So, my efficiency, I think, comes from the fact that I don't try and change things. I get really good at what I'm doing and then I'm able to use that as a way of making client meetings as beneficial for them as possible.

The Value Jennifer Provides Her Widowed And Divorced Female Clientele [1:12:19]

Michael: So, I want to go back, you had said much earlier on that part of what had drawn you in the direction of working with widows was that you were talking to widows and sort of seeing and reflecting that they were not well served by a lot of financial advisors. So, I'm just wondering in terms of what you do as a financial advisor focusing with widows, like what are you doing or how are you engaging with the clients that you work with that fills a void of what's not being done well by other advisors?

Jennifer: Okay. Well, I think the thing that I do well with recently widowed or widowed clients is provide them an opportunity to take things really slow. And I think a lot of advisors, at least from what I'm hearing from other clients, is that their advisor wanted them to make changes really fast. Fund an account, take the insurance check and put it in an investment account right away. Or just really feel that things were kind of being done in a haphazard sort of chaotic way. And I try to use the meetings as sort of single-topic meetings. So, when you're recently widowed, there's so much data gathering, and insurance, social security, employee benefits, investment accounts. It's overwhelming in terms of the number of pieces of information you need to gather.

So, what I do with clients is I have them come in, we obviously talk extensively about what happened, how their husband passed away. Anything just to get to know them as a person obviously, and what the experience has been since the passing. And then I just kind of say, "We're just going to take the next year and we're just going to get everything in place. And we're going to have a series of meetings and each meeting is just going to be about an hour long and it'll just be a single topic. We'll just work on one thing each time, and we're going to just get through it. I'm going to help you. I've done it before, I did it for myself, I've done it for many other clients, and I'm going to help you. And it may seem so overwhelming right now as you're sitting here in the meeting with me, but I can assure you in a year, you're going to be surprised at how much progress and success you've made."

So, I think using a process in that first year to make the client comfortable with what to expect is tremendously helpful. And I've heard from other widows, "I met with somebody and all he wanted to talk about was investments. All he wanted to talk about...and he never asked me what my goal was. He just was asking me about my investments. And he said, "You're just going to be fine. Don't worry about it. You're going to be fine." And she said to me, "I didn't want to hear that I'm going to be fine. I wanted someone to have a conversation with me about what do you want to do? What's important to you? What are your concerns?"

So, I think it's a prime example of slow is fast and fast is slow. And the slower that you can go with a client, the more they trust that you are going to be their partner for the next year and not until the next meeting or until the next investment account is funded. So that's what I feel like I try to convey in my initial meeting with the widow, and that usually is something that resonates with them, and they decide that they want to work with me.

Michael: And so, I am wondering you do operate on an AUM model, so how are you getting paid over the intervening months or years of lots of meetings and taking it slow? Is there a structuring around the fee model? Are they ultimately still moving portfolios in a timely manner, even though that doesn't happen to be the focus? Just how does that work to make sure you are getting compensated for all the stuff you're doing over this year?

Jennifer: Right. Well, currently, I'll only take a widowed client if they're going to be an ongoing investment management client. I will do a two-hour consultation if a widow comes in and says, "I need some financial advice, but my brother-in-law is helping me," or "My late husband had an advisor through his employer. But my neighbor said I should talk to you."

Michael: Okay.

Jennifer: Yeah. Right. So, they'll come in, and I say, "Well, okay, I'll offer you a 2-hour consultation and I charge $300 an hour for the 2 hours. And I can answer any questions you have." But that's a consultation. And if in the meeting they say, "You know what, I would be interested in working with you in the future," or "Can we stay in touch?" Or something like that, then, yes, they would then come on as an investment management client. But most of the women I work with who are widowed tell me upfront, "I want to work with you. I want you to help me manage my investments going forward." So, I guess, for lack of a better word, I take them at their word for it, and I do the work. And I do not charge a financial planning fee for the time, the maybe 5 or 10 hours that we spend together before they're in a position where they may transfer over an account or a 401(k) or something like that.

So, I feel like it all kind of works out, but if I know that the client is committed up front, then I do the work and I know that in the end, it'll all work out. But if a client just comes in and says, "I have accounts at Vanguard. My husband always had his accounts there. I'm going to keep them there because I think it's good, but I have these 10, 20 questions." I'm like, "Okay, I'll answer them as best I can."

Michael: Three hundred dollars an hour, let's start talking.

Jennifer: Right, exactly. Right. And then perhaps they'll decide in the future, "I'd like to meet with you and have you manage my investments." But a widow is so, I don't know, so delicate in some ways that you don't want to put any pressure on them. And I don't put any pressure on them at all. I just say, "You know what? It sounds like you're in good hands, or it sounds like you've got a plan. If things change, I'm always here for you." And that's kind of the way I leave it. I don't try to say, "Oh, no, you shouldn't be listening to your brother-in-law," or, "No, you shouldn't be doing this or that or the other thing." I just kind of say, "Well, in my experience just make sure you're comfortable and you understand what you're doing. Sometimes widows will take advice that they don't fully understand, so just make sure..."

So, I'll give helpful hints, but I don't ever want to make it feel like I'm pressuring them. Like, "Oh no, you shouldn't be going in this direction." But I do hear all sorts of crazy stories about people that they're getting help from and I, as delicate as I can, try to say, "Oh, well, did you ever think about this? Or maybe you could inquire about that." But it's worked out fine. I'm no worse for the wear. And I have...

Michael: Have you had a client that was like, "Hey, I'm going to come on board and work with you, Jennifer." And then you go through all these meetings all through this time and then they walk away and don't end out working with you and don't bring a portfolio and you don't get paid for all that time? Does it happen?

Jennifer: That has not happened. That has not happened. And I'm not sure if I'm good enough at screening upfront and getting a good feel for the client, but that hasn't happened. I did have a widowed client recently who I did financial planning work for, and I helped her make a really big decision. And then after that decision, she came on as an investment management client. So, her husband had accounts at Schwab and Vanguard, and at Schwab, he had a single, maybe two securities in his Schwab account, in his taxable account. It was a joint taxable account. And the one security was a growth fund which had a, I don't know, about 100% capital gain in it. He had had it for a long time. It may have even been higher. So, what I helped her do is she did not like the equity allocation that her husband had in the account, and she wanted to make it more conservative.

So, what I helped her do through a series of $300 hourly consultations, is we talked to Schwab and we had them take the position and do a full step-up on half of the position and do a no step up on the other half of the position. And then we sold the single, I think it was the specific lots that had the full step up, so she didn't get hit with a lot of taxes. She didn't need to sell the whole position, but at least half of the position needed to be sold. So, I did that for her, and that was a series of phone calls with Schwab on the phone to try and get them to take care of adjusting the cost basis. And I do that a lot with clients where there's low-cost basis. So, she was like, "Wow, that was really helpful." And explained how she didn't have to pay any taxes in the year that she wanted to do the rebalance. And then she became an investment management client.

So, lots of times if I add value in those consultations, the client will ultimately come on. But I don't want to pressure anybody. But I think if you lead with just good work and creativity and experience, because I work primarily with widows, I know how important Roth conversions are for widows in low tax years. Especially if they're living off of social security and insurance, that's a great time to do Roth conversions. And even if they're, the two following years after the year of death, you can still file as a married filing joint if you have a dependent child. So, there's so much that is nuanced for widows that when you demonstrate that you are an expert in this field and you have tremendous experience working with clients just like them, that is really powerful to be able to have a client feel comfortable working with you.

Michael: So, I guess in that vein, just how do you explain value of financial planning and working with an advisor when you're talking to a widow prospect? How do you explain the value of what you do, what the firm does?

Jennifer: I try to say that I'm going to be here with you for a very long period of time helping you make good decisions as your life changes and as life goes on. So as much as you can do a financial plan and you can get everything in order initially, when you're recently widowed and you can kind of come up with a plan, life changes. You get remarried, or you have a child with a developmental disability that you're going to need to consider when making financial planning decisions at the end. Or even at the end of life, I recently had a client who passed away earlier in the year from a brain tumor, and we redrafted her estate documents, or I helped her redraft and think about redrafting them because from when she originally drafted them to now, her children had some specific issues that she wanted to protect them against.

So, basically, they're getting a permanent place. I'm providing them a permanent place in their life so that they have the ability to call me at any moment and get clarification or get recommendations from an advisor who's known them for a series of years. So, I really think that financial planning is a process. It's not just the plan. It's not just you put that on the plan, and this is it and now I'm just going to manage your investments for the rest of our relationship. It's being there every step of the way, no matter what's happening. And I think as a single person, you like to know that, and you like to know that they're unbiased. I'm not your brother-in-law, I'm not your son. And sometimes I have to play the tough person. I'll say to the client, "Well, you just tell your son that your advisor doesn't think it's prudent to lend you $200,000 now to buy a vacation home, because you need the money for your own financial independence." So sometimes just having somebody who you can talk to, and in some situations who can be the bad guy or be the blame person, has been very helpful.

The Surprises And Low Points Jennifer Encountered On Her Journey [1:25:55]

Michael: So, what surprised you the most about building an advisory business?

Jennifer: How rewarding it would be. How much of an impact you can have on people's lives. I think about people who are in jobs that don't really have any direct impact on making somebody's life better, and I think that wouldn't be a very fulfilling career for me. So, if I was in data technology or something like that, that would just be an awful way to wake up in the morning and say that's what I'm doing. So I think the fact that I have a career and a practice where I can impact people's lives and I can love what I'm doing and feel that I'm good at it and get paid well to do it, I think that that's a surprising plus that I never...when I embarked on 16 years ago, thinking that I would have the ability to have a career that would've provided me with so much satisfaction.

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

Jennifer: I would say COVID. All of 2020, maybe. From COVID through the election through the beginning of 2021. It was really hard. You're an advisor and you're telling your clients it's not different this time, markets bounce back. And thankfully they did very quickly in 2020. But there were times I thought, no, this time is different. This is different. This is a pandemic. This is not a recession or the global financial crisis. This is something that's unprecedented. So that was a low point, and I looked to other advisors for support and reaching out and just having discussions about supporting each other through that time. Because that was a hard time to be a solo advisor, I think.

The Advice Jennifer Would Give Her Former Self [1:27:54]

Michael: So, what do you know now you wish you could go back and tell you from 15 years ago when you were getting started?

Jennifer: I think I would have hired a full-time, either client service administrator or a financial advisor full time. Because I think that I would have been able to reach even more clients if I did, and offload some of the work that I do now that isn't so client-facing. So, I think if I had started earlier, who knows what things would be like, but I guess take a little bit of a leap of faith. I took it very slow and that worked well for me, and I think a lot of that had to do with my own personal situation, but don't be afraid to invest in websites or employees. Put the money in early, because once you get to that inflection point where you are able to cover your own expenses, everything's gravy after that and that's just a wonderful feeling.

Jennifer’s Plans For The Future [1:29:08]

Michael: So, what comes next for you?

Jennifer: So, yes, that's interesting that you ask that. I had always thought that my daughter, who is 30 years old, and she works in financial services would be my succession plan. And she had been telling me for several years that she was thinking about it and considering getting her CFP and joining me. And it was just in March of this year that she confided that she had thought long and hard about it and she does not want to take over Stonebridge Financial Advisors. So, it was really hard to hear, but she gave me a really good reason and I couldn't argue with it. And so I...

Michael: Has she been involved in the firm in the past in working with you and working with clients, or that would have been the step, the journey from here, and she decided she didn't want to go down that path?

Jennifer: Exactly. The latter. She had not worked with my clients. She works in New York City for a financial services firm. And she would have had to come on, in 2022, I was thinking, and then worked with me for series of years until I was ready to maybe work less in the business and have her take on more of the client relationships. And since that's not going to be happening and I'm at a point in my career where I have to start thinking about succession planning, I've decided that I'm going to pursue a merger with another firm, hopefully by the end of the year. I'm sort of in the beginning stages of discovery at this point and having conversations. But I think that I need to find a place for my clients, and God forbid, I mean, I recently had a friend pass away a couple months ago, 63 years old, otherwise very healthy.

And you realize that I don't want, not that I think that's going to happen to me, but if God forbid it does, I want to know that my clients are in a good place. And I also want to know that I can have a little bit of a renewed sense of maybe business development, if I'm merging into a larger firm where some of the trading and the rebalancing and the compliance and all that is taken off my plate and support with financial planning and meeting prep, then that will give me the opportunity to go out and be able to help more widows, especially in the first couple years that are so critical. And it might just give me another, a little bit of a restart or a little bit of a boost to my career and change things up a little bit, I guess, for lack of a better word.

What Success Means To Jennifer [1:31:55]

Michael: So, as we wrap up, this is a podcast about success, and one of the themes that always comes up is just the word success means really different things to different people. And so, you've had this wonderful path of success with a fantastic practice of the 50 great clients. So, the business has worked well. How do you define success for yourself at this point?

Jennifer: Well, I think professional success for me is having found the sweet spot between loving what I do, doing something that is needed in the world, and being good at it. So, it's kind of in the flow. I just feel like when I'm in a client meeting, it's just flowing. And being paid well, being valued and paid for what I bring to the client relationship. So, I think professional success for me is just having found a career where I love what I do. I'm doing good work, I'm good at it, and I'm paid well for it. And personal success is being able to take that professional success and integrating it into your life so that you have professional success, but you also have enough space in your life so that professional success isn't all it's about and that you also have time to nurture relationships and learn new things outside of business. So, the business isn't your whole life, but that the large part of your life where you are working, that you're feeling the professional success that you want.

Michael: I love it. I love it. Well, thank you so much, Jennifer, for joining us on the "Financial Advisor Success Podcast."

Jennifer: Thank you, Michael. It was really fun. I appreciate it.

Michael: I do too. Thank you.