#FA Success Ep 353: Driving Growth By Setting A Clear Vision Of What You Do Best In Your Business(es), With Brett Danko

Resources Featured In This Episode:

• Brett Danko
• Brett Danko Educational Center
• Main Street Financial Solutions
• American College of Financial Services
• Stockton University
• Orion

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Full Transcript:

Michael: Welcome, Brett Danko, to the "Financial Advisor Success" Podcast.

Brett: Wow, thank you. Thank you for having me. I'm humbled, and I'm honored to be on here. So, I'm excited. So thank you for having me.

Michael: Well, absolutely. I'm excited about this as well. You are, as I view it, one of the best-known names in the CFP world. You know, you teach one of the most popular CFP live review programs out there. So almost anybody who's been through their coursework in probably the past decade or more has at least been looking at a live review program with you if they have not outright gone through a program with you.

You know, I know what a lot of people don't know is that you're also a… little side hustle as a founder of a billion-dollar advisory firm and have lived the journey both of scaling and advisory business and building what you've done on the advisor education side. And so, I'm a little excited to kind of delve into the 2 sides of Brett Danko because I feel like most people are only familiar with one and, at this point are probably just asking, "Brett, how do you even balance the 2 at this point?"

Brett: It can be difficult. It can be difficult. But remember, 1 is centering around what's best for the students, and 1 is centering around what's best for your clients. So, in the end, it's just looking at it and saying, "All right, wherever I am, so if I'm in a class, I'm there." So, I'm going to be present in that place. If I'm working with an advisor, for that advisor, then I'm present with that advisor on the on the asset management side for our RIA Main Street Financial Solutions.

And quite frankly, I love it because I love to teach, I love working with students. I love how much they're trying to better themselves, trying to get their CFP or some other designation, and I respect that so much, and I want to help them to get there. And then on the other side, working with advisors and their clients and helping those advisors help their clients to achieve their short, mid, and long-term goals. So, for me, I love that it varies but it's still dealing with many of the same concepts. And that is what's best for the student, what's best for the client.

And then the material, the information itself, you teach it in the CFP in this world of, "Well, here's this concept." Well, on the other side, you actually get to implement it on the RIA side. And for me, it's just a lot of fun, and it's where I get a lot of my stories for the education side. And that's what kind of we try and do, is put...there's the material, but then how do we go ahead and make stories that allow the material to come alive? And I get a lot of those from being an advisor for many years.

How Brett Structures His CFP Exam Prep Courses [06:55]

Michael: Very cool. Very cool. So, I think, to start, I'd love to just understand more about the education business for you as it exists today. I think a lot of people are probably most familiar with you for some of the exam prep programs that you've got, although I know you even have a few different choices and options of what you do. So, I think, to start, just help us understand the Danko education business for CFP professionals.

Brett: Wow. Yeah. There's really 3 different components. So, 1 component is the educational classes. So, that is the actual courses you need to take to be eligible and pass, to be eligible to pass the CFP exam. So, there's that side of it. And those are 7 courses that we do. And we do those...

Michael: So, that's akin to like me going to American College, or College of Financial Planning, or my local undergraduate university that has a CFP program. You've got your own version of CFP, like the educational classes themselves, the financial planning, and retirement, and insurance, and the capstone at the end, that whole sequence.

Brett: Yep. Yes. And we do that through Stockton University in New Jersey. And so, yeah, so we have that side of the business, and we call it the fast track, where we go 4 full days once a month, and each of those 4 days is an actual class. And then we do other sessions since it's online. We record everything, but then we also do extra study sessions after it as well to really get folks to be where they need to be with the material.

Michael: So, 4 full days, once a month, like Monday through Thursday? Like spaced out, like Monday every week, all month long? Or like, no, no, Monday, Tuesday, Wednesday, Thursday, like, I will give you back Friday at the end?

Brett: Yeah. Yeah. So, we do it...

Michael: But yours is for 4 days.

Brett: ...Wednesday, Thursday, Friday, Saturday. Yeah. And remember, the people in our classes are people who were almost always already in the industry. So, they have a Series 7 or a Series 6. Many of them have an insurance license. Many of them are working with clients. So, while there's textbooks and there's extra materials and things like that, we don't have to explain what a stock is to them or what a bond is. So, we can really go at a higher level. But they are packed days. So, they are long days to get through the educational classes, and we can really focus on what's important, not only for the exam, but what's important for their practice.

Michael: And this is all online? It's all virtual?

Brett: Yes. I used to do them live. And I still...there's 1...I do a class for each cycle. So, as you know, the exam is given every March, July, and November. So, we started a class in March for the November 2023 exam. So, March, April, May, June, July, August, the capstone courses in September, they take a review class, we have our review online or live, in October, and then they pass the exam in November. So, we will do a class for each of those cycles. And we will just space them out in that way. We will be having extra sessions in between the 4-day periods each month.

But, yeah, it's really meant to be fast track, it's meant to be for folks who are motivated. I just had somebody call me last week that said, "Hey, I'm new to the business," and "What should I do?" And I said, "I don't think our program would be best. It's not that our program's bad, it's just that, for you, I think that we're going to be trying to go at a pretty high level, and you may get lost a little bit in between there."

So, for us, we're spacing it out over those roughly 7 months, and then the 8th month, you take a review, and then the 9th month, you pass the exam. So that's one part of our business. We used to do them live, now we do them online. We call it live-virtual, because we track every person that's on the webinar. So, each day we're doing that. We have a whole team that does that. Because we want to know who's on and who isn't.

Michael: So, basically, the whole thing's going to run through in 8 months, and you sit in the 9th. So, I've got 6 or 7 months of the core classes plus the exam review, then I'm doing a month of final prep for the exam, and then I'm off and taking it. So, thus kind of your fast-track framing. Because most people don't go through quite that quickly. That's how you're packing everything in, and thus why you've got 4 full days every month plus some in-between time. Because you're cranking through material.

Brett: That is correct. And also, just, we joke that you don't take anything, you are passing it. So, I don't allow the word to be used, "I'm sitting for the exam," or "I'm taking the exam." Nobody goes to the Super Bowl and says, "Yeah, well we're playing in it. That's good enough." It's, "No, I'm passing it. I'm winning the Super Bowl." Now, 1 team obviously is going to lose, but they don't go in there thinking that.

 

So, the first part is the education side. So, we have students that do that. And then many more students will take our virtual or our live reviews that we primarily do in the northeast.

Michael: Virtual or live. Live, meaning live in-person reviews?

Brett: Live, in person. Yep. Live, in person.

Michael: And so, how do those work?

Brett: Those are 3 and a half days. And I just want to go back and correct 1 thing. Usually, for our 4-day classes, for the education classes, the last day, it usually doesn't last a full day. Now, I'll stay on and answer questions, but that usually doesn't last the full day.

Same thing with our actual live or virtual. It's 3 full days, and they're very long, well, 11 to 12-hour days. And then on the last day, usually, we'll go for a half a day, a little longer than that, and then I just stick around and answer questions. So, it's not going to go 4 full days for the review class, but it could, but it's a solid 3 and a half days.

And then we give them a study plan, and then they go ahead and implement that study plan. We do check-in calls, things like that, group calls. We have a psychologist. She's a Ph.D. in educational psychology who's also a financial advisor. She actually works at our RIA Main Street Financial Solutions. Her name's Amy Leis. She's awesome. She does sessions. We do 3 sessions for anybody that takes our classes, concentrating on the psychological side. She said, "I'm not here to be a tutor. I'm here to help you with study skills and mentally being ready to pass the exam."

And so, we do that 3 and a half days, give you a study plan, have some more calls, we'll have some calls with Amy as well on the psychological study skills side, and then, boom, you go ahead and pass your exam.

Michael: So, how far in advance… Because just you're talking about a lot of follow-up after the exam review, before the exam-exam, because you're building out a study plan, and I've got my sessions with Amy and check-in calls. So, in practice, what do you recommend, or what do you see, or just how do you time it between when the exam itself is in March or July and November and when someone would be encouraged or expected to sit for the live review?

Brett: Yeah, so in terms of the virtual or live review, whichever one you wanted to take, yeah, I would say, if you're going to pass in March, you want to take the review for the March exam cycle. If you're going to pass in July, you don't take it, you wouldn't take a review class for the March class and then say, "Okay, well," 4 months later, "I'll just study what I learned in the review."

One of the things about the review is we do it in 3 and a half jam-packed days. Because the way I look at it is I want it to be immersive. That you are in a class with other people or online with other people, and that is what you're focused on. And then after that, you go ahead and, for the next 2 weeks, 3 weeks, 4 weeks, depending on when you take the review, then you're going to implement your study plan. And we'll do other check-in calls. We have a Facebook page, a private Facebook page, for anybody in the class so that they can throw ideas off of one another.

Rather than sort of saying, "Okay, well we're going to do...every Tuesday and Thursday for 10 weeks before, we'll do that. There's nothing wrong with that. And other programs do that. And I think they have success with that. I like the immersive, throw them in the deep end, bring them all together, and then put them on their way to study.

Michael: But I guess I'm just trying to understand when does the program occur relative to the exams? Like, if my exam is in November, is my class the week before the exam? Is my class the month before the exam? Is the class 3 months before the exam?

Brett: Oh, just 2, 3, or 4 weeks before the actual exam cycle starts. You would sign up by, ideally, 3 months before, and you would get our pre-study books, we call them. And there's 3,500 questions in there. And you'll work through each of the modules.

And the goal is to have that done before you arrive at the virtual or live review, so that once you come into that, it's all swimming in your head. You don't have a good grasp. The review class really crystallizes parts of it for you during those, say, 3 and a half days. And then you spend the remaining time really understanding other concepts that you didn't really get when you were looking at the pre-study prior to the reviews or during the review. So, that's the process as you walk through this.

What Brett Charges To Engage With His Educational Programs [18:52]

Michael: So, Brett, for the different programs, like live educational and then the exam reviews, how does this work from a cost perspective? What is the cost for the various choices here?

Brett: For the education courses, if you are taking them for credit, it's $950. And if you are auditing the courses, meaning you do not need credit for them, you just want to take the courses and get all the materials and all the benefits from it, except that you don't need credit, so you've either taken it before or you're an attorney and you just have to take capstone, you don't need the other ones, and it's called a challenge status, then that's $400. Or $450. I'm sorry, it's $450. That's for the educational courses.

For the review courses, if you're taking the live review, it's roughly $1,300. It's $200 less if you're doing the virtual. And then we have really 3 levels. The 1st level is the 1 I just described. The 2nd level is, we call, Signature, which gives you 8 extra calls with mostly me, but it could be 1 of our instructors as well, plus extra questions and extra cases.

So those, we do usually the Wednesday nights, the 8 weeks before the exam, before the exam cycle starts. And I will go and start at 7 p.m. Eastern time and go to about 9:30. And then I usually just stay on. My record is almost midnight. We stayed on until midnight, answering questions. Now, instead of having a couple hundred people when we started, we were down to, I think, 14 at the end, but I just stay on.

No, because some people just love to get into this stuff, and this is my passion. I love financial planning. I just love it. So, I can talk about it all day long. My children, my wife, my friends, they sort of laugh at me, and they just shake their head, but I dig this stuff. And I think you're kind of the same way, except...

Michael: Oh, yeah.

Brett: You know it probably, well, I would argue, on a higher level than I do. So, it's one of those things that just it's fun. So, yeah, so you get extra questions, like I said, extra cases, as well as those extra sessions, where I'm really saying, "All right, we're going to do income tax tonight," and for 2 and a half hours, I'm going to hit the high points. Now, you still need to do the work. Remember, we're talking about a review course. So, you still needed to do the educational modules. Of course, you did. So, you needed to do that.

And then the 3rd, the highest level that we offer, we just started this, where what we do is we record our educational sessions and those educational sessions for the certificate program to get your education requirement. We record those. And that is mirroring many of the materials that you're getting when you sign up for the review.

So, it's essentially a way for you to sort of go through things that we're talking about in our classes, recorded, so you can play them back when you want without actually taking our courses. Meaning you went ahead through another provider, or you're challenging because you're a CPA or an attorney. So, yeah. So those are our 3 different levels.

Michael: And then how do those price, I guess, like Signature and the top level?

Brett: Yeah, the Signature's $2,200. And the last 1, which also includes an hour-long call with Amy Leis on the study skills test-prep psychological side of getting ready for the exam, and I believe that's $2,800.

Michael: And just so I understand, on the CFP classes, on the educational program, you said $950 for a course. That's for each course, and then I have to go through 7 courses. So, what are those, $6,000 in change for the whole series?

Brett: Yep.

Michael: Okay.

Brett: That's correct. And some people will mix and match because they've already had them from other providers. And we're blessed, because we have a lot of people who jump in after they've started, say, someplace else, especially if they have experience of being in the business, they're licensed, etc.

Michael: Oh, it's like there are 2 classes in somewhere else, and this is going well, but I feel like I can move through this a little bit faster. I want to get through it faster for some career opportunities. Oh, I'm going to hop over to Brett's program. I can do the last 5 with him. It's fast tracked at that point, and I only need to pay for the last 5.

Brett: Yeah, so they don't have to take the extra year...

Michael: Because I already took the first 2.

Brett: Sure. And they don't have to take the extra year and a half to get through it or something like that. I think that's one of the nice things, where we're not...there's so many good choices out there to get your education, and we're one of them.

And so, the other thing is we do it course by course because I want you to be able to fire me. So, it's one of those things where if we're not giving you what you need for the 1st course, well, I tell people, "Look, you can go someplace else, and I'm not going to make you buy all of them all at once." And also, as somebody told me once, they said, "Yeah, you bundle them all together because a good chunk of those people will never go beyond the 1st, 2nd, or 3rd course, and yet you've kind of paid for all of them."

And so, I just said, "You know what, if somebody needs to stop in the middle, I don't want to have their money." And I don't want to say, "Oh, well, you paid for all of them, and you don't get a refund. And if you don't come back within a year or 2, well, then you'll have to pay us extra money." It's, "Look, we're here, and if it makes sense for you to pause because of work life or personal life, guess what, we're going to be here a year from now, and 3 years from now, and 10 years from now for you to go ahead and start back up again."

How Brett Differentiates His Courses And Why Students Choose Them [25:11]

Michael: So, do you find...are there, I don't know, different types of advisors or different types of exam takers, exam pursuers, that pick different programs or different paths? Because I know just people show up very differently for financial planning education overall, right? I certainly haven't done it at the depth that you have, but I've seen there's people that come because they just want to get the letters on their business card to move on to the next stage. There's people that come because they want to know every single fact. They're like, "I don't want to get a 70 on my exam, I want to get 100 on my exam. I'm going to hang out with you, Brett, until I can answer every single practice question with 100% accuracy." Right? And a wide spectrum in between.

So, I guess as I'm curious who you tend to see, if there were certain particular profiles of who tends to engage either with the educational program or the exam review programs.

Brett: We are going to be...I think folks who want to know every single detail probably would not be an ideal fit for our program. That does not mean that we don't give you all the skills you need to be ready to sit for the exam as well as be able to work with clients. I want to be clear about that. But I'll have people, they'll say, "Well, I want to know this." And I'll say, "Well, it's not really on the exam. And, oh, by the way, more importantly, in real life, I've never dealt with that, and I've been doing this for many, many, many decades, so, well, you don't need to know it." And they're like, "No, I have to understand everything." And it's just sort of one of those things I'm like, "You're trying to get a pass on the exam." There's no CFP cum laude, right? There's you pass or you fail.

And people say to me, they're like, "Well, if you took it, you would get an A." I'm like, "I don't know. I don't think...I don't know that I would." I think the exam is difficult. I think it's fair, but I think it's difficult.

So, it's sort of 1 of those things. I know I'd make careless mistakes. I know I'd get it down to 2 answers and say, "Both of these are right," and get frustrated. But the end game is to be able to deal with that and to understand the concepts and to realize that it's almost impossible to learn everything. I just don't know how you could keep it all inside over the course of a year or 2 years in learning the material. I think that would be difficult. So, there is a little bit of picking and choosing.

So, our folks, they're usually people who've worked in the business or at least a couple years, but they are in the business at least a couple years. Many of them will be licensed and sort of they're working with clients. And they come in, and they want to work hard, and they want to learn not only what they need to know for the exam but also how do things work in the real world. And our goal is, in our programs, yes, we want you to pass the CFP exam, but we want you to leave a better advisor.

 

And so, trying to do that in the exam, I think, tries to present situations. And that's what we're trying to do, provide cases and situations that help, it helps the students understand what the exam is looking for. To the best of our ability, of course.

Michael: Yeah. So, how many people typically go through the programs? I'm just trying to say, how many classes are there? How many people typically go through classes?

Brett: It is anywhere from 100 to 250 people. There's large variation of range there for the fast-track educational classes, so for all 7 classes. And then for the reviews, 700-plus for each cycle usually go through, sometimes higher, sometimes lower. Now, you have to understand that they may be taking another review as well. So, depending on what program they went through. And remember, some of those are retakers. We have folks that...we have a core contingent that actually come back every 3 to 5 years. Not a large amount, but we'll have a segment that come back, and just because they've already passed the exam, they want to relearn the material. They want to sharpen the saw. So, yeah. So, usually, that's what it's been averaging over the past year or 2, 3 years.

Michael: Well, and I'm struck by that. I think on the last cycle, there were "only" 3,000 or 4,000 people who registered for the exam. So, you're living in a world where 1 out of every 4 or 5 students who were registering for an exam may be going through a Danko review program. That's pretty amazing to me.

Brett: We've been very blessed. And we also don't...and there's nothing wrong with this, but we don't have a sales team. So, I work with my brother, David, and my sister-in-law, Michelle, and they're wonderful. So, our name's on the door, so we're not advertising, we're not making outbound calls where, "Hey," you know, trying to get people to sign up. We've just been really blessed through word of mouth.

And for us, it's humbling, and it also says that we got to try and keep getting better. Because we're not where we want to get to, but we're going to continue to get better with material, with instruction. I have 2 wonderful instructors, Thomas Pablo and John Choi. And they're just great to work with, truly care about students. And I think that that outreach to the students, with, hopefully, good instruction, good material, can make the difference in getting through the exam.

Michael: So, Brett, where do you ultimately want this to go? Because it sounds like you're still not where you want it to be. So where do you want it to go?

Brett: Well, where I want it to go...when I say I'm not where I want to be, it's less about numbers, and it's more about just making it a better program so that it's better in terms of the CFP, we have more questions, better questions, better ways to interface with the students, better ways to get them the resources that they need. When it comes to numbers, I've never really worried about that. I've worried about just how do we make things better? And I found that if you can make things better, and own mistakes, and accept criticism, and try to do better, you essentially can be successful. So, for me, that's how I look at it.

Somebody says, "Well, would you take over the CFP world?" That's what somebody joked to me once. I was like, "Well, first of all, that would never happen. There's so many good other programs out there that are battling for space." But it's not about that. It's all of us actually doing a good job and making sure that people are prepared for the exam. So, as long as we keep getting better...and, I got to tell you, you get more numbers, you get larger numbers, well, that, in and of itself, forces you to change things around because you don't have as much personal time.

So, one of the nice things is using technology to reach a great number of people. So, instead of 1-on-1 or doing it live, you could do it virtually if you wanted to for the educational classes and doing group sessions in terms of study sessions and reviewing cases and questions. So, yeah. So, it's really trying to utilize technology as we get bigger. And, hopefully, hopefully, we can stay ahead of it.

Michael: So, I guess I'm also curious just in that vein, how do you distinguish the programs that you're doing versus the others that are out there? I guess particularly exam prep. I understand fast track relative to a lot of other programs that just do it slower and a little bit more spaced out. But one of the challenges that I hear a lot from advisors, specifically those going through the process of working towards their exam, is there's all these different exam prep providers. I don't know how to tell them apart.

It's not even who's better or worse, just how are they even different from one another? Because they're all teaching to the same exam at the end of the day. How do you just distinguish and differentiate what you're doing from the other options that are out there for advisors that are trying to figure out how do you choose which 1?

Brett: Well, I think we're doing our best to pare down the material because there is so much material. And there's no way also that you can cover every single concept. And you say, "Well, you could cover..." I'm making this up, "...bonds." Okay, yeah, we're going to cover bonds, but there's intricacies of bonds that could be on the exam that you're going to have to cut out of a review course. It may be in the educational course, but you don't have as much time because you're just paring it down, paring it down, and paring it down.

So, I think preparing students to realize that they're not going to get an A. And I have people, they'll say, "No, I get an A in everything." I'm like, "Well, you're not going to get an A on this. In fact, you'll get very frustrated if you're trying to get an A." Now, you should study like you're trying to get an A, but on the actual exam, there's going to be questions that you're going to look at it and you're going to say, "Wow, this is really challenging," or "My mind's going blank right now." Because you're not a machine, you're not a computer, so you can't keep everything inside. You're not going to get 100 even though some people try.

So, that's one of the things I try and break them of, is that what you're trying to do is pass the exam, and there's so much information, there's so many things that the CFP board could ask about. And what they really want to know is not that you got 100, it's that you had a mastery of the majority or whatever the number is, 70% or whatever it is, of the concepts and of the questions that they asked. They're not going to say, "Sorry, you got a 90, you got an 89, so you failed." That is not what they're after. They know it's really, really difficult, all this information. So, they're looking for preponderance of the material, that you understand, and you can go ahead and get through that and understand it, be able to apply it to your clients, and move forward as a CFP.

So, I think most people out there, if you're taking it from a certificate program, meaning you're outside of the undergraduate world, you're busy, you have a full-time job, you may or may not have a family. I'm upfront with folks, "You're going to get questions that aren't in our review material." I know that. Because you have to pick and choose things to take out. So, we just try and do our best at doing that. And it's a constant struggle because it would be really easy just to add, "Here. Here's 1,000 pages. Here, go ahead and read this." But a lot of folks don't have that time, and they're coming to you or, I would say, coming to us to sort of pare that down for them in the best way that we can. And we haven't figured it out yet. We're just doing our best, and we still have a lot of material that we give to people.

So that's why it's constantly evolving, is to, how do we make the program better? Where are people having problems?

I tell folks to take a review class. There's so many good ones out there. People say, "Well, you really want us to take yours." Yeah. In a perfect world, it would be great. But we're not the ideal for everyone. And some folks want to have tons and tons of material, or they want it done over time. They don't want it done in 3 and a half days. They want it done over an 8-10-week period because that works better with their schedule and/or they learn better. Or they like...we do an online version, but we also do live version. So, they say, "Well, I don't want to do that," before we had an online version. "I don't want to do that. I don't want to go live. I want to do it online." All these things are...it's up to the advisor or up to the student to decide what works best for them. But you're right, lots of choices out there. We're blessed that a lot of people choose us, but we're not perfect for everybody.

How Brett Manages His RIA While Teaching CFP Exam Courses [39:48]

Michael: Very cool. Very cool. So, Brett, now, help us understand the other side of your world. This whole, "Oh, there's a giant advisory firm as well." So, give us just some of the backstory here of...I think so many people are familiar with you for the exam prep side of the business. Where did the advisory side of the business come? Were you doing client advisory work before the education side, or you were doing the education side and then added in an advisory firm?

Brett: Yeah, in the early 2000s, I decided to get my CFP designation, and I went and attained it. And then I was working for an hourly fee, doing financial planning, $75 an hour. So, I was doing that, not managing any assets. But I would be...

Michael: $75 an hour. That must have been terrifying back then. You say it out loud, $75 an hour, like, how can you charge that much, Brett?

Brett: Yes. And, Michael, I was also doing catering at the time as well. I was also doing catering at the time to make some money.

Michael: Well, $75 an hour is better than the catering work. So, that's good.

Brett: Well, you had to get clients that would pay you $75 an hour. So that's the trick, is, yeah, if I had people lining up outside, wanting me to spend hours with them, that would've been one thing. But that was not the case. So, I became a certified financial planner, and I was doing hourly financial planning when I could get it. And I was also doing speeches at personal finance boot camp. I was speaking at colleges, universities. So that was fun. And then I also started to teach. I started at a community college, then I started teaching for a program out there. And then I realized what I really love to do was teach.

So, I would mostly...I was teaching and teaching a lot, and I started putting together my own classes. Because I lived close to where the Merrill Lynch headquarters was in Hopewell at the time. And so, I knew a bunch of people over there in the financial planning division. So, I started up a class, and that went well. And then I had people calling me from around the country, from Merrill Lynch, and then even from other firms, saying, "Hey, I heard about you," and "Would you teach us?" But all at the same time, I was doing a small amount of financial planning and volunteer work, just trying to help people at the abused women's shelter as well as people who were in inner cities, folks who were trying to move from assistance, either for affordable housing and welfare, onto working and living on their own. So, I was doing volunteer work for that as well.

So, I was doing all these things. And then 2006 or '07, and this is going to sound terrible, but I was teaching a class, and I went out to dinner with a number of folks, and I was listening to these folks, and I was like, "There's a number of these folks, it's not that they're bad people, but I don't think they work very hard. I don't know that they truly have the best interest of their clients." I was listening to, like, selling this product and that. And I said, "And they make a lot of money. The education business is great, but maybe I should do that, like, try to manage assets." So, I spoke with a couple of my former students, and we started working together. And 1 of those students, Mike Minter, is still with us. And then we just started from there. So, I'm not recruiting folks. I just go out, and if they want to talk to me about what we are doing on the advisor side and Main Street Financial Solutions RIA side, then I talk to them about it.

Michael: Interesting. So, for you, it was this journey of, started out as a pure hourly advisor, did that for a few years, where it's difficult because you just need so many darn clients at X dollars an hour, $75 an hour, to add up to enough clients and enough fees to be a livable wage. So, you're teaching as well, the teaching gets momentum. You're teaching in front of advisors who are running not an hourly business but a more assets-based business, and saying, "Maybe I should be in the portfolio management side as well because their economics seem to be working better than my hourly business."

Brett: Yes. And 1 of the things that was frustrating is that many of the folks I worked with had an advisor, and they were getting paid AUM. Now, if somebody comes to me, I say, "Oh, you have an advisor? Why aren't you talking to them?" That's what I say now. I didn't at the time. Because I still do hourly financial planning. I have a number of students that I've done plans for, executives, folks that just want me...they want me to sort of look at their situation. And they have lawyers, they have accountants, they have money managers. They just want me to go ahead and do that aspect of it for them. So, I still do some of that. I do not manage any assets at our firm because of the teaching. If I were to be in a class with 100 people or even online with 100 people, and the world fell apart, I can't say, "Sorry, I can't teach anymore." I am going to go ahead and talk to my clients.

So, with the planning side, I find that there's rarely something that urgent on the planning side that you need to get done. However, on the money management or on moving money, things like that, yes, things can come up, like, "Hey, we really probably shouldn't have that happen," but there are emergencies that come up. So, for me, I will do some planning, but I don't do any of the money management. People at our firm would do that. Now, they're also very good planners as well. So, if somebody comes to me and I do planning, if that's all they want to do, I'll just do that. If they say to me, "Hey, what about managing the assets?" I say, "You would be perfect to work with this advisor." And then I provide the introduction, and I still may or may not help with the planning.

But the reason why I still do planning...and I'm teaching, so that's 1 reason, I'm dealing with the concepts a lot. But the main reason why I will always do planning is because when I was in my mid-20s, I went to a session, and it was some kind of CE session. And I'm listening to this guy up there, and, I remember, I'll never forget it, I'm looking at him, he's got, like, 14 hankies and 16 cuff links. He's all decked out, right? He's my age now, in his 50s. And he basically was up there, talking, and we're in the back. And I said to somebody, I go, "This guy hasn't sat in front of a client in a decade." And the guy looks at me, he goes, "Maybe 2." So here he was, talking about it, and he had some huge title, and I'm sure he made millions of dollars. And I was sitting there, I was like, "I'm never going to be that guy. I'm just not."

So, no matter what, I am always going to do planning. On a volunteer basis, I have folks that have no money, and it's harder to do the volunteer work when I'm dealing with other things. So that is an area that I want to get back to a little bit more. But I still help out with that for folks who have nothing. And then I have folks that I talk to that have $100-plus million dollars. So, I'm not managing their assets per se on some of them, I'm just sort of giving them overview of their situations. Because they have people who look at things in a certain way. They'll say, "Oh, I see it through this lens, and that's what you should do." And what I try and do is look at, "Oh, there's many different lenses to look at it." And "Oh, by the way, I'm not going to gain from 1 more than the other because you're paying me an hourly rate."

Michael: Interesting.

Brett: And it's not $75 anymore.

Michael: I was going to say...

Brett: It's a little better than that.

Michael: ...I hope you've raised it a little bit since then. It's a bit higher now.

Brett: But haven't you ever been in a situation like that where somebody's giving a lecture, and you're saying...

Michael: Oh, yeah.

Brett: ...this person has no idea what they're talking about.

Michael: Oh, yeah.

Brett: So, I just didn't want to be that person.

Michael: Absolutely, absolutely. I'd struggle with the same way. It's part of why I've always kept some tie affiliation back to an advisory firm as well. Like, in my own world, similarly, I'm not taking ongoing AUM clients directly at this point because I really wouldn't have the capacity to serve them well and on the timeline that I would expect them to be served. So, we would be happy to help you, right? And someone else at the firm can take that client. But, to me, it's similarly important. I never want to forget what it's like from time to time to still be sitting across from a prospect, trying to bring them on board, or someone that's dealing with a planning issue, to be able to have the conversation.

Brett: And I also think, regarding the planning side, or even, we'll say the...so when I say money management, for us, or advisors, or CFPs, money management is important. And so, many people lead with investments. So, for me, the investments always...they always kind of bored me because other people are more interested in that and can do it better than I could.

I joke that my brother, my brother who I work with...I used to do puzzles when I was a kid. So, my 1 brother's almost, well, 9 to 10 years older than I am, and then my other brother that I work with is roughly 6 years older than I am. And so, they were older than me, and my 1 brother, when I would put together puzzles, and I'm 5, 6, 7 years old, and I'd have a 500-piece puzzle that I'm putting together, he would steal some of the pieces. And I didn't know that at first. And then at the end, he would go, "Hey, you're missing 20 pieces," and he'd throw them down, and then I'd finish the puzzle. So, what I learned to do growing up was I learned to put together puzzles, not having all the pieces. Does that make sense?

Michael: Yeah, yeah.

Brett: Because you know when you're doing the outline and you know that's the straight edge, well, I knew that there might be that missing. I knew that the key piece I'm looking for may not actually be in the pieces that I have. My brother might have taken it. And I may never get it back. Although he was a good sport about it, he'd give them back to me. But what was great is, is that when you...that's what financial planning is to me. People do not have all the pieces. So, you have to sort of put this together, and you're saying, "I don't have all the pieces, but we can extrapolate where we think things are going to go. And that, for me, is fun, and other people don't like that. When I work with clients who are engineers, they love to be very specific.

You have real numbers, etc., and bridges can fall down." I said, "For us, we don't have all the pieces. So, if you could tell me exactly what day you're going to die, exactly how much money you're going to make until then, exactly what your investment returns are going to be, exactly what your expenses are going to be at all times and where interest rates...etc., etc., if you can give me all that data, I'll give you a complete and exact picture. But I can't do that.

So, what we have to do is we have to go with our best guesses, we look at historical norms, and then we talk to you. What are your goals? What are you looking to try and do? So, if we can go ahead and do that, then we can make plans. And then that's a living, breathing document. So, every year, or 2 years, or 3, depending on your stage in life, we're going to go back to it. And I tell people, "If you want me to do a plan for you and then you're going to stick it in a drawer for the rest of your life, it's a waste of my time and a waste of your time." But if you view it as a living, breathing document that, actually, you're going to pull, you're going to be like, "Wait a minute, how have things changed? Let's update it. Where are we now? And what other changes do we need to make?" Meaning spending more or spending less. You know, "I have this goal that's new," then that's fun. Because that is an evolving document.

Michael: Very cool.

Brett: Sorry, I get very excited about this stuff. It's my passion about the planning side, much as other people get passionate about either Ferraris or, in our industry, say, about investments. But the planning side really gets me excited.

Michael: Well, I do like the distinction around just what it's like to be trying to put together the puzzle pieces of planning versus doing the investment side of the business or just the...I know, I almost...as I think of it, that there's a maintenance side to the investment business. Where once we've gotten the client on board and we've gone through the initial planning process and the portfolio's been allocated, that just we have to maintain that relationship with the client, and we have to nurture them off the proverbial ledge, and we have to constantly reset expectations, that like, the recent bull market is not going to go forever, or the recent decline is not going to go forever.

To me, there's a maintenance aspect to it that's very different than the planning side, particularly the planning side with new clients, which is this constant flow of puzzles, of problems to solve. And I appreciate your comments. It resonates for me. I also always appreciated the problem-solving side of planning with new clients more than the ongoing work with longer-standing existing clients. Just, to me, it got a little bit boring after a while with the same client compared to the interesting new puzzle challenge of working on a new client's plan.

Brett:

 

 

 

Main Street Financial Solutions As It Exists Today [55:49]

Michael: So, Brett, I understand the dynamic now for your practice, right? I want to focus on planning clients so that I can stay fresh and never forget what it's like sitting across from clients as I'm teaching this. And clients give a never-ending stream of wonderful stories for education to advisors. You know, planning clients are a good fit for that. Investment clients, that's more challenging because of the ongoing, like timeliness demands, right? You've got to take their call when markets are volatile. They may have timely cash in, cash out disbursement needs and other issues, which is hard when you've got your teaching load. So, you'll grab the planning-only clients, other advisors in the firm can work with the client if it's got an ongoing investment need.

So, then, help us understand more broadly the firm, then, and where and how Main Street Financial Solutions fits in relative to the Brett Danko practice, in particular. What does the firm look like?

Brett: Yeah, so our RIA Main Street Financial Solutions, we have 27 advisors, not including myself. And then we have 23 teams. So, we have some folks who have paired up. And then we have a wonderful team around that on the management side that help me to go ahead and make sure everything is done in the right way. So, each of those advisors, except for 1, have been a former student of mine. And even that person has taken a bunch of our CE, so he says… he is a student as well. So, I said, "Okay, so we'll include you in."

And so, the CFPs sort of drink the Kool-Aid about being a fiduciary and understanding that planning does matter. Investments, insurance matters, obviously, but planning really matters and really ties things together. So, each one of those individuals or team manages their own assets. So, they own their own clients. They can leave at any time. They can manage the assets any way they want. We have some folks that use a certain common investment style, and then we have other folks who use a little bit of this and a little bit of that, whatever makes sense for them and their clients.

So, they're around the country, mostly on the Northeast. We're as far as Texas and up to north of Boston. And so, it's a wonderful group of people. And it's a lot of sharing of ideas, and we're still just trying to improve upon that, to be able to share ideas with one another. And when something comes up, that they call me or they call one of the other advisors, and they'll say, "Yeah, I think that person dealt with that situation. You ought to talk to them." So, it's a way of networking amongst all of ourselves.

And, really, this has been a long haul trying to go ahead and do this over the years and bring this together. Because remember, each person is independent, but they are under our wing. They are W-2 employees, for the most part, W-2 employees, and they also...we concentrate just on assets under management or hourly fee. Or a retainer fee. So those are the ways that we get paid as a true RIA.

Michael: So, what does, I guess, the support staff structure look like to support 27 advisors? Do you have a bunch of internal operations and trading and other sorts of folks that are part of this as well, or do the advisors all then staff their own local teams of admin and other support?

Brett: They would staff their own office, although we would be paying for that. So, we would handle their payroll, their rent, all of their expenses as part of the deal that we work out with them. And so, for us, we want them concentrating on working with existing clients and, if they want, to get more clients. And that's what our goal is. So, if we can go ahead and take the administrative side off the table, that's great.

Also, on the compliance side, so we're handling the tech issues. So, we're making a move. We're in the process of moving over to Orion, so we're working with a consultant and who's serving essentially as a CTO to make sure that that goes smoothly and that we are ready for everything that it entails in terms of us plugging into Orion as a firm, in terms of compliance, making sure that somebody's looking at emails and is blessing newsletters that go out or slide presentations, things like that.

Also, on the practice management... we just had somebody join our firm. We have decided to really try and grow this aspect of our business. And we've brought on some more personnel. And we also brought on our new president and co-managing partner with me, named Ted Durkin. So, he has had a lot of experience at other firms. And, for him, he's really a practice management expert. And so, with the education on my side and understanding situations as well as his practice management, hoping to allow our advisors to get even better at their jobs than they already were.

So, we're excited about that. We're putting a lot of time and money into the firm to really be able to get bigger, not necessarily just to get bigger, but to offer more services and better services to our existing advisors and potentially new advisors.

Michael: So, what kinds of services are you hoping to add? What becomes complementary from where you are now?

Brett: Yeah, so right now, we are using Morningstar, which has served our needs to date. And most of the advisors will use their own version of financial planning software. So, there's many out there, and they will choose which 1 they want. For us, going over to Orion for more portfolio management, if that's something that they wanted, but also, with Orion, really getting the whole package from them, from the financial planning side, if they choose to use that. Some of them are going to use other financial planning software. But then also, just helping us out from the compliance side on being really able to track things in a better way.

So, 1 of the big things that, I think, you get at our firm is you get access to a great group of advisors, but then, also, you get access to somebody like me, who's seen so many different situations, and I know when to say, "It's above me. You need to be talking to an estate attorney. You need to be talking to a CPA about that specifically." And 1 of our advisors once said, they said, "If you tell me that, I don't worry about not knowing it." And they said that, actually, is very helpful.

We have a person who does a weekly newsletter. And what's interesting is, yes, we have to read it for compliance. So, they will send it to us. They send it every Friday. And they send it to myself and our COO every Thursday night. And what's interesting is we read it, but I'm not worried about this individual putting in there, "Well, we're going to guarantee 20%." I'm not worried about that. I'm just not. So, I'm looking at it, I'm looking at words, and I have more questions of, "Hey, the 2nd paragraph, what point are you trying to get across? Because it's a little fuzzy." And they'll actually go ahead and rework it a little.

So, it's less on, hey, I'm worried about them putting something that they shouldn't put in there, and it's more of what's the message to the client? Our firm, we have 2 sayings, is what's best for the client, and no jerks allowed to work here. And if you're a jerk, we'll probably ask you to leave. And somebody said, "Well, what does that mean? Who's a jerk?" And they said, "We'll tell you." Or, actually, I'm not saying I will, but our team, our management team will tell you, "You know what? You're being difficult." And so, for us, it's about are you serving the client first? Are you also trying to help out and be a good, I would argue, citizen within our firm? If somebody needs help, are you able and willing to help them? I don't mean every day work with them, but are you willing to provide guidance if they really need it?

And we really have a special group of people, and it's continuing to evolve. And I think that culture is fun, and it's dynamic, and we hope to be able to grow it without really changing the culture, which, I think, is going to be a challenge. So, doing better on the tech, doing better on resources, to be able to say, "Here's other types of investment philosophies you might want to be thinking about." Because remember, each advisor can manage assets in the way they want. We do not have a central theme at the firm. And part of that is, is if we're not providing the level of service that you need, guess what? You can leave. You own your clients, and they're not tied into a portfolio at 1 firm that they couldn't replicate elsewhere.

Michael: So how does that work? I guess I'm just trying to visualize from the investment management end. Do they each trade their own portfolios because they're setting their own philosophies and models? Or do you have some kind of centralized trading team that manages all...that implements all of their models? Just how does that work in a multi-advisor firm like yours?

Brett: Yeah, obviously, we have an investment committee, but really, each advisor is in charge of managing the assets in the way they see fit. We have a number of advisors who simply say, "Hey, I'm going to farm this out." And obviously, the investment committee is going to be looking at that and saying, "Okay. What are your separately managed accounts? What is your asset allocation? Does it fit in together with risk tolerance and liquidity needs?" Etc.

Some advisors want to be more hands-on, but what we're finding is, is that more and more advisors are looking at, is there a way, based on goals, risk tolerance, liquidity, that they can plug into something? And so, for us, it's really allowing the advisor to do what they think is best for their clients and then us looking it over from a compliance standpoint and a risk management standpoint. So, it's kind of a you be you, but we're looking over your shoulder as well.

So, some advisors will go ahead, and they actually want to spend time on the investment, and they make up their own models and their own separately managed accounts. And that's wonderful. And then others just say...we have an advisor here who came up with his own models, and they're essentially ETF, low-cost, passive groups of investments based on risk tolerance. And we have a number of advisors who go ahead and utilize that person for it, for rebalancing, etc. We have a number of folks who use dimensional funds, which are wonderful. So, it all depends on what the advisor wants, but we're not going to dictate what that has to be.

Michael: But then do they each literally do their own trades, like they're logging into the custodian or whatever your trading tool is to queue up 47 shares of the ETF for Betty?

Brett: They would, although you can do block trading, etc., unless they have farmed that out to someone else. So, say I don't want to deal with investments in terms of dealing with the nitty-gritty of it, and this person has a number of wonderful models. So, I'm actually going to go ahead and let them do it and maybe pay them a certain amount of money, or I'm going to set up separately managed accounts. So, the separately managed accounts are going ahead and doing the internal trading.

And then where it comes in is the advisor's looking at it quarterly or definitely yearly, saying, "All right, what are we doing here in terms of client needs, and is it the right portfolio to move forward to the next quarter, or the next 6 months, or the next year?" So, it all depends. Some of our advisors want to be very hands-on, and others don't want to be hands-on at all.

Michael: Right. And thus, the transition to Orion to try to have a standard platform that everyone uses for this? Is that part of the driver of changing?

Brett: I think that's part of the driver. Yeah. And they have different trading platforms that I think it'll be better for us on a compliance side, just making sure things are done right. Also, right now we're just using Morningstar. So, for Morningstar, which has served our needs for performance software, but Orion, there's other things that we can do, and obviously, you pay more for it, but there's things that we can do on Orion that I think the advisors, once they jump into it, it's going to save them time. And it's also going to allow us to have a better handle on what people are doing out there in terms of our advisors as we grow.

Michael: And so, that's the transition from Morningstar Office over to the Orion capabilities.

Brett: Yes. And so, we'll be running both of them for about a year. So, we're paying for 2 systems and because it's the right thing to do. Because we need to make sure that both systems are running before we shut off Morningstar.

Michael: And so, then, how does this work, just from the business economics perspective? Do you have a payout-rate style structure? They get a certain percentage of their revenue, and then the firm gets the rest for the tech, and the team support, and what you provide? Is it a percentage basis? Is it a dollar basis?

Brett: Yep. It's a percentage basis.

Michael: How does that model work?

Brett: Yeah, it's a percentage basis. We actually have staff that we have to pay for, etc. So, usually, it's anywhere from 60% to 70%, but then we're also paying for your assistant, your rent, compliance, your portfolio software, usually your financial planning software.

So, yes, our goal is to make money, but we're not really looking at the margins that other firms would be looking at. I'll be straight up. I talk to different people, and there's margins of 25%, 30%, and that isn't really our goal. We're below 20%, and we think that if we can work with the right people, grow with the right people, we can give more of that back to the advisor in either services or actual comp. And if we can do that, hopefully, they'll want to stick around for a long, long time.

Michael: Well, I think of it from the classic advisor profit-and-loss benchmarking. Like, advisory firms, as they grow, once they get past sort of initial stages and start building team structure around themselves, very common to have 30% to 40% in overhead expenses for an advisory firm. And so, your margin as an advisor after overhead is often right in the 60% to 70% range anyways. So, you're replicating the same thing, except you don't have to hire your people, and buy your tech, and do all the incremental stuff to get there as an advisor with the firm. Just we'll handle that, you get your portion for doing what you're doing, which is kind of how most advisor P&Ls wrap up anyways.

Brett: And 1 of the things we try and do is once you get over a certain level, then you get 80% of your payout. Of all the fees, you get 80% payout. Once you get over, say, a big level, 5 million or something like that, then you would get a 90% payout. For us, obviously, you have your fixed expenses, and then after that, you're looking at some miscellaneous administrative costs, payroll costs, as well as liability costs. So, yeah, our goal is that since they own their clients and they can leave at any time, that's the other thing, we make sure that...leaving in the dead of night and calling your clients on the side, I don't know how that's best for your clients. I just don't. So, our thing is, is if somebody wanted to leave, they would come and tell us and they would say, "Over the next 30 to 60 days, let's transfer them out."

Now, in the current environment, I understand why that exists. I totally get it, for all the legal reasons. But if somebody's at our firm and they don't want to be here, you know what? We actually don't want them to be here. Not because we don't like them, but why have people who are unhappy around you? I want to work with people who want to work together. We're around 2 billion or a little less than that.

If we had the right mix and we were at 4 to 6 billion, but we had a great group of people, I would say that's hugely successful. If we had 20 billion, but it was a hodgepodge of groups, and we weren't really happy, and it was a bit of a mess, yeah, you may make more money, but...my joke is always, with my kids, sometimes more isn't better. Sometimes more is just more. And so, it's sort of, are you creating the culture or trying to? Because that's a huge challenge, as you know. And are you creating the culture that has the advisor and, more importantly, the client succeeding? And if you can do that, then that's great.

So, currently, we don't have any private equity money, which there's nothing wrong with RIAs with private equity money. At this point in time, we've decided to reinvest profits and make sure that we're going to build in a certain way. Because I never wanted anybody to say, "Well, hey, your quarterly numbers are low," or "Your annual numbers low." If we're growing in the right way and we have the right people, I think we're okay with that. And our goals are just to get better. We do need to grow. I think if you don't grow, you may not be able to provide the tech and the other services to the advisors and the clients. So, we do need to grow, it's just, how do you grow in the right way to create an environment where everybody's having fun and accomplishing your goals?

Michael: And so, how big is it now as it adds up to, I think you said, 27 advisors, sounds like you said, right around 2 billion in assets depending on what markets do from day to day?

Brett: Well, yeah. So, yes. Yes. Close to that. Yeah.

Michael: And do you know what's the client base overall? How many clients get served across that? So many advisors.

Brett: Yeah, we have approximately 1,700 households, I would say. So probably around there. Accounts, probably more than 5,000. Because we're going through this exercise with Orion. So, yeah, so a little over 5,000 accounts. And so, yeah. So, our households are probably around a million dollars once you put them all together, little over that. So, yeah.

How Brett Manages Staff For Two Businesses Simultaneously [1:16:14]

Michael: So, Brett, now bring me back to, I guess, a version of the question I asked at the beginning of our discussion. So, you've got all the classes and the education work that you're doing. Now we're at, oh, by the way, 27 advisors, 2 billion in assets, very, very sizable firm. So, how do you manage all this, again? How do you manage the firm side with just that many advisors, that many people? There's a lot of people issues that crop up with that many people.

Brett: Yeah. I'm truly blessed with a great team. And I know a lot of people just say that "Oh, yeah, we have a great team." Truly blessed. But between just a number of people, our COO, Courtney Elliot, and our CFO, Terry Dzelzgalvis, and Ted Durkin joining us, and many others. But we work together as a team. And I got to tell you, that makes all the difference in the world. And we also have fun doing it. We are friends with one another. Sometimes that's a little difficult when business things come up. But for the most part, we're honest with one another. Communication is key, is, "Hey, this is what I'm struggling with."

And it's one of those things that, for me...we were talking about this technology. Just trying to get on the call here, I was messing it up. And I have a woman I work with, Dawn Shannon, who's fabulous, and she's like, "Would you just get out of the seat? I'll take care of this." No, but it was wonderful. It's just that we know each other's strengths and weaknesses, and we care about each other. And I know they say that elsewhere, I really believe we have that.

And then on the education side, with my brother, my sister-in-law, my sister-in-law's sister work works with us full-time as well. We just have a really good group of people, with our instructors and the other folks that are on the team. We have a woman who helps out with our corporate partnerships, named Libby Mueller. So, we work together, and we talk, and we don't yell at each other. It's business, and it's not personal. And kind of 1 of my sayings is you manage the process. Whatever's going on, it's like you manage the process. If you're having trouble getting online, okay, let's manage the process, let's go through, let's try to not get upset. How do we work through this problem? And if we need outside help, we get outside help.

I think that's the biggest thing. I'm very blessed. I'm also incredibly blessed. My wife, I met her first day of college. We met September 1st, 1986 at the University of Pennsylvania. We lived in the dorms together in Speakman basement. And we were right next to one another, and we've been best friends ever since. So, it'll be 37 years this September 1st that we've been best friends. And then we started dating later in college, and then afterwards got more serious. And I'm so blessed that she has been able to understand the dynamic of my passion, which is working with students, and working with advisors, and working on a team, and helping clients achieve and students achieve those goals.

And so, she basically says, "Hey, I know that you love that." I have 2 kids. I have a daughter, who's 21, and a son, who's 18. And they've been great. Because they will say to me...1 time they just heard me speak, and they were like, "Dad, that was a little boring." Now, they were younger. And they said, "But you seem to be very excited about it." And I said, "Yes, I am." So, they know that's my passion. So, I'm really blessed to have people around me. And, like I said, a lot of people say that. I really am fortunate to have that.

Michael: So, help me understand a little bit more just this management team structure that you have around you at the firm. What are the proverbial seats on the bus of who supports you in leadership of a firm at this size?

Brett: So, it's totally segmented. So, on the Brett Danko Education Center, that actually is my brother and my sister-in-law, and then other folks will be running the business. So, they will go ahead and take care of that portion of it. And then they basically come to me, saying, "Hey, there's an error in the material." Or I usually see a lot of the emails from students that say, okay, what are they having trouble with? Because remember, if a number of students comment that they don't understand the concept, do you know whose fault that is, Michael? It's my fault.

Michael: That's yours.

Brett: Because I didn't do a good enough job explaining it in the material or when it was taught. And that's where we're blessed with our 2 other instructors that are just incredibly helpful in terms of saying, "Okay, yeah, I'm answering this question," etc., because I can't get to this many students. You just can't. So that's on the education side.

And then on the other side, between, like I said, our chief operating officer, our chief financial officer, the new person who joined us as our president, Ted Durkin. And then we have a number of people as well that are working together. So, Ted came over with a woman named MacKenzie Bento. We had a compliance director, and now we have a new compliance director, and now, he's looking at things with fresh eyes. So, I think we were in good shape.

So, I think all of them working together. We do a meeting every week for both businesses, where we try to keep it to an hour, "All right. What are we worried...?" We have a running list of topics of low, medium, and high importance as to what we're going to work on that week, trying to stay organized, and just trying to work together, and communicating. So, we have people on each side that are doing it. And it's fun because they're in the same office, for the most part. So, I am going back and forth. I'll be in one meeting, and then I'll leave and go to the back of the office and be in a different meeting. And so, for me, sometimes I'm not sure what business I'm going...I'm like, "Wait, wait, where am I? Oh, I'm dealing with the education side. What are the problems there?"

But I do think that 1 of the things that you have to realize is as somebody, and I'm sure you've realized this, you can't do it all. And other folks can do things and make up for your weaknesses. I'm not saying you have any weaknesses, but I definitely have weaknesses. So, for those weaknesses, they come in, and they say, "Hey, we're going to go ahead and do this." So, for example, I'm a macro person, I view everything in the macro. Whereas I'm not a micro person. So, who did I marry? I married a micro person. Who runs the businesses, that nitty-gritty side? More micro people.

And so, my wife likes to joke that...I have movies, and books, and various life lessons and stories that I wanted my children to know as they grew. And I had it all written out and say, "I want you to read this book when you're 12 or 13, and then we'll talk about it," etc. So, my wife said, "You're great at all that, yet you would forget to send them to school. You'd just go off to work, and they'd be at home." Or "You would forget to send them to school with a lunch. You would just be like, 'Yeah, I didn't even think about lunch.'" So, I know that's a weakness. So, it's sort of one of those things of realizing you can't do it all.

And one of my mentors...I always had mentors. I always sought them out. And I always urge young people to do this. Search out mentors. And I remember my first mentor was the grandpa who lived next door. He was married for 50-plus years, and he was a great grandpa. And I was like, "Wow, he's just the nicest guy." And I said, "Hey, could I just ask you questions?" I didn't even know what a mentor was, but he became my mentor. And different people from business and personal have helped me out over the years.

And I remember 1 of them said to me, they said, "Look, you're going into college now. Learn your strengths and weaknesses in college and in your 20s." If you learn your strengths and weaknesses, that'll help you out so much in different environments, especially if you get on a leadership team. Because the person that says, "Well, I can do it all," you can't. And other people have gifts to offer. Allow them to offer those gifts, and allow yourself to make mistakes, and allow them to make mistakes. And I didn't think about it when I went to college or whatever, but now that I look back on it, probably some of the best advice I ever got.

Michael: So, I guess I'm fascinated, like, how do you get comfortable as a macro person or, I guess for lack of a better term, surrendering so much control over the businesses to micro people who are running them? I get on the 1 end, they're good at getting the things done because that's their gift and strength. But just, I've seen a lot of advisors over the years that are good at the macro but really struggle with how much just control you either let go of or feel like you're losing when you put people into those seats and give them that much control over the business.

Brett: I constantly struggle with that. Just going to be upfront about it. I worry about everything. I woke up last night with a...it wasn't nothing major, but I was like, "Boom, I forgot to look into that." So, I usually keep a pen and a notepad by my bed. And then, I don't know how old you are, but once you get over 40, 45, as a guy, I usually have to get up and go to the bathroom once. So, I'll write it down, go to the bathroom, and then wash my hands, and then come back and go back to sleep, hopefully. But yeah, I worry about everything. So, I'll be driving, and I'll say to my wife, "Hey, write this down," or I'll just make a mental note of it. And yeah, it's hard because I'm always thinking of the little things, and I'm always worried about what will go wrong.

Having said that, having people that you trust does give you peace of mind. And people who are smart, trustworthy, and work hard. Yeah, when I said I'm really blessed on that, I am. So, it isn't as though I don't know what's going on. I can dig into the nitty-gritty, I just tend to get lost in it too much. So, I've learned to sort of say, "Okay, how are you...oh, you're handling it that way. I understand how you're doing it. We're good. I'm going to leave you alone." So, I do ask the questions.

And sometimes every once in a while, they'll say, "Hey, Brett, we got this." And I'm like, "Okay." And that's their way of saying, "Hey, buzz off. I got this covered, and you know I have your back." And that's the other thing. These folks, I have their back, and they have mine. And, like I said, we're friends, and we love one another. And that matters. Some of them are my actual family. Some of them are my actual family on the Brett Danko side. So, there you go.

The Surprises And Low Points Brett Experienced On His Journey [1:27:45]

Michael: So, what surprised you the most about this journey of building the businesses?

Brett: What surprised me the most. What surprised me the most is the amount of effort and time that it takes to build a successful business or 2. What I mean is, when you're in your 20s, you're in your early 30s, say, you're like, "Oh, yeah, I'll just set up shop, and I'll be a success." Now, that works if you are...and I make a joke. It's if you're part of the lucky sperm and egg club, meaning Mommy or Daddy give you a business. I've had students before and, like, "Well, yes, I manage 300 million." I go, "Didn't you inherit that from your mom or dad?" "Oh, yeah." I go, "You built nothing. Just say thank you, okay?" It is hard building a business. And I thought when we went into money and managing assets, I was like, "Well, this will be easy. We'll just open up the doors, and people...we may have to hire a bouncer to keep people outside because they're all going to come in."

Michael: Because I've seen how many bad advisors there are out there. I'm a good advisor. Once I hang my shingle, the line should be out my door.

Brett: Yes. Yes. And they might get rowdy, and they might get hungry out there. I may have to feed them while they're waiting in line. So, of course, I'm joking, but I think that's one of the biggest things, is it takes time and just is the old adage, the harder you work, that the luckier you get. But I think it's also just showing up. Being there, and working hard, and...I think it was Woody Allen. Didn't he say 80% of success is just showing up? And also, just being curious and asking questions.

My son graduated high school, and, of course, at the graduation, "Do something that you love." One of the speakers said, "Problem is, is that a lot of people don't know what they love." So, you have some people who are naturally curious about everything. But what I find is, is that it takes a while for many people to find what they really want to be curious about. And, unfortunately, some people never find that.

So, it's sort of 1 of those things where trying to find that, and if you can do that, I think it helps with the actual process. But asking me what surprised me, just how hard it is to do it when somebody isn't giving you the break. It wasn't so somebody gave you the job, or put you a leg up, or landed some clients for you. Man, it's hard. I mean hard, I think. And I look back, and I'm like, "Wow, I'm very..." I worked hard, but I also was fortunate and lucky along the way to have people around me, certain...just, I had good parents that always taught me right from wrong. We didn't have tons of money, but we weren't dirt poor. But they taught me the value of education, the value of hard work, of doing the right thing, of having empathy.

People ask me, "What's the most important thing of a financial advisor?" And I just say, "Easy. It's easy. It's empathy." And they're like, "Well, don't you have to understand math?" I go, "It's empathy. It's understanding the client." You can farm out the investments. Heck, you can farm out the planning, but if you don't have a link with that person and understand what their goals are and what they're trying to accomplish, short, medium, and long term. And I think that if you work hard and you try and do the right things, it'll happen, but, man, it takes longer than you think.

Michael: So how long did it take for you? How long was it before you were finally like, "I'm there. This is going to work, and it's adding up okay?"

Brett: I'll be straight up with you. I'll be straight up with you. I don't feel that I'm there. When I was younger, I used to try to measure myself against other people. And after a while, you kind of realize that's a fool's errand. And so, what I just say is, "Hey, can I measure myself against where I was yesterday?" And so, I don't look at it as, well, how many clients do you have? Or how much money are you making? Or do you have a nice house? Or whatever. All those things are byproducts, and they're wonderful. But I got to tell you, it's, am I getting better?

So, will I ever be the financial advisor I want to be? No. And I'm not just saying that to try and be humble and to say it and sound cool or whatever. Because I'm not cool. I never was cool when I was younger, I'm not cool now. I'm saying that because I honestly believe that I'm just trying to get better. And I don't think I'll ever get to that point. They asked great athletes with...obviously, I peaked as an athlete when I was 11 years old, so it's been downhill since then. It is true.

But understand, great athletes, if they ask Michael Jordan, "What do you do to get better?" And they go, "Are you the best that you can be?" He goes, "No." I got to get better. Like, great athletes, great professional. If you ask Meryl Streep, "Are you successful?" and she goes, "Well, I have a lot of nice stuff. I won a bunch of Oscars and stuff. But no, because there's an accent I haven't mastered yet," even though she's mastered every other accent.

So, it's one of those things, it's like you're just trying to get better. It may sound trite, but that's kind of where I am. So, yeah, I don't ever think I'll ever get there. And some people would say that's sad because you should be able to kind of smell the roses. And I do try sometimes. Am I happy of what we've accomplished so far? Yes. Can we do better? Yes. But that better doesn't necessarily mean more money. It just means, for me, it's the processes and working better as a team. And if we do that, then I find that the growth and the money takes care of itself.

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

Brett: The low point. After college, I ended up working at a small hedge fund. And, well, my father passed away when I was in high school, so I was going into my senior year in high school. So, that was traumatic in and of itself. And I went on my little journey of the meaning of life there throughout the rest of high school and then college. And then I ended up working for a small hedge fund. And that kind of folded, and then it went into another business, which was a technology trading business, and that essentially went under as well.

And, man, I was working there. And I was a mess. I had no confidence. I was, you could argue, suicidal. I was severely depressed. I couldn't get out of bed, I didn't have a job. And here I am in my early 30s and thinking I'm a failure, and that's it. And I credit my wife for really being there for me. And I remember going to a therapist. The doctor was like, "You really need to talk to somebody." I was like, "I'm not going to talk to anybody. I'm from Pittsburgh, man, we're not going to talk to anybody." It was the best thing I ever did. But what was great is, is while I was talking to the therapist, I would come home, and I'd say, "Yeah, and then this, and then this, and it was great." And my wife's saying, "I told you that 3 weeks ago." I'm like, "Yeah, but he said it better. He said it better."

But what was great is after...it was, I think, 3 months or so, it was 12 or 13 sessions, I had been writing up what I wanted to accomplish, which is what we're talking about right now. I wanted to teach, I wanted to lecture. I wanted to have a business where I was doing financial planning, possibly managing assets, having other advisors. I wrote up my business plan, and it's kind of been carried out since then. But I wrote that in that three-month process I was talking with this therapist every week.

And he was a very old therapist. And he said to me, he goes, "Look, you're done." And I said, "What do you mean? Are you firing me?" He goes, "I'm firing you. You've written up your life plan. You're ready to go." And I wrote up things I wanted for my kids that were unborn. Not like where they went to college, but did they have empathy? Were they good people? Etc. So, I wrote up sort of my life goals, materialistic business, personal, all that stuff. And I wrote it up over a 3-month period. And he just said, "Look, you don't need me anymore."

And then as I was building the business, 1 of the things that was difficult for me is I spent teaching live classes about...well, 48 to 50 weeks a year, I was on the road for, you included travel day, kind of 5 days. So, I spent a lot of time on the road, and I missed my kids, you know, a lot of their growing up when they were little. And there were certain events that I missed, etc., because I was out building a business.

So, I think some folks think that, oh, it's easy. That the thing that surprised me, was how hard it was. And going in, I would've said, "Yeah, I know it's hard." I just didn't realize how hard it was doing both...especially both businesses, and that you do have to make trade-offs. And it's really hard for that work-life balance. And now, my youngest is now leaving for college, and that's wonderful. And I'm looking forward to spending time with my wife. So, there you go.

The Advice That Brett Would Give His Former Self And Younger, Newer Advisors [1:37:13]

Michael: So, is there anything else that you know now and wish you could go back and tell you 20 years ago as you were first getting started with the first version of the advisory firm?

Brett: I would say just get started. Believe in yourself. Make sure that...I had enough financing essentially for us to live for 2 years, and my wife said, "You got 2 years. I don't mean that you're making a lot of money. I just mean that you can bring in some money. And after 2 years, if you don't think it's going to work, or after a year and a half, you have to go get a job." And I vowed that I was not going to work for anyone else unless I had to. Because there's nothing wrong with that, I had just had circumstances where I didn't control my destiny. And if I failed, I wanted to fail because of me, or succeeded, succeed because of me.

But, yeah, I would say get started, believe in yourself, and just realize that it's going to be hard. And when it's hard, you have a wall, find out a way to break through that wall, go around that wall, and really make sure that you just keep going at it if it's your dream. I would also say leverage relationships, make sure that you stay...which I always tried to do. But I tell younger folks, really, I would want you to, when you have mentors out there, or former bosses, or professors, or teachers, or anything like that, neighbors, utilize their experiences.

All I know is, is that I kind of don't understand life sometimes. I don't understand relationships sometimes and what to do in life and this and that. But they've kind of screwed up, and they've lived it, so why wouldn't I ask them about it?" No, seriously. And other people thought I was nuts. People do want to help, but they also want somebody who's serious. So, if you're going to waste their time, yeah, it's not going to work. You know, be curious about their lives if they're willing to share, and then how that can essentially go ahead and seep into your life.

And the other thing which I always tried to do was read and then say...you know, not everything, but I would read different things. I'd say, "Well, how does this affect my life?" Or "How does this affect our clients? Where could I use this?" Because then it's not an obscure article. And I'll be honest with you, I've read articles of yours, and I'll be like, "Wait, wait, wait. That Scenario number 2..." because you always have a bunch of scenarios, "Scenario number 2, wait a minute, that's just like these 2 clients. Because then you truly learn it. It isn't some esoteric thought process in a white paper. It's, wow, you can actually bring it to life.

So, it's sort of not just reading it, but also reflecting on it. So, I would just put everything you have into it if it's something you really want to do and realize it's going to be hard. And if you think it's going to be easy and you're just going to quit, then you're never going to succeed.

Michael: So, Brett, any other advice for, I guess, just younger, newer advisors coming into the industry and trying to get off on the right foot?

Brett: I think be a sponge. Try to learn as much as you can. Talk to as many people as you can. Don't be afraid of doing work that you might not get paid for. I think volunteer work is huge. I learned so much about credit card debt, student loans, just doing volunteer work when I first became a CFP. So, that is 1 thing that I would...I knew about them, but you really can become experts and understanding cash flows and understanding what the client's goals are. So, I would argue being a sponge and learning as much as you can.

I think that's harder now. It's easier in terms of you can get it online. So, you can get any Fannie information you want online. But I think it's harder because we tend to be in our own bubble, our own tree house. And you don't have people all together, talking around the proverbial water cooler about this situation or that situation. So, that's where, I think, the mentorship and trying to be around people who have seen it before, I think that's important.

Anybody who had been in the industry 20, 30, 40 years, 50 years, I was talking to them when I was young in the business. I still talk to them even though I'm older in the business, because there's little snippets you learn. And you say, "Well, they said a bunch of stuff that I don't agree with." That's the old-timer stuff. Yes. But there's some nuggets in there that you pull out. And also, I think it's important to understand where we were and how the financial planning profession and being a financial advisor as an occupation has evolved. And I think you can understand that better by understanding the history and talking to people who have done it.

So, just keep learning and keep trying to better your skills. If you do that and then if you just work hard...it's not going to come easy unless somebody's giving you the clients. But most of the time, you're going to have to really, really work hard.

What Success Means To Brett [1:42:27]

Michael: So, Brett, as we wrap up, this is a podcast about success. Just one of the themes that always comes up is, literally, that word, success, means very different things to different people. And so, as someone who's sort of objectively built 2 twin successful businesses, both on the education, with so many people who go through the educational programs for CFP certification, and then the advisory business up to $2 billion, how do you define success for yourself at this point?

Brett: We touched on that a little bit earlier. There's lots of ways to view it. I view it in 2 different lenses. 1 is personally, so just trying to be the best son I can be, friend, husband, father, trying to, along with my wife, create kids that are good, hardworking people, that have empathy and believe in a higher power. I'm not saying religion or God, just it could be the force. Just something that's a higher power, so you're not the center of the world. So, on a personal side, that's how I would view success.

And then on the workwise is just trying to be a good leader and a good coworker and help students on the educational side and help clients and the advisors working with their clients to accomplish their goals. And that's what I would say. It's like, can you leave the world a better place professionally and personally than when you came in? I don't know whether I'm going to do that, but that's how I would define success. And I'll probably go ahead, and I won't know that until I am 70 or 80 years old.

Although, I will add 1 thing. When I wrote up my manifesto over 2 decades ago when I was going through therapy, and it was very therapeutic, all the things I wanted to do, I wanted to come up with a measure of financial success. So, I was thinking about, is it a million dollars? Is it a billion dollars? What is it? And I realized what it was. It was that I would get upset if I was forced to take RMDs. Because financially, if I was forced to take them, that means I didn't need them. So, for me, success, that's what it was, I don't know, 23 years ago or so. That's what success meant to me. And I think it's kind of funny, but you asked for success. So financial success, for me, that's what it meant 22, 23 years for me when I was writing all this up. So, there you go. So, it's a long answer, but there you go.

Michael: I have enough that I don't need it, and I can now officially resent that the government's forcing me to take it out.

Brett: There you go.

Michael: They're good financial planning milestones.

Brett: There you go. There you go.

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

Brett: Well, thank you. And, like I said, I'm humbled and honored to be part of this podcast. And yeah, I wish everyone out there much success in your profession and in your personal life.

Michael: Amen. Thank you.