#FA Success Ep 379: Creating A Client Deliverable That Focuses On Behavior Over Returns With Custom Intelligrations, With Hans Blake

Resources Featured In This Episode:

• Hans Blake
• Sample Intelligrations Report – Download (PDF)
• Intelligent Investing Advisors Brochure – Download (PDF)
• Intelligent Investing
• The Gap and The Gain: The High Achievers' Guide to Happiness, Confidence, and Success by Dan Sullivan and Benjamin Hardy
• The Game of Numbers: Professional Prospecting for Financial Advisors by Nick Murray
• Start with Why: How Great Leaders Inspire Everyone to Take Action by Simon Sinek
• Riskalyze
• MoneyGuidePro
• Redtail
• Panoramix
• Orion
• Black Diamond
• Tamarac
• Bob Veres
• RightCapital
• FinaMetrica
• TD Ameritrade
• ChatGPT
• Deloitte
• Pontera

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

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Full Transcript:

Michael: Welcome, Hans Blake, to the "Financial Advisor Success" Podcast.

Hans: Thanks, Michael, it's so good to be here. I appreciate you having me on your awesome podcast.

Michael: I appreciate you taking the time to join us today. Looking forward to seeing you talk more about the ways that we try to show value to clients. And what to me is this sort of rise in recent years of trying to figure out how we more visually show our value for clients, what we're doing for them, how we're keeping them organized. I feel like financial planning, what we've said for a long time, "Well, we help you make your financial life more organized, but we never really had a terribly good way to actually show that and make the point, aside from maybe I produce this 173-page plan to show you how organized your life is." For most clients, a 173-page document doesn't actually make me feel more organized. It's kind of an overwhelming document.

I know you've been spending some time, and energy, and resources within your firm try to figure out how do you build your own version of, as I would call it, a customized deliverable. As most of us would call it, sort of a customized report specific to our firm, how do we show our clients what we've done for them and what we're bringing to the table? You have spent a lot of time creating what I think is something really cool within your firm, and so I'm looking forward to today just talking about this, the journey of how we build these customized deliverable reports for our clients, what you've created, and maybe a little bit of a collective industry conversation around where are we going with all these deliverables and reports that we're trying to create for clients to show value?

Envisioning Intelligrations - Intelligently Integrating Americans' Financial Lives [05:10]

Hans: I think when I launched Intelligent Investing 7 years ago, I realized to me that the number one stress that Americans have is money and finances. I think in 2023 CNBC said something like 74% of Americans are stressed out about their personal finances. So I tried to launch this firm with the passion to minimize that financial stress. "Hey, let us handle that and maximize your life as a result." So that's kind of the genesis of why we launched Intelligent Investing. And so out of that over the last 7 years, I realized that people are super busy, right? Time is money, as I say on our podcast, "Time is money so invest in every minute." Well, they don't want to read a 173-page manual, right? The best thing that's doing for them is a paperweight.

So how do I envision this plan for the client? How do I demonstrate that, hey, we are looking at it from a tax perspective and, hey, we're taking a look at your estate plan? And out of that kind of came this Intelligration, so how do we intelligently integrate their financial life? And I'm probably like most Americans, we like visuals, right? A 1-page statement that shows their entire financial picture. And our high-net-worth clients are just loving it. They're giving feedback on, "Hey, can we add this next?" This is kind of the how, how are we minimizing their financial stress and maximizing their lives? Out of this came this, Intelligrations. And so the last several years, I've copyrighted it, and trademarked it, and we're handling it right now with our current firm and our clients. And I love the functionality of it.

Michael: So you kind of framed there, this is in the vein of creating a visual, creating a 1-page summary kind of document for clients. So I guess tell us a little bit more about just what your version of this looks like. I know you have samples out there, so I guess is it okay if we share a version of this out for listeners as well, just so at least if people want to follow along with the discussion visually.

Hans: Absolutely. So the Intelligrations report that I've designed out of our Intelligrations, first off, it starts when we read in America, we read top left to right, right? So the top left thing, if you're an actor, that part of the stage is where our eyes first are directed to, and the top left part of the page, Michael, is the risk. What is their current risk number in real-time? And what is the risk number or how much risk were they wanting in their portfolio when we both, advisor and client, signed their investor policy statement? So it's a visual that shows them, "Hey, you are in alignment with what we both agreed to take with your risk."

So that's kind of the starting point. And below that, you'll see a snapshot of their allocation of their big buckets, so to speak. Equities, fixed income, cash, and other things as well as a snapshot of what we might think is the annual range midpoint or kind of the expected return of this type of a portfolio, along with their expense ratio. So we as independent fiduciaries are trying to keep a lot of Wall Street out of our clients' portfolios. And so we want to demonstrate that, hey, this is how much your actual portfolio is costing right now in real-time.

Michael: So I'm realizing for folks that are listening along, if you want to actually see this to follow along, we'll have a sample version of this that Hans was kind enough to share. So if you go to kitces.com/379 for episode 379 and go to the show notes area, we'll have a sample of the Intelligrations report. Just because I'm appreciating the irony, we're talking about how great it is to have visuals for clients and then verbally demonstrating the visuals. So if you can take it in that way, then more power to you. But just if you want to see a visual of what this looks like, kitces.com/379, go to the show notes area, and you can grab a little PDF sample version of what this looks like.

Hans: Well, I should just describe whatever I want and have the ChatGPT come up with a picture of this report.

Michael: Oh, there you go. Yes. Yes. We'll draw it after the fact, just be creative, Hans.

Hans: So in the center of the whole report is a focus on their probability of success. So looking at the underlying assumptions of their plan that we've already created with them, their Intelligrations plan, we have needs, wants, and wishes. And so that's the center, so to speak, of this one-pager.

It dials the probability success dial is in line with a few things. One of the things that a client controls is how much they're spending. So I show them right in the front, middle of the report, what is their spend rate, and looking back over the last whole year. That's also dynamic and in real-time to show them, "Hey, you're spending 7% of your portfolio." It changes to red to let them know you can't sustain that indefinitely and have that probability of success stay as high as we would like it. So that's kind of just a snapshot.

One thing that Michael is missing, that I like to point out, at least on my report is returns. And that's on purpose because I am a big proponent of behavioral finance which says that we tend to misbehave with our money. We look at losses and want to do something. And when we look at our losses, which happen if you're gonna be in the markets, the worst thing you can do is react to those losses. And so we purposefully leave them out of at least this report. Now, our clients get a quarterly report where they can see all the numbers they want to see, but it's intentional to show them, "Hey, we're focused on risk. You should focus on your spending and together, we'll have a successful plan."

Michael: Deliberate separation of the investment returns portion from, I'm going to say, the planning portion. It's not just planning portion, you do have portfolio risk and asset allocation here, but I guess keeping it deliberately higher level goals and purpose function, and not drilling here down to the... And let's talk about what your year-to-date and trailing 12-month returns have been.

Hans: Exactly. It just helps us all focus on what we can control and not focus on what we can't control. And I think that that's a really important thing that advisors tend to do. I'm a human, so I think a lot of advisors tend to follow the same misbehaving that they're trying to tell their clients not to do. And it's hard. It's really hard. I've been in this industry where other firms will only talk about the funds that are under the engine and what they just did this last year. And there's just so much that is out of our control that I think that there's just a lot of misbehaving that goes on from both advisor and client, and this is a goal to help me prevent myself from misbehaving.

Michael: So you've mentioned as you've been going through these, you've got a segment on risk. Looking at the risk number of their current portfolio compared to where they said they wanted to be when they went through the initial process with you, you've got a probability of success style that ties into what their needs, wants, and wishes are. And so I'm struck as I'm hearing this, risk number is usually the language of risk allies, need, want, wishes is sort of traditional framework for money guides. So is this drawing indirectly from those as platforms and that's part of your integrations, Intelligrations integrations that you're leveraging those platforms in how you build the report here?

Hans: Yes. So when I launched Intelligent Investing, I wanted to have the best of the best in different categories of the FinTech stack. So at the time, I was really interested in different technologies talking to each other. So, at the time, Riskalyze was an up-and-comer and I just loved their visuals. I loved the behavioral finance focus on helping clients behave and showing them, "Hey, this is the expected range likely that you will experience in a normal environment," and, "Hey, I can... It's speaking my language."

So I partnered with Nitrogen when we launched the firm, and I was looking around at, okay, what's the best? In my opinion, what's the best financial planning software? And at the time, it was MoneyGuidePro. So I was having all these awesome individual financial technologies, but they weren't talking. They were integrating with each other, they might send over name and an address, so to speak, but they weren't sending the data points that I was wanting.

And so what I've had to do in building the software is use what's called application programming interfaces or APIs, so that's the opposite of user interface, what we see, it's the kind of the backend. And so I was able to, working with some engineers and software developers, figure out a way to take my key and go to each of their doors, and unlock the door, and go grab John and Jane Smith's data. I mean, I'm already paying the vendor. I'm using their vendor license, so can I at least get John and Susie Smith's, let's say, a risk number, as an example? And so then they give me the risk number, and I'm able to put it right on that report where I want it to be. There's an application programming interface on my end that's behind the scenes, as I call it the intelligration system, but it's all working behind the scenes to be able to pull in...

If I hit, Michael Kitces, as a client, and I hit Refresh, it goes and logs into 3 or 4 technologies, gets your specific data points, and brings it into my system. And then I hit a button called Print, and, voila, the Intelligrations report is produced. And so it's a way for us to, as advisors, save a lot of time. But yes, we're using a lot of these technologies, but leveraging this intelligent integration to make them even more cohesive, and work together, and combining all these data points into a one-page report that our clients can just visualize and see in a clean, clean way

On this report, we wanted to demonstrate to the client that, hey, we have on file the key estate planning documents. We've heard some horror stories of people being on a cruise overseas and slipping down the cruise railway, hitting their head, and being taken to a nearby hospital in another country, and the kids don't have passports and can't go see dad on this foreign cruise. So it's important for our clients to know that if something ever happens like that, please, have your loved ones call us. We have your documents on file. We are happy to send the healthcare power of attorney wherever it's needed to go. So that's one element, Michael.

Another is I'm a CPA. I'm no longer drinking the Kool-Aid of busy tax season, but I understand a lot about taxes and minimizing taxes. And so future iterations of this report may show the client their current tax rate, for example. On this report, required minimum distributions are listed to show them, "Hey, here's your current year's required minimum distributions. Here's how much you've taken year to date." And at our firm, we automate this. So we take our RMDs quarterly automatically so the client never has to worry about that big tax penalty for not taking them. And then social security, we get up-to-date social security numbers from our clients and we can put that on this report.

So on the backside is a quick snapshot of their net worth, including all of their assets and liabilities, both assets that we're managing and assets that we're not necessarily managing, or land, or business investments, or property elsewhere. And then on the back side is focused on contacts. So we want to be their financial quarterback, and we want to be able to coordinate with their CPA or their estate planning attorney. Trusted contacts are very important as our clients get older to make sure if I'm suspecting something. We had this happen in a meeting where one of our clients left to go to use the restroom, and the spouse was, "Please, help me, he's not right mentally right now." And so we want to have this trusted contact listed, so we can talk to their child if the spouse, for example, is not picking up on the clues that we're seeing, just to protect their finances. We never want anything to happen to that client. So that's just an example of how it looks. And then, of course, there's a section for the client to take some notes and write down their tasks as a result of this meeting. So they leave the meeting with one page, and they're quite happy because we've covered everything, and if something's not quite right, we have some talking points right in the meeting.

Michael: So I get some of these, okay, current risk number and target risk number I can draw from an integration from Nitrogen. Needs, wants, wishes, goals I can pull from MoneyGuide. When you get to areas like, "Here's a list of your estate planning documents, we do have your wills on file. We don't have your POAs on file." I'm assuming like that's manual, just someone's got a look-up, "Do we actually have this on the client file or not?" And then check the checkbox if yes and not if no.

Hans: It's somewhat manual. So, for example, our CRM allows us to drill down in this example, let's just say, John Smith, who is his estate planning attorney? We can drill down into their connections or memberships, and assign that the estate planning attorney is Michael Kitces, for example, and we can say Michael Kitces is the estate planning attorney connected to this client. Well, the next time we run in Intelligrations, It's going to log into our CRM and pull in all of these connections into the system. And we also have... You said, for example...

Michael: A state doc?

Hans: Yeah, a state doc. "Do we have those on file?" We can do a little trigger and say, "Yes, we do." And then next time Intelligrations runs, it's looking for that UDI, and it's pulling that in. So it's a way for us, if we want to in the future, add a new one, whatever that might be, and think of it like a check box, right? Yes or No, or even a drop-down box, right?

Michael: So what CRM system are you using?

Hans: We use Redtail.

Michael: Okay.

Hans: So our backend, we have some triggers that we can kind of pull and type in, for example, on ours, we have what was last year's AGI for the client, right? We don't need to show them that on the report, but I want to be able to kind of pull up that at any time, and then figure out what tax bracket are they in. "Oh, they're in the 22%..." So we have tax bracket and other additional points, but some of it, at this point, you haven't figured out a way to have their folder scanned and within the folder figure out that was a healthcare power attorney for them, maybe one day. It works that way.

Michael: So then where do things like asset allocation and net worth come from? Where's that data pulling from?

Hans: So the net worth is pulling in part from our financial reporting software which we use Panoramix out in Minnesota. And they've been fantastic at working with them on a number of data points that I'm interested in that are coming from our custodian. So with Panoramix, for example, I'm able to kind of summarize all their qualified accounts, all of their non-qualified accounts, etc., and pull them in that way.

And at this point, we are manually entering, for example, let's say, their lake home, but once it's entered, we find that entering it once isn't too big of a deal because it typically doesn't change the liabilities we can update and, "Oh, I paid that off already." "Well, okay, then we'll take that out and then rerun the report." So that's, at this point, how we're doing it. I'm in talks with, for example, RightCapital to see if we can get some of that integrated non-manually, so to speak, but that's how it works currently.

Michael: So curious then Panoramix just... We hear more advisors typically using, I don't feel like there's a big 3 of Orion, Black Diamond, and Tamarac that crop up most often. I know you were very thoughtful about what's in your tech stack. So I'm curious what what led you to Panoramix versus some of the others.

Hans: Absolutely. If you look at any of those Bob Veres annual surveys that are done, you're going to see something jump out about Panoramix and that is their customer service is bar none. I have probably weekly or semi-monthly conversations with the CEO and founder of Panoramix about my ideas. Together, we've created, over at Panoramix, a year-end tax report that has got my fingerprints all over. So I can send easily to our clients a year-end snapshot of here's your short-term, long-term capital gains. Here's your interest and dividends. Here is your requirement of distribution information. Here is this, that, and the other that relates to their taxes.

And so together with Panoramix, I've been able to kind of work with them on creating this really cool report for not only our clients but any advisor who uses Panoramix. And so you're not going to get that with an Orion. You're not going to get that with a Tamarac. They're going to say, "We do it all in-house."

And so I thought, well, what's the incentive for these all-in-one shops to get better? Maybe to compete with each other, but within their own tech stack, I don't feel like there's a great incentive. So I think… I'm a capitalist. I think that the best of the breeds is the way that I wanted to go. And then as an independent RIA, I can. And if, like you said, something misbehaves, or isn't working quite the way I wanted to anymore, or it's just getting too expensive, and I can find this elsewhere, and then I can kind of plug and play. And that was, again, the point of Intelligrations was to intelligently integrate what I thought is the best out there.

And then, in the future, if we offer this to other advisors, be able to kind of plug-and-play with their tech stack. So maybe they don't have MoneyGuidePro, maybe they have RightCapital, or maybe they don't have Nitrogen, maybe they have FinaMetrica, or whatever they might have. We could kind of plug-and-play with this technology and offer this to others.

Learning Coding And Getting Intelligrations Built [26:45]

Michael: So, now, that we've got more of a visualization and understanding of the report here. So, now, take us back to how did this get built?

Hans: How did this get built?

Michael: As you said, you're a CFA CPA, but I'm presuming not also a custom app developer, software developer person.

Hans: I will say I'm trying to self-teach in those areas, right now.

Michael: Okay, learning to build a code, excellent.

Hans: I'm trying to do some GitHub and figuring this out. It all kind of started back, frankly, Michael, when I was probably 6 or 7 years old in Pennsylvania. I had a neighbor who was a techie. This particular guy, he was, I think, partly blind in either one or both of his eyes. So he had to get real close up to the screen. And he was typing all this, MS-DOS kind of stuff. And I'm just sitting there watching what he's doing. And I'm just kind of, "I can't wait to get home to my Commodore 64 to try whatever he just tried." And so, I remember, I'm 7, 8 years old and my parents are upset because I'm using our phone line because you didn't have a dedicated internet line. You had one phone line and at 10:00...

Michael: "Mom, Dad, please, do not pick up the phone while I'm on the internet."

Hans: Well, not only that, they would pick up, and it would obviously either disconnect you... Or, "Hans, what if we have an emergency?" And I'm like, "Well, but I'm trying to instant message." This is before instant messaging. It was pre-instant message, whatever that might have been with bulletin boards and stuff, but I was able to kind of text a message over to my neighbor. And that was, to me, so cool. That was just mind-blowing. And so this was all before AOL and the internet. And so I've always had this kind of curiosity to learn. And that's, I guess why I'm a glutton for punishment for being both a CPA and a CFA charter holder.

But wanting to always learn how things kind of work. And so when I do these assessments, Michael, I'm like 50-50 analytical and creative. And so the technology came about because, again, I was trying to figure out how to demonstrate, like you said at the beginning, our value, right? How do I demonstrate that I want them to not misbehave? Well, showing them the risk number and how we are exactly where we both agreed when we were in calm times is a great way to do that. And so it started out as this idea several years ago where I took what skills I had in Excel and kind of drew out this kind of wireframe idea of this Intelligrations. I didn't know it was going to be Intelligrations. I didn't have that name in mind.

But how do I show a client that they are intelligently integrated, that I am taking into consideration all of this into their plan? And so it started out as this glorified spreadsheet, and I was finding on the web these little dials. And I figured out, "Okay, well, if I make the number this, then that moves the needle like this," and then I'm color coding, and I'm doing conditional formatting, and I'm geeking out on this idea. And then I was like, "Okay, the proof of concept is there. Now, let me kind of roll it out to a few of my clients and get their feedback." And looking back it's very crude looking, like everything else when you look back on it. But I got kind of good feedback on what we were trying to do. And so that brought me into talking to TD Ameritrade, that was the custodian I was using at the time, and I was calling them saying, "How do I get your data points? How do I do this?"

And I had to kind of explain that to them and say, "Here's what I'm trying to do," and you get hung up on. You try again, you wouldn't get the exact right person, and you're just frustrated. You call again and eventually, I guess I talk about this iceberg illustration. This is one of those where a lot of banging your head against the wall until, finally, you get the right call. And that was, "Hey, have you ever talked to so-and-so? They're a developer. They're actually working with us on converting TD Ameritrade to Schwab, you need to have a conversation with that person." So I did. And I laid out my vision for this. I drew it up on a piece of paper. I think I have one. Maybe I can share it with you afterwards of what these first iterations look like.

Out of that came version 1.0 of Intelligrations, and along with that came a Google Sheet that had bugs, right? And problems that we still are seeing happen with this. And another tab was enhancements. My ideas and my enhancement list, it goes on and on and on forever because as things kind of hit me in the shower, so to speak, I want to jot that down and be like, "Oh, that would be cool to do."

So that's kind of the backstory of how this came about was through all of the technology, and just kind of being curious about how can we make this look better, and how can we show them information that affects their lives? If I show them that, hey, their probability of success is 95%. Well, you shouldn't be nervous as much when you hear the news report about inflation, or what did the Dow do today. So that's, again, going back to the roots of behavioral finance and how do I help our clients behave better?

Michael: So I understand it in kind of the origin around building it in Excel document. How did it get from Excel to software? It sounds like, at some point, other developery folks that go deeper in the development world got involved.

Hans: So I found an independent developer who was also working at an RIA firm. And so he understood the RIA kind of language, right? And his firm, I think a fiduciary firm like ours. And I could actually kind of see what he built for their firm, right? So I could, I could visually see, "Okay, this guy knows what he's doing. He was recommended by TD Ameritrade. He's got years and years of experience. He's got developer codes and developer language that I don't have." And one of those first few conversations was, "What happens if something happens to you? Who do I need to know... What language are you speaking in that I'm going to need to find somebody who could take over?" So he kind of shared that with me. The steps in kind of developing it were first kind of just frameworking my vision.

So he took my pieces of paper. He, I think flew down to Greenville, South Carolina to meet with me. I think we had a conversation at our breakfast room table. And I showed him, "Here's what I'm thinking about doing." And so he kind of took away some notes about, "Okay, what technologies do you use?" And we wanted to kind of start off small. So we were going to connect the big three, which was Panoramix, Redtail, and Nitrogen. And I thought, "If I can get those three, that's going to save me a lot of time in prepping for annual review meetings. It'll demonstrate to our clients, our values, etc." He went away with instructions on his goal is to kind of knock on the door of these 3, and figure out a way to extract the data points through the APIs and building the databases, that was the second kind of part-and-parcel of that was building the databases because how do I know that John Smith over at Nitrogen is the same client ID as 247 over here at Panoramix, and the client ID at Redtail is 7,222? How do we merge these 3 clients in different databases as one? And that was a big challenge that he faced when he built this.

And Panoramix, shout out to them, was a big part of solving that and figuring out how do we household? How do we get husband and wife as one household? And what about their accounts for both wife and husband? And then how do we know that household is connected over here to Nitrogen and connected over here to Redtail? Etc.Then it's a matter of looking at their API documentation, figuring out what can we get? And that's the conversation I'm constantly having with the CEO of Panoramix is, "Hey, could we get this?" "Well, I don't see why not."

Michael: The fact that a firm has an API to say, "You can integrate to us", that doesn't actually mean every possible data point is accessible through that API. Someone has to do that or set it up that way.

Hans: That's right. And so it's important to have people that play ball, and going back to your comment about why not Orion and Tamarac, well, good luck even having that conversation with them. So that's the beauty of kind of being independent and having Panoramix who also is independent, kind of work with you and kind of get it right, that customer service.

Michael: So I've got to ask, if you know, what did it ultimately cost to get this built? For those that haven't been down this road, how much do you pay a developer to do this? Is it a project? Is it an hourly thing? How many hours does it take? What was the actual financial commitment for you to get this created?

Hans: I'll just say it was 10s of thousands of dollars. And I knew...

Michael: Okay, but not thousands, not 100s of thousands? Just to put some scope around it.

Hans: No, not hundreds of thousands. But my goal was launching the first iteration, to me it was... In the world of the CFA Institute, you've got human capital, you've got financial capital, right? We wanted to leverage this technology as another human, so to speak. "Hey, can you go run that report for this so-and-so client that's coming in today," right? Well, if I paid someone like that, how much would that cost me a year?

Let's just say, it was $50,000, right? I'm going to pay them this year and next year when the client comes back in, "Hey, can you go run that annual report for so-and-so client?" I'm paying them another $50,000. I think when you go shopping for the first time for furniture, when you're married, you have sticker shock that first weekend, you're like, "What?" I think we should just keep our parents' couch.

I wanted to spend money on it thinking long-term, "Hey, if I can just get this built, and then maintain it, and enhance it. I'm gonna reap years and years of time, and I'll get that back either through getting new clients or lifestyle or what have you." So it costs tens of thousands of dollars. The beauty is I'm a CPA and I knew that I could possibly qualify for some credits, for technology credits.

Michael: R&D. R&D credits.

Hans: R&D credits. So I had to figure that out. So I called the firm up, that was recommended to me, and we had a long conversation about documenting that properly. So I got some benefit back from doing that, but...

Michael: I think, usually, your R&D credits maybe get you back like 10% or 20% of your cost in…

Hans: It's not much, and then the cost of the R&D study is not cheap...

Michael: Takes a piece of that.

Hans: ...right? But my thought was, "Hey, it's something and why not?" And then I think the laws changed where it switched from completely expensing it that first year to then amortizing it over 5 years, but it is what it is, right? At least we get something. So that was kind of how I did it, making sure I partnered with somebody who I trusted, interviewing them on their safety protocols and what happens if... How do I make sure that our data is protected and the client's data? So that's all kind of...those are the conversations that I would have, and the R&D was how to pay for it or help pay for it, but it's not cheap. You have to have reserves and you've got to have the ability to outlay this, and you've got to have a vision for what you're wanting out of it, right?

You don't just build something like a pet project that you're like, "Well, that's kind of cool. It's got my favorite colors on it." You've got to have a business reason for what you're doing and anything you do, right? And why did I partner with the tech stack that I did? Well, I kind of envisioned that in the future, I might want them to talk to each other more. I didn't know I was going to build Intelligrations. I just thought, "I want them to be able to talk to each other. And if I bought one of these all-in-one platforms. Well, as long as their reports are cool, but what if their reports aren't cool, and what if I'm not happy with this, that, or the other and..." What's the phrase about necessity, mother is the...

Michael: "Necessity is the mother of invention."

Hans: And so that's kind of where, looking back, the genesis of Intelligrations was through all that. I hope that makes sense.

Michael: Just coming from this from the advisor's end, waiting a little bit into a technology world. Any lessons learned in hiring and working with a developer as a non-developer?

Hans: Communication just like any relationship is vital. One of the things that we both learned in the process, initially, and he would say, "Amen," to this, if you were on the call, was that he, I think, wasn't sure how much time was going to take for him to do what he needed to do to get into a couple of the technologies. And that kind of hurt him from a time standpoint and his return on investment, so to speak.

Michael: Because you scoped this as a fixed-fee project, it should take you X hours. So I'll pay you this much dollars, and if it takes you longer, that's on you.

Hans: Sort of. We had an idea of the scope and maybe because I'm great at creative, the scope doesn't, it moves, right? You discover as you're developing, "Oh, we can't get in that door. We're going to have to go around a back way." Or, "Hey, while you're doing that, could you just grab that data point while you're in there?" So, I would say, that communication between the advisor and the developer, it's so important. And we've had some candid conversations about just how we're feeling, and I want him to be a developer that's with me for the rest of my life, right? I want to cultivate this relationship with him where we trust each other and I don't make him bite off more than he can chew, or so on. So having that relationship where you can talk to them about how you're feeling the project's going, and letting them maybe vent, and then just walking away knowing, "Okay, we're businessmen. We get it. We've aired our differences. We've shared that we're going to still be able to work together next month." That's really important to find. If you're going to find somebody who either doesn't get your vision or says they do just because they're trying to bid and get the job, that's not going to be good long-term.

Michael: And out of curiosity, just when you start building this stuff, do vendors let you just start building your own integrations using their APIs? Is it just something like a normal advisor license or is there some other enterprise developer-like tier or license thing you have to buy to get them to open the digital door for you?

Hans: I had the conversations with, Aaron Klein before he left a Nitrogen, Riskalyze, about kind of what I was trying to do. A lot of these vendors have pretty good, what they call API documentation. You might have to ask them for it or say, "Hey, can you show me where that's located?" But a lot of them... We're living in a pretty tech-savvy world. I think that you're either going to participate in this kind of API documentation or you're going to be left behind.

I'm having conversations with RightCapital. And my initial conversation with them last year was like, "Well, if you're wanting to do that, it'll probably cost $50,000." And I was like, "Excuse me, I'm just a small RIA firm and all I'm wanting is just maybe 5 data points from my client." So, again, that was one where I beat my head against the wall. And I called back 6 months later, and I said, "Do you have anything yet for us advisors looking for maybe your probability of success number or something similar?"

"Well, let me put you in contact with somebody else who's an engineer here at RightCapital." And so, again, not taking "No" as a permanent "No", is an important thing, I think that advisors need to take away. It doesn't mean, "No forever". It just means, "No today". They might not have the right team on board. Maybe they're struggling, but you've got to be patient. And again, you got to be creative, and say, "Well, how much is it worth me manually entering? I could get the numbers, right? I can still manually enter them if I need to."

And that's what you have to do. You kind of have to work with what you got. And then eventually you'll hear about a solution that you're like, "Oh, that plugs into the problem that I'm facing. I'm going to try and call them, and see if they'll give me the thing I need." It could be a different vendor altogether. It could be the same vendor, just a different team. It could be that just had to wait a little longer for their technology to catch up.

And so I'm what I'm seeing with ChatGPT and artificial intelligence is this ability to accelerate our own learning. Over a few weekends ago, I built some macros within Microsoft Word using ChatGPT as a helper to kind of get my wife's and my weekly agenda meetings more efficient, right? I build a macro to help me write emails to clients or to other vendors using my style, using this is the style I'm wanting. This is the context of the email I received. And I built that, again, over a weekend with very limited coding knowledge myself, just a creative mind and this cool tool, right?

Intelligent Investing's Firm Structure And The Husband-Wife Team [47:28]

Michael: So, now, help us understand Intelligrations in the context of the advisory firm overall because we haven't really talked a lot about the firm itself, so help us understand just size of the firm, who you are, what you do. Just so we understand overall the environment in which this has been created.

Hans: So I have a boutique wealth management firm here in Greenville, South Carolina, serving high-net-worth individuals and families. We have a husband and wife team, a duo-solo practice if you want to think of it that way. Husband and wife team, and we're serving high net worth executives and professionals that are heading towards retirement. So like I'd say 50 to 65 is an ideal age range for our firm. And they're busy doing something else, right? They're building. They're a contractor, an attorney, a doctor. They're an engineer. We have a lot of engineers here in the south.

And they're busy building their widgets, so to speak, or they're building their practice, but then they make a lot of money, and then they don't have the professional skill level to take it to the next level, right? Either the pilots and surgeons typically have this stereotype of they're the do-it-yourselfers. And that's something that we probably wouldn't work well with because if you're not willing to outsource your professional wealth management to a true professional, then we're probably not going to be a good fit.

I think of it like this, Michael, when I need a certain screw, I have a choice, do I go to Home Depot and Lowe's, big shops? And on the way I'm praying, "Please, help someone to be in the hardware aisle," because, otherwise, I'm going to spend all day in that aisle. Or do I go to my local ACE hardware and get greeted with a bag of popcorn, and, "Hey, let me just walk you exactly to the right bin on aisle 7. And here you go, this is exactly what you need," and I'm on my way. I tend to want to go to the ACE hardware.

And so we are trying to be that unique white glove approach compared to you're just a number at a shop. So we started a registered investment advisory firm 7 years ago, Intelligent Investing. And our passion is to minimize financial stress, as I've said, to maximize lives. And how we do that again is through Intelligrations, so intelligently integrating their life. That's kind of where we are now.

Michael: So team size, it is the 2 of you, you and your wife, no other support team? The 2 of you handle all the stuff together?

Hans: So, I would say, the support team would be, we have a marketing contractor that I've worked with from the beginning. He just helps kind of with social media stuff and podcasting and he does a great job with that. And then I've got the software developer. He's obviously independent contractor that I pay to develop and help maintain and enhance Intelligrations. So, you know, it's not just my wife and myself.

But at the same time, that's how I wanted and envisioned it from kind of the beginning. We homeschool our 4 kids, and I wanted, when they got old off and could kind of handle it on their own, to have Amanda kind of come into the meetings with clients and help. As we're dealing with other couples, letting that wife get to know that it's not just, you know, a male relationship with her husband. I want to get to know both of them and I want her to feel the empathy maybe that would emanate more from my wife than me as a former Yankee, right?

So we thought that it would be helpful as a financial couple to help other couples and help them with the emotional side of approaching retirement. There's just the dynamic of spending more time together, they haven't thought through that perhaps yet. There's the finance side. As a husband looks up and says, "Oh, my word, my brother, Bill, just passed away. What if that happened to my wife? What...who's gonna take care of her? Who will step into my financial shoes," right?

Because they've done it themselves their whole life, perhaps. They've grown their 401k. But then they approach retirement and think one day, okay, distribution phase is totally different than the contribution phase. I want somebody who can help me with Roth conversions and those low-income earning years between retirement and social security. Or I want somebody there in case something happens to me where they're not...my wife's not gonna be sold an annuity by the next salesperson. And so that's kind of why we really love serving our clients.

Michael: So does your wife also wear an advisor hat? Is she in client meetings with you?

Hans: Yeah, she's an...

Michael: Are you doing these at tag team meetings?

Hans: Yeah, she's an advisor. And as you can tell from this podcast, I talk a lot. So I'm usually the one that is talking most in the meetings. But, you know, she chimes in and will add her own perspective where needed.

But she wears many hats and one of them is, you know, portfolio administrator and she helps handle a lot of the paperwork that I would just bang my head against the wall if I had to do every day. So she keeps me sane by kind of taking off a lot of the administrative tasks, sort of like a para-planner would. But she is an advisor.

Michael: And how many clients is it that you work with?

Hans: We work with about 40 clients.

Michael: Is that capacity for you guys, given how deep you like to go into service?

Hans: No, I follow the approach that I'm sure you've heard of, Nick Murray and "The Game of Numbers." We think our capacity is 100. We want to get 100 people on our ark and boat. We think, and I think you've written about this, mentally, that's probably all you could probably handle and keeping track of the relationship.

Michael: Yeah.

Hans: So we're looking for a 100. So our capacity I think is another, we'll call it 60 clients.

Michael: Okay.

Hans: And of course, if one of them had $100 million, then our AUM capacity is much higher, right, because that's one client, right?

Michael: Right, right, right. So where is AUM at this point, though?

Hans: At this point, our AUM is at about $50 million.

Michael: Okay. Okay. So, like, typical client for you is north of $1 million already here.

Hans: Yeah.

Michael: And they grow from here because it sounds like you've got...you're more pre-retirees, peak earnings years, like, folks that are still plowing a lot of dollars in before they actually pull their retirement.

Hans: Yeah. So our ideal client, our minimum is $1 million. So in Greenville, it's typically $1 million to $5 million. Around the country, you know, we would be able to take on $1 million to $10 million as an ideal client. And frankly, if you get beyond that, you're dealing with a different dynamic, a different type of client that I may not care to serve. So...

Michael: I've always found there was, like, a strange invisible dividing line of clients that were on the $1 million to $5 million, $1 million to $7 million range versus the clients that were $10-million-plus. That they're just different, like, a little fuzzy zone in the middle. But, you know, there's a lot of folks in the $1 million to $7 million range, just, like, healthy savers and accumulators that built up a good balance of savings by being frugal and earning well and very appreciative of advice.

And you go materially above $10 million, like, you're almost certainly attached to someone who is attached to business value creation, right, like, founder, key employee, executive. And just, they show up with different issues, and they tend to show up with different attitudes. You're working with a business executive who's hired and fired dozens and dozens of people over their career, and you're just another provider, I find, for most of them. They can be nice folks to work with, but the working relationship is different. They are very clear, like, "If you are not performing up to my clear expectations, I will be terminating you, because I do this for a living."

Hans: Right, and I think that going back to my behavioral finance, the people that are going to solely focus on returns are not going to be an ideal client for us. I'm a CFA charter holder, I know how to do portfolio management. I, of course, as a fee-only fiduciary, want your portfolio to grow. That's how our fee itself grows, right? But I'm not going to compromise my own philosophy for your short-term emotions. Just, I won't. And again, that former Yankee in me is kind of uncompromised in that.

C.L.I.E.N.T, The Core Values Of Intelligent Investing [57:13]

Hans: I will say, Michael, I want to take just a minute, if you don't mind, kind of sharing our firm's kind of core values. That's kind of the why we do what we do.

Michael: Please, yeah.

Hans: And this is kind of what attracts a lot of clients to us. Our core values, as Simon Sinek says, start with why. This is how I sleep at night. Of course, I would like the returns to be off the charts every year, but we just know that that's not going to happen. Our core values is what kind of, I think, separates us from a lot of advisors, and it spells the word client. So going through all of my testing, and I know you've gone through it as much as I have, you need acronyms, right, to remember things.

Michael: Yeah.

Hans: So one of the things I've done is tried to help myself remember why I'm doing what I do, and that spells the word client. So it starts with C, Compassion. And we believe that we've all been given time, talents, and money, some more, some less, but we should be compassionate with what we've been given to help others who don't have as much.

L is Legacy. So we think that passing on your family's values is more important than your family's valuables. We know that the estate documents and the wills will dictate how it will be done. But did you pass on your family's values to the next generation? And every family is different, like the Kitces family is different than the Blake family.

I is Integrity. So I think of that as doing what's right when no one's looking. As a fiduciary, I'm legally obligated to do that. It doesn't mean I'm perfect, right? So I'm never going to say...I never promised them that I was going to be perfect, but I promise that I'm going to try my best to do what's right when no one's looking. I think that's really lost in today's world where there's a lot of shortcuts taken. So that's I.

E is Excellence. So just never settling, always looking for ways to improve, to enhance the relationship with the client. What can we add? What can we do? And you can see that from Intelligrations. It's just, did I need to spend money on that? Did I need to take the time to build that? No, I didn't have to, but that's part of the excellence and the goal to help our clients.

N is Nimbleness, I worked at a big firm. I used to work in Deloitte in London, can't get much bigger than that. And there's a lot of red tape and bureaucracy to get something done. And with an independent shop like we have, we can bend over backwards. I can discuss this with my wife over dinner tonight on whether or not we are going to go down that path. So there's just a lot of nimbleness and flexibility that we can have that other firms don't have the opportunity to have.

And then the final letter is T. So T is truth. So how do we take all of this, speaking the truth in love. We have clients, for example, that need to be told something like, "You're spending too much." Now I've been in firms, conversations where you don't want to say that to the client because they'll fire you. They don't want to hear that. So speaking the truth in love is kind of the T, the last core value.

So how do we do this in a kind, empathetic way where they know you've got the right angle, the right heart for why you said that. If you have their best interest at heart, then you are going to talk about the fact that they might be spending too much, but you're also going to do it with, you know, "Are you okay? I mean, is there something going on that has caused this spending to spike this year?" And just having those conversations.

So we think speaking the truth in love is compassionate, which again goes right back to the first core value of compassion. So compassion, legacy, integrity, excellence, nimbleness, and truth spells client. And it's why we do what we do, why we wake up every day and do what we do.

Michael: So is that something you actually take prospects through? I mean, just you highlighted, like, there are folks who become clients because they connect with this. So how do you convey or highlight this to prospective clients?

Hans: Yeah. Good question. So if a prospect reaches out through the internet, we, again, through technology, use Calendly and they can book a call or coffee. That discovery call that I would have with them on the very first call, I say it's 15 minutes, but usually it ends up being an hour because we just have such a good conversation. But in that discovery call I share with them, "This is our core values." You either line up with them and you nod your head as you're listening and agree, or you don't. Like, "That means nothing to me. All I care about is the returns."

Well, it quickly separates, you know, the wheat from the chaff. It helps kind of separate who's an ideal client, who's gonna be a good long-term sticky client that I really want to work with for decades versus the short-time emotional, "Oh, I was just hoping that you could help me with this problem." It just kind of helps kind of with that filtering out of prospects.

It also allows me to kind of see where they are in life. Are they gonna be an ideal client? It helps me kind of perhaps at times, lower them down and kind of just say, "Well, this is what we do and how we serve, you know, high net worth clients." "Oh, well, I'm sorry. That's not me." "Well, don't apologize. Let me at least point you to some resources and tools that will help you on your financial journey." You know, I don't want to burn that bridge. Who knows if they're going to get an inheritance and all of a sudden, they would meet your minimum.

And so it's just that those conversations, I share the core values with our prospects to let them know, this is who we are, this is the hill that we're going to die on. And you either like it, and that resonates with you, or you're like, "It was nice talking with you." And that's fine.

Michael: So how early does this come in the conversation? Like, I'm just trying to visualize, there's a world that's, like, "Before we begin, I need to be clear about something." Like, this is the first thing you talk about. There's another that is, no, no, like, we got well into the conversation, it seems be going. There's like, "Hey, before we go further, like, let me take a moment and tell you a little bit about our values and why we're here."

Hans: Yeah. So it's not, like, "Hello, let me tell you about my core values. Thanks for calling."

Michael: Okay.

Hans: No, it would go something like this, "Please tell me what prompted you to click on the discovery call," and keep it very open-ended, right? And from there, you're going to find out a lot of information. "Oh, so-and-so from church told me I should give you a call because I'm dealing with this." Or, "I read your financial blog on this topic." And so it quickly helps you kind of get a framework of what prompted them the call.

And then from there, if I'm sensing that, okay, this is a possibility of a client needing our help, I will then kind of dive into, "Let me just quickly tell you about Intelligent Investing," right? So I've listened to them. I'm kind of jotting down some of their needs that they've mentioned in the call. And then I'm going to try and integrate that and bake that into, "Well, here's who we are."

And because of course I wanted to let them know about us in case they know of people that, "Oh, I don't need you, but my friend Tim does," From there, I'll share with them our passion of minimizing financial stress and maximizing their lives. I will go through our core values. That'll be one of the first things I do talk about because it's really important. This is my heartbeat. This is why I do what I do.

And I won't tell you how many conversations I've had, after I share that, they say, "I've worked with a financial advisor for 10 years. I've never heard...I don't even know if they have core values." Do they have a...

Michael: You didn't see them on the wall of his office?

Hans: If they didn't have a mission statement, it must be at their headquarters. But this is important for me to share with them, to say, like, "Hey, I'm just keeping it real. This is why we do what we do." And kind of weaving into that conversation, Michael, I talk about the focus on risk, how we think about risk a willingness to take on risk, ability to take on risk, your need for risk, and your actual portfolio risk, and how we at Intelligent Investing view those 4 aspects.

And then we'll talk about how we're not market timers. I'll say that right up front and say, "If you're looking for a market timer or somebody who's going to be investing this quarter one way and next quarter another way, that's also not us."

And so really, I'm trying to weed out myself from whether or not we would be a good fit, right? You know, and if the conversation is successful, I'll end kind of with, "If this makes sense to you and what I've shared, would you like a discovery meeting at our office?" And I'll typically offer that when I get a sense that this would likely be a good conversation because obviously this is going a little deeper.And then I'll leave that open to them and, "Hey, why don't you think about it?"

And from there, they may book the discovery meeting. If they do...

Michael: A discovery meeting for you isn't necessarily they've become a client. This is simply, like, going a lot deeper with them to get to know them because you have to, like, have a screening phase.

Hans: Yeah. So this is kind of, like, the 15-minute discovery calls, like speed dating. This discovery meeting at our office is, like, the actual official date where we're going to be...they're going to get to meet my wife, I'm going to get to hopefully meet, if they're married, their spouse, and we're going to have a deeper conversation. I might reiterate to the other spouse some of these concepts because they didn't hear them on the call. But laying out how we work with our clients, what their experience is going to be. We'll likely in that meeting, take a risk assessment with them to kind of at least give them something they can take away.

They still might not even become a client, but at least they'll have an understanding of where their current risk number is, and maybe possibly if they've given us some of their information, I can share with them what their current risk number is. And that's always eye-opening, right? Because typically they're not aligned. So that's how it would work.

Surprises Hans Faced While Building His Advisory Business [1:08:25]

Michael: So as you reflect on this building journey that you've had, both with the firm overall and in the tech world and intersection of it, what surprised you the most about building your own advisory business?

Hans: I think that there's a lot of self-doubt. The imposter syndrome is real.

Michael: Yeah.

Hans: When you're first launching and you have some of those initial successes, there comes a point where you're wondering, "I can't believe people pay me for this, right? Because why should they pay me for this?" And then you reflect and go, well, do you remember how many years of your life you sacrificed to become an expert as a CPA or as a CFA charter holder?

Do you remember all the nights you spent before you launched Intelligent Investing when you were working for a former firm, all the nights you spent building out the website, right? And, but like you said in your illustration of the iceberg, you know, when you do see some of those successes, it's easy to discount or forget your own trials and struggles that got you to where you are.

I think the imposter syndrome is definitely real. And it's something you can't just dismiss and say, well, just, just stop thinking that way. Because it's hard not to. I mean, especially with Americans as driven as we are, it's so easy to forget and look back on the fruits of your labor. And you know, I think that in Ecclesiastes, a Book of the Bible, they talk about a blessing is that the Lord allows you to enjoy the fruits of your labor. Like, that's just another blessing is the ability to look back and enjoy those fruits. And it takes a lot of time to build a firm.

I think another reflection would be how hard it is to really to get a client. That's always surprising to me because you've built what you think is the greatest firm, right? And you've built this cool technology, Intelligrations, you've gotten to the top of the credential ladder, so to speak. And yet, it's still hard to get clients to recognize you or to find you on the Internet. There's just so many people that say they do the same thing, but you're trying to tell them, "But we're different."

And it shouldn't surprise us, right? Because clients are sticky and they're sticky once you get them if you do your job and you do all that you told them you would do and you give them that white glove approach. Our clients are very, very sticky. But in order to get them from wherever they may be, you have to unstick them as well. And I think that sometimes that's a little more surprising.

I was just reading the other day that 50% of people don't know what's in their 401k. And that's not surprising because they probably put it in there when they first joined and left it all these years. And so we're not surprised by the fact that they don't know what's in their 401k, but yet they're not willing to let that be outsourced to a professional who would manage it and monitor it.

And that's again, one of our latest in Intelligrations has the ability to manage our clients 401ks and 403(b)s while they're still working.

Michael: And how are you doing? Is that another tech solution?

Hans: Yeah, that's another tech solution from Intelligrations. You know, we're partnering with Pontera and that helps us create that one risk number, so to speak, across all their assets, right? So we're trying to minimize that financial stress. And do you even know what's in your 401k? Do you know if that's coordinated or completely contrasting with what we're trying to do over here? So that's another example.

Michael: I liked your framing earlier, though, that part of the overcoming the imposter syndrome is kind of doing that look back of, like, you realize how many, like, you know, nights, weekends, years, you've spent and sacrificed to learn all the things that you know to get to where you are right now. Like, it reminds me of Hardy and Sullivan's, "The Gap and The Gain," that, like, a lot of us when we're achievement oriented, we spent a lot more looking at the goalposts ahead and how we're not to where we want to be yet, and that you have to pause from time to time and look back to see how far you've come to realize, like, oh, no, actually, I belong here where I am. Like, look at all the stuff that I did to get here. I belong here.

Hans: Yeah.

Michael: And hopefully not give in to that imposter syndrome.

Hans: Yeah, I think that, you know, first and foremost, you know, I'm a Christian. So I think that all of that I've been given, and the talents and the abilities all come from God. And that's just my belief system. And I think that you have to be grateful. You have to look back on the fact that you were born in America at this time, the fact that you were born next to that half-blind neighbor who helped kind of teach you the coding, the fact that you were privileged enough to have your mom sacrifice to kind of put you through college.

We stand on so many people's shoulders to get to where we are that I think a lot of times we forget that. And then we become entitled, we become arrogant, or this imposter syndrome can make you really depressed and look back and go, well, I just shouldn't be here.

And instead of being grateful and saying, wow, look at the opportunities that I have to serve other people or to help open their eyes and to take these deep, deep, deep concepts and bring them down to their level where they can understand them. And they can take away and say, "Ah, I've got an actionable item I can take from this meeting," because you helped them see that. And they wouldn't know that. They don't know how social security works. They don't know that if they delay another year, they might get an 8% extra return. So opening their eyes to those things, you have to look back with gratitude. I think that gratitude is a key part of being able to handle your success.

Low Points In Hans' Journey [1:15:13]

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

Hans: The low point, was having to leave the comfort of a steady paycheck and friendships at another firm and having to go through that with letting your boss know that, hey, you appreciate everything that they've done. You watched and admired them build an RIA firm and I kind of want to follow your footsteps. And, you know, just some of the negative responses and results of kind of going out on your own from there.

And I think that that to me, and I won't go into details, but that was a very low point in my financial career going back 20 years.

Michael: What made you take the leap if you had a pretty favorable situation there?

Hans: I've always been a driven person. Again, going back to one of our core values, never settling, right, excellence. I knew it wasn't the end of my rope that there was gonna be another day. This was not all that was meant to be. And if it was, would I be willing to accept that? And there was a lot of prayer and conversations with when is this going to end, when are we going to be able to take off, when are we going to kind of get the monkey off our back with actually leaving.

And it came in a form of a letter, and I won't go in, again, to many details. But it came in a form of a letter to me around Thanksgiving at the time, and it kind of was, like, letting me know that the monkey was off of my back, and I was in the clear to just kind of be broken away in a clean way.

That, to me, was a key turning point to the night becoming day, so to speak, where I was in this funk, I was in this depression. I remember in those first years, I think just to keep it real, I had found online, an image of the word Estate in Scrabble letters, and it looked like it was copyright-free, and it was something that I used on one of our blogs. And it was a trap. This is a scam to anyone who's had this done to you. But they act and post it as if it's free to use, and Google assumes it's a free to use image, and all of a sudden, I was getting lawsuit threats for using this image.

And it's a big scam to try and get you nervous and scared and just quickly send money away. And so I talked to some other attorneys and got a trademark attorney involved and found out that, "No, it's just a big scam. This is not a real thing. It is a real attorney firm out in California, but they had been doing this to all sorts of people and you're just one of those that was caught up in this scam." So that was, again, one of those things where I launched the firm and I'm thinking, is this how being on your own is?

Those are scary times and you do live through another day. You have a support network. Church and family is really important to me. You probably pick up on that on the podcast. But having a network where you can vent and cry and talk to and say, "This is how I'm feeling," that all helps.

Because it's rough. Last year was a really rough year for my wife and I. She was becoming an advisor. She was taking a lot of exams. We had a huge busy schedule. Schwab transition happened. It was a train wreck, but we lived through to get to this year and this year started out so well. And I'm just waiting for the other shoe to drop, right?

Michael: No.

Hans: You just don't know.

Michael: Yeah.

Hans: But that's what the beauty of working in this industry is every day is different, right? And I knew that going in and that's one of the things I like about it, unlike tax season, where you're looking at the same form year day on day out, day in, day out. I don't thrive in that environment. I thrive taking a challenge, a problem and trying to solve it.

Advice Hans Wishes He Could Tell His Younger Self 7,8 Years Ago [1:19:44]

Michael: So what else do you know now you wish you could go back and tell you, I don't know, 7 or 8 years ago as you were planning this transition, you know, deciding next steps for your career?

Hans: I would say that to take it a day at a time, as you said earlier about the goalposts, focusing on those so much that sometimes you can kind of miss the forest for the trees of life. This is something that my wife and I are constantly talking about is balancing the need for saving for our future and also enjoying life. And again, the fruits of your labor.

My grandpa, Michael, went through the depression and my grandparents saved a lot their whole life. Every conversation seemed to be around, "Well, just be grateful I'm saving up for your inheritance," whatever it might be. And I watched them go through the way they handled money was just all about savings, right, saving, saving, saving. And towards the end of my grandpa's life, I asked him, "Do you have any regrets?" And he said, "Yeah, one of the things I wish I would have taken more vacations with your grandma." And that kind of stuck with me.

And because as a CPA who has, I don't know, compared to other firms, probably not as successful as many of the people you have on here, but successful in the fact that my wife and I are able to not kill each other at the dinner table each night as we handle this, I took away from my grandpa that saving for what, right?

Intelligent Investing helps people minimize their financial stress. We want to take that off. But there's another side to that, and that is to do what? To maximize their life. Now, maximizing their life, it depends on who you are, right? I don't know what you're maximizing your life is, but if I can help you minimize your financial stress by taking the concepts that I've studied and learned over the years and help kind of put them into your vernacular as a layman who doesn't do this day in, day out, and you get it and you go, "Oh, I'm so glad that you're handling RMDs," or, "I'm so glad that you understand how these taxes things work," right, then I can help them kind of go on in life and do what they're called to do, whatever that may be.

So I would say looking back, it's having a clearer view of what are you trying to do with your goals and also enjoying life along the way, right? And it's a constant battle, right? That work-life balance, it's a thing we're constantly talking about. We just talked as a family about, I'm an amateur astronomer. And so I'm taking our family up to Ohio to visit some clients and see the solar eclipse that's going to be right in that area in April. So that's important to me is, is family.

Hans' Advice For Younger, Newer Advisors Looking To Start A Firm [1:22:50]

Michael: So any other advice you would give younger, newer advisors looking to become financial planners and start a firm?

Hans: I would say to figure out what your skill is. What are you really skilled at? What makes you, you, right? And don't compromise on that. Be yourself and figure out where your weak spots are. If you can figure out that and either hire or outsource your weak spots, then I think you're going to have a lot more success than just trying to be a jack of all trades, master of none.

I have a hard time doing that myself because, as I said earlier, I love learning. And so, why not just figure out C++ code or whatever it might be? But again, going back to that time constraint, there's only so much time in a day. If I could just take some of what I'm really good at, which I think is speaking in front of people, public speaking, understanding taxes and wealth management in a unique way and focusing on behavioral finance, if I know my strengths, then I can spend more time doing that and maybe getting a client who likes that approach.

And from that revenue, taking some of your expense and paying a marketing person to handle your social media stuff that takes also time and is valuable, but maybe not as valuable as what your skillset is. So understanding your own skillset and understanding where you're weak and where you need help is really valuable.

If you're going to go independent, you're not gonna be able to have it all. You're just not. And you got to figure out how do you get off the ground with the bare necessities, you know, a base website, an idea. And from there, you're going to slowly build it.

I didn't build Intelligrations until just a couple of years ago. It was an idea I had 5 or 6 years ago, but it kind of percolates, right? It just doesn't happen overnight. It slowly starts fleshing itself out onto a spreadsheet and then eventually something. And again, it will evolve into something else.

I mean, Amazon isn't Amazon. It was at once a local bookstore, online bookstore. And I don't have any intentions of becoming an Amazon, but I'm happy with building a solo practice, solo plus one partner, husband and wife firm, doing what we do to be able to balance our work and our life to be able to pour into other people at church and other family members.

How Hans Defines Success For Himself [1:25:56]

Michael: So then as we wrap up, this is a podcast about success, and just one of the themes that comes up is the word success means very different things to different people. And so you're on this wonderful path of success as the firm has grown north of $50 million already and so the business is in a wonderful place. How do you define success for yourself at this point?

Hans: Success to me, Michael, would be getting to retirement age, being on my deathbed and looking back and not having any regret with my personal family. It would be that my kids are well-grounded, I myself have passed on our family's values to them. It's being able to have a conversation with them and letting them know that dad's not perfect. He has struggled in many areas. And not having any regret on my deathbed with my relationship with my wife or my kids. And that to me is how I would define success today.

You'll notice there's no talk about our firm, money, anything like that. It all comes down to, did I lead a good life, leaving to my loved ones a relationship where I meant something to them? And, of course, serving clients along the way, absolutely. I love what I do. I enjoy minimizing that financial stress.

But it comes down to success, to me, is looking back on your life and not having any regret of how you handled the work-life balance. It's not having any regret that you didn't take those vacations when you could have. It's not having regret that you went and overbought in a new forever home when all your friends were, and you really didn't need to, or you didn't have to at that time. So that, to me, is success is just kind of being your own person and having enough guts to do what's right when no one's looking.

And so if you can go through life making those right choices, not having regrets when you had more choices because you were given more money or less choices when you were fired by a few clients and you had a bad rough year and taking a stand in those negative years and the positive years and saying, you know, I know what it's like to abound and I know what it's like to not have, but I'm content in either of those circumstances. That, to me, is success.

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

Hans: Thanks so much, Michael, for having me. I appreciate you taking the time with me today.

Michael: Thank you. Thank you.