#FASuccess Ep 414: Narrowing Down The Focus To Byte-Sized Planning For Tech Employees To 10X To $50M AUM In Just 3 Years, With Eric Franklin

Resources Featured In This Episode:

• Eric Franklin: Website | LinkedIn
• Loom
• Wealth.com
• fpPathfinder | Master List of Goals
• Future Proof Festival
• The Prospero Wealth Concentrated Position Playbook
• Your company is going public. Should you withhold 22% or 37%?
• The Initial Prospero Take on Secure 2.0
• "No Mr. Bond, I expect you to die!"
• XY Planning Network

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

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Full Transcript:

Michael: Welcome, Eric Franklin, to the "Financial Advisor Success" podcast.

Eric: Thanks Michael. I'm stoked to be here.

Michael: I'm excited to get to talk about the success path that you've had. I find for a lot of advisors, the growth path into the industry is a pretty long, slow, really brutal growth path. It can take a lot of firms like 5, 7 years to really feel like they're getting decent income out, 10 plus years to get the dollars to really start to add up. And for a lot of people, that career change, I find in many ways, can be even more difficult because at least when we start in our 20s, we don't necessarily have a lot of the family commitments, kids, mortgage, college expenses looming that we do further along when we come in as a career changer and we're looking at potentially leaving salary and other commitments. It can get even harder. There's even more pressure to ramp up the income to a good level faster. And I know you have had what I would consider to be a pretty astounding fast-growth track over the past couple of years, catapulting up to 50 plus million under management in barely 3 years of going all in full time into this. So I'm excited to talk about what you've done, what you've managed to figure out to hit the proverbial ground running to be able to get growth going so quickly when you're otherwise launching from scratch.

Eric: First of all, yeah, it's probably not a common path to start as a literature major, and then become a career tech worker, and then after 23 years, start an advisory. But I'm sure we'll get into this, but that tech career is really, I think, what has enabled the growth that we've seen so far to date. It certainly helped me find my niche and my clients. But beyond that, it just informs a lot of the way we think about delivering the service that we're delivering, and how we build the practice going forward. So, yeah, I'm excited to talk about it.

What Prospero Wealth Looks Like Today [05:38]

Michael: So I think to get us started, can you take a few minutes and just tell us about the advisory firm as it exists today? Like, help us get oriented to the business and where it is now. And then we can talk about what that growth path has been over the past couple of years.

Eric: Yeah. So today, Prospero Wealth is 3 full-time advisors. The third advisor just came on in the last month. All of us full-time advisors are multi-decade tech career workers. So fairly senior careers in the tech space, largely in big tech companies. And our clientele is niched and looks a lot like us, maybe a little bit younger in most cases. We focus on tech professionals generally in the peak earning years of their lives. So we're helping them sort of as their financial situations start to become more complex with families, buying their first homes, navigating their company equity positions, getting their estate plans, etc. That's really who we serve. And I think every 6 months, we're turning the crank on that niche, and niching down further, and building more and more bespoke kind of service offerings for that clientele. And that's what we've seen work so far.

But in general, I think what makes us super unique in the space is that you have former tech professionals helping current tech professionals. Most of the clients we work with are allergic to financial salespeople, and get offered tons of financial services. And for them, there's just this built in trust factor of working with people that they know have come from a similar perspective. And I think we speak differently to our clients than a lot of financial firms do. We use their language. We're very data driven in how we present our recommendations. We're very time sensitive because we know they're all busy, and most of them are working more than 40 hour a week jobs. So we spend a lot of time prioritizing what we put in front of them. So I think those are kind of attributes that help us stand out in a crowded field, and why our former colleagues recommend us to other people.

Michael: So then help us get a little bit more context on just overall sizing and scope of the firm. So if that's clients, assets under management, revenue, give us some context there.

Eric: Today, the firm manages about $52 million. That's across 80 households. But a large number of those households actually...we'll talk about this, I'm sure. The first few years I did this, I did this as a passion project on the side of my day job at Amazon, fully disclosed to Amazon. But I went through a lot of iterations of what I was offering to clients before we kind of put financial planning at the center in 2019. And that's when things materially changed for us. But I bring that up only because out of those 80 active households, roughly half of them are not financial planning clients. Those were AUM-only clients I had from before. So we've added about 40 households that do the full planning and investment with us.

Michael: And revenue wise, where does the business sit now?

Eric: We gross about 430 [thousand dollars] this year, I think is where we'll be at the end of the year is what we're on track for.

Michael: And is the business model all assets under management

Eric: So all clients coming in with a financial plan do pay a financial planning fee to start. And then we've added sort of a quarterly subscription after one year of that initial implementation and monitoring. We have a subscription offering, but we waive that for people that place assets with us.

Michael: And where do you set those numbers? What's the upfront planning fee? What's the subscription fee?

Eric: Yeah, right now, we're fairly low on the planning fee. We start at $3,000 for an individual, and $4,000 for a couple. And that's the delivery of the initial plan, and then 4 quarterly proactive updates. And then being on call for them whenever they need. So that's the planning fee. The subscription, if they stay on after that first year, we drop those by about 50%. So you can see the individual would be at a $1,500 annual, couple would be on $2,000. And then the AUM fees, they do start at 1% and they drop 10 basis points at every million dollar level. The next million is at 90 bps. The next million is at 80, all the way down to 50. And that's our terminal rate at this point.

Michael: And is there an asset minimum either that they have to have, or that they have to get to for the planning subscription fee to waive?

Eric: For the planning subscription fee to waive, we generally look for 500K, but we fudge it in the client's favor all the time. And really for me, the most important thing is having engaged clients that are growing. So I literally have clients that have started with $1,000 that I don't charge planning fees to anymore just because I want to help. So, yeah, we exercise discretion on that. There's nothing firm, but those people that started with $1,000 are actually doing very well now, and have grown into being...they're not at our minimums yet, but they're moving that direction quickly. That is another factor.

Michael: Well, because I'm going to presume that if you're working like tech employees peak earnings years, even if you have clients that don't have assets, you have clients that might have very high incomes, and be able to save...have 6-figure annual savings contributions.

Eric: Correct. Yeah, 100%. I mean, that's another reason we fudge it. If the person fits our sort of the clients we work with, and we think there's a big opportunity to help them as they grow, then we fudge things in their favor all the time. Like I said, the most the most important thing for us is actually that engagement level. So we actually won't put somebody on a subscription, planning arrangement with us if they don't stay engaged. So we have dropped a couple of clients after the first year just because we're like, "Hey, look, I sent you the same tasks every quarter for 4 quarters, and we're not making any progress. I don't want to be charging you to say that this is your next highest priority again. So if things change, please come back and we'll work with you again. But I don't think it's the right time to go on a subscription." So engagement is a huge factor.

Prospero's “Agile" Financial Planning Process [13:16]

Michael: So you said that you've...I think the label you used was turned the crank several times to keep winnowing down on your ideal client, and who you're working with, and what you're doing for them. So can you walk us through what does that financial planning process look like at this point? Who are you serving as ideal client now? And what do you actually do for them when someone says, "Eric, I love it. I work at Amazon. You know Amazon. I've got questions. I need you to be my financial advisor. Let's go."

Eric: There's a couple of different answers in here. We have what's a fairly standard process, and then obviously a huge diversity of possible outcomes come from that standardized process. So the normal planning engagement with us, the getting to know you, and building trust, and starting to understand your household's goals, and starting to prioritize some implementation for you, that generally occurs over a series of 4 to 5 meetings. We turn them loose in our tool, and have a kickoff meeting with them, provide them with some goals worksheets. And then when they kind of work through that, we come back and we review it all. That tells us how complicated their situation is, how sophisticated we need to get on the modeling side for their goals. And that's when we deliver the sort of statement of work and proposal for the plan.

Once they sign that, then we dive into the planning. We do insights first. Using their particular goals, we usually ask them to select 3 to 5 goals off a worksheet we give them. We go through end to end in the financial planning tool, wire everything up. Start to derive insights that point us in directions on what would be important for them to implement, and a sequence that might be applicable. We have that conversation with them and get a bunch of feedback as to whether they're receptive to that general line. And then once they have their round of feedback, then we go and we start to build out that implementation plan, and we come back and get one more round of feedback. And then we start to go into implementing against it.

I'd say the things that kind of stand out in our process are we don't let perfect be the enemy of the good. So we try to be very cognizant of the client's time. We try and keep it light. We try and identify only the biggest priorities, maybe the top 2 to 3 priorities at a time. And we're just relentless with that. So every quarter, every client's going to proactively get a review of their plan, and we're going to identify the next 2 to 3 things that you should be focused on over the next quarter. So we're not going to give you 100 things to do at once. We're going to give you 2 to 3, and we're just going to keep coming back and saying, "This is what we think is the biggest lever that we need to start working on for you." We call that kind of agile planning, which resonates with our tech clientele. That's one big difference. Just trying not to get it all at once. I'm not trying to give them a plan that's out of date on day 1.

Michael: I want to understand a little bit more of this step by step, just of how you're building the layers. So the first thing I heard there was kickoff meeting. I guess they're not even necessarily fully clients yet because developing the statement of work, scoping comes later. But they're prospects, we're going to get to know them and give them some goals, worksheets. So walk me through a little bit more of what's really happening in this kickoff meeting, or what you're even doing or asking them to prepare, and bring coming into the kickoff meeting.

Eric: So the kickoff meeting, we actually don't ask them to come in with a lot. In fact, the kickoff meeting is…we've typically had some sort of prospect meeting with them. We've made sure that it makes sense to move forward at some level. But in that kickoff...

Michael: So you've got a separate initial screening call, or something just to make sure this is some kind of fit?

Eric: Correct. Yeah. There's a lot of overlap sometimes between these meetings. But the kickoff meeting for financial planning, I'm sure a lot of people listening will realize that a lot of clients don't know what's in a comprehensive financial plan. And they come in very, very investment focused. And I think it really helps…and that also puts them on guard fee-wise and money-wise. They're engaging you, and 80% of the time they're thinking about their investments, maybe their 401(k) plan, maybe getting these things to work together. And I think a lot of that kickoff meeting is just, "Hey, this is what's in a financial plan. We're able to help you with insurance needs, tax planning needs, estate planning needs, figuring out what those emergency funds look like." And then saying, "Yes, the investment piece will come as a part of this process. But we cannot tailor the investment approach to you until we know all these other things about you and your household's timelines and goals." And so I think the first meeting…that's really what it's about, communicating, showing them what an example plan looks like in our tool, showing them the types of outputs they can expect, showing them how we manage tasks with them and just sort of getting them comfortable with the idea that there's a lot more to it than just investments, and that the investments are actually a piece that you determine based on everything else.

Leveraging RightCapital and Loom To Create A More Engaging Planning Experience [19:31]

Michael: So you literally show them like a sample financial plan, "Here's a version of a plan we created for another hypothetical client. You're going to get one like this."

Eric: Correct. Yeah. I use RightCapital, and we're a virtual firm. So everything is basically screen share. So I walk them through a sample client that looks a lot like a tech client. And then I show them diagrams of the CFP planning process, and talk about how the overall process is heavily reliant on the information they need to provide up front. The financial data in that in the goals being the key ones. But then, at some point, once we decide to move forward, then that's where we start to develop those planning recommendations. Also it's a highly iterative process. And so that's something else we get along. If people have been through financial planning before, it was usually a one-off thing with a 100 to-do's. So we like to to show them that we're going to keep it easy for them, and try and just give them the most important things. But we plan on working with them for a long time. So that's another thing that we're communicating in that first meeting.

Michael: So when you're sharing financial plan, it sounds like you're not necessarily sharing like a printed plan or a screen share of a PDF plan. You're literally opening RightCapital and showing them the client screens, and what they'll see in the portal in RightCapital?

Eric: Yeah. I mean, we have tech clients. They're allergic to paper. The PDF is less useful than a web based tool. And that's actually been a very successful piece of technology for us. It's an unsung hero every day, but the clients who are most engaged, they love the fact that they have knobs and dials. Once we've set it up and unlocked kind of a lot of those different views…I have a lot of clients who are in the retirement calculators all the time playing with their retirement expenses, and the age that they can leave their career and live a high quality life. So the interactivity is a lot better than a PDF or a printout.

Michael: And you find RightCapital holds up well for them. It's ironic to me, given that you literally come from a career at Amazon, as I'm sure you've heard a lot of people in our industry say, "We need tech that works as well as what people expect from companies like Apple and Amazon." So you find our industry tech actually holds up well enough to meet that criteria from actual tech company employees?

Eric: I'd say it's the best of the field right now that I've seen and that I've used.

Michael: Meaning RightCapital in particular that you're using?

Eric: Correct. Just the financial field being what it is, it will probably always be behind on the tech vector just from a regulatory perspective. And everything new takes a lot longer. But, yeah. RightCapital in particular, that was one of the only tools that we had looked at that had the ability for clients to play with the plan really on their own, and mess with some of the assumptions. And I do think that that's a key piece of the offering. And it does look a lot more modern than some of the other planning solutions out there.

Michael: And you said you also highlight how you're going to manage tasks for clients. Are you actually using the planning task manager in RightCapital, or do you have or use or do something separate, something else?

Eric: Yeah, that's the core task management for all of our planning clients. And I'll tell you, that is so powerful. If you go in and you mess with the options, you can be notified on every message that gets sent to your clients with reminders. And so I love that. Every day I'm getting exactly what was sent to my clients in terms of reminding them about tasks. And I've used that religiously to follow up with them. So if something pops up a couple of times and it's not getting dealt with, then I ask if I need to change the date, or if we need to look to do something else, or if they're just busy. But it's a great engagement tool used correctly. And the other thing is you can actually kind of implement client service calendar actions pretty easily as well, because you can add tasks at a global level. So you can easily go in after tax filing and say, "Hey, please upload a copy of your most recent tax filing." And we'll take a look at that and run it through Holistiplan and start to look for additional planning opportunities. And that's something you can do globally. It's nice.

Michael: I guess I'm trying to envision how actively and granularly are you using RightCapital's task management with clients? I mean, are they really getting to-dos for each thing they're supposed to do? "Send us a copy of the document, call your attorney to get the estate documents updated." Is it at that level of detail in what you're assigning to them?

Eric: Yes. So I think the flip side of not having 100 things is we're very intensely focused on what are the next 2 or 3 big levers for this client, or they don't even have to be big. But what are the most important things to unlock the next chunk of things we have to do with this client? So even if the client is busy and not engaged with us, we're proactively going in there at least quarterly and frequently more than that. And we will send them a big update every quarter that says, "Here's what's going on with your accounts, here's what our priorities are for you right now. We haven't heard from you in a while, please feel free to reach out and schedule us." That kind of thing. But it's proactive. Even if they're not communicating with us, we remind them that we're here.

Michael: I'm just envisioning all the people out there who are not the biggest fan of task lists, or having task lists assigned to them. So do you get clients who push back on this, who don't like this, who don't want all the tasks, or find it annoying that you're like giving them task homework? Or is the whole point like, "No, no, you hire us because we do this with you, for you, to you. Hold you accountable to get stuff done." I guess I'm trying to visualize this. Is this a challenge point to navigate, or is this actually more like a feature that you help them do this, and become the friendly nudge that they know they need?

Eric: I think it's more the latter. I've been told, "Hey, I can't get to this this quarter. I'll take a look at it in the next quarter."

Michael: It's nice to know they're not going to be doing the thing. It's much easier than bugging them, and then just having them show up to the next meeting not having done it.

Eric: It feels very disheartening if you have 100 tasks on a task list, and there's no focus or priority. I think the difference is how we deliver the focus and priority. So beyond just sending them a task list, it's not every quarter, but I'd say probably 50% of the quarters recently, I've been recording small Loom videos for each client. So at the top of their quarterly update could be a small 3-minute, 4-minute, "Hey, this is what's going on this quarter. These are what we still have for priorities. This is why we think this is the next step for you guys. This is either an urgent thing or a non-urgent thing." So I think most clients appreciate that there's somebody working on their behalf when they're not able to look at it.

Michael: And you'll send that out before the client meeting, like, "Here's what's coming up," or that's an after the client meeting, like a post-meeting wrap-up?

Eric: So we don't actually force...I mean, certain clients reach out to us all the time, and we have meetings with. We don't force meetings onto the schedule. We do these proactive updates and we offer them all the time. But we do...

Michael: So this becomes...the update check-in is the Loom video. "Hey, here's what's going on." Is it all planning oriented? I mean, are you a little bit of investment market commentary as well if you have assets for most clients? What goes into the video?

Eric: Yeah, it's a little bit of both typically. We do have some people who are only planning clients. So then it would be 100% planning focused, but for clients that are planning and investment clients, then we will oftentimes give a little bit on both. And anything idiosyncratic that's popped out in the last quarter. But the feedback's been great, by the way, on those Loom videos. We see very, very high click through. We see much higher engagement and follow up when we do that.

Michael: What is high click-through and engagement for you? I don't even know what to compare to for what's a higher or low number.

Eric: Yeah, it's hard because we get...the feedback for them comes through in multiple channels, right? So sometimes that's somebody clicked to my Calendly and signed up for a meeting from there. But I would say that I see play rates on the actual videos of about 80%.

Michael: Oh, wow.

Eric: Yeah. I know everybody at least has a chance to see them. And then, the follow up rate we're going to get in Calendly or via email or SMS, or whatever that client's preferred medium is.

Michael: So what do you cover again? Like, "Here's what's going on in markets and planning world." If you've got a little bit of that. "Here's a reminder, here's what's on your task list." Are you going down to that level?

Eric: Yeah, 100%. "Here's the 2 things you need to be focused on this next quarter." Sometimes there might be a change in our product offering at the company level. For instance, when we added wealth.com for estate planning, a huge number of these updates for people that didn't have their estate documents done, even if we've given them referrals. A large number of this was, "Hey, we have another option for obtaining these estate planning documents. It's cost effective. It's kind of technology driven. It could put a check in the box that's been hard for you to fill. Let me know if you want to chat about that." I think the exercise for us as advisors is go through every single client, every quarter, make sure their plan is updated, that it has reasonable dates for whatever expectations are in there. Figure out what's most important to communicate to this client in terms of investments, and their financial plan. Record a 3- to 4-minute video. A lot of it is just making sure that we have this core tenant of just documenting your work. And I think this is part of documenting your work. The client should know that you're always working for them, even when they're unaware of it. And even if they just say, "Oh, saw the video and I moved on." They know that they're engaged with you and that you are still working on their behalf. They don't feel like you're just sitting there poaching money. So I think that's important.

How Prospero Discovers And Discusses Client Goals [31:46]

Michael: And then you said the other part of the kickoff meeting is that you give them some kind of goals worksheet?

Eric: Yeah. And we actually use the one from...we get it through the XYPN network, the fpPathfinder goal sheet, which is updated every year. But mostly that's because, again, I think people come into the process very investment focused, and they don't realize how many other life change goals might be coming up. And so just forcing that calibration on like, "Okay, I did go through all these. Oh, and I realized actually I am thinking about this early retirement, or something that I hadn't been thinking about before."

Michael: So you use their master list of goals sheet as a checklist template that...but, if I'm understanding, not that you're talking them through. You literally give them the master list of goals. And I guess they can just mark, "We want to talk about this, this, this, this, and also this one." And now you know what you're covering.

Eric: Yeah, they go through, they click the yeses and nos, and then I asked them to put stars next to the top 3 to 5 that they really want us to build that initial financial plan around. And those are what we spend all of our time focused on in that initial plan.

Michael: Do you do that in the first planning meeting or is that pre homework? Like you send them in advance and then talk about it in the meeting?

Eric: It's pre homework. Yeah, I send it to them.

Michael: So you get through this initial get to know you. They shared some goals, you know the kind of stuff that they might be interested in. You shared what you do, screen share RightCapital, the output, the task manager, all that good stuff, diagrammed out CFP process. How long does this meeting last?

Eric: It's generally half an hour.

Michael: So you're clicking through pretty quickly through the stuff.

Eric: Yeah. I mean, again, I think we have very time-sensitive clients. So I try to make sure that they're not committing to very large, laborious meetings, especially upfront.

Michael: So I think you said the next meeting is reviewing the goals.

Eric: We call it the inputs review. And so we're going to look at two things, we're going to look at that goal worksheet and talk about what their top 3 to 5 are. And then we're going to go into RightCapital and we're going to look at all the data that they populated in their profile. And then we're going to do an audit really of, "Was there anything that didn't link appropriately? Do you not have insurance, or did you just not upload the information about your insurance?" Come up with a list of things that we might be missing. Usually it's very easy. I send them an email after the meeting that says, "Hey, before I can send you your proposal, I'd like for you to upload copies of your insurance."

Michael: I was going to say. So after the kickoff meeting, you're sending them a, "Please create your login and upload your information, or connect your accounts in the RightCapital." That happens between kickoff meeting and inputs review.

Eric: Yeah. I have an email template that I send out after that kickoff meeting. So I'll go into RightCapital and I'll create each of the...if it's a couple, I'll create both of their individual personalized links to join RightCapital. And in my email, it will have those attachments. It'll have the goal worksheet, the CFP diagram that we looked at in the meeting. And it will say, "Here's our process, what the 4 meetings generally look like. You just finished this first one. Your job right now is to click your link below and set up your account, run through that initial onboarding workflow, making note of anything that gave you a hard time so we can chat about it at the next review. And print out that worksheet, work through it together as a couple. And then just take a photo of it, and put it back in there. And we'll talk about this at the inputs review."

Michael: And I just have to ask, how often do clients actually really go in and open RightCapital or link up all their accounts? Or I guess conversely, how many don't? Do you get pretty high follow through with your clients? Because they're techies and this is familiar space, or is it still challenging to get some to actually do that part?

Eric: Most people, I can only think of one client I've had who was very leery about the linking. And requested information on how the security worked and all that. But most of the tech clients are actually very used to this experience, and I've used various tools to look at their finances in the past. So they're familiar with that process, and they understand that the benefits of having kind of live data flowing into the system improves the plan and the guidance I'm able to give. If their 401(k) is connected and I can see that daily balance updated, then when I go in every quarter, it's going to be easier to see what their allocation looks like. It's a lot more work if I require them to upload statements every quarter. That's what doesn't get done.

Michael: So how long does the inputs review meeting last?

Eric: That one's half an hour usually as well. So the first 2 are half an hour. The second 2 meetings that are scheduled for an hour. Sometimes the inputs review and, depending on the complexity of what the client has, sometimes those do require follow-up meetings, or just a longer kind of 90-minute session.

Michael: You're looking at their goal worksheet, you're looking at their data in RightCapital so you can get a feel for how complex the situation is. And it sounds like you basically told clients, "This is building up to after the inputs review meeting, I'm going to develop a proposal for you. That's what we're building up to."

Eric: Yes.

Michael: So then what happens after inputs review? I'm presuming a proposal is coming, what happens or how do you actually build and develop that?

Eric: So what we do is we have it, it's a template, but it's in Docusign. And what we do is we take the client's goals and we just write up to make sure that the statement of work reflects the actual goals and the outputs that that client's looking for in that first implementation plan. The way we structure the payment on our financial plans is that $3,000 and $4,000 starting point, I talked to you about earlier is actually we only charge 50% of it once the initial plan is delivered. So after that implementation planning and we're moving into implementation, that's where we're going to bill them the initial 50%. And then we break the subsequent 50% into 4 quarterly payments. And the reason we do that is because if at the end of that year, if this is a client that's engaged and we do want to proceed with, and maybe they don't have assets with us, then that rate tends to be the same subscription rate that they would see continue. So they kind of get used to that.

Michael: I see. If my $4k fee as a couple is $2,000 upfront and $2,000 payable, quarterly is $500 a quarter, then when I get through the first year and I'm into the subscription model, it literally is just the 500 per quarter continuing because your subscription is 50% the original plan fee.

Eric: Exactly right.

Michael: I see how that links up well. Given that you've got a fairly standard pricing, in practice, most proposals end out substantively similar for you? "We're going to reflect back the client's particular goals because each are different about what they're prioritizing, but we're going to help you with this subset of goals you prioritize as part of our planning process. And we know that doing a set of goals with clients costs $3,000 or $4,000. So that's our proposal."

Eric: Yes.

Michael: So anything else that happens after inputs review before you get to the next meeting? Now they're either saying yes or not. Finishing the sales process and getting them to agree to sign on is all happening between the inputs review meeting and the next meeting? This is the moment of signature or not?

Eric: It is the moment of signature. By this point, we've generally met with them, at least for those...usually an hour and a quarter to an hour and a half because there usually was a meeting preceding the entering the planning process at all, initial prospecting meeting. So at that point, we have a pretty good feel for...they have a good feel for us and we have a good feel for them. The close rate's generally very, very high. I'd say we're above 90% once we send out the proposal.

Michael: And I guess I'm just wondering literally from a sales process end, how does the inputs review meeting end when you're getting ready to set this up? When do you get to the, "So are you going to sign with us," kind of moment?

Eric: I don't put it on them as a large sales burden. I think everything up to this point has been...it is a trust building exercise. Generally speaking, after every meeting, we respond to the client with meeting notes, right? So inputs review is nothing different. We're going to respond with, "Hey, it was great meeting you. We have a good understanding of what's going into your planning. Your next action really is just we're going to put together a Docusign proposal, send it over to you in the next business day. Once you sign that, that's when we're going to start to really dive into the planning work that we do. And we're excited to work with you." And it generally closes. I think that's just those multiple touch points that get you to that place. So there's never a big... I guess if they wanted to back out, they generally back out before they put all their information in the tool.

Holding A Planning Insights Meeting Before Presenting Specific Recommendations [42:41]

Michael: So then the next meeting, I think you said is the insights meeting. So what happens here? I guess what are you building and bringing before this meeting? And then what happens in this meeting?

Eric: We try to put pretty much everything that's built would be put into RightCapital. We're a pretty narrative culture, so there's a lot of writing, where we're going to step through those key top-level areas of all financial plans, really. "Here's what your net worth looks like. And here's what our recommendation for you would look like around what you're going to need from a liquidity perspective. And then that means you have roughly this amount of money to either save, or you have excess that you can invest towards these other goals." But at a top level, we haven't written any tasks at this point. We're just sharing with them, directionally, sort of for each functional area, what we think that their major opportunities look like, and what the shape of those recommendations might look like. It's to take their temperature on whether they're in line with that. Sometimes we hear, "Oh, I forgot to tell you X or Y," and then we can rework it before we start spending all the time on documentation.

Michael: You said, "We're a more narrative culture, there's a lot of writing for us." So is this an actual written PDF plan? Like, is this a write it in Word, deliver a PDF kind of thing at this stage?

Eric: No. I mean, occasionally, we will put something in Google Docs and write it, but generally, we're writing narratives directly into the RightCapital, sort of comments and reviewing that sequentially with the client.

Michael: So you're still embedding it into where RightCapital actually displays this out, and you can tag your comments in, not a separate narrative document.

Eric: Correct. Although I will say on implementation planning, we will frequently have, you know, other artifacts we've created outside of RightCapital, whether those are spreadsheets or diagrams of account structures, those types of things. But yeah, in the insights review, we're leaning on a lot of the visualization that RightCapital offers, and then explaining what we can learn from a lot of those visualizations, or the background data, and just getting aligned on whether they think that these forthcoming recommendations are going to make sense.

Michael: Okay, so it sounds like you're not necessarily trying to write full on recommendations here. You're just trying to give insights?

Eric: Correct.

Michael: So the insight is you don't have much of an emergency fund. The recommendation might be you should establish an emergency fund, but you're not necessarily doing the recommendation part. You're doing the insights part here.

Eric: Right. I think in the example you give, we would say, "Hey, it looks like you need an emergency fund that's significantly larger than what you have. This is going to mean cutting back on some expenses that we're seeing here. Is that something that you're willing to discuss? Or how are we going to talk about facilitating this for you?" Before we get super specific on, "Change your paycheck withdrawal to automatically put an additional $500 a month into this other account until it reaches a certain threshold." Before we get to that level, we sort of work with them to say, "Hey, for you, we think the right amount of your emergency fund is is 4 months of need. And that looks like this. And you don't have that yet. So our recommendation on filling that would probably be to do this. And does that make sense to you? Okay. Is that a challenge or is that something you're willing to embrace?"

Michael: Okay. Interesting. So it sounds like a lot of your focus at this point...my interpretation, you're trying to get their buy-in to the kinds of recommendations that you plan to queue up. You're not giving them the recommendation, "You need more of an emergency fund, say $500 withdrawal a month here." You're trying to get their buy in to the problem. "It seems like your emergency fund is a bit low. This might be an area to work on. You'd have to shift your paycheck to fund this account to a certain size. Does that make sense to you?" Like, is that something you want to pursue, and wait and see how that sits and liens with them?

Eric: Yes, it is. I think the real purpose of this when I think about it is, in most cases, you've only met with these clients, you're in your second or third hour of meeting with them. You've been provided data relatively recently. You don't entirely know if it's comprehensive. What you're doing is you're opening a dialogue, and you're building trust, and you're just saying...you're getting them used to understanding what they're..."If we're going to align this plan with your needs, these are the level of change that we're looking at. Is that something you're comfortable with?" I think a lot of it's just getting to know you. There's nothing worse than making a very specific recommendation that doesn't land. So I think that's what we're trying to get to is feel what resonates with those clients, feel what level of change they're going to be comfortable accepting, what sort of timelines it's going to take them to reach their goals. And have those very broad conversations before narrowing in and potentially giving something that sounds like you have a tin ear.

Michael: I guess that the cumulative goal from the insights review meeting is that you're going to come out with a list of areas of, "Okay, they actually want to work on the emergency fund. They really do want to work on the estate documents. They're really not interested in dealing with the insurance stuff right now. We're going to have to come back to that at some point." They seem to have buy in a 4-month emergency fund reserve. You're going to have a list of the things that they seem most willing to pursue and maybe some additional contours around the level of recommendation, the dollar amount, the threshold, the way that you might pursue it from an implementation, and that you now know and learned from conversation with them so that in the next meeting, you can actually turn these into formal recommendations.

Eric: I just think the success rate in landing those recommendations comes from this work of understanding, working back and forth with the client on how they feel about these things before you get there. The insights review is very much about just coming to a mutual understanding of what the client views as the priorities versus what you view the priorities, and trying to guide them in a gentle way to that without making a large misstep that has them doubt or mistrust you.

Michael: Okay. And then the next step is actually formulating concrete recommendations that we're going to bring in the implementation meeting.

Eric: Yep. And usually the implementation meeting, we'll kind of artificially sequence them out by stubbing in dates. But that's a big part of the conversation is, "This is the sequence of things we're looking at. We can definitely talk about how much work goes into each of these, who's doing what, and how to lay it out on a timeline that makes sense for you." But then we just go through and we get feedback literally on every recommendation. And then by the end we're trying to come up with that final list of revisions so that we can publish the plan and start to move into implementation.

Michael: And this culminates in building them out as tasks in RightCapital at this point, because that's what you're using to drive the recommendations forward.

Eric: Yeah. And at this step, like I mentioned before, we will frequently build additional materials that help understand the implementation. "You have these 12 financial accounts and we're recommending that we consolidate them down to these 4 or 5." And here's what that actual flow chart looks like, and what's necessary to move us there so we have something that's guiding the larger term direction that maybe doesn't fit in a task very well. So we do create those kinds of artifacts as well at that point.

Michael: I just got to ask, when you have this priorities-driven approach so framed around what they're prioritizing, there's a piece of me from the fiduciary financial planner ends that always struggles with this from the end of, "But there's these other things that you really need to be doing as well."

Eric: Hopefully, I can see why you'd get that impression. We are not solely focused on the 3 to 5 things they give us. Part of our job as fiduciaries is to notify them of large blind spots and risks that they might be taking unknowingly. So it's super common, especially in that insights review to say, "I know you really want to focus on these but look, you have zero emergency fund and everything's going to shake you off that emergency fund." Or, "Look, you're super reliant on the single income that's not guaranteed, and you're in a dicey industry. We think you need to consider these types of protections." So, yeah, we are not going whole cloth just on their 3 to 5. We're going to take a look at their entire financial situation and try to notify them at things that they're unaware of or hadn't considered as well.

Michael: And then once you get onto the ongoing basis, you're doing Loom videos to say, "Here's the ones we're working on." They can schedule with you, I guess when they want or are ready to come up with the next few priorities to work on. And now you're just in this ongoing process of what are the next few tasks we're going to put in the RightCapital that you're going to be working on as we iterate the plan. Is that fair?

Eric: Yeah, that's fair.

Michael: And is there a target for how often you actually aim to meet versus...sounds everyone's getting their quarterly video, either way for a few minutes to walk through what they're working on. But how often do you aim to meet, or is it necessary to meet in this model?

Eric: That's at the client level. I have fully engaged clients that I almost never meet with, but that will send me emails and text messages all the time. And are very comfortable transacting business that way. I also have people for whom I send that quarterly update, and they book me 2 or 3 times a year. I would say my ideal for a planning client is to meet at least twice a year. And I go out of my way if I haven't heard anything back from a client from the last quarterly update, and I'm sending them their next quarterly update. I'll go out of my way to find things that I want to engage them to work in a meeting with. I'll look in my CRM and say, "Oh, look, I haven't received an email back from them in Q2 or Q3. I need to push a little bit harder to catch up." The client chooses when they want to meet with us. I just offer it all the time. It's in every single email, it's in everything we do.

How Prospero Achieved Rapid Early Growth [55:08]

Michael: So now help us understand how the growth itself has evolved, and how you relatively quickly came to $50 million of AUM in this model over just the past couple of years. Where does growth come from? Like, where did these sizable tech clients come from?

Eric: Well, I think it's two areas. One is the niche, niching down. And then the second one is kind of tongue in cheek really, but it's like figuring out how to replicate myself. So I'll go through both those. The niching down, when I went full time on my business, the first conference I went to was in Huntington Beach, I went to the first Future Proof and I started to meet other advisor operators. And I was talking to them about all this uncertainty in my business. I had not clearly articulated a niche. At that point, I had a very generic website, very generic messaging offering everything. And what this advisor told me, he said, "Okay, sit down, write down your top 10 clients by level of engagement and who you enjoy working with. And then write down the top 10 from a payment perspective, and then circle who's on both lists." And he said, "Now what's in common with those people?" And the first cut of this, it was super clear right away. It was like, those are all financial planning clients. Those are all tech clients that I used to work with, like former colleagues.

Michael: When was this and what was the size of the business at this point?

Eric: I think the first time I went to Future Proof, 2022 was the first one, so it was September of 2022. I was at $8 million, 7 or 8 million.

Michael: Which was, I guess cumulative you built up to doing this part time on the side while you were still primarily with Amazon up to that point.

Eric: Correct, but that was actually after doing it for almost a year on my own. Actually it was more than a year. When I left Amazon, I had like $3 or 4 million, and I think I built up to $8 or 9 million by the time I went to Future Proof.

Michael: So you left in 2021. I guess first half of 2021.

Eric: July 2021. It made it so clear who those clients were and what niche I should be serving. And then from there, that just makes it very easy to focus on when you learn something from clients, which clients are going to matter for helping you build your practice, it was those people I circled. Those people who are willing to pay, that are willing to engage, that are getting a lot out of the engagement with me that I'm enjoying working with. How do I get more of them? And sort of every product decision you make from that point gets justified by those initial clients, by that persona really that you've uncovered. And I found that like doing this once a year, it materially changes and kind of surfaces the next big thing to work on. So that was certainly probably the most powerful... I came back from that conference. I changed my pricing. I changed my engagement model to a lot of what I'm talking to you about.

Michael: I was going to say, when you decided to pursue this, and you circled the names from both lists, and the answer was, "They're tech clients that want financial planning from me." What actually changed at that point? What did you start doing and implementing that was different than where you'd been?

Eric: Up until then, I'd been scared to turn away AUM-only clients. So I allowed AUM only and planning was very separate. And what I did was immediately I kind of said, "The model is planning-centric." The way that I get this level of engagement with clients is to work closer with them on a much broader suite of things to really understand what they're trying to accomplish. So that was the first big one. I've had a couple of different iterations on the pricing since then. But ultimately it was like, how does my pricing and engagement with the client need to reflect this financial planning centric thing? And that's how we've gotten to what we've been spending the last little bit here discussing, initial financial planning fee, splitting it up over a year, adding asset management on top of it, giving the free planning ongoing to people who do broader asset management with us. All of that came out of that decision.

Michael: What about in terms of I guess just the marketing messaging itself? I mean, you're talking about making the business more planning centric than being AUM only. But you're also talking about this as tech clients. When I look at your website now, I mean, just the home page of the website is literally, "Trusted by tech professionals." There's like a rolling scroller of major tech companies that you serve clients at. So it feels very tech professional centric today. Did it have elements of that then? Is that all new as well? Where did this marketing and messaging shifts come from?

Eric: I keep leaning into it more and more. And I mean, it's something that I learned working in tech, but was scared to implement as an advisory owner. At first, you don't want to message anything that excludes any possible client. But the truth is. I'm still getting referrals for non-tech clients all the time, and I still take quite a few people outside of our niche. Friends, family, just referrals in general. But I think those clients understand that I work largely with tech workers, they understand the prioritization of the growth of my firm. I have just found it all I did was accelerate the sharing within the niche I wanted to work with the most, and it did not slow down any of the people outside of that niche, no matter how crazy I've gotten with it. Like you mentioned, you go to my site right now and it is...all of those all of those companies on the scroller are our clients we have from those companies, right? I didn't add their logos there if we didn't have them. So yeah, if anything, it kind of metastasized on the tech side and we kept growing even in non tech.

Michael: So we can see where it is now. Can you talk about what the changes were that you made at the start? Because I mean, as you've noted I think a few times here, it was scary to start getting more focus on a particular segment and messaging doing a particular segment. So where did it start? What were you doing first?

Eric: I mean, the first thing... I'm trying to think. I redid my website. I redid the messaging to say who I was targeting. I started to develop language around that market that talked about their specific needs, and used terminology that came from the tech field. But that's multiple years of experimentation, and that's very hard to measure. Now that you can see where it's ended up, it kind of feels like...it feels pretty quick to people from the outside. But that was actually probably 2 years of experimenting. We just launched this website several months ago, and it's been a huge, huge improvement for us. But I expect to keep leaning into the more wonky, niche problems and clientele as we go forward because we've kind of found it's not possible if you're being disciplined about it to go too far in that area.

Michael: So when did it start changing marketing growth results for you? How did it start to show up?

Eric: It started to show up by just having more people in that target clientele and heavier engagement overall. So those circles I've drawn, it turns out that the reason that was working is because I communicate more effectively with that audience, and the product offering was already resonating better with that audience. So the more you can tip the table towards those circles on the paper, the better you're going to be. It wasn't like all of a sudden overnight I started getting a million more referrals. I think it just slowly creates this traction and legitimacy. And literally, every touch point you have with one of your ideal clients becomes a possible referral into another ideal client. And I think that focus allows you to snowball much more quickly. So I realized that's kind of at odds with saying we haven't really lost any of the non-tech clients. But I'd say that comes through at a fairly steady rate, referrals by friends and family that are outside of the tech industry. The people who spread the news more quickly are the people that do fit within our profile and resonate with that offering. And so I do think you see that accelerate, and that focus actually brings a lot of additional value.

Adding Advisors With Existing Networks Within Prospero's Niche [1:05:36]

Michael: Well, I'm still just struck. I mean, you went from something like $4 million to 8 million in the first year, and from $8 million to 50 million in the past 2 years. So some shift here literally 10x-ed the growth rate in the last 2 years over the first one.

Eric: That was the second thing that I mentioned back when you asked what was the key. So the first one was the niching down. The second one that I mentioned was replicating myself. Going forward, the combination of these 2 is what's going to keep this growth. We're growing faster now than we ever have. As soon as I get through my CFP exam in November, I'm going to be hitting the growth drum pretty hard again. But to replicate myself was once I had something that was resonating and working for myself, the question was, "Well, you know what?" I've been working with a lot of tech clients. One thing I know from tech clients is 100% of them do not want to work in tech to full retirement age. Like 100% of the clients I work with, roughly, will say they want to retire early. And one of their big questions in planning in this niche is, "At what age can I leave and do something more meaningful to me?"

So there was that knowledge. That certainly was true to myself. It's a stressful, stressful career to be in. Even if you have gold-plated benefits, even if you have salary that makes other people salivate, it is stressful, and you never feel safe. And that's true even more so right now. The last 6, 9 months have even been worse in that regard. But what I thought was, with all these people in tech that are similar to me that have multiple decades of experience wanting to go do something more meaningful, some percentage of those people actually would love to be advisors and would make great advisors. Just like I've loved investment, personal finance for the entirety of my career, and I have done a ton of things to help people before I ever made money in it, to learn in an ongoing way. There are other people just like me that would be great advisors who are not in this space that I just need to tell about it.

And I really lucked into…one of my neighbors was very similar background to me, 23 years at big tech. He was at Microsoft, Meta, and Stripe. He separated from employment from Stripe at the end of 2022. And I went to a coffee with him and he was already known at Stripe as somebody who helped people navigate their finances. He was active in all their Slack channels and everything. So at first he was like, "What's it like doing what you do? How do I get started?" And then by the end of that coffee, he was like, "Well, can I just do it with you?" And I said, "Yeah. I mean, I think so. I have pricing that's working. I have a tech package that's working. I have some services that seem to be working." And so he came in and he quickly built a very large book that is so much cleaner than mine, because I have this legacy of trying all these different pricing plans and AUM only and there's different things. He has a super consistent book. His clients are all kind of $1 to $2 million, kind of a sweet spot. He has some that are bigger, some that are smaller, but he has a higher average than I do. And it's super clean billing and a super clean product offering.

And he built himself up to making a very, very substantial paycheck. And he controls his calendar. He works on the school PTA. He works at our swim club. What we found is that somebody who's worked in tech for 20-plus years and is in very good standing, the marketing requirements are minimal. They basically just tell their former colleagues on LinkedIn, "I'm now an advisor." And then they get swamped with demand. And so that playbook honestly has worked for our third person who's even more senior than Suhas and I. Suhas is the advisor I've been describing. We just added a new advisor that was VP of business development at F5 Networks and worked there for 25 years. He's connected with thousands of people on LinkedIn. And he thought he was going to take off the month of September, but he sent out his notice and he got flooded with demand. So I think this is something that is clearly repeatable at this point.

Michael: I was going to ask more generally, just how you market and get the word out about the firm? Is the whole core of the marketing model here simply attract advisors who are leaving the tech industry who already have existing natural markets and networks and relationships in the industry, and let them just literally announce to their prior colleagues that they're doing this thing as an advisor now because they all seem to jumpstart whenever they make the announcements.

Eric: Well, I mean, that's on the advisor kind of entrepreneurial side of the equation. I think the benefit of having these other very seasoned tech veterans working with me on a day-to-day basis is that our combined understanding of our client continues to improve. And so in the time that Suhas has been here, it's doubled our learning because not only am I...he had to learn to be an advisor. So there was a lot of mentorship and training, and me going to a lot of his meetings initially and debriefing on everything. But you know what, his clients look slightly different than mine. And over time, we kind of co-discover what the next big opportunity for an unlock for our clients look like. And we can develop improved ways of servicing our clients in our niche.

So I think that's really important too is like, I'm not just adding...I'm adding people with high intellectual horsepower, super high integrity. Part of the reason they have these built-in networks is because they built all this trust. But they're also smart enough to really help me figure out what do we need to be offering next? What's the next big scale opportunity for us? Is that a technology unlock? Is it something we need to offer to really kind of build up a product service around? A big one for us has been working with those clients in concentrated stock. We just keep finding ways to get more sophisticated in the offering of what we're able to do for them. And I just published a piece called the "Concentrated Position Playbook." And that really explains kind of our up-to-date thinking on the best way to manage concentrated positions over time, and to diversify them in as tax efficient way as possible. And I think the more you can demonstrate that expertise, you're unlocking people who have multi-million-dollar problems, quality problems, but they are problems. It helps you move up market, and get you more of the clients that you want.

Finding Marketing Success With Long-Form Written Content [1:13:19]

Michael: What surprised you the most in this journey of building the advisory business?

Eric: I think what sets advisory apart is the way they communicate with their clients. Every time I've tried to do something that works for other advisors, it just hasn't been that effective for me, or it's been super overblown. So I've attended tons of marketing best practices meetings. And we pay to access platforms that have content that we can customize that's been sort of pre-generated. And every time I try to do something that tries to systematize marketing, honestly, it's kind of failed. I do do a quarterly newsletter, which people do look forward to, it does have high open rates. But I'm not posting content weekly to a newsletter or anything. It's very ad hoc. But what we found is that the more opinionated we are, the more personality we show, the more wonky we get, the better the response. So our top blog posts in the last...which became newsletter entries, was literally on helping people at Stripe figure out what their tax withholding rate should be on a tender offer. That was something Suhas wrote right after he got here.

I wrote up our opinions, and sort of initial planning insights on Secure 2.0 legislation in late 2022. That was a huge response. And another big one that got shared a lot was in our core asset allocation in 2021, we decided to move away. We didn't like the prognosis for bonds in March of 2021. So I wrote up a post on why we didn't like the prognosis for bonds. But then I told everybody what we were doing in our client portfolios to address that. Like you can see, those are kind of wonky, detailed, opinionated pieces, and they're not like things you write up every week. I don't know. What surprises me is that the things that work are writing about the things that fascinate you. It's impossible to go too deep, really, in terms of detail. And what works for other people just generally may not work for you. The numbers game as far as putting people on drip campaigns and all that stuff, none of that has worked for me. If I want more clients or if Suhas wants more clients, we're going to write some wonky stuff, and then more clients will come. But that's kind of the way it's worked. The more we write, the more people come.

Michael: Well, when I'm struck when you're writing things like, what should Stripe employees say is their tax withholding rate on a tender offer? On the one hand, I can see you're getting into the kind of material that literally gets shared in intracompany Slack channels to hundreds or 1,000 people at a time. Because this is a very tangible reel. There's a form with a line you need to fill out. And it matters about tax withholding rate, like immediate, tangible, high stakes, high dollar problem. And I'm going to venture to say there's probably literally no other advisor in the country, maybe there's one other who's got a tech niche, who wrote that article, that thousands of Stripe employees actually needed that can therefore bring a lot of business awareness and planning opportunities. When you're deep enough in that particular segment to know that that's the hot thing that they're all talking about right now, because there's a tender offer and they've got to fill in a tax withholding form.

Eric: One hundred percent. Yeah, I think that just extends. It's something we…it's so easy to be vanilla. It's so easy to be vanilla. And so almost every message that we send to clients, we have to say, "How do we make this not vanilla? How do we make this resonate specifically to people who have just the needs that we know most of our clients have?" And yeah, so canned stuff never works for us. We constantly have to tailor every everything to that niche. And that seems to work better.

The Low Point On Eric's Journey [1:18:12]

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

Eric: So I initially started this business as a 50-50 partner with my former advisor and long-term friend, Marcus.

Michael: With your former advisor? The person you used to work with?

Eric: Correct. I met Marcus at Amazon in '99. We had a reading group for years together. We ran a local investment club together for, I believe, about 7 years, teaching people to invest here in Seattle. And then he became an advisor at Ameriprise for 7 or 8 years and was my advisor. I love him to death. And I don't think I ever would have had the...I would not have had the strength to go into this business on my own not being able to rely on his experience. I think even though he'd stepped away from being an advisor for several years, knowing that he had done financial planning, knowing that he'd managed people's assets before was hugely freeing and made me feel like, "Hey, at least I have somebody here that can make sure I don't make a big mistake," which was super, super important. But we both started this on the side of our day jobs.

And when I switched over to doing full-time, not only was it incredibly lonely, there's just like a huge impedance mismatch between I'm sitting at my desk every day trying to figure out how to build Prospero Wealth. And he wasn't. And he was making himself available for conversations all the time to me, but it's still not the same as having somebody sit there with you all day, every day. And so the hardest part for me was he made it very easy, but I had to have a conversation with him about buying him out of the business, after I was doing it full time for a year. I talked to him, he made it super easy and I bought him out. And he's still involved in the company. He's still a huge asset from an informational standpoint, and I still hope he'll come work here someday. But that created so much anxiety because I had this very long-term friend and partner that I was hoping to build this thing with, but he just wasn't at the same place in his life to be able to jump over and make that leap that I made on a similar timeframe.

Michael: And ultimately it didn't feel equitable to be 50-50 equity partners when you were in the business deeper than he was.

Eric: Yeah, there was that, but it was also slowing down decisions. There's more process around a partnership, there's more signatures required on everything you want to try out. And so we figured out a reasonable valuation for the business at that point. I paid him for his half. Everything kind of has sped up. I think everybody's better off for it, and he's never felt bad about it. But for me at the time, that was definitely my low point, because I just worried about feeling like I was moving on without him.

Michael: So in retrospect, do you wish it had just never been a partnership? Should it have been a different structure? Now that you have the benefit of hindsight, what would you have done differently going in?

Eric: I don't think you could. I mean, like I said, the only reason that I felt free to even try this was because he was there with me, on the line with me from those early days. I think this was just the natural progression that had to happen. I don't think I could have started this as a non-partnership. Certainly at the time we started it, we didn't know what timeline, if any, either of us would ever go full-time. We had a few people that wanted us to help them, and that's where it started.

Michael: So, "I'm glad we started it as a partnership, but given that our timelines and needs evolved differently, it was good we started as a partnership, and then it was good that I was able to buy him out because we couldn't continue in a partnership at some point…

Eric: Yeah, if anything, I think I could have identified it sooner. I mean, it could have been part of the conversation when I switched to being full-time, but it was only after a year of being like, "This is quite different. And it's handcuffing us from moving as fast as we want, and it's putting additional red tape on things that don't need red tape."

The Advice Eric Would Give To His Younger Self [1:23:01]

Michael: So anything else that you know now that you wish you could go back and tell you years ago as you were just getting started with the practice?

Eric: I think one of the greatest things about this business and starting it as a passion project was that I just had the luxury of growing as slow as I needed to to learn. So that's kind of a key thing. For a career switcher, I think it's very hard to make a hard shift overnight to something and start that first day with an empty inbox. And it's freeing in some way, but you have the fear of the blank page. I think what I wish I had done a little bit differently, especially right when I made the switch to full-time, was it took me, like we talked about, more than a year to go to that first conference and really meet a lot of other advisory owners and start to make sense of the landscape, and how these people competed, and how they delivered their services. I could have uncovered that much more quickly by investing in a conference earlier to try and go meet other people that were at a similar stage of development. Now when I go to these conferences, I know tons of people. I have tons of friends. When I wrote my "Concentrated Position Playbook," I sent it out to tons of people in the industry. They all proofed it for me, gave me feedback. Those are things I was missing and that created a lot of delay. And kind of doesn't look like it, right? Because it looks like we grew pretty fast. But I think that first year could have gone much, much more quickly if I had drafted on the success or best practices of a few other people earlier.

Eric's Advice For Newer Advisors [1:24:52]

Michael: Any other advice you would give younger, newer advisors coming into the profession today?

Eric: I think there's a very large opportunity out there for career switchers to become advisors, just like I did, and not just in tech. I mean, tech happens to be a highly networked industry, so maybe it works better than some others. But I've talked to other people, anybody that has spent 20-plus years in an industry that has a real passion for helping their colleagues and their families and friends with finances, this is just a really high quality-of-life business to be in. And you own your schedule, you have a lot of control over the things that have been shown to produce happiness. And so I think I'd love to be a resource for people who are trying to switch to financial advising from other industries. I'd love to help them uncover what is unique about those industries and build compelling service offerings to those clients and messaging. So those people I probably feel more comfortable providing advice to than just a generic…somebody who's coming out and maybe starting as a junior advisor somewhere. I haven't worked with those people yet, so I don't know how to help them.

Michael: So where would you tell career switchers to get started?

Eric: This will sound like we planned this in advance, Michael, but the other thing I wish I'd done earlier was...it took me a few months to uncover the XY Planning Network. I definitely think that in terms of being able to connect to other solo advisors and a community of people and an offering of products that can get you started, and all the legal templates and all that stuff, that is one of the first things I would recommend to people is that they join a network, that they start joining mastermind groups of people that are in similar situations to them. And that they start talking to people about...in our case, we're in Washington, and Washington regulators have a lot of idiosyncrasies, so you should also...wherever you're at, you need to learn what your regulatory frameworks look like and make sure you're building in a way that's not going to upset them. So, yeah, I think XYPN is crucial for finding all that.

What Success Means To Eric [1:27:32]

Michael: As we wrap up, this is a podcast about success, and just one of the themes that comes up is the, the word success means different things to different people. Sometimes it changes for us as we go through our career evolution. So you're on this wonderfully successful path with the business as it's blossomed out to $50 million-plus in 3 years. So the business seems to be in a wonderful place now. How do you define success for yourself at this point?

Eric: A good start, I walked my kids to school today before we're recording this. And later today I get to go walk and go pick them up. I can put immovable blocks of time on my calendar now to go to the gym. That is something I couldn't do when I was working in tech. My calendar was owned by everybody else other than myself. I think it has been a huge step back in terms of the income I'm making. And I continue to put most of my earnings right back into the business, and getting to the next level and trying to serve more and more people. There's people that make more money than I do, mostly all my clients. But I'll go toe-to-toe with any of them on happiness. And my quality of life is very high. I have a great family, wife, kids. Being present for my kids when they still want me around the house is how I'm marking it right now.

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

Eric: I really appreciate it, Michael. Thank you for everything you do for the entire community.

Michael: Thank you. Thank you.