#FASuccess Ep 415: Systematizing A Firm-Wide Planning Process By Leveraging Centralized Teams And A Ticketing Workflow System, With Erika Wood

Resources Featured In This Episode:

• Erika Wood: Website | LinkedIn
• VisionPoint Personal Discovery Profile – Download (PDF)
• HubSpot

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Full Transcript:

Michael: Welcome, Erika Wood, to the "Financial Advisor Success" Podcast.

Erika: Thanks for having me.

Michael: I appreciate you joining us today and an opportunity to get to dig and nerd out a little bit on like the financial planning process. How we really start to systematize a planning process. I find this kind of comes in stages for advisory firms where first we're out on our own and we're just doing whatever we can for whatever clients we serve and trying to get paid for it. And as you start doing it for multiple clients, you go, "We should probably systematize this. It might be a little bit easier to do it repeatedly."

But as firms grow and especially once they go multi-advisor, I find there's just a whole other level of complexity that comes with, "How do we as a firm have a more standardized planning process, and how do you get everyone bored with it? And how do you get the right tech and systems in place? And how do you get the whole team to actually do all the things that it takes to do this standard process across all the people in the firm?" And I know you have been going down this road over the past several years of building out a more systematized process in a multi-advisor, multi-location firm.

And so I'm just excited to both, I think, nerd out on the planning process itself just like, what do you do? What have you built? And I suppose the secondary dynamics that go with how do you actually get everyone on board and enshrine this into tech and enshrine this into the systems to really actually run more consistently across the firm?

Erika: Yeah. Yeah, it's not easy, but it's worth it.

What VisionPoint Looks Like Today [04:31]

Michael: So I think before we dig into some of the discussion of planning process, what have you built, how do you serve clients, just tell us a little bit about the advisory firm overall as it exists today, just so we have some context as we get further into what you actually are doing for clients.

Erika: Yeah, so we are in 6 different states and then also some others, people work from home, but we have offices in 6 different states, and we've got teams. So we used to be regional, and now we are all one team with different roles. So the benefit of that is that everyone's kind of working to those strengths. You've got a dedicated planning team. You've got a dedicated service team. You've got leadership. You've got advisors with varying levels of expertise and experience. We didn't want to start from scratch with all new people. We want to use the great people that we have in kind of a system that is different to everyone, a little bit foreign, but something they can grow in and have a career trajectory in. But to get everyone on the same page as far as, "Here's a process, we follow it," I think it starts with the why. Well, really, it starts with the, "Who are we? Who are we serving? Why are we doing it?" And once everyone understands that, it becomes a whole lot easier to share in this mission of we want to serve our clients. We want them to have a consistent experience. We want to be able to grow and scale with our clients, be really referable. So how do we build the systems to get to that point essentially?

Michael: And how many people are in the firm overall across 6 office locations and multiple teams?

Erika: So we have 35 people.

Michael: And how many clients is it that the firm serves?

Erika: We have about 1,400 individual clients. That's not households. That is individuals. And really kind of we segment them. So that is one of the very intentional pieces of the business is how do we segment our clients? What do we offer them? And what should we be offering our various clients with different needs and circumstances in their lives?

Michael: And so I want to come back and understand a little bit more of the segmentation, but first, just to understand overall scope, can I ask what revenue is or assets under management are for the firm? However you measure.

Erika: Yeah, so we do measure, we've got private client assets under management of just over $600 million. Households-wise, it's about the 780. So roughly half of those individuals. The revenue last year was $8.8 million and projected this year to be over 11 [million dollars]. So we've had some really nice growth and also evidence that the process, while always being refined and improved upon, is it's working. It's working really well.

Michael: So if about half the clients are private client, what's the other half?

Erika: So we do have a significant retirement solutions business. So that's going to be 401(k) plans and then deferred comp. Brokerage business is very minimal for us, but I would say the whole assets under advisement that would be kind of separating out the 401(k). There's [ERISA Section] 3(38) assets. There's [ERISA Section] 3(21) assets. Assets under advisement for the whole firm is really close to the $3 billion mark.

Michael: Okay. And so then likewise, I can see now sort of clients are split between the clients you've got on the private client side and then the clients you've got on the retirement solutions side. I guess, either plan participants or executives and leadership you're doing deferred comp and other offerings for.

Erika: Exactly. Yep. And no one's in competition, which is the beauty of the whole thing. We're all for one, one for all. We complement it nicely if there's an opportunity on the retirement plan side to do private wealth client planning, then it's an easy referral from the team member and consistent experience for that client, because we understand their group benefits innately. We put them in place, and then we can help them on their personal planning side as well.

Michael: So now help me understand the segmentation. You said you were very intentional about segmentation of clients. So what does that mean? How does that work in your firm?

Erika: So I hound on this all the time. It always starts, and we do a fit meeting. So we're not trying to appeal to everyone. We are very specific in who our ideal client is and what we offer them. Is it a good fit or not? It always starts with what are their needs? So in that fit meeting, we're discovering how complex is their plan or their needs? What kinds of scenarios would be required in this planning? How complex is it overall? So it starts with what level of planning will they need and also, can they afford it? So at the end of the day, there are planning fees that they're going to need to be able to afford in the process as well.

So starting with the need and then going from there. We're not just simply looking to gather assets and say, "You're at a million bucks, so this is what you're going to get from us." We've tried that in the old days, doesn't work as well because come to find out just because someone has a certain balance sheet does not really tell us what kind of planning they need. So we like to start…its needs-based, figuring out what kind of planning, and then we go from there. So we segment based on the planning type. And sometimes there are clients that we are just investment management. It's not something we focus on or even prospect necessarily. But we do have that option for people that might just say, "You guys do a really great job with investment management. Please just do that piece for now."

So it's broken into those planning, investment only. And then we do have some insurance-only clients that I will call legacy clients. They might have been policies we wrote long ago and we kept the relationship. So also not something we prospect, but we have a really robust insurance team that can help service that.

Michael: Are there segments within what it means to be a planning client or segments of planning? Or is your primary segmentation by the service offering itself, like planning only, planning and investments, investment only, insurance only, across the verticals?

Erika: It's the 2 sides. So it is the type of planning. And then if there are assets to manage, we will give it an A category, a double A, triple A, just to help. And also figure out if we're charging X fee on these assets and planning costs, why is that matching up? Is it enough to cover the planning? Is it not? Do they owe some out of pocket because of that? So that's kind of factored into the equation, at the end of the day, we look at it as this plan costs this much to run start to finish with a client. Here's what kind of revenue we'll need to generate to make that make sense.

Michael: So what are the actual segments? How do you characterize them or tier them, or quantify them?

Erika: Yeah, so we do have…we call them private wealth clients. And that's going to be the segment that's higher net worth, more complex planning needs. We meet with them more frequently. We talk to their outside advisors, like attorneys and accountants. That's the most comprehensive, holistic cash flow planning. Just really getting in the weeds and the details on their needs.

Below that is e-wealth, and the way it's been designed is that you can graduate from and hopefully do from e-wealth to private wealth. So e-wealth is fewer meetings, but still comprehensive planning. It's more online-based. The take-homes are electronic. So it's meant to be a streamlined version, for I would really characterize those clients as younger families, good income, good savers. They will be private wealth one day. They're just not there yet.

And then I would say one other tier: our foundational-level clients are a lot of times those private wealth clients' children. So that way we can still do good planning for them. We love family financial planning, so we really want to embrace the whole family. There's a lot of complexities and dynamics with that. And so we wanted to have an offering for them too that they could grow with us.

Creating A Profitable Fee Structure For Each Client Segment [12:51]

Michael: And so is pricing different by tier? Are there different minimums or just outright different fee levels? How does it work between the 3?

Erika: Yep. And so that's what we took a pen to paper. We figured out, okay, each team member here at the firm has...there's compensation and benefits. So we got to figure out their hourly rate and figure out how much time they're spending on each step of the process. And here's that the...you kind of run it through the machine, and here's what that fee is going to be or what the revenue that needs to be generated from the client. So we do have tiers: the foundational planning fee versus the e-wealth and the private wealth. They each kind of start small, and they increase from there.

Michael: So can you give me a sense as to what those fees are? What have you found that works? What does it take in your practice to make the math work?

Erika: Yeah. So foundational plan, this has been a trial and error. We've learned as we went. $2,500 per year would be foundational planning. $7,500 per year for e-wealth and at least $10,000 for private wealth. And then I guess another planning type I forgot to mention is our business owner exit planning, and that is going to be $12,000 and up. I'd say more commonly it's about $25,000. Just it depends on how their business looks and what their needs are. That's a very intensive process, but once again, it is a process. So follow the playbook on it. But yes, I would say all those fees I just said would have been unfathomable to me in the past that you could ever tell someone they'd have to pay this to work with you and they would do it. And I've even…just recently we had someone tell us they were surprised that our fees weren't higher. So maybe we need to raise our fees.

Michael: Apparently. Nice problem to have. So as you set these fees, are these flat fees? Are these like AUM, but this is the minimum? How do you actually price this in your firm?

Erika: Yep, that's right. It's AUM. There's an advisory fee that we charge, and then we figure out are we meeting that minimum revenue amount or not for the planning fee costs? So if somebody has $2 million and we're charging them 75 basis points and their situation necessitates private wealth planning, then that's a private wealth client, and they wouldn't have to owe anything out of pocket because of the advisory fees.

Michael: But if I'm a private wealth client and I'm only at $500,000, so my AUM fee is only going to be a fraction of what it takes to get to the $10,000 minimum, then I'm going to have some additional planning fee that I've got to pay to get me up to the $10,000 minimum to be private wealth?

Erika: Yep. And assuming because that is their need, they'd be able to afford it. If they couldn't afford it, then private wealth probably isn't the planning that they needed in the first place.

Michael: And I guess I'm wondering, mechanically, how do you do it? Do you get to the end of the year and bill them for $10,000 minus actual AUM fees equals the balance that you owe? Do you break it up for them quarterly or monthly through the year? How do you actually true this up?

Erika: Yeah, we do, so after the fit meeting and we're kind of getting the onboarding going, we do send them a financial planning agreement with the calculated fee that they might owe out of pocket. And then we give them the option. They can pay it monthly, quarterly, all at once, within the compliance rules that the plan has to be done in a certain amount of time. But for the most part, people are paying quarterly, I think is the most common frequency.

Michael: But the planning agreement essentially says, "If we work with you, it costs $10,000. If you place assets with us, it'll offset this. If you place enough assets with us, you won't owe a separate fee. Otherwise, we're going to bill you for what you'll owe."

Erika: Yep, that's right. And that's something that's discussed. So there's the fit meeting. We follow up with them afterwards with an invoice. Not an invoice. We follow up afterwards with a quote to say, "Here's the complexity of your needs or not. And here's what we see." Kind of like a contractor coming to your house. They're not on the spot telling you how much a remodel is going to cost. That's kind of the mentality we've adopted here is we want to be able to take it to the team, discuss it as a team. I have stories about how that did not work in the past when people were quoting things. They were undercharging, let's just say, and the planning team was raising their hand to say, "Hey, this is going to cost more than that."

So we have a collaboration afterwards to figure out what those costs will be, bring it back to the client, and they know. And we're telling them if they're a good fit for us. They're hopefully saying if it is a good fit that they want to work with us too. And we've told them what the fee is right away. So there's no follow-up needed. It's they're going to pay at that time, and we get the planning process going.

Michael: So if I'm understanding, there's still some time and complexity estimate for any and every client. It's not just that every private wealth client has a $10,000 minimum. If you're complex and have a lot of stuff going on, your fee could be higher than that?

Erika: Yes, yes, that is true.

Michael: Is that correct?

Erika: Yeah. And that's where we get into the advisory fee is usually covering it at that point, especially when there's custom portfolio management, for example. There's just an inherent cost, as that net worth ticks up, that the advisory fee would cover pretty much.

Michael: So you could have a higher planning fee, but usually you end up with clients that have higher assets at that point as well, so it's kind of a moot point because they generally have enough assets to cover it from an AUM fee?

Erika: Exactly.

Michael: Okay. And then how did you figure out just the rates you needed to set at these minimums in the first place? You said looking at all the team members and what they spend on each step of the process and what their hourly rate is, but it's a messy thing to actually try to figure out. So how did you go about it to really try to set how much time does each person spend in the process? What is the hourly rate of every team member? How did that work?

Erika: Yeah, try getting people to want to log hours or whatever it counts. Yeah, no one wants to do that. So I will say it's an estimate. And I think our leader, he started the firm years ago, Jim Mars, he said from the beginning, "You're always going to forget about those different hours and phone calls and emails, and that you're going to end up undercharging. So always buffer in a profit in there because you're basically going to undercharge."

So we do have a very complex spreadsheet that has all of the team members' names and their hourly rate and about how much time they spend. And we're looking at it on an annual basis. So we're not just talking about the initial onboarding. It is the client touches, the cards, the holiday gifts, the review meetings. It's all the times we might interact with that client in a given year. And come with a really best estimate of what that would cost. So it is not perfect, but it's a lot better than just shooting from the hip and guessing or trying to just match what other advisors are doing. I think if you want to look at it from a business standpoint, you want to look at it from a mathematical equation to make sure that you're coming out okay on it.

Michael: And are you trying to literally do this by client per client or just in the aggregate like, "Betty spends about 3 quarters of her time on planning things, so that's 1,500 hours a year, and we're adding that into the total total fee of clients to figure out what a minimum is?" Is it aggregated like that? Or are you actually trying to go like team member by team member for their time and client by client for how much was spent on each of those clients?

Erika: Yeah, I will say this is not something we're doing frequently. So it was kind of a set it and forget it in a way unless there's been a drastic change to something. And the other thing is there are private wealth level clients that don't want to see us that often, and that's fine. So I'm not going to shove that down their throats if they don't want to meet quarterly. That's fine, too. So then do we charge them differently? We don't. We could overcomplicate this all day long.

Michael: Well, yeah, that's why I'm wondering, like, it's a fine balancing point between "We can measure this in the aggregate for the firm and get close and be off for some clients or we can drill it all the way down to the client level and be really on target for the clients. And we may spend so much time tracking at that level of detail that it's actually more expensive than having to estimate it."

Erika: Yeah, we don't want to cut off our nose to spite our face. Yeah, and the other thing is what isn't really factored into that equation is what happens when our planning software is increasing their rates by 5%? Stuff like that happens all the time. So you don't want to set it and forget it to the point of now we're losing money, but at the same time...it's something that we keep up with, and it's just kind of to come up with a general parameter of here's the minimum revenue that this should produce.

Michael: And as you rolled this out, did you then have existing clients you had to fix who were not on target in the first place?

Erika: Yeah, that's a fine line. There's certain relationships that you're going to offer them what their needs have been and maybe no more, and that's okay. And then there's other clients that we rolled this out actually prior to joining our current firm and sat down with every single client to say, "Now we are looking at planning differently. It is fee-based. Here's exactly what you're going to get. Here's when we're going to meet." Just more organized than we ever had before. And we had several people say, "This is so great. I love that you're doing this. This is kind of what I wished for all along." So that was good feedback that, "Hey, there's probably..." We were doing it our way for so long that rolling it out in a more systematic way was something that they wanted too. So that strengthened our relationship, and they were open to, "Hey, whatever it takes. This is what I want, so you tell me."

Michael: And as you were going down this road, I think you said your owner likes to or recommends to put in a buffer, because if we're trying to guesstimate our hours, we just tend to sort of systematically do that. We forget the one-off things that we had that add up. So, do you know? Is there a set buffer that that was added in? Did you take all the times and just arbitrarily mark them up 10% or 25% or something to that effect to try to dial into an appropriate minimum number?

Erika: Yeah, for sure. And to make it just easy. $10,000 for planning. If it was right around there, it's just an easy number. So, yes, there's always a little bit of a markup because it turns out he was right. There are all those things you forget about that take up your day-to-day that you've got to price in.

Michael: So, do you know? How much did you have to adjust it up to make sure that it actually trued up? Was it like a 10% adjustment? Was it like a 40% adjustment? Because we underestimate that much.

Erika: It was on the lower end just because there's also the idea that, again, kind of the fear factor, I'm going to have to tell a client that I'm charging them, which is so silly that I even said that because there's industries that have been doing that since the beginning of time and there's no problem with it, so why are we afraid of it? But you want it to be reasonable. The other thing is we are in multi-state, so there are some markets that planning fees need to be more palatable or maybe in line with the cost of living than others. So there's kind of an art to it, too, that we want it to be consistent throughout the firm, but we want flexibility that you can still be competitive where your clients are.

Instituting A Structured Client Service Calendar With Quarterly Meetings [25:18]

Michael: So I think you had said when you were kind of going through this exercise to determine the actual cost to service and average clients and figure out where the fee minimums needed to be, that when you brought this out to clients, you were also highlighting an updated planning process of, "Well, just to be clear, here's what we're going to be doing for you going forward. Look at all the things that we do." So can you walk us through a little bit more? What's on that list? What is the ongoing client service, I guess, service model or structure or deliverables? What did you articulate to say, "Here's what we do for you on an ongoing basis for the fees that we charge?"

Erika: Yeah, so in that meeting with whoever you're with, you have an idea of their situation. So that kind of colors the next steps. So what are the offerings? If it's private wealth and it's more complex, then we can be very specific that each quarter when you hear from us, there's a different agenda. And it is specific. So that way we know we're touching all of the highlights of financial planning and we're also going deep when we need to.

So in Q1, we're going to talk about your goal planning and your cash flow from last year. And in Q2, we're going to look at your estate documents, even though we did it last year. We're going to talk about your insurance and your risk management. In Q3, we're going to go into your tax strategy and talk to your CPA and make sure that we're set for year-end tax planning. And then Q4, a deep dive on the portfolio so that way we can see if we need to make some changes to it, talk about how the market played out for the year, gain situation, and things like that.

So they see it outlined. "Okay, sounds great. You're going to hit all the spots." And then those one-off events, "I'm retiring" or "I need you to meet with my kids so we can discuss our plans with them" or "I want to be more charitable." So we've got the one-off non-regular meetings as well.

Michael: Interesting. But the standard cadence for you is with private wealth clients it's a quarterly structure, if I'm hearing right. So Q1, goal planning, Q2, insurance and estate, Q3 tax, Q4, portfolio review.

Erika: Yep. And we were intentional with the timing too. Found that when you do more broad, general financial planning at the beginning of the year, it gets the software cleaned up for the rest of the year, so you're not playing clean up every time you sit down with them.

Michael: And is each of these a meeting? Are you aiming for quarterly meetings, or is this simply the quarterly work you're doing, but it might be behind the scenes and may or may not merit a meeting?

Erika: It is a meeting. And I was surprised at some people, a lot of people that we used to meet with less frequently, especially at that level, that were open to it, and actually they enjoy it. They don't miss it. Now, it's not to say we have perfect attendance from all clients, but yeah, it's sitting down often face-to-face. And then, of course, there's Zoom. But that's the agenda, and that's what we talk at each of those points.

Michael: Interesting. So you found clients were more willing to meet more regularly when you had a structured service calendar, like a structured agenda of what we're actually going to cover in each meeting?

Erika: Yes, for sure. Otherwise, they're like, "You again? Just tell me if anything's wrong," which there are still people like that.

Michael: Right. "I'll call you if anything's coming up in my life. You call me if there's anything going on that I should know about. And other than that, I don't know why we need to meet."

Erika: Yeah. And again, we have a lot of advisors, and they have different levels of how they're used to doing things. So we need to consider that too. And there is kind of a streamlined version of it where it's twice a year and it's combining Q1, Q2, and combining Q3 and Q4. So that way we're still talking about it, but meeting less frequently because, again, don't want to force it on a client that's not interested in that.

Michael: I was going to ask as well, just you have your tiers. So is it the same quarterly cadence with e-wealth clients as it is with private wealth clients?

Erika: No, it is semiannual. So it's the combination of the 2 quarters for e-wealth clients.

Michael: So goals, insurance, estate group together in the first half, and tax and portfolio group together in the second half of the year?

Erika: Yeah. And it makes our meeting prep team's lives easier too, that they're kind of in the mode of this is what I'm prepping for, these meetings. It's the same thing for this quarter or this semiannual period where they're used to looking up the same things, running the same reports, and that kind of thing.

Michael: Well, I was going to ask on that end how systematized it is across the practice. Is it really everyone in the practice, every private wealth client in the practice, aside from the few that just don't want to meet, like every private wealth client in the practice gets the goal plan and cash flow discussion in Q1, the insurance, estate review in Q2?

Erika: Yeah, pretty much. I will say you get those clients that maybe they cancel or reschedule, and now, shoot, we're in Q2. It's not Q1 anymore. Now what do we do? It can get messy. So in our ticketing system, which we haven't even gotten to yet, but you can choose the meeting type in the ticketing system to say, "I understand the guidelines of what each quarter should be, but this client just really needs to talk about taxes, and it's Q2, so I'm going to choose a tax strategy meeting," and the team will accommodate that. So we wanted flexibility in a very systematized world.

Michael: I can envision there's multiple scenarios. There's the client who just we couldn't get them in for their tax meeting in Q3. Now it's Q4. Can we still do the tax meeting in October? And the answer is, yes, you can just tell the team we're prepping for a tax meeting. They can handle it as a one-off. Or clients who just have their own life and stuff going on and their circumstances don't adhere to our wonderfully structured sort of calendar, even though their lives are clearly supposed to conform to our structure.

Erika: Always.

Michael: But if their lives fail to conform to our structure, you'll still accommodate and take those when they come up?

Erika: For sure. And I'll also kindly at our next meeting say, "You know what, I think every 6 months is going to be perfect for your situation." And they're more than happy to say it because there's a reason they've been pushing it off.

Michael: How often do exceptions come up? How often do they just kind of fit the system that's in front of them? I can tell the story the system is so structured that there's really not a lot of one-off things that happen because you're already covering it pretty regularly every year, but clients are going to client. So they...

Erika: Exactly.

Michael: ...don't always conform to our system. So just in practice, how often do you find the structured quarterly process works versus clients pull you outside the standard because clients are going to client?

Erika: More often they adhere to it. When they don't, it's the same people. So you know your clients.

Michael: Okay. So you've got a subset of rule breakers who, yeah, well, the people that just like to do things with their...march to their own drum or they do their own thing.

Erika: Yeah, and if they're a good fit in other ways, then we keep them around and we have good relationships. So we're not looking to be so strict that we're going to off-board someone for not having our quarterly meeting. But that being said, it does make everything easier, and frankly, their financial planning is a lot stronger when we're talking about all the things. So it's a push and pull a little bit, but most people, they stick to it and they get a lot out of it. And that doesn't mean it's an hour and a half-long quarterly meeting. There are some that are very fast. It's just touching base. It's not a lot has gone on, and that's perfectly fine, too. So it's just it's also that face time and building that relationship.

Leveraging A Meeting Prep Team To Support Client-Facing Advisors [33:08]

Michael: And did you say, I thought I heard that part of this and execution for you, there's a meeting prep team who helps everybody get ready for these? So what is that team? What is that structure? How does that work?

Erika: So it's part service people and part financial planning team. What we were finding with such a prescribed meeting frequency was there's prep involved that takes a lot of time. And advisors don't necessarily want to sit down, open the planning software, clean up connections that are broken, whatever the case might be. There's a lot of stuff that can be done by many people, so we wanted to capitalize on that and say, "Okay, if you know this meeting is coming up and you're managing the relationship with the client, then you can submit a ticket." We do have a minimum client level. It has to be a double A client and up, which is about $750,000 AUM to be able to do the prep. So if it's going to be a smaller client than that, you're going to have to do the prep yourself because we only have so many people.

So they can submit this ticket, and what that team will do is prep the agenda. They will prep what I've coined a pre-meeting worksheet. So it is specific to the meeting type where it's kind of a guide for that team member to go into the plan, document what they see. You think of a doctor going in with a patient. They've already gotten prepped by the nurse beforehand. We really wanted to emulate that and say, "The prep for you is very minimal. You can still go into the meeting, still do great work, but a lot of that underlying stuff has already been accomplished for you."

Michael: So help me understand more of what the pre-meeting worksheet is.

Erika: Yeah, so let's say it's the goal-planning meeting in Q1 or whenever it happens. There's a checklist of…here's the things to look for in the plan. Here's the things to possibly clean up. Maybe there's a section where you put down that there's some opportunities like, "Gosh, you're sitting on an awful lot of cash," or whatever the case might be. They're close to Medicare age. There's certain things that they check off. And then it's specific to each quarter. The estate and insurance one is going to be all about policy review, beneficiaries, estate planning documents, and so on. So it is specific to the quarter, but it's a high level view. Then the advisor has their own checklist too, so they have to be able to do the advisor things.

Michael: I was going to say, so this isn't a checklist that the advisor is going through. This is a checklist that the prep team is going through to prompt the advisor, "Hey, they've got lots of cash. Make sure you ask about that. Hey, they're getting close to Medicare age. Make sure you bring that up."

Erika: Yeah, it's actually both because there were parts that the planning team, especially if they don't know the client, there's just things that it'll be easier for the advisor to know or ask about. But yes, most of that work is done by that planning team member.

Michael: And where did these worksheets checklists come from?

Erika: I just made them.

Michael: Okay, so you just built them and narrated them over time internally.

Erika: Yep, and it's also a way to add in. So if you're trying to think of a big team of people at an RIA and you're trying to get everyone to do things the same way, and it's really difficult to do, the pre-meeting worksheet is actually a great way to implement things that become top of mind because it's part of the process. And I can get into the whole process of the meeting scheduling that leads to this pre-meeting worksheet where the meeting is actually set and we're getting ready for it, but it's a great way to put something on there if I want to make a quick edit that if someone wants all the support that we can offer them, they're going to follow this process, and then they're going to see at the top of this pre-meeting worksheet, "Hey, there's this thing to think about." Maybe it's a legislative change, I don't know. If it's something that we want to get out there and be top of mind, that's a great way to do it.

Michael: So how many people are on the service team and the planning team that's doing this prep work?

Erika: So from a service aspect, that's really just agenda prep and performance reports being uploaded. So that's really just 1, maybe 2 people, and that doesn't take very much time. The planning team, it's really right now 1 person who does it, but I know as we grow, we will need more people to do it.

Michael: Okay. Because I guess I'm just trying to visualize how many of the client households on the wealth side are at the private wealth level to do this because you then immediately multiply by 4. For 4 meetings a year, it's just a lot of meetings ongoing. It's great because it's a lot of client touch points, but that's a lot of just repeated meeting prep, plan prep work for whoever's centrally supporting these.

Erika: Yes. Really good point. So private wealth, we have enough right now that it's sustainable. It is also for e-wealth. Granted, those are twice-a-year meetings, so it's not like it's happening every quarter. But as a total, yeah, that becomes a lot of clients. And right now it's okay. It's pretty manageable. But going down the road, I can see us changing the tiers, and I think we're going to have to do that sooner than later, where private wealth needs to have a higher minimum than it has right now. Just because, like you said, that's a lot. It's a lot of work. It's very thorough, and it's great planning, but it's a lot of work. So we need to be very aware of that and how we support that, our team members as well.

Michael: And you said in the middle there of who gets what support from the centralized prep teams that it depends on size of the client, but it sounded like it's a different system. It's not just whether you're private wealth versus e-wealth. You had to be a AA client, which was an assets minimum. Like, what are those tiers or thresholds? How does that work?

Erika: Yeah. So the A level, and we try to keep that secondary because I don't like talking about AUM. I don't want to focus on AUM. I don't want to just try to grab assets all the time. It's planning.

Michael: You just want to focus on planning tier because we know we've got at minimum to support the planning tier.

Erika: Yeah. And that being said, we do need both, though. In our CRM, we have both because if there is a AAA client, so someone with call it more than $1.3 million, something like that, and they don't want to do planning, we still want them to have client experiences. We want to invite them to our events. We want them to be part of our webinars, you name it. So we have the A categories for purpose of client experience.

Michael: Okay. And I guess particularly client experience for clients who might be more investment-only, less planning-oriented, so they're not getting the planning depth, but we really want to make sure we're getting the touch points.

Erika: Yeah. That's exactly it. So the planning side, when I say it has to be AA or up, you could interchange that. It's e-wealth and private wealth. The meeting prep team will take over. It's kind of the same thing.

Using A Ticketing System To Complete Tasks Efficiently And Accurately [40:40]

Michael: And so how do you manage to...just the cadence of meetings that need to get set. I'm also visualizing it's just a lot of meeting scheduling that has to happen. So, and we've got a meeting schedule and then prep, and then we do a meeting and then there's post meeting close, and then we're already scheduling the next meeting and we just, you continue the cycle. So how do meetings get set up or how do you maintain the meeting prep queue?

Erika: Yeah, there are advisors that are really good, and gosh, I wish I could be. They schedule the next meeting when they're with the client, which is amazing.

Michael: Okay. I like that. That's just fantastic. Yeah.

Erika: Yes. Again, other industries do it. Why can't we? He's really good about doing that. I am not so good at that. I always forget to ask. I'm kind of 50-50 at this point. I'm getting better. But that does help our service team a bit that now they don't have to worry about booking that next one. So if we're talking about me, they're going to have to book it. We use the CRM for that. There are tasks that go out at the right frequency. The client, usually we like to be email focused with the scheduling link so that way they can click it, they can book it, they could do it at midnight for all we care. We don't have to be on the phone with them to book it. So it is somewhat automated, but we do have someone manually reaching out when the time comes.

Michael: And is there scheduling software you use? How do you actually manage the calendaring of it?

Erika: Yeah, right now HubSpot, which is our CRM, currently has a scheduling meetings feature. So it actually syncs up with the CRM, and the client can choose if they want in-person or virtual, and the length of time that they want also.

Michael: And so just curious then, so what led you to HubSpot? I do not hear HubSpot as often as an advisor CRM. They're very well known for being an email marketing system that added CRM and other capabilities over time, but for any industry that does marketing, they're not particularly verticalized into advisors. So how did you end up in the HubSpot world?

Erika: So when a couple of years ago, we all became one team, one firm, we centralized our service team, which was very different from before it used to be. There'd be service people in every office servicing just an advisor or 2 or 3. They were all one team. So in order to make that work, we found that a ticketing system would be needed. So that way advisors could submit service requests through a ticket, and then it would get plugged into the CRM. It can be worked on. You can check up on it and see where things are at. We vetted some other systems. HubSpot was what we went with. I think we liked the open architecture of it, and that is why you don't hear much about it in our industry, and that we could make it our own for our very unique setup.

Michael: Interesting. And so, if I'm understanding the ticketing system, sort of the workflow aspect of managing tickets in for all the requests, because you have multiple advisors in multiple locations, and going forward, it's a centralized service team, not you've got your person in your office and she has her person in her office. That was the drive to new CRM and HubSpot in particular? It's ticketing to manage service requests to centralized support teams?

Erika: Yes. And then the other benefits that it is a CRM. There's the scheduling, like I talked about. There are playbooks so that the teams can pull up like, "What do I do next? What comes next?" They can use that. So it's like training opportunities.

Michael: Playbooks for what? Can you give me an example of what a playbook would be?

Erika: The processes. So whether it's a service-related, new account opening type of process or the planning process, really anything that needs a start-to-finish multi-step user guide, that's where a playbook comes in. And it's really meant for on the service side of things. Each contact record can have its own playbook so that you can take notes in it and really keep tabs on where things are at, especially when there're perhaps several steps involved.

Michael: Okay. So I should think of these like processes and procedures manual kind of thing for what playbooks are?

Erika: Yep.

Michael: Okay. And am I to infer if you're running off of a ticketing system into these service teams that then the whole nature of it is the team fields tickets as they come in? Like we're not assigning specific support team members to specific advisors, thus why we need a ticketing system with queuing. Is it working that way?

Erika: If I can be real, it's really the same people doing the same tasks. One person opening accounts, one person handling this, that, the other. I think realistically it happened that way because training everyone to be well versed on every single service item was not going to be a good use of time. But where it comes in is if someone's gone, we really have a very flexible, as long as everyone's getting their job done, there's no set vacation days. You take time when you need it. The service team can pick up the slack when they're not there. The playbook comes in handy then if they're not really sure what to do.

Michael: But that's an interesting structure. So as opposed to, I see a lot of advisory firms, Bob has his associate and Sheila has her associate. Bob puts in any requests for Bob's clients through Bob's associate. Sheila puts in any requests for Sheila's clients through Sheila's associate. And then each of them has to know how to do all the things for that client base. It sounds like you're more functionally divided like, okay, someone is lead on opening accounts, and so whether Bob or Sheila or any other advisor in the office needs to open accounts, it goes to the person who just knows the account opening systems cold and executes that repeatedly, really efficiently. And then someone else owns other parts of the internal system to process on a cash in, cash out meeting agenda prep, and so forth. So you've got like specialized roles in the team. Not necessarily each advisor has their person that does all the things for that advisor and their client base.

Erika: That's right. And each of those service team members came from that world. So that was something to learn, but has been really great because part of what was considered in each of their roles is, first of all, what do you like doing? What do you want to do more of? What are you good at? And so now it can be that people are in the right seats doing what they do best instead of trying to be a jack of all trades. And that really goes for the entire firm, but from a service team standpoint, especially they can just thrive in what they want to be doing.

Michael: Now I'm kind of connecting to that. So thus, in particular, the ticketing system, because you really need a way to queue and track and manage like, "Okay, the account opening person has requests from 4 different advisors this week who each have some new clients in motion." And you can't just have every advisor saying, "Where's my thing for my client's, associate person that works with me?" Because they don't work with just you. They do all the account openings for all the advisors. So we need a way to manage the flow and the status of where things are in the process and who's in what sequence in the queue, which is what ticketing systems are built to do.

Erika: As well as reduce our not-in-good order submissions. So the ticketing system has put a backstop on you can't even submit the ticket unless the thorough data is in there. Which is more work for the advisor, but in the long run it's less work for everybody because now they have complete information to fulfill the request.

Michael: Oh, so you just made like the tickets all have required fields and you literally can't submit the ticket until you fill out the required fields? Like one of those.

Erika: Uh-huh. Yep.

Michael: Well, yeah, that'll cut down incomplete apps and NIGOs [Not In Good Order].

Erika: Yeah. Yeah.

VisionPoint's Data Gathering And Plan Production Processes [48:56]

Michael: So, now take us back and help us understand the new planning process. We've talked a lot about the service calendar and then the support team structure around what you do for ongoing clients. How does it work for new clients or perspective clients? You said at the beginning it starts with a fit meeting, but what happens from there? If we go through the fit meeting and I say, "Erika, this sounds awesome. I think we're a good fit. I want to move forward as a private wealth client. Sign me up. Let's go." What actually happens next? What's the process?

Erika: It's a ticket. It's always a ticket.

Michael: Awesome.

Erika: So you submit the ticket for the type of planning you're doing. Basically, give a rundown of here's where this is at. And the team takes it away, which is just so beautiful.

Michael: So, what do you mean by the ticket for the type of planning you're doing? What are my choices?

Erika: That would be the foundational e-wealth, private wealth.

Michael: Okay. Okay.

Erika: Yep. So... Yep.

Michael: Okay. So then what happens next as this queues up?

Erika: So onboarding begins. And there is a very detailed playbook that says each step of the way, getting them set up in the planning portal, uploading the documents with the checklists on them, sending this email that has a template in the CRM to say, "We're so excited to work with you. Here are the different things you can expect from us." Just lots of communication.

Michael: So is that like an email? What are you sending for this whole, let's get oriented expectations that you just said?

Erika: That's an email, and then they also get an invitation to eMoney.

Michael: Okay.

Erika: Yep. And then there's instructions. We have our own little welcome kit that we put in their vault that's got the checklist, the document checklist, and some compliance documents for them to review, like our privacy policy, Form CRS, things like that. And then they need to do their homework, which, as you know, can be a bottleneck. So always looking for ways to improve that, but I credit you with the get-organized meeting. We did implement that for those that are maybe not getting us their things as quickly as we would like.

Michael: So how does that work for you? What does that get-organized meeting look like?

Erika: That is basically just needing to meet with them again to say, "Okay, we need your stuff." Or having them come into the office with their big bag of disorganized statements and things so we can get them organized and enjoyable.

Michael: And just say, "Bring in your big, messy box. We'll sort through it with you and scan all the things that we need along the way while you're here in the office. And you'll go home with your stuff organized, and we'll get the stuff that we need so that you don't have to actually figure it out yourself if you're struggling with it."

Erika: Yep. "While we have you here, we'll just walk through all of this." So we do that if that is necessitated. And then from there, if they've gotten us, like it's a particularly motivated client, awesome. They get us all their things. And from there, we have a discovery meeting for our private wealth clients. So that's a good 90 minutes of really doing a deep dive. We have all the quantitative stuff. Now it's the qualitative. We're going to ask them how does...

Michael: Because ideally, they're pulling all the quantitative stuff into eMoney by linking up accounts and entering data there themselves?

Erika: Yep. Uploading statements. We do have our own workbook for the things that eMoney doesn't ask that they can fill in.

Michael: What do you cover in the workbook?

Erika: It's going to be names, date of birth, kids, kind of a financial snapshot. So we do ask about things that they're going to be uploading, but it kind of gives us a roadmap of, "Hey, they said they had this policy, and we don't see a statement for it." So kind of lets us double-check things like that. But yeah, it's a broad fact-finder, I would say. There are tax questions on it. There's a budget on it. It's kind of getting a lay of the land of their financial snapshot.

Michael: Okay. So you really try to cover the financial portion in, call it, “self-onboarding,” as it were, like plugging things into eMoney, loading them up into the vault so that by the time you get to the discovery meeting, you're talking about the non-financial stuff?

Erika: Right. Yep. And we actually try to be pretty strict about that, that we do not move on to the discovery meeting until we have all the documents. Because, as you know, incomplete data becomes really hard to do anything with. So we try to, again, that's the whole systematized part is one thing and then the next just to make it work.

Michael: So in practice, what are you covering in the discovery meeting? What kinds of questions are you asking or things are you digging into?

Erika: It's really, it's about their family. It's about how they met. It's about their occupations. What do they like about their job? It's really like we call it going below the waterline. We want to know the stuff, like if you did not have to earn any money to live, what would you be doing? Or if you knew you had a year to live, how would you spend it to really get at the core of, "We're not just here to manage your money or your assets and get great rates of return or even get you to retirement." It's learning more about how they function and what will retirement look like and what do you think about money and what's been a really hard lesson that you've had in the past? What did you learn about money growing up? And honestly, it's a clients favorite meeting. They get to talk about themselves for 90 minutes. Sometimes there are tiers involved. It's just a really powerful meeting to get to know them on a very deep level.

Michael: Is it a standard list of questions that you go through? Is there a playbook for what you cover in this meeting, or is it more advisor or subjective advisor style about what they cover?

Erika: Well, if you know advisors like I do, there are ones who are going to do their own thing no matter what, but there is definitely a notes sheet with sample questions. So it's not meant that you throw all of them at them, but just see where the conversation goes and ask as things are appropriate. But yeah, we call it a discovery meeting notes document.

Michael: Out of curiosity, is that something you'd be willing to share? I'm always fascinated to see the questions that people like to bring into discovery meetings.

Erika: Yeah. And when we add new advisors, they come with their own questions that they love to ask. And I love incorporating that. The more minds, the better that we can just have a really cool client relationship and ask things that... Yeah, sharing of the minds. Let's make it better.

Michael: Awesome. Well, so I guess in that context, so if folks want to check out the discovery meeting notes, document questions, sample questions. This is episode 415. So if you go to kitces.com/415 for episode 415, we'll have a link in the meeting notes area to check out the documents and get some fresh ideas on interesting new questions to ask in discovery meetings.

So this is a 90-minute meeting for you to get through discovery questions. So what comes next in the process?

Erika: So after that, it's all on us because theoretically we have everything we need. Our team goes to work. So that is where the ticket moves over to the planning team, and they start to build the plan. And it can be a process. We give it a couple weeks, but they're going to synthesize all the data. They're going to collaborate with the advisor and say, "Hey, here's what we see." But I will say usually that planning team member is in the discovery meeting, if not also the fit meeting, because we like to convey, we are a whole team working on your behalf. You don't just get one person. Everybody here is working on your behalf. We are all invested in our clients. So that person hopefully was in the discovery, so it makes it a lot easier to also build a plan when you know exactly what they're trying to accomplish.

Michael: Well, I was going to ask, just the challenge for a lot of firms with more centralized planning teams is the difficulty of building a plan when you weren't in the discovery meeting with the client to hear the details and nuances of the goals? So it sounds like you try to have the planning team member sitting, I guess second chair as it were, in the discovery meeting so that they can actually capture some of the notes and details themselves to know what the context is for the plan.

Erika: Yeah. And a lot of times they'll even Zoom in. Even if the advisor is with the client in person, we can have Zoom up. We have a very comfortable meeting space. There's no conference room tables or anything. It's just like a living room space. And we have a TV on the wall where we can Zoom them in so they can kind of be a fly on the wall, but also interact with the clients.

Michael: Okay. Because your centralized planning team is central and you have 6 office locations.

Erika: Correct.

Michael: So sometimes people just literally aren't physically where the client is.

Erika: Yep.

How VisionPoint Delivers Plans To Clients [58:06]

Michael: Okay. So I'm curious just because I'm going to guess there's some kind of process around it, given the ticketing workflow nature of the system. How do you do the back and forth between the planning team and the advisor when you're trying to build a plan? When the advisor is not building their own plan, it's happening from centralized planning, but the advisor has got to know it and put their touch on it, and actually deliver it to the client. How does that back and forth work?

Erika: So there's also a template for our fit meeting. So there's extensive notes there that the planning team can reference to see what was discussed at the fit meeting, what was discussed at the discovery if they weren't there. As they're building the plan, there is back and forth in the CRM within the ticket, there's a notes section. So you can tag someone and ask questions. But before the personal financial organizer, which is a combination of the financial plan and a bunch of other documents that we use, before that's finalized, there is a meeting with the advisor and the planning team to just solidify recommendations, talk about whatever might need to be talked about for that client's plan before we're all ready to deliver the plan.

Michael: Okay. So I'm just trying to make sure I understand the workflow. So the planning team sits in the discovery meeting. They take all this out. They make the whole plan. They have one meeting with the advisor to say, "Here's the plan as we built it for you to deliver. Please look over it, and if there's things you want to change or add, now is your chance."

Erika: Yep. Exactly. And sometimes it's more than that, just one time. And if there's a business owner involved, if that's who's doing the financial planning and we're doing exit planning for their business, that's kind of an add-on that has its own process happening simultaneously. So it can get complicated and more meetings are required, but for the most part, there is a lot of collaboration happening behind the scenes.

Michael: I guess I'm just trying to visualize how much back and forth does it take for your centralized planning team to build plans for the advisors who are out with the clients?

Erika: If everything is happening according to plan and we have complete documents, I don't see why it's more than once, just to say, "Hey, we have everything good to go. How does this look?" And then the advisor might share some thoughts they have, and then it gets uploaded and the ticket is moved forward.

Michael: Okay. So what happens after doing all the internal plan building?

Erika: Yeah, so once the... I'm going to reference it again, personal financial organizer is what it's called. Once that's uploaded to their vault and sometimes printed into paper. I know it sounds old school, but somehow there are clients that, even if it's a couple, one of them always wants the paper book. We will print it at our office and put it in a nice leather binder. But yeah, it gets uploaded, and then the scheduling team takes over to book the plan delivery meeting with the client, and we have the meeting. And a lot of times the planner will be there too, because advisors have different comfort level with the technology specific to us, eMoney. So the planning team knows it very well, and they can be there to be working behind the scenes showing the plan if the advisor is not totally confident in how to use the software.

Michael: Okay. So the planning team may steer the software, may steer eMoney so that the advisor can "just" focus on talking to the client and delivering plan recommendations?

Erika: Yep.

Michael: And so this personal financial organizer, is that the plan? Is that the financial plan, or is this something else or more or separate, or in addition? I'm trying to visualize what that is.

Erika: Yeah, it is. So it's got a cover page with our logo and everything on it. It's got tabs. So there are eMoney reports put into their various tabs, depending on the categories they go in. But we also add some of our own things, like a financial ratios template. We'll put in their monthly cashflow budget as an Excel spreadsheet instead of what eMoney has. So there's things that we've kind of, we looked at all of the reports eMoney has, and then we've supplemented with our own documents. A tax summary. "Here's what you paid in taxes last year. Here's your tax rate." Things like that.

But the thing I'm most excited about in the PFO is the household resources tab. And I got this inspiration from Pinterest because I love Pinterest. And it's basically, if something happens to me, the client, I want my, whoever, beneficiaries, to know exactly where everything is and what's going on. And it's not that all the documents are in this PFO, but it's a roadmap to where to find them. So it's, "Here's where our safe deposit box is. Here's where my passwords are located. Here's what I've considered for my final..." Whatever the case. That's the estate organizer. "Here's where my property is." Here's basically all the things that when we've had clients, unfortunately pass away, those things that the people left behind don't even know where to begin. They have a mess on their hands. It's disorganized. This is meant to be filled out once and then kept in the book for the client, for their beneficiaries.

Michael: Okay. So kind of financial plan, but more stuff you've added into, I guess, the template, the overall deliverable that you give to them?

Erika: Yep, exactly.

Michael: And it's still physical for you. It's a printout, deliver to them kind of thing, not only an electronic, like, let's do it on the big screen together?

Erika: Right. It's both. So there is always a PDF version of it that goes into their vault, but the people who want the actual binder, we'll print that out for them too. And this is private wealth only, where we don't actually do the binder for e-wealth.

Michael: And out of curiosity, just why still the binder? I don't want to make that sound negative, but I feel like a lot of firms seem to be moving to, "We're just in a more digital world. We're doing all this electronically." So why the printed physical deliverable?

Erika: Right now it's only because the client wants the actual binder. There are people that just like to be able to feel and touch and page through and make notes on. And if that's their preference, then we do that for them. I was surprised by how many people even today still like that. But again, there's always someone.

Michael: So you actually ask them and just give them a choice, "Do you want us to print this out for you or should we just give you an electronic version?"

Erika: Yeah, we do ask them. Yep.

Michael: And so how many say... I don't know. What percentage say, "Yes, print it. I still want the physical deliverable?"

Erika: So there tends to be a generational divide. I will say the younger clients now don't really want the paper. But a lot of times it does seem like the person who may be less interested in their personal finances or investing, or maybe is just less savvy, they like the paper. There's something like a security about it that they can just pull it off the shelf at their house and see everything. So that's why I'm not too quick to just draw a line in the sand and say it's electronic, because there are those people that just feel like, "Hey, if mom and dad are both gone, kids, here's where you go. And it's right here on the shelf." And they like that.

Michael: Right. And so then what happens after plan delivery?

Erika: Implementation. So we prioritize it.

Michael: Is that a separate meeting for you?

Erika: No. No. So the plan delivery, there can be a lot to it. And sometimes you have to have a follow up because there's just too much, which is okay. So that's where we prioritize like, "We really need to get the accounts moved over, or you really need to get an underwriting for insurance." Or whatever the imminent need is we'll run with that. And sometimes, actually a lot of times it'll be simultaneous. We'll submit tickets for all the things the client needs. And that is the beauty of the tickets as well is now there can be many balls in the air and different teams are handling it. And you can see where everything is at and kind of just overseeing that part of the process.

Michael: And what determines whether you have to split the plan meeting into 2? Is there a scope? Is there a threshold? Is it just kind of play it by year based on client circumstances?

Erika: Yeah, how long the delivery is getting. If it's a very complicated situation and there's a lot of moving parts, it's going to have to be multiple meetings just because people's attention spans aren't that long and it just gets too long. So we'd break it up at that point, especially those exit plans. Those are multiple meetings with many people. So it just depends on the situation.

Michael: Is there a target for how long you want to let that meeting be before it's getting too long?

Erika: Yeah. Zoom is one thing. When it's in person, it can go an hour and a half. I don't like to do it longer than that. You can just tell people are...they're getting tired. We need to move on with our day. We'll pick this back up in a week. And that's okay. The process can withstand those kinds of diversions.

Michael: And so all of this for your firm is driven by the ticketing system that just, I guess, cues up new tickets, next ticket as it goes through. It sounds like it's not just a ticketing request system. It feels like it's like a workflow system that generates ticketing tasks. Is that a fair characterization?

Erika: It is. So the tickets themselves are not automated. It does have to be submitted by a live person. But that makes sense, like if you need to open a new account, then we submit a ticket for it.

Michael: Right.

Using Client Gifts And Events To Build Stronger Relationships With The Firm [1:08:19]

Erika: The planning process itself, that workflow, that is following the order of operations. So it might be on the stage of... Well, actually, I should say, there is not a stage of plan implementation. It goes right from the delivery to the welcome stage because tickets are handling all the implementation. The planning process ticket itself doesn't need to wait for that. So then we begin the welcoming, where we send them a letter and a gift and close it out, and then the rest of the tickets are taking over.

Michael: Wait, wait. So help me understand. So I get to the end of plan delivery. Now I'm getting a welcome email? Haven't we been working together for a few meetings already?

Erika: Yeah. Yeah, so the letter is more like, "We're just really glad you've chosen to work with us. Here's a token of our appreciation for being able to work together." We'll send for our private wealth clients a personalized cutting board with their monogram on it. And that takes some time to order and get all assembled. But the letter is such that it makes sense. It doesn't feel odd. It's worded like, "We've really enjoyed working with you, and we look forward to working with you for many years to come."

Michael: Okay. And so this is like celebratory, we got through the planning process?

Erika: Yeah. Yep. And a token of our appreciation.

Michael: And so you give them a monogrammed cutting board as appreciation for doing financial planning with you, going through the planning process with you?

Erika: Yeah. And being a client of our firm. So, we put a lot of emphasis on client experience. We have people that that's what they're thinking about is how to have a really unique experience. And this was part of it that we wanted to systematize and make sure every client feels like that white glove service.

Michael: Awesome.

Erika: Yeah.

Michael: So out of curiosity, what else is in the interesting client experiences bucket?

Erika: Yeah. So, we've built in kind of the things you can't schedule like, "If you think of your client when you read this article, send it to them." And then just checking in on their lives. And we also do send a holiday gift at the end of the year. For a while we'd send Thanksgiving cards because that seemed unusual to get a card for Thanksgiving, but also a way to show our gratitude. And then client events too are built in and webinars. So kind of the various client touches on a scheduled basis, so they can hear from us, and it's not always in a meeting.

Michael: So what is a holiday gift for you? What do you do for holiday gifts?

Erika: One of my favorite ones was a wrapping paper set just because who doesn't need wrapping paper? It really doesn't matter what you celebrate. Yeah. So we sent that, and that was very cost-effective too. It came with bows and ribbon. That was really nice. I know that we did a cocktail kit once that was around the pandemic time, kind of like a craft cocktail. It had like dried oranges with it, and it was really, really cool. I think we've done a spice kit was last year, I want to say. So we try to do things that are creative and thoughtful and not your run-of-the mill template card.

Michael: Is there a budget you set for these? This is, it's not inexpensive, particularly if you're doing these, then you got hundreds of clients that you need to send them out to.

Erika: Right. So that's built into that very complex spreadsheet about figuring out hourly rates and things like that. We did plug in budgets for the client experience pieces of it too.

Michael: Okay. So, then what kinds of client events are you doing?

Erika: So we've done, actually, it's really varied depending on the office. I know that our Iowa office on the river there had a river cruise once. We here in Minneapolis got a suite at the Twins game, which was really fun. We also have a really great office space here where there's a patio and you can actually see Downtown Minneapolis. And we've had events there. Just it's part of our rent here. So that's a cost-effective way in a really cool space to get catered and have activities.

Michael: So how many of these are you doing through the year?

Erika: We have not done one this year so far, but it's kind of personal preference. I'm not the most extroverted person in the world, so I'm not itching to do them, but I know there's clients who really like them. So for me, it feels kind of like I got to force myself. But I would say quarterly. Not more than quarterly. It may be a couple of times a year, and maybe you have that anchor event that's maybe the bigger one once a year for the top clients.

Michael: But it sounds like this is more advisor by advisor. You can do a thing for your segment of clients. It's not necessarily like the firm is doing a firm-wide event and all clients are invited or expected to engage in this firm-wide client event?

Erika: It's regionally firm-wide. So never is it "my clients." It's all of our clients. So in Minnesota, all of the advisors here, we would have an event for our collective relationships, and they're all clients of the firm. So same with our other locations too. It's never a one person doing it.

Michael: And then what do you do for webinars to supplement all of this?

Erika: Yeah, we recently started combining…we have a really great education program for our retirement plan participants, and we were already doing webinars for them, so we thought why not add on the private client side, because everyone has the same financial questions and different interests in different matters. So we have now been combining them. So they are available to our plan participants and our private clients, and they're quarterly, and if not every other month, but it's always a different topic that's timely. And we usually have an expert on with us to interview.

Michael: And can you give me some examples of what kind of topics you've covered that you find are relevant?

Erika: Yeah, we just did one on tax. That is to talk about changes coming up here with state tax law and things that clients can expect, how that might impact them. That was with a CPA firm associate that we have a connection to. So that was great. We've done ones that are geared towards our clients' kids. So financial literacy, money matters. Here's why you should save. Here's what a Roth is. We've kind of run the gamut of who the audience is. We had someone from the Social Security Administration come on to explain Social Security. So that was probably for the older crowd, but yeah, we try to get a wide audience.

Michael: Okay. So who's responsible for them internally? How does this get done within the firm?

Erika: Yeah, we have a team member who he's got his whole podcast set up and his mic and the studio, so he tends to run those. But we also have people from all over in our different offices who will maybe join him and be part of it and help organize it. So it kind of depends. We've had multiple team members throughout the different webinars.

Michael: And these aren't necessarily for prospects. This is specifically for existing clients too, to engage them.

Erika: Right. So that same podcast extraordinaire. So he will be looking more towards the prospective clients and advisor side of things with his expertise. So that's to come, but yeah, for now it's for our existing clients.

The Highs And Lows Of Breaking Away From A Broker-Dealer [1:16:19]

Michael: So as you look back on this journey and evolution, what surprised you the most about building the advisory business?

Erika: I would say that I could find an aspect of this career that I never would have seen before had we not kind of completely had that aha moment that there's a different way we could be working with clients. And so that's been really fun just for me personally, but on the client side, I would say I was...and I continue to maybe less so now, but surprised that there are clients out there who are loving what we're doing. And it doesn't have to be scary to rethink how we're hired for our advice. We're not in the business of selling people things. That was kind of the mentality I was brought up with, and it just never really felt right to me. And so I was surprised that I could work with a client in a different way, and they'd be receptive to it and have had success with it. So that's been great.

Michael: So help me understand more of what the aha moment was. What happened? What changed? What were you doing that suddenly was different?

Erika: Yeah, I was at our broker-dealer that our family had been a part of for 3 generations and went to an industry event and went to a particular breakout session that pretty much spoke to all of the frustrations I had in this career. Clients not taking advice, clients leaving because the performance wasn't there. Feeling like I had to sell to make them a client. Meetings being difficult at times. There were just all these things that weren't completely in sync with who I am.

And she really spoke to all of it and was saying, "We need to reimagine our business. We need to think of it as we provide advice for a fee, and that's okay. And clients hire you to work with you, and you're not everything to everyone, and nor should you be. You should be very convicted in what you have to offer and that it's great. And that if they want to work with you, great. And if it's not a good fit for them, then you move on, and it's not a failure." So that was my light bulb. That felt good.

Michael: Because you came up in a brokerage environment where it was the opposite like, "We implement products for clients. You're supposed to work with anybody who comes to you so that you can find some opportunity of whatever it is they need and provide it for them." So the idea of we can provide advice for a fee and just work with the people that are good fit, that's why it was a change, that's why it was a distinction for you, because that wasn't the brokerage environment you grew up in?

Erika: That's exactly right. It spoke to me so much that I want to just be really good at what I'm good at, and I want to be able to provide it to the right people. And a sales model was not that for me. It was fine in that I learned a lot about products. So there's that benefit, but other than that, even just being compensated in a way that rewards sales, that wasn't really ultimately what I wanted to be doing.

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

Erika: Yeah, I guess realizing in that brokerage environment that they said that we could charge fees and provide advice and all that good stuff, but at the end of the day, there were a lot of barriers as to how we could convey our fees in a transparent way that I found problematic. So leaving was exciting, but again, had that whole family history. So that was scary. I worked very closely, I still do, with my dad, and he was all about it. So I guess kudos to him that he was well into his decades and decades into his career and willing to make the change.

I would say the second phase of that. So coming to this firm that shared the same values in how they work with clients and that was in such alignment, we became partners with the RIA that was growing. So there's growing pains as you're growing. One of them being our office was brand new. So we were even just ordering desks and furniture just so we had a place to sit. And we learned very quickly that we were a really great team. Actually, it was 6 of us from the brokerage firm. And we love working together, work really well together. That's all great, but we really did not have good business development.

So being expected to grow at a rate that there really weren't a lot of people that were developing business, we're really good at process and at client experience, no problem. And other offices who had their own balance sheets to deal with were great at business development, but not so much a process and somewhere in between. So that was difficult trying to recruit to that and just feel like, "Okay, how are they doing it?" And trying to find a very specific person for a very specific role in our location. So it was really good, challenging to change and become one, but really good for everyone because now everyone's working to their own strengths and we're all better together instead of separately.

Michael: And what kicked off this journey again? You said you were charging fees in the brokerage environment but couldn't really charge them the way you wanted. What was the blocking point or the moment of no return trigger for you?

Erika: Yeah. Other than broker-dealers are a little clunky, I've learned now that I'm in the RIA world. So even just getting a website approved took probably more than 6 months, which felt crazy to me. And then they were just rolling out fee-based planning and loved it. I even, I spoke to a whole group of advisors on it because I was so bought into it. And I told them, "I want to be able to tell clients that their assets under management can offset their planning fees because that's how I'd like to charge." And they're like, "Yep, that's great, but you can't tell them that." I was like, "Well, that's what we're doing though." Now I can't be as transparent about the fees.

Michael: They were fine that you did a fee offset, but you couldn't market that you did a fee offset?

Erika: Correct. They really wanted to keep those 2 things separate, the advisory business and the fee-based planning business. They wanted this big wall in between. And I found that hard to overcome. And also, I was seeing that there are so many things you can do for clients without those restrictions in place. And I'm not saying non-compliant things, but even simply like having a CPA on staff or whatever we can dream of that a company could become, we have total autonomy where we are now. So that felt good too, is we can grow how we want with the people we want without constantly being told no.

Erika's Advice For Her Younger Self And Newer Advisors [1:23:29]

Michael: I like that. We can grow how we want with the people we want. So what else would you go back and tell you from like 10–15 years ago as you were going down this road and crafting the path for yourself?

Erika: I kind of laugh at my beginnings. My dad, huge role model in my career. I kind of thought, and I still to a point think this way, that to be successful I have to be like him because he is. And we have different personalities. So I remember in the early days of being an advisor, and I just watch him in meetings, and clients love him. And he'd be talking about whatever happened at the football game last night. And I am a former athlete. I like sports, but I don't know a lot about the sports that these clients seem to just love talking about. So I forced myself to learn what was happening in the sports world because I thought that was what it was going to take to be an effective advisor. So anyway, yeah, success does not depend on a certain personality type I've learned. You can be yourself, and there will be clients that appreciate it.

Michael: So you eventually let go of the sports tracking.

Erika: Got rid of it. Yeah. And I also learned that us working as a team was also a huge benefit because he is more of the high level. He's really great at talking with people. He really understands life insurance. But on the other hand, I am very detailed, very meticulous, very type A. And those 2 things actually, even though it can drive me crazy working with a personality like his, it's very complimentary. So I can build the plan. I can deliver the plan. I can make sure everything happens that needs to happen. And he can go out and just make great relationships. So that worked out really well and was a lesson in that we all have different strengths and we can leverage them and have really good outcomes for clients.

Michael: And how long was that frustrating before you got to that moment of zen?

Erika: I will say he is now firmly on the insurance team, and I am on the private wealth team. So he does what he does best, and we're not trying to force him to sit down with a private wealth client and deliver a financial plan because it's not his wheelhouse. And that's the beauty of it is just focus on what he loves.

Michael: So any other advice you would give younger, newer planners like coming into the profession today and trying to carve their own path?

Erika: Yeah. And I go back to that personality thing. I don't know that I ever would have been hired, just me, myself. And maybe that's not giving myself enough credit, but I'm not out there networking. I don't like prospecting. I don't like any of that. So I guess my best advice is finding what part of the profession speaks to you and fully embrace it. If you're really great at the thing you're great at, then continue to get better at it and become an expert and work to those strengths. I think it just makes for a more enjoyable career, more fulfilling, and still room to grow. I love books and podcasts, and I always want to be learning more, but I think focusing really helps with that and finding a really supportive environment for that. A team approach, now that I've seen kind of all the worlds, it's such a huge benefit.

What Success Means To Erika [1:26:59]

Michael: So 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 wonderfully successful path with the business as everybody has merged together, and now the enterprise is growing as a consolidated team, and you're gosh, like a monstrous $3 billion assets under management as a firm. So it seems that the business is in a wonderful place now. How do you define success for yourself at this point?

Erika: Yeah, and my role has taken on such that I'm not always with clients. It's about half my time, but I still think about, I got into this to help people. So even to this day, if I've done a good enough job and the whole team, frankly, if we've all done a good enough job that they refer us, especially without asking, I feel like there's no greater success when it comes to what we do. That's just a job well done enough that they spoke to someone they cared about, knowing that they could benefit. So I still love that. I've loved that since the beginning. And it's a big confidence boost, so that's great.

I would say on the more executive side of things, I love problem solving with the team. If there's a challenge with their role or something's frustrating or not working right, I love figuring it out, putting them in the right spot, and seeing them thrive. We've had examples of that, and everybody wins in that when you have people that are happy to be working somewhere. The clients win too, and people stick around. So that's another measure. And I would say the final one that is one of the best parts of the business is just the flexibility. I'm a mom, I have 3 kids, I have a husband, and there's nothing stopping me from being part of their lives as much as I can, volunteering, going on field trips. And I don't know how I could be so invested in a career without that kind of flexibility that I can show up as the mom I want to be. So that might be to me the most important ingredient of all.

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

Erika: Thanks. I really appreciate it.

Michael: Thank you.