#FASuccess Ep 079: Niching From The Start To Turbo-Charge $250k Of Recurring Planning Fees In Only 3 Years with Anjali Jariwala

What You’ll Learn In This Podcast Episode

• What FIT Advisors does and who they serve. [4:47]
• Why she says her fee model has less conflict of interest than the typical model. [7:44]
• The various fee models that Anjali has tried. [22:32]
• How Anjali explains and justifies charging a $10,000 retainer fee for clients who have less than $1 million in investable assets. [30:31]
• What she says gets clients to stick with her firm long-term. [37:44]
• The “homework” Anjali insists clients do before their first meeting. [46:23]
• The reason they assess clients’ goals before assessing cash flow. [50:55]
• Why FIT Advisors doesn’t run retirement projections until a year into the relationship with clients. [54:58]
• How FIT Advisors marketed into its niche to attract entirely virtual clients. [1:15:32]
• Where Anjali finds her clients. [1:15:32]
• How paying for ads on a blog works and what it costs. [1:18:17]
• How Anjali broke the news to her early clients that she was going to take time off to have a baby within months of bringing them on board. [1:33:51]
• Advice for women hoping to make the leap into starting a firm. [1:42:10]

Resources Featured In This Episode:

• Anjali Jariwala – FIT Advisors
• FIT Advisors’ Fee Page
• PaySimple
• RedTail CRM
• eMoney Advisor
• Google Meet
• Trello
• MyPlanMap
• ShareFile
• NEV Post: Replacing Data Gathering With A "Get Organized" Meeting
• NEV Post: George Kinder's 3 Questions

Full Transcript: Niching From The Start To Turbo-Charge $250k Of Recurring Planning Fees In Only 3 Years with Anjali Jariwala

Michael: Welcome, everyone. Welcome to the 79th episode of the "Financial Advisor Success" podcast. My guest on today's podcast is Anjali Jariwala. Anjali is the founder of FIT Advisors, a niche advisory firm that works entirely virtually with clients and focuses on young physicians and small business owners in their 30s, providing financial investment and tax planning advice for an annual retainer fee that starts at $10,000 a year. What's unique about Anjali, though, is that by focusing in on a niche from the start, it allowed her to pursue unique marketing channels that most other financial advisors don't use, and allowed her to grow to more than $250,000 a year of recurring financial planning fees in just her first 3 years. And she did it while also starting a family, having had her first baby barely a year after the launch of the firm.

In this episode, we talk in depth about how Anjali positioned her advisory firm squarely in the niche of serving independent physicians and similar small business owners by leveraging her background as a CPA and a CFP certificant, the way she marketed into her niche to attract entirely virtual clients who meet with her solely online, how she iterated her business model very rapidly in the first few years, from offering short quick start plans, to charging an upfront planning fee and then ongoing retainers, until she eventually eliminated all the upfront fees and just raised her ongoing retainer instead. And how she explains and justifies charging a $10,000 retainer fee on clients who have less than $1 million in investable assets, for whom her fee can be substantially higher than the traditional 1%.

We also talk about how Anjali structures her upfront and ongoing planning meetings with clients, from an initial get organized meeting, where clients actually have to aggregate all their accounts in eMoney Advisor before they meet for the first time, to a second meeting that focuses on cash flow planning alongside George Kinder's famous three questions of life planning, and then shifting to a cash flow and implementation meeting and allowing her clients to set the agenda from there while sometimes waiting as much as a full year before Anjali ever actually does a traditional retirement planning projection for her young clients at all.

And be certain to listen to the end, where Anjali talks about the challenges of balancing out her work life and her home life, and the way that she broke the news to her early clients that she was going to take time off to have a baby within months of having them start as clients, and how she reinvested into and restructured her staff support to be able to continue serving her clients during that time off.

And with that introduction, I hope you enjoy this episode of the "Financial Advisor Success" podcast with Anjali Jariwala.

Welcome, Anjali Jariwala, to the "Financial Advisor Success" podcast.

Anjali: Thanks, Michael for having me on the podcast.

Michael: I'm excited for this episode. For the past couple episodes of the "Financial Advisor Success" podcast, we've talked to a few people in the consulting world, we've talked to a couple of folks at some very large firms and all the dynamics that go on in large firms, and, you know, you run one of the more successful solo practices that I've seen, particularly kind of getting started out of the gate. I know you're just about 3 years into the practice. You're running $250,000 of recurring revenue. It's built around planning fees and not selling any products. And just don't see very many advisors who quite managed to hit the ground running as strong and as fast as you have already.

And I know on top of that, you have a 2-year-old, which means you had a baby in the midst of getting started with the firm and building it to $250,000-plus of revenue in 3 years. And so in my world, that makes you kind of a rock star to manage all that. In our family, I've managed to build a business while we had young kids, but I didn't have to bear them physically the way that you did. So you're kind of a rock star to me to be able to do that and juggle and balance all that at once, which I know is not an easy thing but is, I'm hoping, what we can talk about on the podcast today. Just how you juggle all of that and just stay at least a little bit sane enough that you can join us on the podcast.

Anjali: Yes, happy to discuss some things that we do within our own family. And mainly it's taking it one day at a time because if I try to project it out too far ahead of time, you know, it'll just overwhelm me.

What FIT Advisors Does And Who They Serve [4:47]

Michael: Yeah, I would imagine so. I would imagine so. I think as a starting point, just to kick off, why don't you talk to us a little bit about your advisory firm as it exists today. Like, what is your firm and what do you do? How do you describe it?

Anjali: Sure. So as you mentioned, I just had my three-year anniversary about a month ago. My firm is now 35 households, so I essentially doubled last year. And I have two people that work with me, a full-time advisor, an associate advisor as well as a CSA. And I would say that our firm is very focused on, you know, the comprehensive holistic type of financial planning. So we really try to get in and understand every aspect of our client's financial life and really become ingrained in it. And the reason why is because I'm a very, very detail-oriented person. You know, I'm a CPA, I worked at PricewaterhouseCoopers. So I live on details. So knowing every piece of our client's financial life and even their personal life, you know, we do a good job of kind of bringing that all together and really understanding their goals and values and helping them get to where they want to be.

Michael: Okay. And who do you work with? Like, you said 35 households. Can you give us a sense of who those households are?

Anjali: Sure. So I do have a niche practice, and our focus is on physicians and business owners. So I would say out of the 35 households, 50% are physicians and about 90% are either a physician or a business owner. And a lot of our physicians are also business owners, i.e., you know, 1099 earners, where we help them set up their business and their legal entity structure and do the tax planning for them.

Michael: Okay. And how do you charge folks? Like, what's the business model end of things that 35 households get you to $250,000-plus of revenue?

Anjali: Sure. So if the assets are under $1 million, I charge a flat $10,000 a year. And usually, I bill that monthly or quarterly. And then if assets are above $1 million then usually there's some sort of asset management fee that I use. And when I look at assets, I actually charge on assets that we advise on versus assets that we manage. And the reason why is because, you know, I'm looking at employer retirement accounts. We're helping clients analyze rental properties. So even though it's not directly under my management, we're still providing a lot of advice on that. So that's why, you know, I kind of look at the bundle of what their current net worth looks like and then come up with a fee structure that makes sense. And even though it's a fee that's based on a percentage of the assets, once we figure out the net worth and we apply that percentage, that essentially becomes the flat retainer that we charge on going forward.

Why Anjali Feels Her Model Has Less Conflict Than The Typical Model [7:44]

Michael: So I've got a couple of questions on that. One, you know, this whole charging based on the investments you advise on instead of just the investments you manage is an interesting one and I guess makes sense. And particularly in this world where you're serving physicians and business owners, where, you know, like, you may literally be telling them like, "Here's how you make a 401(k) plan that we then can't manage because it's in a 401(k) plan and we may not have a platform and be able to manage it for you and all your employees." Or they may have other investments that they're doing outside and I guess the whole virtue of the model for you is you don't need them to move assets and consolidate assets, you're going to bill on whatever you advise on.

Anjali: Correct. And personally, I feel like there's less conflicts of interest with that type of fee model because whether they take the money that's sitting there and buy a rental property or move it over, do whatever it is they may want to do, the fee pretty much stays the same. So I'm not trying to be in a position where I'm trying to accumulate assets because it really doesn't matter to me. It's really, like, what's in the best interest of the client and what do they really want to do long term?

Michael: So how do you determine what's...like, I'm putting air quotes, what's "advised" when you say you're charging on assets that you advise on? And you made an interesting comment in there of even rental properties. And certainly from the general sense, like, buying real estate is a form of investing. I don't know very many advisors who charge an advisory fee tied to client rental properties, though. So, like, how do you determine what are advised on assets?

Anjali: Sure. So usually I'll tell prospects in the initial call that we charge on, you know, employer retirement accounts, anything that we would directly manage, and then as well as cost basis of rental property. And the reason why is I have a lot of clients that come in with one or more rental properties and we do a pretty heavy analysis in terms of cash flow, looking at the cap rate, the net operating income, and then figuring out whether that rental property makes sense to keep long-term or not. And then if it doesn't, then helping them with the process of actually disposing it, letting them know what the tax hit is going to be for doing so with depreciation recapture, things like that. So because there's a lot of work that we do on that side, it seemed to make sense to also pull that in.

And I wouldn't want their fee to be overly inflated by using fair market value, so we usually do cost basis. And it's not necessarily a hard rule of thumb, but it's something that I am going to look at when I'm kind of figuring out what the fee is going to be for a particular client.

Michael: Interesting. So rather than doing the whole debate of like, "Well, we can look up your property value on Zillow and then debate about how accurate Zillow is in the estimation, the fair market value," you just use the cost basis. I guess, like, original costs, whatever they purchased. Because, you know, like, the tax nerd wheels are now grinding in my head of like, "Well, are you going to do depreciated basis?" And like, "Which depreciation schedule are you going to use, because that varies depending on the type of rental property, whether it's commercial or residential?" Like, are we just essentially talking original cost or are you, you know, doing business accounting and cost basis calculations anyway so you really could, like, calculate adjusted depreciated cost basis?

Anjali: I mean, we could calculate that because we are helping clients track that because most clients aren't especially at the point when they're looking to sell and we need to gather that. But I'm usually just charging on original cost.

Michael: "You bought this property for $250,000, like, I'm going to bill you on the basis of $250,000. We don't have to get into whether it's actually now worth $275,000 or $325,000 or maybe it's dipped a little to $240,000. Like, just, here's a fair number."

Anjali: Right.

Michael: Okay. So are those really the primary buckets, stuff you actually manage hands-on, because obviously, that's pretty straightforward, employee retirement accounts and rental properties where you just tie the value to original purchase price?

Anjali: Pretty much. I haven't seen too many other buckets where it made sense that I would charge on it, because when I was kind of coming up with this revised fee schedule which I put into place towards the end of 2017, I kind of looked at my current client profile and said, "Okay, if this client were to come in now, what would I charge them based on…knowing the history of the work we've done with that client?" So those are kind of the main buckets that I identify that we do a lot of work around, that's why those are kind of the main ones I've picked up.

You know, I have clients who do, you know, like, angel investments, things like that, but those are things that I really am not doing any sort of direct advice on, right? They've already made the investment, we just wait to see if it goes zero up or if, you know, it makes money and that's it. So those are kind of the three main buckets that I look at when I assess the fee. But I'll say majority of my clients are in that kind of less than $1 million bucket, so they're getting assessed at $10,000.

Michael: Okay. In this world of advised assets, do you have different fee schedules that you charge for the stuff you are actually literally managing hands-on versus the other stuff? You know, I know some advisors who say like, "Yeah, I'll give you advice on outside accounts as well, but since we're not literally managing those, like, you know, I'm going to charge you a lower rate for your outside accounts where we just advise on them versus the inside accounts where we actually manage them." Do you make that distinction or is it just the same for all of it across the board?

Anjali: It's the same for all of it across the board. I don't make any sort of distinction that way. And what I'm really trying to get to is kind of what that flat fee is going to be for that client. And the flat fee is going to encompass everything that we do for them. So they're not necessarily worried about whether I'm helping them with their outside accounts versus the accounts that I'm directly managing. They know that kind of everything across the board will be taken care of with the one fee that they're paying. And since most of my clients are business owners, I actually don't pull fees from client accounts. Instead, I have them pay it through cash flow. And we actually run that fee as a business expense since we're doing a lot of advising on not only the personal side but also the business side as well.

Michael: Oh, so business owners pay through the business and therefore it's actually a deductible expense, or at least whatever you can reasonably attribute to the "business" portion and not purely personal expense.

Anjali: Correct.

Michael: Interesting. And I guess that… like, has that actually come up as an even more, like, popular and appealing thing now that we had Tax Cuts and Jobs Act actually kill the advisory fee deduction for individuals so you only get it through businesses? I guess you were doing it before then but kind of a nice tax bonus that your fee is uniquely deductible when many other advisors are not.

Anjali: Right. And, you know, for a lot of my clients, the deductibility wasn't going to be an option even if it was purely an investment management fee because most of my dual-income households are, you know, dual-income physicians, you know, working professionals, so the income is so high that even the 2%, they were pretty much phased out at that point. But it's something I do mention to my business owner clients because if there are…you know, there are some people who come in and they may be a little bit more fee-sensitive, and I'll tell them, you know, "Here is my fee." I'm probably a little bit more expensive than some of the other advisors they may be talking to, but, you know, if they're a business owner, there's a tax deductibility portion of it, so they're getting an added savings, whatever their effective tax rate is.

Michael: And what does that AUM fee look like? I mean, I'm presuming if you're a $10,000 minimum retainer fee that then converts to an AUM fee at $1 million that you are effectively at 1% on the first $1 million?

Anjali: Correct. So right now my ADV is at 1% on the first $3 million, but I have language in there that obviously we can adjust if need be. So I tell prospects that it's around 1%, but based on, you know, what the total number looks like, you know, I may adjust that fee down. You know, I have a client who's going to be inheriting $7 million, so I'm not going to charge 1% on $7 million. So we just discuss what's a reasonable fee that makes sense for both the client as well as myself in terms of the time that it's going to take to service that person.

Michael: And then how do you, like, mechanically bill the fee? Like, is this just you essentially invoice their business, they just cut you a check from the business like many of their other business expenses since they're business owners and that's what they do and none of the fee comes from managed accounts directly?

Anjali: Correct. So I usually send them an invoice, I use PaySimple, tell them to pay out of their business bank account or cut me a check from the business bank account. And that's where the fee comes out of either quarterly or monthly based on the billing cycle they're on.

Michael: Okay. And so you're using PaySimple to set this up recurring. So it's not like you are manually asking them to send you a check, you're electronically asking them to send you another payment on a monthly or quarterly basis?

Anjali: Correct.

Michael: Okay. And then how does that fee get adjusted, like, over time? You know, you said you kind of do this AUM calculation but then it gets converted to a flat fee because, of course, we've got to set it up in the payment system to invoice the business accounts. But then what do you do over time? Like, are you recalculating every year or every couple of years? How do you adjust the fee as you work with them on an ongoing basis?

Anjali: Sure. So I do look at the fee every year and then make a determination whether I'm going to increase it or not. I like to try to keep clients, you know, at kind of a consistent fee for the first two years. That hasn't always been the case because some I've just, like, mispriced and they were grossly underpaying compared to the level of service we were providing so I had to adjust it for them. And, you know, if there was going to be a sizable fee increase I told them I could do it over time, so just kind of slowly ratchet them up to the fee that they should be paying.

And then if I do a big fee increase, you know, I usually will say like, "I'll hold this fee for two years." But I have, you know, crazy Excel matrix where I have everyone laid out and when I'm going to redo their fees and kind of what their new fee would look like based on what their level of assets are. So it is something that I try to do on a yearly basis and then make, like, a, you know, internal decision as to whether we will put the new fee structure in place or let them carry on at their current level.

You know, I have a set of clients who one of them launched a business, so it's, you know, one income trying to support, like, the household, there's a baby on the way, and they are due for a fee increase. And they know that because I've told them like, "I need to raise your fees." But because they're, you know, not only emotionally but from a financial perspective, it's "tight" cash flow-wise. I'm not going to raise their fee. You know, I told them like, "Let's just have your guys' cash flow, some of that a little bit. I don't want my fee to be a financial strain and burden for you both, and I don't want you guys to feel like you have to leave. So we'll just hold the current fee for another six months or a year and then we'll reassess."

Michael: You mentioned Excel so of course my ears just perked right up. You said, like, you've got this big Excel matrix to evaluate where clients stand relative to their fees. So can you talk a little bit more about this? Like, what do you analyze? I don't know if you're willing to share this spreadsheet or just talk about it. Like, you know, how are you matrixing your clients to figure out who's paying the right fee or not?

Anjali: Sure. It's not that fancy, so I'll say that. So there's no macros, there's nothing. But, you know, the Excel workbook now is probably, like, 20 tabs. It's where I do all of my projections. I track all of my expenses. And then as I get new clients, I continue to update that because I have, you know, revenue goals that I want to hit. So I am constantly keeping track of how far away I am from my revenue goal for the year.

So essentially when a new client comes on board I kind of put them in my matrix, put down what fee they're currently at. And then usually if they're pretty close to that, you know, above $1 million mark, then I'll put a little checkbox in whichever year I'm going to reassess. And if I already know that their fee needs to go up after a year, because I do have a few clients that I gave them a discount for the first year just to kind of, you know, persuade them to come over and then that discount will go away, so knowing…keeping track of when the discounts go away. And as soon as the discount goes away, you know, I have…I use Redtail diligently, so I'll let my CSA know she needs to redo the invoice as of this date, cancel the old one so that the client gets the new invoice. So it's a lot of moving pieces. You know, I wish it was a little bit more automated, but there's comfort that I have in Excel. It's also a spreadsheet that if I send it to someone, no one else would understand how it works except me.

Michael: I have a lot of spreadsheets like that. Like, it totally makes sense to me because I've lived in it for way too long. So are there…it sounds like you have a lot of tracking of like, "When are they likely to cross the $1 million threshold where they would move from my minimum fee to a recalculated fee?" You've got some folks that you kind of earmark because you discounted early on and you know you're planning to make that go away at some point in the future. Are there other factors that you're using as well to try to figure out how to set fees, or I guess since at the end of the day you're either a $10,000 minimum or you're a percentage of advised assets fee, like, just either you're on one fee schedule or the other and that's that, you don't have to do a whole bunch of, like, time and complexity-based calculations because you've already got your fee schedule structure?

Anjali: Right. I mean, I will say I'm looking at it a lot for my legacy clients because I've probably changed fees, like, six times since I launched. Like, I'm notorious for, like, every six months I redo my fees and slowly creep them up. The one I'm at now is probably what I'll stick to for a while. I think I'm comfortable at that $10k price point. I think any lower I feel like is…you know, it doesn't make sense with the amount of work we do, and then anything higher I think is just a little unreasonable.

So for the older clients that have been kind of on my old, very generous fee schedules, you know, those are the ones that I'm kind of looking at. I've raised a lot of their fees last year. And, you know, I didn't actually get any pushback. I think a lot of them realized that, you know, they were being undercharged, and they were completely fine with my fee increase. But there's a few others that, you know, I go back and forth as to whether…you know, I try to get them closer to the minimum, kind of have them stay where they're at. And that's where, you know, I get a little bit…that's where it's a little bit more nuanced because it's not so clear-cut as….with a new client it is because that's their fee and I don't have to really make adjustments until they're over $1 million.

The Fee Model Changes Anjali Has Gone Through [22:32]

Michael: So you said you've iterated a lot of different versions. So you said six fee schedule structures in three years. And we see this for a lot of firms. Like, we tend to experiment with a lot of things early on while we're just figuring out like, "What are we going to deliver? What will people say yes to? What do I need to charge to make sure I'm getting a reasonable value for my time and the business I'm trying to build?" So I'm curious if you can share, if you can recall, like, what were the other versions that have now been left by the wayside? Like, what did you try that didn't work or just you decided wasn't as good as what you moved to?

Anjali: Sure. So when I first launched, I was doing, you know, those quick starts. So it was $500, 3 financial planning topics, you know, one time delivery of the plan. Usually, a lot of those people were local, so I'd meet with them in person. And at the time we were in Chicago. And then I had the ongoing service, so I was charging…I think I was charging $200 a month for individuals and then $300 a month for couples, and then I had about a $1,500, you know, upfront fee.

So I got to a point where I would say about eight months in I started dropping the quick starts. I'm not capable of just limiting, you know, to three financial planning topics. Like, I literally would sit down and I'll be like, "Well, I'm supposed to advise on these three but then this has an impact and that has an impact, and what about the taxes?" And it would become this huge thing that I've spent, like, 20 hours on. So knowing my personality and the way I operate, I was, like, "I can't do these sort of, you know, quick starts. I need to just drop it and do the ongoing service."

At that point I also…I wanted to move away from the upfront fees. I don't know why. It just never sat that well with me. I also found it a lot harder to figure out my cash flow and my projections because you'd get all this money up front but then that goes away. And then when you look at kind of what the recurring revenue is it's like, "Does this really make sense?" So at that point, I moved to, like, a $5,000 minimum for clients. No distinction between an individual or a couple. And then I moved to a $7,500 minimum. And then, you know, at the end of last year I went to $10,000. And that was kind of a push from my DFA rep who was like, "Anjali, just go to $10,000. You don't need to be at a $7,500 minimum." And I was like, "Okay, I'm going to do it."

And every time I do a fee change, you know, I'll test out for six months, and if I don't get a single client willing, you know, to come on board then I know that maybe it's priced incorrectly. So I would say, you know, moving to the $10,000 fee, the number of prospects I have obviously drops down because that is still a pretty high fee point, especially because the average age of my clientele is kind of late 30s. Most of my clients are either, like, mid-30s to mid-40s. And then I have a few who are in their 20s and a few who are older. So, you know, trying to find that sweet spot and the right type of client to come in. So the number of prospects have decreased, but at least the prospects coming in are usually not fazed by the fee because they already know that's what the fee is going to be. And so it's just more a conversation as to whether I'm the right fit for them or not.

Michael: Yeah. Well, because I know you literally just put your fee schedule on your website. Like, just, it's there. There's a button called fees and, like, "Here it is, $10,000 financial planning fee, and then an investment fee once you're over $1 million."

Anjali: Correct. Yes. I didn't want someone to come in, and if…you know, some people, they come in and they have no idea what financial planning is going to cost, right? And even if you look at the fee-only advisors, there's so much variation on what people charge, which is totally fine. So I didn't want someone to sign up…I'm always happy to talk to everyone who signs up for an initial consultation, but a lot of, you know, the physicians and the business owners I talk to usually have, like, carved through my website in detail, so when they come up, when they schedule the call, they already know what the fee is going to be. And I think it helps in terms of setting expectations when that initial call does happen.

Michael: And you don't worry that people are just going to come to the website and see $10,000 and be like, "Screw that. My current advisor gives it to me for free?" You know, parentheses, we know it's not free but they think it's free. Right. Right. I mean, I'm sure you've dealt with this. You know, like, "I hardly pay my advisor anything at all right now, like, why would I pay you $10,000?" Or, "I'm not even going to bother to call her because it says $10,000 and that just seems like a lot of money." Is that just not an issue for you or just doesn't worry you and keep you up at night because you're getting plenty of people who do call anyways"

Anjali: Yeah, I mean, I guess it's a little of both. You know, I'm not looking to try to convince people to use me, right? I'm really there for…you know, the person coming in is looking for advisor. They know what they want and it's whether I'm a good fit or not. And I know having that $10,000 price point as a minimum is going to have some people walk away. And that's okay with me because at the end of the day, you know, I launched this business to have, you know, autonomy as well as to help the clients I want to help, but it also has to be a profitable business for me.

And I spend a lot of time assessing how much time we really spend on each one of our clients, and it's…I mean, we do so much that it's a little obscene. You know, I have a study group and they'll tell me, like, "Anjali, you do way too much." And I was like, "I understand, but that's the level of service we want to provide." And so if we're providing that level of service then the compensation has to make sense. Otherwise, you know, I just don't know why…you know, to take on a client at a lower price point is okay, but if we're doing the same level of work then it'll cause frustration on my end because I feel like, you know, that it's just not aligned goals-wise.

Michael: So do you get anxious at the other end of, you know, clients…I mean, sort of by definition, like, it's a $10,000 fee if you're under $1 million, it converts to the AUM if you're over $1 million because you'll pay more than $10,000 fee at that point. Do you get pushback from clients that say like, "Look, I've only got $400,000 and, like, hey, I like all the stuff that you're saying, but it's a 2.5% fee, that seems a little high." Like, do you get that kind of pushback of what happens when you try to charge $10,000 flat fees on accounts that are well under $1 million?

Anjali: Not really. And I think the reason why is because since my clientele is younger, like, kind of the mid-30s to mid-40s, they're not ingrained to think of things as a percentage of assets, right? Like, they're much more in tune to the fee-only model, to the retainer model. So when they come in…I have a lot of clients who come in that, you know, are just finishing up residency or fellowship, I mean, they have negative net worth. Like, there is no assets there. So then if we're talking about percentage of assets, you know, they're paying, you know, a ridiculous amount of money.

Michael: Yeah, negative infinity. Yeah.

Anjali: Right. So when we have the conversation, I essentially let them do most of the talking. I say, "Okay, tell me what's going on in your financial life. What's prompting you to seek out an advisor?" And then, you know, they'll kind of give me their history, their story. And I said, "Okay, what other money concerns do you have? What keeps you up at night? What's causes for anxiety that you would like help with?" So I have them lay that out. And then I literally just go to, "What questions do you have for me?" So I let them direct the conversation. I let them ask me what they want to ask, what they're looking for, and then I just specifically address those topics.

And the other thing is, you know, I went to a $10,000 minimum because there's not that many CPA/CFPs, you know, in the industry that are female, that are also minorities. You know, and I have, like, a tax background. Like, I have a master's in tax. I worked at PricewaterhouseCoopers for seven years doing tax. So that's, like, an added value that I feel like we bring to the table at FIT Advisors. That, you know, you just…it's a lot harder to find out there when you're kind of looking at the pool of all the advisors available.

How Anjali Explains And Justifies A $10,000 Retainer Fee For Clients With Less Than $1M In Assets [30:31]

Michael: And so, you know, I think it's an interesting point that you make, that our industry has spent so long in an AUM world that, you know, we convert everything to AUM and percentages because…even when you're in a commission-based world. Like, everything has always been a percentage of something. Like, just we do math and the percentages. That when you talk to younger clients who are just used to paying professionals for their services and have never been attached to an asset model in the first place, they just don't think in those terms. They're not doing the AUM percentage math, they're just literally trying to figure out, "Do I think I'm going to get enough value out of a $10,000 check to feel good about the fact that I'm going to write a $10,000 check or $800-something a month," or however you're going to break it down based on what you billed on that?

Anjali: Right. I'll say that I've had prospects, you know, have the initial consultation with me, and they might be a little bit older and they're very hung up on that. You know, they'll tell me, "Well, you're charging X percentage on my assets, it's only this much." And, you know, for those prospects, I just don't think they're a good fit overall. And the reason why is because they're just so investment-focused. And so it's really hard to convince someone who's so investment-focused that, "Hey, like, I do investments." But I would say investments is 25% of what I do, 75% is, like, the financial and the tax planning. Like, that's the value-add. And so if someone can't wrap their head around that then they're probably not a good fit for us because they'll probably come in, you know, wanting to seek some sort of, like, expected return, which, you know, I'm a DFA advisor, I'm passive index. You know, you're going to get probably something between the high and the low of the market.

So in those scenarios, you know, I'm not trying to convince those people. And if they, you know, kind of start on the path of like, "Well, it's going to be 2% or 3%," you know, I just tell them like, you know, "This is what I do. If I'm not the right fit, here are some other advisors that you may want to speak to instead." You know, that's why I like to talk to everyone, because at least if I can steer them to another fee-only advisor, I feel good about that. But I'm not here to try to convince everyone to work with me.

Michael: Well, and I guess the other piece that goes with it as well is, you are working with physicians and business owners, so I'm presuming, like, your average client has a pretty healthy-sized income, just, like, cash flow revenue in the business.

Anjali: Right. I mean, I would say average is, like, at least half a million, and then I have a handful that are above $1 million. So it is a different type of client base, right? So for some people, $10,000 is a significant amount of money, but for a lot of these clients, you know, it is still a lot of money, but in terms of their overall income, it's a very manageable fee for them.

Michael: Well, I guess, I mean, even if you pretend they have no assets, or not pretend, like, they literally have no assets because they're, you know, negative net worth with the student loans and the rest. If they're earning half a million dollars or more, like, even just as a percentage of income, your fee is less than 2%. And for the ones that are getting up to $1 million of income, your fee is less than 1%. So, like, never mind whether it's a reasonable percentage of assets, like, you're a fairly moderate, you know, 1% to 2% or less of income fee even if they have no assets. And if they have some assets then, you know, percentage of assets plus income combined is just an even lower percentage.

Anjali: Right. I've never looked at it that way, but it's a very good point you bring up.

Michael: Yeah. So I guess, you know, you can charge your 1% on assets, you can charge your 1% on income, either one probably feels relatively comfortable to people who have enough income or assets that it adds up to 1% or less.

Anjali: Right. And I've had people come through who really want to work with us, but I'll tell them, I say like, "Based on your income, like, my fee will be a financial strain and burden on you. And I don't think that you need everything that we do for you. So let me, like, refer you to some other advisors who I think would be a better fit." So, you know, I'm not here to make it a burden for people. I appreciate that they really want to work with us, but…like, you know, when I went to the $10,000 fee structure, I had to internally accept that there would be people that I would really want to help, that I just couldn't anymore. And it's a matter of, you know, I just…there's only so much capacity I have, you know, running the business and being a mom of a two-year-old that I just had to let certain things go. So that was one of the things I had to let go.

Michael: So how do you let that go?

Anjali: It's tough. I would say that, you know, my entire career with my firm I've either been pregnant or a mother of a small child, so I don't know what it's like to not have any of those. You know, I launched my firm and I was pregnant three months later. So, you know, the first 10 months it was, you know, being pregnant, having morning sickness all the time. And that's when I brought on Jennifer on an hourly basis to help me keep my client load going while I was on maternity leave, which I only took one month, which was also a big mistake because after one month I just wasn't in the right emotional or physical state of mind to really get back into work. I know I disappointed a few clients through that process, especially the newer clients that were coming on board. But, you know, I said, "Please, like, bear with me. We're just trying to get through this period right now."

And, you know, once I officially started ramping up full-time again, I had to really look at my schedule and figure out what was essential. So it was more of a personal values discussion, you know, my husband and I had together, where I was like, I only have so many hours in a day, my first priority is going to be my family. Like, that's just what it is. So if my daughter needs me. You know, she's been sick this week, I couldn't work on Wednesday. Yesterday I only worked half a day. Today my husband is home. So, you know, we're tag-teaming a lot of it.

And then my second priority is my business. So serving my current clientele and growing the business. Because, you know, I'm at $250,000 recurring revenue, but I live in Southern California, which is really, really expensive, so I need my business to be at a certain revenue level where I feel comfortable from a personal cash flow perspective. So we are in heavy growth mode. So whatever time I'm not spending, you know, servicing my clients, I'm spending trying to get new clients. So when I take, you know, my parental responsibilities, my household responsibilities, and my business responsibilities, I literally don't have time to do anything else.

Michael: And that's what makes you feel better is, like, just, "I just don't have time to help this other person as much as I would like to or one of those other things is going to have to give."

Anjali: Right. So that's where I at least will make time to talk to prospects who want to talk to me. You know, ahead of time I'll know that they're not a good fit, but at least I get a good feel for what they're looking for and I can point them in the right direction. But I feel like I'm at least doing a little bit something. Eventually, I would like to maybe have the ability to kind of go back and reassess who I want to serve long term, but as of now, I just don't have the time to really do more than what I'm currently doing. You know, it's just it becomes a matter of, like, I have to practice essentialism and what is my top priority items and just focus on that. Knowing that, you know, my daughter is not going to be two forever. Eventually, she'll get older and then I'll probably reassess again kind of what the firm looks like.

How Anjali Gets Clients To Stick With Her Firm Long-Term [37:44]

Michael: So help us understand, like, with this $10,000 minimum fee to get going, like, what does someone get for $10,000? Like what does an annual engagement look like with you through the span of a year that adds up to, "Hey, I feel really good that I just spent $10,000 working with Anjali?"

Anjali: Sure. Let's see. Maybe I'll just describe one of my clients and then that might help give it some perspective. So we have a four-meeting onboarding process, and those four meetings we like to do within two to three weeks of each other, just because that's where we're kind of establishing the client relationship and we're trying to build trust with them. So we're usually doing, you know, a get organized meeting. We use eMoney. So after the client inputs all of their information, we go through eMoney in detail.

Our second meeting is a goals discussion and, like, introduction to cash flow. So we use Kinder's three questions. If it's a couple we have each of them do it separately. We really go through that in detail because a lot of what we're trying to do is really focus in on what's truly important to the client. And I think a lot of times people detract from that, whether it's, you know, keeping up with the Joneses or, "Oh, my friend is doing this and that." You know, we're always trying to get them to come back to like, "Well, this is what you told was really important to you." So I think it helps shed some light for them and that they feel better that they know exactly what they're looking for.

And then for cash flow, you know, we have a system we use. Jennifer is my cash flow expert. Cash flow is something that I absolutely hate doing. I'm not very good at it either, but she's excellent at it. So she kind of handles a lot of the cash flow stuff.

You know, the third meeting we do cash flow implementation as well as investment. So we go through kind of DFA philosophy. You know, at that point we know what accounts there are. Most of our clients the goal is retirement. We discuss what allocation makes sense so that we can just start putting that to work.

And then the last meeting in the onboarding process is usually there's a topic of interest that brought the client in in the first place. So we go through that in detail and we map out the rest of the year for them so they know exactly what we're going to be working on.

And then from there we usually go quarterly for clients, but, you know, I would say most of our clients are reaching out to us pretty frequently. And the reason why is just because of what age and life stage they're at. Like, things are constantly changing, right? Like, we have a set of clients who just closed on their home last week. Their first home, their dream home, they have been with us for a little less than a year, and we had them with one lender. Two weeks before closing that lender essentially rejected their loan with the no explanation at all. So then, you know, I introduced them to another lender, the lender that I work with a lot, who, I mean, I was like, "Can you please make this work?" So we're heavily involved. We're feeding them the information. I'm on the phone with the lender every single day up until that two-week point. And then they did close on time, right?

So it's things like that. Whatever added step we can take to help make the process easier for them, we'll do. So it's not only the planning but we're also kind of there to help manage the relationship with all the other providers they're using, whether it's their insurance agent, the disability person, their lenders, whatever the case may be. And the fact that we helped the client achieve obtaining their dream home, like, those clients are really, really happy with us, right? So it's things like that that I think really get clients to stick with us long term, not so much me running their projections and saying, "Oh, you guys will be fine," or, "Oh, your portfolio earned X% return." It's kind of those things that you don't necessarily think of that really, I think, draws clients in and they're really happy with the quality of work we're doing.

Michael: Well, you make an interesting point there that, you know, for a lot of us, like it or not, like, we talk a lot about investment returns and what's going on in the portfolio or what's going on with some particular product or thing that we implemented with them, or, you know, we're updating planning projections on a periodic basis, but their dream was to buy their dream home, you helped them make their dream home happen, which is all our cash flow and budgeting and mortgages and lending and a whole bunch of things that traditionally we generally weren't involved and we certainly weren't paid for because there's, you know, that infamous line now between brokerage business and mortgage business. But that's the part that actually matter to the client because that was their goal. So you make that goal happen and literally every morning they wake up in their dream home, part of that memory is, "Remember how this thing almost didn't happen but Anjali saved it in the last minute?"

Anjali: Yeah, I mean, you know, I don't want to take all the credit by any means, but it's things like that, you know. And, you know, running a business is really hard, it's really frustrating, it's really draining, so, like, all advisors, we go through periods and phases, especially when we're in the early stages, where, like, you know, sometimes I'm just like, "Forget it, just go sell FIT, go work for a firm. I don't have to worry about any of this stuff." You know, like, I would say every six months I kind of toy with that idea and my husband is like, "Stop being a crazy person." But, you know, it's moments like that that are so rewarding for us, where I'm like, "You know, this is something that we did. Like, we directly had an impact. We made their dream come true." And that to me is why, you know, I launched my firm in the first place. You know, that piece is so rewarding.

And a lot of times, you know, there's, like, the psychology of money that advisors are starting to address more, but sometimes it's just me talking to one of my clients who's having a lot of anxiety about her cash flow situation because she's launching a business, and I just get on the phone with her for a half hour and tell her like, "It'll be okay. Like, here's what I see on my end." And just to have her anxiety kind of go down because she knows, like, we're there to help her along the way. Like, I mean, that…I'm not doing any sort of analysis or numbers there, I'm just having a conversation with them. And that's what we spend our time doing. You know, we make ourselves available to have those last-minute phone calls to really run all these different analyses to really, like, put in the time and effort if, you know, the mortgage doesn't go through and what else can we do? You know, we keep going and going until we get to the solution, which makes our clients happy.

Michael: So I want to jump back for a moment just to that onboarding process again and understand a little bit more about those first two meetings in particular. You know, most of us do some kind of data gathering meeting and then we gather some data and we put in our financial planning software and then we start making recommendations, which sounds like is what you start getting into by the third meeting. So I kind of get that end. But you framed your first two meetings as a get organized meeting and then a goals discussion around cash flow and Kinder questions, which I feel like are not two things that most people put together in planning meetings.

So can you just, like, walk us through these first two meetings a little more? I guess let's just start with the first one. Like, I'm a brand new client, we did a meeting or two to figure how to work together, I've decided I'm all in on this $10,000 fee thing because I'm all excited about the stuff that you said you're going to do for me. So, you know, I've said I'm coming on board as a client but we haven't done anything yet, like, what happens first?

Anjali: Sure. So once a client signs up and they sign their contract and fill out eMoney, they schedule their get organized meeting. We're virtual, so all of our meetings are videoconference. We use Google Meet. So the first meeting is actually the first time we actually see the clients face-to-face. So this is the first time we're seeing them after they've done their initial conversation. And a lot of times the initial conversation, if it's, you know, a couple, we've only talked to the one person, we haven't talked to the spouse, so we make sure that both, you know, husband and wife or, you know, both people in the relationship are on that call because we do planning for the couple, not just the individual.

So the get organized meaning, we usually first start with kind of high-level like, "Let's go back and discuss kind of what brought you guys in." Just to help, you know, make it a little bit more laid-back and relaxed for the client and for us. You know, they're just kind of telling us what they're hoping to get out of it. It's very, very high level usually, and what concerns they have. Sometimes the transition then into the eMoney, going through everything, is a little awkward. I just haven't figured…we haven't figured out, like, the best way to set everything up, but we know there's certain things we need to get through in the first four meetings.

The "Homework" Anjali Assigns Before A Client's First Meeting [46:23]

Michael: And did you say they do their eMoney stuff and then they schedule the first get organized meeting? So, like, is the first thing from them…that you send to them just, like, "Here's a log into eMoney, please start connecting your account, this is the foundation of how we're working together," or are you doing that in the first meeting, "Let's start connecting your accounts and looking at your financial situation?"

Anjali: No. So we have them do that homework before they schedule their first meeting. So they have to have eMoney, like, you know, 75% complete before they schedule their first get organized meeting. And the reason why is because we spend, like, half the first meeting going through kind of high-level goals, and then it takes about another, you know, 30 to 45 minutes, sometimes an hour, depending on how much is the eMoney, going through it. We need them to do that homework ahead of time. So outside of them putting in all their stuff into eMoney, money, we're not requesting any other documentation because that would just be overwhelming.

Michael: Do you ever get pushback on that? Or is this one of those like, "Our clients are all in their mid-30s, they're used to putting everything they've got into a computer. No big deal."

Anjali: Right. So we have gotten a little bit of pushback sometimes, especially if I have…you know, we do have a handful of, like, older clients who, you know, this is kind of very new to them and security is always a concern. So I usually have to send them, like, the security measures that eMoney takes. But they really have to do that because when we're doing cash flow, we're literally pulling transaction history from eMoney, from their bank accounts, from their credit cards, whatever the case is to pull their data together, and we want it to be a live feed of what their current net worth looks like. You know, that's really important. And once clients go through that exercise and then we go through the system together, they usually feel really good about it and they like that they have something that they can also reference on there and to see how they're doing.

Michael: But I think it's an interesting point you make as well that, I guess the anchor point for you on eMoney isn't initially all the planning projections you get there later, it's just literally the cash flow account aggregation because you have a cash flow conversation first?

Anjali: It is, and it's also just getting an understanding of what their net worth looks like, right? So, I mean, a lot of times when clients start putting their stuff and they're like, "Oh, yeah, while I was going through it I forgot I had this, like, random old 401(k) account that's sitting with our previous employer, that's been there for, like, 8 years," right? And when we're going through it, we internally know, like, all the stuff we need to do based on all their accounts. And it's not just cash flow accounts, it's also, you know, taxable accounts, brokerage accounts. You know, what are we going to move over to TD Ameritrade? What do we have to leave as is? How much debt is there? You know, for a lot of our physicians, you know, the student loan debt is no joke, so we want to know what that debt burden looks like because that debt burden is going to have an impact on cash flow, which will have an impact on what goals we can fund and how quickly.

Michael: Okay. So that's the first meeting. It's a lot of just getting organized, you put yourself into eMoney, let's understand more about your situation. Let's look at eMoney together. I guess since your clients are virtual and you're meeting them with Google Meet is this, like, we screen share and show them the eMoney and then, like, the video feeds in the corner so it's, like, screen share plus video all at once set up?

Anjali: Usually yes. So usually both Jennifer and I are on all the client meetings because we operate more as a team. So she'll go through eMoney in detail. So I'm there and she's doing screen share to go through everything with the client. And most clients I would say after we go through that exercise, they actually feel great because I always ask them after the first meeting, "How do you feel?" And they're like, "We feel wonderful." And we haven't even done anything yet, right? We literally just organized their current stuff and they already feel great because at least they feel like everything is in one place and they know where everything is, which is why we make them do that exercise.

Versus if we're trying to do it in the meeting, the meeting will probably be way too long, and a lot of times clients will forget. Because while we're going through, I would say almost every single time when we're going through eMoney, there's always going to be accounts that clients forget about that'll come up while we're going through the system together. So then as follow-up we tell them, "Okay, make sure you add these additional accounts in."

Michael: And I guess that's literally why you call it a get organized meeting instead of a data-gathering meeting. Like, by definition, at the end you will have all the data because they linked all their stuff in eMoney and you've gone through the details with them. But from their end it's just, "Okay, now you can actually see all your stuff in one place on the dashboard, don't you feel better?"

Anjali: Right.

Why FIT Advisors Assesses Goals Before Cash Flow [50:55]

Michael: So now you've gone through the get organized meeting, you're using…you know, they're linked in eMoney, you've got a handle on their financial details and background, you said then meeting number two is a goals discussion. So can you talk to us a little bit about, like, what do you do in this meeting at this point?

Anjali: Sure. So usually we'll schedule the second meeting in the get organized meeting so it's on their calendar and they know what to expect. And we'll send the follow-up, which will include Kinder's three questions if anyone is familiar with Kinder. And we send it as a PDF. We tell the clients to write out their answers and just send it to us before the meeting.

You know, we decided to put Kinder's three questions, and I actually was a little hesitant. Jennifer was the one who said like, "I think we should start doing this in client meetings," and I was like, "I don't know. It seems really like touchy-feely." And I'm, like, a very unemotional person. I'm also a very technical person, so to me, I'm kind of like, "Why would we do this?" But, you know, I listen to Jennifer because she provides a perspective that I wouldn't have otherwise. So I said, "Okay let's try." So we started doing it with clients. And, I mean, it's amazing what people will open up and tell us. And this is only the second time we're meeting with them, right?

So we really just go through the question. We start with, usually if it's a couple, the spouse that doesn't talk as much because we want them to be able to say everything that they want to say without being influenced by the other spouse. So we read the question, we read their answer. We usually pause and let them reflect. They'll usually expand. And then we kind of continue going through the three questions. And so we do that for, you know, both people. A lot of times they'll start discussing amongst themselves, too, within the meeting, so we're privy to a lot of, like, you know, personal discussions about family and goals and values.

And, you know, after we go through that, like, you know, a lot of our clients feel really relieved because they really have a good understanding of what they want to achieve. Because, you know, when you're…like, as a lot of people know, when you're like, you know, dual income, young family, like, you're all over the place. Like, my husband and I are all over the place. Like, I don't know what…

Michael: Us too, our family too. Yep.

Anjali: Right. So a lot of times they just don't have clarity as to what they want. So those questions really help bring that clarity. You know, we've had clients cry after answering those questions. I had a client, I remember one time he called me the next day after we did the questions, he's like, you know, "After doing those questions I realized that, like, I work too much and I don't spend enough time connecting with people that were important to me in my life." So he's like, "I called up my best friend back home and we talked for, like, an hour." And he's like, "I just want to thank you for, like, enlightening me about what we really want to achieve."

So, you know, that's why we…you know, the questions, that's why we do it so early in the process, because at the end of the day, like, Jennifer and I are trying to figure out, "Okay, well, this is what they told us, this is the recommendation that we should kind of guide them toward," right. So we do those three questions. I have some clients who are like, "Well, we're really practical so we're not going to answer them." And I say, "Not allowed, you must answer them." And so, you know, everyone has to do the exercise. It's part of our process.

And then usually from there, we transition into kind of cash flow. So at that point, we've looked at their cash flow, looked at their spending. And it's helpful to kind of do the goals first and then the cash flow because a lot of times we see whether what the client is telling us that's important to them, is that actually being reflected in cash flow? You know, a lot of the consistent themes is, you know, people wish they could travel more, spend more time with family, but then if we look at what they're spending money on, are they're really spending money on the things that bring them the most amount of joy? So it does segue way into a nice transition in terms of cash flow and what they're spending money on. And all we're doing in cash flow is really outlining what they're spending their money on. And then we do a third meeting, which is implementation. And we have a whole separate process on how we help clients with their cash flow and maximizing savings.

Why FIT Advisors Doesn't Run Retirement Projections Until A Year Into The Relationship [54:58]

Michael: So do you even produce what I'll call, like, the traditional financial plan? You know, the projections out to retire at 63 and live until 95 and, "Here's what you'll accumulate to, and here's what you're going to spend down." And do you even do those projections or you and your clients are living in cash flow and just, "Where's the money going? And we're just trying to make sure we live reasonably and prudently and save and we'll figure out further down the road what, like, retirement lifestyle we want to actually retire with and how much money we're going to have to make that happen?"

Anjali: Yeah. So we'll run retirement projections, but we don't usually run them until a year into the relationship. And the reason why is because for me personally, it takes me about a year to really truly understand the client and all their nuances. You know, that's just how it is. And then it takes time to kind of gather all that data. The other problem I would say that comes up and maybe it's not more of a problem but just, you know, change in facts is that almost every client that comes on board, within six months, all their facts change. So it's either, you know, they're going to purchase a new home, a new challenge. Right.

Michael: Yeah, like, it's what happens when you work for a lot of people in their, you know, late 20s to early 40s, particularly when they're growing careers and businesses as well, like, income is growing, family is growing, life changes a lot with fairly high frequency.

Anjali: Right. So any projection that I try to run early on is going to be useless, right? Because all the facts will change once they purchase the home, cash flow completely changes. So what we're trying to really get to is what's that good cash flow number, since, you know, eMoney is a cash flow-driven system. So it's, you know, "How much do you spend? How much based on that spending do you place in that same retirement? Then how much money do you really need? Are you on track to get there?" But most of our clients coming in in the first year, there's so many other things that we find more pressing for them that most clients aren't even thinking about retirement projections until they feel like there's a little bit stability there.

Michael: Yeah. Well, and it's something I've observed a lot for advisors that work with younger clients. Like, so much of the industry is so focused around accumulating for retirements or decumulating if you're in retirement, but even just accumulating for retirement when you're a client that's still in the working years, in accumulation stage.

And when you get to, you know, high-income folks and business owners and people like that in their 30s and even into early 40s, like, there's just so many other demands of life that are going on right now, retirement planning is literally not a priority for them. Not maybe that you don't…not that it isn't important to have a discussion with them about, "Let's make sure we are living prudently within our means relative to our income so that at least there are some dollars that's going towards saving and accumulating towards your future," but the idea of trying to, like, project and, you know, do, like, razor-sharp projections about their trajectory towards retirement, I just find a lot of them they literally just don't care that much. Like, it's just not their financial priority.

Anjali: It's just not a priority just because it seems so far away. I think it's important to run it because, you know, especially with my physicians, I always tell them, "You're behind on retirement plan contributions because by the time you're done and you start making money, you know, you're already in your, like, early to mid-30s, versus most people if they're just getting an undergrad or a master's degree, they're starting to earn and saving away in their 20s. So you're, like, kind of 10 to 15 years behind. So there is makeup that you need to do."

So, you know, we're really focused on, "Okay, what is, like, the main, like, you know, max out your employer retirement plans? Let's get these boxes checked." And then we're going to kind of refocus back on, you know, current goals, which if it's, you know, purchasing a new home, they're really directing all of their excess savings back to a down payment fund, right? And we're kind of in holding pattern until that happens. And then once that happens then we kind of move on to the next step. But I think it's important that we run the projections at a certain point just to show them that if we don't feel like they're quite on track to make it to retirement and have a comfortable lifestyle at that point, that we're trying to pull more money away in savings or whatever the case may be. And I think the client finds it helpful.

But I would say, like, most of our clients aren't even asking for retirement projections until we're kind of at a point where they feel like a lot of it is under control and managed and then they're like, "Oh, are you going to run projections for us?" And I said, "Yes, we are. This year is the year you get projections." And then we kind of revisit them but not as frequently as we would with, like, retirees or pre-retirees.

Michael: To me it's still such a striking thing to reflect on that, you know, you're charging a $10,000 minimum fee and, "Maybe in the second year we'll do a financial planning projection for you because by then we'll have a good handle on it." Like, it's just that's such a strikingly different dynamic, I think, for financial planning when you get into working with young people than what most of us are used to. And it's not that you're not using planning software, because you're loading up clients in eMoney Advisor before the first meeting, but it's all the…like, it's the cash flow side and Kinder questions, not retirement planning projections and all the stuff that goes with that.

Anjali: Right. And I think it's because we're trying to position ourselves to be there for the long haul, right? And so when we're focused on that and kind of taking it one day at a time with our clients, you know, the retirement projections are important but they just don't seem nearly as important as everything else that we're doing for them. You know, it's just because there's so much that they want to accomplish and, you know, retirement is there, it's kind of…but it's so far away for them that they're just not overly focused on it. And it is. I mean, I guess it is different. You know, my only other experience with working for a financial planning firm was, you know, a large RIA in Chicago that I worked with for about a year and a half before I launched. So I guess I'm not jaded by the traditional way of doing things because I had such little experience in the traditional way. And my old firm was ultra-high-net-worth, so it was heavily investment-focused and estate planning. So I literally just relearned financial planning when I launched my firm.

And, I mean, the way we're doing planning now is probably our sixth iteration of when I launched, you know, because every time, you know, every six months we kind of sit down and assess, "How are we currently doing things? Does this make sense?" You know, poll our clients as to what they would like to see and then make adjustments and tweak it as we go, right? Because the industry seems to be changing pretty rapidly so I feel like we also need to kind of reassess our process and our approach so that it continues to stay relevant as we get, you know, a new wave of clients coming in.

Michael: And you say and you actually poll your clients on a regular basis just to, like, ask them like, "Do you like what we're doing? Do you want us to do anything else?"

Anjali: Yeah, I mean, I probably…I wish I would do it a little bit more frequently, but I was running into an issue where, like, majority of my clients were constantly new. And now that I'm three years in there's a handful of clients that have been with me from the beginning, right? So those are the clients that I actually want to just schedule, like, a 30-minute call with, because they've seen all the versions of planning and all the different systems and tools we've used. And so I want to just sit down with them and ask them, like, for honest feedback, like, "What do you like? What don't you like? Is there something that we were doing previously that we're not doing?"

Because, you know, Jennifer and I can sit in a room and think through how we do planning, but at the end of the day, like, we're servicing the clients. So if we poll, like, you know, the few clients that we would like to replicate and ask them what they would like to say, that's probably more impactful than us, you know, with our advisor hats trying to figure out what's the best way to do things.

Michael: And then you mentioned once you get through your four upfront meetings, you know, clients are reaching out frequently as well just because stuff happens, life happens at this age, but you also said you nominally are doing quarterly meetings as well. So is there a structure to what those quarterly meetings look like or is this just, like, quarterly check-ins and may be brief unless something bigger comes up, or do you have a more of like, "We do taxes at this meeting and insurance at this meeting, and estate at this meeting," and, like, a rigorous flow of what those quarterly meetings look like?

Anjali: Yeah. You know, I would love if they were more structured, but they're not at all. So the last meeting in our onboarding we have a roadmap where we kind of map out the rest of the year. And the mapping out of, like, the next 12 months is usually, like, the main tenets of financial planning. So we'll tell them like, "In this meeting, we'll review, you know, your life insurance. In this meeting, we'll look at disability." So those we kind of set based on the client and the need.

Michael: So, like, one of your deliverables in the final meeting is just, like, a roadmap document? Just, "Here's the planning stuff we're going to talk about over the next 12 months or quarterly meanings," or however it's lined up for the client? That's, like, a thing you print and give to them?

Anjali: It is. Yeah. So we show them in the meeting, right? We pull it up on screen share and then we send it to them in the follow up. So they kind of have a general idea of what we're going to accomplish. But we tell them that we keep the roadmap pretty light because between this point and our next meeting, they're going to have stuff that comes up, and that's what the rest of the agenda is going to be.

And it notoriously happens every single time. Like, I have…my very first clients who were my first clients who signed up with me, who're still clients, I'm very happy that they're still clients, you know, the second year in they were like, "You know, I wonder what we're going to continue to talk about a year from now." And, you know, we're third year in and their agenda is just as packed as it was three years ago because there's just always stuff that comes up. So we try not to keep…we try not to make the agenda so structured that there's no wiggle room for clients to give us input as to what they want to talk about as well.

And, you know, that's the dilemma we sometimes run into because we're doing modular planning and we're customizing it for every single client, you know, versus doing, like, an upfront plan so we know exactly what we're going to do over the course of the next few years. You know, we run into scenarios where it's sometimes really hard to manage and keep track of everything going on. But I feel like that's what differentiates us is the fact that we don't have to be…we're not cookie cutter at all, right? We're not using templated financial plans for anyone, we're literally creating agendas from scratch for every client for every meeting as we go through it, which, you know, people will tell me that's a scalability issue. And once it becomes a scalability issue I'll address it at that point.

Michael: So can you tell us a little bit more about just the tech then that powers the firm. Like, you've mentioned a few. You said you're on Redtail for CRM, you're using eMoney Advisor for planning, you're doing virtual meetings with clients using Google Meet, so, like, what led to those platforms versus some of the others, and then what else are you using?

Anjali: Sure. So we just started using Trello for client task management. Because we usually will send client tasks in a follow-up email, but then there was so much back-and-forth going through email that we decided to implement Trello as a way to help clients see what their to-dos are and our to-dos. And then Trello is really interactive, so clients can comment directly in there, and we can comment back. And then we have, like, a completed section of their board, so when something is done they actually get to move it over. So, like, our clients who're really into checklists and stuff, they love it, right?

Michael: Interesting. So, like, it's not just that you're using Trello to keep track of tasks internally. For those who aren't familiar, like, Trello is basically one of these sort of checklist tracking systems that just, you know, keep track of all your to-dos and all the stuff that goes along with it. And they've got a particular style where they do them in boards with columns where you can, like, drag your to-dos to different columns as you progress through a process. But, like, you're not using that just to run the business, you literally give…like, you make a Trello board or, like, a Trello project for each client and then each client interacts with their own Trello board with you?

Anjali: Correct. So each client has their own Trello board. Now when we send a follow-up we don't put the tasks in the email, we actually just tell them to access their Trello board. So they're tagged in their board, so every time, you know, there's an update they get an email notification. And what's interesting is we actually are mainly using Trello for clients to help them track their tasks. For our internal firm tasks, we're still using Redtail. And the reason why is because, for a lot of things we do for clients, we have a lot of workflows built out in Redtail. So Redtail is still our main task tracking system for the firm, but for clients, you know, we're implementing Trello to help them keep track.

Because that's the other, you know, dynamic when you're doing modular type of planning is that it's hard for clients to also keep up with everything that's been done. You know, we've had clients who were like, "Where are we on this and what have we done?" And I don't blame them, you know, because sometimes we're asking the same questions. And, you know, it's testing out. We used to…tried to use MyPlanMap, that one I didn't find to be very helpful so we dropped it and we moved to Trello. And so at least Trello is a nice way for clients to really see everything they've accomplished. You know, like, everything that's completed gets deleted out, gets archived. So we can kind of go back and pull previous versions on their board to show them like, "Here's everything we've done over the course of the year."

Michael: Yeah, I'm just imagining, like, if you've got a client that you've worked with either at the end of the year or especially after a couple of years that, you know, you pull up the Trello board with all the closeout and completed archives and, like, it's just three pages of completed things that you scroll down to, and it's like walking down memory lane of all the things that you've accomplished in working together.

Anjali: Right. So it's helpful in that it keeps, you know, us and the client organized, and then it's also helpful because it's an easy way for us to kind of show our value back to the client.

Michael: Yeah, like, you know, just pull out your board or show them the board, it's like, "Hey, and if you're wondering why you keep paying us $10,000 a year, here's all the stuff we've been doing for you." And you can see yourself checking them off.

Anjali: Right.

Michael: And are there…maybe this doesn't even matter but, like, are there integrations between Trello and Redtail CRM or would you even need them if you're using Redtail for your internal stuff and Trello is really just for the clients to basically track their own tasks?

Anjali: Yeah. So we're actually debating whether we'll move to Salesforce in the near future because the integrations with Redtail aren't quite as good. So, you know, there's just limitations that Redtail has. And before Redtail, I was on Wealthbox, but we didn't like their workflow capabilities as well, which is why we moved to Redtail. And now we're wondering, "Okay, do we move then to Salesforce?" So that's something that we're exploring. I just don't know if I want to do a CRM switch again. Obviously, it'd be a little easier right now with 35 households versus if we're kind of double the size to do it. But that's something that…you know, Jennifer is really into the technology side of things, so I usually tell her like, "Vet them out and then come back to me and tell me what you think." So she's the one who suggested, "Let's start using Trello."

We talked with another advisor and her team, Mary Beth, who was already starting to use Trello with clients to see how they were doing it. And then, you know, they were showing us and we were like, "No, this is exactly what we need as well." So we did kind of full implementation of Trello board starting last week.

Michael: Yeah, it's something that's frustrated me for a long time, that just, you know, the value of ongoing planning is literally ongoing planning. Like, it's all the ongoing stuff that you do. And planning software is not actually built to help do ongoing planning advice, so you get, you know, separate tools like MyPlanMap that have cropped up to try to plug that gap and then, you know, you're just using standalone task management tools like Trello.

Yeah, in my ideal world, like, this should all live in financial planning software and there should be, like, a giant chart that shows their net worth wealth changing over time and little milestones of all the things we've been doing for them. And, you know, after you've been working at it for five years there'll be a big mountain chart of wealth accumulation and all these little labels of all the things that you've done with them over time. But the planning software just isn't built for that, so we have to do all of it outside with all these one-off tools and then try to link them all back together.

Anjali: Right. It's actually really frustrating. It's a very sore spot for me because, you know, we already have clients that have so many different logins between eMoney and TD Ameritrade, and now we...and that'll be the first thing a client tells us. They're like, "Oh, no, another login?" I was like, "Yes, but please try it. I think you'll really like it," right? And, you know, I wish there was one system and one tool that would do everything, and there just isn't. So if someone builds that out, I will buy it. You know, I don't even know if anyone is really working towards something like that. I know the bigger firms, like, internally build their own systems to do things like that, you know, and we're just not in a capacity to be able to put money toward that.

Michael: Yeah. Well, to me it's just it's the sad reflection that at the end of the day, you know, the roots of financial planning were that it was either really good at selling a product or was really good at gathering assets. And so all of those are one-time transactions??? Like, you either get the client to move their money or you get the client to buy the product. And so most planning software is at the end of the day, like, it's built for a single moment transaction. "Here's the plan, I printed it out for you. It says you need the thing I'm offering you, so I hope you'll buy it."

And it's not actually built to support an ongoing advice relationship where you give advice over time and clients complete things over time and their situation changes over time. Most of them you have to, like, literally make a new plan every time you want to do an update for a client because, you know, if you're in a transactional business, a new plan is a new product sale. So, of course, you treat it completely independently. But in an advice relationship, these are just milestones and accomplishments and the tasks in an advice relationship and none of the planning software is actually built to facilitate that.

Anjali: Right. It's why we still have to, like, rely on Excel to do a lot of the calculations because the system just won't do it. Like, if I'm running… You know, we have a pretty robust Google Sheets workbook that we built out. We kind of sat down and thought, we were like, "What's all the different types of calculations we do for clients? Like, you know, we do home affordability analysis, you know, what percentage to max out their 401(k) and their HSA contributions?" You know, we kind of went through all of those. And we've had versions of, like Excel templates and I was like, "Let's just put everything in Google Sheets, everyone has access to it. If there's a change we can make comments." And so that's what we're still using for more basic calculations because eMoney is not going to be the tool we use for those types of things.

Michael: Because those are all actual advice needs, they're not…like, there's no product tied to them. You're not going to sell a mortgage or a mutual fund or a life insurance policy or an IRA rollover at the end of those, so planning software doesn't illustrate them.

Anjali: Correct.

Michael: So is there kind of other key technology that's part of your firm and how you run or are those basically the core systems that drive you?

Anjali: So those are the main ones. We also use ShareFile for clients to share information with us. So all of our email signatures have a link that says, "Upload documents here." So we really educate our clients as to not send us anything via email. So upload everything to ShareFile. And that's what we use for, like our internal storage of all of our clients' information. So we have, you know, a database filing structure, so, you know, when a piece of information gets uploaded, you know, Amy clears it out, and then she usually sets up a task in Redtail to let us know like, "Here's what was uploaded," and then either me or Jennifer will go in and see if we actually have a to-do item from there. So then we'll change it to a to-do item and then put a due date for it. So we've tried to automate what we could, right? So those are kind of the main systems that we're using. And right now it's working. So, you know, six months from now I might have a different set of tech that I'm using at that point.

How Anjali Markets An Entirely Virtual Practice [1:15:32]

Michael: You know, for folks who are interested, curious, or, you know, trying to jot down all of these technology things we're talking about, so we'll have a link out to all these in the show notes as well, as well as, like, Kinder's three questions and such if you want to see more on that. So this is episode 79 of the podcast, so if you go to kitces.com/79, we'll have links out to all these in the resources area just if you want to go check out Trello or something similar.

So Anjali, you know, we talked earlier about, you know, you've had this great growth of bringing in households that are paying $10,000-plus fees over the past couple of years, and, you know, you've been trying more and more to hold to the fee and turn folks away who don't fit. And, you know, I get it from the business end of there's only so much time in the day and there's only so many people you can serve, so figure out who you serve well, charge them appropriately and off you go on your merry way. But I feel, like, the caveat for most advisors is there's sort of this, like, underlying assumption here, which is assuming you have a steady flow of people who are willing to pay you $10,000-plus a year in the first place, which I think is where most of us get stuck.

So can you talk a little bit about, like, marketing, business developments? Like, most firms, I think, struggle just to find clients who can write $10,000 checks, much less clients who can write $10,000 checks and are in their 30s, and are virtual and have never met them in the first place. So where on earth do all these clients come from?

Anjali: Because I try to market to physicians. And as a side note, my husband is a physician that's why that's one of the specialties that I've developed, and 95% of his family, so a lot of exposure there. You know, I started advertising on, like, various physician blog sites, you know, the big one is White Coat Investor. When I was on White Coat Investor there was probably only, like, 10 of us advisors. I think there's over 30 now. So that used to be a really great source of prospects for me. That's dwindled down a bit.

Michael: Yeah, that may be partially our fault. We had Johanna Fox Turner on the podcast last year who I know also has done a lot of business development through being involved in the White Coat Investor site and community and I feel may have sent a few other advisors to market on White Coat Investor after that.

Anjali: You know, and when I was on the "XY Planning" podcast and I mentioned White Coat Investor on there, and that was a year and a half ago, and I remember seeing more advisors creep. Other than that, that's just what's going to happen, right?

How Paying For Ads On A Blog Works [1:18:17]

Michael: I was going to say, like, can we start there? And even what it looked like for you in the early years. You know, most of us in the advisor world, like, the average advisory firm spends less than 2% of revenue on marketing, just if you go and look at the benchmarking studies, and most of that is usually things like client appreciation events for existing clients and maybe a few of their friends that they bring who might be referrals. Virtually no firms do advertising. So tell me about just paying for ads on a blog. What does it cost? What do you get? Like, how does that work?

Anjali: Sure. So White Coat is unique because you can be listed as a preferred advisor. And there's usually, you know, questions you have to answer as well as they review your ADV before you get to be on the site. So that one I think draws a lot of traffic because it's a preferred advisor of the site. So, you know, Jim Dahle who runs the site, you know, he has so much…you know, such a huge following. That is very helpful. Now, because of that, there's been so many other physician blog sites that have popped up over the years, and so, you know, every year I'll get one or two people emailing me saying, "I'm launching this new site, are you interested in advertising? And you'll be the only advisor on the site," right? So it'll usually be something like six months, anywhere from, like, 600 bucks to $1,000. You know, White Coat is a lot more than that because they just have, you know, so many people on their site.

So I usually will look at the site to see if it's kind of…if I like what they're saying on their blog site in terms of, like, investment philosophy and kind of my belief system, you know, getting to know the actual blogger. And then I will always request to write a guest post. So I will only advertise if I can also write a guest post. I usually ask them like, "What is a topic of interest for your readers that I can write about?" So just to get more pieces out there where I'm the author of. I usually tell them, like, "Let me write something that has some sort of tax tilt to it because that's my area of expertise and I can provide more insight than kind of a lot of the general stuff that.

Michael: So why this philosophy of, "I will only advertise if I can write a guest post?" Like, what's the linkage there for you?

Anjali: So I think if I'm just advertising and my banner is on the site, I don't think anyone is looking at it, to be honest. And I think that's just what happens. I think if there is some sort of content written with my name attributed to it, someone has a little bit more insight into me, what my thought process is, and it's just a little bit more information that they get about me, right? So they can read it and they can usually make a determination like, "Oh, I like what she had to say," or, "No, this is not relevant to me." And then they'll see, oh, I'm also…you know, there's my banner with my ad, and then they can click on it and they'll go to my website. So I feel like there needs to be more than just, you know, my banner on there.

And most of the blog sites now, that's part of their offering. Like, whenever they reach out to you to ask, like, if you want to advertise, they'll also give you a guest post as well. And a lot of them that, you know, if I've been on it for a few years, they usually will reach back out to me again and say like, "Hey, do you want to write on this or comment on that?"

Michael: So it just gives you a deeper connection than just a banner in the corner that has your firm or your smiling face, but our brains, for better or worse, have kind of learned to tune out just seeing a banner ad if we have no other connection to it. So that's the goal? Like, it's not, "Oh, there's a banner for Anjali," it's, "Oh, there's a banner for Anjali. Oh, I really liked her stuff. I read her tax article a few months ago and, you know, we've been looking at switching to an escrow because she talked about the benefits." And, like, now I've got a connection to you when your banner ad pops back up.

Anjali: Right, right. And I usually will test out a site for, like, six months to a year, right? And I'm good about looking at my analytics to see if anyone is really coming through on that site. And then once I'm up for renewal again I'll make a determination whether I'm going to stay on this site or if I'm going to move on and spend my marketing dollars elsewhere.

Michael: Okay. So when you were doing this early on with folks like White Coat Investor, I mean, can I ask, like, what were you spending on ads I guess before it got crowded and everybody else dragged the results down? Like, what were you spending on ads and what kind of results did you see?

Anjali: So I wasn't…I didn't have an ad because I think the ads are, like…I think it's, like, the minimum is, like, $3,000 a month or something like that.

Michael: Well, that's pricey. Okay.

Anjali: I mean, it's really expensive. Yeah. So that's why the only people who're really "advertising" are, like, all the insurance people because they actually have the revenue to be able to do that. So I'm pretty much listed as, like, on the preferred advisor side. And that fee I know varies. So if you've been on the site longer, your renewal fee is going to be cheaper than someone brand new coming on there. But I think it ranges from…I think when I started it might have been, like, $750 to $800 for the year, but I know people who're paying, you know, significantly more now. So I think you just…I think it's a different fee schedule for everyone.

Michael: So they've got banner ads and they've got just a listing area. You're in the listing area but you're not doing the banner ads because the listing is more affordable, the banner ads are really expensive.

Anjali: Correct.

Michael: Okay.

Anjali: And before, you know, there was only, like, 10 advisors, so if someone was sorting through, like, they'd see my name. But now that there's 30, I'm at the bottom of the list. So, like, it's also cyclical. Like, I'll be at closer to the top when my renewal comes up, which is when I know more prospects are going to come through. Since I'm at the bottom, it's been a little bit slower, but it's because of my placement on the list. Which is why, you know, this is the first year I'm actually putting money towards having, you know, some sort of marketing consulting done. So we've hired a marketing person to come in. You know, we're kind of in the initial stages, but really figuring out what our brand is, what our messaging is, and then making sure that that branding and messaging is consistent across all the various platforms that we're on.

Because, you know, when I came up with all of that, it was three years ago when I launched, and I just haven't looked at it since. So I feel like there's a lot of inconsistencies out there. And now that, you know, it's been a little bit slower right now, it seemed like a good time to really focus our attention on getting that sort of stuff cleaned up so that, you know, when, you know, the next wave comes, because this business is cyclical, you know, kind of everything is aligned so when people come to the website they clearly know who we are, what we do and what value we provide.

Michael: But, I mean, what kind of clients were you getting from this? I mean, I think just for a lot of us the idea of, oh, I spent $700 to get listed on a website and I got $10,000 minimum fee clients is still kind of mind-blowing for a lot of people. Like just, it really worked that well for you because they would…just the community is that good or it worked that well because they would look at that and then they would come to your website and then your website says like, "No, no, we serve physicians," and they said, "Oh, Anjali is the one for me?" What kind of results did you get? How does that work?

Anjali: Yeah, it's still a little unbeknownst to me, I'll admit. You know, because what's funny is, like, one of my first $10,000 clients last year came from XY Planning Network "Find an Advisor" profile, which never…I don't usually get too many from that. So it's kind of a mixed bag as to what avenue people come. And, like, you know, I think it's just there's something that each of these people are looking for that I seem to resonate with. And then once they find me, and they'll tell me in the call. They're like, "You are who I've been looking for for a very long time." Like, I've gotten that a lot. So once we get to that point, you know, when I tell them the fee they're like, "Okay, fine, done." Like, "Let's just move forward."

So I don't know what it is really. I mean, I think the fact that we, you know, really try to focus in on the business side of things and the tax planning side, I think that draws in kind of a specific niche of people. So even in the physicians, like, I'm getting a lot of the 1099 or the ones who are partners in medical groups more so than the W-2, because they want that help and they're not getting it with whatever source they're currently using. So, you know, just having that I think is very, very helpful.

And then the other side of it is, you know, I get a lot of, you know, young Indian couples, I get a lot of, like, first-generation immigrant couples because that's what I am. So I think the other side of it is, you know, you can have all the technical expertise and knowledge in the world, but at the end of the day, like, someone is going to pick you because they like you and they feel like they connected with you. And I think, you know, having a similar shared background whether it's cultural, whether it's life stage, you know, I think that really helps. And maybe that's, you know, an added thing that draws more people into me and they can accept the fee that I'm quoting them.

Michael: And of clients that you've gotten, do you have a sense as to where they came from? Like, was almost all of this White Coat Investor or was it, like, being listed on other sites, or was it, you know, find an advisor search tools like NAFPA or just word of mouth people? Like, just how do 35 people paying these minimum fees find their way to you in a virtual environment?

Anjali: Sure. So many of them came through White Coat, especially last year. So, like, well, of course, White Coat. I had a few through XY Planning Network. NAPFA has never been a good source for me. I feel like everyone that at least comes through NAPFA on my end seems to be more used to their traditional model, which I'm not, so it's hard for them to wrap their head around that. And I've seen a lot more client referrals. So, you know, the client referrals are starting to come in more and more. And I think…I have a feeling that this year, my client referrals will actually…that number will probably be higher than the White Coat number.

Michael: Okay. And as you look forward from here, like, are there particular marketing strategies you're trying to focus on for drawing people and going forward from here?

Anjali: That's a good question. It's something that I struggle with because I'm virtual. So any marketing effort that's location-specific I can't really do because I'm not really looking to stay, like, to just service clients in Southern California, right? I think we have clients across 18 states now. And so we're really trying to be like, you know, "If you're the physician or you're the business owner and you need a lot of the tax help and the hand-holding and you want somebody to really guide you, like, we are the firm you come to." And how you market that and have it reach out to the masses, that I haven't figured out yet. So, you know, it's just a process of, like, I'm trying to take it one step at a time, which is why I'm using a marketing person because it's a skill set that I definitely do not have. So, you know, I want someone independent to come and…

Michael: I was going to say, so you had a pretty phenomenal start for not being a marketing person just immersing yourself into some of the doctor communities and getting a couple dozen doctors and business owners that are paying the fees that they're paying.

Anjali: Right. Yeah, and, I mean, maybe some of it is a little bit of luck. And I think that's the only reason why I'm more focusing on marketing because I'm starting to see my normal channels dry up a bit. Which is, you know, and because I'm still in growth mode I'm like, "Okay, well, if these channels are drying up and…" You know, just the number of advisors that have come in who, you know, "specialize" in physicians has increased dramatically. The number of advisors who are providing kind of that comprehensive holistic approach has also increased significantly.

So even when I'm talking to my marketing person she's like, "So is your differentiator that you're fee-only?" And I was like, "No." Because there are so many fee-only the advisors now." And she's like, "Well, what about this comprehensive?" And I was like, "Well, everyone is using comprehensive now," right? And she's like, "Even…" You know, so many people are now saying that they do heavy tax planning, which I'm kind of like, "But you're not a CPA. Like, how are you doing tax planning," right?

Michael: So the CPA side I guess is still a little bit unique for you. And do you do their…like, are you doing tax returns and small business accounting stuff as well or solely focusing on the tax planning end of things for the tax portion of what you do?

Anjali: Just the tax planning. Doing the compliance was something that I contemplated when I first launched, but, you know, coming from a compliance background, like, that in and of itself is a full-time job. So I decided to position myself as more the planner. And we work really heavily with, you know, the client's CPA. And I usually have all my clients give me access to their QuickBooks so I can run through their numbers and, you know, see what they're doing.

Michael: So talk to us a little bit about just back to the beginning and getting launched, and this balance point you said that you decided to go out on your own, you launched the firm to do this, and you were pregnant three months after the launch. So what's going through your head at that point?

Anjali: I was probably in full freak-out mode. But in retrospect, you know what?

Michael: I mean, was this like…not to get too personal but, like, was this planned up front, that, like, "I'm going to start the business and we're going to be starting a family," or, like, "I'm going to start the business, and oops, it looks like we're starting the family?" Like, were you trying to sequence these things out in a certain way or just life happens?

Anjali: Life just happened. It was more we were wanting to have a child. You know, it's never really a right time. You know, so many friends said, "It'll take a while," and we were like, "Okay, we should probably start," and then it happened right away. So that's what happened. And, you know, I'm kind of a high stress, high anxiety person, I'm very type A, and I'm a planner, like, I like all the details planned out. And a child is something where you just can't…no matter how much planning you do, you know, it's a curve ball every single time. Every day is like that.

So my husband is the exact opposite of me. You know, he's very chilled, very laid-back. You know, he's an optimist. He's the one who pushed me to launch the firm, you know, when I was having a lot of doubts as to whether I could do it, and, you know, just capacity-wise. So he was like, "No, do it. This is the right time to do it. You know, there's never going to be a good time." So, you know, when it happened, you know, I was in full freak-out mode. You know, being pregnant, how to tell my clients. You know, I really thought my clients would leave me, saying like, "How dare you type of a thing?" Which in retrospect seems completely absurd, but it's a true reality when you're in that situation.

You know, you hear stories. And, you know, I remember back in the day when I was at PwC, like, if you decided to have children that would hinder your ability to make partner. Like, that's what I was used to is, like, a world where, like, if you decide to have a family then your career has to take a back seat. So I really thought clients would look at me and penalize me for the fact that I was going to have a baby. And that didn't happen, no one left. You know, we, you know, set the expectations. It's why I brought Jennifer in. You know, a lot of people may have told me that it was premature to try to hire someone, but I knew I needed someone just to help keep things going.

And at the time, you know, my firm was really small. I think the first year I only really had, like, 10 clients, so it was manageable, but it didn't seem manageable just because of not only, like, you know, figuring out how to make this work with a baby, but just the emotional side of carrying a baby and the weight and the emotional and the hormones that go on with that whole process.

How Anjali Told Her Clients She Was Going To Take Some Time Off [1:33:51]

Michael: So a few questions there. You know, number one, just how did you break the news to your clients?

Anjali: Yeah. So I did it during a meeting so we could do it kind of face to face. I told them like, "I'm pregnant." And, you know, most of my clients were just like, "We're so happy for you," blah, blah, blah. So I said, "But, you know, don't worry, nothing will change. Like, I'm still going to service you the same way." And most of them were just like, "Yeah, you know, don't worry." Like, you know, I kind of walked them through the timeline. At that point, you know, I already had Jennifer starting, so I was trying to introduce Jennifer to clients.

Michael: So you actually went to hire…like, you hired Jennifer before you were even at the point of telling them so you could already show them like, "No, no, we have all this under control. Literally, like, here's the person who's going to be here to help make sure that the continuity is happening while I'm out with the baby."

Anjali: Right. Right. And if nothing else just someone to, like, look through their emails and make sure there was nothing pressing or urgent. So we did that, you know, right? I had an email already drafted, so as soon as, like, I had the baby, you know, I would let Jennifer know and then she sent the email out to all the clients letting them know that like, "Okay, Anjali had her baby, like, so, you know, please direct all questions to me but copy her," type of a thing. And, like, none of my clients really emailed me during that time until I started reaching back out to them and they're like, "Are you sure you don't want to take more time up?" You know, I got a lot of that. And I closed my calendar off, you know, for two months for prospects. And I had it in my schedule once saying like, you know, "I'm on maternity leave but I'll be back in this month so please schedule a time."

And I remember there was a prospect call I had, and I was up, like, all night with Nila and it was probably when she was, like, three weeks old, and I literally slept through the prospect call. And I remember sleeping through it and I remember waking up and looking at the clock and I was like, "Oh, no." And so, like, I remember emailing her…

Michael: You literally conked up during the prospect call.

Anjali: It was like, I fell asleep, like, I think an hour before the prospect call and I was like, "I'm going to wake up in an hour," and I slept through the alarm and I didn't wake up. And I felt terrible at the time.

Michael: All right, well, at least that's better than, like actually falling asleep during the call. You ask the client an answer and they respond and then you're just silent and they're like, "Anjali, what do you think about that?"

Anjali: But, you know, any, like, new mom knows, like, that is definitely a possibility. I mean, I definitely wasn't on my A game like those first few months I was back because, I mean, you're just so, so sleep-deprived and overwhelmed with everything. So, you know, it was a lot of struggle in the beginning to kind of get into a routine that works. And then, you know, it's a completely different life change. So how do you now adjust from there?

Michael: And in the meantime, from the business end, I guess the good news is you had gotten some clients going, the bad news is you basically had to take all the revenue from all the clients you've gotten so far and put it back into the business to hire Jennifer?

Anjali: Yes. So Jennifer was…she was actually, like, still working at her previous firm, and I, like, had just…I remember just emailing her and I said, "Do you have any interest working hourly for me, like, on nights and weekends?" And I'm like, "I just need some help while I go through this phase." And she's like, "Sure." She's like, "I can manage that." So she started working with me on an hourly basis. And at that point, you know, I didn't even care if all of my revenue was going to her because to me, like, I wasn't expecting to really make a profit until, like, two to three years in. So I've been happy with, like, you know, the trajectory we've had, but I had no expectation of making a profit that year. So, you know, bringing her on.

And then once, you know, she started working with us more, I mean, if people know Jennifer's story, she was actually working across four of us advisors. So four of us pulled together because at the time none of us could really hire someone full-time, right, but we needed more help. So we kind of pulled together to essentially make her whole with a full-time salary. So she was working hourly across four advisors, trying to, like, manage four different practices. Then it dropped down to working with three advisors, then she was working with two advisors, and then she came on full-time with me as of March 1st.

So it's an interesting dilemma that you face, right? Like, you get to a point where, you know, if someone, like, hears this and they're like, "Oh, well, she's…her revenue is $250,000." And I was like, "Yeah, but now I have a full-time employee," right? So I have payroll I need to meet, you know, there's things that come up. I have an hourly CSA. So, like, a lot of times when the revenue uptick happens, there's usually a corresponding expense that happens as well. So you're kind of always feeling like, you know, that you're not quite there where you feel like it's financially independent yet.

Michael: A lot of two steps forward, one step back, two steps forward, one step back, with I guess the additional challenge, so for most firms, like, there's nothing harder than the first hire because you literally double your headcount, which is a lot of change. And going from no salary payroll to salary payroll is, like, a painful giant leap. I guess part of the challenge in your situation, like, you had to dive in relatively quickly because you literally needed to come up with something for coverage when you were going to be out with the baby.

Anjali: Right. And, you know, when I brought Amy on, who's my CSA, I brought her on right before I felt like we were going to hit capacity between, you know, me and having Jennifer part-time. So I feel like I tend to hire, like, maybe six months before I actually need to hire. And it's just because I don't have that much excess time I feel like I just can't get to a point where I'm completely tapped out, because then I feel like everything will fall apart. So I just have to do these hires and things, you know, a little bit before I would probably need to if I didn't have the responsibility of, you know, having a child.

Michael: But that's the life choice balancing reality. Like, that's life.

Anjali: Right.

Michael: So, like, where does it go for you from here? You know, you've talked about the fact that you're in growth mode, but I'm just wondering, like, how much growth are you looking for? How big do you want to be and to grow this?

Anjali: Yeah, you know, the answer to that probably changes, like, weekly. So at this stage, all I really can think about is getting to a point where my personal cash flow is sufficient. You know, that's all that I'm really focused on right now. So, like, we're at a point personally where we're able to do everything we want to do. We're saving enough money. You know, I don't feel like we're behind because, you know, any advisor who launches their firm thinks about, like, the forgone salary, forgone retirement plan contributions. Like, just feeling like I'm caught up, that's, like, the point I'm trying to get to. I have pretty detailed projections. I know when I'm going to get to that point. I'm hoping it's in the next year or two. And I feel like once that strain and stress is gone, that will allow me the ability to really decide how large this firm gets.

You know, when I launched, I wanted to keep it small boutique, but I always thought that it would just be me. Now I have, you know, two people working with me. You know, Jennifer is really driven, very ambitious. Like, she wants to be a lead advisor. She wants to have her own firm. So, you know, I'll get to a point where I'm growing to develop her versus, you know, more money in my pocket. Because for me, it'll be enough, so that means, like, what's the next step of the firm? And as of now, I don't really know.

Michael: Yeah. That's always kind of the dynamic and caveat you have to bear in mind from the business owner end. You know, if you hire great, smart, ambitious, uprightly mobile people, there comes a point where you have to keep growing not for your income in business per se, but for their opportunities, or they will leave and just find something else that gives them more opportunities for upside, because that's what ambitious people do at some point.

Anjali: Right. And I definitely don't want her to leave, so whatever I need to do to, you know, keep her. I felt like I got lucky with her. She's a great fit, has strengths that, you know, balance my weaknesses. And so it's been a good fit for us overall up to this point.

Anjali's Advice For Women Hoping To Start A Firm [1:42:10]

Michael: Very cool. So, you know, as you look back on this, like, any advice you would give to other people? I guess other women maybe in particular about the fear of starting your own practice and making the leap?

Anjali: Yeah. I would say, you know, in the beginning, I probably spent way too much time trying to figure everything out. You know, trying to get all the tools in place, trying to get all the processes in place. And I probably could have launched six months earlier than I did or grown a little bit faster the first year. And in retrospect, I would say, like, don't worry about all of that stuff, just put, like, your basic things you need to put in place and then just go out and get clients. Because as soon as you get your first round of clients, everything you planned and did you pretty much throw out the window because you're going to change it as soon as that first client comes in, and then you start to realize what's the service offering that you're going to give them, what you're going to give people going forward.

You know, juggling the family responsibility, like, between my husband and I, I mean, we're 50/50 in terms of household responsibilities. Like, he does…you know, he takes care of Nila as much as I take care of her. We really have to, like, split roles and responsibilities. If we didn't do that, there's no way I could have launched my firm and have it be where it is now. I think having a baby probably delayed my growth a little bit, even though, you know, where I'm at, I know I could have grown a little faster if I didn't have the baby because I would have just had more time, and there would probably have been opportunities I could have taken advantage of that I just didn't have the time to do. So, you know, little things like that which, you know, in the grand scheme of things isn't going to make a huge difference, but, you know, at the time, it was a little frustrating because I'm an impatient person and I want to grow faster just like everyone else.

You know, so it's definitely a juggling act. Anyone with a child knows the first six months are really, really rough. It was very, very rough for me. I also had postpartum depression, so that was an added burden for me in terms of just being able to get back into the mode of things. But, you know, as my daughter continues to get older, there's constantly challenges. So I've come to accept the fact that, you know, like, it's never going to be at a point where things are just kind of calm and normal. You know, it's just more like, "What do I do to adapt and to keep things going?"

And I feel lucky that, you know, my clients are people that I really like working with, and most of them have young kids. So, you know, this week my daughter was really sick, and I had to cancel a few client meetings. So I texted them, I said, I'm, like, "Sorry, guys, like, Nila is sick. Like, I've got to reschedule." And no one will push back. You know, everyone is so understanding and considerate. Which is really great, you know, so it makes me feel like, you know, there's a personal side to it, there is that flexibility, which is really great, but it's constantly a balancing act and it's constantly a juggling act. And it doesn't get easier as I grow. It's just different challenges that I'm facing now than I was a year ago or two years ago.

Michael: Yeah. There is a fascinating thing to me about just the constantly changing nature of trying to grow and run a business. Like, "I just have to do this one more thing and then we'll get to a good point in the business." And then by the time you get there other things change. It's like, "Oh, I've just got to deal with a different challenge now," Because the business moves along with you.

Anjali: Right. And, I mean, I always wondered, like, when I talked to my study group, I was like, "When does this get easy?" Like, that's, like, the question we all…because we're all kind of at the same stage in our careers. We all kind of launched at the same time. And then we've all come to the conclusion that it doesn't get really easier. It's just, what do we do with kind of where we are in our careers and our firms? And what do we appreciate and enjoy? And then what do we focus on going forward?

Michael: It's one of those things that I've gotten to appreciate more lately, that, like, work-life balance is just, like, a bad way to frame it and think about it because it never…like, work-life balance implies there's going to be some equilibrium point, but you really never get to an equilibrium point because the business never stands still, which means the rest of it doesn't stand still. You know, the one I've been…like, the framing I've been liking more lately is aiming for work-life harmony, which just means…

Anjali: Oh, that's a nice one.

Michael: …figure out how to make them work together. You know, even in my world, like, I work a stupid number of hours every week, but I mostly work from home and I play with my kids on the lunch break because they're still young and so one's home and the other one is home in the early afternoon. And so that's the balance if you want to use that word, but, like, I don't know how to balance it, I just know how to try to make sure I'm enjoying both parts and finding some way to blend them together in harmony.

Anjali: Right. Yes. That's actually a challenge in and of itself so congrats on doing that. I feel like we're still trying to figure it out.

Michael: It's still definitely a work in progress here as well.

So I'm also curious as you were getting launched, like, was there a plan with your husband about the launch? Did you have a like, "We're going to live on one salary for two years and then after two years, like, either this is working or I'll go back and get another job to bring more dollars to the household?" Like, was there that kind of discussion as well or just, "Hey let's go for it?" What did that look like?

Anjali: Yeah. No, I mean, anyone in, you know, a couple situation, you know, both people have to be on board. You know, my husband is a physician so I am lucky in that at the time when we were in Chicago, you know, his salary was enough for us to maintain, you know, a similar standard of living and cover all of our expenses. And before I launched, I actually was working part-time with, like, an accounting firm, so I actually was trying to have a little bit of income coming in. And I eventually left that position I would say, like, six months after I launched.

Michael: You kind of had a wind down from the old place while you were winding up in the new firm?

Anjali: Right, right. Just to have some income stream coming in. And so, you know, we made the decision together that I wasn't able to spend the necessary amount of time growing my business, you know, working part-time, you know, 20 hours a week at this other firm. So, you know, it came to a point where I needed to drop that responsibility.

You know, I would say the bigger struggle for us was when we decided to move to California. I had my baby, we moved to California three months later, we bought a home, you know, three times as much as what our home in Chicago cost. So that was actually a harder adjustment for us to make because…you know, my husband, you know, he got a good salary increase coming to California, but compared to, like, the cost of living out here, it wasn't enough. So, you know, at that point I was, you know, maybe contributing a small amount of money back to the household, so it wasn't until last year that my income was sufficient enough to at least cover all of our household expenses.

And, you know, when we decided to do this, my husband had told me, he said, you know, "We should be able to maintain the same standard of living that we're used to." Because the dynamic that plays out is that when you were financially independent, which we were, you know, when I was working full-time and he was working full-time, we were saving so much money we didn't even have to think about it, to go from that to the exact opposite of that is really, really rough. You know, and it's not like we overspend, but there's things we like to do that we didn't want to necessarily have to cut down so much, because the burden of doing that would have kind of deemed launching the business not attainable. So, you know, that's when I just had added pressure that, "Oh, God, I need to…"

And I'm the one who knows all the numbers in the household, right? Like, my husband doesn't even really know how much is in the bank accounts because he's like, "I'm married to a financial advisor, I don't need to worry about that." So it's me knowing, you know, exactly how much money I need to contribute back to the household to just make us whole again. So that was a big turning point for us, which took, you know, a year or two of my firm.

And then this year, you know, we're finally able to start contributing back to retirement and, you know, start saving for my daughter's 529. And I bring that up because those are just…it seems small in retrospect, but for us, it was just such a big accomplishment to be able to go back and do those things where the business actually feels like, "Okay, this is a legit business. I'm actually contributing back to the household. You know, this is something where now, like, the chance of failure doesn't feel as high, it's just, you know, where do we take it from here?"

Michael: So as we come to the end, this is a podcast about success, and one of the caveats is always that just the very word success means different things to different people. And so you're having this huge, successful start to the business, growing and trying to decide what you're growing towards. And I know I asked you a little bit earlier about, you know, where you want to grow the business, but I'm wondering just at the personal level for you, how do you define success for yourself?

Anjali: So for me personally, I think it's finding that balance or your word harmony between my personal life and my business life. Like, feeling at a point where there is some sort of balance and equilibrium in both, where, you know, I can kind of fully enjoy both sides of it without all the stress and anxiety that I currently feel on both sides of it.

Michael: Okay. I hope a little bit more growth and full momentum, and if only, like, you know, getting to the point that your daughter gets into school on a regular basis, which I will admit from our household, like, once they start going to school on a regular schedule makes it a little bit easier to balance those things out a little bit more, just put some regularity back into a schedule that is not very regular for the first year or two. And that you can build, I don't know, your life around the business or your business around your life, or some combination of the two. Again, I think that's kind of where the harmony angle comes in.

Anjali: Right.

Michael: Well, thank you. Thank you so much for joining us on the "Financial Advisor Success" podcast and sharing your story and path.

Anjali: Yes. Thank you for having me.