#FASuccess Ep 087: Going Independent To Run Your Advisory Firm With The Systems And Clients You Want with René Nourse

What You’ll Learn In This Podcast Episode

• What made René decide to leave a big-name wirehouse to start her own firm.
• What Urban Wealth Management does and who they do it for. [4:38]
• How René structures her business. [11:06]
• The proposal tool René sends every prospect. [16:38]
• The material she sends every prospect before their first consultation meeting. [17:44]
• What technology tools her firm uses to keep things running smoothly. [24:34]
• How she determines which meetings she’ll take versus the ones she hands off to other advisors in the firm. [26:01]
• The thing that scared her about going independent. [35:55]
• Issues to consider when leaving a wirehouse and going independent [41:34]
• Where René’s clients come from [1:06:42]
• René’s experiences as a woman of color in the industry. [1:17:44]
• What she thinks would make the profession more hospitable to women and minorities.
• The low point of her career. [1:35:23]
• How René defines success. [1:37:42]

Resources Featured In This Episode:

• René Nourse
• Urban Wealth Management
• Urban Wealth Management "Connect" Page
• Association of African American Advisors (Quad-A)
• Don’t Get It Twisted: Working With a Financial Planner 
• Stash Wealth
• SharpSpring
• eMoney Advisor
• Acuity Scheduling
• VOIP with MiTel/ShoreTel System
• StartMeeting from FreeConferenceCall
• CopyTalk
• Advisors Assistant CRM
• Schwab Institutional
• Sowell
• Smart Women Savvy Money Facebook Group
• Do You need A Big Firm Brand To Succeed As A (New) Financial Advisor?

Full Transcript:

Michael: Welcome, everyone. Welcome to the 87th episode of the "Financial Advisor Success" podcast. My guest on today's podcast is René Nourse. René is the founder of Urban Wealth Management, an independent RIA in the Los Angeles area that manages nearly $120 million of assets under management for more than 200 clients, with a team of 6. What's unique about René, though, is how she built a successful practice at a wirehouse for the first 20 years of her career as an advisor and only went independent later in her career so that she could use the system she wanted to use to build with the type of clientele she wanted to serve.

In this episode, we talk in depth about the systems that René uses to run her business. The unique way that she structured her "contact us" page to better engage prospects, the material she sends every prospect before the first complimentary consultation meeting, how she determines which prospect meeting she takes versus the ones that she hands off to other advisors in the firm, and the proposal tool she sends every prospect who's interested in engaging her services.

We also talk about the process that René went through to break away from the wirehouse and form her own independent RIA. How she retained the trust of her clients even without the big-name wirehouse firm at the top of her business card anymore by focusing on the safety and security of the RIA custodian she was going to use instead, and the new social media and webinar-based marketing initiative she's created called Smart Women ~ Savvy Money, to grow the firm with the female professional she most enjoys working with.

And be certain to listen to the end, where René shares what it was like building her advisory practice at a wirehouse environment as both a woman and a minority, why she sees mentors as crucial to supporting better diversity in the industry, and how there's increasingly a business case and not just a moral imperative to give better opportunities to both women and racial and ethnic minorities in financial services.

And so with that introduction, I hope you enjoy this episode of the "Financial Advisor Success" podcast with René Nourse.

Welcome, René Norris, to the "Financial Advisor Success" podcast.

René: Thank you, Michael. I'm so excited and honored to be here.

Michael: I'm really looking forward to the discussion today because you have I think a very interesting advisory firm. I know you built your early career in the world of wirehouses. You transitioned out to the RIA world later. And you spent a number of years now building this, I guess a niche in working with women with a very, I guess I'll call like a very digitally-savvy marketing approach. You've got this Facebook group for Smart Women ~ Savvy Money. You're doing monthly webinars and all these really interesting online social media digital marketing-driven stuff. And I suspect if I...well, as I'm talking about this on our lead-in here, I suspect a lot of advisors are sort of imagining this 32-year-old millennial advisor that does all this digital social media-savvy stuff. And that's not quite your background.

René: No.

Michael: So I'm excited to talk about how you came to this niche and digital marketing and trying to get clients through a Facebook group coming out of the wirehouse world as an experienced advisor. That is not quite the usual path we see for most.

René: And it wasn't one that I had figured out the path that I was going to go. I figured I was going to be in the wirehouse for a while. But it's been a wonderful transition, a great experience. And every day I ask myself, "Why didn't I do this sooner? Should have transitioned before." So it has been a great journey. And being in the wirehouse has allowed me to have, which I tell everyone, excellent training. You get to understand the capital markets, because that's what they focus on is asset management, for the most part. And now I get to balance it out with financial planning. So good combination.

Michael: So as a starting point, why don't you just tell us a little bit about your advisory firm as it exists today? Urban Wealth Management, what do you do? Who do you do it for?

What Urban Wealth Management Does And Who They Do It For [4:38]

René: So Urban Wealth Management and I often get asked this question, "Why do you name it urban? Do you just work with African Americans?" And I look at them and I say, "You know, is Urban Outfitters just for African Americans? Or Urban Plates?"

René: I swear, I get that a lot. So I say, "You know what? We really focus on..." And we start at the financial planning door, our conversations are with individuals. We focus on working with professionals, and most of the professionals are in urban settings. And we do have a niche where we work with professional women, not at the exclusion of men. So we've got, I would say half and half. But 80% of the new clients coming in in the last year and a half have been women. But where a lot of individuals, because of the lifestyle in urban settings, they're busy. They have a lot of moving parts. And one of our themes is, "We help you get your financial life in gear. You just don't have the time to focus on the things that really are important, because if you make good decisions today, you're going to have a better lifestyle later."

So focusing on working with professional women in particular because I am a woman. I'm a professional woman. I get what some of the life gaps are. And it's easier for individual women to relate to me and my all-woman team, firm, so that we now are actually able to expand out a bit more and specialize even deeper into different areas of professions. So that piece has worked out very well in terms of being able to connect with women. And because there aren't a lot of women in this industry, we're finding people that are googling us and trying to find, "Are there some women financial planners or financial advisors?" And that's been really, really key part of leveraging our profile.

Michael: So can you share with us a little bit, how we think of the size of the firm? I don't know if you're ultimately managing assets and you would look at it from AUM or if you look at it from client count or revenue size. How do we understand the size and scope of how many people you're serving at this point?

René: Well, I would say even though, I mean, the foundation, and I've heard many and read many of your articles about this piece, the asset management platform is something that, to me, is a foundation. It is a foundation for revenue streaming. And since I came out of that industry, came out of the wirehouse, and since that was the focus, that was a big, wide foundation that enabled me to start my own firm. But we're finding more and more and more, and which is the reason why I left the wirehouse is that the conversations are around more about financial planning. And so the majority of individuals who are reaching out to us or coming to our website say, "I want financial planning. I don't want to have products sold to me. I don't want you to manage my assets. I need help. I need some strategies. I need to understand how to get from A to Z." Some of them are just from A to C, but, "I need help in this space." And a vast majority of those conversations are happening there.

So what ends up happening, though, is after we have those conversations and we go through our sessions, individuals say, "You know, I really like your advice and you're helping me in this area here, so I'm going to bring these assets over for you to manage." But we always tell them, "Look, if you like your advisor, keep your advisor. We're your planner. There's a difference between an advisor and a planner. We can be both, but if you want us as a planner then we're not going to compete with your advisor." And that takes the anxiety level, I think, off of most people when they're speaking with us.

Michael: And I would think is just an interesting distinction. Most consumers, I think, don't particularly understand and appreciate the nuances of all the different terms and the labels that we use in the industry. So I'm imagining, for a lot of clients, you just say something like, "Look, if you like your advisor, keep your advisor, we're here to be your planner," that there's a pause, a moment of, "Oh, wait, those are different?"

René: Yes. Yes.

Michael: "Wait, what do you do again?"

René: Right. Exactly. Exactly. And you have to kind of explain it. And I actually wrote a blog about a year ago explaining the differences between these different titles. And a lot of people will say they have a financial planner, but they're actually an investment advisor. So, there's the financial advisor, there's an investment advisor, there's an insurance professional, there's a financial planner. And while they may all have your objectives and your goals in mind, the planner is your quarterback. And that's the person that's going to make sure that all of these other individuals are aligned with what you're trying to accomplish. So we do things differently, and we take a 30,000-foot-level approach. And so, being able to explain that to individuals so that they know, "This is what this person does over here. This is what we do. Which one of this is most important most of the time?" They're looking our way saying, "I want that. I need somebody to help me make good decisions."

Michael: So how does this work from a business model end? On the one side you had said asset management is ultimately kind of the business foundation for driving revenue streams, but then you're having conversations with at least some clients of, "No, no, if you like your advisor, who's really just an investment manager, that's fine, keep your advisor. We're here to be your planner." So what does the business model like look for you? Are you charging AUM fees if they give you a portfolio but then charging planning fees if they don't or, like, planning fees upfront and then you'll do AUM later if they decide to transition a portfolio? How are you actually structuring the business of doing this?

How René Structures Her Business [11:06]

René: Sure. And so I did a big refresh of our platform earlier this year because I don't want to ever have a conversation with someone that says, "Oh, this person charges me this and you're charging this, so what am I...you know, this one's less than what you're charging." And looking back and the conversations that I ended up having with our clients, 9 times out of 10, it's not just about their investments, it is around family life matters, financial issues that they want to address.

So what I did was change our platform. We always had a flat fee basis, a package of so many hours of planning they would be charged. They could have it on a retainer. But now, if they have a certain amount of assets with us then they get so many hours of financial planning included and wrapped up in their AUM fee. So we have to keep very stringent records obviously, strict records to know how much time that that is. So that's our wealth management platform. You get this. If you have less than that number of assets, you can get a discount on what our financial planning fees are.

Then we just have a straight financial planning platform that's based on net worth. And the more net worth, the more moving parts, the more in-depth approach we have to take, then we charge more for that. And then we also have a flat hourly rate. We did also introduce a Planning Essentials platform which is really geared more towards our younger clientele, mostly millennials. And it's a flat fee. They get six sessions. It's very structured. It covers everything from cash flow management to debt repayments. How did they build out their credit scores, understanding employee benefits, and also, believe it or not, estate planning. I tell them, "You might not think you have an estate, but if you've got a pen or a pencil, that's your estate. You need to protect that." So the Planning Essentials program has been very popular with a lot of our younger clients. So the majority of what we're doing and I want to focus and have our team to focus on is financial planning, because that's the direction that this industry is really going. And I even see that happening in the wirehouses now, too, which is kind of interesting.

Michael: So it's an interesting structure. I guess I'm kind of thinking of it as four tiers on a progression of kind of rising net worth and rising complexity. So if I move them that end, first we've got Planning Essentials generally for younger, newer clients that are just trying to get oriented in their financial lives, six meetings that cover specific modules for a set flat fee, and where do you price that? What will a young person pay for a Planning Essentials series of six educational meetings?

René: It's $1,500 and 6 sessions. And I was very happy to see, and I didn't know about this other website, but one of our team members found a website, I think is called Stash Wealth, focusing on HENRYs. And when I saw their pricing, I was like, "We're on point. We're doing the same things."

Michael: Yeah, Stash Wealth. And similar, Stash Wealth I think is based in New York, so kind of similar metropolitan area because you're in Los Angeles area. So, higher income folks that are trying to get financially oriented in the city life world, here you go.

René: Right. Right. Although we have clients across the country. So we even have them here in California. We have them in Texas, as far as the Planning Essentials platform is concerned. And some of them are coming from either directly into the website or they're existing clients' kids. So yeah, we offer that.

Michael: So Planning Essentials is sort of my first piece. Then the next is I can just buy some of your time for advice as needed. So you've got a straight hourly option.

René: Right.

Michael: And how do you price that? Do you just, "Here's a flat hourly rate. Like, $200 an hour and we'll just turn on the clock and you can ask me whatever it is," or do tend to do packages as well, "Hey, you can meet with us for 2 hours on this or 6 hours for a project financial plan and our 6 hours cost blank?" How do you put hourly forth?

René: The hourly, we kind of position it as this is more of a one-off kind of conversation. Maybe they're just trying to figure out how to pay something off, or they received an inheritance, or they want us to review or evaluate their 401(k) or their insurance plans or something like that. So we'll give them an estimate. We charge $250 an hour. And we'll say, "You know what? To do the research and the back door and for us to have this meeting and give you evaluation, it is going to take two hours, three hours," or whatever. And we'll tell them that upfront. So we always put together a proposal, which is something I should have said. Even if it's the Planning Essentials client, we always offer a 30-minute complimentary chat so it gives us an opportunity to really do a little bit of a deep dive into, "What are you trying to achieve?"

The Proposal Tool René Sends Every Prospect [16:38]

So with the Planning Essentials, it's easy enough because this is very structured. These are the things we're going to cover, period. And there might be something a little bit different we add, but we put together something in writing, a proposal and say, "This is what you have." For somebody who just wants a one-off kind of scenario, maybe they want to see us three times a year to review some things with them, we just charge a flat rate and we'll tell them, "This is how much it's going to cost." But we still put together something in writing and have everybody to sign a planning agreement so that we're all on the same page of what we're trying to do.

Michael: So you'll do this 30-minute complimentary chat just basically, "Tell us about your situation and what kind of help you're looking for." And maybe will explain a little bit of your different tiers of services just so they can understand which one matches their situation and you can get a sense of what the scope is. And then what, like, the next day or the next week you send them a follow-up email with a document attached that says, "Here's our formal proposal about how we'll work with you, here's what we'll do, here's what we charge you?"

The Material She Sends Every Prospect Before Their First Consultation Meeting [17:44]

René: Right. Right. Generally, we try to get it to them within 48 hours, you know, the proposal to say, "This is what we heard during our conversation, did we get it right?", kind of thing. And that kind of takes us into either our wealth management or just optimal...we call the Optimal Planning platform, which is just strictly financial planning. And with that, it still is a 30-minute complimentary chat. We also give them what's called a Life Heat Map. I put together something that lists different categories of financial or lifestyle issues that they may not have thought about for the initial reasons why they want to connect with us. But when we send them that Life Heat Map, they're like, "Oh, yeah, you know what? I didn't think about that. I need to preview XYZ," or, "I'm due to get an inheritance," or something.

Michael: So it's like a big checklist of, "Here's 10 different things that might bother you about retirement. Here's 10 different things that might be out of whack with your insurance. Here's 10 different things about your personal financial situation. Just let us know which of these are concerns you want to talk about." And often the mere fact that they're looking at them on the list they're like, "Oh, yeah, I need help with that. Oh, yeah, I need help with that. Oh, yeah, I need help with that."

René: Exactly. Exactly.

Michael: So is that something you give them before the first meeting so that they can come in with their Heat Map with the boxes checked off and now you know in the first 30-minute meeting like, "Here's the list of areas that are going to be an issue," or you meet with them initially, you give them the Heat Map and the proposal? I'm trying to figure out where this comes in. Because you don't want to give them a proposal and then have them come back and say, "Oh, I thought of 17 more areas I want you to help me with." And they're like, "Oh, well, we've got to tear up that proposal."

René: Exactly, and start all over again. So yeah. So in the initial chat, so a lot of times, let me just back up, someone might come to the website, or maybe they were referred to us, or they come in through our Smart Women page, whatever, and they will indicate. They have little checkboxes. They might come in through our website and there's a "contact us," and we give them options to check off what things they might want. Could be, "I want a 30-minute complimentary chat," or, "I just want to join the Smart Women," or, "I just want the UWM newsletter," because we put out two publications each month.

Michael: It's an interesting point just right there, though, that you're...I mean, for most advisors, well, if we even have a "contact us" page, it's, you know, "Enter your name, your email address, maybe your phone number, maybe what your net worth is so I understand if you're a good prospect for me." And then you just hit the "send" button and someone calls you back. They don't have a bunch of checkboxes like, "I just want to be on your newsletter," or, "I want to join your Facebook group," or, "I actually want to meet with you for a complimentary chat." So you give them these as choices on your contact page.

René: Right. Right. So they have...there's just four things for them to check off on and then there's a message box. So they can say, "Hey, you know..." Because we don't ask for any specifics. You know, if I was going into someone's website, I'm not going to tell them what my net worth is or any of that stuff?

Michael: Yeah, I know why we do it. Like, "I'm just trying to qualify you as a prospect." But I've always looked at this and thought, "Wow, that's a very personal question for a random stranger website." And I do wonder how many firms say, "Well, I have a website and I have a ‘contact us’ page, but no multimillionaires ever contact me through the website because, you know, digital marketing doesn't work." It's like, "Well, or maybe they just felt a little wigged out that you've never met them before but you ask them how much they're worth on your contact page." There is a process of just how forward do you want to get on the first contact?

René: Exactly. I'd rather talk to them individually. And again, since a lot of the traffic that we're getting is coming from women, they're not going to give that information out in a public venue like that. So we just give them those four choices. The platform that we use is SharpSpring. So we were on Confusionsoft for a while. Oh my God.

Michael: I have lived on Confusionsoft for a long time as well. For those who don't know, it's actually called Infusionsoft, but anybody who has used it for a long time does not find it infusing, they find it confusing. So we tend to colloquially call it Confusionsoft.

René: Exactly.

Michael: So you switched from Confusionsoft to SharpSpring, which is one of the competing platforms out there that helps with marketing automation?

René: And it's been easier for us to navigate. But I do have a website, husband and wife actually who manage the website and will upload content. And we do all of our own content. And they're actually in Texas. I've been working with them for about four years.

But anyway, so going back to that process, when someone says, "I want to schedule a complimentary 30-minute chat," we use a scheduling, online scheduling link. And once they book it, we'll also send them our ADV and our Life Heat Map. And the content of the emails is essentially, "We look forward to talking to you, and here's some things that we can talk about. Or if there's some issues that you're not aware of that you want to talk about, maybe this Life Heat Map can help." So the 30 minutes is really kind of designed for them to tell us what they're looking to do. Is it financial planning? Is it asset management? Is it both? What their timeline is. Sometimes it's something very urgent and they need an answer to pretty quickly. So it helps us to really kind of wrap our head around, "Okay, how can we help this person?"

And then we'll get a commitment. Sometimes people are not ready for that commitment because, of course...we also include our services platform. So they know and we'll talk about it during that call. So a lot happens in that 30 minutes. So we have a very structured approach about how we want to...what information we need, what information they need. Generally speaking, they'll make a commitment and we'll put together a proposal and send it out to them, then follow up just to make sure that everything that we put in the proposal is what they want to address. But we'll also send it along with the financial planning agreement if they decide that they want to move forward. Then they'll sign it and send it back. And we do everything pretty much online. So we bill them with our invoice online and they can pay electronically. And most of our meetings are done online as well.

What Technology Tools Her Firm Uses To Keep Things Running Smoothly [24:34]

Michael: So can you talk to us a little bit about just some of the tools you're using that you found work? You said, the scheduling apps, there's invoicing and billing online, there's meetings online. So what are you finding works in your firm for handling all that with clients?

René: Yeah. Well, that's a good question because we've got a lot of technology that we use. And that was one of the things that was so wonderful, so exciting coming out of the wirehouse. And I'm like, "Okay, I can build out a platform where I can use technology." And one of the first things we did, I did, was I researched financial planning software and eMoney was at the top of the list. And I've been with eMoney since I started in 2012. But for online scheduling, and we've used a few of them, and this one so far, which is Acuity, has been pretty good. And with that, we have the ability, each team member has their own Acuity scheduling tool. We can also join up. I also have a joint calendar with two of the team members. So we might share some clients, or I'll have...I want to make sure a team member is in on a meeting with me, so we have a combined calendar that people can schedule for.

How René Determines Which Meetings She’ll Take Versus The Ones She Hands Off To Other Advisors In The Firm [26:01]

Michael: So how do you make sure they're hitting and getting on the right calendar or just when they're contacting you to say they want a 30-minute chat? Is it like they check off the box on your contact page that says, "I want a 30-minute chat," and then you look at the initial thing that comes in and someone on your team sends them like, "Oh, this is going to be René's scheduling calendar." Like, "Oh, no, this person, based on what they said, is going to get someone else's scheduling calendar," one of your other team members because they're not the right fit for you and someone has to figure out what scheduling link to send them?

René: Right. Well, and that's a good point because I took myself off the online scheduling on the website. Unless somebody puts in the contact message that they were referred or they want to speak with me directly, then I will always...I'll send them a scheduling link that is with myself and a team member.

Michael: Otherwise they just don't even get you. They get another advisor in your firm. Just to protect your own time that you couldn't meet with every prospect because you've got too many clients now?

René: Absolutely. Yeah.

Michael: Okay.

René: And one of the things hopefully we'll talk about is the big difference between running a practice and running a firm, a business. So I had to be very, very specific about timing. Yeah. So everybody else is on there for the scheduling, but unless they ask for me specifically then I will send them or my assistant will send them a link that is combined with my calendar and one of my team members' calendars.

Michael: And then how are you doing actual meetings with clients? Because you said you're doing them virtually. And I get it. Having actually been out in your LA area just recently where I was speaking at a conference center that was eight miles from the airport. So I wrapped up my meeting and I got in my rental car and I pulled out my smartphone and I hit the little Google Maps, "Take me to the airport," and it said, "You have 7.9 miles to drive, 38 minutes." And I was going at 7:15 in the evening. It's not even like I was trying to go right at 5:00 rush hour. 7:15 in the evening, under 8 miles, almost 40 minutes.

René: Exactly.

Michael: So they can be local, they don't want to drive to your office. They would rather meet online.

René: Exactly. Exactly. So we don't put that on people because by the time they get to our office, their jaws are tight. They're like “arrrrrgh.”

Michael: Yeah, they need 20 minutes of the meeting just to unwind the road rage.

René: Exactly. Exactly. So, yeah, the virtual meetings have been fine. And especially with people's, again, since we're in urban areas, we're working with professionals, a lot of times we can only talk to them midday, lunchtime, or after work. So we will work until 7, 7:30. Our last scheduled times are at 6:30 for an hour. So we'll work until about 7:30, for me, just three days a week, Tuesday, Wednesdays, and Thursdays.

So there's two different platforms that we use for our virtual meetings. Because we have VoIPs, our phones are Voice over Internet with Mitel/ShoreTel system, it does come with conference call and online meeting and recording options for each phone that we have. And so we all have cameras on our desktops, and so we can wave at people and talk to them or whatever. Most of the time they’ll say, "I'm in my pajamas. No, I don't want to turn on my camera," or, "I took my makeup off, I don't want..."

So as long as we can share our screens and their monitors, which we do often, especially with our Planning Essentials clients, and I'll ask them about their employee benefits, "Let me see your employee benefits portal. Who do you have listed as a beneficiary?" And oftentimes they don't have a beneficiary listed. So the screen sharing is really important. So we use that. And for our monthly webinars, we use StartMeeting, which is the paid version of FreeConferenceCall. And we've been using them for, well, I've been doing the webinars for five years. And it's about 20 bucks a month. It's been wonderful.

Michael: And was there something that led you to that platform in particular or, you used others and you didn't like them so you ended out with that one? Like, what...?

René: Well, the price was one thing.

Michael: All right. Well, yeah, 20 bucks a month is pretty reasonable.

René: Exactly. Yeah. I was using FreeConferenceCall even when I was in the wirehouse because I was doing some webinars there, but there wasn't a visual. And so I think I just called FreeConferenceCall one day, or I looked on their website or something, maybe I called them and I found out that they had this other arm. And they're local. They're in Long Beach, but they have a national presence obviously. And so we've stayed with them that entire time. So we use them for our monthly webinars and/or for meetings. So it's been helpful for our webinars because we record all of our webinars and we send out the replay links the same day along with the content, the visuals for everybody. So that's for some of our tools. I also use Copytalk to provide notes.

Michael: For keeping your own… your own notes? You come out of a meeting, you record in a Copytalk on your mobile device and then that gets transferred over to your CRM at some point so you've got client notes?

René: Right. Even at my desktop, you know. So I had a couple of calls, any calls that I have with clients, even if they're not formal meetings, I will just call Copytalk. I give them the consent, and it comes into my Outlook, which also integrates with our CRM. And it populates the CRM. So I don't have to type all of that stuff out.

Michael: So you come out of the meeting, you call into a Copytalk line, you basically just dictate your notes, they do a transcription, they send you an email follow-up that you pull into Outlook, and then what, you just have to click a button that says, "Oh, this was for Jenny Smith," so I connect that Copytalk transcript over to Jenny Smith's record and now it's connected to her in the CRM?

René: I don't even have to do that because they ask to identify the CRM, the profile, you just say the person's name. It could be a prospect, a client, whatever, and their phone number. So that's how they link it. So it comes into Outlook but it gets synced automatically and it drops into the profile.

Michael: It's in the subject line or something that you've got a plug-in that just detects, "Oh, when it has Jenny Smith's name and her phone number, we just link it up to the CRM."

René: Right. Exactly. So it'll show up in the Outlook, and then the CRM syncs and it flags it to say, "Okay, it's green," meaning that it's been synced so you know that it's been synced. And you can go into the profile and you just can confirm it and delete it out of Outlook.

Michael: And what's your CRM that's smart enough to go into your Outlook and find this correspondence and put it into the right place?

René: It's kind of an old school one, but they're good. They're also here in California, which is great. But it's called Advisors Assistant. And I know when I first started the practice, that was actually the first thing I had to do, rather than just get the financial planning software. eMoney was great, but it's like, "I need a CRM."

Michael: If you're going to build a business, you have to have a CRM. The CRM is the...

René: Very first thing.

Michael: ...anchor point.

René: Very first thing. And so I was going back and forth with Redtail. Salesforce I heard was great, but you have to build it out. And I'm like, "This is too much. It's too much of a transition coming out of the wirehouse and trying to get all this stuff done. I need something easy." So I went with Advisors Assistant. And so it's integrated with Copytalk, which made it really great.

Michael: Made that part really easy.

René: Yeah.

Michael: So for everyone who's listening, if you want to track down some of the solutions we're talking about, SharpSpring and Acuity Schedule and Advisors Assistant and such, this is episode 87. So if you go to kitces.com/87, we'll have links in the show notes and Resources section out to all of these if you want to delve in further to a Copytalk, Advisors Assistant integration for your firm.

René: Great.

Michael: So I am struck just as you're talking through this. You approach your advisory firm from a very structured systems process. That you're putting all these pieces in place and like, "No, no, we don't just get new clients who contact us because they want to do business. They go to our contact page and then they have four choices. And then if they say they want this 30-minute chat, they can get it. But then who they get depends on what their situation was. And then we send them very specific things, the ADV and the Life Heat Map and some guidance to prepare them. And then the 30-minute meeting has a particular structure of what we do. And then we send a specific proposal with a template that we fill out." Is this just how you're wired? That you think this way and construct in these terms or do you work with a coach or a consultant, someone that's helped you figure all this stuff out?

The Thing That Scared René About Going Independent [35:55]

René: I'm a girl and we're just kind of structured that way. We're just like that. Stuff just...organized. And this is a process. This is a process. But I'll tell you the other thing that's just really scary when I did go independent. And when you are independent as an RIA too, you're fully responsible for everything. You know, what is your process? And there has to be some transparency there. And the rest of your advisors need to understand. Is everybody is speaking the same language?

So I think that it's easier. People still have flexibility to do things, but still, these are some of the critical steps that we want to go through. So if we ever have any issues from a compliance perspective and somebody is stepping outside the line there then we kind of know, "No, you need to pull it back in." Or maybe we need to take that out because it's not working. But, you know, having a process in place, I think, and having it structured that way makes it easier for clients and prospective clients because they know what the next step is going to be. And for us as far as running the practice, it's important for me because it gives me a better feel for, "What are going to be my next steps? I'm stuck here, where do I go now? Oh, yeah, that's right, I wrote that down, we're going to go over here."

Michael: It's been a funny evolution for me as well. As you said, you're a woman. You're wired for creating some of the structure. So, I'm a traditional male, I just figure it out by ramming it with my head until I beat it into submission. And so a lot of business-building for me, I tend to be very strategic about what I do. I'm really good with the long-term strategic perspective, but I don't think about system and process the way that you do. I tend to just kind of dive in there and do some stuff and then hopefully refine it as we go.

And I'll admit it, it wasn't until after my business grew to a certain size that… and, really, as you articulate, started making some of the transitions from doing what I did as a practice versus doing what I did as a business that that whole approach started to break down and life got really, really busy, and suddenly I found that, "Oh, I really like process. Process makes me not have to be as tired thinking about what I'm supposed to do next and where I go next and trying to remember, "What do I do after this? And did we drop a ball on one of the 47 things that I'm juggling in the air?'" Because everything has got a process and then you know what comes next and you don't live to think about it much. That's why habits are awesome.

And it was a strange thing, at least for me, that I was someone who for a long time really tended to just, instinctively, I pushed back on structure, I liked my freedom. And now, bizarrely, at least to me, I found that the larger the business gets the more freedom there is in having a structure, and the more taxing and tiring it is to always be in that reactive mode when there's not a lot of structure and process.

René: Absolutely. Because it takes a lot of energy out of you. And then your brain goes into this crazy mode of, "Okay, I was doing this, I've got to finish this, but no, I need to take care of this." So I think that...

Michael: "I've got this other thing and I've got to do that." And then I just completely forget about this one other thing.

René: Exactly. And then the next day you're like, "Oh, crap, I was supposed to do that." Yeah, it's….

Michael: And when there's more structure, I just have a little task list and there's a whole bunch of things and some of them are green because they're urgent and some are yellow because I've been doing for a while. Like, "That's really easy, I can check boxes on a list."

So talk to us a little bit about the rest of the team that you have around you. You've mentioned a few times there are some other people on board at Urban. There's some other advisors because not everybody always gets you, or they get you joint with someone else. So what does the rest of the team structure look like around you?

René: The rest of the team is number one, is my assistant, who is now an office admin. I told her, "You just got a promotion because you're the boss of everybody." And she and I have been working together for 20 years.

Michael: Wow.

René: And if it hadn't been for her, and I told her when I was then leaving Smith Barney, which was just getting ready to be Morgan Stanley. You can't tell people in the wirehouse that you're leaving. You can't say, "Hey, I'm leaving in the next month or two weeks," you have to leave immediately once you give that notice. And so when I made that decision, we had already been working together for 12 years, I think, at that point or 13 years. And so I told her, "I'm looking to make this move. I won't do it if you don't want to or you don't feel that you want to make this transition. But I can't do it without you. So I will stay if you don't want to."

Michael: That's an interesting dynamic, right? "I'd like to be an independent business owner as long as my team member comes."

Issues To Consider When Leaving A Wirehouse and Going Independent [41:34]

René: Exactly. Exactly. And so, there's no way because it was such a jumble of moving parts. There's so many things to think about when you are leaving a wirehouse. It's one thing I think if you're independent and you're RIA and you're going to another RIA. You don't have to go through all of the crazy madness, the anxiety and the background checks. And you have to be very quiet. You can't print stuff about your clients there because the system knows, "Oh, they're printing...why are they printing those reports and those statements?"

Michael: Yeah. Well, and it's a scary thing to point out that stuff does get monitored. It's a sad reality, but wirehouses have figured out the average advisor does not print full statements to the printer of every client they have on a Friday afternoon at 6.30, dot, dot, dot, unless they're going to give notice in the next week or two.

René: Right. Exactly.

Michael: So that stuff gets monitored. There's a couple of things that they track, some of which we know, some of which I'm sure they've figured out are predictors that we don't even know. But they track in the systems about what their advisors are doing and how they're interacting with the tools because there are certain patterns that just scream, "This is not a normal advisor interacting with their clients on a normal basis. This is someone who's prepping all their information to leave the firm."

René: Exactly. Exactly. It's exactly right. And so it took several months for us to do that process. But once I told her, she thought about it for 24 hours, she came back, she says, "Okay, I'm in." I was like, "Yay." So that was in December of 2011, and we left in June. And my intention was to leave a little bit early. I wanted to leave in April because the full-on takeover of Smith Barney, which I loved, I love the company. But anyway, Morgan Stanley took them over. It was going to be in June. But in April, I was being awarded by this organization. I was given this award and I was like, "Oh my God, I can't leave now."

Michael: They would be a little bit bothered if you literally left the month they gave you the award.

René: Yes. Yes.

Michael: So you let the dust settle and left 60 days later.

René: I had to. Yeah, I did. So we ended up...yeah, I had to leave about 60 days later. But it was literally in the month that Morgan Stanley was taking over Smith Barney, and so I was able to get my client data together and get all of the transfer documents in place. And of course, when Morgan Stanley took them over, in about a month, they changed all the account numbers. So I had to go back to many clients and resubmit documents and get them all set up again. So that was a mess. Anyway.

Michael: Oh. So you had a whole boatload of pending outbound transfers...

René: Right. And they wouldn't....

Michael: ...to the old account numbers. Well, I'm sure they could have been really helpful and just automatically mapped all the old account numbers to the new account numbers for those outbound transfers, but, you know...

René: They did for some of them. Yeah.

Michael: ...darned this thing, they just asked you to...yeah.

René: They did for some of them, but a big portion of them. And of course, clients were kind of upset. One person I had talked to the day before, he was livid. He said, "You didn't tell me," and I said, "I'm so sorry, but I couldn't." He didn't transfer. He did not transfer. He came back to me, though, two years ago and said, "Get me out of here." He was one of my biggest clients. But anyway.

Michael: Because he was upset that, and that's the challenging dynamic in the wirehouse environment. You can't talk to your clients proactively and then say, "Hey, I think over the next 6 or 12 months or 2 years, well, I might make a transition and we're going to be serving you in some different ways and doing these cool things." If you're in an independent firm on your own, like, if you want to talk to your clients about what you're going to do more for them in 12 or 24 months, like, you can do. That's your business. You just talk to them about what you plan to do for them. But in a wirehouse environment like that, your legal obligation is still back to the firm. You can't tell your clients, "I'm leaving and I'm planning to take you with me." That can actually be a terminable offense for the firm because you didn't represent the firm. And then you don't have any place to work, which is not good.

So the transition challenge I know for most wirehouse advisors coming out is just the awkwardness of, you've got to call every client in a big hurry and say, "Hey, we've been working together for a long time, you've always known me with this firm, but I left yesterday afternoon."

René: Or two hours ago.

Michael: Yeah, or two hours ago. And like, "I'm calling you on a Saturday and I'm hoping that you'll sign this paperwork I'm sending Monday morning to move your life savings with me." And, good news is most clients tend to move because we have good relationships with them, but it's an awkward thing. And not surprisingly, there are some clients that just feel very put off. Like, "How could you not tell me? This is really disruptive to me. I'm just not sure I'm comfortable and on board with this."

René: Right. Exactly. And before we walked out, they distributed all of our clients. And actually, we had good relationships with the manager and the other...the management team and also the other advisors. Most of the time, majority of the time, when you tell them you're leaving, they walk you out, but they let us stay in there for an hour to say goodbye to everybody. We get hugs and, "We're going to miss you."

Michael: Wow. That is kind of an unusual thing. A lot of the time they just...

René: It was very unusual.

Michael: ...they walk you out immediately and then they go back in and reassign all your clients and everybody starts calling them the moment you're out the door.

René: Yeah, exactly.

Michael: So at least they let the hugs happen for an hour, and then you left and then they called every single one of your clients.

René: And then I left and then they started calling. So that's my first team member. So, she's been integral to everything that we do here.

Michael: And aside from the one, unfortunately, big client who felt flustered and didn't want to transition until a few years later, did most of your clients come with you? Were you even trying to bring them with you or was the whole point to have a fresh start?

René: Absolutely. Absolutely. Absolutely. So I would say immediately, 80% of the clients came over. You know, within a...when I say immediately, within a six-month period of time. So by the end of the year, we had 80% of the clients there. And so my assistant/office admin, it was just the two of us. Her name is April. It was just the two of us for three years until I brought on the next employee advisor at this point. And that advisor came from a wirehouse, came from Merrill Lynch. And ironically was a woman that I had met 10 years prior to that who was making a career, mid-career change. He had been in the nonprofit space for a while. Someone had referred her to me and said, "Hey, talk to René; she can give you an idea about what this industry is like."

And so we talked, and we talked, and she made the decision. She went to Merrill Lynch. And then I ran into her at an FPA meeting. And is usually the case with girls, we meet each other in the restroom, we're like, "Oh my God, how are you?" And we connected. And she was like...

Michael: We don't usually do that as men.

René: I know. Guys don't, but girls do.

Michael: No. Okay.

René: Yeah. Yeah. But in that FPA, the Financial Planning Association meeting for Los Angeles, we connected and she came on board about...within six months, four to six months. She said, "Yeah, I'm ready. I see what you're doing. I want to be there." So she's been on for...came at the end of 2015. And then two other women came on board this year. One came from Waddell & Reed, and the other one came from another RIA located in Woodland Hills, which is quite a distance away. But she's an IAR, whereas the other individuals are employees, advisors. But she's part of the team because she really wanted to also focus on women. Then we have an intern who actually has her MBA, so she's more than an intern....

Michael: To sharpen her...yeah.

René: Exactly.

Michael: So such an interesting balance. Essentially, you've got four active advisors, one assistant, and an intern. It's not a lot of admin staff infrastructure compared to a lot of other firms with a similar number of advisors. So that just drive back to, like, it's what happens when you have all the system and process and technology tools? You just don't need as many other people?

René: That's true, but we also have a partner. We partnered up with another RIA who provides back office services. And so that's been helpful. So they do our compliance consultant. So they oversee the compliance piece. They do our billing and also account maintenance, opening accounts for us. We custody primarily at...custody, everything is at Schwab. So they take care of that piece. So that piece has been delegated out.

Michael: And who's that that you're working with that does that kind of work?

René: They're actually also a TAMP. So they developed this other part of their business. They're called Sowell, spelled like "so well."

Michael: S-O-W-E-L-L?

René: Right. And they're located in Little Rock. And it's interesting because most of my partners and our business partners and/or portfolio managers are in the middle of the country, staying away from Wall Street. But they've been very good partners in handling a lot of our back office. And we've gotten better billing on some of the investment platforms based on the fact that we're partnered up with them.

Michael: So you're not necessarily actually outsourcing to their TAMP, you're picking I guess, various third-party managers either through them or through Schwab that they're helping out with, but they're just doing the actual compliance support, billing support, account maintenance stuff as well?

René: Correct.

Michael: And can I ask, how is that structured for the business? Do they charge you basis points but they just say, "Hey, since we're only doing the service work but not the TAMP models we'll charge you a different basis point fee," or do you pay a flat fee for this set of fixed services? How does it work?

René: So currently, it's basis points. And we're going to revisit it in the next few months because as our assets continue to build, grow, based on the amount of back office admin that they're doing, we need to kind of balance that out and say, "Maybe we need to look at doing a flat rate as opposed to getting a percentage of what assets we have under management." So we're going to review it, but right now it's an AUM fee and it's basis points, but they are open to doing it as a flat rate as well. So we're going to evaluate that.

Michael: I don't necessarily want to get you in trouble with them talking about pricing if you have some special negotiated arrangement, but can you give us at least a sense of how this prices? Are we talking 5 to 10 basis points for all this stuff? Are we talking 20 to 30 basis points for all this stuff? What sort of range is it for getting a support structure?

René: I would say we're in the 5 to 10 basis points area. Yeah.

Michael: Okay. Okay.

René: And the more that you want from them, because they can provide TAMP services, and they've actually been honored as being a great TAMP, the third-party asset manager or accessing is on the Envestnet platform. And so that was part of the reason why, too, I wanted to partner with them is because I could get better pricing on the Envestnet platform. And I could also get better pricing.

Michael: Right. Because Envestnet have a lot pricing arrangements based on volume and scale with the partners they work with. So if you work with their partners, it's a good deal for you as well.

René: Exactly.

Michael: Interesting. And so from an AUM perspective, how big is Urban Wealth Management at this point? What is the asset base that you're serving?

René: We are currently serving about 120.

Michael: And, from a revenue perspective, as you talked about the various hourly fees and Planning Essentials and other ways of charging, is almost all the revenue of the firm still driven off of the $120 million of AUM or if we looked at your firm we would see like, "Oh yeah, we have $120 million of AUM, but that's only 70% of our revenue," or, "That's only half of our revenue because the rest is all these other planning fees?" How spread out is the revenue mix?

René: Well, this is going to be...this is a transitional year for us. So just by way of background, I was an IAR under another RIA between 2012 and 2016. And then I became my own SEC-registered RIA in January of 2017. So when that transition happened, I had to reposition a lot of the service platforms and access to different partners at that point. So all that said, in addition to that, over the last six years, I've also noted that with a lot of clients, insurance comes up in our conversation. So I started an insurance arm last year as well. So we have an RIA side and we also have insurance, which is more personal risk management.

Michael: Is that health insurance? Is that life and disability insurance? Is that mostly long-term care because you're on the older end of retired clients?

René: We're on the personal risk management solution side, so it's going to be life, income protection/disability, long-term care, and guaranteed income options. So basically using annuities.

Michael: Okay. And how much of what you're… how much of revenue and activity in practice is actually this personal risk management solutions versus the AUM and planning fees? Is this just a like, "Hey, we do it as a convenience. It's a couple percent of revenue. It helps pay for the person," or is it like, "This has become a material focus for the business?"

René: Well, again, this is a tipping point because even though it was started last year, we literally just in the last 60 days have started really focusing on that and offering the services. So just in the last 60 days.

Michael: You've just got to go to clients, you can say, "Hey, we do this now."

René: Exactly. Exactly. Because I needed...I was kind of concerned. I needed to make sure that these were two separated entities and to make sure that they were aligned properly from a business perspective, from a compliance perspective. So we really didn't start doing anything until July of this year. But just so far, just in the last 60 days, I would say that the revenue just on a monthly basis, and we charge our clients monthly, by the way, for AUM. We don't do the quarterlies. And the reasons for that have to do with market shifts and changes. And I don't want to pull out a bunch of money and the market has gone down considerably. So by doing it monthly, it's a little bit more constant and consistent.

Michael: So every client pays their AUM fees monthly.

René: Correct.

Michael: And that's not disruptive for you from just a billing administrative perspective? Or I guess you said not your problem, it's Sowell's problem.

René: Well, no, because, well, Sowell pulls it, but it goes in directly into our business account. So actually, I prefer it this way because it's much more constant. But even more so, even in the wirehouse, you would see a full three months being pulled out. And if the markets drop then you just have this big chunk that's come out of...or when the market was dropping and these big chunks were coming out of clients' accounts, it just didn't feel right. So I wanted to go to monthly and I asked Sowell to change this from quarterly to monthly. That's the way I wanted to do it.

Michael: And how did the clients take it?

René: They were fine with it. Because once I explained it, "This is the reason why we're doing it." It also cuts down the issues if somebody decides to transfer, which is very rare. But if somebody decides to transfer, going through all the calculations and figuring out, "Okay, well, they left, they're leaving May 2nd and we already charged them for the full three months and we've got to put this money back in." So this way, on a monthly basis, I think everybody, you know...

Michael: Because your natural process was billing in advance.

René: Correct.

Michael: So if they left midterm, you've got to refund. So, I mean, I guess technically, you may still have one, but if they leave mid-month, at worst you're on the hook for, well, up to 29 or 30 days I guess, but you're not necessarily having to refund back 2 and a half months because they quit 2 weeks after the quarter.

René: Yeah. So interestingly enough, when we did that last year and I sent out notification as part of this changing over to being our own RIA, blah, blah, "These are the two things that are going to happen," no one complained. Everyone said, "We're open to it," was open to the idea. So going back to your question about well, how does the insurance piece, how is that a relationship? How does that relate to the amount of revenue that we're producing monthly? And so far I would say just in the last 60 days, it's probably been about 10% to 15%, and we haven't really started to ramp up on the insurance side.

Michael: And what are people buying or doing, right? Because I imagine if you never offered this to clients before and suddenly you do, there's maybe some pent-up business demand because you just never necessarily had these conversations before and now you do because you can serve them. So what's coming up? Oh, there's a whole bunch more life insurance that they needed that you didn't realize or there's more long-term care or just there's people that you're layering in guaranteed income annuity strategies? What's moving the needle?

René: You know, all of those, all of those. I would say just looking at the last 30 days, there's been life insurance. And we're more on the side of term life. We're not really into doing the cash value piece because most people need to have some other personal risk management solutions in place too. So if they're going to spend a bunch of money over here on this life insurance cash value policy, they don't have enough to take care of their disability. So for most professionals, they don't have disability coverage. And once they realize when we have that conversation with them, "Look if you got sick or you were in an injury, if you're the high-income earner or a single person, how is your income going to be replaced?" So that's at the first set of conversations that we have with people.

And if they are working, if they have an insurance professional we tell them, "Here. We're your planners." We tell them, "This is what we also do. Tell them this is what you need." If they don't have an insurance professional that they're working with or what their professional is offering them is maybe not in their best interest, then we will come back to the table with them and say, "Okay fine, we can look at variety of different companies. Here are different illustrations for you to consider."

So the income protection, since we're working with a lot of women, long-term care is a big piece, and guaranteed income, so annuities. We haven't done a lot of annuities because that's the space that we are still doing some homework on because the annuity space has changed quite a bit. And so we're looking for low-cost alternatives for our clients. But there really isn't anything out there to replace pensions. And guaranteed income streams is something outside of Social Security that people are looking for. So we want to be able to provide those solutions for them.

Michael: So out of curiosity, there's certainly lots of buzz in the industry these days around not just fiduciary rules and the fiduciary model, but the fee-only model in particular. So, you went from a brokerage world into the RIA space that classically is the fee-only space and have decided to add a layer of insurance commissions back in. So I'm just curious how you think about that. Just not an issue? Clients really wanted it? How do you look at that discussion? Or do you just not even worry about it?

René: I think it's more of an issue...well, first of all, I won't use the word issue. I did think a lot about it for at least a year or so before I started the insurance arm and I came to the conclusion that, and this happened several times, I would ask clients to get insurance to cover these things, XYZ. When we have our next session, "Did you get it yet?" "Well, no." We have our next session, "Did you get it yet?" And they would always ask me, "Well, can you do that for me?" Now, I still have my insurance licenses when I was in the wirehouse. And then it just dawned on me. These are people that trust my judgments. They know that I have high integrity. I'm not just trying to sell them something. I'm really doing this as a means to protect them. And I always tell them, "If you've got an insurance professional, go to them. If you don't then I'll work with you." But we disclose that we have the insurance arm, and it hasn't been an issue. It hasn't been a problem.

Prior to that, I was working with, and we still do, and she's part of our virtual network or it's not someone that is physically here at our office, an insurance professional. She's actually in our website with MassMutual. And I would turn over any conversations that involved insurance to her. And she did an excellent job and always respected the relationship with the client. So we shared in revenue together on that. But because the, particularly in the long-term care space has changed so much because women are paying 25% to 40% higher premiums than men in long-term care, the company that she worked for was really the only one that hadn't gone to gender-based pricing. And so we continued to work with her because of that advantage.

So the insurance piece, the personal risk, management solutions is a really big, important part of the work that we want to do with our clients. You can work with them and tell them, "Okay, you can be strategic and do this, and here's the right things you need to do, and this is how you can invest your money," but somebody gets sick, has an accident, they could be down for nine months at a time and you haven't...you being the planner, had not really ensured that that person, using the wrong word "ensured," but you had to be involved to make sure it was implemented, the recommendations that you made. If they didn't do it, this is a way you could kind of force them to say, "Look, you need to pay attention to this." So our clients up to this point have been very thankful about us offering that solution because they don't have to go through a vetting process with somebody else.

Michael: And I think it's an important thing to note as well that I find some advisors don't realize, particularly if they came from the broker-dealer end where the brokerage firm did all the various investment products and did all the various insurance products, you don't actually need a broker-dealer relationship to do fixed insurance solutions, to do life, disability, long-term care, and fixed annuities. You need it for variable products, so variable annuities, variable universal life. But the rest, you do need an insurance license, but you don't need a broker-dealer relationship and don't have to go back to a broker-dealer relationship. There are insurance-only relationships with general agents and a couple of other structures out there that lets you do this work directly without turning a broker-dealer relationship back on.

René: Absolutely. Yep.

Where René’s clients come from [1:06:42]

Michael: So talk to us a little bit about where these clients come from. I mentioned at the beginning as we were getting underway, you've gone this interesting route with a lot of social media and digital marketing around a program you call Smart Women ~ Savvy Money. So can you talk to us a little bit about, like, what this is? What do you do? What did you create? How does all the social media stuff connect into this?

René: So the community of Smart Women ~ Savvy Money was kind of partially...I started kind of working on this when I was in the wirehouse. And I always had an interest, and I did seminars. I did a lot of public speaking that was focused on women. So in the earlier years, it was great. The firms weren't really excited about me doing that because there wasn't any immediate sales.

Michael: Just generally doing seminar marketing and educational sessions, they were upset with. Not necessarily the women part, just the seminars and educational sessions. "How much business did that bring in?" "Oh, nothing right now." "Wait, why are you doing it?"

René: Exactly.

Michael: Okay.

René: There was lots of those conversations. And business would come in, but it would be a few months. It's not something that's going to be done immediately. So coming out of the wirehouse gave us the opportunity to be a lot more flexible and open and free with doing that. So as far as the webinars, the social media pieces, a lot of the public speaking that comes with it, there's definitely this leveraging and hike of your profile. So people can now, and we find that's happening, people are blogging, or not blogging but they're searching for Smart Women ~ Savvy Money.

But we decided as a team, we're just not going to focus on financial issues. The thing that is most important, I think, to our community and again, being a woman and a professional woman, I want to know more about solutions to lifestyle issues because I've got a lot of moving parts. I'm raising… well, my daughter is in her 30s… but I was a single mom for many years while I was an advisor. And so, how do you deal with all of these other moving parts? So most of our calls are lifestyle-related issues and not necessarily around financial things. And so we get a lot of traffic, if you will, people coming and signing up for the webinars. But because we record them, maybe not all of them when they register are on the call. And plus there are people from across the country because of the time zone difference. But we can see that people are downloading the replay links.

Michael: So at a high level, just help us understand what this is. You've talked about a community and there are calls. And I know you have a Facebook group thing that...like, what's the structure to this? I know you must have a...there must be a process of how people are supposed to go through this. What was the structure and process that you were trying to create of, you know, if this goes well, what does a professional woman do and how does she engage? And what is she going to do in this Smart Women ~ Savvy Money thing you've created?

René: Right. So there was a couple of angles. One is we have a variety of speakers. So it's a way to support other women business owners or professionals and promote their businesses by speaking and connecting with our community. And anyone can join the webinar. So you don't have to be part of the Facebook community, for example, in order to come to the webinars. So we've had men on there if the topic is something that they're interested in. They can certainly come on, and it's not a problem.

So the idea is we want to promote other women businesses, and we want to connect them to our community. So that's one. When we do the webinars, we always ask the speaker to give us a blog the month before their actual webinar. We use that to promote the upcoming webinar. And we give them the links to send out to their community so that we can also expand our connections. So we have our community, let them connect and bring their people in to register for the calls too. And then when they come in, they come to the website and they're like, "Oh, okay, there's all this other stuff here, let me sign up for some of this stuff." So we're getting traffic in that way.

Michael: So this monthly webinar structure kind of becomes your initial anchor point. Like, "We're going to do an educational webinar for women on a monthly basis. We'll bring in other women business owners that can serve them as guests to talk about something they're doing." Your community gets access to this guest, the guest gets access to your community, everybody wins on that end, and you get this growing brand and growing connection that you're making with the community as a whole because René is the one that made all this happen, that brought all this together. Like, you are...

René: Right. Or the team. Yeah, the team. Yeah.

Michael: ...the leader of the Smart Women ~ Savvy Money community, so the firm gets the collective credit for making this happen.

René: Right. Right. And that's helped us to create a vetted network, which is something also we talk about is being a member of the Smart Women ~ Savvy Money community, if you're looking for an estate planning attorney, for example, or you're looking for… if you're going through change in your marital status or you're looking for ways to teach your kids about money, we have all of these resources and/or people that they can connect with. So we really want to just not be in the financial part of their heads, although they know that's what we do, but we want to be the go-to advisor, planner, person, community. And there's a safe space where they can come in here.

Michael: And when you say they're in the community, what does that mean in practice? They're on a mailing list where they're getting updates about the next webinar? They're in a Facebook group? They are connected to you in some other way? What does it mean for someone to say they've crossed the line and they're in the community?

René: They also, so on a monthly basis, we post in the Facebook community page. And it's invite-only. So we post about, oh my gosh, three or four times a week in there. But also other members of the community, if they want to post something, let's say they're having an event or they're looking for a job or they are looking to hire someone, we get to vet it. We have to look at, the content first. But we can post that and share that. We also can create a more interactive, engaging kind of community by asking a question. So as an example, of course, which is probably the case with most people, a few months ago, someone wanted to know about Bitcoin. And of course, the whole community was like, "Yes, yes, yes, tell us, tell us, tell us." And so, we provided some information about Bitcoin. What is it? It's cryptocurrencies, as just an example. So it's a place where they can feel comfortable about asking questions and learning about things. So that's one thing.

We also, for example in the next couple of months, one of my team members is a board member for The Women's Foundation of California. So we're hosting a all-day summit in the San Francisco area. They'll get a discount for attending that. I'll be speaking at a local university. It's a women's conference, they'll get a discount for attending that. So there's just a variety of different things that we can offer to them by being a member. And in addition to the monthly, there's a little short monthly newsletter that goes out. We keep it short and sweet for our members to read.

Michael: And you find you get business from this? You get people that say, "I've been to your community, I've seen three webinars, how do we work together?"

René: Right, we do. We do. And, content also will reach out to us for a variety of things. One person just emailed me last week, for example, and says, "Hey you know what? I write for...I submit articles to Forbes. You know, we've been getting your newsletter. Love it, love it. Can you give us comments on this topic?" Which I did. So, it's a collaborative kind of a space, which is what we have here in our workspace, which is one of the reasons why the women who are here love being here, because it's collaborative as opposed to competitive. And in our community for Smart Women, we are there to support each other and be collaborative as well.

Michael: And so how did you decide to do this and figure out how to do it? Did you hire a marketing consultant? Were you just really into social media and said, "Hey, I've got this vision of how we're going to create a community and I'm going to do it on Facebook and we'll do these webinars and pull it in?" How did this come together for you?

René: Well, before I brought on the first advisor whose name is Diane, came from Merrill, I was working with a company, a woman-owned company locally that were doing my social media for me. And Diane is an excellent writer. And she started...because she came from the philanthropy space initially, she made that career change, stayed with Merrill for 10 years and then came on board here, one of the first things she did, for example, was to interview philanthropic leaders. And so we were running a series of those, as an example. And then she started posting short articles. And I had been writing some on my own.

So what we ended up doing is if we're writing these blogs, and all of the blogs that we have here are our own. We don't hire anybody to write. It's all unique, fresh content. So we use that as an opportunity to obviously put on our website, but we can also share in social media places as well. And so we've been picking up more followers as a result of that and people coming into the website and filling out that contact form, connect-with-me form, to set up a time to have that 30-minute chat.

René’s experiences as a woman of color in the industry [1:17:44]

Michael: So as we approach sort of the final portions of our interview and discussion today, I want to shift a little bit and just understand a little more about the early stages of your career and journey. I know you started in the wirehouse world in the '80s, in an environment that was pretty well known to be not terribly hospitable to women and not terribly hospitable to minorities, much less a woman of color. And so, just help us understand. What does it look like to come into the wirehouse environment at that time? What brought you in and why did you stay in where I'm guessing was not the most welcoming and supportive environment for you at the time?

René: No, it wasn't. But, I'm one of those California girls, I'm like, "Yeah, the universe was taking care of me doing this." So just by way of background, I kind of stumbled into this industry. I actually started out in insurance. And part of the platform involved you needing to get your securities license to just sell mutual funds. And I got really fascinated enough by it because, in the early '80s, the stock market was starting to take off. Interest rates were coming down and there was this explosion. And I was like, "Wow, what is that all about?" Never talked about it at home. I didn't know what a stock or a bond was. All I knew was to go to the bank, put your money in the bank. So I was really fascinated by it.

And just fast-forward probably about three years, I was married at the time and I'd just had my daughter. And I said, "Oh, okay, while I'm off," and I took some time off, "I'm going to get my securities license." And so I studied. I got my securities license. And as soon as I was ready to go back to work, I was so naive I said, "Okay, I'm just going to pick these companies to contact and interview. Tell them I'm interested."

Michael: Right. Like, "All right, I'm ready. I've done my studying. Here's a couple of big firms of names I've heard of, let's just start calling some of them."

René: Exactly. Yeah. Yeah, I went knocking on the door. And, some of those companies aren't around. They got acquired and they're tucked under other companies there. But I went to about five different companies and they all turned me down. They said, "You know what? We don't think you're going to be a good fit here." And, you know, they took you through these little exams and there was this sort of platform or this process where they pretended that you were a broker because back in the day you were a stockbroker, and they actually would have people to call you on a phone. You sit at a desk, and they want to see how you reacted to...within a two or three-hour period of time, how would you craft your day and your activities based on things that would happen?

Anyway, so they said, "You know what? You're not going to be a good fit." So I got turned down. And then I went to Dean Witter, which was an amazing firm, and they opened their door and said, "Come on in. We would love to have you." And I had great mentors. And that is the key for why and how I ended up staying. It's because I had some great mentors and people who really cared about my level of success.

So Dean Witter, at the time, was owned by Sears, and so we were selling stocks next to our socks in the Sears stores. And that was part of the training process that they had. And I, at that time, had a great mentor who became...was my branch manager, and there were some instances where people did not want to work with me because I was African American. They knew I was a woman because back in the day you could cold-call. And, one person came in one day and made an appointment with me, and I went up to the reception desk to shake his hand and tell him to come back to my desk. And I put my hand out and he pulled his handbag and he looked at his watch and he said, "Oh, you know what? I'm sorry, I forgot. I have an appointment." And he left. So back in the day, you would be broker of the...

Michael: Wow, and he just walked right out the door.

René: Yeah, he just walked out the door. So back in those days, there was a broker of the day. And that was a person who had to take all incoming calls. So this man actually called back. I was broker of the day the same day he came in and left. And he called back and said he wanted to make an appointment. And I asked him what his name was. So I knew immediately, I knew from his voice. And he said, "Yeah, I was in there and I saw this colored person." And so I said, "Well, what color was she? Was she yellow? Was she green?" He said, "You know what color she was?" And I was like, "Oh, sorry," and I hung up on him. Then he came back.

And then another time, another person came into the office, similar kind of situation, and they went in and talked to my branch manager. And my manager was 6-feet tall, stood up out of his desk and he said, "If you're not going to work with her, you can't work with anybody here. You have to leave." And he left. So I've had some amazing people that supported me throughout my career when I was at Dean Witter, went to Prudential, which was Prudential Securities, and then I ran away from Prudential, I went to Smith Barney. And that's where I met my assistant.

So it was never an environment that was supportive of women. There would only be these initiatives and women conferences when these firms got sued. They would be sued because of, discriminating against women, not giving them accounts when advisors left. They'd give it to the guys and be very open about it. They're like, "You know, well, you wouldn't work with them well anyway." Or they'd give you just a little handful of accounts.

Michael: "Oh, he has a lot of money. He wasn't going to work with you anyways."

René: Right. Exactly. So they made those kind of decisions. And then they'd ramp up. The firms would ramp it up and say, "Okay, you know, we..." Because they had gotten sued, "We're going to have a women's conference." And that would be good for about a year and then it would fall off the plate. The same thing with African Americans, "Oh, you know, we're really recruiting and we really want to support you. We're going to have an African American Conference Day." And then a year later it was, "Sorry." You know, nothing else. They didn't follow through with it.

So I think we're in a tipping point now. That's not going to happen anymore, where this shift, this change that's taking place in this industry, not just in ours but across the board, is very, very impactful. And I don't think we're going to go back. I believe we're never going to go back to where we were before. So I'm excited about still being in this business, still being in this industry, and I'm pulling a lot of women along, all kinds of women from different backgrounds. So I'm mentoring a lot of women, tell them, "This is the place you need to be. You need to be in this industry."

Michael: So how do you fight through those environments of, "Oh, the firm is doing another diversity initiative." Well, that ended in a year. And, "Oh, well, another broker left and all the clients got redistributed to a bunch of the men and I got the scraps or nothing at all." Like, at what point did you just say, "I'm fed up with this. This is ridiculous. I'm just going to go to another industry or another career?" I mean, you didn't do that. So something for how you're wired you didn't want to walk away, but...

René: Yeah, yeah. I think that, for most people, you kind of know if you're going to stay in this business or stay in this industry after two years. Two years seems to be the marking point. If you can make it to two years then the next cutoff is five years. So at that point, I was in at five years, and the idea, and I was, again, a single mom, the idea of coming out of this industry I was already down the road a bit and starting over someplace else completely different wasn't really an option for me. And again, because I had some great mentors and I also had a community of other women who were at different firms, who were also financial advisors. We cried a lot together. We literally did cry a lot together over some wine, but we held on to each other.

And, having those two foundations and platforms of support made all the difference. And someone is telling you, "Look, you can do this. You can do this. You can make this happen." There was always something that happened that made me stay in. When I was at Dean Witter, I was actually their national spokesperson. I was national ads for the firm. So that was like, “Okay, just when I thought things were really not working out it was a bad environment, someone gave me that opportunity.” And it's like, "Okay, well, they must see that I can do something here." And I got a lot of good support when I was at Smith Barney. When I first came on board. And to some extent at Prudential Securities. But I had a mentor that was my manager at Prudential Securities.

So those people, who I still know well, were so instrumental in keeping me on point and keeping me grounded that I said, "Okay, I'm just going to push forward." And one of my mentors did tell me, "If you want to stand out… if you want to be successful, you've got to stand out from the rest of the crowd. You can't look like everybody else. You are going to be different."

Michael: Well, I was going to say if your goal is you have to look different than everybody else to stand out and succeed in the industry then that would probably bode very well for you as an African American woman in our industry.

René: Exactly. Exactly. Well, hopefully, that won't longer be the case. I see that with a lot of younger advisors coming in who're working in a much more diverse, open environment. And it's so wonderful to see that, because that's what the rest of the world is.

Michael: So what do you think it is that's been missing that we're doing better now about how to make the profession more hospitable to women and people of color?

What She Thinks Would Make The Profession More Hospitable To Women And Minorities [1:28:12]

René: Well, some of the people in the industry are saying, "This is the right thing to do." Some get it and some are like, "No." But I think what's happening, finally, is that they're beginning to see from a business succession planning standpoint, this is business. It's all about business. If you want to maintain your practice and you retire and you still want to get income from that practice and it needs to be ongoing, you need to expand your network of clients. And your network of clients are going to look very different than what you've built over the years. And so, from a business perspective, the rest of their cities, communities, the rest of the world looks very different than what someone might have built their practice on. And we are starting to see that.

I did a talk at a Riskalyze Conference last year, and it was about women being, you know, the growth for this industry, whether they're clients or as advisors. And, we looked at it from the standpoint of just breaking it down to dollars and cents, because women are going to have the majority of the wealth in this country, so you better take a position where you have a platform and a practice that is focused on them. And it doesn't mean you have to have flowers, pink stuff in your office and soft music, but you need to have an approach that is much more focused on what a woman's goals are. And as far as people of color, to hire people of color. Could be Latino, could be African American, could be Asian. But hiring people that look like the rest of the community will ramp up your success. And some people are getting it.

Michael: Well, and I know you're also active with Quad-A on this. So for those who aren't familiar, there's an association specifically for African American advisors, so AAAA or Quad-A for short, which I guess is trying to be both that support community and also helping to make, I guess as your kind of call it, “the business case for diversity?”

René: And I think that's where you have to take that angle in order for certain people to hear you. It's a little bit different when you're on the Left and the Right Coast because in both instances, it's a little bit more diverse. There is that everyday activity and visual where you can see people from all over the world in your community. That's not so much the case in other parts of the country, where there has not been as open engagement for the concept. And so I think there's a lot of work that's being done by both the FPA and significant work on the CFP side, CFP Board, to really focus on the diversity and inclusion. And InvestmentNews doing the same thing. So it's the theme across the industry, and I think we're getting there.

Michael: So as we come up on the end of our discussion here, I am wondering just looking back, you have this 20-plus-year career in the wirehouse world now, 6 years in the independent channel side. So I'm just wondering, having had one foot in both camps now, what do you know about being in the independent RIA world now that you wish you'd known then and just didn't understand in the wirehouse environment? I can imagine there are some things that are surprises that you just couldn't have conceived it was going to work the way that it did until you got to the other side.

René: Yeah. And, well, first of all, it was just very scary coming out of a wirehouse because you don't...you feel that your clients are connecting and they're working with you because of the big name behind your name. So, coming from a Merrill Lynch or coming from a Morgan Stanley. And that was actually the line that a lot of the advisors and my previous firm used when they called my clients. "Why are you going to go with somebody with Urban Wealth Management? What is that?" You know, kind of thing. But not realizing that who's the custodian? When you're in the wirehouse, they're everything. They are the custodian, they're the broker-dealer, they're all of that, the product platform. And it took a while for me to figure that out. Had I figured that out...

Michael: That you tell them like, "Yeah, yeah, I'm not at Merrill Lynch anymore, but your assets are being held at Charles Schwab. Ever heard of them?"

René: Exactly. Exactly.

Michael: So the custodian becomes your anchor point of like, "Yes, your money is so safe at another mega-national firm, I just will be giving you the advice portion separate from them."

René: Correct.

Michael: "Just my business card won't say Schwab the way it said Merrill, it's going to say Urban Wealth Management, but your money is just so safe."

René: Exactly. And one of the key things that I did tell people is that Schwab did not take any money from the Feds during the downturn, but everybody else did. And that's why Morgan Stanley and Smith Barney ended up in this...you know, everybody got matched up in these marriages on a weekend. They were like, "Okay, you get together with that person, you get together with that person." So Schwab did not take any money. And why is that? So that was one thing. I wish I had wrapped my head around that a little bit sooner because it was scary saying, "Okay, well, who is Urban Wealth Management? What is that about?" And it became very clear, more than anything else, that clients relate to their advisor/their planner based on how you're taking care of them. It's just not about their asset management. It really isn't.

And the one client that I described that didn't come with me immediately and he came two years later, the first thing he said was, well, first of all, that he was sorry that he didn't come early. He says but this person doesn't care about him. "He doesn't give a damn about me. You know, I'm sick." And I knew this client had some health problems. He says, "But, I needed to get some money out, he wouldn't give me a solution for how to work around my issues." And he said, you know, "And he tells us that every day over the last year and a half. I love you guys. I'm so happy that I'm back here because you guys really care." And all of my clients have told us that. So realizing that the key element is the relationship, the relationship with the client. What do you know about them? You know, how do you care for them? How do you care about them? The rest of...everything else falls into place.

The Low Point Of René’s Career [1:35:23]

Michael: So what was the low point of this advisor career for you?

René: On the independent side or on the wirehouse side?

Michael: I guess of all of it.

René: On the wirehouse side, two main reasons why I left the wirehouse is that I really did want to serve my clients better. I had gotten my CFP back in 2002 or 2003, and they didn't really care about it. You know, it was sort of like, "Okay, well, we'll just kind of post it out there that you got a CFP," but I didn't have the opportunity to really utilize it in helping clients. So that was a key element was that they didn't really care about that piece. And that it was most important. And I could see that there was a shift taking place in the industry that I wanted to be that person over there that's going to be able to provide solutions.

The other thing is I got tired of having to make excuses for all the fines and penalties and all the bad stuff that the upper tier was doing. And it would shuttle down to us as advisors. Clients would ask us, "Well, you guys just got hit with a $200 million penalty," or this happened or that happened. And I just got tired of trying to explain it away. You know, sort of, "Things are going to go all right." It should be on my shoulders because I did it, not because...

Michael: Well, it's an interesting shift that, initially, the good news of having that other name on your business card was that you were backed by the other name. And now I know, at least some firms more than others, but for some of them, that big name turned from an asset on the business card into a liability on the business card and you had to explain what they did before.

René: It did. Yeah, unfortunately, we can use someone like Wells Fargo as an example, which just continue to just kind of get deeper and deeper. And I know they'll come out of it. They'll come out, they'll clean everything up, but it's that kind of stuff where sometimes clients will just leave you. And it has nothing to do with you, but it's the culture of the firm that you're at and all the crazy stuff that they're doing.

How René Defines Success. [1:37:42]

Michael: So as we wrap up, this is a podcast about success, and one of the things that we always find is that just the word success means different things to different people, sometimes different things to us at different stages of our own careers. So as someone who's built a successful business and a successful career in the industry, I'm just curious for yourself now, how do you define success?

René: I define it as feeling that and getting confirmation from my clients daily that they appreciate what we do for them. Yeah, I don't have to make millions of dollars in order to feel like I've hit that spot. I just am so, so blessed to hear that from people to say… the average length of time that my clients have been with me is 15 years. And in one instance, and I just talked with this client, she's been with me pretty much since I started, 30 years ago. She was a widow, lost her husband in her 40s. And, we have been together ever since. And she said, "If it hadn't been for you, I would not..." And she's made a lot of money since then and has remarried, but being able to have that continuity of relationship.

And I have families where I have three generations. That's success to me. That there's a level of confidence about what we do, how we do it, and the honesty. And if I screw up I tell them, "I'm sorry, I did this. I'll fix it." And not try to push it off on someone else. And I think people...I know people really appreciate that. So that's success to me.

The other part of it is, as I said, I'm pulling the rope back over the fence and I'm bringing in more people. I mentor so many different people. And I started a women's advisory, co-founded a women's advisory, a mastermind group. These are all independent women advisors. We call it WAMM, W-A-M-M. And we have the opportunity to share and support each other. And we're learning things. We have different speakers that come in. We do all of that. And now we're going to be starting a mentoring program to bring other women in who have less than, so many years in the business but we know that they need to have access to a group of women who can help support them and mentor them too.

Michael: Well, very cool. Well, I'm thankful you continue to help not only do what you do, but pull everyone else along. And I guess the helping part of that vision is also just what makes it possible to fight through the occasional low points and frustrations with our industry as well.

René: Yes, exactly. Exactly.

Michael: Well, thank you for joining us and sharing that here on the "Financial Advisor Success" podcast.

René: Thank you so much for having me. What a joy. I look forward to seeing you again, Michael, soon.

Michael: Absolutely. We'll see you soon.

René: All right. Take care.