#FASuccess Ep 404: The Evolution Of Specializing In College Planning To Work With Mid-Career Professionals Who Save, With Ann Garcia

Resources Featured In This Episode:

• Ann Garcia: Website | LinkedIn
• How to Pay for College: A Complete Financial Plan for Funding Your Child's Education by Ann Garcia
• The College Financial Lady
• 2014 Gallup-Purdue Index Report
• The College Financial Plan Masterclass
• Thinkific
• The Price You Pay for College: An Entirely New Road Map for the Biggest Financial Decision Your Family Will Ever Make by Ron Lieber

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

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Full Transcript:

Michael: Welcome Ann Garcia to the "Financial Advisor Success" Podcast.

Ann: Thank you so much for having me.

Michael: I really appreciate you joining us today and the opportunity to talk about college planning as one of the paths that we use to find clients, build our practices, to build our own expertise. College planning to me has always felt like an interesting space in our advisor world. We didn't really do much with it, then 529 plans came out in the 1990s. Then we were all in 529 plans because it kind of looked like all the mutual funds that we were selling at the time, "But you could do it in my 529 plan wrapper and get tax benefits." And we never really seemed, I feel like as a profession, to get all that much deeper in college planning than just, "It's another thing you should save for, and if you want, I'll do the analysis. Tell me how much to save, and then you can put it in the 529 plan I'll manage for you."

Ann: Yeah. And it seems like the advice we give tends to be on the opposite ends of a bad spectrum. One is, "Don't save at all for college, you'll get more financial aid." And the other is, "College costs $95,000/year, so you need to save $2,500/month every month from the minute your child is born, or they won't go to college."

Michael: Which is very daunting. Well, and I even remember my, at least, conversations I had and was trained in 20-something years ago. We would still push clients, say for retirement first, college second, because you can borrow money for college, you can't borrow money for retirement. We used to literally use the analogy of it's like when you're on the airplane, you have to put on your mask first before you put on the mask for the other. These were the metaphors that we used.

Ann: But you do need to put that other mask on.

Michael: You'll get to it eventually. You'll get to it eventually. And so I'm excited to talk about what this looks like and how it shows up in practice when you try to literally build it into an advisory firm and what you do for clients. Because, as you noted, I feel like it's sort of "We'll help you figure out how much to save for college, and then maybe we'll help you invest the savings for college." And then there's not really a lot else that most of us tend to do in the college planning context.

Ann: Exactly.

The Importance Of Initiating Family College Planning Conversations Early On [05:49]

Michael: So help us understand a little bit more what this looks like in your world. When you talk about doing college planning, what do you do with clients?

Ann: What do we do with clients? So we do college planning a couple of ways. One is just as part of our overall client engagements for our clients who have children or clients who have grandchildren who want to help. We help them through the process of setting up savings accounts, figuring out how much to save, figuring out what college is going to cost, how much they can pay out of pocket, are they okay with loans. But I always say planning for college is equal parts financial planning and parenting.

So the other thing that we help our clients with is how do you talk with your kids about money and how do you help them to have reasonable expectations and not wait until senior year and see where they want to apply and say, "Well, we'll figure it out one way or another." But to really have them building up a pool of assets between savings, ability to pay out of cash flow, scholarships, and whatnot, and creating good pathways that'll get their kids through college without assuming a whole bunch of student loan debt.

Michael: So can you help us understand a little bit more what that "talk to kids about money" conversation with clients looks like? Your comment, "They'll apply senior year. We'll see what they get into, and I guess we'll figure it out..." it happens a lot.

Ann: Yeah.

Michael: I see that a lot in our friends and family world as well as in clients over the years. So because the alternative for most of us is, "My children are my children. My children are my future."

Ann: How can I not make this possible for them?

Michael: "How can I not try to do this?" So, how do you approach this conversation with clients? How do you navigate this?

Ann: Yeah, and it's a tough one, because, like you said, these are my kids. I would do anything for them, right? And so, having those conversations, a lot of it is about being age-appropriate with how you talk about money and how you talk about college. So, for example, we coach our parents with young kids to have what we call college-adjacent conversations. So not like, "I want you to go to this preschool, because this preschool sends the most people to Stanford," but talk about friends you made in college, talk about interesting things you learned. "Hey, I never understood about thunderstorms until I took a meteorology class when I was in college." Just things that introduce college as something that enriched your life, or for parents who didn't go to college, things that you maybe wish you would have had the opportunity to experience as a college student. But introduce that idea in their heads that this is something that you would like to be a part of their lives.

And as kids get older, those types of conversations evolve over time. Here being in Portland, we have a lot of students who are choosing between, say, University of Oregon and Gonzaga. And I found when my kids were in middle school, a lot of their friends had older siblings who were making those choices, and this was coming up in stuff that they were hearing about. And so it provided an opening to talk about different costs that college would cost and what kinds of things you might be able to buy with the difference in costs between college A and college B. But that's also a great time for parents to start talking about the fact that they're saving for college because this is important to them, and that it's important to the parents that you're creating this opportunity for your child, and that the universe of choices will not be unlimited.

Once students get into high school, it's important to have really specific conversations about what does the budget look like and what kind of support are you willing to provide, and in what form? And I think it's important to have those conversations from the perspective of goals rather than from constraints. And by that, I mean, not "You need to just apply in-state because that's all we can afford," but "our goal is that you can graduate from college debt-free, and we know we've saved enough that you can do that at this pool of schools. There'll probably be others that you can find that will cost the same amount, and we are thrilled to support you in helping to find them."

Michael: I like how you frame that. Not "You’ve got to apply in-state. We can't afford anything else," but "our goal is for you to graduate debt-free, and in-state schools will allow you to do that. And maybe certain other schools that you might find that cost a similar amounts to in-state schools, because hint, hint, that's the budget." But saying it from a place of "We're trying to get to the point where you can graduate debt-free." And then we extend...

Ann: One is empowering and the other is limiting.

Michael: Yeah. And then I find also just the hearing it as you say it frames it more directly, like, "And if you're going to make other choices, there will be debt." So just kind of getting that out there now. So that's a conversation you would start high school, like you start freshman year. When does that conversation begin?

Ann: By opening up this conversation when your student is early in their high school years, you can start looking around and seeing, "Are we a candidate for merit scholarships, or are we a candidate for scholarships based on need? And if it's merit scholarships, let's also plan our high school career so that our kid gets the GPA that they need to get the scholarships that will make this all possible for them." So, for example, most state schools automatically award merit scholarships to students with GPAs above certain thresholds. It's wonderful to know that freshman year. It's not so wonderful to learn it junior or senior year.

Michael: Right. So where are folks going to try to figure out what my merit scholarship threshold levels are? Is that published? Can I go to my in-state university and find this on their website?

Ann: Yeah, most in-state schools have that on their website, because the reason colleges offer scholarships...this is one of those things that we tend to get backwards because we let so much of the college narrative be driven by the Harvards and Stanfords of the world where it's like, "You should be thrilled that we would even read your application, let alone admit you. And so once we do, we will charge you any amount that we deem appropriate, and you'll pay it." But most colleges are actually actively trying to recruit and enroll students, and so they do make this information pretty readily available.

So, yeah, look at your states, look at your in-state colleges and see what scholarships they offer and to whom, and how you need to qualify. What types of GPA do they use? Do they care about test scores or not? Learning that all freshman year gives you a great opportunity to make sure that you are staying on track for those targets, because it'll make a bigger difference in your kid's life to graduate without student loan debt than to take AP Chemistry instead of regular chemistry in high school.

Michael: Well, that's an interesting way to frame it for all those parents that are very focused on we've got to get our AP credits and our high-level classes in that graduating debt-free, I guess, implicitly because you got the higher GPA, which let you get the better scholarship and the lower tuition cost. Getting the better GPA may actually be more long-term impact than doing the AP class if that's going to buckle your grade average below a crucial threshold.

Ann: Yes, and I say this both as a financial advisor and as a parent of that student.

Key College Planning Conversation Topics As Students Approach The End Of High School [14:03]

Michael: So, what conversations continue to occur with clients as you now you're moving through high school and approaching college?

Ann: Yeah, so the big one is, like I said, figuring out early on what type of scholarships the student is likely to be eligible for. Is it need-based? Is it merit-based? And being eligible for merit scholarships doesn't mean you have a 4.6 GPA. It just means you're not eligible for scholarships on the basis of need. And making sure that the family is focusing on those pathways that are appropriate for them. And then, as they're in high school, looking annually at their budget and saying, "Okay, based on what you've saved, what you can pay out of pocket, what your student can contribute, this looks like it's your budget. Let's go see how that compares to colleges that you're interested in." And of course, the further ahead of college you start having those conversations, the more opportunities parents have to adjust what they're doing. And whether it's adjusting their savings, adjusting their spending, changing their budget, or adjusting their expectations, because there's no way that their budget is going to support 4 years of full-price private college for 3 kids.

Michael: So how do you navigate the conversation of what schools they're planning on or looking at? At least my experience in these conversations with clients, I usually find 1 of 3 buckets, "This was my alma mater, and you should go there too." And all planning is around mom or dad's alma mater, which may or may not be the alma mater for 6 generations of the family. Or we're very focused on this particular in-state school because it may be a very big school for the state, depending on my state and how focused they are. And this is one in our state. It's pretty good. Everyone knows it. It's got a reasonable tuition because it's in-state. And everything kind of built around the big state school.

Or I find clients basically say, "We have no idea. We want little Johnny to explore the world and find the thing that..."

Ann: Find themselves.

Michael: "Find themselves, what little Johnny will want." And so, at least for me, I found these conversations around what school are we going after challenging. Because the little Johnny scenario is everybody throws their hands up in the air, and then we get back to, "Well, let's just plan on Harvard or Stanford to be safe. And if Johnny does better than that, we'll work backwards." And even for a lot of clients who think, "Johnny's going to go to my alma mater or Johnny's going to the in-state school," then that's the plan until junior year, and then Johnny visits the school and decides he doesn't like that one and wants a different one, and all the plans we've been talking about for the past few years end up kind of up in the air anyways.

So I guess my aggregate question to this is how do you navigate this when it feels like it's even a blessing if the kids can figure out where they want to go to school in their junior year when we start doing college tours, but they have no real idea before that, but we have very sizable planning decisions to start making at the beginning of high school or potentially a decade or 2 earlier, if I was trying to save early and accumulate for this. So how do you navigate this challenge of what school are we planning on really, at the end of the day?

Ann: It's a great question. And the way I navigate it is I don't. I navigate towards the budget, and I help them to find choices that fit within that budget and give them the tools to find things within that budget. So when I work with a family, when we're talking about college, we're talking about what's available to save, not what's the ultimate cost that we're planning for. And there's a couple reasons for that.

The first one is if I tell someone, "Based on that choice, you need to save $2,000/month," most people will just throw up their hands in despair, bury their head in the sand, say, "Let's go socialism, because this isn't going to work for me." And then they don't do anything. And then 5 years later be like, "No, no, really..." "Now it's $3,000/month, by the way, but let's get started." And you haven't helped.

The other thing is college is available at literally every price point. You could pay $100,000/year to send your kids to many colleges. My son has a good friend who got a 4-year degree for free doing free community college, and then she worked at Starbucks, and Starbucks has a partnership program with Arizona State. She finished her degree there. And guess what? Her diploma looks the same as everybody else's. So whatever dollar amount the family has, they will find good choices for their student.

And so what I try to do is have parents think not about specific colleges, but what is it that you're actually trying to accomplish by getting your kid through college? And it's not necessarily posting on Instagram that my child is going here…I am dropping my child off at their Harvard dorm. But who's the adult I'm trying to create? What do they look like when they're 25, when they're 30? Are they a homeowner? Are they starting a family? Are they going to graduate school? And how do you create that possibility? And a big part of creating that possibility is making sure that they don't take out student loans as an undergrad if at all possible.

Michael: So I'm struck. To me, just the framing that you're putting forth here, you can pay 100 grand a year, or you can get the community college path with the Starbucks deal, and the diploma looks the same as everyone else's. Everybody can find some good choices, no matter what their budget is. I feel like that's rather foundation and faith-shaking for a lot of people. Just there's a narrative of "The best colleges cost a lot of money. You have to be prepared as a parent to spend a lot of money to get your kids into the best schools."

I think many of us even experience this to varying states when you're in the K-12 experience, where a lot of parents really do make decisions about where to live, what zip code to live in, what neighborhood to live in based on schools and school systems, which I think at least the K-12 level do have some non-trivial differences depending on schools or counties that you're in. So this idea of, well, you've got college choices, even if you haven't saved a lot, you just may be doing some of these different paths. I feel like there's an implicit expectation of, well, the other one can't be as good.

Ann: Well, I would say several things to that. And I will share some data and I'll share an anecdote. The data point is this. There was a big research study done a few years ago called the Gallup Purdue Index, and they surveyed adults who were successful to tie it back to what about their college education made them successful. Was it where they went? Was it what they majored in? And what they found is it had absolutely nothing to do with the college itself. It wasn't public versus private, large versus small, urban versus rural, liberal arts versus research. It was all about specific experiences that they had at college. And those were things like finding mentors, having the opportunity to apply classroom learning to a job or an internship, feeling like faculty cared about them, participating in extracurriculars. So it's all things like that. And those exist at every college, not just at some small subset of colleges.

I will also say, as an anecdote, my family, I have twins. They graduated from college last year. One of my twins went to a single-digit acceptance rate private college. The other went to a public college that you basically sign up for and they give you a very large merit scholarship.

Michael: Because they're just happy for enrollment.

Ann: And they both have the same job right now.

Michael: And they have the same job.

Ann: Yeah, virtually the same job. One studied finance, the other studied computer science, but they're both working for Fortune 100 companies in their corporate management training programs. They have the same salary, same benefits. Same, if they stick around, the company will pay for their MBA. And one went to a college with a 6% acceptance rate, and the other went to a college with an 86% acceptance rate. But the other thing about college...

Michael: So you're challenging a lot of foundational beliefs here.

Ann: I know, I'm so sorry.

Michael: Well, that's fine. That's fine. So it's like help us process further. Why is the conventional view so often different from what you're describing here?

Ann: Well, I think certain colleges have done a really phenomenal job of marketing themselves as the gatekeepers to a better life, and that's just simply not true. There aren't enough spots at those colleges for them to be the gatekeepers of a better life. There's about...

Michael: These is your traditional Ivys…

Ann: Yeah, the Ivy Plus schools. Yeah. And they are great for some students. That's where my daughter went. Her school was a perfect fit for her. Her twin brother would have been absolutely miserable there. Likewise, his school was a perfect choice for him. She would have been utterly miserable had she gone there.

Michael: And what were the defining factors of why one was so good for one and the other was so good for the other?

Ann: They're just really, really different students. One of them really gravitated to all of the IB [International Baccalaureate] classes in high school, was always looking for additional academic challenges. And where she was most comfortable, both as a student and as a person in her high school environment, was in these really intense academic discussions that they would have in these higher-level classes. And we knew that translating to college meant that that was the kind of academic environment that she was going to thrive in as a college student. Now, we didn't say, "Go, have your pick, take them all," because that didn't work for us financially. And so, we researched that landscape and found the schools that were most likely to be the most generous with her, and those were the ones that we focused our applications on. And she got a terrific scholarship, and the world's most expensive university ended up being her second-cheapest choice.

Michael: So, this kind of creates the secondary, I guess, question and challenge to me. So, how much planning am I doing or am I supposed to be doing when it sounds like the nature of scholarships at the finish line can so dramatically change what I thought all this was going to cost in the first place?

Ann: Yeah. Well, and that's why I think it's more important to plan for a budget that works for your family and fit the choices into that budget than to budget for a specific outcome and then hope that the outcome matches the budget.

Michael: So whatever numbers are right. I'm working with the family, they figured out they can save $400/month for Johnny. So, they've been doing that for 16 years. So, that's going to compound out and grow up to whatever balance that it manages to be by the time we were getting the sophomore year, junior year. And so, we're going to sit down with Johnny and basically say, "Okay, we've got this much money available for you, whatever it is. There's $150,000 in the college account. Let's sit down and figure out what you can get for a 4-year college with $150,000 balance and the fact that mom and dad can put $10,000/year out of current cash flow towards you as well."

Ann: Exactly. Exactly. So, that may be, "Hey, looks like our budget is around $60,000/year. Let's find colleges that fit that budget." And there are loads. There's unfortunately no one central database out there. I don't like to engage with clients in the college selection process other than helping them to figure out what colleges they're interested in might cost. First and foremost, because I think that's an area where the student needs to have a very high level of agency. They're the one who actually has to go and spend 4 years there earning their degree. And secondly, because as a parent, I can't imagine that anything would have been more off-putting to my kids in the college selection process than for me to say, "Hey, guys, my financial advisor says you can afford to go to Oregon State. So, have at it. That's the pathway for you." But from there, it's a matter of finding what the options out there are. There are 4,000-plus colleges in this country. There's going to be good choices for everyone.

Michael: And so, I'm kind of inferring at this point that the nature then of how this conversation gets set up when we're starting with a budget that says, "Here's a list of schools that you can afford or at least that you can choose to go through and be able to graduate debt-free. Choose other things with your own debt consequences." So, I'm sort of inferring then. So, we're not really picking by price as we look at schools now, because by definition, we've started with a list of schools that fit the budget. It sort of sounds like we're not necessarily choosing on the basis of selectivity, because that's not necessarily altering the outcomes per the Gallup-Purdue Index. So, what are we guiding decisions on at this point? Just all the other non-financial things? Thus, why you are not involved in selection as the advisor, because we've gotten into the non-financial factors now.

Ann: Well, because I don't know that student... We've usually met and chatted and things like that, but I don't know what kind of a student they are. I don't know what kind of classroom environment works for them. I don't know how they are as a learner. I don't know how they make friends. And those are really, if you have, let's say hypothetically, you've got your budget, you've got a list of 25 or 30 schools that you could attend for that price point, I'm not the person who can tell you which, from taking that list of 25 to 30 and narrowing it down to 10 to 12 that you're going to apply to, I'm not going to be the best judge of who to eliminate from that list. Because now you're at the point of, "What's the best fit for my kid? Where are they going to engage? Where are they going to make friends? Where are they going to excel in the classroom? Where are they going to build the connections that lead to internships and jobs and lifelong friendships?"

Building An Online Course To Provide Answers To Common College Planning Questions [29:57]

Michael: So, help us understand now how this shows up in the context of running an advisory practice, right? The underlying business itself. How does this connect back into the 'traditional' advisory business?

Ann: Yeah. Well, so, our target client is mid-career professionals with competing financial objectives. And usually those competing financial objectives at a minimum include college and retirement. Sometimes it's career change, divorce, other transitions. But how are we balancing these 2 competing draws on our money for people who don't have unlimited financial resources? And so that's where we're building a savings plan into their overall plan, making sure that retirement isn't being shortchanged.

But also sometimes, as our clients' kids get closer and closer to college, we'll notice, "Gosh, you guys have been doing great on retirement savings. Now is the time you could, in fact, dial that back a little bit for the next couple years, knowing that cash flow is going to be tight while you have kids in college." Or,
"You've got these couple of overlapping years with 2 kids. That's where you're going to struggle. How do we make sure that you're prepared to handle the cash flow crunch that you're going to experience during those years?" And unfortunately, since most of our planning tools are pretty linear, that can be a little bit challenging. So we've developed some of our own cash flow tools that we use because college is in so many ways a cash flow piece of it because so much of the cost gets paid out of pocket.

Michael: Oh, and just the whole nature of "We're saving this much except for these 4–6 years, depending on how many kids and how they're offset. We're saving this much for the next 17 years, except these 6 years," is not always the easiest thing to plug in a certain financial planning software.

Ann: Exactly. Exactly.

Michael: So what is it that you've built internally in order to do this?

Ann: We've built some internal Excel spreadsheets that we use for cash flow planning. And then I have another set that I use for college stuff that figures out things like, "What's your actual shortfall if you make this choice?" And if you take out loans, "Here's what the payment plan looks like after the fact." Or maybe you have some outside resources, like a grandparent who's contributing, Where's the best point at which to deploy those resources?

Michael: And so these are all things you've built internally? You don't find any...

Ann: We use our planning software to model things like what would happen if you stopped contributing to your 401(k) or didn't max out your 401(k) for the next 3 years. Would that be the straw that broke the camel's back on your plan, or are you in good shape for that? Or maybe after the fact, how would you make up for it after the fact?

Michael: So, I take it you don't find any standalone college planning tools, software that helps with this. There's no Holistiplan for college planning?

Ann: Holistiplan for college?

Michael: Yeah.

Ann: It would be so great if there was.

Michael: So you still see gaps that are even relative to traditional planning software when you're really trying to get into the changes and savings and the cashflow dynamics during that stint of college years.

Ann: Yeah. And we use MoneyGuide. It's possible that some of the other programs...because MoneyGuide, not being cashflow-based at all, isn't a great tool for this. In fact, we usually create 2 separate versions of everyone's plan, one that includes college and one that doesn't. Just because there ends up either being excess assets left over or money being pulled out of 401(k)s to cover a shortfall where there's other ways to do it.

Michael: Right. Probably not actually the first asset you're going to be drawing down.

Ann: I'm not going to actually take money out of your 401(k).

Michael: Yeah. Yeah.

Ann: Yeah. So I've developed my own set of spreadsheets, and partly I use that because I get a lot of people coming to me just for college planning. And I found over time, it's not good use of my time, so I created an online course that I send people to, and it's got my stump speech about college and then a whole workbook of spreadsheets for planning, as well as some qualitative questionnaires for planning.

Michael: So I guess I'm still just trying to visualize overall where this fits into the advisory firm. Are you running a business model of "We charge X dollars to do college financial plans?" Are you doing the more "traditional" AUM model, but clients who have a healthy amount of dollars and are accumulating also have these issues, and college planning is simply part of the financial planning process you do because you work with people who are mid-career, which means they tend to be at the age and stage where this is a financial planning issue?

Ann: Yeah. This is one of those areas where we've gone through a lot of iterations of how we approach this topic. Initially, once I started getting demand for this service, I started offering just a college plan consultation. It was a flat fee, and we would meet a couple of times, go through budget and savings and likely scholarship paths and how to research colleges, and all that kind of stuff. And I charged a flat fee for it. And at the end of virtually every engagement, the client would say to me, "It looks like if I just contributed less to retirement while my kids are in college, I could make this all work. What do you think of that?" And I would say, "I think that is outside the scope of this conversation. Since I'm a fiduciary to you, I cannot give you guidance on your retirement savings without looking at your retirement savings."

Michael: Right. Yeah. Sort of like you go to the doctor because your elbow hurts and you ask them to look at your elbow and you say, "By the way, I've been having stomach pains." I'm like, "I'm an elbow doctor. You hired me to look at your elbow. You can't do the whole gastroenterology thing on the spot."

Ann: Yeah. And so I would tell them, "We'd be happy to have that conversation, and here's what that looks like." And then they'd be like, "Oh, but it's just this one question."

Michael: Right. I'm a comprehensive financial planner. It's never one question.

Ann: Yeah, and that one question has a larger dollar value to its answer.

Michael: So when you were doing this version, what were you charging for these? How did the model actually work?

Ann: I think I was charging $750.

Michael: Okay. So how many meetings were you doing?

Ann: It was usually 2 meetings.

Michael: Okay. Okay. So, just, I'm thinking of this as a very hourly fee for your time. I know it takes me 2 meetings. An hour or 2 each and a little bit of prep in between. And I can do the math and figure out that I'm going to make an okay hourly rate on my time for this. Am I thinking about that properly?

Ann: Yeah. Yeah.

Michael: Okay.

Ann: And early in my career, I had a lot of bench time. And so if someone was willing to pay me that much to spend some of it, I was thrilled to do it. Over time, that became a little bit less efficient, A, because I didn't like having that conversation of "No, I'm sorry, your very biggest question is one that I can't answer as a result of this." And the other, because I had a lot more demand for larger-scope work from clients. And so then I focused on, okay, how can I make this efficient? Because it's too much time.

And so, initially, I hired someone who she was a career changer and wanting to get into the industry. And she basically, we had a conversation about what this was supposed to look like. And she put together a whole bunch of tools to really simplify data gathering so that she could pull in all the clients' data and have everything prepped. And then I would get on a meeting with them, and she would do all the follow-up and send them the reports and schedule the meetings, and everything like that.

And that was great because then I just basically got on a Zoom call with people and answered their questions. And I always felt I didn't want to be the person who, for $5,000, I'll tell you how to save money on college, because I think people spending too much on college is a much bigger societal problem than that. So that setup was really great. And unfortunately, the person I hired to do that was so fabulous that she got hired away somewhere else. And so I realized from those meetings that 80% of every conversation was the same. And so I turned it into an online course.

Michael: Okay. So...

Ann: And then, yes, for clients who are overall clients of the firm for comprehensive planning, investment management, whatnot, this is just part of the services that we offer.

Michael: So, then tell me about the online course. Well, how did you go about building that?

Ann: Through a lot of trial and error. Really, it was just after having done a bunch of these meetings, I said, you know what, everybody has the same set of questions. So let's just create a bunch of different modules that answer these questions. And I was in the process of writing my book at that time. So I kind of had an outline of what the course looked like. And it's really targeted at parents of high school students who are in those very final stages of their college plan and trying to figure out where they're going to apply, what it's going to cost, how they spend down their accounts, how to figure out what they can contribute out of cash flow. Do student loans make sense for them? Having the conversations with their student. How to negotiate a financial aid award. And just packaged it up with a series of videos and the same workbook that I was using when I was doing the meetings.

Michael: So how did you price the course?

Ann: So the course is priced at $299.

Michael: Okay. And the idea is people can just find it directly on the internet, go through, buy it, pay, engage. And so, now effectively, you get it down to zero hours from your end, or the time it took to build the course, but...

Ann: Yeah, which was not insignificant.

Michael: Yeah. So, I was going to ask how long...

Ann: But it's a sunk cost at this point.

Michael: How long did it take you to build the course?

Ann: It took, start to finish, we did it really quickly. So my husband and I did it together. He was between jobs, and so he helped me out with it a lot. And like I said, I was in the process of writing the book, so I had a lot of sort of ready-made content for it. So it probably would have taken quite a bit longer had I not been at that point. But we got the whole thing done in about 6 weeks.

Michael: Okay. Is it full time, everything else is paused for 6 weeks, or this is an hour here, an hour there?

Ann: No, but it was during COVID, so it was when we didn't have that many other things to do with our time.

Michael: Okay. And what are you using just to host the course?

Ann: The platform is Thinkific, and then it's just linked off of my howtopayforcollege.com website.

Michael: Okay. Were there other LMSs, course programs used? How did you land on Thinkific?

Ann: There are a number of them out there, and I just delegated that whole project to my husband because he's in tech and he loves stuff like that.

Michael: Okay. Fantastic delegation. I love it. And so how much uptake have you had of the course?

Ann: It's not the thing I'm going to retire off of. So it's been okay, but it's nice that when people come in with this question, I have a solution for them.

Michael: Do you get dozens of people? Do you get hundreds of people? I don't even know how to think about the framing of how many people come to engage with the courses.

Ann: Yeah, I would put it in the dozens annually.

Michael: Okay. Oh, because it's just, it's out there, people go through this every year as they're dealing with college, so you get a flow that shows up every year at college season, basically?

Ann: Exactly. Exactly.

How Independent Progressive Advisors Is Navigating Its "Awkward Teenager" Phase [42:59]

Michael: Okay. So, now just help me connect this further back to just the advisory business overall. What is the core advisory business because it sounds like it's not literally...

Ann: It's not a college planning business. No.

Michael: Yeah. Like, charge fees for college financial planning. So what's the core business?

Ann: No, we're a pretty typical RIA. We do investment management. We do comprehensive planning, and that's part of the reason why I separated the college stuff off was it just wasn't part of our core business. And as our business has grown, we've really had to dial down and focus more on what is our core business and what isn't. And standalone college planning was not part of the core business.

Michael: So, what does the practice look like now, as in assets or clients or revenue or however you measure?

Ann: So there's 2 of us. I have a partner and myself, and we serve about 120 households. We moved up to SEC registration this year.

Michael: Congratulations.

Ann: Thank you, I think.

Michael: The transition is time-consuming but gets a little simpler with multiple states for a lot of advisors once you register.

Ann: Yeah, that's definitely simpler. So, yeah. So we're a very typical RIA. We like to focus on mid-career professionals in part because our belief is if you start working with a client in their 40s or their 50s, your answers to their questions are more often "yes." "Yes, if you want to do that, here's how we do it." If people wait to come in to get planning until they've retired or after the fact, you're telling them "No" a lot more. "No, sorry. You don't have enough money to do that. No, I don't think you should be gifting to your grandkids this year because you might have a long-term care need." Or "No, your budget just doesn't support that." And so we've always tried to bring people into the planning fold at a younger age and build the pathway for them to have the life that they want to live.

Michael: And so, can I ask what, I guess, AUM or revenue for the practice is at this point?

Ann: So our AUM is about $115 million.

Michael: Okay. And is it just you and your partner? Is there staff team support along with you?

Ann: We have a part-time admin.

Michael: Okay. Okay. So very efficient for the 2 of you to just run 120 households directly that you can handle with your capacity?

Ann: Yep.

Michael: So does the college planning aspect, does it still play into the business at this point? It sounds like you crafted this expertise and then the business grew away from doing standalone college planning, and the expertise that you built. So is it still part of the, what you do for clients? Is it still part of how you get clients? Or is this like stages of career evolution that was what I did in my initial years, but not so much anymore?

Ann: It's definitely both. I mean, it's a service we provide for our clients as part of our overall service. It's definitely part of our marketing, mostly because I do a lot of speaking on this topic, and that tends to bring people in. But it's a little bit of a catch-22, right? Because as our practice has grown, there's only so many new clients that we can take on. And that was part of the rationale for the online course was we can't support the demand for our services that we have. And so, how can we come up with ways to serve them more efficiently? And yeah, it's tough because we get a lot of inbound inquiries because someone's read my book or heard me on a podcast, or something like that. And we're just not always able to serve them.

Michael: Because they may not be able to meet the current AUM structure of the firm, or because you can just only handle so many new clients with your partner before you're drowning.

Ann: There's just only so many new clients we can handle as a two-person shop. And yes, it begs the question, when are we going to hire the third person?

Michael: Well, I'll come back to that question in a moment, but I'm also wondering, what is capacity for you? What is the new client flow that's comfortable given the client headcount that you've got? Where is that threshold of "Can't take any more than this in this time period?"

Ann: Yeah. Candidly, I feel like we're at one of those growth plateaus where we need to add resources in order to add clients.

Michael: So basically, almost any new client is stressful at this stage. So, which I get it.

Ann: No, it's not stressful because we both love what we do, but it's stressful to think, "Am I going to commit nights and weekends to this? Or am I going to, at some point I need to start worrying that am I able to do my best work for everyone?"

Michael: So are you thinking about hiring and trying to expand, or are you guys happy where you are? We can do the math on $115 million of AUM and advisory firm rates when you have very little staff to pay. You don't have a lot of payroll expenses. So a lot's going to go from the top line to the bottom line. So it adds up very nicely. So are you looking at growth and hiring, or are you happy where the practice is now?

Ann: We're looking at what's the best next step to support our growth. It may be hiring, it may be...and there's that really hard thing of eventually we intend to have a succession plan, which means we can't really stop growing.

Michael: But you don't have a team, like there's not a succession plan person in yet?

Ann: No.

Michael: The idea is if we hire one, we have to grow to be able to support that.

Ann: No, and we're at that sort of awkward teenager phase where internal succession would require us to build out a pretty good-sized team at this point. It's probably more than one person could take on.

Michael: And so, what's the choice?

Ann: What's the path?

Michael: Yeah. How are you choosing at the crossroads here?

Ann: Yeah. Well, as a small business, I think, and I know all the playbooks would tell you to do it differently, but I think you hire the person and you make the job work for them because in a two-person shop, having someone who we like and trust and feel good about is potentially more important than having a specific skillset come in, right? Because there's enough work for everyone. And so, if we find someone that we can delegate chunks of the work to, whether it's financial planning, whether it's trading, whether it's working with Schwab, whether it's being a paraplanner, whether it's a junior advisor doing some of all of the above and managing some of their own clients. I think when the right person is there, and then of course there are so many entities out there who will do all that for you.

Michael: I'll say while you can get the capacity with external entities that provide the support, doesn't necessarily give you the internal succession plan. If that's a concern.

Ann: Right. It's not necessarily an internal succession plan. It's an external succession plan.

Gaining Credibility In The College Planning Niche By Blogging [51:00]

Michael: So what was the path to come to college planning as an expertise? How did this come about in the first place for you?

Ann: In my first job as an advisor, and I started in the banner year of 2009...

Michael: Tough timing.

Ann: Yeah. My boss came to me at one point and said, "This client has a question about college planning, and I'm not really interested in answering it. So do you want to figure this out?" And it was kind of a light bulb moment for me. Not that this was some big, brilliant thing, but I always remember when I was a kid, my dad was a management consultant, and I grew up in the Bay Area, and he at one point decided to start his own business, and he decided he was going to focus on the computer industry because it was 1974. So he said, "Nobody knows any more than I do about this." As in, nobody knows anything about this.

Michael: Because nobody knows anything. We're just inventing computers. So, okay.

Ann: Exactly. So I could be that guy. And I kind of thought the same thing when the question came up in my practice. This probably isn't the only advisor who is interested in this topic. And so I picked it up, and like I said, I have 2 kids of my own, so I knew this was something I needed to know for myself and kind of ran with it. And over time, as I talked more and more with clients about it, I realized I was answering the same questions again and again. And so I started writing down the answers because that made it easier to email them out to people. And one year I made a New Year's resolution that…writing something I've always liked doing. And so I said, "Okay, I'm going to start writing a blog." And fortunately I had 12 emails that I sent out to people regularly that were going to be my first blog posts.

Michael: So you literally just took the responses that you were writing to repetitive client questions and made them your first blog posts?

Ann: Yep. Does this sound familiar?

Michael: Yeah. It's a version of what we did on our platform. It's fine for not all, but a lot of people who blog, particularly in the context of marketing and trying to build your business. Just take questions that people ask you repeatedly and write the answer on the internet. And then A, you don't have to keep answering the question because you can send people the article. And B, Google helps other people find their way to your content, and that can grow over time.

Ann: Yeah. Yeah. And then I got super lucky where about 3 months into writing this blog, where fortunately I had 12 blog posts already, so it wasn't nothing. There was a press request from the New York Times about a topic that I had just written a blog post about. And so I responded to it and linked to my blog post, and the writer ended up interviewing me. And not only interviewing me, but linking to my blog in the online version of the article. And so...

Michael: In the New York Times?

Ann: In the New York Times. Yeah.

Michael: So that's probably a bit of traffic that showed up.

Ann: A little bit of traffic. Yeah. And subscribers. And so that's kind of kept me going ever since. Not that one. I mean, there've been others over time.

Michael: So what was the blog when you stood it up? What did you call it? Where did you set it up? How did you run it?

Ann: So I set it up on WordPress. It was called The College Lady only because you had to have a name for it. And I was like, "I'm not good at names." So I came up with that.

So when the New York Times article came out, it turned out somebody else had trademarked The College Lady. So I stopped being The College Lady and started being The College Financial Lady.

Michael: Oh, interesting. Did you get like a legal...

Ann: A cease and desist letter? Yes.

Michael: I was going to say legal nastygram?

Ann: I did. Yes. Yes. So I changed it. And then when my book came out, I changed it to be howtopayforcollege.com because that's the name of my book is "How to Pay for College."

Michael: Interesting. So it was College Lady briefly, College Financial Lady, because that wasn't taken. And then How to Pay for College, was that howtopayforcollege.com, like all one word?

Ann: Yep.

Michael: Okay. To tie to the book. So I just have to ask from the nerdy, technical content, and do you lose traffic and engagement from the old site when you went to the new site? Have you changed from College Financial Lady to How to Pay for College?

Ann: When I first did the new howtopayforcollege.com site, I tried to get my subscribers from the original College Financial Lady blog to migrate over, and it just didn't happen. So I still do blog posts on both.

Michael: Like the same thing on both sides? Or you're writing different things for different audiences?

Ann: No, they're same on both. And part of the issue is that one is on WordPress, one is on Squarespace. And when we started the Squarespace site, it didn't have as good of tools for emailing content out to your list.

Michael: Okay. Interesting. Interesting. And so it sounds like you're using native tools or plugins for both to do the email distribution of the content.

Ann: Yeah, because I'm all about pushing the easy button when it comes to stuff like that.

Michael: So I'm fascinated that I guess taking a name as straightforward as the College Lady was very good credibility. I guess that the New York Times would pick you up, interview you, and then link out to the blog because there you are hyper-targeted on the exact thing that they were talking about.

Ann: Yeah. Well, and partly it was what the article was. It was, should you save for college or for retirement? And Ron Lieber was the one who wrote it. And he said, "Everyone's telling me don't save for college, save for retirement." And I said, "College is too big of a goal to not save for it. You have to do both." And by the way, your kid's going to go to college when they're 18. You might retire when you're 60. When you're 65. When you're 70. When you're 75. You might work part-time afterwards. There's a level of flexibility with retirement that there isn't with college. And so he said, "You're the only person who said that everyone else told me no, don't bother saving if you..."

Michael: Interesting. Well, I know that continued to be a fascinating topic for Ron because he published his own book on that a few years ago, The Price You Pay For College, around I guess more what are you going to pay as opposed to how do you pay for it?

Ann: Yeah. Yeah, I like to think our books are complimentary.

Michael: Yeah, yeah, yeah. So just help me down this journey of what it's like to put your flag in the sand to say I'm the College Lady now. Early in your career, having not really written anything about college until the emails that you collated together to put on the blog as the first dozen articles.

Ann: Yeah, it's interesting, because I'm the kind of person who has imposter syndrome when they're making breakfast. So calling myself the expert on something, it definitely isn't my comfort zone.

Michael: But you did call yourself the College Lady, not the College Lady Expert. You took it down a notch for yourself.

Ann: But I think part of what worked for me is, this is a problem that I was personally invested in. I was a parent myself who was not willing to spend $80,000/year per kid for college, but college was really, really important to my family and not just college, but good college outcomes was really important for me. So it was a personal journey as well as a professional one. And I kind of think the moment when I was like, "Oh, I think I've got this," happened when I was taking my daughter to tour colleges, and we sat down for an admissions presentation, and someone asked a question that was straight out of my blog. And I was like, "Oh, my gosh..."

Michael: Oh, like questions that you tell people to ask the financial aid person?

Ann: Yeah, ask these questions at schools, and somebody asked it, and it was just word for word what I had on my blog. And I was like, "Oh, my gosh, I'm out in the world as this person."

Michael: Very cool.

Ann: Yeah. And so I introduced myself to them afterwards. And they're like, "Oh, my gosh, this is so helpful and so great." Yeah, and it turned out that the things I was recommending to people, I did them for my own family, and they worked, and my kids had great college choices. Their budget was in-state. And neither of them went in-state. They both went to great, great colleges that were great, great fits for them that worked for our budget. And they've graduated, gone out into the world, they're working. They've each gotten a raise, they have their own health insurance, all that kind of stuff that we think that posting an Instagram picture of their acceptance letter feels really great. Taking them off your health insurance is what really, really, really feels great.

The Process Ann Used To Plan For Her Own Kids’ College Decisions [1:01:15]

Michael: Well said. Well said. So, now I'm just really curious. So how did that conversation go in the context of your family when you had the same journey of we set the budget of in-state, and then apparently they went and visited schools and neither of them wanted to go to the in-state school? So you lived it. So how does that conversation flow in practice?

Ann: So I think it was a bigger conversation with my son than with my daughter. And it was a really fascinating experience. So he was, let's say, not an academic superstar in high school. He was a very normal kid who probably took classes that were too tough for him and more work than he wanted to put in. So he didn't have a spectacular GPA. But he was also always the guy who did his own thing. He played club soccer on a club that none of his friends played on. And he was a camp counselor at a camp that none of his friends went to. And so the last thing in the world he wanted to do was follow all of his friends off to the University of Oregon, where they were all going.

And so he started looking around, and he found that he was eligible for a really good scholarship at the University of Arizona. And so he applied there, and he got the scholarship. And the thing is when he got the 2 aid awards, it looked like Arizona was about $7,000/year more than Oregon was. And so we had this conversation about, here's what $7,000/year every year is. And he was like the human manifestation of wind coming out of your sails when we said that, and we're like, "$7,000/year seems like a lot for good weather." But we said, "But if you can figure it out, we will support you in that."

And it was such a struggle for my husband and me as parents, because when he would talk about Arizona, he would say things like, "I want to live in the academic residential community for pre-business majors because I think that'll be a good way to meet people. And the intramurals, you can sign up as a free agent. And so I know I can get on a soccer team." And so all this conversation about Arizona was that. And when he talked about Oregon, it was like, "Well, Kevin said we should live in this dorm, and Matthias and I are going to be roommates." And we're like, "We like the Arizona person better."

So he went down to research the college, and he learned a bunch of things, like that one college had used their highest-priced dorm and highest-priced meal plan in their aid award, and the other one had used the lowest price, and so that was a big chunk of the price difference. And he learned that at Arizona, they had a shortage of male RAs [Resident Advisors], so he could be an RA for a year, and that would make up another big chunk of the difference. And at Arizona, you pay the same tuition all 4 years. There's no tuition inflation. So even though the tuition was a little bit more his freshman year, by the time he graduated, it would be less. And all this stuff.

And it was such an interesting experience because I started out feeling like I am a horrible person for not letting my son do this thing. And afterwards I was like, "What an amazing amount of growth and maturity he's shown in figuring this stuff out and making it all possible." And so that was where he ended up going.

Michael: So, how were you growing? It's like the blog, the audience, the activity, the results, is we feel like there's a view for a lot of blogs, you publish things on the internet. Cool. But does anybody show up? How do they discover it? How do they find their way to it? What were you doing to try to grow and sustain, and build this?

Ann: So at first I didn't do anything because the firm that I was working for at the time really didn't want me doing it. And so they're like, "Well, okay, you can put it out there. Just don't promote it at all." And from there, once I left there, it was a lot more just organic stuff, responding to press requests, building relationships with journalists, because at the time there weren't a lot of financial advisors who were talking about college. Now there's more talking about them. More and more advisors are talking about it, but not always productively. So, it was fairly easy to become sort of established as the go-to person for this topic. Since the book's come out, I've been doing a lot more proactive going onto podcasts and speaking and things like that, which has definitely helped to drive traffic.

Michael: And so, but it sounds like in your world, there's sort of this split that in the earlier days of your career, driving traffic was good because more readers meant more questions, more questions meant some of them would actually reach out and pay you for a college plan. And you could do your $750 for a couple of meetings. And early on, when we have a lot of time and not a lot of clients, that's great. And anyone who will pay me for my time, yay.

Ann: Now it's more like, "Here's a great resource, so I don't have to spend time on this."

Michael: Does that take you away from this as a specialization at some point? Do you have a sense as to how this plays out for you in the years to come? If your kids are past college, you don't really want the clients that are coming from it, and the core business is doing really well with the core business.

Ann: Yeah, and it's a great question, and it's one I ask myself a bit. There's a couple elements to that. One is I love the process of writing. It helps me organize my thoughts. Writing about one thing helps me create frameworks for thinking about other things. So from that perspective, I think I'll continue doing the writing, doing that piece of it. I also feel like, as advisors, we have this great career where there's so many things I love about this career. And I love that I'm very well compensated for doing it. This is one form of pro bono work for me, is making sure that people out there who don't have access to financial planners still have access to good quality information about a topic that is probably their second largest expense after retirement.

Acquiring A Practice To Jump-Start Her Advisory Business [1:08:18]

Michael: Very cool. Very cool. So as you look at this journey, what's surprised you the most about the path of building the advisory firm, kind of, I feel like almost alongside and in parallel to what you were doing with college planning?

Ann: Yeah, I think a big part of it is so many of the things that I thought would be hard turned out to be easy. And so many of the things I thought would be easy turned out to be hard. I acquired this business from another advisor who was retiring, and that was about 9 years ago. And I thought that was going to be incredibly difficult, and in fact, it was really straightforward. A year after that, I brought on my partner, Scott, and I thought that was going to be difficult. And it was actually pretty easy. And both of those things made my life so much better. And they were so...just these big, I thought of them as mountains to climb. And they ended up actually being nice strolls through the park, lengthy strolls through the park, on the other hand.

And the flip side of that is there were a lot of things that I thought would be pretty easy, and they turned out to be a lot harder than I thought. It took a long time and a lot of work to build up the practice to where it is now. There was a lot of grinding. There was a lot of just casting about, "Where am I going to find clients? Please, will this CPA have lunch with me? Please, estate planning attorney, let's have coffee." And how do I build that up into a business?

Writing the book was a lot harder than I thought it was going to be. I thought I've got all this content, I'm just going to sort of organize it, and it'll be a book, and that'll be great. And it wasn't that simple. I ended up hiring an editor to help me because I was just completely flailing around. And honestly, that was a great lesson in just because you're good at one thing doesn't mean you're good at another thing. I'm good at being a financial advisor, but that's different from being good at writing a book.

Michael: So, tell us more about this acquisition path into the business. If I heard, you basically started or launched by acquiring an advisor's existing practice.

Ann: Yeah. So I started my career working for another local advisor. And from there, I got recruited over to another local firm that was a little bit bigger. And then a few years into that, this woman approached me and said, "I'm retiring, and I want you to take over my practice." And I said, "Oh, I'm Ann. Nice to meet you." I mean, it was almost literally like that. And she was one of the first women fee-only advisors in Oregon, and so it was important to her that another woman take over her practice. And we had met through our NAPFA study group. I was the study group leader, and she said, "I've seen you as the study group leader, and I like what I've seen from you. And I feel like you're someone who would do well with my clients. And my goal is to leave them in good hands. And I feel like having you take over my business would be leaving them in good hands."

Michael: So how do you navigate that when you were already an advisor with another firm?

Ann: So, for a minute, I went to the firm and said, "I've been approached by this woman who wants me to take over her practice. How about me bringing it in here?" And then I had a moment of reflection and realized that in fact, I was desperately unhappy at that firm and that I didn't want to bring this business there. In fact, I wanted to leave and go take over the business and do it on my own.

Michael: So how big was the practice that you were buying into? What did it look like?

Ann: So it was a solo advisor, and she had about 30 clients and about 15 million in assets.

Michael: Okay. Which was particularly, I guess, this was like a decade ago?

Ann: Yeah, I think 9 years ago.

Michael: Okay. Okay. So very solid asset base to be able to get building when you're on your own.

Ann: Yeah. It was an amount of business that I could bite off and take on, on my own. And she stuck around for a while to make sure everything went smoothly, and it's gone very smoothly ever since.

Michael: So how did the deal work? Did you have to write a check upfront? Did you have to get a bank loan? Did she finance it for you?

Ann: It was seller financed. So I did a down payment and then seller financing. And this happened when my kids were in high school, so I was able to structure it. So I basically had no income because of paying off the note so that my kids could get financial aid at college.

Michael: Oh, so the expenses of the acquisition actually ended up being well-timed in that it just naturally came out.

Ann: Yes, perfectly timed.

Michael: Interesting. And because I was going to say, I feel like for all the discussion of kids getting ready to go to college and saving and budgeting for them, about to go to college, not the ideal time to do a down payment.

Ann: To take on a big...

Michael: And financing, but I guess the flip side is, except when that knocks your income way down while you're doing the purchase.

Ann: Exactly. Exactly.

Michael: So, and then how did the transition work?

Ann: So we went through, and just it was very standard, it was very easy. When I look back at it, I'm like, "That was it?" She introduced me to all the clients, and they all said, "This sounds great. Thank you very much." And so we started the process in April, and then by December 31st, she was out of the business.

Michael: So I feel like...

Ann: It should have been harder than that, right? And that was the surprise to me.

Michael: Yeah. The industry view, and there's all this risk. What if they don't like you? What if it doesn't transition smoothly? Right? All these downside possibilities, then in practice, she introduced me to 30 people. They liked me. Now they're my clients. Moving on.

Ann: And since then, one has left.

Michael: One of the 30 left in 9 years?

Ann: Yeah.

Michael: So...

Ann: Yeah, it should have been harder than that, right?

Michael: Yeah. Well, or we make it more complicated than it needs to be sometimes. Right? I've got to imagine, if she was a solo practice that had been doing this for a long time, there had to be a whole bunch of clients who were already wondering what happens and how this plays out because she's obviously going to retire at some point. And I don't know, just the story, at least I can tell in my head. Maybe they were just all relieved that they weren't going to have to go to find a new advisor because she found one for them by getting you.

Ann: Honestly, that's a lot of it.

Michael: And they're like, "Great. Great. We're so happy. We don't have to do the work of finding a new advisor when you retire. Thank you."

Ann: Yeah. Yeah. And for her, it was a good opportunity to say, "All these things you've been asking about, well, Ann's going to do them for you now."

Michael: Right.

Ann: And so, she really was a wonderful facilitator, the transition too, because she basically gave me permission and let the clients know that she was giving me permission to make it my business and not just that I was taking over for her.

The Low Point For Ann On Her Journey [1:16:20]

Michael: So, as you then look back over the journey, so where did it get hard? What was the low point in this journey for you?

Ann: I would say the low point would have been my employer before I took over this business. So I was recruited to another local firm, and they were a bigger firm than where I was working. And it was very much a shiny object syndrome thing. And I realized as I was working there, I'm like, "This is everything that it's supposed to be, and why am I so unhappy?" And what I realized over time was that the partners there wanted really different things from their career than I wanted. They wanted to be masters of the universe. And they were willing to work with anyone who had enough money who would help them get there.

And I went into this career…I'm a career changer, and I was very deliberate in choosing this career, and there were specific things I wanted. I wanted something that was intellectually stimulating, something that was personally and financially rewarding, and something where I had control over my time and my life. And I want to work with people I like, and I want to feel good about the work that I do and feel good about the people that I help. Because I feel like there's too much values in financial planning to work with racists or sexists. I mean, not that the sexists want to work with me anyway. Or just, you know, people who I generally think are awful people. I want to be rooting for my clients' success. And I don't want to help awful people have have better lives. I think they'll be fine without me. And so it took a long time to come to that realization, because on the surface, everything about the job was so perfect.

Michael: It was profitable, the firm was growing, those kinds of metrics basically were fine.

Ann: Exactly. I had a nice corner office downtown with a view of Mount Hood. And so all of those things seemed so wonderful, and why would I leave to take over this tiny practice and take on all this debt and all this risk when I had this other thing. And it really came back to what did I want to be when I grew up. And I realized that I wanted to be something other than what that firm wanted me to be.

Michael: Because they were, at the end of the day, just focused on grow revenue, grow profits, make money?

Ann: Exactly.

Michael: That was the deal.

Ann: Exactly.

Michael: Even though it's grown to be a wonderfully financially remunerative practice on your own.

Ann: Exactly. And it's taken time to get here. And so it was definitely 1 step back for 2 steps forward. And it was tough to come to that realization, but it was also a good reminder of why I'm doing this in the first place, and helped to really reset me for what I wanted to do, and I couldn't be happier that I made that choice. And I feel like, as much as that was a low point, I'm glad that it happened because it was so instructive for me going forward.

Michael: Because it sounds like it balanced out, personally, financially rewarding was on the list. It is a good career if you think in the long run, it's pretty financially rewarding, but the stimulating control over time in life, enjoy who I work with and what I'm doing, those became the trigger points, it sounds like to say, I think I need to do this on my own and not necessarily as an employee in someone else's firm.

Ann: Yeah. Yeah. And I knew when I took over this business, I knew I didn't want to be a solo advisor. And there was someone I had worked with at the first firm I worked out who I really liked and felt like we had really complimentary skillsets. So pretty much my first phone call when I took over this firm was to him to ask him to come join me. And that took a year of sorting out. And so we've been working together for 8 years now, and it's been fantastic.

Michael: So how do you split just work duties, job tasks, between the 2 of you within the firm?

Ann: So we have a mix. We have kind of yours, mine, and ours clients. Since we've been working together, all of our new clients who have come on have been, we consider them clients of the firm, and they work with both of us. What happens is over time, they tend to choose one or the other of us that they gravitate towards, and we have no hard feelings between the 2 of us over that.

And for a long time, it was just sort of, we just kind of did things in tandem and picked things up as we needed. The last couple of years, as the business has grown, we've done a little bit more divide and conquer. So he's done a lot of the back-end stuff. Here's how awesome my business partner is. When my book came out and I started doing some more stuff, he came to me and said something that I don't believe anyone else has ever said in the history of the RIA space: "You're really busy. Do you want me to take on compliance?"

Michael: Wow.

Ann: So he's doing that, and then I do a lot of the front-end stuff just because the fact of promoting the book and doing things related to the book have de facto sort of turned me into the voice of the firm.

What Ann Would Tell Her Younger Self [1:21:50]

Michael: So what else do you know now you wish you could go back and tell you from 10, 15 years ago as you were getting started?

Ann: So one thing I would say, and you and I may disagree on this, but to me, a niche is a goal, not a starting point. And I think one of the best things that I did in getting started was I took every meeting that I could. Even if I knew that this person was never going to be a client, that they weren't anybody for me to talk to, I took every meeting. And a couple of things came out of that. One is I learned a ton of stuff. First time I heard about DSTs [Delaware Statutory Trust] was someone who came in for a meeting who wasn't going to be a client, but she had a whole portfolio of DSTs that she had inherited. So I learned all about DSTs from her. I learned a lot about our state's PERS [Public Employee Retirement System] system. And I found a bunch of things that I was interested in through doing that.

And the other thing that happened is I'm really good at that prospect meeting. So when the client that I want to work with comes in, they always end up working with me because I'm good at that prospect meeting. And I'm good at that prospect meeting because I put in the reps. So that would be sort of a piece of advice I would give to people is put in the reps.

The other thing that I think was the best thing I ever did for my career was I not only joined my local NAPFA study group, but I ended up being the study group leader. And being a study group leader, especially if it's one where you have continuing ed sessions, is the best way to network with COIs [Centers Of Influence]. I have a gigantic database of COIs, and it's so much easier, let's say, to meet a COI when you call them up and say, "Hey, would you like to come speak to my advisor group about estate planning," versus, "Hey, can we meet for coffee so I can learn more about your practice?"

But it's also how I got my business. And when I was just getting started, I just hit up everyone in the study group for informational interviews. I've had others reach out to me about acquiring their practices as they're retiring. So it's been an incredible resource for me. And I think a part of why it's such a good resource is just the diversity of advisors that you'll meet. People who are very senior, very tenured, down to people who are brand new, or even just starting the CFP curriculum as I was when I started going.

Ann’s Advice For Newer Advisors [1:24:27]

Michael: So any other advice you would give younger, newer advisors looking to become a planner and get started?

Ann: I think it takes more time and more work than you think it does, but suddenly one day the flywheel is spinning.

Michael: How long was that for you before you felt like the flywheel was spinning?

Ann: After taking over this firm, it was probably about 3 or 4 years into taking this firm over, and there was a process of just sort of digesting the business, getting to know all the clients, making sure I was doing all the things I needed to do, and then bringing Scott on, and then starting to work together, and then suddenly one day we're like, "Oh, wait, we can't help this person. No, this person, that's one too many." We're like, "How did that happen? That's so great."

Michael: So, and how many years were you working at other firms before you did the deal to take over this firm?

Ann: I think a total of about 5.

Michael: So if I'm putting it together, it was 8-plus years before it really felt like this flywheel was spinning in your own firm?

Ann: Yeah, yeah. And I think part of it is just, it takes time to figure out. We're into this because we're all financial planning nerds. We think this is the most important thing that anyone does. And the rest of the world places a different value on it than we do. And it's hard to figure that out.

Michael: People don't wake up in a cold sweat at midnight, worrying about a financial plan.

Ann: Yeah. We always joke, your financial life isn't in triage mode until it is, but lots of other parts of your life are, and that's what you're focused on. And so the world of consumers doesn't value this the way that we do. And I'm a career changer, I worked in tech beforehand, and I worked at Intuit for a long time. And we always talked about these transition points that people go through, where they start actually paying attention to their money, whether it's getting married, buying a home, having a child, starting to look at retirement. And so, there's that whole process of figuring out what's that point that I'm going to latch onto and work my way into being of value to people.

What Success Means To Ann [1:26:58]

Michael: So as we wrap up, this is a podcast about success, and just one of the themes that always comes up, the word success means very different things to different people. And so you have this practice that's built so wonderfully over the past decade and now over $100 million, SEC registered. So the business is going very well. How do you define success for yourself at this point?

Ann: I look at it from 3 perspectives. First of all, as a business owner, one of the things that I took away from my days at Intuit, which it was a great company to work for and very much a corporate values-driven company. And one of the key corporate values that we had at Intuit was customers define quality. And I think that's a really important part of being a business owner is that recognizing that you're only as good as your clients think that you are. And so we consider ourselves successful as a business if our clients are successful and they're living their best lives. They're implementing the planning recommendations they make, they're referring their friends and family to us, because they value the work that we do.

I also look at it as a professional. And to me, getting back to my reasons why I became an advisor, looking for a career path, it was intellectually stimulating, personally and financially rewarding, and let me control my time. And so as a professional, I feel successful when that's how my life as a professional is going. And then, just kind of as a person with a career, I feel successful when I'm not trying to fix myself. And I own that I suck at Schwab forms, and I'm not going to try to get better. Instead, I've hired someone who does them for me. So, that's not to say I don't still have goals. I have plenty of things that I still want to accomplish. But I don't think I'm somebody who needs to be fixed anymore.

Michael: And thank you to the Schwab forms person for being awesome at Schwab forms.

Ann: Yes. I have someone who does my Schwab forms and someone who volunteered to do compliance. What better team could you have?

Michael: Things are going well. Things are clearly going well. Well, thank you so much, Ann, for joining us on the "Financial Advisor Success" Podcast.

Ann: Thank you so much for having me.

Michael: Absolutely.