#FASuccess Ep 435: When The Next-Gen Clients’ “Wealth Builder” Offering Becomes The Main Driver Of Growth For A $1B+ Advisory Firm, With Gideon Drucker

Resources Featured In This Episode:

• Gideon Drucker: Website | LinkedIn
• How To Avoid H.E.N.R.Y. Syndrome: Financial Strategies To Own Your Future, by Gideon Drucker
• Redwood Publishing
• Altruist
• Fidelity
• com
• Sora
• Eight Digit Media
• Nick Murray

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Full Transcript:

Michael: Welcome, Gideon Drucker, to the "Financial Advisor Success" podcast.

Gideon: Thank you so much for having me. And I'd be mad at myself later if I didn't say this at the outset. I've listened to every episode of this podcast, and honestly, it's done more to shape my career than anything or anyone outside of my dad. So to be here right now is just kind of a special full circle moment. And, yeah, I'm just excited to dive in.

Michael: Well, I really appreciate it, and I'm excited to talk to you today. And I get into what I guess is one of my favorite subjects around the industry, which is this whole phenomenon of how we serve "the next generation" of clients. The industry, I feel like, has this almost fixation on what's now been dubbed the generational transfer of wealth, however many tens of trillions of dollars are supposed to move hands over the next decade or two from mostly baby boomers to their children and grandchildren, for which the standard industry solution is, "Well, then I guess we need to build relationships with the next generation of our clients' families. We have to build relationships with the children and grandchildren so that when Pop-Pop dies, we can still work with the people who inherit the money." And the fascinating thing to me, I see so many firms talking about it and remarkably few where it's actually working in any material way. Maybe if you're in the ultra-high net worth family office, multi-family office area where...

Gideon: You're doing generational planning.

Michael: You are legitimately running family meetings about "how's everybody going to handle their $15 million inheritance" kind of thing. But for the rest of us, the truth is most of us are pretty retiree-focused, sort of by definition. If our clients are so old, they're regularly passing away, and we're having a concern about generational transfers of wealth at death. And their children and grandchildren seem to figure out pretty quickly that we're not really built for them. "I don't really want to work with Pop-Pop's advisor. I want to work with someone for me." Because when we focus on retirees, we really know retiree issues. We don't necessarily know the issues, the financial planning issues that are front and center for clients in their 20s, 30s, and 40s. And if we were that good at it, frankly, that would just probably be one of our core clientele in the first place. We wouldn't be so retiree-focused. We'd have a segment of the business serving next-generation clients with a business model and service model that fits them. And then you wouldn't even need the grandchildren and children of your clients because you just have an offering for "young people."

And I'm excited for the conversation today because my understanding is that that's effectively what you built in your firm is an offering for working with younger clients in a firm that predominantly historically worked with older clients and more retirees and not just as a, "This is a way to get the grandchildren of our clients," but more a, "No, we really want to generate a million dollars of revenue from serving next-generation clients." And I'm just excited to talk about how that actually came about and what you built to make that happen.

Gideon: Yeah, absolutely. As I'm listening, I was thinking, "Wow, yeah, we didn't really have that as a game plan, or I didn't have this vision five, six years ago of anything that was going to come over these last five, six years of building a new entire division or having more advisors or different service models." And I definitely wasn't thinking at all about working with the kids and grandkids. It was really just a natural evolution of, "All right, who am I going to work with? Who do I enjoy working with?" Taking it one client at a time, one prospective client at a time, and still it kind of developed organically. And then you get to a certain point where there's momentum, and, "Wow, I think I'm building something that can actually stand on its own. I'm enjoying this, and I can kind of see where it's going."

And that's when you start to plan ahead of what you want to build out, how you want it to all come together. But at the start, yeah, there really wasn't a vision. I'd like to say there's a vision now, but there wasn't then. And really, no part of it, even if it would be a good story at this point, no part of it was thinking I was going to be working with the kids and grandkids of my dad's clients, although that's what ended up happening. It was just, "Hey, who do I want to work with? Who do I think I'd be successful with?" And letting it kind of happen from there.

What Drucker Wealth Looks Like Today [07:26]

Michael: So I want to get deeper into this in a moment of just the divisions of the business and what's been built. But I think, first, as a starting point, just give us an overall picture of just the advisory firm as a whole as it exists today. So we understand the context of the business that we're going to be talking about.

Gideon: Yeah, absolutely. So, Drucker Wealth, we're an independent, now, RIA. We left our broker-dealer about 13 months ago as of recording. We're a fully virtual team. We have team members, clients throughout the country, and we have two client divisions at Drucker Wealth, each with their own service team. So the team is kind of segmented into one of those two divisions. We have our retirement and income division, that is, clients that are 60-plus, traditional retirement planning. And when I say we have two divisions, prior to five, six years ago, that was the firm. There was no other division. So there was no need to call it that. It was just that's who we've been working with for 20, 30-plus years.

And then we have our wealth builder division. This is what I created about five, six years ago for mid-career, high-income-earning families, usually people in their late 30s and 40s, usually with kids, usually living in high-cost area cities, really focused on full life financial planning. Altogether, between those two divisions, we work with about 800 client families. We oversee approximately $1 billion of client assets, with $750 million of that being advisory AUM and the remaining $250 million or so in annuities that's held at our friendly broker-dealer.

From a teaming standpoint, we have 13 people, full-time people on the team that's made up of five lead advisors that obviously manage and run client relationships, two second chair or support advisors that help those advisors run those relationships, three operation managers, one estate planning specialist who is actually starting a week from now as of this recording, and then we have two people that operate more at a firm and leadership level. Bridget, who's our head of people and really serves as chief of business development, and Neisy, who's our director of operations and also our chief compliance officer. And obviously, I can get a little bit more into the teaming structure, but 13 people overall and about 800 families that we're working with on an ongoing basis.

Michael: And can I ask, what is revenue for the firm overall?

Gideon: Yes. So in 2024, we did a little over $6.2 million of revenue, $4.6 million of that came from advisory fees. We did another $350,000 in upfront financial planning fees. That number is a little bit lower just because we transitioned the firm in February of last year. So the first six months were really transition-focused more than anything else. My dad did another little over a million in annuity revenue and then a small remainder from life insurance and disability, but that's really less than 1% of the revenue at this point.

Michael: Okay.

Gideon: And I'll make a quick note just for anyone doing the math at home, as, quite frankly, I would be if I were listening in, we added a good deal of assets under management in 2024, a little over $125 million. And most of that was in the back half of the year. So we just, quite frankly, haven't...that AUM isn't part of the fees, obviously, for the majority of the year. So if our AUM looks a little bit off compared to the AUM fees, that's why. It's just most of that new money hasn't been paid out yet. So we're expecting, in 2025, obviously, market dependent, which who knows when this comes out, but we're looking at closer to 5 or 5.5 just based on our kind of growth rate over the last few years.

Michael: Five to 5.5 million in advisory fees.

Gideon: Right. Closer to 5.5 of AUM advisory fees, just based on money we added in the second half of 2024 and already in the start of 2025.

Michael: Okay. All right. So that's really helpful. So now, take us one step further. You said the company is structurally in two divisions at this point. There's retirement and income for, we'll call it, the older clients and wealth builder division for the younger clients. So, how does the revenue split between those? How does the client count split between those? How does the team split between those? Because I'm trying to envision how divisionally split they are. And do you actually keep metrics by division, as it were?

Gideon: Yeah. So we try to just for our own understanding of what's going on in the business, not necessarily because we need to know those numbers. We understand most of the growth at this point. And by growth, I really mean client, number of new clients, team members were consistently hiring for us coming on the wealth builder side, even if...just because when we're working with retirees that have more money, quite frankly, obviously, they're at it if they have a new 401(k) rollover, there's more money coming in. So they're still growing from just an asset standpoint, even if they're not taking on so many new clients at this point. But, yeah, just to give some context of what the breakdown looks like, so the wealth builder division has about 275 families ongoing that we work with.

Michael: Okay.

Gideon: Of the 800, about 275 families. And we, on the wealth builder side, manage $170 million of the assets under advisement, and that's all pure assets under management. We're on track to add another $75 million of assets under management on the wealth builder side this year. And then, on the wealth builder side as well, we did last year about $350,000 of upfront financial planning fees and about $50,000 or so of insurance, mostly term and disability revenue.

Michael: Okay.

Gideon: So obviously, the retirement income division has been around 30, 40 years, and they've been doing really well for a long time. So it still makes up, I would say, 70% of the total revenue. Although, and I'd say, the wealth builders, over time, 3 years ago, that was 90-10. Four years ago, 5 years ago, that was 95-5. So it's slowly changing dynamics over time is where kind of building that runway to get to that point that the retirement and income division is already at.

Michael: Yeah. I'm struck. When you've got a retiree base that's north of $500 million to $750 million of what is called traditional retirees, adding 30% of revenue growth working with younger clients in a wealth builder style division, that's a lot of growth change in a couple of years. It's literally a lot of revenue to add to say, "We grew," I'm just napkin-mathing, that's more than $1 million of revenue that got grown on the wealth builder side in the past couple of years.

Gideon: Yeah. Yeah, that's fair. And to be fair, we've hired a few new advisors to support that growth just because we've done a lot of marketing. So we kind of know the flow of new clients that we have. I'm sure we'll get into that. So we've been hiring for the wealth builder division. It's grown pretty organically, which has been a great thing. And, yeah, we're trying to... I'm fortunate in a lot of ways in this business growing up with a dad as a mentor. He's done a great job my whole life, and to have somebody like that that has my back at all times, and that is my best friend, my role model. All of it, it's just, how many people are lucky enough to have that?

But I'm also lucky because I had the runway to build this thing right, to do it the way that made the most sense for our team, our clients. There was never any pressure of, "You need to sell this insurance policy," or, "You need to do that rollover." It's just, "Hey, do a good job for your clients. Speak to a lot of people," right? "Activity is the key to productivity." Something I've heard my whole life. Definitely, a BD [Broker-Dealer] aphorism. But he allowed me to find my own way of being an advisor of how I wanted to market, how I wanted to grow, the type of clients I wanted to work with. Looking back, I realize how fortunate I am. So we've done pretty well over the last few years, but I also realized most young advisors don't have that opportunity, that time to figure things out the right way and get to that point. So, yes, there's been growth, but I really need to give a lot of that credit to my dad and our team that's allowed us to build this thing the way that made the most sense.

Creating A Staffing Structure To Serve Both Retiree And Accumulator Clients [15:31]

Michael: So you said that this is staffed...each division has their own service teams. So, can you explain a little bit more what, I guess, the staff of the team structure is for each side?

Gideon: Yeah, absolutely. So on the retirement and income division, my dad, Lance, and Kathleen, we call her Kitty, are the two lead advisors for all client relationships, and they've been working together for over 15 years. Most of the client relationships even extend longer than that. And quite frankly, they just kind of found their rhythm organically with their clients in terms of how the clients want to engage with us. So there's a lot less official this is Lance's client, this is Kitty's. It's just, Kitty runs a lot of client relationships. My dad, Lance, and I'll just...so I don't say my dad a lot, I'd call him Lance when we're talking to anybody. Lance runs a lot of client relationships. Some meetings, they're on together, and some clients, they're very different personalities.

They have a great partnership, but they're just very different. And some clients really gravitate towards my dad, I would say, a lot more. He can be intense. He's a lot, type-A New Yorker. So we're like, "Yeah, we like that Lance is behind the scenes, doing everything, but we'd really like to work with Kitty. She's more comforting. She's listening." And so they've really found their rhythm organically, like I said, in terms of who runs the client relationships. They now have a full-time second-chair support advisor, Dru, who's a Certified Financial Planner but really is more helping them get ready for meetings, sending follow-up. She can meet with clients, kind of operationally, things have to happen, but really making it so that Lance and Kitty, the majority of their days are spent just sitting in front of clients, calling clients, really being the front-facing advisor.

And then we have two excellent people in operations on the retirement and income side, Eric and Giselle. And they're helping clients open accounts, handling transfers, withdrawals. A lot of their clients have RMDs [Required Minimum Distributions], so they're handling that all throughout the year. And they're both really hands-on. I think part of what my dad's done a great job of is giving everybody on the team an ability to grow, to find their voice. So they speak to clients, obviously, just on the operational side, not providing advice, but just, if something needs to happen, they're comfortable calling the client, "Hey, we need to move this. Remember, we were doing that. Just let us know how we can help." So they handle the operations side. And then Neisy, our director of operations, kind of oversees that, making sure everything's going smoothly operationally on the retirement and income side. So those six people really run the retirement and income side on a more day-to-day basis.

Michael: Okay. So then, now, tell me about wealth builder side.

Gideon: Yeah. So on the wealth builder side, we have three lead advisors, what we call us, myself, Autumn, and Sarah. And by lead advisors, I really mean running client relationships. They're setting up their client meetings, providing advice. They're responsible for managing and taking care of the client. The firm really handles the marketing, the business development, lead generation, all of that. So the individual advisors can spend most of their day in front of clients and then doing the planning work that's actually required to get in front of clients.

And then, in my role as a lead advisor, I have a second-chair advisor, Karina. She oversees and really supports all of my client relationships. She's on every meeting with me. Clients are really reaching out half the time. They'll email her. They'll email both of us. They know... Anything that's not just the pure advice part of it, she's going to respond and make sure that everything gets done. And she actually started as an intern with us six years ago, was just so incredible that, slowly by slowly, she's kind of become kind of my right hand in building this thing out. And so she's a support second-chair advisor.

And then our newest hire, Tyler, is our operations manager. So he handles, for the three lead advisor client relationships, all the account opening transfers, rollovers, planning agreements. He's been fantastic. That's been a huge help over the last three, six months. And then Bridget, who's our head of people and really running the business development and marketing side of things with me, she kind of oversees...she's organizationally running the whole team but, I would say, spends a lot of time with the wealth builder side of things just because so much of the growth, so much of the new ideas and new services we're offering are originating on the wealth builder side that a lot of her time is spent with us figuring out how this is all going to happen. She's kind of the implementer on the wealth builder side, just to use the EOS [Entrepreneurial Operating System] parlance.

Michael: So I'm struck in hearing this, that just the whole staffing structure feels quite, quite different between the two sides, that there's 2 advisors, Lance and Kitty, for close to 500 clients on the retired side, there's 3 advisors for "only" 300 clients on the wealth builder side. Lance and Kitty have two or three operations staff supporting them. Wealth builders actually has one. You've got a higher ratio of advisors to serve the clients on the wealth builder [side], but a lower ratio of operations to support the advisors on the wealth builders. Am I following that properly?

Gideon: Yeah, yeah. No, that's a great point. And obviously something...this has been an intentional evolution, so something we think about. So a few points just to kind of bring that home. On the retirement income side, I would say, the number of clients is a little, I don't want to say, misleading because that's how many clients, but a good deal of them are, I would say, legacy clients. They're older. They're receiving their RMDs, their dividend income, their annuity income. And there's not so much ongoing planning that they're looking for. We reached out being like, "Hey, we're going to do this Roth conversion. We're going to talk about tax-loss harvesting." They'd be like, "Lance, Kitty, I have enough money. I'm good. I can live my life the way I want. I can take care of my family. I have money for the kids, and I have insurance and the right estate planning."

Michael: Okay.

Gideon: So they do have a lot of clients that, I would say, aren't... We're still meeting with them, of course, throughout the year, but it's less hands-on changes to the plan that they're making just because of the stage of life they're at, and it's a lot more making sure, operationally, the money gets to them when they need it. The RMDs are coming out. We're changing their income strategy as markets change, the amount of annuity income versus dividend and stock income. So that's why, Lance, Kitty, and Dru, all three, so it's really three advisors, even if Dru is more in a supporting capacity, but that's why there's more operational support there because, I would say, for a good hundred, if not more, of those retirement and income clients, it's more just making sure they're getting their income and that they're, I would say, more on the legacy distribution side of things rather than active week-to-week planning side. And quite frankly, the exact opposite is true on the wealth builder side.

Michael: I would say, and so that's why it gets reflected in staffing the way that it is, right? When there's more just, "I need my money out of my account. I have to get my RMD processed," there's more sort of support operational processes, you end out with a higher ratio of operation support staff to advisors on the retirement side. On the wealth builder side, there's less investment dollar management things happening and money moving around. There's just a lot more planning things happening. And so wealth builders end out with more advisors and fewer operations on a relative basis.

Gideon: Exactly. And it's based on the stage of life of where the wealth builder clients are at. So if you're 43 years old, dual-income household, you're making $500,000 a year, you have 3 kids, well, we're going to be talking about education planning. We're talking about life insurance. We're talking about estate planning. We're talking about cash flow and your bonus coming each February and the RSUs [Restricted Stock Units] that come quarterly. And you're thinking about buying a vacation home, and you're thinking about buying a larger primary home or moving to be closer to family, and now you want help with your older family. So there's a lot more planning work, so that's why the advisor count.

Operationally, it's a lot smoother as well. Most on the wealth builder side, we're using Altruist as a custodian. And between our wealth builder clients just being a little bit more, I don't want to say intuitive, although I guess I just did, but just, digitally, everything's a lot smoother. And then combining that with a kind of forward-looking digital custodian, it makes the operational that Tyler can really handle everything because it's just a lot smoother on that side of things. And I'll point out, that's kind of answering from the client, right? How do we deliver the best value to our clients in the retirement and income side, making sure that the operational support is there to support Lance, Kitty, and Dru? And on the wealth builder side, it's really over-leveraging the financial advisors because that's what creates the most value for clients.

If I change the conversation to more of a business side of things, right, because you can say, "Well, you have three advisors but a lot less revenue on the wealth builder side," I would say, we're skating to where the puck is going, or we're trying to of, "Hey, we know how many new wealth builder clients we're taking on. Over 75 new clients that we've done financial plans for each of the last three out of the last four years, we know how much new assets under management." So we're building the advisory team. We're building the advisory team, understanding where we're going to be at the end of 2025 and 2026. Even at the moment, we understand that three advisors for the amount of...we're kind of building it out, understanding the growth trajectory over the next two to three years based on what it's been the last two to three years and the fact that it hasn't yet slowed down.

Michael: So you said part of this was...I'm struck on the custodian side now, that this is the younger, more digitally native clients. You picked the digitally forward custodian with Altruist. Does that mean the retirement and income side does not use Altruist and uses a different custodian?

Gideon: Yeah. We use Fidelity on the retirement and income side. And it's not 100% of people in one, but by and large, yeah, retirement and income is at Fidelity. Wealth builder is at Altruist. And again, all of this, we launched our RIA 13 months ago, so both custodians are obviously new, and this all started last year.

Michael: Okay. So then, I guess, just bring me back for a moment. So, why different divisions? Why so distinctly stated in different divisions, not "just" in terms of how you're marketing it, although I suspect we're going to come back to that moment, but literally how it's staffed internally?

Gideon: Yeah. So I would say it happened organically. I'm probably making it sound a little bit more official than it really is, just for the point of explaining the differences. It really started as marketing, who are we trying to reach out to, right? We always talk about niche marketing. We want to tell our prospective clients, "Hey, here's who we specialize in working with. Our wealth builder team works pretty much exclusively clients in their 30s, 40s, sometimes early 50s, but mid-career professionals at a certain income range." And so it allows us to find the right people and then do a great job for them.

From a staffing standpoint, it really just happened organically. We started...most of the wealth builder side of the team only came on board, was only hired in the last four to five years. Whereas most of the retirement and income side has been with Drucker Wealth for a lot longer, not everybody, but Kitty has been with us 15 years, Neisy 10, 12 years, Giselle 7-plus. So the staffing just was a little bit more about going to who needs more help, where resources need to be allocated, and letting that happen organically. So at this point, it looks like we have these two neat divisions from a staffing standpoint, but it was more about, "All right, who are we taking on as new clients? Where is revenue coming from? And then, really, where do people on the team want to be?"

On the wealth builder side, we hired our first non-me advisor in 2021 purely because we had so many new clients that I couldn't handle the inflow. At the time, we said, "Hey, I think it makes sense to have a new advisor to work with some of these clients that are reaching out," and then we did the same thing again in the end of 2022, beginning of 2023, when our next advisor, Sarah, joined. So it really did just happen organically as business evolved

Michael: I, interestingly, hear that sort of "It's shaped up this way" as opposed to "We had a grand division of two different divisions with two different staffing infrastructures." But I guess I am struck with how different they shaped up to be, right, just sort of as simple a sense, a three-to-one advisor-to-support ratio versus a one-to-one advisor-support ratio. Those are really different. And I get that it's because different clients, different needs. It very much makes sense to me in how it's staffed. But if you came in with, "Well, we're used to this is how many clients an advisor can support on the retired side. Now we're just going to do the same thing with the younger client side," it wouldn't work.

Gideon: Yeah, it wouldn't. And even just to that, just so the numbers make a little bit more sense, with the three advisors on the wealth builder side and one support advisor, the newest advisor, so one of the three, was a support advisor for the other advisor up until the last three to six months. So it was more of a two-to-two. And then she kind of evolved, and now she's starting to work with clients that are coming into the firm and building her own client book, so to speak, within Drucker Wealth. And then we're going to be hiring another support advisor over the next three to six months. So the numbers, I think, just at this exact moment that we're speaking are a little bit different, but it's just a snapshot in time because, obviously, once you transition somebody in a support role to a lead advisor role, well, then it takes time to find the next person to fill the gap on the support role. And that's the exact...that's a snapshot of where we're at right now.

Michael: Okay. But the client...so I guess, with the new advisor into a lead role, where do you feel you are relative to capacity for the wealth builder side? If you're at 3 advisors for close to 300 clients, but someone just came up, are you close to capacity, or are you like, "No, no, we could go to 400-plus now that we've got this expanded advisor capacity?"

Gideon: Yeah. So I do think we have capacity, but we will be hiring another advisor in the next three to six months. We're actually talking about hiring an internal CFP to really focus more on the building out of plans, of the upfront financial plan, so the start of more of a financial planning department, as it were, to when a client first signs up to build out the financial plans behind the scenes, run the input meetings, and kind of deliver them to the lead advisor, and then deliver the plans together. So we're in a little bit of a transition period, I would say, right now, just because the one advisor kind of stepped up in role, and we're going to be hiring another internal CFP or a new internal CFP and then a support advisor after that. So I would say we're at capacity now, but we are thinking ahead of understanding how many new clients we've been adding and what that's going to look like.

Analyzing The Profitability Of Retired Vs Working-Age Clients [31:16]

Michael: And is there just an overall difference in profitability between these?

Gideon: Yeah. So I would say, yes, just from the raw numbers of it, the retirement and income side, having done this so much longer, kind of gotten into a rhythm, working with clients for 20, 30-plus years, in some cases. It is more just profitable day-to-day at this point. But quite frankly, the wealth builder division, because of our growth, I would say we're at that point right now of reinvesting into the business, making sure our client experience is always top notch, that is the most important thing to us. Marketing is great, but if you're not doing a great job for clients and you're not delivering on everything you said you were going to, then they're not going to stay with you. They're not going to introduce friends and write Google reviews and do all the things that has helped kind of grow us exponentially.

So I would say, right now, we're at this point where the wealth builder division is a full cup, if you think about it as a water bottle, but it's only 20% full. And we know we can fill up the rest of the water over the next year or two. And we're at that point right now. So just in the simple fact, quite frankly, that our wealth builder division, because of who they are, average client is 42 years old, making $400,000 to $500,000, and that number keeps growing, they're adding $5,000 to $10,000 a month into their accounts. When bonus time comes, they're adding $200,000 into their investments. They're maxing out their 401(k)s that we're managing.

So we really got to see, over the last four or five years, it's starting to happen because we have a long enough track record of seeing average revenue per client, what it might have looked like when they became a client. We're managing $500,000, and now, four years have gone by, and obviously, some market growth is part of that. But most of it is just they're adding a lot more to their accounts, and they have a lot more going on in opportunities. So we're seeing our average revenue each month, seemingly, is going up just because our clients are adding to their accounts, and they're just at that stage of life.

And then the second part, we've become really intentional of making sure that each client is paying a minimum financial planning fee. We've graduated or had to kind of move on clients last year, 2024. We graduated over 25 clients that just were below really what made sense to be working with. They had the best deal in town, which is good for them, but it didn't make sense for us. And 25 other clients, they started paying a minimum financial planning fee on top of their 1%. And then we've increased that minimum planning fee for 2025. So we realized that, in the beginning, when you're just building this, and again, this all happened organically, right, so in the beginning, I'm working with anybody...what's the expression in BD world, anyone that can fog a mirror?

Michael: Yeah. Yep.

Gideon: In our case, it's anyone that would do an upfront financial plan. So that alone made it a little bit better than it otherwise would be. But we've really taken the last 12 to 18 months, and that's an ongoing project, we're not there yet, of making sure that every client that we are committed, we're providing all this value to, is at least paying a minimum fee so that we are increasing profitability and that our larger clients are not paying too much more relative to our smaller clients. But as you know, that's an evolving conversation, and it doesn't happen overnight.

Michael: So then help us understand more what the fee structure revenue model is for the business overall, I guess, across the two divisions. It sounds like, again, they're a little bit different in fee structure.

Gideon: Yeah. So it's really the same fee structure. We've just had to put a few, maybe a minimum planning fee parameter on the wealth builder side just because these clients are younger, newer, and because we're actively promoting and doing a lot of content creation and marketing around the wealth builder side. But every new client coming into Drucker Wealth, regardless of division, regardless of advisor, everybody starts by doing a financial life plan, is what we call it, but it's an upfront financial plan for a flat fee. We take two to three months. We really look at every aspect, comprehensive planning, right? Every advisor talks about it in our parlance, how we talk about it. We go through every aspect of their financial world, spending habits, saving habits, how money moves throughout their financial life. How does money move between their checking, their high-yield savings, their investment, their 401(k)? Do we need to dive a little bit deeper in budgeting? Sometimes we do, sometimes we don't.

And even I'll say, somebody making $700,000 a year, they're saving a great amount, but because they're making so much, what we call a dangerous amount of money, they have no idea what they're spending. And not knowing stresses them out, right, even if they're saving what they should be. So we will spend a lot of time there, looking at their estate planning, their insurance, their cash flow, their investments, and starting to model out some of their financial priorities, goals, what they're trying to achieve. So all of that, over the first two to three months, we build out this plan. We charge half of the upfront fee. We charge half the fee upfront, half at the end of the plan after we've delivered it. And that's how everybody starts.

Michael: And what is that planning fee? How do you set the fee?

Gideon: Yeah. So it's anywhere from $4,000 to, really, I'd say $7,000, $8,000 on the high end. And we tier that based on household income. So our starting fee for an individual is $4,000. For a couple, it's $5,000. So if two people are involved in the plan, $5,000, and that's if you're making under $500,000 of household income. If you're between 500 and 750, it goes up to $6,000. And if you're 750 to a million, it's $7,000. And then, after that, it's a little bit more negotiated nuance, just understanding what's going on. I think there's no perfect way of setting that flat fee. Income seems to make sense. The more income, the more clients typically have going on, traditionally, a little bit older, even within the wealth builder side, and that seems to work. And we have this on our website. I think that's one of the best things we did when we were revamping our website a few years ago. And I can come back to that. So clients know from day one, whether they're listening to my webinar or they're going to our website, exactly what those flat fees are, even before they set up their first call with us.

Michael: Okay. And so, as you're building out this fee structure, I guess it kind of scales with income, but it's not literally a percentage of income. We're not pulling out a calculator and doing the math. But in practice, it is kind of a "moves with income" with some break points, functionally.

Gideon: Yeah, exactly, for this upfront fee. And, yeah, I've seen the calc. We want it to be clean, transparent. We want clients to know. They look at our website, they know what they can expect both in terms of the service model, the pricing. And so I think for those reasons, we want to keep this upfront fee as straightforward as possible.

And then, once clients go through this initial financial planning engagement, we like to say they can go in one of two directions. They can say, "Hey, the plan was great, phenomenal, answered my questions, understand what I'm doing, or even validated some of the decisions I'm making, or pointed out some things." Sometimes clients come to us, and they already have an advisor, and they really want a second opinion, or they want to know what's missing. And we say, "Yeah." So at the end of the plan, you can say, "Great. This all makes sense. I'm going to go take your plan and implement this on my own," or, "Bring it back to my friend who's my advisor," or, "I'm going to go implement the decisions just internally as a family. And adios." Totally fine. We got paid for the work we did over that two- to three-month engagement. You got everything you wanted accomplished, and then you go on your way. That's option A.

Option B, obviously, is they can say, "Hey, this all makes sense. Now, I'd like your team's help to implement the plan. I'd like you to become our ongoing financial planning and wealth management team." And that's when we would open the new accounts, transfer what needs to be transferred, set up the monthly saving strategy, do the 401(k) rollovers if that's part of the plan, set up the insurance or the estate planning recommendations to be implemented. And then they'd have semi-annual review meetings with their lead advisor. Their team is available whenever they have questions, and it just kind of builds out the ongoing phase of the relationship. And on that side, that's just assets under management fee.

Michael: Okay.

Gideon: Transparently, most clients do choose option B. From the start, they're reaching out because they really want that sort of ongoing partnership over the long term. But I think it's really important, and there's all different ways of doing this. I think it's really important that clients know, "Hey, I'm getting this upfront plan. I'm paying a flat fee. I know what I can expect. I can analyze it, validate it. I know at the end of two to three months, I'm going to have a lot better picture of what this ongoing relationship would look like. And then I can feel more comfortable to make that second decision afterwards rather than we meet twice, and I'm going to hand over my life savings and have you guys manage it, indefinitely." I think this plan is a really good way of kind of gradually bringing them into our planning process, the way we speak with clients, the way we do things for them to make that second decision a few months in.

Instituting A Minimum Fee To Ensure Profitability For Accumulator Clients [39:58]

Michael: And so, I think you said earlier, is there some asset minimum or minimum fee that they do have to pay to do the ongoing relationship after the initial plan?

Gideon: Yeah. And this is a moving target, so I'm going to get into the numbers. All of our existing clients last year, anybody on the wealth builder side, anybody that wasn't paying, that didn't have at least $250,000 of assets under management, we reached out and basically said, "Hey, we're growing. We're growing. Here's everything we're doing for you. Just quite frankly, we need to raise our fees in order to keep providing this level of service value. We're sure you can understand why and how. Here's what it looks like if you want to pay these new fees, which would effectively just be $2,500 flat fee paid quarterly on top of the 1% we're already managing." So if they're already $100,000 under management, it'd be 1% of that plus $2,500.

Or if that doesn't make sense, if you're not comfortable, we're happy to introduce you to another custodian. We can give a few recommendations of hourly advisors that might make more sense if that's the direction you're looking to go. So we kind of laid that out all throughout 2024, really, kind of, mostly at the end of the year. And then, at this point, so everybody, 2025, all new clients, the minimum household fee is $5,000 annually.

Michael: Okay.

Gideon: I felt it was tough to go if a client is $100,000 to say, "Hey, you were paying us $1,000 a year. You're going to go to $5,000 a year." I didn't think we could do that in such a short period of time. It just wasn't right. It didn't make sense even if I know the value we're providing is such that we should be charging a minimum of $5,000. So that's why the numbers are a little bit different because I kind of grandfathered existing clients into what the lowest point I thought made sense, even if those clients are kind of still on anomaly or an exception, but at least they're an exception in a way that's still we are generating profit from that client relationship.

Michael: So I want to make sure I understand just mechanically how this works when you said it, because I thought I heard you say the... So if they're under 250, there's a $2,500 a year minimum fee, platform fee, and they're still paying an AUM fee for their $100,000 or some number below the 250 minimum. So it's "$2,500 and" to try to get the total revenue up a little bit higher?

Gideon: Correct. And a lot of those clients, quite frankly, we took this one by one. If somebody had $230,000, we kind of said, "Hey, you're going to pay a flat $2,500," because they're so close. I'm not trying to have them pay that. That would kind of go against what I was just saying of not quadrupling their fees. Most of the people that are paying both, it's really below $100,000. So it's that 1% is a really small amount.

Michael: Really small. And so the idea is once they get to $250,000 of assets, that fee gets waived?

Gideon: Correct.

Michael: Okay. So...

Gideon: And again, that's just for the existing clients that we were already working with. Clients that have been coming on the last few months are aware from day one that the minimum annual fees are going to be $5,000.

Michael: So, I guess, can you explain a little bit further just how you literally rolled this out, broke the news?

Gideon: Yeah. So looking back on it, and this all happened throughout 2024, I get anxious about a lot of things, don't get me wrong, but this just really wasn't one of them because I really was, and our team of advisors, just really confident in the value we're providing clients, what we're doing for them, the fact that most of these clients had been paying a very small amount for a few years as we're having multiple meetings a year. We're available whenever they have questions. It is an in-depth relationship. So we were confident in what we were doing and the value we were providing. And also, our clients, even the clients paying a small amount to that point, their income, all of our clients' incomes are above $200,000. These are clients that if they want the ongoing financial planning relationship and they value the work that we're doing, they can pay for it, right?

This isn't a matter of they don't have the funds. It's, do they think the value we're providing and the relationship...and not even the value, because sometimes I think, advisors, we can make it too much about us. Sometimes it's just the stage of life. Clients might say, "Hey, you guys were so helpful in getting me set up the first year or two. I had no idea what I was doing. I didn't know what my 401(k)…I didn't understand the insurance or the RSUs, but you guys did all of that. And I'm not married, I don't have kids, I don't have all these other things going on, so thank you so much. But I got it from here." And that's not a reflection on our value. In fact, we got them to where they are. It's just the moment in time of they didn't feel like they needed help.

So anyway, that's kind of how we went into just the thought process around it. At terms of how we actually...I wrote out kind of a long email, just kind of laying out, "Hey, here's where we're at as a firm. Here's the different things we're doing for you. Here are the things that we're actually adding to the mix in terms of what we're able to do for you and new service models, new things we're doing. And here's what's going to be implemented three months from now. We want to give you enough time to really think this through, ask any questions you might have." And so we sent that email with a link to their individual advisor's calendar and said, "Hey, once you've gone through this, set up some time. We're happy to discuss it, happy to answer any questions, and talk it through." And that's the way we did it. I thought the email would be a good kind of lead-in so they really can sit with it in their own time, kind of lay it all out together, rather than just you're on a Zoom, you're on a phone, and just saying, "We're increasing your fees," and then they can't hear anything else you said.

Michael: Right, because they're doing the immediate emotional kick-in of like, "My fees are raising. Ahh!"

Gideon: And you can say that. Yeah, that's us being a wimp as well. Maybe, I really think sometimes people can read, kind of process information in total, and then they can come to us once they've thought it out, kind of ask their best questions rather than their first questions. And that's exactly how that laid out. And again, this wasn't a huge amount of clients we're spending a lot of time, so I don't want to make it sound like this is a bigger thing, but I know this is a challenge for a lot of advisors. And, yeah, we had that of, "Hey, these are clients that have been with us for a few years and got us started when the wealth builder..." I don't even know if we had the name, the wealth builder division. It was just, "Hey, I want to work with young clients because I'm young. So work with us," which is what it was at the time. But as we're growing, as we're bringing on more clients, we really thought this was necessary to get us to that next point.

Michael: And so you said the start of this was basically laying out, "Here's what we're doing for you now. Here's what we're adding going forward." What were the things? How did you frame up what we're doing for this fee, things where you're looking to add in the future?

Gideon: Yeah. Some of it was just kind of organizing what we were already doing, but just what happens throughout the year, right, sometimes you're not looking at a list all at once. Semi-annual review meetings, going through their tax return, talking tax strategy throughout the year, talking about their estate planning. And a lot of our clients are having new kids every year, every week, seemingly. If anybody wants to know those popular names for children these days, they can come to our team because we have that on lock. Which involves updating their insurance and updating their estate planning and talking about their education funding targets, right? It's its own value out of, "Hey, how much are we funding towards your education goals? How does that impact the retirement planning work that we're already doing? How do we think through your emergency reserve?" Because, again, that's not a static thing for most of our clients.

Every year or two, they have a big...they're doing a renovation, they're buying a new home, and that's an entire conversation by itself on top of, obviously, the investment management, the trading, the cashiering, setting up their high yield savings account, their cash accounts, which most of our clients have at Altruist. So it's laying out...I'm not saying anything that I'm sure most great advisors aren't doing, but just kind of laying that out all in one organized fashion so they really understand what the relationship is all about year to year.

Michael: And so you're bullet-pointing this out for them, "Boom, boom, boom, boom, boom, we do all these things?"

Gideon: Yep.

Michael: And then, do you also try to frame what you were adding, this new services rollout as well?

Gideon: Yeah. And some of that was not like, "Hey, this is happening on day one." But we just hired an internal estate planning specialist to help our clients with their estate planning documents that are created through wealth.com. Obviously, we're not estate attorneys but somebody really guiding clients through that entire process. Ultimately, we want to build a tax division. We've partnered with Sora for loan and finding new refinancing opportunities. So just a little...it's less about, "Hey, we're doing these new things, and this is why you should work with us," and more, "Hey, here's why we're growing, what we're trying to become, and what we imagine the firm to look like over the next three to five years." Just because, I think, if clients say, "Hey, I want to hitch my wagon to you guys, not just because of what you guys are doing today, but kind of, what can I imagine," again, these clients are 40, their income, their growth trajectory is going to look a lot different 5 years as it does today, and they want their advisor to be the same thing. We're growing, we're evolving, and I want clients to know that as they're thinking about their future and ours.

Gideon's Path Into The Financial Advice Industry [49:17]

Michael: And so, now, zooming back out for a moment, you said that you started down this road four or five years ago. It's now closing in on 300 clients. It's a million or two dollars of revenue in this wealth builders division. So, where did 300 clients come from in 5 years or so?

Gideon: Yeah. So, without going too much into my background, I will just give a little bit of how I joined Drucker Wealth because that story kind of brings us to the marketing. So I grew up...I don't think I've said this yet, I grew up in the business, so to speak. My dad's been a financial advisor, running his own business my whole life and his whole life since he was 21. And personally, my dad's been my hero, role model, best friend, kind of all wrapped in one my whole life. So, as a kid, naturally, I wanted to do what my dad did, just for no other reason than he was my dad, but I really liked that. He worked for himself. He had his name on business cards. He made things happen. I loved coming in on holidays and mailing out his client appreciation letters, and all that stuff when you're a one-man shop and running a business. It really becomes the family business. Everybody is involved and hearing stories and all that.

So that was kind of my lead-in. I never wanted to do anything else. And I joined Drucker Wealth at the end of 2016, beginning of 2017, actually, after serving as a paratrooper in the Israel Defense Forces for a few years. That was kind of my after-college before joining Drucker Wealth, hardest, most meaningful experience of my life. Anyway, so I came in after that. At the time, and again, I think this is just kind of helpful now that we've already kind of shared what the firm looks like now, we had five full-time people at that point when I came in at Drucker Wealth, and really, my dad was the sole rainmaker, for lack of a better word, on the team. He did the prospecting, closed all new business. Any new idea, any new initiative came from him. And the team around him, including Kitty, the advisor, the team now, everybody was there to kind of manage, support the clients that he brought on, and kind of moved as he had new things to bring to the team.

So I came in at that point, and really, my first six months, I sat in on my dad's meetings, right, taking notes, just learning whatever I could, asking questions, learning the business from the ground up. I did a lot of the admin or assistant prep work, right, just to pay my dues and learn, "All right, what do we do?" prepping for meetings, all of that. But at the same time, day one, I knew my job was going out and getting clients. That was...I couldn't be in this business if I wasn't developing my own client relationships, closing business. If I couldn't do that, quite frankly, none of the other stuff mattered. And again, that's a little bit of when you're in the BD environment, but it was more...it came from myself. I knew I wanted to produce business. I need to generate business like my dad, and I just knew I'd never be comfortable being the stereotypical next generation that comes into a great business and is just tasked with keeping the lights on, gliding along. I'm first to admit, I have a little bit of an ego chip on my shoulders. So I knew I wanted to build my own client relationships, prove I can do it.

So that was always day one. It was, "All right, how do I find my clients?" And I tell all of that because, at the beginning, it was really twofold. It was orphan clients at the BD, right, clients that had my dad's name on their statements, but they weren't really our clients. We just got handed them when an advisor left or what have you. So calling those clients. And then what the insurance companies call their natural market and just kind of filing that out. So that was really my first two years, was just cold calling orphan clients, reaching out to friends and friends of friends, doing a small Roth IRA here, and small insurance policy there. But those were, looking back on it, all the marketing that came after, I would spend my Saturday afternoons with a stack of 200 "orphan." I know there's probably a better term for that, but this is what they were called.

Michael: That's how I grew up knowing them, orphan clients.

Gideon: Yeah. So I would call, sit on a Saturday afternoon in what I term the most depressing office space in America, and I had a rule, I had to get at least 50 people on the phone, didn't matter what happened, but I had to get 50 people on the phone before I could meet my friends wherever, bar, whatever they were doing. I was in my mid-20s. And that was not the most fun entry point and a lot of rejection. A lot of, "Oh, you're my advisor?" They were warmer than, I guess, if our names weren't on the statements, but not that much warmer. To them, we were the insurance agent or whatever that was calling them from a policy they set up 15 years ago, and they don't know anything about who we are. So that was really...that started kind of everything, and I did that for a few years.

And just another kind of, I don't want to say point of failure, but point of just I started doing these wine and finance classes with another advisor at the broker-dealer that brought me in to speak at these events at companies where a sommelier would talk about wine, I would speak about finance, and we'd go back and forth for an hour or two, and really good experience looking back. I spoke at small companies and at large companies. I spoke when people were showing up late, were disinterested. Just getting comfortable speaking in front of a group was fantastic. And, yeah, you're talking to three people that are 100% there because they're getting wine and do not care about anything...

Michael: That's a good way to draw some people out.

Gideon: Do not care what I have to say. And so, again, I don't think...I think maybe I got one client from that entire endeavor, but it was a good learning experience to teach you how to speak in front of a room and speak on your feet and learn and follow up. That was the big part, leaving your card and then calling and following up, and sending an email, and all of that, but didn't actually net that many clients. And I hope that wasn't too long, but that was kind of the first 2017 through 2019. A few things hit just because of the law of numbers. If you're reaching out to enough people, you're going to get some big clients. And I was able to kind of set that up for my dad, and that kind of kept the lights on for me as well.

Writing A Blog And Book To Attract His Ideal Target Client [55:29]

And then, 2019, I kind of just looked around and said, "All right, this cold calling is not how I'm going to spend the next 30 years, building a book of business." It's, in my opinion, soul-sucking. I didn't enjoy that. The idea of networking, going to networking events was the last thing. It's just not my personality, the last thing I imagined doing. And I always loved to write. That was always kind of my thing in high school and college. I was an international relations major. I was on the student newspaper. I had a popular blog at the Times of Israel after college. So I always loved to write. I genuinely enjoyed it. I was pretty decent at it. So I started writing blogs for HENRY's, high earners, not rich yet, and then I started...I had the idea of turning the blog, or all the blogs, into a book. And that was really the turning point for all of this.

I spent 2019 sitting in coffee shops on Saturday afternoons writing this book, and it came out in February of 2020. It was launched. So "How to Avoid H.E.N.R.Y. Syndrome" was the name of the book. It came out right before the pandemic, and it did pretty well, not in terms of books sold but just kind of...I was interviewed by Business Insider. It kind of made waves a little bit, I think, mostly just because of that HENRY acronym that was starting to get really popular around that time. And so the book started to do well. And then I kept writing, and that started to build a little bit of an audience. And then we partnered that with a webinar series where I started doing these free webinars twice a month aimed at high-income earning mid-career professionals, people in their 30s and 40s, and we used the book cover as the advertisement on Facebook and Instagram. And so we started doing these webinars, and then everybody that signed up for the webinars would get on our newsletter list.

And I started building out this, at this point, it's 90 separate email newsletters where once somebody signs up for the webinar, downloads the first chapter of my book, and those two things could be independent, they start getting these newsletters twice a week every Tuesday and Friday. And all of that content marketing started slowly at first, for sure, but slowly started to compound on each other. And at the bottom of every newsletter, at the end of the webinar, I had an offer to set up a 15, 20-minute right-fit call. And that started going, and I still do these webinars twice a month. We've done it a little bit more evergreen at this point just as it's gotten bigger, but all of the turn in the business and the turn of the wealth and the start of the wealth builder division is when I moved from just kind of following what seemed like the natural BD…of orphans and my natural network and started writing and doing content writing and letting that kind of evolve on its own over time.

Michael: So it sounds like the starting point for this journey was an initial blog targeting HENRYs.

Gideon: Yeah. And blog is probably even too...it was more like I would write an article for clients. So it was really internal facing, and then we post it on Facebook. And so that was really it. Yeah, it wasn't a public-facing thing, and the blog didn't get any traction by itself, for sure. It was really when I started to write the book that...just the fact of having a book, is...the book, I was young, it kind of stood out. So the book is really what got everything going, but the book only came about because I was doing a lot of writing already for these client newsletters and blogs. And then the start of the book were all these blogs that I put together and then started elongating everything I was writing and making it all flow into a book format.

Michael: So I'm fascinated by this. So, what were you writing at the initial blog stage?

Gideon: Yeah. So it was nothing life-changing, quite frankly. I'm talking a lot of Nick Murray, hey, investing for the long term, and how do we think about stocks versus bonds? How do we think about a pre-tax 401(k) versus a Roth 401(k)? How does term insurance for a young person fit into the mix when we're thinking about buying property versus renting property? What are the kind of benchmarks? What do you want to think about? So just, again, none of this was super different, super crazy. I'd say one of the ideas that I think got popular early on with the people I was trying to reach was this idea of making a dangerous amount of money, because, again, a lot of my clients, at that point, they earned a little bit less, but what I call a dangerous amount of money is if you're making mid-6 figures, 300, 400 [thousand dollars], you make enough day-to-day to be totally comfortable, right? You don't have to worry about where you're going out for dinner, trips, how much is in...you're maxing out your 401(k), you're doing all these things, but you're not making $5 million, $10 million that you don't have to think about a long-term plan, right, where you're just like, "Oh, I've set it and forget it. I'm going to be totally fine."

So this idea of a dangerous amount of money is, "All right, I'm great, and I'm comfortable day-to-day, but I still need to make a plan for the long term." And that dichotomy can feel a little unnerving, right, for families in that situation, where it's like, "All right, I don't know where things are going, but I don't have any money issues." So that idea, again, that's just like one example, but it was something that I intended to write a lot about and use some client stories to drive the point home. I tend to write a little bit long, and I'm working on that, but I do think that also gave a little bit more credence to everything because I wasn't trying to write a paragraph of boilerplate. I really was writing 1,500, 2,000-word blogs, and I figured people that were interested enough to read that long would then reach out to us, because if they cared enough to read the whole blog, they probably care enough to find out more and see how it all comes together.

Michael: Yeah. I found a very similar phenomenon as we started putting out our long-form content on the Kitces.com end as well. There's all this discussion of people who have short attention span, so they don't want to read anything long. That's true for 98% of people, but 2% of them do read long things, and the people who tend to read long things are people who have a lot of money at stake and significant problems that they're willing to spend time on, otherwise known as good prospects.

Gideon: Exactly. Right. What they say on your website, you want to repel 99% of people that show up there.

Michael: Yeah.

Gideon: But you want the 1% to be exactly who you're meant to serve. And, yeah, that's exactly how we think about it. It's also how we think about the upfront financial planning fees, quite frankly, right? If you're engaged enough and willing enough to pay an upfront fee and you see the value in professional advice and expertise and relying on an objective outside party, well, that's somebody we want in our universe, right? That's somebody that's probably going to be a good client if they see the fee and they're not, "Oh, my God, why would I pay a fee before you even manage my money?" Well, somebody that that's their first instinct is probably not going to be a good long-term client anyway because they just, for whatever reason, don't value financial advice and expertise. Same thing in terms of somebody that's committed to reading a long blog or listening to a two-hour podcast or what have you.

Michael: And so you were writing these blog posts how often do you say at the blog stage?

Gideon: Yeah, I don't remember at the exact start, but we post, we publish, or send out at this point and for the last few years at least, we send it out twice a week. I would say I probably write a new one at least every week. Really, the last year with the firm transition and just everything new we're doing, a little bit less, quite frankly. But I got in a rhythm where I was writing at least a blog or two a week, I would say.

Michael: Okay. So, how long...?

Gideon: Usually, early morning, sitting with my coffee, having an idea that I keep on my notes on my phone, and then just taking that, or that I come up with, I'll go for a run every morning, think about an idea, put it down in a quick note, and then write it out the next morning at 6 a.m.

Michael: And so I'm going to presume then you're a pretty fast writer or typist. How long did it take you to crank one of these things out?

Gideon: Yeah, 30 minutes for it. Yeah. And I would say, with all of this, perfect is the enemy of good. And I'm definitely a type A perfectionist, and honestly, it's why I haven't done videos yet because I know I would obsess about, "Oh, I wanted that word to come out a little bit better. So let me redo this ten-minute video that was great, but that one word could have been better." I've gotten over that with writing because I can spend as much time and make it perfect, and then I'm off. So videos are our next thing, and I'll admit that's just a personal challenge I need to get better at of being okay. If I mostly get the point across and it's not 100% of what I want, it's good enough. But I'm able to do that writing and kind of get it out there and let people read it without going through it 15 times.

Michael: And so, how many of these blog posts did you write before you said, "I think I have a book here?"

Gideon: Not that many. I think the book...and my dad wrote a book earlier in his career, not at my age, more like when he was, I'd say, in his mid-40s. And so it was part of his...I think it was his idea probably of like, "Hey, you're a good writer. You enjoy doing this. You should write a book at some point." And I was like, "All right, well, I can write a book now because I'm not getting as many clients as I want, and I don't have that many clients right now. So now seems like a good time."

Michael: "I've got time now."

Gideon: Yeah. Now seems like a good time to change what I'm doing and how I'm doing it. So the book didn't come out of nowhere. He had written a book, and it was successful on his end as well. And so that's kind of how it started, and that's why I think it was a little bit earlier than maybe it would have. I didn't have 100 blogs. I might've had eight, and then I was like, "All right, now, let's go build this book around the blog."

Michael: And so, how did you actually go about getting the book done?

Gideon: Yeah. So I did all the writing myself. Again, I enjoy it. It was a fun challenge to get to put it all together. I had a long Google Doc that I just kept updating. And then we had a publisher. And I'm actually finishing my second book now, and we're using her again, Sara Stratton at Redwood. And she helped me put the book together, from editing, publishing, handling, getting it on Amazon and Barnes & Noble, and the cover design, and all the things that I would have no idea about, like getting it licensed with the Library of Congress, I think it was, I could have made up what that's called, but all the things that I had no interest in, and handled our pricing, which I really had no interest in because I knew I'm not becoming a famous author.

This was a way of getting financial planning clients. I didn't really care how much we made. And I actually dedicated the proceeds of the first book to Flags of Honor, a veterans organization, 100% of the proceeds, which isn't a big deal. To be clear, I'm not patting myself on the back. The book did not make that much money, and I donate to the organization anyway, but it just seemed like a good way of getting more publicity out there. So she handled the pricing mechanics and really all the things outside that I had no knowledge of or, quite frankly, interest in of publishing a book in the first place.

Michael: And so, how did it work? You get a royalty from the book they published, you get the revenue, but you pay them a flat fee to make this happen. How do you actually engage...

Gideon: The publisher?

Michael: ...the publisher this way? Yeah.

Gideon: Yeah. It was a flat fee for the work they were doing to get the book launched.

Michael: Okay. And just curious, do you recall, what did it cost?

Gideon: I honestly don't.

Michael: Just even the neighborhood, is this thousands of dollars? Is this tens of thousands of thousands of dollars?

Gideon: No, not ten...thousands of dollars, I want to say. Under ten.

 

Driving Client Growth Through Regular Webinars [1:06:43]

Michael: Okay. Okay. And so you publish the book. Redwood Publishing makes it happen and appear on the internet and Amazon and all the places that books appear when you hand them the transcript. So then remind me again, so what came next? Is this the point that it starts going to webinars?

Gideon: Yeah. So pretty soon after the book launched, I started doing these webinars. And again, it was COVID. Everybody was in their homes. I had done public speaking. I liked speaking in public. I had done these workshops, seminars, even if they weren't that successful. And so we figured the webinars were good, and I have to credit my partner, Bridget, who's our head of people and business development, the two of us, we threw a lot of stuff against the wall and said, "Hey, we want to start using Gideon's writing ability," the content creation, the fact that a lot of clients are at large tech companies and they speak to each other, right, and they're in company Slack groups. And we just thought, "Hey, if we can make inroads in this sort of group, we can stay here. This is something that could have legs that could build out over time."

So we started doing the webinars, advertising on Facebook and Instagram, and then we would send it to our clients. We started sending it to clients, people that were already on the newsletter series. And all of these things kind of...the reason I love content marketing and the way we've built this out is everything, every dollar you spend compounds on itself, right? So if I'm writing a blog and I send it as a newsletter to prospective clients that get on our list because they downloaded the first chapter of my book, and then they see my webinar, and then they're right on the list, well, that blog, they're going to see it a few times, and they're going to maybe be able to...if it's something that's really specific to their life, they're going to pass it to a friend. If I'm writing about buying a home and their best friend or their sister is buying a house, well, they're probably going to send it and say, "Hey, this might be interesting to you."

So I like the idea that any money you're spending on advertising and any time I'm spending writing or doing a webinar, it's all going to come back as opposed to, I don't know, a custodian referral program fee. And again, it was the first thing that came to mind. Anything where you're spending a dollar to, hopefully, or a lead generation service, you're spending the money, but then if you don't get the client there or the prospect that came out of the thing, then kind of that money is down the drain, as opposed to we have a new client from last week that she joined our mailing list in 2021. She's been getting emails from us for four-plus years before it made sense. It was the right time of her life. I think she was single when she reached out. Now, she's married with two kids. Things have changed, and now she wants to help. And we've been top of mind for her for years. And so I like that idea that everything is building and compounding on itself over time.

Michael: So, what were the webinars actually about? What was the topic focus of the webinar?

Gideon: Yeah. So a few different things. They're all the same, and I make small adjustments every time. A lot of tax planning, just helping people understand, "Hey, what is the pre-tax bucket of money? What is the after-tax?" the tax advantage or Roth, a little bit about just our financial planning process. I explained our financial life plan process, what it covered, how clients thought about it.

So I really tried to strike a balance between just pure information, things that they can think about, and help them understand that maybe they didn't know with, "Hey, here's what it looks like to work with Drucker Wealth." And I always thought, trying to hide that you're trying to get clients by doing this free webinar is a little ridiculous, right? Everybody knows. Anybody that's hosting content is like, "Hey, I want to provide value, I want to give an education, but I'm also trying to get... I want to, if we're a good fit, work together." So I was always very upfront of, "Hey, this is our financial planning process. Maybe you're going to want to work with us. Maybe you're not. Maybe you're going to want to do everything I'm talking about on your own. But if you're interested in financial planning, you should be thinking about all of these things." I'm going to present it the way we work with clients, but you can kind of think about this in your own world as well. And I just think being upfront of, "Hey, here's what we're trying to get out of this, and here's what this all looks like," tended to resonate because I wasn't trying to hide the fact of...

Michael: I like that.

Gideon: ...at the end of this, you can do a financial plan. Well, yes, I assume that, at some point, you're going to do something. And I put that at the start and at the end and made sure that I talked about real, just tax strategy and ideas that had nothing to do with Drucker Wealth. So it was a nice balance.

Michael: And so, what do you call the webinar?

Gideon: "Designing Your Financial Life Plan."

Michael: Okay.

Gideon: And we trademarked this financial life plan kind of our initial planning engagement. And I do think the webinars...the fact that all of this leads to a flat fee upfront financial planning engagement, I think, also, that was another turning point around that time because you're not taking people through a seven-meeting sales cycle of, "Hey, at the end of all of this, you're going to want us to manage your assets," or if we don't really do that much insurance anymore or you're going to want this insurance, it was, no, you're going to have an initial call. Then we have a discovery meeting where we're going to talk everything out. From day one, you're going to know what the upfront fee is. And then, at the end of that discovery meeting, you're going to know if you want to work with us or not. So having this content lead generation flow into a very binary, either you want a financial plan and you want us to do a deep dive in everything you have going on or you don't, I think complemented the marketing efforts really well.

Michael: And, ultimately, this thing you said, you do two webinars a month. So it's the same "Designing Your Financial Life Plan" webinar over and over again. You're iterating on it to improve it. It's not like there's a multi-webinar series and people come to multiple webinars. You've got the webinar, and you do it on an ongoing basis.

Gideon: Mostly, yes. We've been experimenting more. So 2024, with the firm transition to the RIA, and this new client, it was just a whirlwind. So there's something to be said for having the same show and just showing up and delivering. We're experimenting more now with, and we've been doing this off and on, but I think we've realized it really works. it's that thing of you do something once it works, so you never do it again. Fantastic thing. Of smaller webinars where like well, I did one a few weeks ago for parents, so financial planning for parents, where I spoke a little bit more about estate planning and term insurance, because I've yet to find a family that's making $600,000 that has enough term insurance to replace their income and their lifestyle if, God forbid, something were to happen. And that one really resonated, actually.

We did one... A lot of our clients have RSUs because they work at large tech companies, so we did one, planning for your RSUs and your financial plan. So for those, we get a lot lower turnout, and a lot of times, we're not even advertising those because it's a lot harder to make sure you're advertising to the exact right person. We're just sending that to our newsletter series, which we have 7,000-plus people. So it's a lower turnout, but it's a lot more targeted, because anybody that has, "Oh, I have RSUs. I've never really thought about them beyond just I sell those and pay for the kids' camp. Maybe I should be doing something different." So the same show, in general, but then we're working on specific more targeted things as well.

Michael: And how many people come to a typical webinar when you're doing them with this frequency?

Gideon: I would say 130 to 200 people sign up, maybe 150, I should say. That's more fair. The average, I would say, 25% show up. It really flows. There can be 20 people. There can be 45. Truthfully, it's one of those things my dad loves. He's not doing any of this, but he just loves building this marketing funnel, right? Because especially back in the day, the number one problem an advisor had was how many...where's your next piece of business coming from? Who's your next client? And at this point, for our wealth builders division, that's not...I can name other things where, "Hey, what's the big focus?" But it's not that. So he loves seeing, "Hey, how many people are signing up for your webinar? How many people are on?"

And personally, I just don't care. Not because I don't care, obviously, I'm spending my night doing it, I care, but because I know it's the law of numbers. And quite frankly, so 20 people show up, 100 people don't. Cool. All 120 are still showing up on our newsletter series, and they're going to get all the content and who knows what's going to come of it. So I try to take a long-term view of all of that just because I know it's all going to come back in the end for doing a good enough job on the content side.

Michael: And is there a typical ratio of how many of the attendees actually will schedule a follow-up right-fit meeting and how many of those eventually become a client? Do you have a sense of how that numbers funnel flows for you?

Gideon: Yeah. I would say, from each webinar that we do, somewhere between 10 and 15 scheduled calls.

Michael: Okay.

Gideon: And that includes a few people that schedule a call before the webinar. They just see the advertisement, they go to our website. We radically changed our website four or five years ago at the same time that I think has helped with all of this as well. So I would say 10 to 15 calls. So a lot of them come on the webinar itself. I can see them scheduling as I'm speaking. But some just come in the course of the week that the webinar is being hosted.

Michael: And then, how many of those might become a client in practice?

Gideon: So in the last 3 to 4 years, last year, we had 50 new clients come from webinars. The year before, it was 75, and it was 85 the year before. But I would say, yeah, if we want to talk about 75 new clients a year, I would say 2/3 of them are coming from these webinars or webinar-adjacent set, book, Google, all of that.

Michael: I'm sorry because it still feels like a good old-fashioned version of, as I learned, the 10-3-1 rule in...

Gideon: A hundred percent. It's exactly that.

Michael: ...any kind of marketing. You get 25 or 30 who show up. A third of those turn into calls, which is about ten. A third of those turn into clients, so you get 3, and you're doing 20-plus of them a year. And sure enough, that's 50 to 75 new clients, which is exactly where your numbers have been.

Gideon: Almost spot on. I had, in 2023, a little over 300 right-fit calls held, meaning they actually showed up for the call. So 300 right-fit calls, and from there, we did about 75 new plans that year.

Michael: And then the attendance from the webinar itself is a combination of you send it out to the mailing list that you're building, and you're doing Facebook ads and Instagram ads just to encourage people to come to the webinar.

Gideon: Yep. And it's usually a cover of my book, although, with the team, we've experimented with different things. And, yeah, so they sign up, and when they sign up, they get the first chapter of my book automatically. And then they get on our newsletter series until the webinar is live, which, typically, they might get one email before the webinar. And then they'll get reminders 24 hours ahead of time, 1 hour ahead of time, 15 minutes before.

Michael: And what do you use to run the webinar platform?

Gideon: So we work with Eight Digit Media. We found them four or five years ago. It's been great. And, yeah, we've been working with them ever since. And we haven't changed too much, with all of the, with all these marketing, because it's been working. And like you said, the 10-3-1, it doesn't go away.

Michael: And so that's what's driving at the end of the day, just all this growth to add up to 300 wealth builder clients in the past 5-ish years.

Gideon: Yeah, that and introductions, referrals.

Michael: Sure.

Gideon: It's been really cool to see how many more introductions we get now than we got three, four years ago, and part of that is we were around longer. But I just think, as we're really getting better at the client experience and the way we work with clients, providing value, we've just seen, even in the last, since the transition, the last three, six months, just a lot more introductions. Last year, we had 50 right-fit calls from introductions. And I think three years before that, it was a quarter of that. So that's there, obviously, and that's happening more and more. Really, we don't have a good system for that. I don't ask for them. We don't really even bring it up as often as we should. It's one of those things we've talked about every year for five years, and I keep saying, "Hey, if we provide value, if clients appreciate what we're doing, if they know we're growing, which I do talk about, we're growing, then I'm never going to make it uncomfortable, and they'll introduce when they have a friend, a colleague, somebody that it makes sense that they want to introduce us to."

What's Surprised Gideon The Most Building An Advisory Business [1:19:40]

Michael: So, as you reflect on this journey, what's surprised you the most about building the advisory business?

Gideon: Yeah. So I think the thing that surprised me the most is how much I enjoy the business side of all of this, of when you're getting started and even before I got started, it was always about, "All right, well, I need to learn how to find new clients and become a CFP." I wanted to become a CFP ASAP, just actually have the knowledge, learn what we actually do as financial planners. So it was always those two ideas, and I think I surprised myself with how much I enjoyed everything else, like integrating new custodians and tech platforms and tech partners, and bringing it all together, and figuring out new service models and client deliverables and value-adds that we want to provide, and thinking about how we want to bring new advisors on and how we want to grow the advisors and when it's the right time.

All of that side of things, I guess I was pleasantly surprised that I really took to that and I can nerd out with the best of them of everything. That's part of why this podcast has been so impactful because it opened my eyes of, "Oh, wow, you have to think about all the stuff my dad was already doing but within the broker-dealer world." I love thinking about all these other things. And actually, the more you think about it and kind of visualize where you want to get, it actually allows you to get there sooner and kind of force the pressure, the needle.

I think the other side and the part that I think I still need to get a lot better at is just as you get bigger, how much of my role as CEO or just kind of a leader is managing the team. How important the team is, your next hire, the way you train people, and just kind of the general morale, right, how you run your organization. And that sounds kind of obvious, even as it's surprising me how the team is doing is important, but when you start out so laser-focused on the client side and the business development side, you realize, no, the degree of Drucker Wealth's success is not about our next 20 clients. It's about our next hire. And it's the way everybody on the team feels like they're included and they're growing.

And I think that's something I'll get better at with age, but it's something I really think about, is how do I get better at inspiring the team, right, making sure everybody's fully invested. My dad is incredible at this. He's that energy. He's still, on the day-to-day, making sure everything gets done and growing and all that. He's the energy, inspirational, and I need to get better at that, and that's something I'm working on. But I think it surprised me how much the team management part matters and how important it is as you get to that kind of next stage of growth.

The Low Points On Gideon's Journey [1:22:11]

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

Gideon: I guess I have two. The first one, which I don't really know that I can call it a low point, because at the time, I wasn't, is when I was calling the orphan clients and reaching out to friends. And everything was so new that I was excited to be there, and I was in my mid-20s, so I wasn't...how am I going to feed a family, or where am I going to be when I'm 40? It was just taking it day by day, and it was a grind, and it was a lot, a lot of rejection and all that. So that's a low point, I guess, looking back, but at the time, it was just, "All right, here's where I find myself."

And then I think the transition time and kind of right before the transition where there are all these exciting things I want to do and new services and new partners, and we're at the BD, and I'm trying to...there was just so much going on all at once. Sometimes I'm trying to solve 100 different things, and you really got to focus on 3, and I needed to learn that. But just, again, these are good problems to have because a lot of it stemmed from growth, but just a little bit of that overwhelming feeling of, "Hey, I want to do a million things, but I got to prioritize." The transition has to come first because just nothing else matters if you're not successfully transitioning and getting your clients up to speed and comfortable at the new RIA that we launched. But that kind of three months before, three months after was just a whirlwind of craziness, quite frankly.

Gideon's Advice For His Younger Self And For Newer Advisors [1:23:30]

Michael: So, what else do you know now as the business is built and scaled as it has that you wish you could go back and tell the you five or six years ago as you were starting to build your client base and build the firm?

Gideon: The one thing is how important hiring is, hiring the right person, and sometimes you hire from a need standpoint, "Hey, we need somebody in this seat, so this person seems great, and let's get it going." And that is a mistake. But I think nobody's a perfect hire. I think that's kind of impossible.

Being really disciplined of, "Hey, if somebody's not working out, you got to cut bait." I think there have been a few times where I was a little too...I wanted to be nice, I wanted to give the benefit of the doubt, I wanted to get there, and I realized that I was kind of doing a disservice to the rest of my team by keeping somebody on board that wasn't really a fit and was making other people's lives harder. So I would cut bait a little bit sooner with really nice people, and that's part of why it took longer, but that just didn't make sense for Drucker Wealth. So knowing that I needed to take my lumps there, but maybe taking one lump there instead, it happened a few times.

Michael: So, any other advice you would give newer advisors coming into family practices, in particular, having lived that part of the journey as well?

Gideon: Yeah. I think, for every new advisor, young advisor, becoming a student of the business, that was the number one thing my dad said when I was starting out. Especially these days, information is out there on every aspect of the business almost for free. It's really not expensive to learn everything from kitces.com and from Nick Murray and from tax, business planning, investments, everything. So I would say become a student of the business. And I'd say there's a lot of different ways of being successful in this business. Learn from advisors, and especially if you're in a family business, learn from advisors not in your bubble, outside of the family.

I think the best thing I did and the best thing my dad said was, "Hey, don't just listen to me. Just don't do what I did. Go out and learn from whoever you want to learn from and pick their brain and learn how they do things." So even down to if you're at an insurance BD or you're at a BD, learn, listen to advisor stories that have their own RIA and charge subscription fees, how they charge subscription fees. And if you're at an RIA or a fee-only, I don't know, learn a little bit about insurance and maybe how people got their start in the BD world. I just think there's so much out there. There's no one way of doing things, and it doesn't...learn all of it because you don't know where your career is going to go, that trajectory.

And the last part, and this is all tied to that, and maybe this is my own just being on LinkedIn a little bit, is when you're just starting out, don't listen as much. I think so many advisors post about, "Hey, I charge fees this way, and this is the only way to charge fees. And I charge less." There's a lot of, "Hey, I'm better because of the way I charge fees." And I think, at the start, learn the information, work with clients, find people that you can provide value to that you can serve, and that'll all take care of itself. Don't get involved in that advisor-to-advisor conversation that nobody but advisors is actually listening to. Go out and do the work, figure out what works with you, what you're comfortable with. You'll get out the answer that makes sense for you. And that is a little bit off the beaten path of advice, but that's just something I see a lot. And I'll just say, get out there and figure it out, and don't get distracted by a lot of the conversations we, as an industry, might have internally.

What Success Means To Gideon [1:26:56]

Michael: So, as we wrap up, this is a podcast about success, and just one of the themes that always comes up is the word success means very different things to different people. And so you're in this wonderful place of success with the business, $6 million-plus of revenue and $1 billion-plus of assets and this fast-growing wealth builders division. The business is in such a wonderful place now. How do you define success for yourself at this point?

Gideon: Yeah. So a few ways. I think, as I already mentioned, becoming more of a leader for the team, and I really do want to get better at that. And not that that's a problem, but I want to keep kind of growing as a person, as a leader in that way. And really, I want to keep building Drucker Wealth. I think it's fun and exciting to see how big we can get this thing, how many people we can work with, how many advisors and team members we can grow. I'd also personally like to continue evolving to be able to get out of the day-to-day seat a little bit more. Really, my goal over the next five, ten years is if I can be on more podcasts, kind of get the Drucker Wealth story out there and really have the rest of the team step up more on a day-to-day level. That's really part of something I want to achieve. Part of that is just I like doing these things. I think I can make more of an impact and kind of grow the firm talking to a lot of people at once and having individual advisors kind of growing and servicing, working with clients.

And I have other passions. I'm involved in defending, supporting the Jewish people, Israel advocacy work. It has nothing to do with this, but that's a passion that feeds my soul that I know is important. So I want to keep building Drucker Wealth. I want to keep kind of growing the next generation of advisors at Drucker Wealth in a way that I can keep doing this and enjoy it and have time for some of these other things, part of my life, and kind of bring those two things together as kind of part of my ultimate story. And then, obviously, as I have a family, which I don't yet, as I grow and have a family and time for that, which I have not had, that would have been tough over the last few years. Kudos to all advisors that are building and doing everything they're doing with spouse and kids. But all of that is kind of what I'm excited about over the next five, ten years.

Michael: Very cool. Very cool. Well, thank you so much, Gideon, for joining us on the "Financial Advisor Success" podcast.

Gideon: Absolutely. Thanks again. Thanks so much for having me.

Michael: Thank you.