#FA Success Ep 374: Turning Your Marketing Loss Leader Into A Positive Revenue Diversifier By Getting Clear About The Value, With Dianne Nolin

Resources Featured In This Episode:

• Dianne Nolin
• Argent Bridge Advisors
• Done With Divorce
• Family Law
• Clockify
• AdvicePay
• eMoney
• Salesforce
• Quadro
• Morgan Stanley

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Full Transcript:

Michael: Welcome, Dianne Nolin, to the "Financial Advisor Success" Podcast.

Dianne: Thank you, Michael. Appreciate being here. I'm a huge fan.

Michael: Oh, thank you. I appreciate that. And I'm so thankful you're willing to join us today and share a little bit of the journey that you've had around building your firm as I think you scaling up your niche. There are things that we do when we get started in trying to find our niche, our specialization, whatever the thing is we're going to go after and be good at in the advisor world. But then it is, like if it works, when it works, then things kind of get messier in some different ways.

It gets bigger and now there are more advisors and you have to figure out like how to train them and get them up to speed to do it the way that you do it. And the business gets more complex. So there's more people on board now. And you have to actually figure out systems and process that we didn't really have to do when it was just us, but it matters a lot more for there's multiple people. And I know you've lived this journey of what it's like as the firm really begins to scale beyond the individual expertise that you start out with.

And you have to do this across multiple advisors, multiple team members to reach more clients for those of us that have that passion to serve and have to keep adding more clients to serve and help more people. I appreciate your willingness to join us today and talk a little bit about what that you're scaling up your expertise beyond yourself journey looks like.

Dianne: Thank you. Thanks for having me. I look forward to sharing.

What Is Dianne’s Advisory Firm And Team Structure? [04:49]

Michael: I think to get started, if you could just tell us about your advisory firm as it exists today. Let's just understand the business as it is and then we can talk a little bit about kind of the growth journey and the path and you getting here.

Dianne: Yeah, sure. Absolutely. The firm is Argent Bridge Advisors. We are 13 in total. Not all advisors. The team is our focus is largely women. Women who manage the money for the family, women who are divorced or widowed or never married, but they're in control of the finances. The firm, we have 6 financial advisors, 5 of them women. We have a dedicated portfolio manager and an investment committee. We have a support team, a fantastic support team with an operations manager and director of client service, a paraplanner. I have a new hire, an advisor who joined us that will be working with our client's children. We call her our next gen advisor.

I don't think I left anybody out. So, the team has, we have traditional financial planning practice and we have divorce financial planning that I would call the niche. And we now have 6 certified divorce financial analysts and the focus for that team is largely working as a referral from an attorney to work with the client at the point that they are working through the division of assets. So I did that for a long time. I spent some time on that, but far less now that we have a team of advisors that are handling the divorce financial planning. We call that the divorce team and then we have traditional financial planning.

Michael: Can you share a little bit more? I thought you made an interesting distinction there that we have financial planners and we have divorce financial planners. Like these are different categories.

Dianne: Yes.

Michael: Can you talk to us a little bit more about what the difference is between the 2? Because I feel like there's a lot of advisors that would say like, well, I'm a trained financial planner. I study my CFP marks. I can research things. If a client has some divorce stuff, I can talk to them about divorce stuff. What's the difference between a financial planner who does research on a client's divorce need? Because we provide responses versus like I'm a divorce financial plan.

Dianne: Again, different certification, different approach. The point that someone's getting divorced, there's a couple of reasons why an attorney might refer a client. They either have never been involved in the family's finances, so they don't know. They have to build their own budget, especially if you're the spouse that's asking for spousal support. You have to have an understanding of your budget and you have to share that budget because they're asking you to prove that you need this support. So understanding the finances, creating a budget, that's one reason that we get involved that's often the first step.

Michael: Interesting. That's a striking framing to me. So in the divorce context, we're separating I'm a spouse who has a support need because I'm not the primary earner. There needs to be a budget to substantiate what the support need is. And if I was not necessarily as financially sophisticated of a spouse, I just really might not be able to build an effective budget to advocate for the amount of dollars I need in support.

Dianne: Exactly, exactly. And that might look different if the same applies, but you believe your need is greater or you're entitled to more. And sometimes what we're doing is educating the client that the pot is only so big. So you might think that you need $10,000 a month to support your lifestyle, but you're not going to be receiving 10,000. So how do we help you create a realistic budget for what your life looks like when this is all over? So, budgeting is a big part of divorce financial planning. And yes, any CFP could do that, but one of the things that we do is help define what it's going to look like after the marriage ends.

So now all of a sudden you might need daycare and you haven't had that need before because you were a stay-at-home mom and you're going back to work. You might need someone to take care of the lawn. You might need, you know, a handyman. You have services that you didn't require when you were together. So these are the kind of things, just thoughtful discussion around what the budget's going to look like and budget planning and creating a budget is a big part, the first step really in the divorce financial planning.

And then where it gets more complicated, when one party has restricted stock or stock options or a deferred comp plan, people barely understand those when they're entitled to them, let alone be the spouse who's not in the corporation, doesn't understand all these benefits. And whether or not that's marital or separate property. Like we spend a lot of time on that as well. The complicated financial assets as well as who owns what? At what point did it become marital? So there's assets and then there's this budget piece. Those are the big parts of divorce financial planning.

Michael: What was different previously? Were you not charging for it? Were you charging a much low...

Dianne: Yeah, we weren't charging enough. Frankly, we weren't charging... We have, as you said, you start to build out the niche and you have much more need for things like Clockify and tracking the time you're actually spending on that, a really great invoicing system, AdvicePay to pay using a credit card. All of these things didn't exist when we started. We were just accounting for time that was spent on just the data entry and sitting with the client. And again, maybe we attract what we're good at. I just didn't have the complexity in some of these cases that we now get.

Michael: I want to make sure that I understand what shifted though. Was it like you just literally weren't charging for people and you said now we're going to bill it? Was it you were charging like $150 an hour and said, no, wait, we're valuable enough, we should be charging $400 an hour. Was it something else?

Dianne: We were always charging. We were charging the same. I would say what changed was, yeah, really intentional documenting of the time and the deliverables and the service. We just got really detailed about from the start of the relationship rather, I really do think it was we put the system in place. We made it its own separate little growth engine. And for that, you then need to pay attention to the time you're spending there, the people that are spending time on that, the letters of engagement are in place, the retainer's been collected.

We started getting really strict with ourselves about, okay, I'm not going to start that until someone engages. And then I'm not going to start that they are committed, but they haven't paid the retainer. We're going to make sure that gets paid before we start doing any work. It sounds silly that we would be talking like that, but that's what happens to you. We wanted so much to help these people for so long that we weren't paying attention to just those little things organizational elements of the relationships.

Michael: Which meant in essence, you might have billed the client for 5 hours of work, but the truth was you did 8, 10, 12, 15 hours of actual time on it, which meant it really wasn't very profitable, not because you weren't charging a reasonable hourly rate, but because you weren't really billing for all the time that you were spending on it.

Dianne: That's correct. That's correct.

Michael: Was that awkward to change? Like just when you. It just feels like when you're not used to saying, "Well, you know, I spent 15 minutes on that and I got to add that to your bill," that's got to be hard to start thinking in that mindset.

Dianne: I have to say it's probably not understanding our value because there's no awkwardness. People will willingly pay it if you're helping to educate them and help them see what they're. You know, and an example of this separate property tracing, Alina, one of our advisors, created...the client ended up with $176,000 of additional retirement assets through separate property tracing that they would never have received. So, all of a sudden you're like, maybe again, light bulb goes off. Hey, this is very valuable work. This can mean a meaningful difference to the clients. Why are we underselling ourselves? Why are we not considering every minute that we spend on this? And the clients appreciate it. So no, we got no pushback. It was our own limiting belief that this was going to be helpful. And then in the end, this is going to become a financial planning client. We just sped too far into what the relationship will become, not where we were.

Michael: Even though notably it sounds like you still live in a world where about 90% of the revenue is the clients that ultimately do come from the relationship that gets built when you're doing the the divorce support works. I almost think of it a frame of you're providing a service that helps you establish the relationship to get a long-term relationship, which is sort of like the loss leader invest into the relationship approach that many of us, most of us have taken for most of our careers. The difference is you're getting paid for that stage of marketing because you really provide meaningful value in that stage. So you can bill for it. So you get to bill people for the privilege of also building a relationship with them in service that eventually ends up often turning them into longer term clients as well.

Dianne: Precisely. And I would say, because we now have 2 dedicated divorce financial analysts, they're paid based on their hourly revenue, what they're billing. So, it was easy for my partner and I to say, well, we're going to do this work and then we're going to get this great financial planning client at the end. But this divorce financial analysts, their revenue is driven by the hours that they bill not based on AUM. So it became an even more intentional approach to billing.

Michael: From their perspective or I guess so from your perspective, it's easy to can mentally slough off billing every last increment because, hey, at the end of the day, if this is going to turn into a million plus dollar clients, do I really need to track down that last 30 minutes I spent on their on their issue? But when you've got a segment of the team whose sole role is doing that and their compensation is tied to the hours, they want to bill every hour they legitimately can.

Dianne: And I have to say like that, I think we always found that the work was really valuable. And I just don't think we paused to say, until we made it this... It was the first of what we hope to be multiple avenues of alternative revenue sources. It just was the most obvious and the easiest to develop because we were already doing that work. That would be like one spinning plate. I'd love another spinning plate and another. You know, I want it to be something more than just that one separate niche. I think we'll always have, at the core, the AUM that we manage, the clients that we have, where we're referral based, like many of the advisors you spoke with. I mean, we're not trying to cast a wide net. We have client referrals and that's very valuable. And being referable is, really, important to us and intentional, but, we continue to try to raise the bar.

What Is Dianne’s Client Onboarding Sequence? [29:57]

Michael: I'm intrigued by this kind of client onboarding communication sequence. You'd said a lot of things there, like, meet the team in your journey and meet Rasha and meet Sierra. Can you walk us through that a little bit further? Like I'm coming on board as a new client. I've just signed the packets. What is this onboarding sequence? What do I get, when?

Dianne: So, well, before you ever become a client, the first conversation might be with a relationship manager, one of our advisors. Her name is Elise Finney. Elise is an extremely warm, social person. She's going to just have a conversation about the firm. It's really easy when it's not you saying it. It doesn't come across as, look at what we've done. Look how great we are. It's somebody within the team saying, this is a special place. When you come, we're going to send you a map, exactly, we have valet parking, but here's where you'd park if you want to park your own car. And we're going to make sure that you know exactly what to expect when you come in the door. Here are some questions to be thinking about, that sort of thing. She has her own conversation with the client just for 10 minutes or so. And then we send out, before the client comes, something that describes the financial planning process, just a little visual about the journey of financial planning as well as meet the team. And it's sort of an org chart, what everybody does and who they are. Then the client comes in.

Michael: Is the meet the team everybody in the firm?

Dianne: Yes. It's absolutely everybody.

Michael: It doesn't just describe like here's the 2 or 3 people you're going to interact with primarily. It's the firm.

Dianne: It's the firm because they are going to meet everybody. They may have primary interaction with a few people, but they're going to meet everybody in the firm. If they're live in the office and others are in, then we're going to introduce the potential client around or over the course of the onboarding, they're going to meet everybody. Emily's our business manager. She's going to be scheduling the next meeting. So there's just a reason for everybody to be in touch.

Michael: And how much detail is on this meet the team? So, this feels like you've got 13 people, like a picture and a couple of paragraphs.

Dianne: Yeah, not even paragraphs, not even paragraphs.

Michael: A seven page document really quickly. That's why I'm asking. Like this could get really long, really quickly.

Dianne: Yeah, you're right. No, it's really just a 1-page document, and it does have the pictures, so they're familiar, and the pictures, you know, they're going to get to know them and recognize them.

Michael: So this is like picture, title, and a sentence of what they do?

Dianne: Yes, that's exactly it. That's exactly right. That's the theme, team and meeting the team and understanding what differentiates us is very much that, that we've got this team, everyone having their own unique abilities. So there's that, you know, they've understood what it's going to look like to come in and what's going to happen. We're going to do an intake. If we agree they're a good fit and they agree we're a good fit, then we're going to send off, then enter our ops manager, Sierra, who's going to send off our letter of engagement and tell them what to expect next. Next, they hear from our paraplanner to say, here's eMoney and here's how you get in and here's the information we need you to share in advance and so on.

Michael: What else is there? I'm so fascinated by like all the different pieces that they're getting.

Dianne: So, we have different workflows. We use Salesforce as our tool for our CRM and within Salesforce there's workflows. So we have one that is a workflow that is from interest to being a prospect. That's a collection of things as I said, the emails, the introductions and so on. And then we have one from onboarding to clients. So that's a different set. It might be, um, again, we're pretty visual. There could be a visual about how we discern what we're going to do in the way of rebalancing the portfolio. Not specifics, but like, here's our filter.

And again, I know many people use this, but we try to educate about, here's what we might be doing differently when we get to the point of asset management. Before that, when we're creating the plan, it's going to be our paraplanner saying, as I said, here's how to input this information into eMoney. Here's why we need this information. Once it's shared and we create our plan, the first meeting we have after intake is to go through our financial plan, which is largely driven by analysis that we do through eMoney.

And then at the end of that, we're going to share some observations about how we fund the plan. That's something I think we've said for a long time to clients, your assets aren't the plan. Your assets are funding the plan. So then we talk plan and then we get to how we might do things differently in terms of the assets that they have, the decision that maybe they need to save more, work longer, they could spend more, that they're going to leave a huge legacy. All of these things are starting to frame this discussion with the clients about how we plan with them going forward. When they see it all in one place, all of a sudden they're understanding what that means.

Michael: How quick in succession does all of this come? I'm trying to visualize this onboarding and the emails and the first meeting, where they're getting like an email from Sierra on Monday and then the paraplanner on Tuesday and then someone else on Wednesday and it's like, it's a daily sequence or does this stretch out over weeks?

Dianne: Each person ticks off what they've done and then it becomes an activity for the next person. So, however long that takes, let's say to connect with the client, it might have taken a few days to have a conversation and get a letter of engagement off. And then Sierra...

Michael: So this isn't just an automated email sequence. This is literally, Sarah, it's your turn to send the email to start onboarding them. And then Sarah checks off her box that it's done. And now it goes off to the paraplanner that's like, now you have a task waiting for you to outreach the client. So this isn't an automated sequence. This is a workflow of it's your turn to send the new clients the email explaining what you do. It's your turn to send it. For which I'm going to guess they probably have like a kind of templated thing that they adapt for each client circumstance. But it's not an automation sequence. It's a workflow for each client.

Dianne: Precisely. We spent a lot of time on workflows a couple of years ago to make sure we got every aspect of that down. And like I said, multiple workflows. So, from the point that they, from the interest to being a genuine prospect there's a workflow. And then they've come in and we've had an intake and we've decided we're moving forward. Then there's on onboarding to client and so on. So and again, and each time it's a task, you complete your task and then the next person sees their task.

Michael: Are you Salesforce workflow inclined? Where did all these come from to get these built?

Dianne: We created them all, and I would say that was a huge team effort, frankly. Here's what I do. Here's what I do. It just became all of us in a room deciding how we're going to go about creating these workflows, who does what, and in what order. And we use Salesforce because that's a requirement of our broker-dealer RIA with this triad. And that's there. We also communicate with them and their back office through Salesforce for clients. So, it was the tool that we were given and then we learned how to make that tool work for our needs and that the workflows were a big part of that.

Michael: And then who actually programs them into Salesforce?

Dianne: Our business manager put them in.How Does Dianne Segment Clients?

Michael: You mentioned earlier that, in part of being referable, you also try to do some client segmentation, invest a little bit more into into top clients. Can you share a little bit more about how you actually segment clients, how you decide the way this works and what what actually changes from one segment to another.

Dianne: We got some great coaching some years back about what makes an A client, if you will. So we just use ABC and it was not obviously just the money they manage. For a long time, that's in the old firm, that's how we did it, based on AUM only. And that would drive the service level for that client. But we got a great matrix from a coach a while back that included things like, do they refer? Do we like working with them? Maybe these are obvious to other people, but we weren't screening our clients based on this information, but do they have more assets? Meaning they're going to retire one day with a big 401k roller. So future opportunities was a part of that. And each one of those were given a value.

And then based on the rating at the end with whether do they have family? Are they influential people? There's probably a dozen things that we look at and give each one a score of 10. And based on their total score is what's driving A, B, or C. An example of a C client, they could have as much money as an A client, but they are largely in distribution mode. They're sort of a small circle. Maybe they don't have many people in their lives. Maybe they aren't really active in the community. There could be a whole myriad of reasons why somebody could have just as much money but not be ranked the same way.

And reverse, somebody with fewer assets but is extremely active in the community and they've referred a number of clients and we even keep a separate summary of the relationship tree and what has that meant to the firm in terms of assets, AUM by referrer. And that's important to that one. If let's say that client has a couple million dollars, but the relationship and everyone they've referred friends and family has 15 million, we're going to treat them very differently than just someone who has, we happen to manage a million dollars for them. Only.

Michael: Do you have some target of how many clients are going to be in each tier? Because I'm cognizant just when you put a dozen different things and then give each of them a score, I mean, you're going to end out with a range of scores, but then at some point you have to decide what's the threshold for A, B, and C.

Dianne: Yes. I should say of that scoring process, how much we manage is a big part of the score. So it does start with that, but then there are other variables. And, really, as it turns out, our very best, our A+ if you will, is probably less than 20 clients. It takes a lot to be at that level. And at that level, again, we have many more communications. We have some unique events that we do just for those clients and their, and we're, I mean, I just think we take very special care of those very biggest clients. They've taken a great interest in our firm, too. So it's easy to do.

Michael: Can you share a little bit more than about what do you do that's different for A+ versus A. Is there actually like an A+ and an A? It's like A+, A, B, C. What...?

Dianne: A+ might only be, again, it might have been less than 10. A and A+ together is probably only 25 households. So, yes.

Michael: Okay, so A is a pretty elite echelon for you. So you said earlier, 350 clients. So an A threshold for you, because I've seen some firms like 50% of our clients are A's and we love everyone. And a relatively small percentage are B's and even fewer are C's. For yours, A is a special place. If we're talking 20 clients out of 350, this is our top 5% of clients level.

Dianne: Precisely. Exactly right. A very small group of A, a larger group of B, but I would say we're the reverse, 50% are C. And not because we don't value them or that they're not, it's just, it's based on all those factors that I shared some of. That every all clients get certain communication like newsletters. And when we do state of the market, maybe we'd invite somebody with our portfolio manager. He does an education session. You said they used to be in person and now they're webinars.

And so everyone gets invited to certain things. And then those top clients get invited to special things. Like we did a champagne tasting or a bourbon tasting. It doesn't always have to do with alcohol. Maybe we've done something in the community. We did an event once with this organization in Vienna, Virginia called Rustic Love. They paint hearts on signs. I don't know if you've seen them in the Metro DC area, but if you ever see one in a yard, it's a not-for-profit organization that sells these signs for the work they do in their nonprofit.

We went out with clients and we painted these signs and then had a big lunch afterwards. Just unique things, things we can think of that might be fun or interesting. We're doing Galentine's the day before Valentine's day. We're doing a luncheon at a local restaurant for some women attorneys and divorcees and widows that we work with. Things like that. Just things that are unique. Everyone doesn't get invited to everything. Just special events for certain clients.

Michael: I know for some advisors, there's a big fear and concern around special things for top clients, particularly when they're event-based because they're worried that at some point a client is going to say to another client, like, oh, I'm going to Dianne's bourbon tasting next week. Are you going to be there? And they go like, "Really? I wasn't invited. I never heard about a bourbon tasting." And now there's implied awkwardness. Is that a thing for you? Is that not a thing? Is this another one of these, like it's in our heads, but it doesn't manifest in practice?

Dianne: I think it is largely in our heads. But I would say when we look at our client relationship tree, we know who might want to be included even if they aren't. We try to be sensitive to that where we know that that's been an issue in the past, but largely I would say it's in our heads. I think clients come to unique things and they don't say, were you invited? If that's happening, we're not aware of it.

Michael: How do you think? Because if you told them it's a unique thing, they maybe sort of understand not everyone's invited and they don't go flaunting around that they're going to a thing that you might not be going to.

Dianne: Yes. Yeah. I think that's part of it too. I don't even know that we've had to work on it that hard. I can think of one time in all of this time that we had a fireproof bag that we sent out to certain clients to keep their estate documents in. And it was branded, but the fireproof bags are kind of expensive. So we sent it out to a certain group. And then we heard from a friend, she literally called and said, why didn't I get one of those bags? So we sent her one. That was no big deal. So other than that fireproof bag situation, I don't think I've ever had an issue where a client has been offended or somebody shared that a client was offended because they weren't included.

Michael: Honestly, my big takeaway is just apparently fireproof bags are literally like referable conversations. Like that only came back to you because they were talking about it. Like that's what clients talk about? Okay. Duly noted. I need to escalate the relative priority of fireproof estate document bags. Apparently, that generates actual conversation amongst clients and prospects with each other.

Dianne: It certainly did.

Michael: Today I learned. I am intrigued by this framing that your A tier is really narrow and your C tier is really large. I think you said like more than half the clients fall there.

Dianne: That's correct, yeah.

Michael: I'm curious to understand more about that tier because... In fact, for some firms, the C-tier is, for lack of a better term, like the bread and butter clients. This is the core of our business. We serve them well. They're profitable to serve. We do our thing. And for other firms, the C tier is basically a euphemism for these are clients who are too small, not profitable. We kind of have to minimize our services to them or we're going to lose more money on them, but we don't really want to let them go. So we're going to note them as a C tier to kind of recognize don't spend too much money because we're probably losing money on these, but we don't want to let them go. So, which version of C tier is this?

Dianne: I would say these are valuable. No, I think it's our view of that, those C clients are extremely valuable. And we don't have anybody in the firm at this moment, I could say, that we say, oh, we wish we could just sell them off or get rid of them. And I don't know if that's because, again, we established the new firm 5 years ago and the clients that came and the clients that we've been really intentional about who we're attracting or who we want to work with from that point forward. So I would say, no, the C's are valuable. They're bread and butter, as you said, but they just don't need as much either.

Maybe the assets aren't all that complicated. Maybe they haven't retired yet. Maybe we haven't done a lot of complicated planning where they have a lot of moving parts. It's relatively simple. It doesn't mean it isn't important. We want to educate them. We have meetings with them once a year. We're staying in front of them. More often, if something's going on in their lives, but no less than once a year. I feel like we're giving them that we have good relationships and we are servicing them in a way that's consistent with what they need. That's just all they need at the moment.

Michael: Do you have like asset minimums or fee minimums in place just to try to maintain this pricing threshold where you need it to be?

Dianne: With our broker dealer, we're not allowed to do a fee minimum, but we'd love to do that. But we do have an asset management minimum of a million dollars. Though we're pretty strict about that, except if a client says, I want you to work with my son, I want you to work with my neighbor. We're going to do that no matter what, because they asked that of us. But I would say the smallest of clients still probably have several hundred thousand dollars. They're just somebody that our clients know. That's probably another reason why we could never envision saying, well, we're going to lop off this end of the book, because somebody knows somebody that's important to the business.

Dianne’s Transition Of Firms [50:57]

Michael: And if I heard correctly in that discussion as well, you made a transition a few years ago in changing firms. And it sounds like part of the transition was we'll call them the "legacy clients" that we took on in the early years that may or may not be the best economic fit for the business at this point. You just didn't bring them when you made the change.

Dianne: Yeah. I mean, I've...

Michael: So, you don't have them on the book to have to make adjustments now because they didn't come with you when you made the change.

Dianne: That's right. We didn't invite. We have a real challenge with that. Something we're trying to work out. And that is when someone isn't a good fit for the firm, who has a firm, where could we comfortably refer them to? We have a few situations like that with very small divorce financial planning clients. We have another divorce financial planner within a different firm that we can refer to, but we don't have that with the traditional financial planning clients. We're always looking for advisors that we meet that might be, oh, that sounds like they have a similar approach. And so we're looking for that all the time. We want to make sure that that person's taken care of. That's not scalable for us to take everybody.

Michael: Out of curiosity, who was the coach that helped you visualize and get all this set in place?

Dianne: Coaching is really important to the team. I would say we've had a number of coaches. I went to Strategic Coach for about seven years and just learned how to structure my day, focus on the right things, focus on the right clients. That was a great program for me probably 15 years ago. And I did it for seven years. But I've worked with a coach her name is Elizabeth Ledoux. She's with Transition Strategists. And the work I primarily started doing with her in 2018 was before leaving the old firm. It was about how to create a really succession-type culture in the old firm, which didn't work out. It was like the pendulum swinging completely in the other direction.

We start this new firm and we're going to start with succession in mind. We're going to start with this referral culture. We're going to start with those core values, as I mentioned, and it was sort of a clean slate. It was easy to the clients that we worked with that we really valued, the relationships were more than willing to come. And that was scary leaving and it takes a certain amount of bravery to get started over and figure out that is this going to work and are they going to follow? And when they did, that meant so much to us. But it also, those that are there then really want to be there. And it allowed us to, from there, be really focused on who we want to attract.

Michael: You mentioned at the beginning you've added in this next-generation advisor, who's working with younger clients. Can you share that just a little bit more about what that role is and how that fits relative to this client segmentation?

Dianne: So it's a relatively new position, too. We know we've needed it for a little while. And that's because our clients' kids are very curious. They're wanting to learn about investing. We want them to ask their questions of us. So we're hoping that years from now, when there's a transfer of wealth, we have the relationship. But today, what Maggie's going to be doing is sharing things that are relevant to that generation. So her first education piece to clients was about when you get your first job, why it's important to contribute to the 401k, even if it's the minimum that the company matches.

And then an education, she sat down with some younger clients to talk about just the basics of investing. And it's that kind of thing. And she's going to do a lot of work this year. She was a summer intern for us. She was exceptional. She's the daughter of a client and when she interned with us, we thought, wow, she has a great rapport with multiple generations. And we thought that's unique. And so we engaged her as an intern and then promised her a position when she got her college degree.

And then she immediately started studying for tests and exams and jumped right into, she was a student athlete. She'd love to educate student athletes because they're in a position oftentimes to make money, have to make money decisions. And so that's how it all started. And then from there, you know, we carved out all of the clients' kids that are Gen Z or millennials and she started working on her research and educational efforts towards things that generation might want to know about. So really, it's not been long. It's certainly, we've got a path for her. Developing that was pretty easy because she had things she wanted to focus on.

Michael: Is she doing individual client work? Because it sounds like this is primarily sort of various one to many initiatives like educational articles, workshops, seminar webinars, those kinds of things. Is it all one-to-many or is she getting or expected to get like individual clients that you're charging and serving as well?

Dianne: It's presently a lot of one to many. However, she has had a few client meetings that are not, these clients already have accounts. These are children of clients and the clients have been gifting into a UTMA account for years or into a Roth IRA for the kids. So she is going to be having one-on-one relationships, but right now, in order to be a friendly face by the time she goes to do that, she's doing a lot of one-to-many. She's going to do some YouTube shorts and she's going to be doing, we've sort of laid out her goals and objectives for '24.

Michael: Very cool. Is this a full-time role that she's doing this educational work?

Dianne: It is because she's got other things. So in the meantime, the things that we did early in her training was she sat with the service team and learned how to open accounts and move money and why do you need this document? Or here's what a letter of engagement looks like. And then when she mastered service, she worked with our paraplanner. Here's how you enter information. Here's how you create a performance report. She did that work so that when she is working with these smaller clients, she's going to do everything. So it takes a little of the burden of the smaller, younger clients off of the service team because she's going to service them as well.

Michael: Because notwithstanding the ABC delineation, if there are, you know, direct like child of client in family relationship tree like those are relationships that you will take outside of asset minimums. Like that's the space you have in exception. So this becomes a way to service and support those clients without the cost, as it were, of a lead advisor and the compensation that it takes in the capacity limitations that a lead advisor has. We're going to have a different advisor at a different stage of career where we can manage the cost a little bit more for servicing these clients. And hopefully it's someone that maybe just has more generational rapport with that.

Dianne: Exactly. Yes, Michael, that's it.

How Dianne Transitions Clients [59:48]

Michael: Help us understand a little bit more now. You've highlighted that the growth engine for the firm is around this transitioning clients that start out on the divorce end and then become traditional financial planning clients. How does that transition work? How do you get from we did divorce work to we're trying to get them to come on board as a traditional client post-divorce or post-engagement.

Dianne: Well, once the client's been through their divorce and have a property settlement agreement, you've gotten this document. It's a legal document. It's all paragraphs. And it says you're entitled to half of this 401k and you get half of the bank account and you get the house. So retitle it in your own name. And so there's all of these administrative items that have to happen for someone to actually claim what they're entitled to from their property settlement agreement. IRAs have one set of rules. 401ks have a different set of rules. Dividing a joint account is relatively straightforward. Maybe you have to divide equalized IRA accounts. There's multiple steps to getting things to your name.

So we have a separate, function after divorce financial planning, what we call post-divorce financial planning. And post-divorce simply means the process is done and now we bring in our operations manager, we'll help. If they want our help, by the way, and if we agree that they're going to be a right fit client for financial planning services, then we're going to support them in all of that. And that's what I was sharing earlier. If they're a relatively small client, they just have a 401k, we have someone we can refer them to. We don't want them left alone with this legal document without any support as to how to get these assets that you just argued for in this, hopefully, equitable distribution. We work with them post-divorce.

We also created a nonprofit called Done With Divorce. And that was designed to have a lot of, not necessarily Do-It-Yourself, but there's a lot of information. We have invited attorneys to speak, mortgage lenders to speak, estate attorneys to speak. And we have some educational pieces on there as to what happens next. So you're done with the divorce, then what? So that's our nonprofit called Done With Divorce.

We do a lot of just pro bono advice from people that come through Done With Divorce. Just tell them, Hey, find a good estate attorney, or here's a recommendation. It's not the work. It's just making sure that they're cared for. But when it's complicated and when they're going to be a financial planning client, we do that work. We establish the accounts. We go to the 401k provider and find out if the Quadro, which is this legal document was provided by the family law attorney, etc. So we're deeply involved in the division. And then we call it next chapter when that's all done. And then we're now starting this next chapter in their financial journey.

Michael: In a similar manner to you do the CDFA analysis work in the divorce process and charge for this post-divorce financial planning, like implementation of the property settlement. Do you charge planning fees or hourly fees for this on the divorce side of the business? Or is this considered the like the onboarding and account moving that we do on the financial planning end? Because anytime we've got a new AUM client, there's usually paperwork and transfers to do.

Dianne: Right. And the answer is more often it's done as a financial planning arrangement. We start that process after we have a formal, the divorce financial planning relationship or engagement has ended. And then we engage in traditional financial planning relationship. So that's often the case. There are some cases where a client has said, I love my financial advisor, which is great, and I want to continue to work with them, but I want you to help us with this piece. In that case, we will do it at an hourly.

So we help and we work with, we just did this with a Morgan Stanley broker and helped them who isn't involved in our divorce financial planning. So we helped with the division of the assets and worked with them to get the client where they needed to be. And we did that on an hourly basis because that was not going to be a financial planning crime for us.

Michael: How do you stay engaged from the CDFA divorce analysis work until this post-divorce stage? I'm certainly no divorce expert, but my understanding is it could be months if it's a messy divorce from when you initially do the, we did the financial householding and budget analysis to help you determine what a reasonable support agreement would be and made some recommendations on the property settlement until you actually get to the divorce is set, it's finalized, the legal paperwork signed. Now we need to start moving money. So how do you stay connected and engaged from when you initially do the CDFA divorce consulting work until they're able to become a client?

Dianne: That's a great question. It varies. Like anything else, there are certain clients that we just touch base. There's definitely, again, a workflow that is 30 days out, 60 days out, 90 days out that's just a check-in. And that at a minimum from the point that they engage, but also to the point that we last did work, there might be a 30-day check in, 60 days, 90 days. You're right. It could be a year. It could be longer than a year. which again, back all the way back to when we weren't intentional about the charging and the hours.

That's part of what made that doable because we might not have work to do again for 6 more months, or maybe it's being revisited some period of time down the road. But just again, relying on a workflow to just jog us to remind us that we should touch base and see what's happening. Sometimes it's just an email back, nothing going on, you know, next court date is such and such. So then maybe we'd put in a reminder to check in after the court date.Is The Divorce Financial Planning Path A Niche?

Michael: I'm also wondering in that direction. You had said earlier at the very beginning, like your focus, your specialization is women who manage the money for the family often from a divorce path, maybe widowed, maybe never married. I feel like our industry collectively has been debating for many years this framing of are women a niche? Can you specialize in 51% of the population?

Dianne: Yeah. Isn't that funny? I don't see it as a niche at all. I simply think it's, and for a long time, I think I was secretly grateful that people thought that you had to treat it like a niche. Because it isn't. These are people who are making financial decisions, maybe sometimes very critical times in their lives and they need support and I think women are great at asking for, maybe not always asking for help, but they seek advice. Women, I don't know, we're just not, my experience, women aren't afraid to say, well, I don't know what you're talking about. I'm not sure that, how does that important to me? Why do I need to know this? And it just women are really, by nature, I think they're open to being coached and are very coachable. And, again, in some cases, really grateful to have someone partner with them when they're going through something tough in their lives.

Michael: How do you define that as different from a niche? In your mind what's a niche that what you're saying is not...

Dianne: Yeah, I think the fact that women getting divorced and doing that work is definitely more niche work. But working with women in general, I mean, many of those women that I said, or they just manage the money in the family, they're just happily married couples and the wife's taking the role as like household CFO. They're just managing the money. And it's not to say we don't work with men. We have happily married couples and men that are clients. But maybe because we're women? I don't know. A lot of the firm, there's only 3 men. So maybe because there's so many women that we're attracting women? I'm not sure. But I would just say I don't view that as a niche so much as just who we serve. Just the same way. Maybe, well, I don't know, maybe that makes it a niche. I'm not sure.

What Surprised Dianne The Most About Building Her Advisory Business? [01:12:27]

Michael: What surprised you the most about building your advisory business over the years?

Dianne: I don't think it was as complicated as I thought it was in my head. When I started many years ago, my mentor had a goal, like a goal beside the giving financial advice. It was, he wanted to employ his, he had 3 daughters, he wanted to employ his future sons-in-law. He wanted people in the industry. He wanted to give people opportunities and chances. And I had zero experience and no financial background. And it was simply because when I met him, it was a great conversation and dialogue. I got to know him over time. And when he invited me, I had no idea what this industry was all about.

And yet today, sort of full circle, I feel like who can we introduce? This is a fabulous industry. This is a great, I know I have 2 kids. I raised my kids while working full-time. I mean, this is a very flexible industry. This is a very, you know, I want to be welcoming. I want to give people the same opportunities. What I found was that's not that complicated. You meet somebody with a real will to serve and a great personality and a curiosity about how they could be involved. And they're highly motivated to perform, and to participate, and to get better and again, the whole idea of creating success. I mean, there's a certain mindset I think that people have that when you're given an opportunity, you don't want to blow the opportunity, right? You want to make that person. I find everyone sort of eager to contribute.

Michael: I am a little bit struck as you were relating the story of your mentor and I recognize this may be kind sign of the times in how the industry has changed. But if I heard right like he had 3 daughters and the question was how his future sons-in-law could get opportunities in the business, not how his 3 daughters could get opportunities in the business...

Dianne: No, that's true. This was, keep in mind, like 1987. So, yeah, consider the time. And by the way, I think his daughters are involved. He still has a very successful practice.

Michael: Good for them. Showed them a little something.

Dianne: So you're right. Isn't that funny? I never thought about that, but although that, I was given a great opportunity and again, I think that's the idea if sort of the right type of person comes along and you give them the opportunity, I feel like, they want to prove you right.

Michael: Then I'm wondering that context as noted, the industry is very male dominant now. It was even more painfully so in the late 1980s. What brought you into the industry to persevere through that environment where your mentor was looking for opportunities for his future sons-in-laws and not his daughters.

Dianne: And again, good, great guy. And frankly, probably what I started in the wire house, I started in what was Shearson Lehman Brothers back in the day. And, yes, there was one woman advisor that again, worked with my mentor. And so, it was an interesting environment. Again, I was really protected. I have to say working. You know, the constant theme for me is team. I started on a team. I got to work with my mentor and the team that he was already developing. And then when I left the Pittsburgh area to follow my husband to Northern Virginia, again, it was switching branches and working with another team and then going independent with that team.

I have a real conviction that the whole is better than the sum of the parts. And so, again, I had an opportunity to do just one little thing. When I first got licensed, all I did was sit on the phone. I don't know, this is before like discretion in accounts. I would sit on the phone and explain why someone should sell one international fund and buy a different one. That was pretty much, you know, so I got to have conversations. I got to learn how to provide this one little wedge of advice and so different than how we do it today. But it was a neat opportunity. And I loved when people ask questions. Maybe I didn't know. Maybe as I got better prepared for those conversations, it was extremely rewarding. It's all different today.

Michael: I love when people ask questions and I didn't know. Like, so is imposter syndrome not a thing for you?

Dianne: I mean, I think I'm pretty honest. I just, yeah, at that point, I mean, as young as I was, who was at that point, I was in my 20s and this is what actually I shared with Maggie, our youngest, newest advisor, who's going to be working with the next generation of clients. You don't have to know it all. You just have to know who to go to, to find the answers. And that imposter syndrome, I think that's real for all of us for a long time until because there's just no substitute for experience. You have to go through a lot of experiences, right? Before you feel pretty confident.

But it's not to say you wouldn't get great advice from someone brand new in the industry. I just think it's easier to get that advice when it's been through a team effort, like by committee. We've decided we're doing something. And much like back in the day, I would make that call about one thing you could be pretty confident about sharing this one idea. So, yeah, you don't have to be the expert in everything and you can not know something. You just know a lot about this one thing at the beginning.

What Was Dianne’s Low Point On Her Journey? [01:18:41]

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

Dianne: It was the decision to leave the old team to make that change. That was tough. I really wanted that whole transition to work out. And hence the coaching that I got and lots of advice from people I trust in the industry. And it was always plan A to stay and have this successful transition. And when that didn't happen and pivoting to plan B and feeling like there's uncertainty with that. You don't know how it's going to all work out. And as it turned out, it was the best decision. Along this journey, it was the best decision to start the firm and with the people that are there, the team that we have, and the clients that we serve. It's been great.Dianne’s Old Team, What Wasn’t Working And What Lead To The Transition?

Michael: Can you give us a little bit more context of just what was the setup with the old team in the first place? And what wasn't working for you from your perspective, at least that you've had to…

Dianne: Yeah. And again, I bet you this is not too uncommon. So there was the old team had the original advisor and I came to work with her. And over time, I just developed more client relationships. I started managing the team. I started the clients I worked with were the A clients. The clients I was attracting were bigger clients. And yet there was no formality to a partnership or a path to ownership. The advisors that I work with today, the associate advisors, didn't even have an opportunity for ownership, didn't have a seat at the table, no decision-making capabilities. It just became very, it was all sort of top-down.

There was no collaboration. There was no opportunity. Even though it took a long time to get to that place, once I was there, it was very challenging to imagine, just staying in that place, just being not an ego thing, but a heart to develop all this and then have no confidence that it was going to be, that there was going to be a successful transition. to a practice that looks like what we have today, where everybody would have a seat at the table.

Michael: Because in essence, you were growing in your career. You were expanding the team, moving up market to more valuable relationships, driving more revenue. And in the same kind of employee role that you'd been without…

Dianne: Yeah. Even though it was...

Michael: ...like, if I'm making a bigger piece of this pie, do I get to have a part of this pie at some point.

Dianne: Exactly. It wasn't even an unfair revenue share. There was nothing like the relationship was the, the business aspects of it were equitable. It was the other things, the soft things. It was how we manage the relationships that we take a focus that's more on the planning and the client need and not on the product. It was just a different approach and I felt like that I was having success with that approach. And then it was, but it wasn't something that we could adopt across the team because the founder wasn't on board with that. We were moving in a different direction and with some resistance. So that was very tough.

Michael: The transition to launch your own firm was the first time you had to go through the like, ownership-y, do I actually like set up a firm and own a firm and find the lawyers that I need and all that stuff?

Dianne: Yes. That's right. That's exactly right.

Michael: How was that transition?

Dianne: We actually had a lawyer client of ours who has a partner in his firm, who works with a lot of financial clients in establishing their ownership structure and operating agreements. So we had someone we, through someone we knew and trusted, we got to someone who could help us with that. And we were, it was the first thing we did was to make sure that we had something in place that defined our ownership, that defined how we were going to operate. The decisions that we make as partners and how that was going to go. And so our future planning from the beginning was all about what the firm would look like in the future and what we were trying to accomplish and where we want the firm, you know, like 50 year decisions as they call them. We were trying to make these really big, important decisions right from the beginning.

I would just say that the one thing that we might have done, we might, again, I think this will evolve over time, but we were so, the pendulum swung so far in the other direction in terms of we wanted everyone to have a say on everything. And we were definitely trying to make it so much more collaborative, almost at like the detriment, because now it's like, we all have to decide if we're buying branded merchandise or something. We have to get that. We have to get better about decision-making. That's something we can improve on. And that every partner doesn't have to be part of everything. But we so much wanted it to be different than the last environment that I think we swung a little far in the other direction.

Michael: Interesting. You got founded, born from the ashes of we're going to be a hyper-collaborative decision-making environment. Except now it's gotten larger and there's 13 people and 4 partners and it's slowing down a little to have to have every partner sign off on every decision.

Dianne: Exactly, exactly.

Michael: How did you get everyone lined up in the first place as you were formulating this? I think you said like it was you and 3 people who were going to be partners like the 4 of you are doing these operating agreements, 50-year decisions, as you put it. Practically speaking, like, how do you get everybody synced up on 50-year decisions?

Dianne: Again, I mean, we may have to, it's only been 5 years and we want to make some modifications. So we thought, but no, I think we all were motivated to, we worked together for, in the case of Cecile and I at that point, a decade, Joe and I, 2 decades. So we've already had a long working relationship. Eric, 7 years at that point. So we already had this trust between us. We all knew what we wanted and some things were more important to one partner than another. So we just went with it. If it was important to you, then we wanted to identify that and make sure we addressed it, dealt with it, included it, if it needed to be.

I think that there was a lot of trust between us before we ever left and so establishing the new firm wasn't a big lift. Once the clients agreed to come, like, you know, again, people have been through it when you leave and you invite clients to join you at a new firm and you're starting from scratch because of all the rules, you take nothing with you. Other than their name, address, and a few things, you just hope that they're on board because it's some work. It's some work for the clients to make the move.

What Does Dianne Wish She Could Go Back And Tell A Younger Her? [01:26:59]

Michael: What else do you know now you wish you could go back and tell you 10, 20 years ago in your career? What would you go back and teach younger you?

Dianne: I would teach younger me that it's so much more about relationships than we all like maybe identify. It's not what you know about the industry or what you know about a product. It's what you know about that person. It's a people business.

What Advice Would Dianne Give Younger, Newer Advisors Today? [01:27:27]

Michael: What other advice would you give younger, newer advisors coming into the industry today?

Dianne: Our young advisor and I were recently having a conversation and she was a little nervous about this idea of leaping into giving advice and that sort of thing. And what I shared with her is that. You know, the old adage, people don't care what you know until they know that you care. But also what I was saying to her was, we know so much, just what we absorb every day, being in the office, in the industry, every bit of collateral, every time we listen to a Kitces podcast, we know so much more than we give ourselves credit for. So what I was sharing with her is when you're in front of a new young client, you already know far more. You're the expert. You just have to believe it.

Michael: I like that. You already are the expert. You just have to believe it.

Dianne: Yeah, exactly.

How Would Dianne Define Success? [01:28:28]

Michael: As we wrap up, this is a podcast about success. And just one of the themes that comes up is the word success means very different things to different people. And so you're on this wonderful path of success. I mean, the business is 500 million+ and 13 team members. I think the business is successful by any traditional measure. How do you define success for yourself at this point?

Dianne: I think that my filter for success is always wanting to make sure that the people that mean the most to me, my family, my very close family, my husband and kids, but also my parents who are now deceased. I have 11 siblings. Maybe that's why team was so important. But whatever my filter is, it's always would they be proud of this? Am I doing something that makes a difference?

Michael: Very cool. Is it something that makes a difference? I love it. Well, thank you so much, Dianne, for joining us on the Financial Advisor Success Podcast.

Dianne: Michael, thank you. It's been a real privilege.