#FASuccess Ep 202: Improving Client Follow-Thru On Advice By Scaling A Quick-Touch Monthly Meeting Model, With Pamela Capalad

What You’ll Learn In This Podcast Episode

• How Pam Discovered Her Niche Clientele Of People Who Are Afraid To Talk About Money [04:29]
• How Brunch & Budget Evolved From Trading Advice For Free Food Into A Full-Scale Business [12:17]
• How Pam Schedules Her Monthly Client Check-Ins And The Software She Uses To Keep Her Clients On Track [25:18]
• Why Pam Started Using MoneyGuidePro’s MX Platform [32:53]
• Pam’s Process For Onboarding New Clients And How Her Monthly Client Quick-Touch Meetings Are Structured [41:32]
• What Brunch & Budget Looks Like Today And How Their Services Are Priced [52:32]
• Pam’s Client Capacity And How Her Firm Is Staffed [01:00:29]
• Why Pam Decided To Obtain The AFC Designation In Addition To The CFP And How She Finds Her Prospective Clients [01:12:22]
• What Surprised Pam The Most About Building Her Advisory Business And The Low Point On Her Journey [01:26:10]
• The Advice That Pam Would Have Given Herself Five Years Ago And Her New Group Financial Planning Program [01:33:18]
• The Advice That Pam Would Give New Advisors And How She Defines Success For Herself [01:41:10]

Resources Featured In This Episode:

• Pamela Capalad
• Brunch & Budget
• Brunch & Budget 2 Advisors
• Brunch & Budget Podcast
• Pockets Change
• See Change
• Meister Task
• eMoney Advisor
• MoneyGuide
• MX
• Mint
• Tiller
• Using Tiller Money For Cash Flow Tracking And Budgeting With Clients
• UCLA Study Links Personal Capital App to 15+% Increase in Savings
• AFC Designation
• Idealist

Full Transcript:

Michael: Welcome, Pam Capalad to the "Financial Advisor Success" podcast.

Pamela: Thank you so much for having me. I'm excited to be on.

Michael: I'm really excited about today's episode... We try on this podcast to really showcase just a wide range of advisors, approaches, styles, value propositions of like, size of firms, pricing models, and really just show the range and the richness of all the different ways that we can provide financial planning advice and create value for clients. But I feel like, truly, and in the most positive way, like your business is a little bit kind of out there and different from some other advisors in what you've built. I think you've done a lot of things that look different than the traditional financial advisor business model. And so I am super excited just to have you on the podcast and share what you're doing. Right down to the name of the business, which is Brunch & Budget, which I know for you was very literal in the original founding proposition of the business, which is like, hey, if you want some financial advice, we'll do brunch, and you'll pay for it. and I'll give you financial advice.

How Pam Discovered Her Niche Clientele Of People Who Are Afraid To Talk About Money [04:29]

Pamela: Oh, yeah, no, that is... And honestly, when I first started doing it, I was literally just trading food for advice. I had friends who were asking me a bunch of questions. And I am part of a pretty big artist community. So I was the only finance friend around. When people found out I was in finances, I would get cornered at parties. People would be asking me about IRAs and helping to check their credit scores and things like that. And one day, someone asked me for help and I was like, "Do you want to do it over brunch?" And she was like, "Oh, okay." And her whole face changed. She lit up. And this fear that she had about just asking me the question, and the switch over to like, "Oh, yeah, let's do it!" was just like amazing. It was instant. And I was like, "Oh, this could actually be fun for people if we did it this way."

Michael: And so the idea was just like, going to a financial advisor is scary, going out for brunch is just sort of chill. So this is a comfortable way to talk about finances and money? That sort of angle?

Pamela: Yeah, that was the original conceit. It was really just like, "Oh, people feel better when they have food in front of them. And people can kind of talk about anything when there's food in front of them. So why not talk about money?" And I think what it actually really evolved into, and really, with the mission and vision and like values of Brunch & Budget is how do we take away the shame and embarrassment that we all kind of feel around our money? And some people have more degrees of it than others. But what I like to say is that my business serves people who are afraid to talk about their money. That's my niche. And really, by putting people in a place where we're breaking bread, we're finding common ground, and we're having a conversation that feels comfortable, people just open up, and people are open about their finances in a way that they've never been able to before.

Michael: I love that framing that my business niche is serving people who are afraid to talk about money. It's powerful to me because I think we've long had these challenges in the advisor world of, like even just simple things like, I'm supposed to be working with a client, I asked them for the data, they don't give me the data, I'm like, "What's going on? You've got to give me the data so I can do the plan and do the analysis and give you the thing at the end." And we can get stuck at relatively early stages like that in the planning process.

And I found, in practice, for a lot of clients, it basically comes down to, "Well, I'm not really, actually, that financially organized, because, frankly, that's part of the problem why I need a financial advisor. And when you give me this data gathering form, I'm not really sure how to fill it out. I don't have all my information together. That makes me feel awkward or outright shame or guilt, because like, apparently, all your other clients have all this information together, but I don't. So I must be particularly broken and a terrible client."

And we can sometimes get stuck so early in the planning process and not even realize it because of these – I was going to say hang ups – but I feel like even that puts more blame on the client than it should be. We get stuck in these areas because there's so much fear and embarrassment and shame and awkwardness around money. All of which gets amplified when you're basically going to bare your soul to a financial expert. It's like, so let's figure out how many different ways you completely screwed up your financial life so I can help you solve it. Which feels great as an advisor because we're showing our value, and just makes people feel awful when we poke all of the different holes and all the different ways their financial lives are screwed up.

Pamela: Yeah. Oh, yeah. I'm glad that you brought up the fact-finder in general – in that big questionnaire – and even the fact that we call it a ‘fact-finder’ and data gathering. That's scary in and of itself. And I think that we take so much for granted in this business when it comes to jargon and when it comes to how we talk about things internally. And thinking about how someone who's literally never talked about their finances to anyone. That is where a lot of my clients are coming from. This is literally the first time they've talked about their finances with anyone. They don't tell their mom about it, they don't tell their significant other about it, they don't tell their friends about it. And so I am for the first time hearing out loud from someone that they have credit card debt, and that they have never checked their credit score. And they don't know what an IRA is. And they get this long fact-finder form. And they're like, Oh my god, I don't know how to answer any of these questions.

I actually, literally, have – at the front of my fact-finder, it says, "Please be kind to yourself as you fill this out. This questionnaire is kind of long, and you might get some feelings and thoughts while you're going through it. Possibly feeling like an idiot for not knowing how to answer some of these questions. Totally normal to feel this way and know that you are not alone in this, and you are not an idiot, and it is okay to not know how much you spend on food or what estate planning is. You are still great." And that's the first thing they read before they dive into this 10-page thing.

Michael: Wow. That's awesome. Wow. I just love that we're putting it right out there. Again, my business is just certain people who are afraid to talk about money. So when you think about that it quickly gets to, well, how do you make them feel more comfortable about talking about money? Well, let's just put it at the top of the data-gathering form, you might not know everything on here, and it's okay.

Pamela: Yeah, most of us don't. This is the first time you're probably doing this ever in your life. And lots of people are the same way. And what I've really focused on is how do we make people feel like they're being seen individually, but also that they're not the only ones who are dealing with their finances in this way. And I think that's what's really important about Brunch & Budget, and really important about our job as financial planners, is to make people not feel alone and to have them understand like, "Listen, the financial system is screwed up, it's convoluted, it's confusing on purpose, it's probably not you in terms of how you got here."

Michael: So I'm trying to help people who are afraid to talk about their money. Isn't brunch in a public restaurant sort of off-putting from that perspective?

Pamela: So it's funny, I don't know if it's a New York thing, people talk about whatever during brunch. I don't know if there's a culture where people aren't listening, or people don't care. People break up on the street in New York. So we may not have a filter in that sense. But people have generally been comfortable with it. I also do go to people's homes. So people have invited me over to their home and made me brunch, which is always really lovely. And also, people – pre-pandemic – had the option to meet virtually. Now everyone meets virtually, but people also had the option to meet virtually if they really wanted to protect their privacy in that sense. But a lot of people, honestly, we just kind of talked quietly or picked a loud brunch place and people were fine.

Michael: And the conversation just sort of hushes for a moment when the waiter or waitress comes over and fills your drink or serves your food and then we get back onto conversation again?

Pamela: Exactly, exactly. It's really just like we're having a brunch and happen to be talking about money.

Michael: What does this look like from an advice and planning perspective? I know it's evolved a lot. So we'll get in a few minutes to where it is. But take me back even to the beginning while you're starting. Just this model and this experiment of what does it look like if we just literally do brunch and talk about money and budgets? Because I think of this as the equivalent of like an hourly planning engagement, coming to an advisor and asking whatever questions are on your mind, they will answer the questions with their expertise and then we part ways. You simply did it over brunch. So we're not necessarily doing financial planning software and planning projections. Like, "Can you move your plate over to this side because I need to turn to page 17 of the report?" Was it more of that hourly, "Let's just have a conversation," kind of advice engagement? Or were you actually trying to do this as a three-brunch series? And we're going to come back in two weeks, I'm going to present your reports and actually doing what I'll call a more 'traditional' planning process?

How Brunch & Budget Evolved From Trading Advice For Free Food Into A Full-Scale Business [12:17]

Pamela: Yeah. I'm laughing because you say that, and I was like – early on, I didn't know what I was doing. I was just like, "Let's cram as much as possible as we can in this brunch session." And I had brunch sessions lasting like, two and a half or three hours long. I was having them pull up Mint, I was having them pull out statements. I was trying to do analysis on the spot. And I think as I did more of these, and I realized – well one, just like how impossible that was, and also that people do have money fatigue when it comes to talking about this stuff after a period of time, that I really need to figure out how to condense it into one hour. And also figure out what advice I could actually give that was actionable, but also didn't take very much analysis.

So, especially for the first brunch, a lot of the conversations that we have are around what their goals are, what their core values are. We look at their savings; we look at their checking. We talk a little bit about their cash flow; we dive into like if they have any questions about employer benefits, their 401(k), things like that.

But a lot of this stuff is some parts education, some parts advice in terms of like, “Hey, you should roll over your 401(k) into an IRA because it's been sitting at your old job for X amount of time.” Or, “Hey, do you tap into your FSA at work when you sign up for health insurance?” So it's these things that, as financial planners, we just kind of know off the top of our heads and take for granted that we know, and it doesn't take much analysis to just be able to look at a questionnaire and say, “Oh, these are the few things that I can pick out that I know would be super valuable for you.” And it can even be as simple as like, “Hey, you don't have a savings account,” or, “Hey, your savings account is earning 0.01 percent interest, have you ever heard of high-yield savings?” And that's where the conversation really opens up.

Also, we do look at their credit card debt. And so we give them an education on how to raise their credit scores, we give them an education on how to open a new credit card, how that affects your score, things like that. And I think that ends up taking a lot of the hour. And what we do afterwards is we actually send an email summary of everything that we talked about in terms of what the next steps are. And the brunches have actually become prospect meetings. So it's this weird hybrid combination of they pay for a brunch and they pay a fee too. So our fee is a sliding scale – pay what you can. So we take them on as a client in that hour, but also if people feel overwhelmed or they feel like they can't do this on their own, they get a little taste of what it's like to get advice in that one-hour brunch. And then we actually pitch them into our longer ongoing services if we think it'd be a good fit for them.

Michael: Okay. So talk to me a little bit about, I guess, the evolution of this as a business model. Because as you just said, in practice, now this kind of queues them up for opportunities to work with them on an ongoing basis. And I know you've got a whole ongoing service model around that which we'll come to soon. But correct me if I'm wrong, really early on when you got started, the brunch was the business model. Right? Like, I'm going to get paid for the brunches and that's the deal. So talk to us just how has the pricing model evolved? Well, I guess initially, it started with just literally, "Buy me brunch, and I will give you advice in exchange for some free food." How did the brunch model evolve over time into getting paid for brunch? And then when did it start to move into something different or additional beyond that?

Pamela: I honestly didn't think this was going to even turn into a business. I was doing this on the side to help friends, and they told their friends, and they told their friends. And eventually, I realized I was literally sitting and meeting with strangers for brunch. Like they were three times removed from the friend who referred them.

And one thing that I noticed was that I wasn't planning on charging, but when I didn't charge, then they wouldn't show up. I would have people just straight up stand me up. I would have people who would text me two hours beforehand and say, "Oh, my God, I'm sorry, I can't make it. I went out of town, and I forgot we were meeting." And so I actually added the 'pay what you can model' because I wanted to have people put some skin in the game. That was it. That was really how all of that started. I was like, I need them to show up. And that's the first step. And so when people pay for something – when people pay for advice – they take it seriously and they actually come. And so as soon as I added that, 98%-99% of people would actually show up for the brunch.

And then one thing that I realized was, we'd have a really great meeting, they'd be super excited. There was no plan for me to do any ongoing work, it was more of like, "I'll check in with you in three months and see how you're doing." And so I would send them this long email, they would say thank you. It would be like maybe a list of 8 to 10 things that we talked about. And then three months later, I had set a reminder to check-in. And almost everyone that I checked in with was like, either they came back and told me that they didn't do any of it, or I just didn't hear from them at all, because they were probably embarrassed that they didn't do any of it.

And so that's when I realized that there was probably a need for some ongoing support. And not even just like, “Hey, let's like check in occasionally,” or “Hey let's like try and figure out how to meet regularly.” A lot of it was not just about the advice and about talking through what needed to happen. But as I started working with people on an ongoing basis, because when I first...

So, my first idea, just to tell you how I really started is I actually was like, "Okay, I want to charge what I think is a monthly subscription." I started off charging like $20, $40, or $60. And I had these three tiers. I was terrified of asking anyone to pay me money on a regular basis. So I was like, “I think I'm comfortable being uncomfortable with this amount.” And I just signed up a couple of people on to pay monthly. I actually started off meeting with them monthly just because I didn't really know what the model needed to look like. And I was like, “Okay, if they're paying me monthly I should meet with them monthly.” That's how that works, right?

And as that evolved, I realized that this, like, monthly meeting where I was meeting with people was a combination of giving advice, and also actually doing the thing with them. Like I would tell them, “Hey, you need to increase your 401(k) contribution. Let's just do it right now.” We're on a video chat, why not? "Why don't you screen share with me? Log into your 401(k) that you've never logged into before and walk me through what the 401(k) looks like." And then we would literally just increase their contribution and make sure their investment options were correct and things like that.

Michael: Because you might have been meeting via Zoom. And so it's just literally like, "Hey, why don't you turn on the screen share, and let's go to your 401(k) provider website right now. And okay, the logins – create your login and then go to your email, get the login password.” We're configuring this for the first time. And just literally going through with them on the spot. And by the end of this meeting, you will have a properly allocated 401(k) plan.

Pamela: Yes, exactly. And then you'll be done. And that's what we did for the month. Amazing, right? And so that was working, except it was getting to the point where it's not sustainable, especially for what I was charging. And so my next idea was, okay, I have to increase my prices a little bit. So I bumped them up a little bit with the highest price, which was like back in 2015 or 2016. It was like $100 a month, and then I would meet with them every month.

And then I started talking to other advisors who were doing a subscription model. And they told me they only meet with their clients twice a year, or they only meet with their clients every quarter. And I was like, "Oh my God, I should do that."

Michael: Just be a little bit less intensive than literally scheduling meetings every month.

Pamela: Yeah. And so I tried switching to the quarterly or semi-annual model for a little bit, and I signed a couple who were doing that. What I realized was if I did that I would have to truly create a full financial plan for it. So I started doing the traditional process of gathering all the documents, writing a financial plan, things like that. Whereas before it was modular. Before I was like, "This is what we need to do this month based on what you've told me." And I was writing a financial plan...

Michael: So the concern was if you stretch it out to only two or four times a year because it was modular, you just don't get through enough modular stuff in only two or four meetings a year. So then you felt the need to do more planning upfront? Am I still following that line well?

Pamela: And they would have to do stuff in between without me, right? So if we're not meeting monthly, then there would be tasks that I would give them in between that they would need to do monthly, or they would need to do on their own and then we would check-in in three months. And the things they didn't get to, we try and make time to do on those calls.

Suffice to say, that model didn't stick. I actually...

Michael: What didn't stick for it?

Pamela: People just still weren't getting things done. Meeting every three months was not enough for the people who I was working with and the people who I signed on. And one thing that I realized was that my job wasn't only to give people advice and to give them a task list. But for a lot of my clients, they actually needed help straight up implementing it. When we go and log on to your 401(k) or we call a financial institution – I actually call them financial advocate calls. So I've literally been on the phone with collection agencies and helped clients settle debt. I've called student loan servicers with clients and gone through the income-driven repayment program with them and helped them answer those questions.

Michael: And you'll just literally do it on the call, in the meeting with them? So I guess the whole like, "Is Pam authorized to speak to us on your behalf?" The clients they're like, "No, no, seriously, talk to her right now. I'm here with her. Talk to her because I don't know what to say to you. But I'm not happy with my relationship."

Pamela: Yes, exactly. Exactly. That's what we'd do. And so one thing that I also realized was those are separate from – I went back to meeting with people on a monthly basis because one thing I also realized was I was actually spending just as much time doing work behind the scenes – that the client didn't see – to prepare for a quarterly meeting than I was just meeting with a client every single month and doing work right in front of them.

So the other thing that I realized is that my clients, in any case, really like to see the work happening. They really like to see, "My planner is calculating this in front of me. We're going through this process together." The analysis that was happening behind the scenes was not getting calculated in the client's head as work that was being done. So all they saw was that we were meeting every quarter. And maybe some stuff got done in that meeting. And maybe some stuff didn't.

And I was spending a ton of time on the back end doing all of the analysis, preparing reports, remembering what we talked about three months ago, even just going through all those notes and things like that was time and energy. And so I switched back to the monthly model. And I actually set a parameter where all my meetings are actually around 15 to 20 minutes long. So I do meet with people on a monthly basis, but I'd spend about 15 to 20 minutes with them. And we talk about cash flow, and we maybe talk about a task that needs to get done. And if we need to schedule an additional financial call in between, we'll do that.

But what I found was clients love it when, for instance, like a client wants to buy a house, and they need help calculating their debt to income ratio. I'll do it right in front of them. I'll take the five minutes to go to the mortgage calculator and calculate the mortgage and put all their debt in a spreadsheet right in front of them. And they find that super valuable. They see what the process looks like. And I feel like they end up understanding it more and connecting to it more too versus if I just sent them an email and said, "Here, we'll talk about this later." And so going the monthly route not only ended up with me either spending the same amount of time or saving me time by doing that by meeting with clients every month, but the clients actually felt like they got way more value out of me actually doing the work in front of them.

Michael: Because well, they literally see the progress. Like, had the monthly meeting, thing got done. Had the monthly meeting, thing got done. It’s the end of the year, like wow, we got a lot of things done.

Pamela: Yeah, yeah. Stuff that they hadn't done for years that they knew was on their list. And we did it all together.

Michael: And so, how does this look? Just from the scheduling management end. This is a bajillion short meetings to be scheduling getting done. Do you end out putting clients into standing meetings and standard routines? Like, "Okay, I don't currently have a client at 11:15 a.m. on the third Tuesday of the month. You can have 11:15 a.m. on the third Tuesday of the month, and that'll be our time to do our monthly check-ins." Are you building it that way? How do you get all this done? Because I'm just imagining the sheer number of meetings that have to be scheduled. If you're not careful, you can spend 15 minutes of back of forth correspondence to schedule a 15-minute meeting, which is not going to go well for the efficiency of the business to have many, many clients.

How Pam Schedules Her Monthly Client Check-Ins And The Software She Uses To Keep Her Clients On Track [25:18]

Pamela: Which is definitely what was happening for a while. I remember the first time that I got an automated calendaring system, and I was like, “Oh, my God, this changes everything.” But we were still running into an issue where clients weren't scheduling. So what we started doing a couple of years ago, is at the end of a meeting, we always scheduled the next meeting. So there's no standing meeting. It's, “Hey...”

Michael: Like my dentist. I'm not allowed to leave my dentist until I schedule my next tooth cleaning. So okay, so we do not end the meeting with Pam until we have put the next one on the calendar.

Pamela: Yeah, so everything is always rolling. And if they have to reschedule in between, that's fine. They can use the scheduling system, they can email, whatever they need to do. But they're going to remember that they had to have the meeting in the first place. The other way we were doing it, they just kind of forgot. And then a month would roll by and they couldn't get in the calendar.

Michael: Interesting. Interesting. And so this becomes just the ongoing meeting cadence. So this is a monthly meeting model.

Pamela: Mm-hmm. Yep, we meet every month for 15 minutes. I actually keep track of tasks in a task management system called MeisterTask. So we have things set up in columns. And it's Kanban board style.

Michael: MeisterTask?

Pamela: MeisterTask. Yes. Yeah.

Michael: Okay. So this is not industry software. This is just like standalone task management?

Pamela: Yeah, standalone task management. And it's similar to Trello. But honestly, prettier.

Michael: Okay. So the colored columns, and I can move my little cards across the different columns to show the status and things that have been done.

Pamela: Yeah. And I tried many different ways to configure what was the best way to do it. And I was like, "Do I put things in categories? Do I sort it by like priority, blah, blah, all this stuff?" And what we settled on is that we have a column for quick links. We have a column with all their goals. We have a column that says 'current actions'. We have a column that says 'future actions'. And then we have a 'done' column. And so the only thing that a client needs to worry about is that current actions column. Every month, we move into the 'current actions' column. This is what we're thinking about this month. This is what you're working on this month. The 'future actions' column is everything that's parked. And so what ends up happening is clients either know they don't have to worry about it, but we're going to get to it eventually, or clients get ahead and they start working on their 'future actions' and feel like they're acing the test.

Michael: Interesting. And from what you're describing, I should think of the MeisterTask set up as, basically, like your standing client meeting agenda. Like this is basically the agenda. I don't need to make separate agendas, we just pull up MeisterTasks at the beginning of every meeting and see what's going on. "Okay, here are the goals you're working on, here are your 'current actions'. How are you doing? Can we check this one off?" If not, let's work on it. If yes, we'll move it to 'done' and we'll grab a 'future action' and pull into the 'current' column. And that's going to be our thing for the next month.

Pamela: Yeah, that's pretty much how it works. So again, when we started meeting with clients every month, it eliminated so much prep work. Like separate agendas, looking back at past calls, and trying to remember what happened and everything. Because also, you can take notes in MeisterTask and leave comments, and clients can leave comments back and forth throughout the month. So clients who are MeisterTask power users will actually put in things that they want to talk about or work on in MeisterTask and put in questions in MeisterTask. So it's been a really great way for clients to stay involved with their plan in between our calls as well.

Michael: Interesting, interesting. And how does this work – just, literally, mechanically? Because obviously, I'm assuming you have to have one of these for each client. Clients shouldn't be able to see each other's boards and items and such. So do they end up buying the equivalent of a business plan for the software as though you're a team and every client is a team member that can only see the board for their team member participation? And that's basically their interaction? Is every new client like a new "team member" who only has limited access to the one board for them?

Pamela: Yes, exactly. I love all these questions. I'm like such an operations nerd at heart. So I appreciate all these. I'm like, I'll talk about it all day.

Michael: I'm just imagining though like, I'm sure this system was not literally made for what you are using it for. So, how do you just jerry-rig this together? So, I guess, you just have to pay a couple of dollars a month for another user?

Pamela: MeisterTask is actually free if you only have three boards. So yeah.

Michael: And every client has only got one.

Pamela: And every client has only got one. I have had clients who have bought the premium version of MeisterTask. They're like, "I have 15 boards now because of you." But most clients only have one. And basically, we have our own logins as a team. And then everyone on my staff has access to every client's board. But the clients themselves only get shared to one board.

Michael: So they've basically got their free account and they give you access, but you don't actually have to have like 50 boards for 50 clients. You've got 50 clients who each have basic accounts that only have their one board, and they share to you so you can get access, but then...

Pamela: We actually share to them. So we create the boards, we manage them. We see a list of like, all of our clients' boards in our MeisterTask login because we have a premium login, and then we share their one board with them. And then that's how they access it. And so there's actually a direct link to it, too.

Michael: Okay, but because their login is only their board, you don't actually have to pay for each of them as a user that gets set up and logged in, you just have a premium subscription for yours, because your account has a premium login. And then 50 other accounts are free 1-board only logins?

Pamela: Yes, exactly. So on their end, they don't need to pay anything. And neither do we.

Michael: And I'm struck just at how this flows from the business mechanics ends. That when you've got these regular ongoing meetings and they're smaller bites, you just don't end up with a lot of meeting prep work. Because there's not a lot of stuff to remember and catch up on, just literally like, "Okay, this was the task from last month, we'll talk about the task, there will probably be notes on the task about what's going on with the task. And you did it or you don't and we talk about it, and then we queue up the next one."

Pamela: Yeah, yeah. And depending on the client, it's definitely there's an art to how many tasks to give certain clients. So some clients are like really great at completing them. So we do a lot more than others in a month. But yeah, that's basically the rhythm. And so I will check on a client's task list. What I do is I actually look at their cash flow. So we actually use MoneyGuidePro. We recently switched from eMoney because MoneyGuidePro has this platform called MX – this personal finance manager called MX – so we switched clients over to that. And I check their cash flow. I spent probably maybe like 5-10 minutes before the meeting. I check their cash flow and see what their spending looks like. I look at their tasks. I'll see if I missed any comments in between. And that's my meeting prep for my clients.

Michael: Okay. And so, talk to us for a moment about MX. I know generally, it's another one of these personal financial management dashboard sorts of tools that MoneyGuide has integration to. Why MX because eMoney certainly has account aggregation capabilities as well? What was not checking the box for you on eMoney that led you to MX instead?

Why Pam Started Using MoneyGuidePro’s MX Platform [32:53]

Pamela: Yes. Oh, my God. So my background is I worked in wealth management. I'd been using eMoney since, like, 2008 when I first started the industry. It was super cutting-edge in 2008. And it still is in a lot of ways, but for wealth management. And so my clients are not wealth management clients. Showing them a 30-year cash flow would just make them upset. Honestly. They'd be like, "Oh, great. As soon as I stop working, I run out of money. Thanks. I knew that." A lot of my clients are in the early stages of their careers and the mid-stage of their careers, accumulating wealth. They have intermediate goals that are going to happen before retirement, like buying a house, starting a family, maybe changing careers, maybe quitting their job and freelancing, taking a year off, whatever it is.

And so with 30-year cash flow and eMoney was something that I actually didn't end up needing to use with most of my clients because we weren't doing retirement planning that far out. It just wasn't relevant. What I did end up doing was realizing that looking at one month's worth of expenses was not enough, looking at 30 years of expenses was not relevant. And so I actually started creating spreadsheets for my clients – just in Google sheets – that were 12-month cash flows.

And so I would literally go in and input manually all of the numbers in terms of what categories they were spending in. And the reasons why I was doing this were a couple of reasons. One was that clients had no idea what their bills were. So they had no idea how much was going out every single month on a recurring basis. And then bills would come in quarterly, semi-annually, annually. And so the 12-month cash flow allowed the client to do enough intermediate-term planning and start to see patterns in terms of when things were happening. So we captured the bills, and then we also captured their discretionary spending.

And this is where a lot of the work that we do with our clients really happens. A lot of our clients, a lot of people in general, honestly have no idea where their money is going. There's no clear way to track that.

Michael: And giving them, "Here's the data gathering form, please fill it out." So like, "Yeah, if I knew where my money was going to fill out the form, I wouldn't be scheduling a meeting with you."

Pamela: Exactly. Exactly. No, I ask clients all the time, "Do you track your money regularly or whatever you use to track your money?" And a lot of them look at me and they're like, "Nothing. These are guesses."

Michael: Trackable?

Pamela: Yeah, exactly, exactly. And so, the thing that we realized was that looking at someone's cash flow in one month didn't tell them a story. And we got a lot of excuses around why some expenses were high in one month versus the other. And they would immediately forget what happened. Like they would look at, like, the food spending and it was like $1,500 and they're like, "Oh, that's because my parents were in town. And we had three birthdays." And they gave me all of these reasons why it was so much higher. And then all of it was forgotten the next month, even though the food spending was still the same. And so...

Michael: Because there was a different excuse.

Pamela: Yeah, there was a different reason, right?

Michael: So the core problem is because I know eMoney has some tools around tracking cash flow and "budgeting and reporting out," but eMoney was very heavily around, where did literally the last one month's worth of spending go? Which doesn't let you do annual budget analysis and spending conversations.

Pamela: Yeah, so we were using these spreadsheets because the things that were actually – in terms of like helping clients like change their habits and understand their cash flow – we were literally looking at the food spending. And we needed to know what happened in the last three months or the last six months and to show them like, "Hey, your food spending has been consistently between $1,200 to $1,400. See the number? And if you want to work on reducing your food spending, what do you think a reasonable goal or a target would be for you to lower your food spending to?" And then we'd be able to track them through that and have them look and talk through like, "Okay, and how are we going to achieve that goal? Are we going to only buy lunch twice a week? Are we only going to order in X number of times a week? Are we only going to Uber one way instead of both ways when we're running late?"

Those kinds of little things are the conversations that we're able to have when we get to show clients a pattern of like, “Look, this number or this category has been consistently high for X number of months. And how do you feel about that? And if you want that number to change, let's talk about how to change the habits around that number.”

Michael: And so your challenge was just eMoney couldn't do this, so you went to make your own Google Sheet. And so how did you get the data into the Google Sheet? Are we back to now clients need to know what their numbers are so that they can figure out what numbers to enter into the Google Sheet?

Pamela: So we were doing it for them for the longest time.

Michael: Okay. That sounds labor intensive.

Pamela: It was very labor intensive. People got fast at it after a while, I guess, but there was a lot of room for human error. And there was also, clients would have to categorize at least 24 hours before. And so we had clients actually categorize because there was no way we were going to be able to figure out what they spent money on. But we would go in and literally have a list of food, shopping, transportation, entertainment, and write in the number every single month from eMoney.

Michael: So you were manually transcribing stuff out of eMoney into a spreadsheet so that you could actually understand client budgeting trends over time?

Pamela: Yeah, exactly. And believe me, I had many, many, many conversations with my operations director about, "How valuable do you really think this is? Do you think clients get a lot out of it?" And she had sat in on a number of meetings, and every time she came back and said, "Pam, we have to keep doing this. I know it takes a lot of time, we'll figure it out. Maybe one day, we'll find something we don't have to do it.” But clients got so much value out of seeing all of their bills laid out, out of seeing all the discretionary expenses laid out in this specific way, where they could look at things over 12 months, that we could not justify not spending the time doing it.

Michael: And I'm just curious. Did you ever look at going to good old-fashioned consumer tools like Mint.com, and just having them use Mint instead of eMoney?

Pamela: Well, Mint also doesn't have the 12-month cash-flow feature that we had created in the Google Sheet. I looked at Tiller for a little bit, but I didn't want to learn macros or pivot tables or anything like that. I searched for years, far and wide. So I found MX a couple of years ago, but they are not out of the box. They're not subscription-based. Actually, you have to buy the program from them and then hire someone to code all of that in and all of this stuff. And I had recently demoed again. And I asked them, "Okay, so how much would it cost?" Because it was getting to the point where we're doing this for 75 clients. It was ridiculous. This was like someone's day, sometimes.

And so, it was one of those things where I started looking into it again. And I asked them, "How much would it cost for me to like, buy the program, hire a coder, do all of that kind of stuff?" Just to see if from a business perspective it will be cost efficient. And they told me that MoneyGuidePro partnered with them last year and already did all of that. And I was like, "Oh, let me check that out." And that kind of solved that problem.

Michael: Okay. So then explain what exactly does MX do? How is it different from eMoney or just Google sheeting? Like, what exactly is it and what are you using it for?

Pamela: Yeah, so MX actually has this tab called trends that will literally recreate the Google spreadsheet that we had in real-time. So anytime a client categorizes something, it automatically updates in this trends tab they have, I wish I could show you screenshots because it really is just...

Michael: I'm envisioning it. It's beautiful and things are categorized.

Pamela: It's so beautiful. And a client can jump on 10 minutes before our meeting, categorize everything, and then it automatically updates. And you could go back 3 months, 6 months, 9 months, 12 months and just see a client's entire, like year's worth of spending broken out by month. So it's kind of like QuickBooks, but for personal use, I guess, is the way to think about it.

Michael: Because I know this is a challenge with so many of these tools, there's still a categorization piece that clients have to do?

Pam’s Process For Onboarding New Clients And How Her Monthly Client Quick-Touch Meetings Are Structured [41:32]

Pamela: There is, yes. And so, our very first call with a client is an onboarding call. So we have four strategy calls at the beginning. And our very first call is an onboarding call. And that's all a tech demo. Here's how to log on. Here's how to link your accounts. Here's how to categorize your expenses. Here's how to use MeisterTask. Here's how to access all of the technology that we use around you, right? And so we train them on how to use it, and we teach them how to categorize. So we actually have them share their screens, log in, and have them navigate the site themselves. And so when we made the switch, we had some clients test it out and just be beta testers for the new site. And the feedback that we got across the board was that it was just so much easier to categorize, and it was more accurate. And people could do it on their phone more easily, too. So then we just started making the switch. And we just moved everyone over last month 100%. And the feedback that we've consistently gotten is like it's so much easier. I can log on really easily. I can see my stuff in between.

The other thing that MX has is a debt paydown calculator, which is something that a lot of my clients – we were doing it by hand. We had also downloaded like a Google Sheet template, and we were calculating all that stuff by hand. And because MX pulls in not only the debt amount, but the credit limit, the interest rate, if it's available, and the minimum payments, if it's available, the debt paydown calculator is pretty automated. And you can just show someone like, look at how long it'll take to pay off your debt if you make an extra $300 a month payment. So there are a lot of tools in there that we're able to use with our clients on a regular basis.

Michael: Interesting. And a few other questions. So, I'm assuming this also flows by account aggregation. So are clients giving passwords? Do you still have to deal with passwords breaking and resetting connections? As I know it's a common challenge in eMoney and the others as well.

Pamela: Yes, yeah. So everything is account aggregation. And MX has their own team of programmers we reach out to. So we actually don't reach out to MoneyGuidePro. MX has their own, like Zendesk-type of team that we email or message whenever a client's link is broken, or whenever we see links broken across the board, we'll be able to email them and they get back to us via email that way. So what's nice about this too is not all our clients stay forever, and we don't want or need them to, but we tell them we can give them lifetime access to the financial portal because while they're our client, we'll manage the link breaking for them, but when they go off on their own, they're able to email MX directly and get support on the software side if they continue to use the portal.

Michael: Okay, interesting. So they can actually keep it as a setup. So then what does this cost? What does the firm pay? And how exactly does payment work if they want to keep it after they leave you?

Pamela: They don't have to pay for anything. It's free lifetime access. It's a part of being a Brunch & Budget client anytime. We actually talked to compliance about whether we needed to charge for a client to keep their site, and it was actually more complicated to charge them a small fee than just to give them lifetime access for free. So it's just a feature that we now say is a part of the offering.

Michael: And what does it cost you to use the software and have access and set it up? Is it a firm charge for Brunch & Budget? Is a per client charge, like a per-account charge for each one they link in?

Pamela: It's all through MoneyGuidePro, so it's $2,500 a year.

Michael: Okay, so $2,500 per year for the firm. And you've got MX for...

Pamela: Per advisor.

Michael: Per advisor. And you've got MX for all of your clients.

Pamela: Yes.

Michael: Also, separate from also paying just the MoneyGuidePro fee for whatever MoneyGuide costs?

Pamela: No, that's all in. So, MoneyGuidePro is $2,100. And then it's a $400 add-on to use MX. So it's $2,500 all in.

Michael: Okay. So the actual MX add-on is very slight at the margin. It's $400 per year to add on to the $2,100. But you have to buy the $2,100 base license from MoneyGuidePro?

Pamela: From MoneyGuidePro. Yeah, exactly.

Michael: You were talking about tracking this over a year-round cycle. Is that for a client who's been on for a year? Or when the client logs in and links their accounts for the first time, you can go backwards from day one with the client and figure out what their spending has been historically?

Pamela: Yeah, it depends on what the financial institution provides. So usually, we can go back three months, sometimes a year, sometimes six months, a lot of credit cards will go back a year. What we found is we can usually see patterns just by looking at the last three months and be able to talk about it with the client. So the system will pull in the past three months' worth of data, which is fantastic. So we have a baseline.

Michael: Three months of history sounds like it's kind of standard. And then institutions may or may not be cooperative in going further back and letting you see more history.

Pamela: Yeah, exactly.

Michael: Interesting. And so this becomes an anchor for the monthly meetings that before every monthly meeting, clients get prompted to log in and tag their categories. And you're going to glance at what's going on with their household cash flow is a part of this process of, then, what do you what are your current actions? Which future action are we going to work on next?

Pamela: Yeah, exactly. And so our meetings are a combination of, "Let's get the financial tasks done, and let's keep continuing to analyze your cash flow and have you learn how to understand how to look at it." Because that's the big change, and that's the big mindset shift with a lot of our clients is lifestyle creep is real. And as you make more money, you end up spending it. And so, our clients don't realize... I had a client in total shock when she saw how much money she was spending on food. And she was like, "I had no idea that was happening." And when we dug into it, she was like, "Oh, yeah, I started going to that thing every day," or "I started going to this place every day. And I didn't even realize how much it was costing me."

And even just that awareness, we see clients go from spending $2,000 on food a month to like $1,500 or $1,400 in a month. And then we see that number continue to go down as they – and that's money that, all of a sudden, they have to say when they thought they didn't have any money to save before. And so the change is gradual. There's like that initial peak of like, “Oh, my God, I have to stop doing this.” But the continuous change is something we track because it's gradual. And it's the coaching part of what we do. We do financial planning, but we also do financial coaching. I'm an accredited financial counselor. I decided to get that designation a couple of years ago because I realized that a lot of my clients I was coaching and counseling them as much as I was planning for them. And a lot of the conversations we were having around were around behavioral changes, around mindset shifts, around really understanding what their habits were and how that connected to their values.

And so that's a big part of the work that we do. It's why we require clients to work with us for at least a year because it does take that long to build that foundation. And I think that with a lot of our clients who don't have experience with a financial advisor or a financial planner before, it's nice to know there's something that feels like a program where you're like, oh, in 12 months, I'll be in a different place.

Michael: There was a study that had come out, it was probably five or six years ago now, from Personal Capital when they started doing their budgeting and accounting integration tools where Shlomo Benartzi's team, who run the behavioral finance group, they went in and did a study of consumer behavior using Personal Capital's app. Like, how do people behave once they start tracking their spending and using account aggregation? And I think the number that they ended out with was the average user cut their spending by 15% in 6 months. Just when you think about that, for all the things we try to do to get clients to save more or spend less, be more financially responsible, just imagine a world, all you have to do is literally give them the tools and let them look at it and reflect for themselves. This was a no-human-intervention model. This was just people using the app to see where their money was going. And the average person was cutting their spending by 15% in 6 months because you literally didn't realize where their money was going until you look at it and go, “Oh, yeah, I guess I probably need to change that.”

But it's an interesting framing to say we do so much to try to get people to change their spending. And certainly, I think there's value to advice and guidance there as well. But I feel like we grossly underestimate the sheer amount of impact of just making it easy for them to actually understand where the money is going and show them that, and then just get out of the way and let them react.

Pamela: Yes. Oh, man, that's such a big part of it. And really, to add another layer to that, because I've certainly had plenty of clients who've tried to use me and have tried to use account aggregation in the past on their own. And everyone's like really excited at the beginning. And they're like, “Oh, my God, I'm going to change my life. I know where everything's going.” All this stuff. And then you do see a drop-off in three, four months. You do see people like, "The link keeps breaking. I don't understand why I'm looking at. I keep trying to spend less money on food, and I have no idea why it's not working." And I think that all of those things, you look at that on your own and you're like, “I guess I'm just bad at this. Maybe I'm just bad at money. I just don't know how to budget.” And that's the feedback that we get from clients who are in a place where they're like, "I'm trying this thing and it didn't work or my habit didn't change and I don't know why."

And so, I think that the clients who we work with also kind of need this other layer of, “Hey, the data is great. It's awesome that it's there. It can be really overwhelming to look at. So here's what we're going to look at right now, in this moment. Just this one thing. We're just going to focus on this one thing and work on that. And let's figure out what to do about that.”

And I think those are the conversations that we end up having with our clients.

Michael: Which I guess, again, is why you frame this as such a heavy component of financial coaching. Like, "Let's just actually help you change your behavior a bit for the better based on what we're seeing here. Because you know you need to do it, but if you only know what's enough, we probably wouldn't be meeting. But we're meeting. So there's maybe a little bit else that you need help with too."

Pamela: Yeah, absolutely.

Michael: So talk to us about how this works as a business model today. You've talked about – the first day was just buy me food. And then we were like $20 a month, and $60 a month, and $100 a month. And then we tried to get away from all the monthly meetings and the monthly budgeting, but we couldn't get away from it. So at least we found technology to automate it more. And MeisterTask keeps us efficient.

But relative to most advisors, like even with the efficiencies, just monthly meetings, a lot of meetings, a lot of activity is pretty intense. So talk to us about the business model. And how do you price this today?

What Brunch & Budget Looks Like Today And How Their Services Are Priced [52:32]

Pamela: Yeah, for sure. It's all on the website: brunchandbudget.com/budge. And we actually do a sliding scale based on income. So, rates start at $299 a month and go all the way up to $899 a month, depending on what your income is. And clients usually end up falling in the $399-ish a month range, I'd say. On average, our client fees are like $350 a month. And everyone gets the same level of service. So everyone gets four strategy calls at the beginning. So they get that onboarding call that I mentioned, they get a discovery call where we really do a lot of things like goal setting, priority setting, fact-finding, things like that. Then they get two financial planning calls. So the first call for the financial plan is usually going over cash flow, credit reports, credit scores, and then bank accounts and things like that. And then the fourth strategy call is going through investments, insurance, and tax returns.

What's been great about breaking up the calls into four – because I used to just do two. I used to do 2, 1-hour calls, and now they're 4, 30-minute calls. And I used to do two at one hour, and that was a little too long for a client. And the amount of things I was asking them to do in between those two calls was really overwhelming. So by breaking it up into these four strategy calls, I broke up what a client needed to give us in a way that felt more manageable and bite-sized for them too. So they'd link accounts and categorize in the first call, or they'd share their core values questionnaire, and on the second call we put together their bills calendar, and the third call, then we asked for like a handful of documents for the third call. And then we asked for more documents on the fourth call. And so we broke up that process.

And then after those four strategy calls, we meet with clients every single month starting from when the fourth strategy call ends. And so, this is where we put together their MeisterTask board. So they've been using MeisterTask since the beginning. So since the onboarding call. And I actually, when I can, will input tasks as we're talking. So during the strategy call. We don't get to all of them, usually, because we do have a lot to go over. So then, at the end, I'll go in and put in all of the remaining tasks that we didn't get through. And then that's how we start the monthly meeting. So by the end of the fourth strategy call, they have their whole list of things to do. They're onboarded on their financial portal, and we just start going and we just start implementing everything.

Michael: And so, you said there was this $299 to $899 a month pricing sliding scale based on income. So, can you talk a little bit more about just how does the sliding scale work? Is this a percentage of their income? Is there a grid? If your income is from A to B, you're here in C to D, you're here...

Pamela: That's exactly it. Yeah. So it's like, anyone who makes less than $80,000 is paying $299 a month, anyone from like $80,000, like $125,000 is paying $349 a month. And on, and on, and on. We have a separate grid for individuals versus couples. And so if you're in a couple, then the income scale is a little bit different.

But yeah, that's basically how it works. And it's something that I've literally had people sign up for it. Sight unseen. We didn't meet for brunch, they didn't call us, they didn't talk to us. They just like clicked by and then they became a client and they picked their income range and we started working with them.

Michael: And so now I'm kind of struck from the other end because, on the one hand, I'm sure initially there are people listening just imagining how to do all this stuff and make this work? How do we make the math work to make it economical? And now, suddenly, I'm listening to this. I'm like, “Well, wait, wait, wait, now I'm at the other end, $299 a month for what amounts to a 20-minute phone call?”

Pamela: And five minutes of prep.

Michael: This is like a pretty good hourly rate. Obviously, there's still some service work. And we’ve got to be available when they have calls. And I realize that's not literally the only commitment, but I guess there probably really isn't a lot in between. So if you know you're going to see your advisor again in three or four weeks, you tend to wait with most of the questions until you just have the next meeting because you know you just come in in just a few weeks.

Pamela: Yeah, well. And a lot of people do. And if they don't, then they'll email us or leave a note in MeisterTask. And that takes a few minutes to answer. If they ask a more complicated question, we'll stop and analyze. It's open enrollment season right now. So we're doing a lot of analyzing people's employer benefits and things like that. So that takes a little more time. But for the most part, especially when we really get into a rhythm, I can really finish a client call in 15 or 20 minutes and have spent like 5 to 10 minutes prepping for it.

Michael: And so, talk to us a little bit about affordability as well. I've got to think about... $299 a month is $3,600 a year. Which is like your starting point if they're making under $80,000, or even the next tier up. Like if I'm making $100,000, I'm paying $349 a month, which is over $4,000 a year. You're up at what essentially amounts to a sliding scale that can be 3%, 4%, 5% percent of household income, which is not a trivial number if they're going to go and save 15% more. We're definitely on a hedge here. But just when we all stress about charging people 1% of their assets and justifying this 1% AUM fee. And you're talking about something that can mathematically add up to 3%, 4%, or 5% of income and is very tangible because coming up with a bank account. Just talk about the affordability of this fee and get people comfortable with a number that I would think, relative to where they are, these are not small numbers.

Pamela: No, you're absolutely right. And we say upfront, this equals like 2% to 3% of your income for the most part. And I think that people who really need this really understand the value. As much as possible on the site, we're very transparent about the process, we're very transparent about what happens and what gets done. And also I feel like we are pretty clear about what you accomplish and what the value is. So I think when people look at this, they're at the point where they're like, "You know what? I need something. I've tried everything. And this sounds like something that could work." The other thing that kind of helps people get over the hump is knowing that they're only committed for 12 months. So I actually set up the 12-month commitment at first because we were doing so much work upfront and I wanted to see that work come to fruition. And because of all the work we were doing upfront, we needed to actually be getting paid for 12 months to make it worthwhile for us to work with this client.

But what ended up happening on the other end, and kind of on the consumer client marketing side, is them looking at it and saying, “Oh, I'm joining a program.” And so some clients will leave after 12 months, and some clients will continue on with us either at the same rate or at a reduced rate if we're doing less for them. If we're meeting with them less often. So after the first year, a client can switch to meeting with us every other month or meeting with us every three months. And that's how we continue working together. But I think clients recognize that this is not only a financial commitment, but it's also a time and energy commitment. So we also make that very clear that we're partnering on this together. It's not us doing everything for you. And the clients who sign up are very motivated, both financially, because we've priced it at a point where it's not unaffordable, but they feel it. They feel about money coming out. Yeah.

Michael: You're going to feel it but you know, if you're in pain because you feel like you don't have control over your financial situation and the rest, a year of making the investment for a lifetime of stronger financial foundation. If they're feeling the pain, that probably feels like a very compelling trade-off.

Pamela: Yeah. Yeah. And that's really how clients end up thinking about it.

Michael: So, what does this look like from a servicing or capacity perspective? How many clients can you handle when you're doing this level of ongoing monthly intensiveness for clients?

Pam’s Client Capacity And How Her Firm Is Staffed [01:00:29]

Pamela: Yeah, totally. So I was doing, at my max, I think 75 clients before I had... Well, I an operations director. I hired her as an operations manager. And now because we have two other employees, she's the director of operations. But I was doing 75 clients on my own with the support of the operations manager, and then we started looking for someone else to hire. Because at 75, my capacity – I will say caveat to that is I was doing a lot of other stuff. I was doing a lot of business development stuff. I was doing the podcast. I was doing a lot of marketing. I was traveling to do workshops and things like that for my other organization, Pockets Change. And so 75 felt like a capacity for me. And I will say, as someone who had a lot of industry experience working with clients and things like that, I think that what we're starting to see now with our other lead financial planner, that I feel like the right number is still going to be around 70-75 clients.

Michael: Okay. Because at some point, there are only so many clients and people you can keep track of and mentally manage?

Pamela: Yeah, well. And also, how many clients you could meet in a month before it gets to the point where it just really feels overwhelming. But I do think that a full-time planner, who we have that's not doing business development, that's not doing other things, can probably handle about 75. And she's only been around for just over a year now. So she doesn't have her full book of clients yet. But I think that in the next year, we'll really start to see what someone's capacity is in that sense and see what scaling looks like and things like that. And I think that's what this year has been.

So I got pregnant last year. My baby just turned one. But the other thing that happened...

Michael: Congratulations.

Pamela: Thank you.

...was my operations director got pregnant three months before me. So we...

Michael: Oh my. That’s a good stress moment for the small business environment.

Pamela: Yes. Yes, it was. And we had been trying to hire someone new for maybe a year or so. And we were having a hard time finding one person. And then both of us got pregnant pretty much at the same time, and we looked at each other and we were like, "I think we might need to hire two people to help out."

And so we ended up hiring someone who'd been in the industry for a while. And she's our lead planner. And then we ended up hiring someone else who actually had not been in the industry at all. So I posted this job listing on all the regular places, CFP board, Indeed, all of those things. But I actually also ended up posting it on Idealist. And Idealist is nonprofit and social entrepreneur or social enterprise job listings, as well. And just based on the work that I do around the racial wealth divide and racial wealth equity in general, they allowed me to post this job. And we found someone who was amazing and who really wanted to be in this industry and had no background in it. No licenses, no degrees in it, no client experience. And so she was truly like we're hiring her as an associate planner, career changer.

And I think that has been an interesting dynamic. It's also honestly been really great. Even though it was a stretch for us – budget-wise for the business – to have two people come on at the same time and to have them learn the business together and to also have each other's backs in a lot of ways when it came to navigating this. Because also, working virtually and working remotely can end up feeling really lonely, even if you have a team. And so having them be able to have that rapport was really great too.

Michael: I'm just thinking about this from a capacity perspective, like 70 to 75 clients that you're committed to meeting with on an ongoing basis is like 18 to 20 client meetings a week. But you're running 15 to 20-minute meetings. So in theory, I can basically do meetings in one-hour intervals, do six meetings a day, Tuesday, Wednesday, and Thursday, and then have Monday to get going and Friday to wrap up and be able to handle that client load with still some reasonable buffer and breathing room between meetings. I guess you could cluster them even more if you wanted, that you could do...

Pamela: I do. Like every 45 minutes. And also, not all of our clients on our list we meet with monthly. So when a client graduates...when we graduate them out of the 12 months, a lot of them we meet with every other month or every quarter because they already have that foundation. So they just really like having us around to help them through whatever the next thing is in their lives financially.

Michael: But I'm struck with this as well, just the nature of the work you're doing – there's not a lot of, in our traditional world, "We plugged it in the MoneyGuide or eMoney, we did our projection, and then we'll check in in 6 or 12 months and make sure you're on track for your goals." Like, "Update us on the progression and see if you have moved incrementally closer to retirement at 29 years instead of 30." You're living in a world with most of the value proposition, the advice is just literally, "Whatever current action you are working on that you bring to the next meeting and we figure out your next thing in the meeting."

Pamela: Yeah, that's it. That's what people needed. And what's interesting is going from wealth management to working with non-wealthy clients, I guess is one way to put it, I actually found myself working with a lot more people of color. So maybe just over half of our Brunch & Budget clients or people of color, half of our ongoing clients, I'd say.

And the thing that I realized is that I had to plan for them differently. And the reason why the retirement projections didn't work is because they were worried about their parents' retirement. Did their parents have a retirement plan? Did their parents have an estate plan? A lot of my POC clients are first-generation immigrants, first-generation college graduates, the first-generation with a professional salary, and sometimes all three. And so they're dealing with more student loan debt, they're dealing with not having a family history of homeownership, and they're dealing with other extended family obligations, financially, that I found hard to address under just my educational background with the CFP, and also my experience in wealth management. So we had to do things differently.

And if you think about first-generation college grads, first-generation immigrants, I've been calling them ‘first-gen kids’ – they had to fill out their own FAFSA form, they had to ask their parents for their tax returns. We had to fill out our field trip forms and our field trip slips and things like that. And so they're navigating all of this for the first time. They don't have a parent to ask to review their benefits with them, they don't have a parent to explain to them what an IRA is, they don't have a parent to explain to them why a will is important.

And so a lot of the things that we're doing for our clients of color, and you know – we're doing this for all our clients now – is a combination of education, but also really just like hand-holding them through this process for the first time. Because they don't have that safety net, both financially and also just education-wise, in a lot of ways.

Michael: This is one of the things that's long struck me just about our industry. And a lot of the focus, particularly these days, is on the racial wealth gap in the advisor community, both in the representation of advisors and the representation of the clients that we serve. And to me, it's been a long frustration that we seem to have just missed, when like 99% of the business models are built around managing pools of assets, and pools of assets are disproportionately not racially divided out there. That, yeah, when investable assets are disproportionately white, you end up with clients who are disproportionately white served by advisors who are disproportionately white. And as soon as you unhinge the business model from being based on assets under management and just let people pay directly from their income and their available cash flow, suddenly you get a more diverse client base, you get a more diverse advisor base, and all the demographics start looking differently.

Pamela: Yeah, yeah. And that happened to me anecdotally, and this is why I really started doing racial wealth equity work. I think I really started in 2016 digging into it, because I really started to see like, I'm not equipped to help these clients. I didn't feel equipped to help them with the training and the experience that I had. And so I had to learn more about how to help POC clients, I had to really understand what their background was. And I'm Filipino and Chinese. So I had one experience as a first-generation immigrant, but really understanding not only a client's family history but also the systemic history that they're dealing with that they may not even realize, and the generational systemic oppression that we've had to deal with as POC in this country, is something that affects their finances.

And it doesn't just affect their finances, but the reason why we spend so much time talking about behavioral change is because when you don't have money growing up, when you don't have access to resources, then when you suddenly do have access to resources, you're still going to do the things that you had to do when you didn't have access to resources. I don't know Michael if you're familiar with the marshmallow test? Do you know that?

Michael: Like for the delayed gratification?

Pamela: Yes, the delayed gratification. So for people who are listening who are not familiar with it, the marshmallow test is this experiment where they put a five-year-old in the room and they put a marshmallow in front of them. And they said, "Okay, five-year-old, you can eat this marshmallow now, or if you wait five minutes, and I come back and you haven't eaten the marshmallow, then you get two marshmallows." And the theory behind this marshmallow test was that if a kid was good at delaying gratification, was good at maintaining their willpower and waiting for more instead of eating the thing right in front of them that would lead to success, financial success, life success, whatever it was.

And so a lot of people tried to recreate the marshmallow test. And the Atlantic actually put out an article a couple of years ago that debunked it. And they realized that the kids who didn't eat the marshmallow were in a higher socio-economic class than the kids who did eat the marshmallow. And so what that meant was that, yeah, the kids who ate the marshmallow were in home situations where there may not be food on the table the next day, where they were told they were going to get something and they didn't. And so if an adult tells them, "If you wait a little bit, I'll give you another marshmallow," why would they believe them?

And this is why it's hard to save. Because you're like, "I must have the money now or someone else is going to take it away from me." So that's a big part of helping clients understand, “Hey, you're not bad at saving. It's not that you didn't learn it, it's that there's a lot of other things that we have to unravel beyond just you learning it or getting the financial education that you didn't get.” And I think that's a big part of the work we do too. And also a big part of the work that we do is really helping clients understand these systems and the complications of them, how do you navigate them? How do you take advantage of them? How do you really help not only yourself but the generation before you and the generation that's coming after you?

And so we're working with these clients to help them stand between these two generations they're straddling.

Michael: And is that in part why you had said you ended out going out for the AFC designation in addition or separate to CFP? Can you talk about that for those who think our advisor world is disproportionately familiar with CFP certification and not so familiar with AFC? Share a little of what AFC is and how it's different and why you went to get that?

Why Pam Decided To Obtain The AFC Designation In Addition To The The CFP And How She Finds Her Prospective Clients [01:12:22]

Pamela: Yeah, I feel like AFC completed the picture for me. The CFP education that I got, I found super valuable in terms of understanding how all the systems work, in terms of understanding how wealth is accumulated, and how it's maintained and built. But my clients needed help with credit card debt, and how to get a mortgage, and how to budget, and how to save, and how to manage their bank accounts and things like that. And they also needed help on the counseling side. So I ran across the Accredited Financial Counselor designation and I looked more into the education courses that we're supposed to take and the material. And I was like, “Oh my god, this is what I've been missing.” One of the textbooks is an entire textbook called "Surviving Debt." And it's about, “Hey, this is the debt system as it stands, these are your rights as a consumer, as someone who's a borrower, and here's how to navigate through all of that.”

So, I was learning a lot of the stuff on my own, and the AFC really solidified it in a formal way all of these things that I was kind of piece-mealing together by like googling and experience and things like that, and kind of walking clients through the situations I was running across with them. So I decided to take the AFC to really round out my practice and to really round out my professional experience in all of this and really make sure that I was able to serve the clients that I was serving in a way that merited the same professional designation or the same professional level that the CFP did.

Michael: So now, help us understand where clients come from in the first place. How do you get people that are making less than $100,000 a year onboard for $299 a month, and keep a flow of them because, as you've said, a lot of your clients, they have a 12-month commitment, but they may graduate and move on after a 12-month commitment, which means you've got kind of an ongoing marketing thing you have to keep doing to keep a base of clients that you're serving? So, how does the marketing work? Where do you find people? How do you keep a steady flow of clients in this model?

Pamela: Yeah, actually, people find me on Yelp. To be honest.

Michael: On Yelp?

Pamela: Yeah. You will find me on Yelp. People find me through the local Google searches. Yelp was an idea that I got from a planner in Chicago, actually, several, several years ago. I don't even remember when. And he said that his clients had started leaving reviews on Yelp. And I was like, "Oh, that's great." And so, actually, when I found out the SEC really – which I know has changed since then. So this is not relevant anymore for anyone out there trying to get on Yelp. But back in the day, when Yelp was new, it was considered a third-party review provider. So as a financial planner, I couldn't modify the reviews. And when I talked to my compliance consultant, they actually said, as long as you email every single client to get a review, then you can ask clients to leave reviews. And as long as you don't charge the clients...

Michael: Don't cherry-pick. Yep, don't cherry-pick. But if everybody gets a chance and you can't modify it, it's just a third-party site where there's public feedback. They could shout what they think of you in the Agora marketplace, they can shout what they think of you on a website that is not yours and you don't control and you can't cherry-pick.

Pamela: Yes, exactly. And so clients have started leaving reviews; people just started leaving great reviews. Yelp has a really good local SEO. So people would search for a financial planner in New York or a financial planner, Brooklyn. They'd book a brunch on my site, like sight unseen, and then we'd meet. And then they would either get funneled into our Budge program or they would get an email with the next steps. And we check in with them every couple of months or something and see how they're doing. And so that is where a lot of my clients came from in the early days. A lot of clients still do come through that.

But we also started doing workshops. My husband and I do our Brunch & Budget podcast, and we've been doing that since 2014. So it was a long-game thing. Doing the workshops is a long-game thing. I've had clients sign up after seeing me in a workshop like a year ago. They're like, "I went to a workshop of yours last year, and I'm signing up for Budge now" kind of thing.

And so that was something where clients came through. Clients listening to the podcast. We've been stepping up our Instagram games. We've got clients who've come through Instagram and things like that. So yeah, so a lot of it, honestly, because the people I'm trying to reach like, my biggest competition is not another advisor, my biggest competition is them not doing anything.

And so, if I can be out there as someone who feels accessible, who feels like they know what they're talking about but is not going to judge you, who feels like we'll take them through the scary process and make it not so scary. That's the goal. And if we can put ourselves out there as a financial planning firm that does that, that's how we get the clients that we get. And so we're attracting the clients who really are a right fit for the program.

Michael: I think that's one of the interesting and powerful things about the kind of business you've built and the model that you've got. I think, all-told – I don't mean this in a negative way – you have a fairly high-priced model that is more expensive than a lot of other advisors if you just literally try to boil down, what is the hourly rate for this service. Yeah, most advisors charging hourly are charging a lower number than you are. As you said, but you're not in competition with them. When you build something that is so unique and differentiated where, as you put it, again, you're not in the financial advice business, you're helping people who are afraid to talk about money business and making them comfortable with that. Your competition isn't other advisors because other advisors are scary, and you're not in a price competition dynamic because other advisors don't do what you do. It's just literally, "If you feel this pain, I can help you make this pain go away. And if you're willing to pay to make this pain go away, I would be happy to work with you." And that's the only case that you have to make. It's Pam versus nothing. It's not Pam versus the hourly rate of any other advisor.

Pamela: Yeah, exactly. Exactly. And I think that the clients who really do find value in the service... It's interesting because we're not results-driven, we're not outcome-driven, strangely. Because I know that's what so much financial planning is. But I like to say that our metrics are based in identity. I love it when a client says, "I'm a saver now." They're not like, “Oh, I saved X amount.” They're like, "I'm a saver." So no matter what happens, whether we're still working with them or not, they identify as someone who knows how to save. So even if they dip into their savings, even if they're at a point where they spend some of it and have to replenish it again, that's a skill that they've learned working with us. And I think that's a big differentiator too, is the coaching aspect of it. So much of it is now your identity and your relationship around money is completely different. I think that's such a big part of what we do too.

Michael: I love that framing that it's not about whether you reach your savings goal, per se, it's that someone comes out of it and says, “I'm a saver now.” My self-image is, “I'm a person who is capable of saving.” Savings come, saving go. Emergencies happen. Emergency funds get used, but when my self-image is, “I'm a saver,” then, if I have to use my savings, I make my savings back, because I'm a saver.

Pamela: Oh yeah, no. My biggest victories are when a client gets a windfall... And when I first start working with them, their instinct is to pay off the credit card debt. And then a year later, they get their tax refund. And they're like, "Oh, I just dropped it into my savings account." It's not that they don't have credit card debt still, it's not they're not working on paying down their debt still. But they reprioritized what they realized was important, and they reprioritized what they realized they needed to protect their finances. And I think that's the kind of thing that people really walk away with.

Michael: And so I guess in that context, now I'm seeing how all the dots connect. So your model essentially went from, "We'll advise for food," to, "I meet for brunch and you kind of pay me and pay me for my time," the equivalent hourly engagement sort of model, to what you have today, which is like, "No, we have this systematized ongoing 12-month program that helps you transform your identity and your relationship with money. And if you want to get familiar with what we do and get some valuable advice upfront, check out our brunch program. And I'll just meet with you for brunch in a totally non-scary format. And if that goes well, pay what you want for that meeting. And if that goes really well, I'd love to help you for the next 12 months."

Pamela: Yes, you make it sound so easy. You're right? No.

Michael: After five years of trying every possible permutation to arrive at this.

Pamela: I'm like, "Oh, okay, yeah," that is what it is though. It's so funny hearing it said back to me, just because we spend so much time experimenting still. I feel like that the model is always changing because the clients' needs are always changing. And I think the place that we've landed now even is going to be different in a year. It just is. And I think that part of our job as planners is not to find the system and stick with it. Our job as planners is to evolve with our clients and to evolve with their needs, and to evolve with the people who are coming to us. And I think that the thing that was so scary to me in the beginning that I've learned to get over as much as someone can, is to not be afraid to change what you're doing already. Because maybe it's kind of working, but is it still working? Or maybe it was working before, but now it's not working anymore? So what do we do? And how do you continually have a process where you re-examine your processes too?

Michael: To me, that's one of the interesting angles of what happens for advisors that kind of find their way into these sorts of niches, specialized business models, unique offerings. I feel like advisors that want to go that route are like, “Okay, I got to sit down with a whiteboard and vision precisely what it will be and how it will work for the rest of my career. And then I'm going to like set my stake in the ground, and then that will be my business for all my days on earth.”

And when I talk to virtually every advisor who has ever actually focused in any sort of niche or specialization, who is several years down the road, not only are they often very deep-down that road, but even their model today doesn't look like what it did three years ago, which didn't look like what they were imagining in their head when they started. Because the more you serve the clients who you are great at serving, the more you find newer, more refined segments of clients. Like well, I was helping these people, but these people really need my help and I can provide even more value to them. But if I'm going to serve them, I need to deliver a thing that's a little bit different. And I probably have to change my price model a little to just serve them even better. And these models are so much more evolutionary than master-planned upfront.

And I think one of the biggest blocking points that a lot of advisors and are creating for themselves, they're where you were five-plus years ago trying to perfectly imagine what you're doing today to set the goal. And you're just not going to figure it out where it's going to go five years from now, because what you're going to know after serving those clients for five years is very different than what you know today. So at some point, just do a thing that works well enough for them that, all-willing, someone will pay you. And then as you do it, learn what's working for them and figure out where to focus to do more of the things that they value the most that are least like what other advisors do so that you're differentiated and a premium value.

Pamela: Yeah, exactly, exactly. It's definitely easier said than done. But I feel like keeping that – I like to call it ‘infinite curiosity’ – to always just be questioning and always be asking 'why' and always asking if we can do it better and always asking if we can serve people better. And to know that part of running a business is knowing that the business is going to change and knowing that it has to change. Like, truly, and honestly, Michael, my goal is to put myself out of a job. Like, if we really think about the system, if we really think about what's going on, my job shouldn't even exist. The fact that someone has to hire a financial planner to help them figure out their financial life because it's so complicated and the financial system is so complicated that people are paying thousands of dollars a year to help someone navigate all of that. That's a little messed up. That doesn't feel right.

And so, while I know that there's this immediate problem that we're solving now, and we're serving people with now, my goal is ultimately to dismantle this system, and to dismantle the fact that it is so confusing and so convoluted, and really takes advantage of marginalized people at the end of the day. And so, it's these worlds that I'm straddling of understanding to constantly evolve which means I'm also getting closer and closer and closer to putting myself out of a job. And I'm both terrified and excited by that prospect because something's still going to be out there on the other end, but it's just a matter of what that's going to look like.

And I think that's how I like to think of all this stuff. And that's why I'm okay with the business changing and evolving because as it evolves, that hopefully means that we're making progress as a whole on making all of this more equitable.

Michael: So as you look back over this journey, what surprised you the most about trying to build your own advisory business in this new direction?

What Surprised Pam The Most About Building Her Advisory Business And The Low Point On Her Journey [01:26:10]

Pamela: Oh, man, can I say everything? Like, really, and truly, I had no idea that I was even going to go down this road. I thought I was going to work for a wealth management firm for a while; I thought I was going to be teaching financial literacy workshops. And that was going to be the core of my time on my business. That's what I thought I would eventually quit my job to do. And I think just realizing the sheer fact that like so many people are in this kind of pain and dealing with this kind of shame on a regular basis is probably one of the most surprising things that I found and the fact that we still run into it on a regular basis.

I think the other thing is really understanding... It's so interesting because I was talking to my other financial planner the other day, and she's very versed in the racial wealth divide and really understanding, like looking at financial planning for racial equity lens, but she told me the other day, she said, "I had no idea how visceral the racial wealth divide was until I started working with our clients." Where you can see it on the regular. Where you see it in people's balance sheets, where you see it in their cash flow, where you see it in their habits, where you see it in their family relationships and their family dynamics.

And I think one thing that has been really amazing and surprising about this whole process is we're not just doing financial planning. We're really building relationships with people and helping them really set themselves up on a generational level. Maybe we'll work with them for a year, and maybe we'll work with them for five years. Whatever it is. The fact that we have a hand and we're able to set people up in a way that will last longer than our lifetimes, that's freaking amazing. How awesome is that? And to really understand the systems enough to be able to know how to help people in such a specific way and in such a specialized way I think is something that, it's why I love this profession.

Michael: And so, what was the low point for you on the journey?

Pamela: Oh, man. Yeah, the toughest thing for me, especially in the last couple of years was, so I mentioned earlier that we had a hard time hiring. We spent a year, maybe a year and a half trying to hire another financial planner. And we actually hired three people. And they all left. I had to fire one of them. One way or another. And going through that year, year and a half, whatever time frame it was, at some point, I was like, can I actually grow this? Are there people out there who want to do the same thing that I'm doing, who have the capacity to, who have the... Going through that process of trying to find the right person and getting to the point of like, “Oh, my God, what if there is no right person?”

And I know that's ridiculous thinking about it now. But when you're in it, and when you're like, "Okay, I grew this business to my capacity. Absolutely. This is all I could do. But I have a vision for growing it beyond this, and I just can't find the right person. I can't find the next person to do it. So does that mean there is no person?" And I think that that's something that I really struggled with when we were trying to hire people and trying... Because we do something that is very different from someone who's coming from a wealth management background, and also someone who's coming from a financial counseling background. So, a lot of people who have their AFCs work for nonprofits with people who are in extreme financial crisis.

And so we're in this weird in-between space where the financial nonprofits are working with the people who are in extreme financial crisis, and we have wealth management over here who's working with people with extreme wealth. And we're in this in-between space where, like, where do we find someone who has expertise? And if we can't find someone who has expertise, how do we train someone to get it?

And that was the thing I was really struggling with was probably a combination of not knowing how to find the right person. And truly, and honestly, letting go of my clients and letting go of my process and letting go of me having a hand in everything. I think that was the hardest part for me in that year was; it was not only finding the right person but like finding the ability for me to trust the process we created can really translate to someone else. And I think that that's something that was really a low point for me that I can think of recently.

Michael: And so, just in this dynamic of, “I can't find the right person. I don't know if I'm ever going to find the right person.” I think most advisors that have tried to grow beyond themselves at some point or still have had this struggle or hit the wall of not being able to find people that will serve the clients the way that they believe their clients should be served. What changed? How did you ultimately get through or overpass this is what I'm looking for?

Pamela: Well, shout out to my amazing operations director who's been with me for like, three, four years now. Nicole Gomez, amazing. But every time we had a mis-hire, we reexamined our interview process. And we re-examined what we're actually asking of people in the job description, and also, what we were actually looking for in the interview. The interview process before was like, I talked to them, Nicole has talked to them, we both like them, we hire them. And by the time we hired the two people we have now who have been around for over a year now, we had like a five-step interview process. It was like Nicole interviews them; they get a two performance test. I interview them. They have to do a mock brunch. Then Nicole and I interview them together.

So there was this evolution too of like who we were looking for. And also, part of the process was that we don't take cover letters. You can send us a cover letter if you want. I want a cover video. You make a video and you pre-interview with us. And one, if you don't do the video, we're not going to talk to you. And two, it allowed us to really see what people's personalities were beyond their resume. And you know, it's not so easy now.

Michael: If you can't show up for a cover video, putting your best possible foot forward in the hopes of getting this job, I am not confident in your ability to show up for video meetings with our clients.

Pamela: Exactly, exactly. And so there was a self-selection process that happened by the time we got to that point where we were able to refine the process. And I guess that's what I mean by just this infinite curiosity too is like really being able to go back and say, “Okay, what didn't work? What did work? What do we have to do next?”

Michael: So now, as you look back at this over five-plus years, what do you know now that you wish you could go back and tell you from five or six years ago, as you were getting started?

The Advice That Pam Would Have Given Herself Five Years Ago And Her New Group Financial Planning Program [01:33:18]

Pamela: I'm trying to think. Oh, my gosh. I've listened to your podcasts before. I knew you were going to ask this. What would I tell myself five years ago? I think that one thing I'd probably tell myself is to not sweat the small stuff as much. And I know that sounds super corny, but I'm someone who definitely... My husband tells me that sometimes I talk in my sleep about my clients. So it's hard to not lose perspective when you're dealing with people's finances and when you're helping them through something that is really difficult for a lot of people, and in particular, for our clients. I think I would tell myself five years ago that you're always doing the best that you can, no matter what that looks like. And I think that's hard to remember when you're in it. And it's hard to remember on the hard days, and it's easy to forget on the good days. And I think that's a big part of the work that we do is maintaining that perspective so we can keep doing it because the work is hard.

We're launching a new program on Monday. We didn't mention it yet, but we're launching our See Change program. We're relaunching it on Monday. And it's a whole other experiment that we've been doing for like the last two years. And I have been very anxious about it because we've had this small group of beta testers who've been with us for the last two years. And they've been with us through all the iterations and all of the experimentation. And we're onboarding a whole new group of people on Monday based on what we learned, and I have no idea what's going to happen or what it's going to look like or what it's going to feel like. And See Change is even further of an iteration from Budge.

See Change is a group financial planning program for people of color. So it's group financial planning, plus group coaching, and some one-on-one components as well with a financial coach. But it's a much lower price point so that we can serve more POC. And so that we can serve people who do look at that $299 a month and they're like, "There's literally no way I can afford that." But they also can't go to a financial nonprofit because they make too much money to do that. So who's really serving that demographic? Like, if we're going to even further niche down, who is serving that demographic of POC who are making maybe between like $40,000 to $80,000 a year?

And so we've been experimenting with this group model. And it is also something that has been guesswork in a lot of ways. It's something that hasn't been done. In a lot of ways, it's something that's unprecedented. And doing a group model of financial coaching through a racial wealth divide lens for POC who have all of their own stuff that is coming in with them and asking them to talk about their money with strangers has definitely been a journey. And I think adding a whole new element of people, I have been extremely anxious. Like, for this whole month about the launch, I've been up at night thinking about it. And I think that, as I say this to you out loud now, I'm like, I probably do just need to chill out.

Michael: So what's the model? What's the price? How many people are in the group? What do you do for them? I know there are a few people out there that have been talking about experimenting with group models of financial planning. What are you envisioning yours is going to look like?

Pamela: Yeah. So this is like iterations of – we did like beta groups like two years ago. And what we came to with this new group was we needed to keep the cohort small. So the cohorts are around eight people, capped. We're having four cohorts this round. And it's going to be a mix of, you meet with your financial coach one on one for onboarding to put together your financial plan – we're calling it a financial roadmap. And then all of the implementation happens in the group. So you meet with your cohort once a month. And your cohort decides what topics they want to cover during the meetings. And they also decide how they're all going to hold each other accountable. So it's community-driven accountability, and also community-driven education and coaching in a lot of ways, with a financial coach as a facilitator for every cohort. And then at the same time, they're going to be able to message their financial coach one on one as needed. We're going to be dropping education courses once a month.

But one thing that we realize is, especially in POC communities, the stigma around talking about money, period, is so daunting and so overwhelming, people just don't do it. It's such a taboo in so many POC communities to talk about this at all. And so we are creating a safe space for people to really share what their stories are, share what their family histories are, and to also be working towards the same goals together.

And so, the new thing that we're trying is that we're actually having the cohorts themed. So before it was just like, as you join, you would get added to a cohort. And now we're actually giving people the option. There's a family legacy cohort, if you're trying to start a family or you have one, there's a Hire Black cohort. We were actually in a virtual conference a week ago, there's this woman who started this initiative called Hire Black where her goal is to get 10,000 black women hired, promoted, and moved up the corporate ladder. And so we did a conference, and we're doing a special cohort for them. And we have like a first-gen kids cohort where kids are first-generation, and they all can relate their like childhood stories to where they are in their finances now.

And so we're trying these new cohort themes to see if this is a way to build community internally. And I say all of this saying, these are some things that we haven't tried yet. And let's see what happens. And let's keep experimenting. And so it's priced at $50 a month per individual and $75 a month per couple. So it's significantly less than Budge.

Michael: Interesting. So, ideally like 8 in a cohort $400 a month for the facilitator managing these meetings?

Pamela: Mm-hmm. Yeah. And so we did the math and basically, a facilitator coach would probably spend about five hours per client per year, and we were paying coaches between $15 and $20 per member, based on whether or not they have a Series 65 and can advise them on investments. And it comes out to about $30 an hour for the coach based on the math. So that's the price point that we've kind of settled on for now. We know that right now we're going to be breaking even for a while. And I think that we're experimenting with this low price point because one, this is probably the price point that a lot of people needed it to be who need the support, and that we are asking people to not necessarily make a huge financial commitment, but asking them to make a huge time, energy, and community commitment. And I think that's really the big experiment is can we build community around something like this?

Michael: So I know you've had a journey of both traditional advisor world – we didn't talk about much at the call, but you spent time in traditional IRAs, doing traditional wealth management. You transitioned to this several years into your career as well. So for an advisor who's out there listening and just getting started in the industry today, what would you tell new young people coming into the industry about where to focus or how to get started?

The Advice That Pam Would Give New Advisors And How She Defines Success For Herself [01:41:10]

Pamela: Yeah, I think that I'm going to say the thing that I feel like people don't want to hear. My time in wealth management was extremely valuable. It was really hard. It was really difficult to be one of the only POC trying to be a financial planner at a wealth management firm. But the skills that I learned sitting alongside a financial planner and watching them actually run client meetings, and navigate client emotions, and navigate educating clients while also planning for them was truly invaluable.

And I think that if you're new to this, the thing that I would jump into is not trying to start your own business but to jump into getting some experience and getting someone to pay you for it. Because I think that if I tried to jump into this without having that wealth management experience and working at a financial planning firm, trying to both learn how to be a financial planner and learn how to be a business owner, I don't think I would be where I am if I didn't spend that time in the industry, honestly.

Michael: Interesting. So, view this sequentially. Like, spend your years getting your experience, learning the financial planner and client-y stuff, and then you can go figure out how to also be a business owner?

Pamela: Yes, yeah. And also, don't be afraid to do stuff on the side. Like, you probably need to clear some things with compliance. But I was writing a financial literacy curriculum on the side while I was working for a firm. I was meeting with people for brunch on the side while I was working for a firm. I had a good relationship with the financial planner who was my boss. So he knew I was doing a lot of this stuff. And he was really supportive of it. And I think that – try stuff out while you're learning stuff. And don't be afraid to do that. And don't put a price tag on it. Don't try and monetize anything right away. I think that there's also this pressure to be like, "Well, if I try a thing it needs to make money." And, no, it doesn't. Not at first. You're learning along the way for everything.

Michael: I like that. Don't worry about making money upfront, just try the thing. So as we wrap up, this is a podcast around success. And one of the themes that always comes up is just the word success means very different things to different people. And so you're on this awesome trajectory for what you're building and now hiring and scaling team members around this very new and different model. But, how do you define success for yourself at this point?

Pamela: Yeah, I think for me, at this point, success would be getting to take Fridays off so I could spend the day with my son, to be honest. I would love it if I was able to carve out some time next year to figure out my schedule, to figure out how the business worked, to figure out how these processes work so I could spend more time with my family. In the midst of all this big stuff that we're planning and all this big stuff that we're doing, having a son definitely gave me perspective on what I really want to be spending time on as well. So that's a big part of it for me.

Michael: Very cool. So finding that balance of what happens when you're having kids and starting a family. And oh, by the way, we're trying to build this business on the side with multiple different new business models all at once for underserved populations.

Pamela: Yeah, yeah. How do we do all of it?

Michael: Oh, I love it. I'm so excited to hear what comes next for you on the journey and trying to find that balance between the two. But thank you so much, Pam, for joining us on the "Financial Advisor Success" podcast.

Pamela: Thank you so much for having me.