#FASuccess Ep 425: Implementing A Financial Planning Quality Control System To Improve Both Client Outcomes And Referrals, With Sebastian Guerra

Resources Featured In This Episode:

• Sebastian Guerra: Website | LinkedIn
• Kitces Report On How Financial Planners Actually Market Their Services
• Miami Retirement Summit
• Webex
• Entrepreneurial Operating System (EOS)

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Full Transcript:

Michael: Welcome, Sebastian Guerra, to the "Financial Advisor Success" Podcast.

Sebastian: Thank you so much, Michael, for having me here. I was just talking to my wife a couple minutes ago, and she goes to me, she's like, even she's honored for me being on this show. So, I'm really happy and honored to be here with you.

Michael: Well, I'm really excited to have you on. And I get to talk about something today that I don't think we talk about enough in our planning world. We do market research on this from the Kitces platform. Most advisory firms grow mostly by referrals, and most advisory firms don't particularly proactively ask for the referrals because they don't feel comfortable doing it, which means basically most firms try to grow by just being so awesome for clients that they will voluntarily refer us and say, "That was amazing. You've got to talk to my friend, brother, or business partner," or whatever it is.

But in practice, some firms get a lot more referrals than others, which to me kind of implies that we're all trying hard for our clients, but some of us are somehow delivering a service that is at least incrementally better than others, that it really does trigger more of that referral flow, either because they just intuited better what their clients really want and how to execute it, or maybe they're one of the few firms that regularly surveys clients for feedback and makes ongoing improvements to try to make themselves more referrable in the first place.

And I know this is an area you've spent a lot of time in your firm trying to figure out, like how do you get feedback, input from clients to make sure you're really delivering a planning experience at a level that drives referrals. So, today I'm just going to talk about how you actually go about getting feedback from clients to make sure you're really delivering at a level that gets them talking about you.

Hiring A Quality Control Specialist To Drive Google Reviews And Referrals [05:15]

Sebastian: Yeah. So, just a little bit of a backstory. So, this actually all started a few years ago. Our firm has been in business for about 40 years. My father started the company back in the 1980s, came to the U.S. as an immigrant from South America and was literally going door knocking here in South Florida and just started selling Medicare supplement policies, eventually led to life insurance, eventually led to annuities, mutual funds. And now we're a full-service wealth management firm.

But kind of it all started where we started meeting with specific clients. And as the firm started getting bigger and bigger and our name started going out there more, there was a lot of clients, prospects that were coming in and meeting with us. And they already had another advisor, and they were working with another advisory firm. And this other advisory firm, eventually, after a few meetings, they started losing their business from where they were at, and the clients started working with us.

And we quickly found out that within just a couple of days after that one advisor ended up losing two clients because they were both friends. The advisor went on Google and started pretty much talking crap about our firm. And they started saying some things about us like if they were a client. And we didn't even know who these people were. So, we started talking to the client, and we were like, "Do you think this could be that person?" And they were like, "For sure. For sure. That's definitely my old advisor."

Michael: So, this is like going and leaving fake negative reviews on Google, that kind of thing?

Sebastian: Yeah. Yeah. So, we didn't even know who these people were that were writing these Google reviews. And there was about two of them within a two-day period or a three-day period. And so, we didn't like that. And obviously, we know how powerful reviews are. People will go and look up online, and they're like, "All right. What do we know about this?" And we had already about 10 or 15 reviews at the time, and we had these two bad reviews, and we were like, "All right. This is not a good sign." And you know how the algorithm works. They average stars, and you have 10 five stars and then you have the 2 bad stars, and all of a sudden now you're a four-star firm, right?

And so, it was something that we just didn't like, and we were like, "All right. How do we fix this?" And so we started thinking, "Okay. Well, why don't we just ask our clients to start leaving Google reviews?" And we really didn't know about exactly the process of how to do it, and so we started having a few of our team members start calling people and asking them, "Hey, are you happy with our service?" and all these things. But then eventually we were like, "You know what? We're going to hire a person in our firm with a couple of roles that they're responsible for", and we call them a quality control specialist.

And so, this was probably...we do a lot of marketing at our firm, but this is probably our best return on investment out of all of our marketing funnels. And what we did is we created a position from scratch where this person would be responsible after every meeting that any of our advisors have in the firm, she would have to reach out to the client either the same day or during the client meeting because we do a lot of Zoom meetings as well. So, if the client had a Zoom meeting with us, then the next day or the same afternoon, the client would be getting a call from this quality control specialist.

And what this person was doing is they were asking a bunch of questions about how their experience has been with the firm, everything from their experience when they walk in through the door by our front desk person to the experience on how we answer the phones, to the experience on how we service them and how we get back to them, do we call them on time. And then we had a set of questions or we have a set of questions where we also ask them how their experience has been working with their advisor and everything from communication to their knowledge, to their skill set, to their personality. We ask all these different questions. And we go through the entire firm as far as all the departments, and we're trying to figure out what are the areas that we need some improvement in.

But what we notice is that as we go through this process, a lot of these clients are very honest about it. They start telling us, "Well, I wish you could do this. I wish you would do that better." But we started noticing our clients were very happy with our process, and obviously, no firm is perfect. But we said, "Okay, this is the perfect opportunity to take advantage of asking our clients for referrals." And our firm is the type of firm where our advisors are so heavy in the meeting mentally, they're not thinking about how to generate more business or how to generate referrals. That's not where their mind's at. Their minds' at serving the clients, serving the customers, and just making sure that we service them the way they expect to be serviced. And so our advisors, they're not even paying attention to generating more referrals. So, this is why we created this entire role.

And so at the end of the interview, now this quality control specialist, one of her responsibilities is to ask our clients to obviously leave us Google reviews. And this is how right now I think we're at over 600-something Google reviews that we got over the last 1 to 2 years just using this exact same process. And so after that, now the next step is this person is also going to now ask them for referrals in the process.

And so if I'm not mistaken, I think we are generating somewhere around 400-and-something referrals on a yearly basis just with one quality control specialist. And so we just recently added a second because we noticed how powerful it is. And then all these leads, all these prospects that are generated from this process, get handed off to our appointment-setters, and then their job is to go and reach out to them, qualify them, and get them to come in.

Michael: So, I'm fascinated by this. I have so many questions. First, I guess just anchoring a little. You said you've driven 400 referrals a year from this. How many clients are there in the firm in total?

Sebastian: 2,700 individuals. 1,750 are the amount of households.

Michael: Okay. Okay. So, it is fair for me to think of these in a rough ratio, like 400 referrals out of 1,750 households. About was it a little under 25% of clients end out with a referral?

Sebastian: I think it's a little bit higher. And the only reason I would say it's a little bit higher is because the firm's been around for such a long time, we have a lot of clients that don't really meet with us on a yearly basis...

Michael: Oh, sure.

Sebastian: ...unfortunately, right? So, we still reach out to them. They're just legacy clients. We normally don't like to let them go or fire them. I think it also can tarnish our reputation. We also played with that idea of potentially letting some of our clients know or letting them graduate, how I've heard some firms call it, and just let them go. And it's just something that we just didn't want to do. And so even though we do have probably about 25% of our clients that are not profitable, let's just call it, it is a decision that we made not so much from a financial standpoint but more from a moral standpoint.

And so with that said, we don't necessarily meet with every client every year. We do meet with somewhere around 70% of our clients on a yearly basis. And so the other 30%, they might meet with us probably once every 2 years.

Michael: Okay. Sure. We've all got legacy clients. I know, particularly when you come up in insurance, annuity channels early on, just we end up with a huge long tail legacy of folks we implemented something with 5, 10, 15 years ago, and we can check in periodically, and they call us if there's a service need. But they're not engaged for ongoing planning. That wasn't how they came to us back in 2012, whatever it is.

Sebastian: Yeah.

The Question Guerra Wealth Advisors Uses To Drive Client Referrals [12:28]

Michael: So if you can, I'm just wondering how this referral conversation goes. Is there a scripted question? How does a person in the firm who's not the advisor ask the client for a referral when this is probably the first time they've ever met and talked?

Sebastian: Yeah. So, we came up with a very...I think, a pretty unique way of asking. I've heard so many different ways of asking for referrals over the years. And again, we can keep changing this up as time goes on, but this has probably been the one that's worked for us the best. And it's a conversation with the client of asking them, "Hey, are you..." Obviously, they're happy with the firm. They already gave us all their feedback on how we can get better. And then usually what this person will do is, "Hey, before I let you go, do you mind if I just ask you one question?" And normally the client will say, "Yeah, absolutely."

And so what they'll follow up is they'll say, "So if you right now, for whatever reason, you decided to start a wealth management firm like ours, somebody that you're starting a wealth management firm where you're going to help them with their tax planning and their investment management and helping them grow their wealth and helping them retire within the next couple of years. If you were to start, if you were to create a firm like this, who would be the first person that you would call as a potential client of your firm? I know you're not going to start a firm right now, but if you were to start a firm, who would be the first person that you would reach out to?"

And so normally the client, the prospect...I mean the client in this scenario, will start thinking of exactly the type of prospect that they would first call. And that's worked amazing because you're kind of putting them into a mental challenge of "Hey, I'm about to start a wealth management firm. Who's the first person?" Their brain normally goes to, "Well, who do I know that has money?" And so that's probably the best way that I've seen asked. And then after that, once they give you the first name and they're like, "Okay, so after you would call that person, who would be the next person that you would call?"

Michael: "We're not done yet."

Sebastian: "And then after you call that person, who would be the next person that you would call?" And so you keep just putting them into this mindset of they are creating their own wealth management firm, and now they're going to start thinking in a more productive manner.

Michael: I love the framing because we all, I think, go through varying levels of struggles in trying to articulate who the ideal client is that the current client is supposed to refer to put them in the right mindset about what a qualified client looks like. So, I like how you set this up because you're putting them in the context of basically who needs wealth management services that would be the easiest fit. Right? The first person you call is whoever is going to be the best fit in the client's mind. You don't start with the hard ones. You start with the easy ones. I like the framing. They're thinking. It's a way to get them to say, "Who do you know who would need wealth management services that would most readily engage?"

Sebastian: Yep.

Michael: So, as you ask this, do you then say, "Oh, and can I have their contact information? Oh, and would you provide an introduction to them?" Like, what's the... I'm assuming there's some next step beyond just literally they're like, "Oh, my neighbor, Bob..."

Sebastian: Well, yeah. So, what we've trained our quality control specialists to do is that as soon as they say Bob's name, they're writing Bob's name down. They're just saying Bob. And then they're going to say, "Oh, Bob, what's his last name?" "Bob Jones." "Okay. And what's his phone number?" We're not going to ask, "Hey, are you okay with us reaching out to them?" We'll ask that after we ask already for their contact info. It's a normal conversation, right? Because they're already kind of in this process of actually being asked for the referral.

So, "Hey. Bob? Okay, awesome. And what's Bob's last name? Okay, Jones. And what's his phone number? We're not going to reach out to him or anything like that before you speak to Bob, but what's his phone number? We'll actually send him an invite to probably one of our events over the next couple of weeks, or we'll also send him to one of our webinars." We have so many marketing strategies that we use to engage people. So, usually what they'll do is they'll either invite them to one of our webinars or invite them to one of our educational events, dinner seminars.

Michael: So, I get it now. It gets relatively low stakes, right? "We're not going to call him in for a hard-press sale. We might reach out to him to invite him to one of our educational events. You probably found us through one of our educational events. We're going to invite him to one of the things that you came to. You can come with him if you want to."

Sebastian: Yeah. And then usually what happens is once these five names and numbers are provided to our appointment setters, the appointment setters first have to call the existing client to make sure that the client spoke to the person because we don't want them doing a cold call to this prospect and the prospect's like, "Who in the world are you guys? I don't know who you guys are." So, we always want to make sure that the client has spoken to the prospect prior to us calling in.

Michael: Oh, interesting. So, you will do an outbound to the prospect, but you ask the client, "Hey, will you reach out first and just let them know that we may be in touch?"

Sebastian: Yeah. So, our appointment setters will first call the client and say, "Hey, remember the five names and numbers you gave us three days ago? We're going to go ahead and call these five people this afternoon. Can you please let them know that we'll be calling them this afternoon?"

Michael: Oh, interesting. To me, there's interesting nuances to that. So, you're not just leaving it open. You're kind of setting a timeline for them like, "Hey, we're planning to call them this afternoon. Can you please just take a moment and let them know that we're going to be reaching out?" It's not just, "Hey, let them know some time," and then whenever you get to it on whatever one-week, three-week, ten-week schedule, you get around to seeing them somewhere and then letting them know. You kind of, you take control of the timeline a little bit more by saying, "Hey, we were going to call them this afternoon. Have you touched base with them? If not, could you do that really quick?"

Sebastian: For sure. So, you need to definitely tell them. In our case, we noticed that we just have to tell them upfront, "We're going to call them this afternoon after 4:00, so please make sure that you speak to those five people before 4 p.m."

Michael: And I'm assuming they have to give some level, I don't know, of satisfaction feedback in the initial quality control call before you ask for referrals. Hopefully, it doesn't come up often, but I'm presuming every now and then a client is a little grumpier about some experience that they had, and it's not the best time to ask them for a referral.

Sebastian: Yeah, absolutely. And that's our opportunity to get better, right? So, our company runs at a million miles an hour. Sometimes things fall through the cracks and we need to hear these things because sometimes some clients are going to just not say anything, and this is our opportunity for us to hear their feedback and try to make things better. And so sometimes we'll see that a client might be on the cusp of probably leaving us for whatever the reason is. It's good that we know these things before it happens. And so every time these meetings occur, our yearly financial reviews or quarterly financial reviews, whenever these meetings happen, we want to know, "Hey, how was the experience? How's been the experience with us so far?"

And we also want to know details about the advisor. We want to make sure that the advisor is giving all the answers to the client as well that they're looking to hear, that they're more confident about their financial future after every one of their sessions. So, we do have a set of about, I think, anywhere between five to ten questions per department, because we do want to make sure that all this feedback is being given to the department leaders so that they can communicate it over to their team.

Gathering Client Feedback About The Entire Advisory Business [20:05]

Michael: So, help me understand how long this, I guess, questionnaire process is. Five to ten questions per department. How many departments? How many departments are there? How much do you get into here?

Sebastian: Yeah, so mainly it's four. There's a lot more departments than just four, but they're the four that we look at as kind of the areas that we need feedback from a client. The first is their client experience, and that means primarily, as walking into the office, how you're greeted. So, that's the main...that's the first area.

The second is advisors, right? So, we want to know how was their experience with their advisor recently. Any feedback on how the advisor could get better? And there's also a rating scale on the advisor as well. And there's also...the advisors are also...they also get bonuses at the end of the quarter based on that as well. So, there's also some questions that are tied to that. And then there's a point system that is attached to their bonus. So, there's the advisor questions.

Then there's the new business questions, which is probably is primarily making sure that any client that is in the process of transferring assets, we want to make sure that the new business team is executing the transfers the right way as far as not being any hiccups. So, we always ask the questions like, "Hey, how was your transfer process, right? How was your process in the transfers of your accounts from these institutions over to us? How was that process?" And we have a set of a few questions. Mainly it has to do with callbacks, the turnaround time of the transfers.

And so we're just trying to get feedback. And obviously, some of the things they don't really know, because we can't control certain things. But then there's a lot of things that if we see repetitive things about a certain team member that they're probably not calling...they're not giving the client a weekly update of their transfer status, then now we know, okay, this one team member probably needs a little bit more training in that area. That's the third.

And then the fourth area is service, right? So, we have a whole service team where we have about six or seven people on that team, and their job is to pretty much just process all service requests coming in, in all categories, whether it's transfers or...not transfers, but withdrawals, positions that need to be sold. Any sort of questions: beneficiary changes, addresses, things like that. So, as those things happen, there's also a set of questions for the service team. Just making sure that we have a proper turnaround time for the questions that clients are asking us, and we want to make sure that they're reaching back out to the client as soon as possible.

Michael: So, how long does it take for this conversation? It just feels like a number of questions per department across client experience and advisors and new business and service, and then the Google review and referrals conversation. How long...

Sebastian: Michael, it's even more than that.

Michael: All right. What else is in there?

Sebastian: We even ask for the client to follow us on social media as well, because we do post out a lot of content on social media. So, we want to make sure that they're constantly seeing our content. Just telling the client to follow us is not enough. So, we actually have our quality control specialists. They actually ask the client, "Hey, so do you use Facebook? Do you use YouTube? Do you use...are you subscribed to any of these platforms?" And so we'll help them subscribe. Some of our clients are a little bit older, and so she'll grab the client's phone and actually walk them through the subscription process for any of our platforms that we put content on.

So this could be anywhere between a 15- to 30-minute conversation. And what we've done is over time, we've removed certain things in the process. So, we had about a good year where we 100% focused on reviews, and that was our primary driver in the process. And I think we removed the foot off the gas probably about six months ago. We are still getting Google reviews, but it's not something that we're doing in every one of these quality control meetings. So, there is about a good five or six different areas, but we rotate those topics depending on the necessity that the company has in that moment.

Michael: So, you said you may even...you pull out the client's phone with them to try to sort out, "Here's how to actually follow our channel on YouTube." So, does that mean sometimes this process is happening in person, in the office?

Sebastian: Correct. Correct.

Michael: Because I presume this is a follow-up phone call, but not necessarily.

Sebastian: So, it happens in both ways. So, we have the person's calling them, and if that's the case, then what we'll do is we'll send them a link by text of our YouTube channel in that case. And we want to make sure that, "Hey, do you..." To make sure that they subscribe. But some people don't have a YouTube account, right, that they actually subscribe to anything like that. So, we have to ask them, "Hey, are you subscribed to YouTube? Do you have a YouTube account where you have subscriptions on it?" If the answer is no, then we're going to bypass that, right? We're going to ask them, "Hey, do you use Facebook?" "Okay. Yes, I use Facebook." "Okay, I'm going to send you a link right now so you can go ahead and follow us on Facebook."

Michael: Oh, wow.

Sebastian: So, we're asking them the different platforms that they're using, and that's one of the other reasons why some of these platforms that we're on have grown, obviously, a lot. And we want to make sure that our clients are staying in touch with us. It's not just the yearly call or the quarterly call. We're posting out content on a weekly basis. We want to make sure that the client is seeing this stuff.

Michael: So, I'm just trying to visualize how this works when it's in the office. The client was in for a meeting, and then the advisor leaves, and the quality control person just kind of walks right in? You do a handoff in the room?

Sebastian: Yeah. So, what will happen is in the middle of the meeting, the quality control specialist will knock on the door and they'll pass them a little paper. And the little paper just says QCT. It's just a form of a reminder, just letting them know, "Hey, after your meeting, please make sure that you don't let the client leave, because I'm going to come right in."

Michael: And so you've got meetings planned and staggered, so one or more quality control team people can just literally be there, ready to rotate into the room.

Sebastian: Yeah. And we don't get to all the clients. That's another challenge, right? That's the reason why we hired a second person. Sometimes in an office, in our office, we have eight to nine meetings happening at the same time. Some of them are new prospects, some of them are existing clients. And so we don't get to every client meeting. So, they're just trying to see which ones are the meetings that we probably need to get the most feedback from or clients that probably haven't given us referrals recently because they want to make sure that they're going into those meetings to ask that prospect, excuse me, that client for those referrals.

Michael: Interesting. So, I was going to ask as well, just clients... Well, I guess two follow-ups, then. How often is this an in-person, "Hey, before you leave, can our team ask you a couple of questions," versus doing it as a follow-up phone call?

Sebastian: So, we don't ask the client, "Is it okay for our team to ask you a couple of questions?" We just let the client know, "Hey, just..."

Michael: "We will be asking you some questions."

Sebastian: Yeah. So, we always assume. "Just give me a couple of minutes. Our quality control specialist, Nancy, she'll be coming in right now in about two minutes. She just has to ask you a couple of questions about how your experience has been with the firm. We just want to make sure that we're doing the right thing by you." And so the client never has a problem with that. Ever. Because you're letting the client know that they're going to be asked some questions on how we could get better. And it's a very honest conversation, right? The client is really honest in the process because it's not in front of the advisor. It's a private conversation that's being had.

And this person, I will say is probably one of the reasons why this worked so well, is this person that first started as our first quality control specialist. Her name is Nancy. She actually was a client first. She retired from a law firm that she was at for, I don't even know, 20, 30 years.

Michael: Oh, wow.

Sebastian: And so she was a client first. And she's like, "Man, I love what you guys do. I love everything that you guys represent here. I would love to somehow work with you guys." And her personality just fits the part so well. And so she's just great at that.

Michael: Very cool. And so, is this... You said you can't quite get to every client because there just can be too many client meetings in a day for the QCT person to get them, or two of them to overlap and finish at the same time, and you can't get both. But nominally, is the goal to do this continuous, ongoing? So, I guess I'm just trying to visualize is this mostly a new client process or even off an existing client? I've been working with you for years. I come in for my annual review and I know at the end of the annual review you're going to ask me the set of questions again about feedback.

Sebastian: Yeah, at least every six months. Right? So, after the client's been with us, at least six months is when that person is involved in that.

Michael: Okay. So, you will wait. So, it's not immediately a new client onboarding process. You have to wait until they get to the six-month stop before you begin?

Sebastian: Well, primarily that has to do with the service questions. So, anything that has to do with service, we want to make sure that the client has gone through with us at least six months to make sure that they can give us real feedback of how our service has been over the last six months.

Michael: Okay.

Sebastian: Yeah. And what they're doing is they don't go in, and they don't do another quality control interview unless the person has done it at least six months. So, there must be a six-month period between every single one of those interviews. Because we do meet with some of our clients every quarter, so we're not going to do that every single quarter. So, before they go in, every single day, that quality control specialist, they look at all of the clients that are coming in that day. And what they're looking at is, okay, what clients are coming in that day that have not done a quality control interview over the last six months? And what they're going to do is they're going to go into those meetings and go through their process.

Michael: Okay. And so I guess as a client, I'm going to assume most clients are in once or twice a year. So, as a client who's in once or twice a year, I just learn and get the gist pretty quickly that once or twice a year I'm going to have my QCT questions coming in at the end of my meeting with my advisor there.

Sebastian: Yeah. Yeah. And again, right now, because of the amount of clients we have versus the amount of quality control specialists that we have, it's not happening as often as we want. That's the reason why we just recently, over the last 30 days, we just hired a second person. So, if it gets a little bit too much for a client, obviously, we're going to want to scale back, but we don't have that problem right now. We have the problem that we have too many clients and we don't have enough quality control specialists. And we've noticed that out of all of our marketing funnels, this is by far the most profitable one. I mean, you pay someone $50,000, $60,000, $70,000, $80,000 to do this role.

And it's also performance-based, right? So, the compensation is also tied to this is we want to make sure that there's bonuses based on whether it's reviews that are being generated or there is also bonuses tied to the amount of referrals generated. Whether they become clients or not, that doesn't really matter, but there's also bonuses and compensation structures tied to this. And so we're not just telling the person, "Hey, these are the goals. Here's the salary. It is what it is." We want to make sure that they're following the process and they're generating the most amount of referrals as possible.

Generating Process Improvements Based On Client Feedback [30:30]

Michael: So, beyond referrals themselves, have you had a process improvement? It's things you found in client experience, service, new business that changed as a result of going through this.

Sebastian: Oh, absolutely. I would say that the most powerful thing has just been feedback for the advisors. The advisors are kind of... The clients sometimes come in and they're like, "Yeah, I feel like the advisor kind of skipped over a few of my questions" or, "I feel like the advisor probably spent a little bit more time talking about my outside assets and probably didn't talk about my assets with you guys." And so that's where we have to have those conversations with the advisor of letting them know, "Hey, look, you want to make sure that you're servicing the client on the front end before you start talking about outside assets that they still haven't brought in."

Michael: And who delivers that conversation to the advisor?

Sebastian: Yeah, right now, it's the director of advisors, which is me right now.

Michael: Okay. Okay. So, the QCT person doesn't necessarily have to come back to the advisor and say, "Oh, and here's what your client said about you." It essentially goes to leadership, and then it comes down to the advisors.

Sebastian: Yeah, correct. And all that's documented. So, as the client's giving all this feedback to the quality control specialist, it's all being typed out, and this is being sent over to each department leader, just letting them know what the challenges that they got from the client.

Michael: And I presume then most of what the QCT person does, the quality control team person does, is very scripted.

Sebastian: Yeah.

Michael: I'm sure you practiced it enough that it sounds natural, but there's a flow, there's a sequence, there's a way that the questions are supposed to be asked that you built, or you just iterated over time.

Sebastian: Correct. Yeah.

Michael: So, I just I've got to ask this overall. And just in a world where I feel like most businesses' feedback is an email survey you get after the meeting, "Please tell us what you thought of the experience that you had." You can largely automate it with technology. It's a fairly nominal cost to get some feedback going. I guess I'm just curious: how did you get to, "Oh, yeah, there's survey software that we could buy for $1,000 or $2,000 a year, but let's hire a full-time employee to do this?" How did that jump happen?

Sebastian: So, we didn't look at it that way. We looked at it as this is our person that's going to generate hundreds of referrals every single year, and you're not going to be able to do that with software. That's a conversation. And so the way we justified it is this person is going to go through the process of asking the client for feedback on how we can get better. But in doing so, we're also going to insert there the process of asking for referrals.

And so the way we justify it is if you're paying somebody, call it $70,000 a year, and they're helping us generate 400 new leads, 400 new referrals on a yearly basis, which normally out of that, I think if I'm not mistaken, there's somewhere around 150 to 200 of them are turning into appointments, it definitely makes financial sense, right? If you look at it from a marketing standpoint, we just spent $70,000 on generating 200 additional qualified appointments?

Michael: Yeah, that's a good marketing ROI just in and of itself.

Sebastian: Well, it's our best marketing ROI across the board from all of our channels. And it's crazy because it's like the least traditional one that we all hear about. We all hear about radio, TV, seminars, all these things. And on top of that, the closing ratio of these prospects are way higher than any of the other categories because of referrals.

Michael: Because of the referrals. So, you still get your traditional 50% plus close rates kind of scenarios?

Sebastian: Yeah, I think it's closer to 70 for referrals.

What Guerra Wealth Advisors Looks Like Today [34:10]

Michael: So, help us now understand the advisory firm overall.

Sebastian: So, what our biggest priority is, we want advisors to only be in meetings. That's our number one priority. We want advisors that work 40 hours a week. We want them to spend 38 hours in client meetings. That's our mission, right? That's our goal. And obviously, I'm exaggerating it, but ideally it would be all 40 hours.

So what we've done is we've built teams around advisors to do as much as they possibly can so that the advisors are only in client meetings because that's really where revenue is generated, right? It's by meeting with existing clients, meeting with new prospects and bringing in new assets, and generating new business?

So what we've done is we have a marketing team, which is right now, if I'm not mistaken, somewhere around like 12 or 13 people. Their job entirely is to do a bunch of client events. We do about 100 dinner seminars throughout the year. They run our YouTube channel. They run our social media. So, we have a whole digital team as well. We also have a pay-per-click division, which also generates leads through digital as well. So, we spend some ad money there to help generate leads as well. We also have a traditional marketing side, which makes sure that we get onto different TV shows, radio shows, things like that. That same person's also in charge of optimizing our website for SEO purposes. So, we have a marketing team, which is somewhere around 12-13 people.

Then we have an appointment setting team, and their job is to pretty much reach out to every prospect, every lead that is generated from the marketing team. And so if I'm not mistaken, I think it's somewhere around 400 leads a week, 300 or 400 leads a week, somewhere around that, that our marketing team is generating.

Michael: Wow.

Sebastian: And that's across the board in all the different departments we have. Sorry, all the different marketing channels. So, it's about 300 or 400, if I'm not mistaken. Somewhere around that. And then their job is that goes to the appointment-setting team. But remember, as you know, not all 400 of these people qualify to meet with you or meet with the firm. So, there is usually out of these 400, close to about 40% to 50% of them don't even end up qualifying. So, that brings us down to about 200 potentially qualified leads.

And then the job of that team is to generate, right now, if I'm not mistaken, I think our target is about 33 new appointments every single week of held appointments. They're booking, if I'm not mistaken, I think it's about 42, 43 appointments on a weekly basis of brand new prospects. And out of these 42, 43, about 33 of them are supposed to show up. So, we expect about a 75% show ratio for every appointment that is scheduled on the calendar. So, that's the appointment-setting team.

Michael: Interesting. And how many people is the appointment-setting team to manage to this?

Sebastian: So, that's something that we've tested over time. We realize that this position is a position that can easily be burned out just because of the amount of calls that are made. And it's a very unique type of individual that probably is going to do very well there.

So, right now we have six people. That is something that we are scaling back because what we noticed is that we have a lot of leads that are generated, obviously, on a weekly basis, but the mistake that we were doing is that we were splitting all of the leads evenly between all of the appointment setters. And the problem with that is that there are some appointment setters that are much better than others.

And so what we decided is...this is something that we just recently did. Is we now have... So, I don't have the data for this yet, but what we did is we kind of broke up the appointment setters into three different tiers. So, you have appointment setters that only talk to prospects that have been generated over the last seven days. Then you have appointment setters that are only talking to prospects that have been generated from day 7 back all the way up to day 30. So, that's about that three-week period.

And then you have a third tier of appointment setters. They're in charge of reaching out to prospects or leads that have been generated more than 30 days ago. And so the reason we did that is because we didn't...all these leads that are being generated on a weekly basis, we just didn't want to split them evenly with maybe an appointment setter that's not that good at the conversation of turning a person that's potentially interested into an actual appointment. So, that was one of the reasons why we kind of broke up the appointment-setting team into those three departments.

Michael: So, the idea is, "Look, at the end of the day, when you've got an active marketing system, leads that didn't turn into an appointment over the first 7 days of the first 30 days are already probably a wee bit cold, so let's let our least experienced appointment setters work in that space because anything they generate is good, but it's also kind of a good, safe learning ground. Whereas our strongest prospects are the ones that literally just reached out for the first time in the past seven days, and they're interested in our services. So, our best, most experienced appointment setters go there because that's our highest quality leads, where we want to put our highest converting activity."

Sebastian: Right. And I think that's...

Michael: Am I describing that well?

Sebastian: Yeah, that's accurate. So, I think one of the things that we've done probably really well is we always want to put people in where their strengths are. And that's across the board. That's just a company philosophy is we want to make sure that we are optimizing every decision that we're making. And so I've seen a lot of people that they say, "Oh, no, we want to treat everybody equally." And it's like, no, we have to make sure that we are earning our way to be able to probably meet with those hot prospects that were just generated last night or at a dinner seminar.

We had a dinner seminar two days ago. We had 31 appointments that were booked there. Those 31 people, I don't want those 31 people to go and be given immediately to an appointment setter that probably just started with us a month ago that's not really converting at the level of other appointment setters. So, we give the hot leads to the top two appointment setters.

Michael: So, what is this typically boiled down to in actual new client flow? I'm just trying to think through the funnel. Four hundred leads a week, 200 are qualified. Forty-something of them set an appointment. Thirty-something of those show for the appointment. What do you typically find is conversion once you get down to initial prospect meetings that are held?

Sebastian: Yeah. So, our closing ratio right now is about 33%. I believe last year, 2024, we onboarded about 480 new households.

Michael: Okay. Okay. So, now keep taking us…so, you talked about appointment-setting team and a bit of how you're restructuring it to align. So, then what's the rest of the organization structure that you're walking us through here? Because this is really helpful.

Sebastian: Yeah. So, right now we have a total of 10 advisors, but that's not something that we started off with last year. So, 12 months ago from today, I believe we were at only 5 or 6 advisors, I think, 1 year ago. So, we've added about 4 advisors this year, and it really has to do with the amount of lead flow. That's probably one of our biggest challenges is we don't have…

Michael: You have almost 500 clients. At 500 clients, you're going to need a lot of new advisors. Yep.

Sebastian: Yeah. Yeah, so I think that's one of our biggest challenges. It's not so much the lead flow, which it's kind of funny because that's kind of the biggest challenge I think that most people have in the industry. They don't have enough people to talk to. We kind of see that we don't really have that challenge. We have the challenge of we don't have enough advisors at the firm to make sure that they can service all these leads. And so we do have that challenge where we sometimes have clients that need to wait three weeks to meet with us. And that's not a healthy thing, right? Not clients, but prospects. They have to wait three weeks to meet with us. And that's not a healthy thing, right? Because you have a bigger drop-off of a prospect when you have a prospect having to wait three weeks.

So what our mission is, is how do we get a prospect to turn into an appointment within 48 to 72 hours? Because we know that the show ratio of this prospect drastically goes up. And actually it starts going down by about 5% for every day that you wait to book that appointment. So, if I book an appointment for 24 hours out, there is close to about like a 90%-95% show ratio. And every day that you wait, it drops by about 5%. So, the mission is how do we get a prospect to turn into an appointment as fast as possible and meet with an advisor as fast as possible? Because the longer you wait, the higher likelihood that that prospect might not show up or might not be present.

Michael: So, you can drop your show ratio by half if you have to push these meetings out two to three weeks?

Sebastian: Oh, yeah. Absolutely. Our show ratio has gone down to 40% if the client has to wait more than 2 weeks. And I think that that's one of the things that a lot of advisors also talk about is they're always, they're saying things like, "Oh, you want to be exclusive. Make the client wait two weeks or three weeks." And it's like, I think that does more harm than good. That could work with some people, but a lot of people are going to get cold.

So if you just generated a lead last night from an event or if you just had a white paper that was downloaded and an appointment setter reached out and turned it into an appointment, you want to make sure that that lead is being turned into a client or to an appointment as quickly as possible because they're the hottest that they're going to be versus letting them cool down for two weeks and have to meet with you.

Michael: Right. They're never going to have more energy and enthusiasm than right there, right in that moment.

Sebastian: And I don't know if it's a Miami thing. We're in South Florida. So, Miami is a very hard-charging type of environment where people don't like to wait for things. They want things now. And so having that whole thing of, "Well, you have to wait three weeks to meet with this advisor," in Miami, that kind of doesn't go well.

Michael: Right. So, then keep taking us through the organization. So, what are the other kind of departments and headcount?

Sebastian: Right now we have about those ten advisors. Yeah. So, as I mentioned, we were about five or six about one year ago. So, definitely there's a really, really robust process on how to onboard an advisor. That's probably a separate conversation. But then we have the new business team.

So, the new business team, it's kind of broken up into different subdivisions within. We have the AUM side. We have the insurance side. We also have the estate planning side as well. And so we also have a life insurance division as well. So, we have the new business team, which their job is to process all of the planning and all of the types of accounts that need to be set up.

Partnering With A Law Firm To Offer Clients Estate Plan Preparation Services [44:21]

And so the estate planning division, what we've done, which actually has been a huge lead generator for us. So, we market a lot of estate planning, not as attorneys, obviously, but we market the subject matter a lot. It brings in a lot of people that are interested in setting up legal documents, wills, trusts, powers of attorney, things like that. And so what we did is we have our estate planning team, and their responsibility is to process all of the estate plans that are, call it, offered to clients.

So we have an external law firm that does all the legal document preparation. And so what this estate planning team is responsible for is they kind of operate as a paralegal for the client, and the client actually buys the estate plan pretty much through the attorneys that we obviously partnered up with. And their job is to do all the legal drafting. Our job is to do all the facilitation as far as gathering the information. So, we are not in any way operating, obviously, as attorneys in the process, but we are operating as the paralegals, the people pretty much gathering the financial information, the details that the client wants so that we can go and shift that over to the attorneys to draft up the legal documents.

Michael: Do you do the post-implementation work as well? The...

Sebastian: Yes.

Michael: ...funding assets into revocable living trusts and the like.

Sebastian: Yeah. We do all of that for the client, which we kind of tell the client how expensive all that process is because some clients don't really understand how a real, full-detailed estate plan could cost them, especially in South Florida. That could be anywhere between $6,000 to $12,000 in South Florida to do a full estate plan with all that execution afterwards. So, we let them know that even doing it through us, it's much less expensive, and we're just pretty much charging the client for the facilitation of it, and then obviously the attorney is the one that does all the legal drafting.

Michael: And is this a service you charge separately for?

Sebastian: Yeah. Yes. The fee could range depending on what type of legal documents are needed. I would say that the average is somewhere around $3,000 for that, which is much less expensive than what they would spend with obviously any other law firm. And then all of the...

Michael: Wait, $3,000 for documents and the support you do, or that's just your layer?

Sebastian: No, that's the documents and the support we do.

Michael: Okay.

Sebastian: Yeah. Yeah. So, it's everything. It's about $3,000. Some clients end up spending a little bit more if they need a few additional documents that need to be drafted up, but our average, I would say, it's somewhere around $3,000.

Michael: So, I'm presuming then you've set a relationship with a law firm that you send the business to that's giving you some kind of favorable rate because you're going to send them a lot of flow of estate documents, so you effectively negotiate this on behalf of?

Sebastian: That's exactly what we did. So, I believe we have a requirement to send them about 200 estate plans a year. I think we're blowing that out of the water. I think we're at, I don't even know, almost 400 or something like that just last year, and we just started that division mid-last year. So, obviously it's going to die down because a lot of our clients didn't have their estate planning.

And in the past, what we would do is we would just refer it out to other attorneys, and that was something that we just didn't like. We didn't like that we were referring it out to other attorneys, and then if something went bad in the service process or the attorney didn't call them back, or the attorney just charged too much money or whatever it is, then it was a bad reflection on us. And we did this for years and years and years, Michael, and we were just done with it, and we were like, "Man, we're not going to do this anymore. We need to figure out a way on how we can bring this in-house and control it."

And so our attorneys right now, they just do the legal drafting. In our contract, they have to have a turnaround time of, I believe, three weeks from the moment we provide the questionnaire to the law firm. And so we took the full control of the gathering of the information, of the delivering of the estate plan, of making sure that it's notarized and have the witnesses in the room. And we took control over that process. We just needed the attorney to do the legal drafting.

And so we pay them very, very little in comparison to what we charge for the service, but the reality is there're...you know how the majority of these attorneys, they operate, right? They operate off of a standard template, and they just add the additional pieces that the client is filling out from their questionnaire. So, because of the amount of business that we send them, yeah, they give us a very favorable rate, and in doing so, we also help the client out because the client doesn't have to go spend $6,000, $7,000, or $8,000 to get what we're doing for almost 3 [thousand dollars].

Michael: Out of curiosity, how many estate plans, how many estate drafting documents are you queuing up in a year? Just even in a year, are you doing a dozen of these, are you doing a hundred of these?

Sebastian: Yeah, so we did, I believe, last year, and I think we launched it back in May of last year of 2024, and I believe we did almost about 400 estate plans last year. It's going to start dying down, and the only...

Michael: Wow.

Sebastian: Yeah. So, it's going to start dying...

Michael: Well, you work through the backlog of all the clients that just never have been getting around to them.

Sebastian: Exactly. Right. So, it's going to die down. I would say this year it's still going to probably be the same amount. But I would say on a yearly basis, it'll probably be somewhere around 300 to 400 throughout the year once we go through all of our clients and finish off all of the estate planning for every client.

Michael: Wow. So, is this a local in-person firm? Did you look at... There's lots of digital services out there now that are doing versions of this as well for advisors, Wealth.com and Trust & Will and Encore Estate, and such. I'm curious, did you look at those services versus local? How did you choose who you selected?

Sebastian: Yeah. Yeah. The main reason was we were just looking for a firm that can help us out with this, and we were trying to negotiate the pricing. And we obviously saw all those models, and we saw what they were doing. And this firm is actually in California. So, what we did is we were just talking to a lot of people, and we kind of told them what we were looking for, and it was just something that we negotiated and we agreed on, and they decided to move forward with us. And we've been super happy with the process. We have no complaints either.

Michael: And I guess just you found one that could handle the volume. A lot of law firms couldn't do 300 to 400 new documents in the span of 7 or 8 months. They don't have the volume. You got to have a pretty sizable firm just to be able to handle the activity level.

Sebastian: Right. Well, I think the challenge is the majority of law firms and the majority of attorneys and paralegals, they spend the majority of their time speaking to prospects and clients, gathering their information, and that's where the real time is spent. So, if we take that time away from them, they could pump out a lot more legal documents, and they do what their job is. The attorney's job is to draft up the legal documents. And so that's kind of where they step in.

Michael: So, do the attorneys still have any client-facing time, or do you just interface all of that?

Sebastian: Zero. Yeah, the client never meets with the attorney.

Michael: Interesting. So, you...

Sebastian: But we tell the client from the very beginning, "The reason this is a less expensive process is because of this. If you want to have that interface with the client, with the attorney, just get ready. It's not going to be $3,000. You're going to start spending $5,000, $6,000, $7,000 for that, because now you're spending $400 or $500 an hour for the attorney time.

Michael: So, how many people are in this new business team?

Sebastian: Well, the business, the entire...

Michael: I guess there's investments, insurance, estate. Yeah.

Sebastian: Yeah. The entire new business team, I believe, right now is about 14, 15 people, and that includes all from the estate planning team, the paralegals.

Michael: Okay. So, then what else departmentally?

Tasking Team Members With Bringing In Clients' Outside Assets [51:50]

Sebastian: Then you have the service team, and their job is...there's kind of there's two divisions there. There is what we call wealth management associates, and then we have what's called wealth management processors. And so that team right now, I believe it's about seven or eight people, and their responsibility is to...the wealth management processors, their job is to process service requests. So, what they're primarily doing is any sort of a) client service request, their job is just to do the processing of the service request.

Then you have the wealth management associate. This is kind of what we call our internal service sales team. And so even though they're part of the service team, they're also, their job is to do activity that generates additional revenue, finds additional business. And so what their job is, is to reach out to our existing clients that have outside assets, because a firm like ours, we sometimes end up meeting with clients, and we don't get all the assets up front.

And so what the service team is supposed to do is to reach out to the clients that have outside assets that have not transferred over. And we have that all documented as well of we have clients categorized into maybe, let's call it, a silver or platinum client. And what that means is they might be a silver with the firm. That means they have a certain amount of assets with the firm. But if they're platinum, that means that they might have...they have more assets outside of the firm. So, we kind of categorize clients like that.

And so what they do is, on a daily basis, they pull up a report of all of the clients that have outside assets, and then they're reaching out to those people, servicing them better, asking them how we can do better as well, and getting those assets transferred over. And so these are also people that are licensed as well. They're getting assets transferred over to the clients' whether retirement accounts, brokerage accounts, whatever it may be. They're getting those assets transferred over, and then they're also getting paid for doing those transfers. They're not giving any financial advice to the client. All they're doing is just processing transfers of external assets.

Michael: So, help me understand how that outreach or ask works. I visualize an existing client that we're working with some of their assets and not all their assets. Asking for more business from the client, I guess it's traditionally I think of as something that happens by the advisor in a client review meeting. "Hey, we've been servicing you really well over the past several years. We'd love to know what it takes to win all of your business." Or however it is that you want to queue up that conversation. So, how does it work when a wealth management associate who isn't the lead advisor and isn't necessarily giving advice is supposed to open the door for clients to move more in assets?

Sebastian: Yeah. So, this wealth management associate is the go-to person that the client calls every time a service request is needed. So, there is that relationship. Think of it as the right-hand person to the advisor, and the client knows of this person as well, and they speak to this person very often. But when a client says, "I need $10,000 out of an account, or I need to change a beneficiary," they're not the ones processing it, but they're the ones receiving the request.

So it all seems like this person is the one that is also processing it, when in reality they're not processing it. They're just the relationship person with the client. And in doing so, they're also asking...they're reminding the client of the service that we've done, of the work that we've done, and just asking for that business. And so, this is also a position in training for an advisor. So, that's a whole other conversation of how we train advisors, but this is one of those roles that when a person really shines here is where we know that person is almost ready to start meeting with new prospects and existing clients to be their advisors.

Michael: Okay. And so is it still mostly in-bound for the wealth management associates, or are they going outbound?

Sebastian: Outbound.

Michael: I mean outbound to existing clients, but outbound.

Sebastian: Yeah. And they spend the majority of their time outbound. And so what their role is, is to reach out to the existing clients that have outside assets and get those assets transferred. And then the second responsibility is to book meetings for the advisors. So, they know that because their entire team's compensation structure is also tied to making sure that there's a certain amount of appointments that are held on advisor calendars. And so what they're doing is they're just reaching out to all of the existing clients, not only asking them to transfer additional assets, but they're also asking them...they're also booking their financial reviews, either quarterly or semiannual or yearly. So, the wealth management associate is in charge. Their primary two goals is transfer assets, external assets, and book appointments on advisor calendars.

Leveraging An In-House Recruiter To Streamline Hiring [56:29]

Michael: Okay. So, what other departments as we go through the organization? Have we covered everything?

Sebastian: Yes, so that would be service, and yeah, you have operations, you have HR. That's actually another area that I think has been a big reason why we've grown, I think, over the last couple of years is a lot of...I've seen usually at all these conferences and all these events that we all attend, you tend to hear that people say things like, "Oh, you can't find good people. You can't find good hires, and it's hard to find good people."

And I look at it the same way like a client, right? What's the effort that we are putting in generating a brand new client? And obviously a lot of firms out there that are putting a significant amount of effort in doing a lot of marketing and generating new business and generating leads. What type of effort are we putting in generating potential candidates to work for your company?

So about two years ago, we decided to create a full-time role in the company. And instead of having headhunters or anything like that, we had an in-house recruiter. And so this person's responsibility is to...their entire job is to find new talent, either to improve our talent or to also add new pieces to the team.

And so every quarter, my brother, which he's the one that mainly leads this side, his responsibility is to provide on a quarterly basis either people that need to be...positions that might need to be replaced or positions that might need to be added to the company. So, every quarter, it's anywhere between four to six people that need to either be replaced or added to the company. It could be three replaced, three new, something along those lines. And every single quarter, that person's responsible for adding those six new people.

And then we have another person that also works on that team that's in charge of onboarding. And so there's a 90-day onboarding process for every position in the company. Some positions take a little bit longer to train, but this is probably one of the biggest reasons why over the last two years our team has grown. I think two years ago, I believe we were at somewhere around 30, 35 employees, and now we're at about 60. And I think the big reason is because of this division. And instead of just having departments, and if you're a firm that's looking to grow, I think that you need to have a recruiting strategy in place to make sure that you're bringing on new talent.

Michael: So, we're 55 to 60 team members. I think you'd said earlier about 1,750 client households. So, what is that in terms of based on their assets, revenue? I don't know how you measure overall for the firm.

Sebastian: Yeah, so you're talking about primarily assets as far as the average assets per client. Is that kind of where you're getting at?

Michael: Or just total assets for the firm or total revenue for the firm? Like, what does this all add up to from a business perspective?

Sebastian: Yeah, so I believe last year we were right under $15 million. I believe we were like $14.8 in total revenue for the firm. This is all of the channels as well. So, this includes the estate planning side. This also includes any insurance revenue as well, and then also any AUM.

Michael: Okay.

Getting 115 Prospect Appointments From One Major Marketing Event [59:31]

Sebastian: And then we also did that big event, the Miami Retirement Summit, which we also charged for attendance there as well.

Michael: So, what was the Miami Retirement Summit?

Sebastian: Okay, so this was an idea in the making for about the last three years. We were kind of talking about how we wanted to do a very big event with a few hundred people there. And what we kind of decided is we were like, "We want to do an event with probably 400, 500, 600 people where we can have everyone from the community there and pretty much turn this into a big giant seminar. That's kind of what our goal was.

We had no idea how we were going to do it. We had no idea how we were going to get so many people to attend. We had no idea how many leads were going to attend. We had no idea how many clients were going to be potentially interested in working with us. We didn't know, but we wanted to give it a shot and see if this was something that made sense to do every single year.

So we decided last year was the first year we were going to do it, and we decided, we were like, "Okay, we're going to try to... Our target is to hit about 500 people. We hit, I believe, a total of about 510 people that attended the event. And our entire mission was to do a big all-day event. We did it at the Trump Hotel in Miami, in Doral. And we had about a little bit over 500 people. And it was all...the entire title was called the Miami Retirement Summit.

We noticed that we needed to have...one of the things that we learned just in marketing is we needed to have a person that could draw people in. So, we were like, "Okay, who do we know that... Or not who do we know, but who is someone that is really famous, that is known for the subject of retirement and that we can bring in?" And so we decided we're going to bring in pretty much Miami's biggest star in the 1980s and '90s, Dan Marino.

So we had Dan Marino at the event, and he was kind of our draw. And he's the person that pretty much we hired him. We interviewed him on stage. He was the last person, obviously, to speak on that day. And we just asked him the questions of what does it mean to be... What does it mean, retirement, to you? And we asked him those questions, and my brother interviewed him for about like an hour, hour and a half. And we had a bunch of speakers there, right? We had like Ed Slott. We had a Social Security spokesperson as well. We have a few of our advisors. We had an attorney, our attorney, fly out and speak as well at the event.

So we did have a good probably eight people, eight or nine speakers throughout the day. We had breakout sessions, kind of like a regular conference. And it was mainly for the community. And we did charge, I believe it was like $69 or $79 to attend. It wasn't so much. We just wanted to make sure that we had as many people to actually attend. We also gave everyone lunch. And then we also had VIP packages that people could purchase, and they could get a photo with Dan Marino as well. So, we kind of try to make it a fun event. And we had about 500. Yeah, about 500. A little bit above 500 attendees at the event.

Michael: And so was the goal of this simply teaching, giving back to the community at its core, or ultimately is this still trying to drill down to can we drive leads, can we drive new clients as we call it traditional seminar marketing?

Sebastian: Yeah. So, our mission definitely was, yes, to educate the community, but it's still a business, and we spent a significant amount of money on putting together this whole event. Just in speaker fees, I think we spent $75,000 just paying speakers to come out and talk to the audience. So, we still needed to generate some sort of revenue from this.

So, I believe there was about 500 people there, a little bit above 500. Out of those 500, obviously, there's some of them are households, right? They're coming in with their spouses, so we don't really look at them as 500 households. It was probably somewhere around like 350 households. And out of those 350, there were some clients in the audience as well. But when it was all said and done, there was about 115 appointments that were scheduled for people that were not clients from the event.

Yeah, so we had to clear out all of our schedules. In other words, all of the advisors had to be 100% dedicated for the next two to three weeks. Nobody could take vacation. We just needed to be all hands on deck as far as a team, because we knew that the influx was going to be an enormous amount. We also stopped all of our marketing for all of our other marketing sources for two weeks prior because we knew that that was going to obviously fill us up too much. So, we stopped all of our marketing two weeks prior to the event. And then we ended up booking about 115 appointments out of that.

Michael: Wow.

Sebastian: Excuse me, 115 held appointments. So, I believe we booked like 160 appointments from it, but 115 of them were actually held.

Michael: And I'm presuming similar kinds of conversion rates that ultimately a third became clients, give or take a little?

Sebastian: So, I believe the conversion rate was a little bit higher for a few reasons. Number one, the people were there for the right reasons. Sometimes when you do these dinner seminars, as we all know, some people are there for the wrong reasons. The other is we generated a much bigger average asset size. I believe the average asset was about 50% higher than the normal type of lead that we were generating through all of our marketing sources. And a person that's willing to spend six, seven, eight hours at a conference, the likelihood of this person converting is much higher because they spend a lot more time with you versus a person that just saw a 45-minute dinner presentation.

Michael: Right. I guess in that context, what was typical asset size here, and what's normal for your marketing?

Sebastian: Yeah. So, our normal from a marketing standpoint is about $650,000. And from this event was almost about $1.1 million average spendable assets, or what we call liquid assets.

How Advisors At The Firm Are Able To Manage 35 Prospect And Client Meetings Each Week [1:05:13]

Michael: Wow. So, I guess in this vein, as advisors are fielding all these inquiries, and you'd said earlier, your goal is to really leverage up your advisors to be prospect and client facing. So, are there goals that you set of how many hours client-facing per week or how many meetings per week that advisors are expected to have?

Sebastian: Yeah. So, what we do is that every advisor has a...our appointment setters have these goals of trying to make sure that every advisor has a certain amount of appointments on their schedule on a weekly basis. And so our average advisor is having right now somewhere around five appointments per week, five brand-new appointments of brand-new prospects. Everything else, the other 25, 30 appointments that come out throughout the week, is everything else, right? That's existing clients. That's second appointments, third appointments, investment strategy meetings, estate planning meetings. So, that's everything else.

But our appointment setting team and what our expectation is out of our marketing and our appointment setting team is that we deliver five new potential households on a weekly basis to every advisor that are held. Not that are scheduled, but that are actually held. And the advisor doesn't have to confirm the appointment. The advisor just has to show up, walk into the room and do their thing.

Michael: But that means in total, like 25 to 30 meetings a week is normal for your advisors. That's typical flow?

Sebastian: Very normal. I would even say probably closer to 35 appointments sometimes.

Michael: Are these hour-long? Are these half hour? I mean, just at some point, there's only so many hours in the day to get them in.

Sebastian: Yeah. So, we have different appointments that have different lengths to it. There're some appointments that are one hour. There're some appointments that are an hour and a half, and there're some that are 30 minutes. So, every category of type of appointment we have. Our firm has, I think about nine different appointment categories or something like that. And every appointment category has a different amount of time. So, it usually is anywhere between 30 to 35 appointments.

Michael: How do you prep for 35 meetings? I'm just envisioning. Prep and follow-up is a lot for 35 meetings.

Sebastian: And this is why our support staff is probably so large is pretty much we have about three to four support staff for every advisor. And so, number one, all of the prep is done by someone else prior to the meeting, and it's all updated in our financial planning software. So, prior to the meeting, all of the assets are inputted. We also call the client. We also update all of the assets that the client has. So, that way, the advisor is walking into a meeting with all of the assets usually updated.

The advisor is still going through a full review of all of the assets, just making sure that everything's correct. And then what also happens is right before the meeting, right before they walk in, literally two feet away from the door, the wealth management associate is letting the advisor know of anything that's important for that client that needs to be discussed, because that wealth management associate that's booking the appointment is always asking the client what's important for you to discuss during the meeting, even though we do have specific subjects that we like to cover in every single meeting, but there are specific topics that a client might want to discuss in their financial review.

And so all of that is put in the notes of the activity in our CRM. And the advisor, pretty much every advisor has their CRM right on their phone, which is Salesforce. And then they can just go into the activity that they're about to walk into, the appointment that they're about to walk into, look into the notes, and just see exactly what type of meeting they're about to walk into and what are the biggest concerns that the client has.

Michael: Interesting. I'm almost envisioning this like the doctor's...

Sebastian: Like a doctor.

Michael: Yeah, like the doctor's office with a lot of nurses where the doctor has their notes that they review before they come in, but the main focus of the doctor is just literally be present with me as the patient to answer whatever questions I have and go through whatever I'm working on or dealing with. And then the nurses keep them really well prepped for the next meeting.

Sebastian: You got it. And then what happens is right after the...but the advisor actually goes into all these meetings by themselves. They don't go in with the nurse, let's call it, or with the wealth management associate. They go into the meetings by themselves. But right after the meeting is over, the advisor dictates all of their notes into our...pretty much our communication system. This communication system is now the audio because it's an audio dictation.

Then we have a person that grabs that audio. They upload it into an AI transcription service, which then summarizes the entire process. I've seen all these other AI programs that exist, and I haven't really found one that really works at the level that we want, so we're still enjoying the advisor having to do their actual dictation after the meeting. Then we have a person that will grab the audio, upload it into a transcription system, which then that will live in our CRM for all of the notes for any compliance reasons or just documentation purposes.

Michael: So, you don't put the AI recorder in the meeting. You have the advisor audio dictate, and the AI transcribes and summarizes their post-meeting summary dictation.

Sebastian: Yes. And then, because in every meeting there could be different tasks for different departments, the advisor needs to tag the team member in the note of who is relevant, right? Because you might have... Every advisor has their own, call it advisor chat pod where they're sending in their notes, but there might be an estate plan that was sold during the meeting, or there might be a transfer that needs to take place. And so, the advisor needs to tag the relevant team members that need to be involved in that process. That way, the advisor just completely releases the process and each team member, whether it's every team member on the business side or the service side just has to process the request that was dictated.

Michael: So, how does the advisor tag the department or people?

Sebastian: So, we use a system called WebEx, which is pretty common. A lot of people probably know about it. And so everyone in our system, if I'm tagging John, I just put @John, and it automatically just pops up there, and then John gets a notification that that's an audio that John needs to listen to.

Michael: So, where does this... I guess I'm trying to visualize where this happens. This is in the meeting, after the meeting via the CRM. Just where it's tagging.

Sebastian: On our phone.

Michael: Oh, on your...

Sebastian: On our phones.

Michael: Because WebEx is what you use for the audio. You create a WebEx meeting for yourself, but it's literally just you. And then you @ the people who are supposed to be tied to the meeting that they're not in. But the meeting isn't actually a meeting at this point. It's the audio dictation of the meeting.

Sebastian: Exactly. Right. So, we have, at the end of every single meeting, the advisor grabs their phone. And this is a system that the advisor has no control over. We actually can remove an advisor immediately or remove any team member immediately, and any history that's in that chat is gone. I remember back in the day we would even use WhatsApp as a form of communication, which was horrible internally. But now what we can do is, with the system, is if a team member is not with the firm anymore, it's very easy for us to remove the team member off the system, and then the team member doesn't have access to any previous history inside that system as well. So, pretty much right after the meeting, you finish the meeting, the advisor dictates the notes right on their phone. It's not on a computer. Whether it's on their way walking to the next meeting. And then they act. The two or the three team members that need to be involved.

What Surprised Sebastian The Most In Building His Firm [1:12:27]

Michael: Okay. So, as you look across just this whole growth journey and evolution, it sounds like a particular growth ramp-up in the past couple of years. What surprised you the most about building the advisory business?

Sebastian: So, I think that one of the things that my brother and I we always talk about, my brother is also a partner in the firm, and we went through a buyout with my father a few years ago, is this concept of struggle. And I think that it's sometimes we start thinking of what are the areas that we have struggled in? And I go back, and I think of people like my dad, a person that arrived to this country with no English, and he arrived here trying to do the best thing for his family. And my dad really struggled, right?

And so when my brother and I, we talk about this concept of struggle, it's like, no, we really haven't struggled in comparison to what my dad went through, in comparison to what other people have gone through all around the world. And so I can't really stand here and say that we've struggled. I can say we've had challenges in the company. And I think that one of the biggest challenges that we've always had is metrics, is having metrics in every position, because I think that one of the biggest mistakes that we did in the past is we did not track people or track responsibilities or track our goals well enough. And then what that did is it didn't allow us to make smart decisions moving forward.

And so that's something that we've gotten a lot better at over the last three to four years is just making sure that every position has their KPI [Key Performance Indiator] and making sure that we have a clean system of getting clean data so that we can make the right decisions. I think that that's probably a very easy way to grow, is having clean data, because then now you can know exactly what decisions you need to make.

Michael: So, how did you go from a firm that didn't have great metrics to one that did? What did you do? What did you change?

Sebastian: It's been a lot of work. One of the things that we did a couple of years ago is we decided to join EOS, which I know that you're a big fan of as well. And it was something that really changed the way we do things. It just helped us get clear on what our goals are, what our vision is, what our mission is as a company, what our core values are. And just get the entire team more aligned and then just operating off of the concept of rocks. And it's still not perfect. We're still trying to get better at tracking data.

But we operated off of Google Sheets for many, many years, and pretty much everything was living on a Google Sheet. I would say that one of the powerful things that we did is we had great team members that are very good at Excel and Google Sheets, and they know how to create formulas and pull up reports and things like that, and I think that was a big reason why it helped. And then eventually we were like, "We can't operate a company off of Google Sheets." And so that's where we eventually transitioned to Salesforce.

And that was the big thing that my brother and I we spoke about a couple of years ago is where is the company going in the future? And we want to make sure that the systems that we are putting in place today are systems that can still be used when the company's 10 times bigger than it is today. And so that's where we're like, "All right. We got to suck it up. Salesforce is a very expensive system, but it is something that when the company is 10 times bigger, it is still something that we'll be able to use." Google Sheets is not going to be something that we'll be able to use when the company's 10 times bigger than what it is today.

Applying The Firm's Core Values When Making Difficult Personnel Decisions [1:15:50]

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

Sebastian: I think it goes back to the struggle. I can't sit here and say that we had a low point because it's been I think my brother and I have just been very focused on hiring more people. But I would say the biggest low point is hiring people that did not fit the core values of the company. My brother and I, we've always been the type of people that we know who we are, and we kind of expected people to just be how we were. And so we were like, "All right, this is... How do we put this into words?"

And so EOS is what really helped us clarify our core values of who we are and what we expect out of our team members. And we've had to make some very tough decisions with new hires and old hires based on the core values. And unfortunately, we've had to let people go because they don't meet our core values. And it is something that is really, really important to us.

So, yeah, the core values were kind of the biggest eye-opener for us in every person that we hire. And everybody gets evaluated on a quarterly basis based on the core values. And we're constantly just reminding the team of the importance of them.

Michael: So, what are your core values? How do they get articulated?

Sebastian: Yeah. So, the first is always be learning. We expect that of our team to just constantly be learning as much as possible. It's something that we've noticed that all of our people in our firm that have grown the fastest, that have grown the most, they've put a lot of dedication to the learning part.

The other is your words matter. We're a strong believer in the power of words. And you can use it to lift people up. You can also use it to tear people down. And that's something that I think across the board is very, very difficult for most people, but it's something that I believe that as a firm we're all more conscious of, and we're always calling each other out about it's not about what you said, but how you said it. And so that's our second core value.

Our third is all for one and one for all. We want to make sure that we're always here for each other and we have this sense of support on a regular basis. Pretty much every person in our company was trained by somebody else. And so one beautiful thing that I think our company has is that every new team member that's been brought on board, all of our existing team members were previously trained by somebody else, and none of them expect to be paid for training other people, even those that are operating off of performance base.

All of our advisors, they have all helped each other out just get better and better, even though they don't get paid to train other advisors. And I think that's something that's been really beautiful about our company, is that all of the advisors, they see an advisor struggling with something. All of our meetings are normally recorded on Zoom. And so we also have weekly training on it. And all of our advisors get these videos that we can now all go back and watch as well. And then we all give each other feedback on how we can get better. And so I think that's also a very powerful thing.

The fourth is taking ownership. So, is we want to make sure that when a person's being critiqued or being given feedback, that they're actually taking ownership of it, that they're not pushing back on the feedback that's being given. And mainly it's just acknowledging and accepting your actions and your results. And then the fifth is just doing the right thing. And for us, doing the right thing, it's a combination of mainly three things. It's doing the right thing for the team. It's doing the right thing for the company. And then it's also doing the right thing for the clients.

And I think that's one of the big struggles that I think a lot of advisors and firms have is how do you balance all three of these? How do you make sure that you're doing the right thing for the client, doing the right thing for the company, and doing the right thing for the team? And so there're certain moments that it's like, "Okay, we got to do something that's better for the company." There are some moments that we do what's right for the team. And then there's obviously most of the moments it's we're doing the right thing for the client.

Something that we just recently did is our firm hit our target in 2024 about our goals. And one of the things that my brother and I made an admission is we wanted to take our entire staff, our entire team, out on a trip. And so what we decided to do is right now, in about two months, the entire company, we're all getting on a cruise ship, and we're going to go to the Caribbean, and we're taking all 50, 60 team members with their spouses and all their children, and we're inviting everyone out. And the reason we do that is because they were a big reason and they're the main reason why the company has gone to where it's at. And so we're just a strong believer in just making sure that we take care of our team. And we got bigger goals this year, and we're just trying to push forward. And I think putting in the goals, these big dreams that we have is part of the reason why companies can grow a lot.

Sebastian's Advice For His Younger Self And For Newer Advisors [1:20:52]

Michael: So, what do you know now you wish you could go back and tell yourself 10 years ago as you were starting this growth ramp-up?

Sebastian: I think definitely getting clear about the type of people that you want to hire. I think that was...which goes back to the core values. I think knowing that, I wish 10 years ago, 15 years ago, we were more focused on that. And I would say that the biggest reason, which is kind of what I mentioned earlier, is having an individual earlier on that focuses on recruiting.

I think that if 10 years ago, we would have had a recruiter in-house that their entire job was to find new talent for the firm, I believe that today the firm could probably be 4 times bigger than what it is today. Because this is just something that we did over the last 2 years, and over the last 2 years, we've added over 25 people to the team. And it's mainly been because of the recruiting division, the HR division. If it wasn't for that, there's no way that we can have the focus or the amount of talent that we're onboarding.

Michael: So, can you help us understand further what changed in hiring, I guess, as you set core values, as you brought in a recruiter? Can you help us understand more? What was different? What really changed? Because I'm sure you already felt these values, you were already hiring people, but something's different now.

Sebastian: Well, the thing is that I think when you're an owner of a company or you're an adviser of a company, you're wearing so many hats and you put on all these goals. It's like, "Okay, I want to hire more people. I want to do more business. I want to train the staff. I want to do all these goals." But it's not until you literally give the task to a person to have that responsibility, is not until it actually happens.

And so I think hiring a recruiter and giving them very, very clear metrics on these are the amount of interviews you need to do every single week, these are the amount of shadow days that need to take place on a monthly basis, these are the five hires that we need to do for this quarter, is a very clear way of getting them very focused on exactly what the goal that they need to accomplish.

And so when you go and put this hat on, for example, myself or you put this hat on my brother, on top of that, he's running a bunch of other department leaders as well. And on top of that, he now needs to go and focus on hiring these five new people and going through this process, is in reality it doesn't become a priority because he's wearing six other hats. And so when you give this one hat to this one person, I think that there's no excuse on the goal not being accomplished. And so that's, I think, one of the big reasons why we just said, "Hey, you know what? We just need a full-time recruiter. And yes, it's not a revenue-producing activity, but it is the position that's needed to find the talent that's going to help us get to 1,000 employees over the next 10 years."

Michael: So, what advice would you give younger, newer advisors looking to come into the profession today?

Sebastian: Yeah, so I would say that one of the things that I did is I remember even when I was just 17 years old, going to school, going to high school, I was listening to a lot of audio tracks on financial planning, which is pretty weird for a 17-year-old. I think that's probably why I didn't get too many dates at 17 years old. But I think that one of the reasons is I was very obsessed with the subject matter. I truly don't look at my job as a job or something that I don't enjoy. I truly love the subject of financial planning, and I just love learning new ideas, new concepts about money that I just didn't know. So, I think number one is being obsessed.

And then I would say number two is finding an organization or an individual that you can go and learn a lot from. And obviously you're a big mentor for, I think, the entire financial planning community, but I would even go deeper than just listening to someone's podcast. If I was 22 years old, 23 years old, and I wanted to get into the industry and I wanted to be the best possible advisor, I would literally go and find the top three advisors in your city, in your town, and just say, "What do I need to do to work for you?" I think that doing that for your first three to five years is extremely powerful.

And our top advisor right now at our firm, that's exactly what he did. We gave him an opportunity, and when he technically probably, looking back at it today, we probably wouldn't have let him come into the company. But back in the day, we would have to hire people that just we need to fulfill a role. But this guy, Jimmy, he came into the company, and one of the first things that he did is he's like, "I'm going to sit next to you, and I'm going to learn everything I possibly can from you."

And he, this year, I mean, just this year by himself, he'll probably move probably about $50 to $60 million on his own. And it's all because he was obsessed with just being the best version that he can and not necessarily just saying it, but actually going and finding the top advisory firms, the top advisors to go in and learn from. And so I think doing that at a very early age in your career is probably a very easy, easy way to get 20 years of experience in two or three years.

What Success Means To Sebastian [1:26:06]

Michael: I love it. So, as we come to the end, this is a podcast about success, and just one of the themes that comes up is literally the word success means very different things to different people. And so you and your brother have built this incredible business, what anyone would objectively call a very successful business as you crest $15 million of revenue. So, the business is in a wonderful place. How do you define success for yourself at this point?

Sebastian: So, that's the question I've been asking myself over the last...pretty much the last 30 days. I've always been a very hard-charging individual. I've always been a person that has this mission and this goal. And I've always had this mindset of, I think sometimes I'll say to advisors, we have this challenge, which is we have this mindset of nothing's going to get in my way until I accomplish my goal.

And I would say that for the last 15 years of my career, it was all about that until about 3 years ago, which is when I got married. And 365 days from the day that we got married, our daughter was born. We got married on September 8, 2021. Our daughter was born on September 8, 2022. And I think that after the last two, three years of my daughter's life, I started noticing that there's this mission that you have as an organization, but you start looking at what are the other areas that you're potentially sacrificing in the process?

And I've had to make some recent strong decisions, willing to sacrifice call it the mission and the drive of working until 10:00, 11:00 at night, starting work at 6:00 in the morning, and constantly just going at it to make sure that we accomplish the goal, and just creating these very strong boundaries of work and personal. And I think that's just what's worked for me. I know that some people kind of blend it all in, but what's worked for me, or what's working for me now, is just creating very strong rules that I'm not willing to break, and I'm not willing to budge in no circumstance. And so I leave now the office at 6:00, which is for me very, very, very early, and I get in at 9 a.m., which for me is very, very, very late.

But I think that was one of the biggest things is for me, I think success has...it really boils down to what the priorities are in your life at that given moment in your life. Success five years ago looked very differently than what success looks like today for me. And I'm sure that 15 years from now, or 20 years from now, or 30 years from now, when I'm a grandfather, I'm sure my success is going to be looking very differently. So, I think success is looked at differently depending on the stage of life that you're in. And for me today, it's really it's being able to understand the difference between spending quality time with your family and really driving the company forward. And so that's kind of my next challenge in life.

Michael: I love it. I love it. Well, thank you so much, Sebastian, for joining us on the "Financial Advisor Success Podcast."

Sebastian: Thank you, Michael. Thank you so much. And thank you so much for everything you do for the community.

Michael: Thank you.